A lawsuit was recently filed by the U.S. Department of Justice against DirecTV, which alleged that the satellite TV provider arranged unlawful information exchanges with three of their competitors. These information exchanges resulted in the decision of the companies to not carry the Dodgers Channel.
The DOJ claims that the AT&T owned DirecTV unlawfully exchanged sensitive information with AT&T, Cox Communications, and Charter Communications. They further added that the information shared were about the ongoing negotiations to broadcast the Dodgers through SportsNet LA, who hold the exclusive rights to broadcast live Dodgers games currently. In addition to that, information on whether to carry this channel in the future or not was also shared by DirecTV.
If the companies failed to secure the broadcast of this channels and if one of their competitors did secure the rights to broadcast the channel, then this companies would have lost many subscribers. However, this will not happen because of the information exchange between the companies. The Dodgers Channel is still not available to AT&T, Cox, and DirecTV subscribers.
In a statement, Jonathan Sallet, Deputy Assistant Attorney General of the Justice Department’s Antitrust Division said that, “Dodgers fans were denied a fair competitive process when DirecTV orchestrated a series of information exchanges with direct competitors that ultimately made consumers less likely to be able to watch their hometown team. Competition, not collusion, best serves consumers and that is especially true when, as with pay-television providers, consumers have only a handful of choices in the marketplace.”
Joe Flint, Wall Street Journal media reporter said, ”The facts that are in this suit —if the facts are accurate —[show] that there was collusion. It’s a very interesting suit because basically, from reading it, one can gather that Cox and Charter cooperated with the Justice Department on this… It doesn’t exactly look good for DirecTV, and Game 7 of the World Series timing aside, there’s something even bigger at stake, because critics of AT&T’s potential deal to acquire Time Warner — the entertainment company, not the cable company — will point to this suit as an example of why this deal shouldn’t happen.”
Flint further said that both Donald Trump and Bernie Sanders have commented that the merger between AT&T and Time Warner is not a bad deal. “[The DOJ is] stepping into this with a designated goal and that goal is to send a message, both instantly to the various cable providers in this particular case, and I think, to a larger picture of the larger deal that is going down with AT&T and Time Warner. This a deal that is opposed across the political spectrum by some pretty heavy hitters,” he added.