The Department of Justice filed suit against DirecTV (commonly known as AT&T after the recent merger) for anti-competitive collusion in violation of antitrust law.
The suit comes as DirecTV parent corporation AT&T has petitioned the Department of Justice and Federal Communications Commission for another mega-merger with Time-Warner’s content division.
The DOJ’s action stems from a 3-year blackout of Los Angeles Dodger hometown baseball games during negotiations with SportsNetLA, which holds exclusive broadcast rights for the games.
The lawsuit, filed in the U.S. District Court for the Central District of California, alleges that DIRECTV unlawfully exchanged competitively-sensitive information with Cox, Charter and AT&T during the companies’ negotiations for the right to telecast the Dodgers Channel. The complaint also alleges the companies engaged in this conduct in order to obtain bargaining leverage and to reduce the risk that they would lose subscribers if they decided not to carry the channel but a competitor chose to do so. The complaint further alleges that the information learned through these unlawful agreements was a material factor in the companies’ decisions not to carry the Dodgers Channel. The Dodgers Channel is still not carried by DIRECTV, Cox or AT&T.
The lawsuit, which speaks to the power of loyal baseball fans to get the government’s attention, is likely to dim the prospects of a quick approval for the latest AT&T mega-merger.