DirecTV, and its parent, AT&T (T) - Get Report , on Thursday settled federal charges that the satellite TV provider acted as the ringleader of a conspiracy that ended up preventing the Los Angeles Dodgers' SportsNet LA from being carried in much of the team's TV market.
The settlement with the Department of Justice will prohibit DirecTV and AT&T from illegally sharing confidential, forward-looking information with competitors.
The department's Antitrust Division filed suit on Nov. 2, 2016, alleging that DirecTV organized a series of unlawful information exchanges with three of its competitors -- Cox Communications, Charter Communications (CHTR) - Get Report and AT&T before it acquired DirecTV in 2015 -- during the companies' negotiations to carry the SportsNet LA "Dodgers Channel." SportsNet LA holds the exclusive rights to telecast almost all live Dodgers games in the Los Angeles area.
The settlement, which obtains all of the relief sought by the department in its lawsuit, will ensure that when DirecTV and AT&T negotiate with providers of video programming, including negotiations to telecast the channel, that they will not illegally share competitively sensitive information with their rivals. The settlement also requires the companies to monitor certain communications their programming executives have with their rivals, and to implement antitrust training and compliance programs.
"When competitors email, text or otherwise share confidential and strategically sensitive information with each other to avoid competing, consumers lose," acting Assistant Attorney General Brent Snyder of the Justice Department's Antitrust Division said in a statement. "Today's settlement promotes competition among pay-television providers and prevents AT&T and DirecTV from engaging in illegal conduct that thwarts the competitive process."
According to the complaint, DirecTV Chief Content Officer Daniel York unlawfully exchanged competitively sensitive information with his counterparts at Cox, Charter and AT&T while they were each negotiating for the right to telecast the Dodgers Channel. The companies engaged in these unlawful information exchanges to decrease the risk that any individual company would lose subscribers by not carrying the Dodgers Channel while others did. The DOJ alleged that eliminating this threat corrupted the competitive bargaining process and likely contributed to the lengthy blackout.