DOJ sues DirecTV for conspiring against LA Dodgers (updated)
Government says it colluded with competitors to get a better deal from the team for broadcast rights.
The Department of Justice announced on Wednesday that it is bringing suit against DirecTV for its role in an alleged collusion scheme involving the broadcast rights to Los Angeles Dodgers games. Specifically, the DOJ asserts that DirecTV and three of its competitors -- Cox, Charter and AT&T -- shared "agreed to and did exchange non-public information about their companies' ongoing negotiations" with SportsNet LA, the only channel authorized to show Dodgers games.
The DOJ filed suit in U.S. District Court for the Central District of California and alleges that the four companies essentially gave each other a heads up as to their individual progress in negotiating with SportsNet LA and whether they'd actually carry the channel should they be successful. Doing so, the DOJ argues, allowed the companies to not only gain unfair bargaining leverage but also minimize their subscriber losses should only one company be successful.
What's more, the DOJ is saying that the reason that none of these companies have yet to carry SportsNet LA is a direct result of their collusion and in doing so, they've prevented a large swath of fans from watching the games over the past three seasons. "As the complaint explains," Deputy Assistant Attorney General Jonathan Sallet of the Justice Department's Antitrust Division stated. "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."
Update: AT&T released the following comment to Engadget: "We respect the DOJ's important role in protecting consumers, but in this case, which occurred before AT&T's acquisition of DIRECTV, we see the facts differently. The reason why no other major TV provider chose to carry this content was that no one wanted to force all of their customers to pay the inflated prices that Time Warner Cable was demanding for a channel devoted solely to LA Dodgers baseball. We make our carriage decisions independently, legally and only after thorough negotiations with the content owner. We look forward to presenting these facts in court."
