Department of Justice

How does antitrust fare in the required reduction in federal regulations? First, antitrust is law enforcement, it’s not regulation.  At its best, it supports reducing regulation, by encouraging competitive markets that, as a result, require less government intervention.  That is to say, proper and timely antitrust enforcement helps competition police markets instead of bureaucrats in Washington, D.C. doing it.

The Department of Justice’s Antitrust Division announced that it will require Entercom Communications Corp. to divest 13 radio stations in order for Entercom to proceed with its acquisition of CBS Radio, Inc.

With your permission, I will discuss three topics today. First, why antitrust enforcement is such an important part of a free market system. Second, the progress we’ve made in sharing the value of effective antitrust enforcement around the world. And third, a few thoughts on what I hope we can achieve in the future. On all these points, I hope to emphasize the fundamental role of the rule of law and procedural fairness in the application of the antitrust laws. ....

The Department of Justice reached a settlement that will prohibit DIRECTV and its parent corporation, 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 was the ringleader of a series of unlawful information exchanges between DIRECTV and three of its competitors – Cox Communications, Charter Communications and AT&T (before it acquired DIRECTV) – 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 will obtain 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 Dodgers Channel, 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.

The Department of Justice announced that it will require AMC Entertainment Holdings to divest theatres in 15 local markets, sell off most of its holdings and relinquish all of its governance rights in National Cinemedia LLC (NCM), and transfer 24 theatres with a total of 384 screens to the network of Screenvision LLC in order to complete its $1.2 billion acquisition of Carmike Cinemas Inc. The Justice Department’s Antitrust Division filed a civil antitrust lawsuit in the US District Court for the District of Columbia to block the proposed acquisition. At the same time, the department filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit. The department said that without the required divestitures and other relief, the merger would result in higher prices and lower quality theatre amenities for moviegoers and weakened competition in the markets for preshow services and theatre advertising, where Screenvision is NCM’s only meaningful rival.

Each of these themes runs through the topic of these remarks: how the law, as I have seen it develop at the Antitrust Division and the Federal Communications Commission, has and can create and protect economic opportunity in the marketplace of broadband Internet access services provided to individual consumers. I’d like to structure this discussion around four primary themes:

First, competition is the best driver of innovation and consumer benefits in the Internet ecosystem; that ecosystem in which broadband connectivity is a critical component. Thus it is important to understand the state of competition, especially in those high speed connections that provide today the platform for so many complementary services provided by what we now call “the edge.”

Second, both antitrust law and public policy must rest upon a sound understanding of the incentives and abilities of broadband providers to artificially shape competition not only in the markets for residential Internet access but also in complementary markets across the Internet ecosystem. Here it is valuable to reflect upon the decades-long conclusion that telecommunications networks hold gatekeeper power that can be used to threaten competition.

Third, government should protect competition from artificial constraint that injures consumers and, especially in dynamic markets, threatens the future of innovation. The shared, overlapping jurisdiction of the FCC and the division focuses on the review of telecommunications mergers. Such reviews should be carried out always with a clear- eyed vision of the impact of market conditions on consumers today and innovation tomorrow.

Finally, the FCC has determined that an Open Internet advances economic and social goals so important that they must be preserved in the face of both obvious and subtle threats; threats that have long-been identified as well as those that are nascent or novel.

The Department of Justice sued DIRECTV and its corporate successor, AT&T, for acting as the ringleader of a series of unlawful information exchanges between DIRECTV and three of its competitors – Cox Communications, Charter Communications, and AT&T – during the companies’ negotiations to carry SportsNet LA, which holds the exclusive rights to telecast almost all live Dodgers games in the Los Angeles area.

The lawsuit, filed in the US 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. Specifically, the complaint alleges that DIRECTV and each of these competitors agreed to and did exchange non-public information about their companies’ ongoing negotiations to telecast the Dodgers Channel, as well as their companies’ future plans to carry – or not carry – the channel. The complaint also alleges that the companies engaged in this conduct in order unlawfully 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.

“As the complaint explains, 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,” said Deputy Assistant Attorney General Jonathan Sallet of the Justice Department’s Antitrust Division. “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.”

The Department of Justice announced that it will require Nexstar Broadcasting Group to divest seven broadcast television stations in order to proceed with its $4.6 billion acquisition of Media General Corporation. The department said that without the required divestitures, the prices for broadcast television spot advertising and the fees charged to multichannel video programming distributors (MVPDs) – such as cable and satellite providers – for the retransmission of broadcast television programming to MVPD subscribers would likely increase in six designated market areas (DMAs) located across the United States.

The Justice Department’s Antitrust Division filed a civil antitrust lawsuit Sept 2 in the US District Court of the District of Columbia to block the proposed transaction and simultaneously filed a proposed settlement that, if approved by the court, would resolve the competitive harm alleged in the lawsuit. The department’s complaint alleges that the proposed transaction would lessen competition in the sale of broadcast television spot advertising and the licensing of broadcast television programming to MVPDs for retransmission to MVPD subscribers in the following DMAs: Roanoke-Lynchburg (VA), Terre Haute (IN), Fort Wayne (IN), Green Bay-Appleton (WI), Lafayette (LA), and Davenport (IA)/Rock Island-Moline (IL)(“Quad Cities”). As a result of the acquisition, Nexstar would control between 41 and 100 percent of the broadcast television station gross advertising revenues in these six DMAs and at least two broadcast television stations affiliated with the four major national television networks.

The Justice Department and the Office of the Director of National Intelligence released the following joint statement: Consistent with the President’s March proposal, in May, the House of Representatives passed H.R. 3361, the USA FREEDOM Act, which would, if enacted, create a new mechanism for the government to obtain this telephony metadata pursuant to individual orders from the Foreign Intelligence Surveillance Court, rather than in bulk. The bill also prohibits bulk collection through the use of Section 215, FISA pen registers and trap and trace devices, and National Security Letters.

Overall, the bill’s significant reforms would provide the public greater confidence in our programs and the checks and balances in the system, while ensuring our intelligence and law enforcement professionals have the authorities they need to protect the Nation.

The Administration strongly supports the USA FREEDOM Act. We urge the Senate to swiftly consider it, and remain ready to work with Congress to clarify that the bill prohibits bulk collection as noted above, as necessary.

Given that legislation has not yet been enacted, and given the importance of maintaining the capabilities of the Section 215 telephony metadata program, the government has sought a 90-day reauthorization of the existing program, as modified by the changes the President announced in early 2014. Consistent with prior declassification decisions, in light of the significant and continuing public interest in the telephony metadata collection program, the Director of National Intelligence, James Clapper, has declassified the fact that the government’s application to renew the program was approved by the FISC.

The order expires on Sept 12, 2014. The Administration is undertaking a declassification review of this most recent court order and an accompanying memorandum opinion for publication.

The Department of Justice has reached a settlement with eBay that prevents the company from entering into or maintaining agreements with other companies restraining employee recruitment and hiring.

The department’s Antitrust Division filed the proposed settlement in the US District Court for the Northern District of California in San Jose. If approved by the court, the settlement would resolve the department’s competitive concerns and the original lawsuit filed on Nov 16, 2012.

In its lawsuit, the department alleged that senior executives and directors of eBay and Intuit entered into an agreement, beginning no later than 2006, that prevented each firm from recruiting employees from the other and that prohibited eBay from hiring Intuit employees that approached eBay.

The agreement between eBay and Intuit diminished important competition between the firms to attract highly skilled technical and other employees to the detriment of affected employees who had less access to better job opportunities and higher pay. The proposed settlement would prohibit eBay from entering or maintaining anticompetitive agreements relating to employee hiring and retention for five years.