United States of America v. DIRECTV Group Holdings, LLC et al

Filing 41

FINAL JUDGMENT 40 by Judge Michael W. Fitzgerald. Defendants shall not, directly or indirectly: A. Communicate Competitively Sensitive Information to any MVPD; B. Request Competitively Sensitive Information from any MVPD; or C. Encourag e or facilitate the Communication of Competitively Sensitive Information to or from any MVPD. (See attached document for details. ) Unless this Court grants an extension, this Final Judgment shall expire five (5) years from its date of entry. (MD JS-6, Case Terminated). (lom)

1
2
3
4
5
6
7

FREDERICK S. YOUNG (DC Bar No. 421285)
[e-mail]
CORY BRADER (NY Bar No. 5118732)
[e-mail]
U.S. DEPARTMENT OF JUSTICE
ANTITRUST DIVISION
450 5th Street N.W.
Washington, D.C. 20530
Telephone: [phone]
Facsimile: 202-514-6381

JS-6

Counsel for Plaintiff,
UNITED STATES OF AMERICA

8
9
10
11
12

UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION

13
14
15
16

17 UNITED STATES OF AMERICA,
18
19

Plaintiff,
Case No. 2:16-cv-08150-MWF-E
v.

20

FINAL JUDGMENT

21 DIRECTV GROUP HOLDINGS, LLC,
et al.,
22
Defendants.
23

Hon. Michael W. Fitzgerald

24
25
26
27
28
PROPOSED FINAL JUDGMENT, CASE NO. 2:16-CV-8150-MWF-E

1

WHEREAS, Plaintiff, United States of America, filed its Complaint on

2

November 2, 2016, alleging Defendants’ violation of Section 1 of the Sherman Act, 15

3

U.S.C. § 1, and Plaintiff and Defendants, by their respective attorneys, have consented

4

to the entry of this Final Judgment without trial or adjudication of any issue of fact or

5

law, and without this Final Judgment constituting any evidence against or admission by

6

any party regarding any issue of fact or law;

7
8
9

AND WHEREAS, Defendants agree to be bound by the provisions of this Final
Judgment pending its approval by the Court;
AND WHEREAS, the essence of this Final Judgment is the prohibition of certain

10 alleged information sharing between Defendants and their competitors;
11

NOW THEREFORE, before any testimony is taken, without trial or adjudication

12 of any issue of fact or law, and upon consent of the parties, it is ORDERED,
13 ADJUDGED AND DECREED:
I.

14
15

JURISDICTION AND VENUE

This Court has jurisdiction over the subject matter of and the parties to this

16 action. Venue is proper in the Central District of California. For the purposes of this
17 Final Judgment only, Defendants stipulate that the Complaint states a claim upon which
18 relief may be granted against Defendants under Section 1 of the Sherman Act (15
19 U.S.C. § 1).
II.

20
21

A.

DEFINITIONS

“AT&T” means AT&T, Inc., a Delaware corporation with its headquarters

22 in Dallas, Texas, its successors and assigns, and its subsidiaries, divisions, groups,
23 affiliates, partnerships and joint ventures, and their directors, officers, managers,
24 agents, and employees.
25

B.

“Communicate,” “Communicating,” and “Communication” means any

26 transfer or dissemination of information, whether directly or indirectly, and regardless
27 of the means by which it is accomplished, including without limitation orally or by
28 printed or electronic means.
C.

“Competitively Sensitive Information” means any non-public information

1

of Defendants or any competing MVPD relating to Video Programming distribution

2

services in the United States, including without limitation non-public information

3

relating to negotiating position, tactics or strategy, Video Programming carriage plans,

4

pricing or pricing strategies, costs, revenues, profits, margins, output, marketing,

5

advertising, promotion, or research and development.

6

D.

“Defendants” means DIRECTV and AT&T.

7

E.

“DIRECTV” means DIRECTV Group Holdings, LLC, a Delaware

8

corporation with its headquarters in El Segundo, California, its successors and assigns,

9

and its subsidiaries, divisions, groups, affiliates, partnerships and joint ventures, and

10 their directors, officers, managers, agents, and employees.
11

F.

“MFN Clause” means a contractual provision that entitles an MVPD to

12 modify a programming agreement to incorporate more favorable rates, contract terms,
13 or conditions that the Video Programmer agrees to with another MVPD.
14

G.

“MVPD” means a multichannel video programming distributor as that

15 term is defined on the date of entry of this Final Judgment in 47 C.F.R. § 76.1200(b).
16

H.

“Person” means any natural person, corporation, company, partnership,

17 joint venture, firm, association, proprietorship, agency, board, authority, commission,
18 office, or other business or legal entity, whether private or governmental.
19

I.

“Video Programmer” means any Person that provides Video Programming

20 for distribution through MVPDs.
21

J.

“Video Programming” means programming provided by, or generally

22 considered comparable to programming provided by, a television broadcast station or
23 cable network, regardless of the medium or method used for distribution.
III.

24
25

APPLICABILITY

This Final Judgment applies to Defendants, as defined above, and all other

26 Persons in active concert or participation with any of them who receive actual notice of
27 this Final Judgment by personal service or otherwise.
28

IV.

PROHIBITED CONDUCT

Defendants shall not, directly or indirectly:

1

A.

Communicate Competitively Sensitive Information to any MVPD;

2

B.

Request Competitively Sensitive Information from any MVPD; or

3

C.

Encourage or facilitate the Communication of Competitively Sensitive

4
5
6
7

Information to or from any MVPD.
Notwithstanding the foregoing, nothing in this Final Judgment shall prohibit
Defendants from:
D.

After securing advice of counsel and in consultation with the Antitrust

8

Compliance Officer, Communicating Competitively Sensitive Information to or

9

requesting Competitively Sensitive Information from any MVPD when such

10 communication is reasonably related to a lawful purpose, such as a lawful joint venture
11 or legally supervised due diligence for a potential transaction, or the enforcement of
12 MFN clauses;
13

E.

Communicating Competitively Sensitive Information to or requesting

14 Competitively Sensitive Information from an MVPD if such Competitively Sensitive
15 Information pertains only to either (a) Defendants’ supply of Video Programming to
16 that MVPD, or (b) that MVPD’s carriage or potential carriage of Defendants’ Video
17 Programming;
18

F.

Communicating Competitively Sensitive Information to or requesting

19 Competitively Sensitive Information from a Video Programmer, including one
20 affiliated with an MVPD, if such Competitively Sensitive Information pertains only to
21 either (a) that Video Programmer’s supply of Video Programming to Defendants, or (b)
22 Defendants’ carriage or potential carriage of that Video Programmer’s Video
23 Programming;
24

G.

Responding to any question from any news organization related to the

25 distribution of Video Programming or to any actual or proposed transaction with any
26 MVPD, provided that response does not disclose Defendants’ negotiation strategy; or
27

H.

After securing advice of counsel and in consultation with the Antitrust

28 Compliance Officer, engaging in conduct in accordance with the doctrine established in
Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127

1

(1961), United Mine Workers v. Pennington, 381 U.S. 657 (1965), and their progeny.
V.

2
3

A.

COMPLIANCE PROGRAM

Defendants shall implement a training and antitrust compliance program to

4

instruct their executives and employees responsible for, or participating in, content

5

carriage negotiations that Communicating Competitively Sensitive Information with

6

competing MVPDs when not reasonably related to a lawful purpose may be a violation

7

of the antitrust laws. This compliance program shall include designating, within thirty

8

(30) days of entry of this Final Judgment, an Antitrust Compliance Officer with

9

responsibility for implementing the training and antitrust compliance program and

10 achieving full compliance with this Final Judgment.
11

B.

The Antitrust Compliance Officer shall, on a continuing basis, be

12 responsible for the following:
1.

13

Distributing, within thirty (30) days from the effective date hereof, a

14

copy of this Final Judgment to (i) each of the officers of Defendants who has

15

duties or responsibilities related to the acquisition of Video Programming or to

16

Video Programming carriage plans and decisions; (ii) each of the other

17

employees and agents of Defendants who has duties or responsibilities related to

18

the acquisition of Video Programming or to Video Programming carriage plans

19

and decisions; and (iii) each of the other employees or agents of Defendants who

20

has duties or responsibilities related to reviewing any submissions to Defendants’

21

ethics portal or to any other anonymous suggestion or complaint vehicle

22

available to Defendants’ employees or agents.
2.

23
24

Distributing within thirty (30) days a copy of this Final Judgment to

any person who succeeds to a position described in Section V(B)(1).
3.

25

Briefing annually those persons identified in Sections V(B)(1) and

26

(2) on the meaning and requirements of this Final Judgment and of the antitrust

27

laws, and advising them that Defendants’ legal advisors are available to confer

28

with them regarding compliance with both the Final Judgment and the antitrust
laws.

4.

1

Obtaining from each person identified in Sections V(B)(1) and (2)

2

an annual written certification that he or she: (i) has read, understands, and

3

agrees to abide by the terms of this Final Judgment; (ii) is not aware of any

4

violation of this Final Judgment that has not been reported to the Antitrust

5

Compliance Officer; (iii) has been advised and understands that his or her failure

6

to comply with this Final Judgment may result in an enforcement action for civil

7

or criminal contempt of court against Defendants or any other person who

8

violates this Final Judgment; and (iv) has maintained and submitted a record of

9

all Communications of Competitively Sensitive Information with any MVPD,

10

other than those consistent with Sections IV(D), (E), (F), (G) and (H).
5.

11

Maintaining (i) a record of all certifications received pursuant to

12

Section V(B)(4); (ii) a file of all documents in existence at the commencement of

13

and related to any investigation by the Antitrust Compliance Officer of any

14

alleged violation of this Final Judgment; and (iii) a record of all communications

15

generated after the commencement of any such investigation and related to any

16

such alleged violation, which shall identify the date and place of the

17

communication, the persons involved, the subject matter of the communication,

18

and the results of any related investigation.
6.

19

Maintaining, and furnishing to the United States, on a quarterly

20

basis for the first year and annually thereafter, a log of all Communications,

21

between or among any person identified in Sections V(B)(1) and (2) and any

22

person employed by or associated with any other MVPD, relating, in whole or in

23

part, to Competitively Sensitive Information, excluding those communications

24

consistent with Sections IV(D), (E), (F), (G) and (H). The log shall include but

25

not be limited to an identification (by name, employer and job title) of all

26

participants in the communication; the date, time, and duration of the

27

communication; the medium of the communication; and a description of the

28

subject matter of the communication.
C.

If Defendants’ Antitrust Compliance Officer learns of any allegations of a

1

violation of any of the terms and conditions contained in this Final Judgment,

2

Defendants shall immediately investigate to determine if a violation has occurred and

3

appropriate action is required to comply with this Final Judgment. If Defendants’

4

Antitrust Compliance Officer learns of any violation of any of the terms and conditions

5

contained in this Final Judgment, Defendants shall immediately take appropriate action

6

to terminate or modify the activity so as to comply with this Final Judgment.

7

Defendants shall report any such investigation or action in the annual compliance

8

statement required by Section VI(B).

9

D.

If Defendants’ Antitrust Compliance Officer learns any Competitively

10 Sensitive Information has been communicated from an MVPD to any person identified
11 in Sections V(B)(1) and (2), excluding those communications consistent with Sections
12 IV(D), (E), (F), (G) and (H), the Antitrust Compliance Officer shall instruct that person
13 that he or she must not consider the Competitively Sensitive Information in any way,
14 shall advise counsel for the MVPD which communicated the Competitively Sensitive
15 Information that such information must not be communicated to Defendants, and report
16 the circumstances of the Communication of the Competitively Sensitive Information
17 and the response by the Antitrust Compliance Officer in the annual compliance
18 statement required by Section VI(B).
VI.

19
20

A.

CERTIFICATION

Within sixty (60) days after entry of this Final Judgment, Defendants shall

21 certify to Plaintiff whether they have designated an Antitrust Compliance Officer and
22 have distributed the Final Judgment in accordance with Section V(B) above. This
23 certification shall include the name, title, business address, email address, and business
24 phone number of the Person designated as Antitrust Compliance Officer.
25

B.

For the term of this Final Judgment, on or before its anniversary date,

26 Defendants shall file with the Plaintiff an annual statement as to the fact and manner of
27 its compliance with the provisions of Section V, including the record(s) created in
28 accordance with Section V(B)(4) above.
VII.

COMPLIANCE INSPECTION

1

A.

For purposes of determining or securing compliance with this Final

2

Judgment, or of determining whether this Final Judgment should be modified or

3

vacated, and subject to any legally recognized privilege, from time to time authorized

4

representatives of the United States Department of Justice, including consultants and

5

other persons retained by the United States shall, upon written request of an authorized

6

representative of the Assistant Attorney General in charge of the Antitrust Division,

7

and on reasonable notice to Defendants, be permitted:
1.

8

access during Defendants’ office hours to inspect and copy, or at the

9

United States’ option, to require Defendants and their members to provide copies

10

of all books, ledgers, accounts, records, and documents in their possession,

11

custody, or control, relating to any matters contained in this Final Judgment; and
2.

12

to interview, either informally or on the record, Defendants’

13

officers, employees, or other representatives, who may have their individual

14

counsel present, regarding such matters. The interviews shall be subject to the

15

reasonable convenience of the interviewee and without restraint or interference

16

by Defendants.

17

B.

Upon the written request of an authorized representative of the Assistant

18 Attorney General in charge of the Antitrust Division, Defendants shall submit written
19 reports and interrogatory responses, under oath if requested, relating to any of the
20 matters contained in this Final Judgment as may be requested.
21

C.

No information or documents obtained by the means provided in this

22 section shall be divulged by the United States to any person other than an authorized
23 representative of the executive branch of the United States, except in the course of legal
24 proceedings to which the United States is a party (including grand jury proceedings), or
25 for the purpose of securing compliance with this Final Judgment, or as otherwise
26 required by law.
27

D.

If at the time information or documents are furnished by Defendants to the

28 United States, Defendants identify in writing the material in any such information or
documents to which a claim of protection may be asserted under Rule 26(c)(7) of the

1

Federal Rules of Civil Procedure, and Defendants mark each pertinent page of such

2

material, “Subject to claim of protection under Rule 26(c)(7) of the Federal Rules of

3

Civil Procedure,” then the United States shall give ten (10) calendar days notice prior to

4

divulging such material in any legal proceeding (other than a grand jury proceeding).

5
6

VIII.

RETENTION OF JURISDICTION

This Court retains jurisdiction to enable any party to this Final Judgment to apply

7

to this Court at any time for further orders and directions as may be necessary or

8

appropriate to carry out or construe this Final Judgment, to modify any of its

9

provisions, to enforce compliance, and to punish violations of its provisions.

10
11

IX.

EXPIRATION OF FINAL JUDGMENT

Unless this Court grants an extension, this Final Judgment shall expire five (5)

12 years from its date of entry.
13
14

X.

PUBLIC INTEREST DETERMINATION

The parties have complied with the requirements of the Antitrust Procedures and

15 Penalties Act, 15 U.S.C. § 16, including making copies available to the public of this
16 Final Judgment, the Competitive Impact Statement, and any comments thereon and the
17 United States’ responses to comments. Based upon the record before the Court, which
18 includes the Competitive Impact Statement and any comments and responses to
19 comments filed with the Court, entry of this Final Judgment is in the public interest.
20

SO ORDERED:

21
22 Dated: October 2, 2017
23
24
25
26
27
28

________________________________
Michael W. Fitzgerald
United States District Judge