The U.S. Department of Justice is suing AT&T because its DirecTV unit allegedly orchestrated a backroom deal with competitors to not carry the sole channel that broadcasts Dodgers baseball in Los Angeles.
The civil antitrust lawsuit filed Wednesday in Los Angeles federal court accuses DirecTV of swapping information with cable companies Cox Communications Inc., Charter Communications Inc. and AT&T — before it acquired DirecTV — during negotiations to carry SportsNet LA, the network owned by the Dodgers.
The complaint says the companies made the agreements to prevent competitors from offering the channel to lure customers. Dodger fans were bitter they could only watch games through Time Warner Cable — now owned by Charter — the past three seasons.
The government says DirecTV was the ringleader because it was the only company that unlawfully talked to multiple rivals, and says that DirecTV executives acknowledged that the satellite-TV company would be in a stronger position if competing TV providers also did not carry the Dodgers channel.
David McAtee, the general counsel for AT&T, which bought DirecTV in July 2015, said in a statement that cable and satellite TV providers chose not to carry the channel because the companies did not want to pass inflated prices on to customers for a channel devoted only to the Dodgers. He said AT&T looked forward to presenting its side of the case in court.
The Justice Department's suit comes as it also needs to evaluate the telecoms giant's proposed $85.4 billion acquisition of Time Warner, the owner of channels including HBO, CNN and TBS as well as film and TV studios.
AT&T's CEO has said that he expects that any concerns regulators have regarding its Time Warner deal could be addressed with conditions on the merger.
But John Bergmayer, of public-interest group Public Knowledge, said in a statement Wednesday that the Justice Department's complaint illustrates that it is difficult for the government to monitor companies' behavior and enforce any restrictions on behavior that result from deal conditions.
Tali Arbel contributed to this report from New York.