High-ranking antitrust enforcers, speaking at an influential D.C. legal forum, zeroed in on big tech companies’ potential for anticompetitive behavior but also signaled they may take a broader approach to policing the industry.
U.S. Justice Department antitrust chief Makan Delrahim says that existent U.S. antitrust laws are “flexible enough” to address harm caused by technology companies, in the face of growing criticism that such laws cannot tackle tech monopolies.
Officials within the DOJ’s antitrust division are looking into Comcast’s announcement last week that it will replace 17 Starz channels in its Xfinity TV package with movie channel Epix amid complaints, including by some U.S. senators, that the move is anticompetitive, sources say.
The Department of Justice on Wednesday announced the arrest of a Defense Intelligence Agency official for allegedly leaking classified information to journalists, including one with whom he was apparently in a relationship. Law enforcement officials arrested 30-year-old Henry Kyle Frese of Virginia as he arrived at work Tuesday and charged him with two counts of willful transmission of national defense information. If convicted, he faces a maximum of 20 years in prison.
Exclusives
The Justice Department will open an antitrust investigation of Facebook, a person familiar with the matter said on Wednesday, marking the fourth recent antitrust probe of the social media company.
The Justice Department’s antitrust division chief, Makan Delrahim, said Tuesday that its probes of “market-leading online platforms” such as Alphabet’s Google were a “priority” that could result in either “law enforcement or policy options as solutions.”
DOJ antitrust chief Makan Delrahim has named section chief Kathy O’Neill to a new post as senior director of investigations and litigation. As such she will be the most senior civil antitrust attorney. Most recently, she had been chief of the Antitrust Division’s transportation, energy and agriculture section.
A federal grand jury has indicted eight people on charges of conspiring to violate copyright law by running a couple of the largest unauthorized TV show and movie streaming sites, according to the Department of Justice.
Heading towards a $20 billion showdown with Comcast at the U.S. Supreme Court this fall in his long running racial discrimination lawsuit against the media giant, Byron Allen today tore into the Brian Roberts-run company and an 11th hour intervention by the Department of Justice. “This is historic,” the Entertainment Studios boss said of an Aug. 15 brief filed by the feds seeking to tighten the definitions of a Reconstruction Era statute in Comcast’s favor. “Donald Trump’s DOJ and Comcast are working together to destroy a civil rights statute in the U.S. Supreme Court.”
“Without the required divestitures, Nexstar’s merger with Tribune threatens significant competitive harm to cable and satellite TV subscribers and small businesses,” said antitrust chief Makan Delrahim. “I am pleased, however, that we have been able to reach a resolution of the division’s concerns, thanks in part to the parties’ commitment to engage in good faith settlement talks from the outset of our investigation.”
Dish says it will combine $5 billion in assets being spun off from the Sprint-T-Mobile merger with its own vast reserves of wireless spectrum to compete head-on with AT&T, Verizon and Sprint-T-Mobile. “We’ve been here before,” said Dish CEO Charlie Ergen. “When we entered pay-TV with the launch of our first satellite in 1995, we faced entrenched cable monopolies, and our direct competitor was owned by one of the largest industrial corporations in the world.”
The cable operator submitted a proposal to the Justice Department to buy certain assets being spun off by the merger of the two wireless companies, but never heard back from the agency, three sources familiar with the matter said. Instead, Justice opted for a plan to sell the assets to Dish. Justice is expected to greenlight the merger.
As part of the agreement settling DOJ’s antitrust concerns, the merging companies would spin off assets to Dish that would facilitate its entry into the wireless market as a new No. 4. The arrangement provides for Dish to acquire prepaid subscribers and wireless licenses from the merger partners, the Wall Street Journal says citing unnamed sources. Dish would also get a multiyear agreement to use the wireless companies’ network while it builds its own infrastructure.
The Justice Department said it will investigate how internet giants like Facebook, Amazon and Google have accumulated market power and whether they have acted to reduce competition. Similar inquiries are underway in Congress and at the Federal Trade Commission, which shares antitrust oversight responsibilities with the DOJ.
KDLT Says DOJ Has OK’d Sale To Gray
An internal email from the GM of Red River Broadcasting’s NBC affiliate in Sioux Falls, S.D., says the Justice Department has signed off on the $32 million sale to Gray Television first proposed in 2018.
DOJ Extends ASCAP-BMI Comments Deadline
The Department of Justice’s Antitrust Division is reviewing the antitrust consent decrees that govern ASCAP and BMI — the decrees that require that these performing rights organizations treat similarly situated licensees (and artists) in the same way and that allow a court to review the reasonableness of the rates that ASCAP and BMI propose. Those comments were initially due tomorrow, July 10, but the DOJ announced on its website that the comment deadline has been extended until Aug. 9.
Justice’s Antitrust Confusion
The Wall Street Journal editorializes: “Google and Facebook are squeezing local news by gobbling up more and more advertising dollars. Yet the Justice Department is trying to stop local TV broadcasters from combining to become more competitive. Can the antitrust cops please stop protecting the Goliaths? Consolidation could help broadcast stations sustain local news coverage amid shrinking ad revenues, which would benefit consumers. The government’s job isn’t to
prop up cable monopolies. By trying to micromanage media mergers, antitrust regulators are merely shielding dominant players from competition.” Journal subscribers can read the full editorial here.
If the Department of Justice is going to allow T-Mobile to merge with Sprint, it’s going to need more concessions from Deutsche Telekom. The German telecommunications company that will control a combined T-Mobile/Sprint is in talks with both Dish Network and the DOJ on the parameters of a divestiture and spectrum-hosting agreement that will prop up Dish as a new U.S. wireless competitor. Deutsche Telekom, Dish and the DOJ are close to an agreement, and a deal could be finalized by next week, according to people familiar with the matter.
Jessell | Defending Sinclair (Somebody’s Got To Do It)
Last week, Senators and Democratic presidential nomination rivals Elizabeth Warren, Bernie Sanders and Cory Booker called on the DOJ and FCC to investigate Sinclair’s purchase of 21 regional sports networks from Disney. Why single out Sinclair? Because they don’t like Sinclair’s right-wing, pro-Trump politics. And another thing, it’s hard to see how the FCC can single out Sinclair for doing something (circumventing ownership limits) that many other broadcasters have done with impunity.
A trio of Democratic Senators/presidential candidates — Elizabeth Warren, Cory Booker and Bernie Sanders — has asked both the FCC and Justice Department to take a hard look at Sinclair’s purchase of Disney’s (formerly Fox’s) 21 regional sports networks (RSNs), saying they are worried both about Sinclaircombining the RSNs with its TV stations to raise the price of carriage for the latter, and about the “danger” of Sinclair’s “partisan political” programming getting a wider audience.
The agreement with CBS, Cox, Scripps, Fox and Tegna requires them to “terminate and refrain from sharing revenue pacing information and other competitively sensitive information.”
WASHINGTON (AP) — The U.S. Justice Department’s antitrust chief suggested Tuesday he’ll take a broad view of how competition is harmed when assessing whether big tech firms should be broken […]
The precipitating event for Silicon Valley’s regulatory reckoning? A change in our political beliefs.
For more than 75 years, the decrees have governed the process by which these two organizations license rights to publicly perform musical works. Justice says the review is to determine whether the decrees should be maintained in their current form, modified or terminated.
The Wall Street Journal reports the Justice Department is gearing up for an antitrust investigation of Alphabet Inc.’s Google, a move that could present a major new layer of regulatory scrutiny for the search giant, according to people familiar with the matter. Journal subscribers can read the full story here.
Those looking for Justice’s decision on whether it has any antitrust issues with Tegna’s purchase of Nexstar spin-off stations will have to wait a little longer. That is because for the sixth business day in a row the Federal Trade Commission has issued no early termination notices on any deal, an unusual hiatus for such announcements.
At the Justice Department last Friday, broadcasters were joined by Facebook and Comcast Cable in arguing that they all compete with each other for local advertising dollars. Winning that argument is the first step in convincing the DOJ to stop blocking duopolies of network affiliates. “There’s a really high overlap between these media types,” said Marcien Jenckes of Comcast. “Advertisers have shifted focus from this type of media or that type media. They think instead about their overall return on their media spend.”
Speaking yesterday on day one of the Department of Justice’s two-day workshop on the local advertising market, BIA Managing Director Rick Ducey said digital media are the fastest growing sector of the market. Digital, he said, will get 40% of the local auto spend this year and nearly 50% by 2023. DOJ is holding the workshop as it reconsiders its policy of blocking duopolies comprising network affiliates in light of changes in the ad market.
Jessell | Winning Over DOJ On Duops Won’t Be Easy
This Thursday and Friday, at a “workshop” in Washington, broadcasters get to make the case to the antitrust division of the Justice Department that TV stations compete not only with each other, but also with cable and digital media like Facebook and Google. It’s nice that Justice is giving broadcasters this opportunity to air their grievances, but I’m doubtful it will trigger a change in policy, at least not in the short term.
The DOJ’s antitrust division has told the two wireless carriers that their planned merger is unlikely to be approved as currently structured, according to people familiar with the matter, casting doubt on the fate of the $26 billion deal.
The Justice Department is OK with Nexstar’s spin-offs of eight TV stations to Scripps, part of its deal to acquire Tribune. Scripps is buying eight stations in seven markets for $580 million. The sale keeps Nexstar on the right side of FCC ownership limits.
Jessell | News And Views From NAB 2019
Good feelings about the broadcasting business at the NAB last week were tempered by the slow pace of ownership regulations at the FCC and Justice Department and the threat from the ever-growing roster of direct-to-consumer streaming services. Some other random takeaways: Is the convention shrinking? | ATSC 3.0 felt more like ATSC 2.4. | There’s a repack disconnect. | Reporting on the Trump White House.
The Justice Department has warned the Academy of Motion Picture Arts and Sciences that its potential rule changes limiting the eligibility of Netflix and other streaming services for the Oscars could raise antitrust concerns and violate competition law.
As FCC Commissioner Michael O’Rielly sees it, Justice has been hostile to, say, combinations of top four TV stations in markets because it continues to hold that TV stations compete only with each other. “That’s completely wrong,” he said. “Everybody is in the same market and the big tech companies are trying to steal everybody’s lunch. We have to recognize that.”
DOJ antitrust chief Makan Delrahim slots the event for May 2-3 and says the event may result in Justice changing how it looks not only at mergers, but also at spot advertising and retrans.
Jessell | The Ergen-Locast Link And Other Vital Matters
A smorgasbord of topics this week: (1) I don’t know it for a fact, but I know that it’s true that Charlie Ergen is the money behind Locast, the OTT service that is streaming local broadcast signals. (2) Retrans is also under attack from STELAR, the law that empowers satellite operators to import distant signals of network O&Os into areas where subscribers cannot receive local affiliates off air and is up for renewal. (3) With the emergence of the new Fox Corp. this week, a forecast finds that most of its broadcast fee growth will come from reverse comp. (4) A tip of the hat to FCC Comish Michael O’Rielly for taking on the Justice Department, which has been stepping on the FCC’s turf regarding local TV ownership rules.
Federal prosecutors are conducting a criminal investigation into data deals Facebook struck with some of the world’s largest technology companies, intensifying scrutiny of the social media giant’s business practices as it seeks to rebound from a year of scandal and setbacks.
The Justice Department has signed off on the sale of 15 TV stations from Evening Post Industries’ (EPI) Cordillera Communications to Scripps for $521 million. That came in an early termination notice Tuesday released by the Federal Trade Commission, which divvies up merger reviews. The notice means that the antitrust review has been ended early with no issues that would cause the deal to be blocked or conditioned.
