ase Document 31-1 Filed 03/23/17 Page 1 of 11 Page ID #2261 ATTACHMENT A Case 2:16-cv-08150-MWF-E Document 31-1 Filed 03/23/17 Page 2 of 11 Page ID #:262 1 2 3 4 5 6 7 FREDERICK S. YOUNG (DC Bar No. 421285) frederick.young@usdoj.gov CORY BRADER (NY Bar No. 5118732) cory.brader@usdoj.gov U.S. DEPARTMENT OF JUSTICE ANTITRUST DIVISION 450 5th Street N.W. Washington, D.C. 20530 Telephone: 202-307-2869 Facsimile: 202-514-6381 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 Plaintiff, 19 20 Case No. 2:16-cv-08150-MWF-E v. PROPOSED FINAL JUDGMENT 21 DIRECTV GROUP HOLDINGS, LLC, 22 et al., 23 Hon. Michael W. Fitzgerald Defendants. 24 25 26 27 28 PROPOSED FINAL JUDGMENT, CASE NO. 2:16-CV-8150-MWF-E Case 2:16-cv-08150-MWF-E Document 31-1 Filed 03/23/17 Page 3 of 11 Page ID #:263 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. 2 PROPOSED FINAL JUDGMENT, CASE NO. 2:16-CV-8150-MWF-E Case 2:16-cv-08150-MWF-E Document 31-1 Filed 03/23/17 Page 4 of 11 Page ID #:264 1 C. “Competitively Sensitive Information” means any non-public information 2 of Defendants or any competing MVPD relating to Video Programming distribution 3 services in the United States, including without limitation non-public information 4 relating to negotiating position, tactics or strategy, Video Programming carriage plans, 5 pricing or pricing strategies, costs, revenues, profits, margins, output, marketing, 6 advertising, promotion, or research and development. 7 D. “Defendants” means DIRECTV and AT&T. 8 E. “DIRECTV” means DIRECTV Group Holdings, LLC, a Delaware 9 corporation with its headquarters in El Segundo, California, its successors and assigns, 10 and its subsidiaries, divisions, groups, affiliates, partnerships and joint ventures, and 11 their directors, officers, managers, agents, and employees. 12 F. “MFN Clause” means a contractual provision that entitles an MVPD to 13 modify a programming agreement to incorporate more favorable rates, contract terms, 14 or conditions that the Video Programmer agrees to with another MVPD. 15 G. “MVPD” means a multichannel video programming distributor as that 16 term is defined on the date of entry of this Final Judgment in 47 C.F.R. § 76.1200(b). 17 H. “Person” means any natural person, corporation, company, partnership, 18 joint venture, firm, association, proprietorship, agency, board, authority, commission, 19 office, or other business or legal entity, whether private or governmental. 20 I. “Video Programmer” means any Person that provides Video Programming 21 for distribution through MVPDs. 22 J. “Video Programming” means programming provided by, or generally 23 considered comparable to programming provided by, a television broadcast station or 24 cable network, regardless of the medium or method used for distribution. 25 26 III. APPLICABILITY This Final Judgment applies to Defendants, as defined above, and all other 27 Persons in active concert or participation with any of them who receive actual notice of 28 this Final Judgment by personal service or otherwise. 3 PROPOSED FINAL JUDGMENT, CASE NO. 2:16-CV-8150-MWF-E Case 2:16-cv-08150-MWF-E Document 31-1 Filed 03/23/17 Page 5 of 11 Page ID #:265 IV. 1 PROHIBITED CONDUCT 2 Defendants shall not, directly or indirectly: 3 A. Communicate Competitively Sensitive Information to any MVPD; 4 B. Request Competitively Sensitive Information from any MVPD; or 5 C. Encourage or facilitate the Communication of Competitively Sensitive 6 7 8 9 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 10 Compliance Officer, Communicating Competitively Sensitive Information to or 11 requesting Competitively Sensitive Information from any MVPD when such 12 communication is reasonably related to a lawful purpose, such as a lawful joint venture 13 or legally supervised due diligence for a potential transaction, or the enforcement of 14 MFN clauses; 15 E. Communicating Competitively Sensitive Information to or requesting 16 Competitively Sensitive Information from an MVPD if such Competitively Sensitive 17 Information pertains only to either (a) Defendants’ supply of Video Programming to 18 that MVPD, or (b) that MVPD’s carriage or potential carriage of Defendants’ Video 19 Programming; 20 F. Communicating Competitively Sensitive Information to or requesting 21 Competitively Sensitive Information from a Video Programmer, including one 22 affiliated with an MVPD, if such Competitively Sensitive Information pertains only to 23 either (a) that Video Programmer’s supply of Video Programming to Defendants, or (b) 24 Defendants’ carriage or potential carriage of that Video Programmer’s Video 25 Programming; 26 G. Responding to any question from any news organization related to the 27 distribution of Video Programming or to any actual or proposed transaction with any 28 MVPD, provided that response does not disclose Defendants’ negotiation strategy; or 4 PROPOSED FINAL JUDGMENT, CASE NO. 2:16-CV-8150-MWF-E Case 2:16-cv-08150-MWF-E Document 31-1 Filed 03/23/17 Page 6 of 11 Page ID #:266 1 H. After securing advice of counsel and in consultation with the Antitrust 2 Compliance Officer, engaging in conduct in accordance with the doctrine established in 3 Eastern Railroad Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127 4 (1961), United Mine Workers v. Pennington, 381 U.S. 657 (1965), and their progeny. V. 5 6 A. COMPLIANCE PROGRAM Defendants shall implement a training and antitrust compliance program to 7 instruct their executives and employees responsible for, or participating in, content 8 carriage negotiations that Communicating Competitively Sensitive Information with 9 competing MVPDs when not reasonably related to a lawful purpose may be a violation 10 of the antitrust laws. This compliance program shall include designating, within thirty 11 (30) days of entry of this Final Judgment, an Antitrust Compliance Officer with 12 responsibility for implementing the training and antitrust compliance program and 13 achieving full compliance with this Final Judgment. 14 B. The Antitrust Compliance Officer shall, on a continuing basis, be 15 responsible for the following: 16 1. Distributing, within thirty (30) days from the effective date hereof, a 17 copy of this Final Judgment to (i) each of the officers of Defendants who has 18 duties or responsibilities related to the acquisition of Video Programming or to 19 Video Programming carriage plans and decisions; (ii) each of the other 20 employees and agents of Defendants who has duties or responsibilities related to 21 the acquisition of Video Programming or to Video Programming carriage plans 22 and decisions; and (iii) each of the other employees or agents of Defendants who 23 has duties or responsibilities related to reviewing any submissions to Defendants’ 24 ethics portal or to any other anonymous suggestion or complaint vehicle 25 available to Defendants’ employees or agents. 26 27 28 2. 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. Briefing annually those persons identified in Sections V(B)(1) and 5 PROPOSED FINAL JUDGMENT, CASE NO. 2:16-CV-8150-MWF-E Case 2:16-cv-08150-MWF-E Document 31-1 Filed 03/23/17 Page 7 of 11 Page ID #:267 1 (2) on the meaning and requirements of this Final Judgment and of the antitrust 2 laws, and advising them that Defendants’ legal advisors are available to confer 3 with them regarding compliance with both the Final Judgment and the antitrust 4 laws. 5 4. Obtaining from each person identified in Sections V(B)(1) and (2) 6 an annual written certification that he or she: (i) has read, understands, and 7 agrees to abide by the terms of this Final Judgment; (ii) is not aware of any 8 violation of this Final Judgment that has not been reported to the Antitrust 9 Compliance Officer; (iii) has been advised and understands that his or her failure 10 to comply with this Final Judgment may result in an enforcement action for civil 11 or criminal contempt of court against Defendants or any other person who 12 violates this Final Judgment; and (iv) has maintained and submitted a record of 13 all Communications of Competitively Sensitive Information with any MVPD, 14 other than those consistent with Sections IV(D), (E), (F), (G) and (H). 15 5. Maintaining (i) a record of all certifications received pursuant to 16 Section V(B)(4); (ii) a file of all documents in existence at the commencement of 17 and related to any investigation by the Antitrust Compliance Officer of any 18 alleged violation of this Final Judgment; and (iii) a record of all communications 19 generated after the commencement of any such investigation and related to any 20 such alleged violation, which shall identify the date and place of the 21 communication, the persons involved, the subject matter of the communication, 22 and the results of any related investigation. 23 6. Maintaining, and furnishing to the United States, on a quarterly 24 basis for the first year and annually thereafter, a log of all Communications, 25 between or among any person identified in Sections V(B)(1) and (2) and any 26 person employed by or associated with any other MVPD, relating, in whole or in 27 part, to Competitively Sensitive Information, excluding those communications 28 consistent with Sections IV(D), (E), (F), (G) and (H). The log shall include but 6 PROPOSED FINAL JUDGMENT, CASE NO. 2:16-CV-8150-MWF-E Case 2:16-cv-08150-MWF-E Document 31-1 Filed 03/23/17 Page 8 of 11 Page ID #:268 1 not be limited to an identification (by name, employer and job title) of all 2 participants in the communication; the date, time, and duration of the 3 communication; the medium of the communication; and a description of the 4 subject matter of the communication. 5 C. If Defendants’ Antitrust Compliance Officer learns of any allegations of a 6 violation of any of the terms and conditions contained in this Final Judgment, 7 Defendants shall immediately investigate to determine if a violation has occurred and 8 appropriate action is required to comply with this Final Judgment. If Defendants’ 9 Antitrust Compliance Officer learns of any violation of any of the terms and conditions 10 contained in this Final Judgment, Defendants shall immediately take appropriate action 11 to terminate or modify the activity so as to comply with this Final Judgment. 12 Defendants shall report any such investigation or action in the annual compliance 13 statement required by Section VI(B). 14 D. If Defendants’ Antitrust Compliance Officer learns any Competitively 15 Sensitive Information has been communicated from an MVPD to any person identified 16 in Sections V(B)(1) and (2), excluding those communications consistent with Sections 17 IV(D), (E), (F), (G) and (H), the Antitrust Compliance Officer shall instruct that person 18 that he or she must not consider the Competitively Sensitive Information in any way, 19 shall advise counsel for the MVPD which communicated the Competitively Sensitive 20 Information that such information must not be communicated to Defendants, and report 21 the circumstances of the Communication of the Competitively Sensitive Information 22 and the response by the Antitrust Compliance Officer in the annual compliance 23 statement required by Section VI(B). VI. 24 25 A. CERTIFICATION Within sixty (60) days after entry of this Final Judgment, Defendants shall 26 certify to Plaintiff whether they have designated an Antitrust Compliance Officer and 27 have distributed the Final Judgment in accordance with Section V(B) above. This 28 certification shall include the name, title, business address, email address, and business 7 PROPOSED FINAL JUDGMENT, CASE NO. 2:16-CV-8150-MWF-E Case 2:16-cv-08150-MWF-E Document 31-1 Filed 03/23/17 Page 9 of 11 Page ID #:269 1 2 phone number of the Person designated as Antitrust Compliance Officer. B. For the term of this Final Judgment, on or before its anniversary date, 3 Defendants shall file with the Plaintiff an annual statement as to the fact and manner of 4 its compliance with the provisions of Section V, including the record(s) created in 5 accordance with Section V(B)(4) above. VII. 6 7 A. COMPLIANCE INSPECTION For purposes of determining or securing compliance with this Final 8 Judgment, or of determining whether this Final Judgment should be modified or 9 vacated, and subject to any legally recognized privilege, from time to time authorized 10 representatives of the United States Department of Justice, including consultants and 11 other persons retained by the United States shall, upon written request of an authorized 12 representative of the Assistant Attorney General in charge of the Antitrust Division, 13 and on reasonable notice to Defendants, be permitted: 1. 14 access during Defendants’ office hours to inspect and copy, or at the 15 United States’ option, to require Defendants and their members to provide copies 16 of all books, ledgers, accounts, records, and documents in their possession, 17 custody, or control, relating to any matters contained in this Final Judgment; and 2. 18 to interview, either informally or on the record, Defendants’ 19 officers, employees, or other representatives, who may have their individual 20 counsel present, regarding such matters. The interviews shall be subject to the 21 reasonable convenience of the interviewee and without restraint or interference 22 by Defendants. 23 B. Upon the written request of an authorized representative of the Assistant 24 Attorney General in charge of the Antitrust Division, Defendants shall submit written 25 reports and interrogatory responses, under oath if requested, relating to any of the 26 matters contained in this Final Judgment as may be requested. 27 C. No information or documents obtained by the means provided in this 28 section shall be divulged by the United States to any person other than an authorized 8 PROPOSED FINAL JUDGMENT, CASE NO. 2:16-CV-8150-MWF-E Case 2:16-cv-08150-MWF-E Document 31-1 Filed 03/23/17 Page 10 of 11 Page ID #:270 1 representative of the executive branch of the United States, except in the course of legal 2 proceedings to which the United States is a party (including grand jury proceedings), or 3 for the purpose of securing compliance with this Final Judgment, or as otherwise 4 required by law. 5 D. If at the time information or documents are furnished by Defendants to the 6 United States, Defendants identify in writing the material in any such information or 7 documents to which a claim of protection may be asserted under Rule 26(c)(7) of the 8 Federal Rules of Civil Procedure, and Defendants mark each pertinent page of such 9 material, “Subject to claim of protection under Rule 26(c)(7) of the Federal Rules of 10 Civil Procedure,” then the United States shall give ten (10) calendar days notice prior to 11 divulging such material in any legal proceeding (other than a grand jury proceeding). 12 13 VIII. RETENTION OF JURISDICTION This Court retains jurisdiction to enable any party to this Final Judgment to apply 14 to this Court at any time for further orders and directions as may be necessary or 15 appropriate to carry out or construe this Final Judgment, to modify any of its 16 provisions, to enforce compliance, and to punish violations of its provisions. 17 18 IX. EXPIRATION OF FINAL JUDGMENT Unless this Court grants an extension, this Final Judgment shall expire five (5) 19 years from its date of entry. 20 21 22 23 24 25 26 27 28 9 PROPOSED FINAL JUDGMENT, CASE NO. 2:16-CV-8150-MWF-E Case 2:16-cv-08150-MWF-E Document 31-1 Filed 03/23/17 Page 11 of 11 Page ID #:271 X. 1 2 PUBLIC INTEREST DETERMINATION The parties have complied with the requirements of the Antitrust Procedures and 3 Penalties Act, 15 U.S.C. § 16, including making copies available to the public of this 4 Final Judgment, the Competitive Impact Statement, and any comments thereon and the 5 United States’ responses to comments. Based upon the record before the Court, which 6 includes the Competitive Impact Statement and any comments and responses to 7 comments filed with the Court, entry of this Final Judgment is in the public interest. 8 SO ORDERED: 9 10 Dated: , 2017 ________________________________ Michael W. Fitzgerald United States District Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 10 PROPOSED FINAL JUDGMENT, CASE NO. 2:16-CV-8150-MWF-E