Department of Justice Joins DIRECTV in Urging Appeals Court to Reconsider Nexstar Lawsuit Ruling
Department of Justice Joins DIRECTV in Urging Appeals Court to Reconsider Nexstar Lawsuit Ruling
Calling a lower court ruling ‘erroneous,’ a DOJ filing said it supported DIRECTV’s position that its suit should not have been dismissed.
DIRECTV’s fight against what it calls unfair collusion and price-fixing by station owners hasn’t ended just yet. In 2023, DIRECTV filed a lawsuit against station owner Nexstar, claiming that it was conspiring with two smaller TV channel owners to manipulate prices in several markets around the United States. That suit was dismissed in March, but DIRECTV has appealed that decision. This week, the Department of Justice filed an amicus brief in support of DIRECTV’s appeal, saying that the lower court’s decision to dismiss the case was made in error.
Key Details:
- DIRECTV says that Nexstar has colluded with White Knight and Mission Broadcasting to manipulate prices in certain areas.
- The case was dismissed because a judge found that DIRECTV had not suffered enough direct harm from the scheme.
- The DOJ brief supports the argument that a company doesn’t have to have paid fixed prices to have suffered harm from them.
DIRECTV’s suit against Nexstar was filed on grounds of antitrust violations. It alleges that Nexstar colluded with two independent station owners — Mission Broadcasting and White Knight Broadcasting — to inflate prices by sharing data on carriage fee negotiations, among other violations of the law.
DIRECTV alleges that as a result of the scheme, a retransmission dispute led to it losing 27 channels owned by Mission and White Knight. The suit was dismissed by Judge Kevin Castel in March, who said that DIRECTV had failed to demonstrate that it had suffered direct harm because it chose to drop the channels instead of paying what it saw as unfair retransmission rates for them.
“DIRECTV’s injuries are too indirect and speculative to confer antitrust standing,” Castel wrote while dismissing the case.
DIRECTV has already appealed the ruling and has now been joined by the Department of Justice. The DOJ is not taking a stance on DIRECTV’s claim that Nexstar is guilty of antitrust violations, but it does agree with DIRECTV that the company doesn’t have to actually pay manipulated prices in order to be harmed by them if a price-fixing scheme does exist. Dismissing the case on those grounds was an error by the lower court, it argues.
“The harms from a price-fixing conspiracy are not so limited,” the DOJ’s brief reads. “Price fixing corrupts the competitive process, and that anticompetitive harm can result in various antitrust injuries, such as reduced output and decreased quality, in addition to increased prices.”
While the suit works its way through the courts, it has not stopped DIRECTV and Nexstar from doing business. The two sides reached a multi-year retrans agreement in September 2023 that embraces more than 170 Nexstar-owned channels, though the White Knight and Mission stations were not included in the deal.
The case is yet another sign that the Department of Justice has a watchful eye out for any practices from media companies that it thinks could be harmful to competition. That could be a bad sign for Disney, Fox, and Warner Bros. Discovery as they try to bring the Venu Sports joint venture platform to market; the DOJ has already pledged to review the service for antitrust violations, and Fubo has filed a lawsuit on those grounds to try and halt Venu in its tracks. DIRECTV has filed a statement of support for Fubo’s lawsuit as fears about Venu’s ability to sap customers from other live TV streaming services — such as its own DIRECTV STREAM — grows.
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