DOJ Supports DIRECTV in Antitrust Appeal Against Nexstar

The Department of Justice (DOJ) has filed an amicus brief supporting DIRECTV’s appeal in its lawsuit against station owner Nexstar Media Group. This lawsuit, initially dismissed earlier this year, accuses Nexstar of colluding with two smaller broadcasters to manipulate market prices.

DIRECTV’s lawsuit, filed in 2023, targets Nexstar, along with White Knight Broadcasting and Mission Broadcasting, alleging the trio engaged in price-fixing activities that inflated costs in several U.S. markets. The core of DIRECTV’s claim is that Nexstar conspired with these independent station owners by sharing confidential data on carriage fee negotiations, effectively driving up retransmission fees.

In March, U.S. District Judge Kevin Castel dismissed the case, ruling that DIRECTV had not shown sufficient direct harm from the alleged scheme. The judge noted that DIRECTV’s decision to drop 27 channels owned by Mission and White Knight, rather than pay the higher fees, weakened its position. “DIRECTV’s injuries are too indirect and speculative to confer antitrust standing,” Castel wrote in his dismissal.

However, DIRECTV swiftly appealed the decision, arguing that the harm from price-fixing does not require direct payment of inflated prices to be considered significant. This week, the DOJ lent its support to DIRECTV’s argument against Nexstar, asserting that the lower court erred in its dismissal. The DOJ’s brief underscores that the impacts of price-fixing extend beyond direct financial losses, affecting competition and market quality.

“The harms from a price-fixing conspiracy are not so limited,” the DOJ stated in its brief. “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 legal process continues, the business relationship between DIRECTV and Nexstar remains active. In September 2023, the two companies secured a multi-year retransmission agreement covering over 170 Nexstar-owned channels. Notably, the channels owned by White Knight and Mission Broadcasting were not part of this deal.

The DOJ’s intervention adds weight to DIRECTV’s appeal, highlighting broader concerns about competitive practices in the broadcasting industry. As the case progresses, it will be closely watched for its implications on antitrust enforcement and market dynamics in the media sector.

Source: The Streamable