United States v. DIRECTV Group Holdings, LLC, et al.; Public Comment and Response on Proposed Final Judgment, 40597-40601 [2017-18091]

Download as PDF sradovich on DSK3GMQ082PROD with NOTICES Federal Register / Vol. 82, No. 164 / Friday, August 25, 2017 / Notices documents filed in connection with this investigation are or will be available for inspection during official business hours (8:45 a.m. to 5:15 p.m.) in the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW., Washington, DC 20436, telephone (202) 205–2000. General information concerning the Commission may also be obtained by accessing its Internet server at https://www.usitc.gov. The public record for this investigation may be viewed on the Commission’s electronic docket (EDIS) at https:// edis.usitc.gov. Hearing-impaired persons are advised that information on this matter can be obtained by contacting the Commission TDD terminal on (202) 205–1810. SUPPLEMENTARY INFORMATION: The Commission instituted this investigation on January 24, 2017, based on a complaint filed by Sony Corporation of Tokyo, Japan; Sony Storage Media and Devices Corporation of Tagajo, Japan (‘‘SSMD’’); Sony DADC US Inc. of Terre Haute, Indiana; and Sony Latin America Inc. of Miami, Florida (collectively, ‘‘Sony’’), alleging a violation of section 337 of the Tariff Act of 1930, as amended, 19 U.S.C. 1337 (‘‘section 337’’). 82 FR 8209–10 (Jan 24, 2017). The complaint, as supplemented, alleges violations of section 337 by reason of infringement of certain claims of U.S. Patent Nos. 6,345,779; 6,896,959; 7,016,137; and 7,115,331 (collectively, ‘‘the patents-in-suit’’). The complaint further alleges that an industry in the United States exists as required by subsection (a)(2) of section 337. The notice of investigation names as respondents Fujifilm Holdings Corporation and Fujifilm Corporation both of Tokyo, Japan; Fujifilm Holdings America Corporation of Valhalla, New York; and Fujifilm Recording Media U.S.A., Inc. of Bedford, Massachusetts (collectively, ‘‘Fujifilm’’). Id. at 8210. The Office of Unfair Import Investigations is also named as a party. Id. On July 28, 2017, Sony filed a motion for leave to amend the complaint and notice of investigation to reflect a corporate reorganization of SSMD. Specifically, Sony seeks to replace the entity SSMD with two distinct entities: ‘‘Sony Storage Media Solutions’’ and ‘‘Sony Storage Media Manufacturing Corporation.’’ Sony submits that the reorganization did not affect the ownership of the patents-in-suit. Sony stated that its motion is unopposed by Fujifilm or OUII. On August 4, 2017, the ALJ issued the subject ID, granting Sony’s motion pursuant to Commission rule VerDate Sep<11>2014 17:40 Aug 24, 2017 Jkt 241001 210.14(b)(1). The ID finds that Sony has shown good cause to amend the complaint and notice of investigation to reflect the corporate reorganization of SSMD. The ID further finds no evidence that these amendments would harm the public interest or prejudice any party to this investigation. No petitions for review were filed and the Commission has determined not to review the subject ID. The authority for the Commission’s determination is contained in section 337 of the Tariff Act of 1930, as amended (19 U.S.C. 1337), and in Part 210 of the Commission’s Rules of Practice and Procedure (19 CFR part 210). By order of the Commission. Issued: August 22, 2017. William R. Bishop, Supervisory Hearings and Information Officer. [FR Doc. 2017–18044 Filed 8–24–17; 8:45 am] BILLING CODE 7020–02–P DEPARTMENT OF JUSTICE Antitrust Division United States v. DIRECTV Group Holdings, LLC, et al.; Public Comment and Response on Proposed Final Judgment Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 16(b)–(h), the United States hereby publishes below the comment received on the proposed Final Judgment in United States v. DIRECTV Group Holdings, LLC, et al., Case No. 2:16–cv–08150– MWF–E (C.D. Cal.), together with the Response of the United States to Public Comment. Copies of the comment and the United States’ Response are available for inspection at the Department of Justice Antitrust Division, 450 Fifth Street NW., Suite 1010, Washington, DC 20530 (telephone: 202–514–2481), on the Department of Justice’s Web site at https://www.justice.gov/atr/case/us-vdirectv-group-holdings-llc-and-att-inc, and at the Office of the Clerk of the United States District Court for the Central District of California (Western Division), 312 N. Spring Street, Los Angeles, CA 90012. Copies of any of these materials may also be obtained upon request and payment of a copying fee. Patricia A. Brink, Director of Civil Enforcement. FREDERICK S. YOUNG (DC Bar No. 421285) frederick.young@usdoj.gov PO 00000 Frm 00060 Fmt 4703 Sfmt 4703 40597 U.S. DEPARTMENT OF JUSTICE ANTITRUST DIVISION 450 5th Street NW. Washington, DC 20530 Telephone: 202–307–2869 Facsimile: 202–514–6381 Counsel for Plaintiff, UNITED STATES OF AMERICA United States District Court for the Central District of California Western Division United States of America, Plaintiff, v. DIRECTV Group Holdings, LLC, et al., Defendants. Case No. 2:16–cv–08150–MWF–E Plaintiff United States’ Response to Public Comment on the Proposed Final Judgment Judge: Hon. Michael W. Fitzgerald Pursuant to the requirements of the Antitrust Procedures and Penalties Act, 15 U.S.C. § 16(b)–(h) (‘‘APPA’’ or ‘‘Tunney Act’’), the United States hereby files the single public comment received concerning the proposed Final Judgment in this case and the United States’ response to the comment. After careful consideration of the submitted comment, the United States continues to believe that the proposed Final Judgment provides an effective and appropriate remedy for the antitrust violations alleged in the Complaint. The United States will move the Court for entry of the proposed Final Judgment after the public comment and this Response have been published in the Federal Register pursuant to 15 U.S.C. § 16(d). I. PROCEDURAL HISTORY On November 2, 2016, the United States filed a civil antitrust Complaint alleging that DIRECTV acted as the ringleader of a series of unlawful information exchanges between DIRECTV and three of its competitors— Cox Communications, Inc., Charter Communications, Inc. and AT&T (prior to its acquisition of DIRECTV)—during the companies’ parallel negotiations to carry SportsNet LA, which holds the exclusive rights to telecast almost all live Dodgers games in the Los Angeles area. The Complaint alleges that DIRECTV unlawfully exchanged competitively sensitive information with Cox, Charter and AT&T during the companies’ negotiations for the right to telecast SportsNet LA (the ‘‘Dodgers Channel’’). In 2015, Defendant AT&T acquired DIRECTV, and AT&T was included as a defendant in this action as DIRECTV’s successor in interest. The United States and Defendants subsequently reached a settlement and, on March 23, 2017, the United States filed a Stipulation and Order and proposed Final Judgment (ECF Nos. 31 E:\FR\FM\25AUN1.SGM 25AUN1 40598 Federal Register / Vol. 82, No. 164 / Friday, August 25, 2017 / Notices and 31–1). The Court entered the Stipulation and Order on March 27, 2017 (ECF No. 35). The proposed Final Judgment, if entered by the Court, would remedy the violation alleged in the Complaint by prohibiting Defendants from sharing or seeking to share competitively sensitive information with competing video distributors. Such information includes without limitation ‘‘non-public information relating to negotiating position, tactics or strategy, video programming carriage plans, pricing or pricing strategies, costs, revenues, profits, margins, output, marketing, advertising, promotion or research and development.’’ Proposed Final Judgment at 3 (ECF 31–1). At the same time, the United States filed a Competitive Impact Statement (‘‘CIS’’) (ECF No. 32), which explains how the proposed Final Judgment is designed to remedy the harm that resulted from Defendants’ conduct. As required by the Tunney Act, the United States published the proposed Final Judgment and CIS in the Federal Register on April 13, 2017. See 82 FR 17859. In addition, a summary of the terms of the proposed Final Judgment and CIS, together with directions for the submission of written comments, was published in both The Los Angeles Times and The Washington Post for seven days between April 6 and April 14, 2017. The 60-day period for public comment ended on June 13, 2016. The United States received one comment, which is described below and attached as Exhibit 1. sradovich on DSK3GMQ082PROD with NOTICES II. THE INVESTIGATION AND THE PROPOSED SETTLEMENT The proposed Final Judgment is the culmination of almost two years of investigation and litigation by the Antitrust Division of the United States Department of Justice (‘‘Department’’). The Department conducted a comprehensive inquiry into the conduct of DIRECTV and the other companies involved to determine the facts of what occurred and the impact of that conduct on competition. The Department collected more than 100,000 business documents from DIRECTV and others, conducted numerous interviews of individuals and companies with potentially relevant information, obtained deposition testimony from a number of individuals, including those involved in the relevant communications, and required the Defendants to provide interrogatory responses explaining DIRECTV’s conduct and any potential justifications for that conduct. VerDate Sep<11>2014 17:40 Aug 24, 2017 Jkt 241001 As a result of this detailed investigation, the United States alleged in the Complaint that DIRECTV was the ringleader of information-sharing agreements with three different rivals and that DIRECTV and these rivals agreed to and did exchange non-public information about each company’s ongoing negotiations to telecast the Dodgers Channel, as well as each company’s future plans to carry—or not carry—the channel. The Complaint also alleges that each company engaged in this conduct in order to obtain bargaining leverage and reduce the risk that a rival would choose to carry the Dodgers Channel (while the company did not), resulting in a loss of subscribers to that rival. The Complaint further alleges that the information learned through these unlawful agreements was a material factor in each company’s decision not to carry the Dodgers Channel, harming the competitive process for carriage of the Dodgers Channel and making it less likely that any of these companies would reach a deal because they no longer had to fear that a decision to refrain from carriage would result in subscribers switching to a competitor that offered the channel. The Complaint alleges that these agreements amounted to a restraint of trade in violation of Section 1 of the Sherman Act, which outlaws ‘‘[e]very contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States.’’ 15 U.S.C. 1. The Complaint seeks injunctive relief to prevent DIRECTV and AT&T from sharing non-public information with any other multichannel video programming distributor (‘‘MVPD’’) 1 about a variety of competitively sensitive topics concerning potential video programming distribution agreements. The proposed Final Judgment is designed to remedy the anticompetitive conduct identified in the Complaint. As explained in greater detail in the CIS, Section IV of the proposed Final Judgment provides that Defendants will not, directly or indirectly, communicate a broad array of competitively sensitive, non-public strategic information (such as negotiating strategy, carriage plans, or pricing) to any MVPD, will not request such information from any MVPD, and will not encourage or facilitate the 1 MVPD is an industry acronym standing for multichannel video programming distributor, and it applies to a variety of providers of pay television services, including satellite companies (such as DIRECTV and DISH Network), cable companies (such as Cox and Charter), and telephone companies (such as AT&T and Verizon). PO 00000 Frm 00061 Fmt 4703 Sfmt 4703 communication of such information from any MVPD. At the same time, Section IV makes clear that the proposed Final Judgment does not prohibit Defendants from sharing or receiving competitively sensitive strategic information in certain specified circumstances. The Final Judgment also requires Defendants to designate an Antitrust Compliance Officer, who is responsible for implementing training and antitrust compliance programs and achieving full compliance with the Final Judgment. This compliance program is necessary considering the extensive communications among rival executives that facilitated Defendants’ agreements. The Defendants will be subject to these compliance obligations throughout the five-year term of the proposed Final Judgment. The terms of the proposed Final Judgment closely track the relief sought in the Complaint and are intended to provide a prompt, certain and effective remedy to ensure that Defendants and their executives will not impede competition by sharing competitively sensitive information with their counterparts at rival MVPDs. The requirements and prohibitions provided for in the proposed Final Judgment will terminate Defendants’ illegal conduct, prevent recurrence of the same or similar conduct in the future, and ensure that Defendants establish a robust antitrust compliance program. The proposed Final Judgment protects consumers by putting a stop to the anticompetitive information sharing alleged in the Complaint, while permitting certain potentially beneficial collaborations and transactions as described in detail in the CIS. III. SUMMARY OF PUBLIC COMMENT AND RESPONSE OF THE UNITED STATES During the 60-day public comment period, the United States received one comment, from Joe Macera. Mr. Macera stated that, in his opinion, the fact that this case was filed also shows that collusion has occurred between DIRECTV and the owner of the Dodgers Channel, Time Warner Cable. Mr. Macera called for a separate suit against Time Warner Cable for unfair business practices and stated that this settlement should include additional relief in the form of either a fine against DIRECTV or a requirement that DIRECTV telecast live Dodgers games. The United States appreciates receiving Mr. Macera’s comment. The United States conducted a comprehensive investigation of the companies involved in the communications detailed in the E:\FR\FM\25AUN1.SGM 25AUN1 sradovich on DSK3GMQ082PROD with NOTICES Federal Register / Vol. 82, No. 164 / Friday, August 25, 2017 / Notices Complaint. Based on that investigation, and as recounted in the Complaint, the United States concluded that DIRECTV had agreed with its rival MVPDs to share competitively sensitive information about their plans to carry the Dodgers Channel. The Complaint did not allege that Time Warner Cable was involved in the alleged illegal information sharing agreements, and the Complaint does not draw any conclusions about Time Warner Cable’s conduct. It is well-settled that comments that are unrelated to the concerns identified in the Complaint are beyond the scope of this Court’s Tunney Act review. See, e.g., United States v. SBC Commc’ns, Inc., 489 F. Supp. 2d 1, 14 (D.D.C. 2007) (explaining that ‘‘a district court is not permitted to ‘reach beyond the complaint to evaluate claims that the government did not make and to inquire as to why they were not made’ ’’ (quoting United States v. Microsoft Corp., 56 F.3d 1448, 1459 (D.C. Cir. 1995))); see also United States v. U.S. Airways Group, Inc., 38 F. Supp. 3d 69, 76 (D.D.C. 2014) (‘‘A court may not ‘construct its own hypothetical case and then evaluate the decree against that case.’ ’’ (quoting Microsoft, 56 F.3d at 1459)). Accordingly, the portion of Mr. Macera’s comment addressed to Time Warner Cable’s conduct does not provide a basis for rejecting the proposed Final Judgment. Mr. Macera also called for additional relief beyond that included in the proposed Final Judgment, such as a financial penalty or a requirement that DIRECTV carry Dodgers telecasts. The Sherman Act, however, does not provide for civil penalties or civil fines. The injunctive relief sought by the Complaint has been obtained in the proposed Final Judgment, which fulfills the remedial goals of the Sherman Act to ‘‘prevent and restrain’’ antitrust violations. See 15 U.S.C. § 4 (investing district courts with equitable jurisdiction to ‘‘prevent and restrain’’ violations of the antitrust laws). No additional relief is needed to prevent and restrain DIRECTV from entering into information-sharing agreements such as those alleged in the Complaint. The United States’ Complaint in this action also did not seek a requirement that any MVPD carry the Dodgers telecasts. Similarly, and as explained in the CIS, the proposed Final Judgment is not intended to compel any MVPD to reach an agreement to carry any particular video programming, including the Dodgers Channel. Negotiations between video programmers and MVPDs are often contentious, high-stakes undertakings VerDate Sep<11>2014 17:40 Aug 24, 2017 Jkt 241001 where one or both sides threaten to walk away, or even temporarily terminate the relationship in order to secure a better deal. The proposed Final Judgment is not intended to address such negotiating tactics, or to impose any agreement upon Time Warner Cable or any MVPD that is not the result of an unfettered negotiation in the marketplace. Rather, the Final Judgment is intended to protect the competitive process for acquiring video programming from being corrupted by improper information sharing among rivals and to prevent harm to consumers when such collusion taints that competitive process and makes carriage on competitive terms less likely. IV. STANDARD OF JUDICIAL REVIEW The Clayton Act, as amended by the APPA, requires that proposed consent judgments in antitrust cases brought by the United States be subject to a sixtyday comment period, after which the court shall determine whether entry of the proposed Final Judgment ‘‘is in the public interest.’’ 15 U.S.C. § 16(e)(1). ‘‘The APPA was enacted in 1974 to preserve the integrity of and public confidence in procedures relating to settlements via consent decree procedures.’’ United States v. BNS Inc., 858 F.2d 456, 459 (9th Cir. 1988) (noting that the APPA ‘‘mandates public notice of a proposed consent decree, a competitive impact statement by the government, a sixty-day period for written public comments, and published responses to the comments’’ (citations omitted)). In making that ‘‘public interest’’ determination, the Court, in accordance with the statute as amended in 2004, is required to consider: (A) the competitive impact of such judgment, including termination of alleged violations, provisions for enforcement and modification, duration of relief sought, anticipated effects of alternative remedies actually considered, whether its terms are ambiguous, and any other competitive considerations bearing upon the adequacy of such judgment that the court deems necessary to a determination of whether the consent judgment is in the public interest; and (B) the impact of entry of such judgment upon competition in the relevant market or markets, upon the public generally and individuals alleging specific injury from the violations set forth in the complaint including consideration of the public benefit, if any, to be derived from a determination of the issues at trial. 15 U.S.C. § 16(e)(1)(A) & (B). In considering these statutory factors, the PO 00000 Frm 00062 Fmt 4703 Sfmt 4703 40599 Court’s inquiry is necessarily a limited one as the government is entitled to ‘‘broad discretion to settle with the defendant within the reaches of the public interest.’’ Microsoft, 56 F.3d at 1461; see generally SBC Commc’ns, 489 F. Supp. 2d 1 (assessing public interest standard under the Tunney Act); U.S. Airways, 38 F. Supp. 3d at 75 (explaining that the ‘‘court’s inquiry is limited’’ in Tunney Act settlements); United States v. InBev N.V./S.A., No. 08–1965, 2009 U.S. Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11, 2009) (noting that the court’s review of a consent judgment is limited and only inquires ‘‘into whether the government’s determination that the proposed remedies will cure the antitrust violations alleged in the complaint was reasonable, and whether the mechanisms to enforce the final judgment are clear and manageable’’).2 Under the APPA a court considers, among other things, the relationship between the remedy secured and the specific allegations set forth in the government’s complaint, whether the decree is sufficiently clear, whether enforcement mechanisms are sufficient, and whether the decree may positively harm third parties. See Microsoft, 56 F.3d at 1458–62; see also BNS, 858 F.2d at 462–63 (‘‘[T]he APPA does not authorize a district court to base its public interest determination on antitrust concerns in markets other than those alleged in the government’s complaint.’’); United States v. Nat’l Broad. Co., 449 F. Supp. 1127, 1144 (C.D. Cal.1978) (‘‘[I]n evaluating a proposed consent decree, one highly significant factor is the degree to which the proposed decree advances and is consistent with the government’s original prayer for relief.’’ (citation omitted)). With respect to the adequacy of the relief secured by the decree, a court may not ‘‘engage in an unrestricted evaluation of what relief would best serve the public.’’ BNS, 858 F.2d at 462 (quoting United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see also Microsoft, 56 F.3d at 1458–62; United States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 2009 U.S. Dist. LEXIS 84787, at *3. As the Ninth Circuit has explained: [t]he balancing of competing social and political interests affected by a 2 The 2004 amendments substituted ‘‘shall’’ for ‘‘may’’ in directing relevant factors for courts to consider and amended the list of factors to focus on competitive considerations and to address potentially ambiguous judgment terms. Compare 15 U.S.C. 16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); see also SBC Commc’ns, 489 F. Supp. 2d at 11 (concluding that the 2004 amendments ‘‘effected minimal changes’’ to Tunney Act review). E:\FR\FM\25AUN1.SGM 25AUN1 40600 Federal Register / Vol. 82, No. 164 / Friday, August 25, 2017 / Notices sradovich on DSK3GMQ082PROD with NOTICES proposed antitrust consent decree must be left, in the first instance, to the discretion of the Attorney General. See United States v. Nat’l Broad. Co., 449 F. Supp. 1127 (C.D. Cal. 1978). The court’s role in protecting the public interest is one of insuring that the government has not breached its duty to the public in consenting to the decree. The court is required to determine not whether a particular decree is the one that will best serve society, but whether the settlement is ‘‘within the reaches of the public interest.’’ More elaborate requirements might undermine the effectiveness of antitrust enforcement by consent decree. Bechtel, 648 F.2d at 666 (emphasis added) (additional citations omitted).3 In determining whether a proposed settlement is in the public interest, a district court ‘‘must accord deference to the government’s predictions about the efficacy of its remedies, and may not require that the remedies perfectly match the alleged violations.’’ SBC Commc’ns, 489 F. Supp. 2d at 17; see also U.S. Airways, 38 F. Supp. 3d at 75 (noting that a court should not reject the proposed remedies because it believes others are preferable); Microsoft, 56 F.3d at 1461 (noting the need for courts to be ‘‘deferential to the government’s predictions as to the effect of the proposed remedies’’); United States v. Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (noting that the court should grant due respect to the United States’ prediction as to the effect of proposed remedies, its perception of the market structure, and its views of the nature of the case). Courts have greater flexibility in approving proposed consent decrees than in crafting their own decrees following a finding of liability in a litigated matter. ‘‘[A] proposed decree must be approved even if it falls short of the remedy the court would impose on its own, as long as it falls within the range of acceptability or is ‘within the reaches of public interest.’ ’’ United States v. Am. Tel. & Tel. Co., 552 F. Supp. 131, 151 (D.D.C. 1982) (citations omitted) (quoting 3 Cf. BNS, 858 F.2d at 464 (holding that the court’s ‘‘ultimate authority under the [APPA] is limited to approving or disapproving the consent decree’’); Nat’l Broad. Co., 449 F. Supp. at 1142 (under the APPA, ‘‘a court’s power to do very much about the terms of a particular decree, even after it has given the decree maximum, rather that minimum, judicial scrutiny, is a decidedly limited power’’ (citation omitted)); United States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the court is constrained to ‘‘look at the overall picture not hypercritically, nor with a microscope, but with an artist’s reducing glass’’). See generally Microsoft, 56 F.3d at 1461 (discussing whether ‘‘the remedies [obtained in the decree are] so inconsonant with the allegations charged as to fall outside of the ‘reaches of the public interest’ ’’). VerDate Sep<11>2014 17:40 Aug 24, 2017 Jkt 241001 United States v. Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff’d sub nom. Maryland v. United States, 460 U.S. 1001 (1983).4 To meet this standard, the United States ‘‘need only provide a factual basis for concluding that the settlements are reasonably adequate remedies for the alleged harms.’’ SBC Commc’ns, 489 F. Supp. 2d at 17 (citation omitted). Moreover, the court’s role under the APPA is limited to reviewing the remedy in relationship to the violations that the United States has alleged in its Complaint, and does not authorize the court to ‘‘construct [its] own hypothetical case and then evaluate the decree against that case.’’ Microsoft, 56 F.3d at 1459; see also U.S. Airways, 38 F. Supp. 3d at 75 (noting that the court must simply determine whether there is a factual foundation for the government’s decisions such that its conclusions regarding the proposed settlements are reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (‘‘[T]he ‘public interest’ is not to be measured by comparing the violations alleged in the complaint against those the court believes could have, or even should have, been alleged.’’). Because the ‘‘court’s authority to review the decree depends entirely on the government’s exercising its prosecutorial discretion by bringing a case in the first place,’’ it follows that ‘‘the court is only authorized to review the decree itself’’ and not to ‘‘effectively redraft the complaint’’ to inquire into other matters that the United States did not pursue. Microsoft, 56 F.3d at 1459–60. Courts ‘‘cannot look beyond the complaint in making the public interest determination unless the complaint is drafted so narrowly as to make a mockery of judicial power.’’ SBC Commc’ns, 489 F. Supp. 2d at 15.5 In its 2004 amendments, Congress made clear its intent to preserve the 4 See also U.S. Airways, 38 F. Supp. 3d at 75 (noting that ‘‘room must be made for the government to grant concessions in the negotiation process for settlements’’ (quoting SBC Commc’ns, 489 F. Supp. 2d at 1461) (citing Microsoft, 56 F.3d at 1461)); United States v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985) (approving consent decree even though the court would have imposed a greater remedy). 5 See also United States v. Mid-Am. Dairymen, Inc., No. 73–CV–681–W–1, 1977 U.S. Dist. LEXIS 15858, at *22 (W.D. Mo. May 17, 1977) (‘‘Absent a showing of corrupt failure of the government to discharge its duty, the Court, in making its public interest finding, should . . . carefully consider the explanations of the government in the competitive impact statement and its responses to comments in order to determine whether those explanations are reasonable under the circumstances.’’); S. Rep. No. 93–298, at 6 (1973) (‘‘Where the public interest can be meaningfully evaluated simply on the basis of briefs and oral arguments, that is the approach that should be utilized.’’). PO 00000 Frm 00063 Fmt 4703 Sfmt 4703 practical benefits of utilizing consent decrees in antitrust enforcement, adding the unambiguous instruction that ‘‘[n]othing in this section shall be construed to require the court to conduct an evidentiary hearing or to require the court to permit anyone to intervene.’’ 15 U.S.C. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d at 76 (indicating that a court is not required to hold an evidentiary hearing or to permit intervenors as part of its review under the Tunney Act). This is what Congress intended when it enacted the Tunney Act in 1974. As Senator Tunney explained: ‘‘[t]he court is nowhere compelled to go to trial or to engage in extended proceedings which might have the effect of vitiating the benefits of prompt and less costly settlement through the consent decree process.’’ 119 Cong. Rec. 24,598 (1973) (statement of Sen. Tunney). Rather, the procedure for the public interest determination is left to the discretion of the court, with the recognition that the court’s ‘‘scope of review remains sharply proscribed by precedent and the nature of Tunney Act proceedings.’’ SBC Commc’ns, 489 F. Supp. 2d at 11. ‘‘A court can make its public interest determination based on the competitive impact statement and response to public comments alone.’’ U.S. Airways, 38 F. Supp. 3d at 76 (citation omitted). CONCLUSION After reviewing the public comment, the United States continues to believe that the proposed Final Judgment, as drafted, provides an effective and appropriate remedy for the antitrust violations alleged in the Complaint, and is therefore in the public interest. The United States will move this Court to enter the proposed Final Judgment after the comment and this response are published in the Federal Register. Dated: August 10, 2017. Respectfully submitted, PLAINTIFF UNITED STATES OF AMERICA By: /s/FREDERICK S.YOUNG FREDERICK S. YOUNG, Attorney for the United States, U.S. Department of Justice, Antitrust Division, 450 5th Street NW., Washington, DC 20530, Telephone: 202–307–2869, Facsimile: 202– 514–6381, Email: frederick.young@usdoj.gov. Exhibit 1 From: Joe Macera To: ATR-Antitrust—Internet Subject: AT&T and DirecTV Case Settlement Date: Friday, March 24, 2017 12:10:45 p.m. I am very disappointed with the DOJ decision to settle the AT&T and DirecTV case without affirmative action to end E:\FR\FM\25AUN1.SGM 25AUN1 Federal Register / Vol. 82, No. 164 / Friday, August 25, 2017 / Notices the blackout of Dodger games. In my opinion collusion has occurred between DirecTV and Time Warner Cable (TWC) which was apparent in the filing of this case. The sharing of inside, confidential information between the parties has put TWC in the position to control their monopoly for the broadcast of Dodger games by knowing where all the competitors stand, giving them an unfair advantage in their negotiations. A settlement in favor of the public would be punishment of the parties either through a fine or requirement to carry the broadcasts and a separate suit against TWC for unfair business practices. Joe Macera Email: Work Cell: Personal Cell: [FR Doc. 2017–18091 Filed 8–24–17; 8:45 am] BILLING CODE P DEPARTMENT OF JUSTICE Drug Enforcement Administration sradovich on DSK3GMQ082PROD with NOTICES Binh M. Chung, M.D.; Decision and Order On June 29, 2017, the Acting Assistant Administrator, Diversion Control Division, issued an Order to Show Cause to Binh M. Chung, M.D. (hereinafter, Registrant), of Las Vegas, Nevada. The Show Cause Order proposed the revocation of Registrant’s Certificate of Registration and the denial of any pending application to renew his registration or for a new registration, on the grounds that: (1) He ‘‘ha[s] been convicted of a felony relating to a controlled substance’’; (2) he ‘‘do[es] not have authority to handle controlled substances in . . . Nevada, the [S]tate in which [he is] registered’’; and (3) he ‘‘ha[s] committed acts which render [his] registration inconsistent with the public interest.’’ GX 2, at 1 (citing 21 U.S.C. 824(a)(2), (3), & (4)). With respect to the Agency’s jurisdiction, the Show Cause Order alleged that Registrant holds Certificate of Registration No. BC9308936, which ‘‘is valid for Drug Schedules II–V,’’ at the address of ‘‘8785 Warm Springs Rd.[,] Suite 109, Las Vegas, NV.’’ Id. The Order also alleged that his registration ‘‘expires . . . on August 31, 2017.’’ Id. As to the substantive grounds for the proceeding, the Show Cause Order alleged that ‘‘[o]n May 22, 2017, [Registrant was] found guilty of engaging in a scheme related to [his] administering ketamine to sedate patients and then raping them in [his] medical office.’’ Id. The Order alleged VerDate Sep<11>2014 17:40 Aug 24, 2017 Jkt 241001 that Registrant was found guilty in state court of ‘‘multiple sexual assault counts and multiple counts of the administering of a controlled substance to aid in the commission of a felony.’’ Id. The Order then asserted that ‘‘[t]his constitutes a conviction related to controlled substances under 21 U.S.C. 824(a)(2)’’ and ‘‘acts which are inconsistent with the public interest.’’ Id. (citing 21 U.S.C. 824(a)(4) & 823(f)(5)). The Show Cause Order further alleged that on June 23, 2015, Registrant’s medical license ‘‘was summarily suspended’’ by the Nevada Board of Medical Examiners and that he ‘‘currently lack[s] authority to handle controlled substances in Nevada, the [S]tate in which [he is] registered with the’’ Agency. Id. The Order thus asserted that Registrant’s ‘‘lack of authority to handle controlled substances in Nevada is a separate and independent ground to revoke [his] registration.’’ Id. (citing 21 U.S.C. 802(21) and 824(a)(3)). The Show Cause Order notified Registrant of his right to request a hearing on the allegations or to submit a written statement while waiving his right to a hearing, the procedure for electing either option, and the consequence of failing to elect either option. Id. at 2–3 (citing 21 CFR 1301.43). Finally, the Show Cause Order notified Registrant of his right to submit a Corrective Action Plan. Id. at 3 (citing 21 U.S.C. 824(c)(2)(C)). On June 29, 2017, a DEA Diversion Investigator personally served the Show Cause Order on Registrant who was then incarcerated at the Clark County Detention Center, Las Vegas, Nevada. GX 3, at 2. According to the Government, as of August 15, 2017, Registrant had not requested a hearing nor submitted a written statement in lieu of requesting a hearing. Supplemental Request for Final Agency Action, at 2; see also Supplemental Declaration of Diversion Investigator, at 1. The Government further represents that Registrant has not submitted a Corrective Action Plan. See Supplemental Request for Final Agency Action, at 2; see also Supplemental Declaration of Diversion Investigator, at 1–2. On July 31, 2017, the Government submitted a Request for Final Agency Action (RFAA) and an investigative record, and on August 16, 2017, it submitted a Supplemental Request for Final Agency Action. Therein, the Government seeks revocation of Registrant’s registration pursuant to each of the three grounds set forth above. PO 00000 Frm 00064 Fmt 4703 Sfmt 4703 40601 Based on the Government’s submission, I find that more than 30 days have now passed since the Show Cause Order was served on Registrant, and that neither Registrant, nor anyone purporting to represent him, has requested a hearing on the allegations or submitted a written statement in lieu of hearing. I therefore find that Registrant has waived his right to request a hearing or to submit a written statement and issue this Decision and Order based on relevant evidence in the investigative record. See 21 CFR 1301.43(d) & (e). Having reviewed the record, I conclude that the Government is entitled to relief only on the loss of state authority ground. I make the following factual findings. Findings Registrant is the holder of DEA Certificate of Registration No. BC9308936, pursuant to which he is authorized to dispense controlled substances in schedules II through V as a practitioner, at the registered address of 8785 W. Warmsprings Rd., Suite 109, Las Vegas, Nevada. GX 1. This Registration expires on August 31, 2017. Id. Registrant also holds a medical license issued by the Nevada State Board of Medical Examiners. GX 3B (Order of Summary Suspension & Notice of Hearing). However, on June 23, 2015, the Board’s Investigative Committee immediately suspended his medical license based on ‘‘preliminary findings’’ that Registrant ‘‘injected a minor female [patient] with a medication that caused her to become groggy’’ and proceeded ‘‘to abuse her.’’ Id. at 2. While the Board’s Order set a hearing for July 27, 2015 ‘‘to determine whether [the] suspension may continue,’’ according to the Board’s Web site, of which I take official notice, see 5 U.S.C. 556(e), the suspension remains in effect as of the date of this Order. I therefore find that Registrant is not currently authorized to dispense controlled substances under the laws of Nevada. On May 2, 2017, a Third Amended Indictment was issued in the criminal proceeding brought by the State of Nevada against Registrant. GX 3A, at 1. The indictment charged Registrant with, inter alia, four counts of sexual assault; one count of battery with intent to commit a sexual assault; one count of attempted sexual assault; and four counts of administering controlled substances including ketamine and/or midazolam, to aid in the commission of a felony (sexual assault and/or a kidnapping). Id. at 2–5. On May 22, 2017, following a trial, a jury found E:\FR\FM\25AUN1.SGM 25AUN1

Agencies

[Federal Register Volume 82, Number 164 (Friday, August 25, 2017)]
[Notices]
[Pages 40597-40601]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-18091]


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DEPARTMENT OF JUSTICE

Antitrust Division


United States v. DIRECTV Group Holdings, LLC, et al.; Public 
Comment and Response on Proposed Final Judgment

    Pursuant to the Antitrust Procedures and Penalties Act, 15 U.S.C. 
16(b)-(h), the United States hereby publishes below the comment 
received on the proposed Final Judgment in United States v. DIRECTV 
Group Holdings, LLC, et al., Case No. 2:16-cv-08150-MWF-E (C.D. Cal.), 
together with the Response of the United States to Public Comment.
    Copies of the comment and the United States' Response are available 
for inspection at the Department of Justice Antitrust Division, 450 
Fifth Street NW., Suite 1010, Washington, DC 20530 (telephone: 202-514-
2481), on the Department of Justice's Web site at https://www.justice.gov/atr/case/us-v-directv-group-holdings-llc-and-att-inc, 
and at the Office of the Clerk of the United States District Court for 
the Central District of California (Western Division), 312 N. Spring 
Street, Los Angeles, CA 90012. Copies of any of these materials may 
also be obtained upon request and payment of a copying fee.

Patricia A. Brink,
Director of Civil Enforcement.
FREDERICK S. YOUNG (DC Bar No. 421285)
frederick.young@usdoj.gov
U.S. DEPARTMENT OF JUSTICE
ANTITRUST DIVISION
450 5th Street NW.
Washington, DC 20530
Telephone: 202-307-2869
Facsimile: 202-514-6381
Counsel for Plaintiff,
UNITED STATES OF AMERICA

United States District Court for the Central District of California 
Western Division

United States of America, Plaintiff, v. DIRECTV Group Holdings, LLC, 
et al., Defendants.

Case No. 2:16-cv-08150-MWF-E
Plaintiff United States' Response to Public Comment on the Proposed 
Final Judgment
Judge: Hon. Michael W. Fitzgerald
    Pursuant to the requirements of the Antitrust Procedures and 
Penalties Act, 15 U.S.C. Sec.  16(b)-(h) (``APPA'' or ``Tunney Act''), 
the United States hereby files the single public comment received 
concerning the proposed Final Judgment in this case and the United 
States' response to the comment. After careful consideration of the 
submitted comment, the United States continues to believe that the 
proposed Final Judgment provides an effective and appropriate remedy 
for the antitrust violations alleged in the Complaint. The United 
States will move the Court for entry of the proposed Final Judgment 
after the public comment and this Response have been published in the 
Federal Register pursuant to 15 U.S.C. Sec.  16(d).

I. PROCEDURAL HISTORY

    On November 2, 2016, the United States filed a civil antitrust 
Complaint alleging that DIRECTV acted as the ringleader of a series of 
unlawful information exchanges between DIRECTV and three of its 
competitors--Cox Communications, Inc., Charter Communications, Inc. and 
AT&T (prior to its acquisition of DIRECTV)--during the companies' 
parallel negotiations to carry SportsNet LA, which holds the exclusive 
rights to telecast almost all live Dodgers games in the Los Angeles 
area. The Complaint alleges that DIRECTV unlawfully exchanged 
competitively sensitive information with Cox, Charter and AT&T during 
the companies' negotiations for the right to telecast SportsNet LA (the 
``Dodgers Channel''). In 2015, Defendant AT&T acquired DIRECTV, and 
AT&T was included as a defendant in this action as DIRECTV's successor 
in interest.
    The United States and Defendants subsequently reached a settlement 
and, on March 23, 2017, the United States filed a Stipulation and Order 
and proposed Final Judgment (ECF Nos. 31

[[Page 40598]]

and 31-1). The Court entered the Stipulation and Order on March 27, 
2017 (ECF No. 35). The proposed Final Judgment, if entered by the 
Court, would remedy the violation alleged in the Complaint by 
prohibiting Defendants from sharing or seeking to share competitively 
sensitive information with competing video distributors. Such 
information includes without limitation ``non-public information 
relating to negotiating position, tactics or strategy, video 
programming carriage plans, pricing or pricing strategies, costs, 
revenues, profits, margins, output, marketing, advertising, promotion 
or research and development.'' Proposed Final Judgment at 3 (ECF 31-1). 
At the same time, the United States filed a Competitive Impact 
Statement (``CIS'') (ECF No. 32), which explains how the proposed Final 
Judgment is designed to remedy the harm that resulted from Defendants' 
conduct.
    As required by the Tunney Act, the United States published the 
proposed Final Judgment and CIS in the Federal Register on April 13, 
2017. See 82 FR 17859. In addition, a summary of the terms of the 
proposed Final Judgment and CIS, together with directions for the 
submission of written comments, was published in both The Los Angeles 
Times and The Washington Post for seven days between April 6 and April 
14, 2017. The 60-day period for public comment ended on June 13, 2016. 
The United States received one comment, which is described below and 
attached as Exhibit 1.

II. THE INVESTIGATION AND THE PROPOSED SETTLEMENT

    The proposed Final Judgment is the culmination of almost two years 
of investigation and litigation by the Antitrust Division of the United 
States Department of Justice (``Department''). The Department conducted 
a comprehensive inquiry into the conduct of DIRECTV and the other 
companies involved to determine the facts of what occurred and the 
impact of that conduct on competition. The Department collected more 
than 100,000 business documents from DIRECTV and others, conducted 
numerous interviews of individuals and companies with potentially 
relevant information, obtained deposition testimony from a number of 
individuals, including those involved in the relevant communications, 
and required the Defendants to provide interrogatory responses 
explaining DIRECTV's conduct and any potential justifications for that 
conduct.
    As a result of this detailed investigation, the United States 
alleged in the Complaint that DIRECTV was the ringleader of 
information-sharing agreements with three different rivals and that 
DIRECTV and these rivals agreed to and did exchange non-public 
information about each company's ongoing negotiations to telecast the 
Dodgers Channel, as well as each company's future plans to carry--or 
not carry--the channel. The Complaint also alleges that each company 
engaged in this conduct in order to obtain bargaining leverage and 
reduce the risk that a rival would choose to carry the Dodgers Channel 
(while the company did not), resulting in a loss of subscribers to that 
rival. The Complaint further alleges that the information learned 
through these unlawful agreements was a material factor in each 
company's decision not to carry the Dodgers Channel, harming the 
competitive process for carriage of the Dodgers Channel and making it 
less likely that any of these companies would reach a deal because they 
no longer had to fear that a decision to refrain from carriage would 
result in subscribers switching to a competitor that offered the 
channel.
    The Complaint alleges that these agreements amounted to a restraint 
of trade in violation of Section 1 of the Sherman Act, which outlaws 
``[e]very contract, combination in the form of trust or otherwise, or 
conspiracy, in restraint of trade or commerce among the several 
States.'' 15 U.S.C. 1. The Complaint seeks injunctive relief to prevent 
DIRECTV and AT&T from sharing non-public information with any other 
multichannel video programming distributor (``MVPD'') \1\ about a 
variety of competitively sensitive topics concerning potential video 
programming distribution agreements.
---------------------------------------------------------------------------

    \1\ MVPD is an industry acronym standing for multichannel video 
programming distributor, and it applies to a variety of providers of 
pay television services, including satellite companies (such as 
DIRECTV and DISH Network), cable companies (such as Cox and 
Charter), and telephone companies (such as AT&T and Verizon).
---------------------------------------------------------------------------

    The proposed Final Judgment is designed to remedy the 
anticompetitive conduct identified in the Complaint. As explained in 
greater detail in the CIS, Section IV of the proposed Final Judgment 
provides that Defendants will not, directly or indirectly, communicate 
a broad array of competitively sensitive, non-public strategic 
information (such as negotiating strategy, carriage plans, or pricing) 
to any MVPD, will not request such information from any MVPD, and will 
not encourage or facilitate the communication of such information from 
any MVPD. At the same time, Section IV makes clear that the proposed 
Final Judgment does not prohibit Defendants from sharing or receiving 
competitively sensitive strategic information in certain specified 
circumstances. The Final Judgment also requires Defendants to designate 
an Antitrust Compliance Officer, who is responsible for implementing 
training and antitrust compliance programs and achieving full 
compliance with the Final Judgment. This compliance program is 
necessary considering the extensive communications among rival 
executives that facilitated Defendants' agreements. The Defendants will 
be subject to these compliance obligations throughout the five-year 
term of the proposed Final Judgment.
    The terms of the proposed Final Judgment closely track the relief 
sought in the Complaint and are intended to provide a prompt, certain 
and effective remedy to ensure that Defendants and their executives 
will not impede competition by sharing competitively sensitive 
information with their counterparts at rival MVPDs. The requirements 
and prohibitions provided for in the proposed Final Judgment will 
terminate Defendants' illegal conduct, prevent recurrence of the same 
or similar conduct in the future, and ensure that Defendants establish 
a robust antitrust compliance program. The proposed Final Judgment 
protects consumers by putting a stop to the anticompetitive information 
sharing alleged in the Complaint, while permitting certain potentially 
beneficial collaborations and transactions as described in detail in 
the CIS.

III. SUMMARY OF PUBLIC COMMENT AND RESPONSE OF THE UNITED STATES

    During the 60-day public comment period, the United States received 
one comment, from Joe Macera. Mr. Macera stated that, in his opinion, 
the fact that this case was filed also shows that collusion has 
occurred between DIRECTV and the owner of the Dodgers Channel, Time 
Warner Cable. Mr. Macera called for a separate suit against Time Warner 
Cable for unfair business practices and stated that this settlement 
should include additional relief in the form of either a fine against 
DIRECTV or a requirement that DIRECTV telecast live Dodgers games.
    The United States appreciates receiving Mr. Macera's comment. The 
United States conducted a comprehensive investigation of the companies 
involved in the communications detailed in the

[[Page 40599]]

Complaint. Based on that investigation, and as recounted in the 
Complaint, the United States concluded that DIRECTV had agreed with its 
rival MVPDs to share competitively sensitive information about their 
plans to carry the Dodgers Channel. The Complaint did not allege that 
Time Warner Cable was involved in the alleged illegal information 
sharing agreements, and the Complaint does not draw any conclusions 
about Time Warner Cable's conduct.
    It is well-settled that comments that are unrelated to the concerns 
identified in the Complaint are beyond the scope of this Court's Tunney 
Act review. See, e.g., United States v. SBC Commc'ns, Inc., 489 F. 
Supp. 2d 1, 14 (D.D.C. 2007) (explaining that ``a district court is not 
permitted to `reach beyond the complaint to evaluate claims that the 
government did not make and to inquire as to why they were not made' '' 
(quoting United States v. Microsoft Corp., 56 F.3d 1448, 1459 (D.C. 
Cir. 1995))); see also United States v. U.S. Airways Group, Inc., 38 F. 
Supp. 3d 69, 76 (D.D.C. 2014) (``A court may not `construct its own 
hypothetical case and then evaluate the decree against that case.' '' 
(quoting Microsoft, 56 F.3d at 1459)). Accordingly, the portion of Mr. 
Macera's comment addressed to Time Warner Cable's conduct does not 
provide a basis for rejecting the proposed Final Judgment.
    Mr. Macera also called for additional relief beyond that included 
in the proposed Final Judgment, such as a financial penalty or a 
requirement that DIRECTV carry Dodgers telecasts. The Sherman Act, 
however, does not provide for civil penalties or civil fines. The 
injunctive relief sought by the Complaint has been obtained in the 
proposed Final Judgment, which fulfills the remedial goals of the 
Sherman Act to ``prevent and restrain'' antitrust violations. See 15 
U.S.C. Sec.  4 (investing district courts with equitable jurisdiction 
to ``prevent and restrain'' violations of the antitrust laws). No 
additional relief is needed to prevent and restrain DIRECTV from 
entering into information-sharing agreements such as those alleged in 
the Complaint.
    The United States' Complaint in this action also did not seek a 
requirement that any MVPD carry the Dodgers telecasts. Similarly, and 
as explained in the CIS, the proposed Final Judgment is not intended to 
compel any MVPD to reach an agreement to carry any particular video 
programming, including the Dodgers Channel. Negotiations between video 
programmers and MVPDs are often contentious, high-stakes undertakings 
where one or both sides threaten to walk away, or even temporarily 
terminate the relationship in order to secure a better deal. The 
proposed Final Judgment is not intended to address such negotiating 
tactics, or to impose any agreement upon Time Warner Cable or any MVPD 
that is not the result of an unfettered negotiation in the marketplace. 
Rather, the Final Judgment is intended to protect the competitive 
process for acquiring video programming from being corrupted by 
improper information sharing among rivals and to prevent harm to 
consumers when such collusion taints that competitive process and makes 
carriage on competitive terms less likely.

IV. STANDARD OF JUDICIAL REVIEW

    The Clayton Act, as amended by the APPA, requires that proposed 
consent judgments in antitrust cases brought by the United States be 
subject to a sixty-day comment period, after which the court shall 
determine whether entry of the proposed Final Judgment ``is in the 
public interest.'' 15 U.S.C. Sec.  16(e)(1). ``The APPA was enacted in 
1974 to preserve the integrity of and public confidence in procedures 
relating to settlements via consent decree procedures.'' United States 
v. BNS Inc., 858 F.2d 456, 459 (9th Cir. 1988) (noting that the APPA 
``mandates public notice of a proposed consent decree, a competitive 
impact statement by the government, a sixty-day period for written 
public comments, and published responses to the comments'' (citations 
omitted)). In making that ``public interest'' determination, the Court, 
in accordance with the statute as amended in 2004, is required to 
consider:
    (A) the competitive impact of such judgment, including termination 
of alleged violations, provisions for enforcement and modification, 
duration of relief sought, anticipated effects of alternative remedies 
actually considered, whether its terms are ambiguous, and any other 
competitive considerations bearing upon the adequacy of such judgment 
that the court deems necessary to a determination of whether the 
consent judgment is in the public interest; and
    (B) the impact of entry of such judgment upon competition in the 
relevant market or markets, upon the public generally and individuals 
alleging specific injury from the violations set forth in the complaint 
including consideration of the public benefit, if any, to be derived 
from a determination of the issues at trial.
    15 U.S.C. Sec.  16(e)(1)(A) & (B). In considering these statutory 
factors, the Court's inquiry is necessarily a limited one as the 
government is entitled to ``broad discretion to settle with the 
defendant within the reaches of the public interest.'' Microsoft, 56 
F.3d at 1461; see generally SBC Commc'ns, 489 F. Supp. 2d 1 (assessing 
public interest standard under the Tunney Act); U.S. Airways, 38 F. 
Supp. 3d at 75 (explaining that the ``court's inquiry is limited'' in 
Tunney Act settlements); United States v. InBev N.V./S.A., No. 08-1965, 
2009 U.S. Dist. LEXIS 84787, at *3 (D.D.C. Aug. 11, 2009) (noting that 
the court's review of a consent judgment is limited and only inquires 
``into whether the government's determination that the proposed 
remedies will cure the antitrust violations alleged in the complaint 
was reasonable, and whether the mechanisms to enforce the final 
judgment are clear and manageable'').\2\
---------------------------------------------------------------------------

    \2\ The 2004 amendments substituted ``shall'' for ``may'' in 
directing relevant factors for courts to consider and amended the 
list of factors to focus on competitive considerations and to 
address potentially ambiguous judgment terms. Compare 15 U.S.C. 
16(e) (2004), with 15 U.S.C. 16(e)(1) (2006); see also SBC Commc'ns, 
489 F. Supp. 2d at 11 (concluding that the 2004 amendments 
``effected minimal changes'' to Tunney Act review).
---------------------------------------------------------------------------

    Under the APPA a court considers, among other things, the 
relationship between the remedy secured and the specific allegations 
set forth in the government's complaint, whether the decree is 
sufficiently clear, whether enforcement mechanisms are sufficient, and 
whether the decree may positively harm third parties. See Microsoft, 56 
F.3d at 1458-62; see also BNS, 858 F.2d at 462-63 (``[T]he APPA does 
not authorize a district court to base its public interest 
determination on antitrust concerns in markets other than those alleged 
in the government's complaint.''); United States v. Nat'l Broad. Co., 
449 F. Supp. 1127, 1144 (C.D. Cal.1978) (``[I]n evaluating a proposed 
consent decree, one highly significant factor is the degree to which 
the proposed decree advances and is consistent with the government's 
original prayer for relief.'' (citation omitted)). With respect to the 
adequacy of the relief secured by the decree, a court may not ``engage 
in an unrestricted evaluation of what relief would best serve the 
public.'' BNS, 858 F.2d at 462 (quoting United States v. Bechtel Corp., 
648 F.2d 660, 666 (9th Cir. 1981)); see also Microsoft, 56 F.3d at 
1458-62; United States v. Alcoa, Inc., 152 F. Supp. 2d 37, 40 (D.D.C. 
2001); InBev, 2009 U.S. Dist. LEXIS 84787, at *3. As the Ninth Circuit 
has explained:
    [t]he balancing of competing social and political interests 
affected by a

[[Page 40600]]

proposed antitrust consent decree must be left, in the first instance, 
to the discretion of the Attorney General. See United States v. Nat'l 
Broad. Co., 449 F. Supp. 1127 (C.D. Cal. 1978). The court's role in 
protecting the public interest is one of insuring that the government 
has not breached its duty to the public in consenting to the decree. 
The court is required to determine not whether a particular decree is 
the one that will best serve society, but whether the settlement is 
``within the reaches of the public interest.'' More elaborate 
requirements might undermine the effectiveness of antitrust enforcement 
by consent decree.
    Bechtel, 648 F.2d at 666 (emphasis added) (additional citations 
omitted).\3\
---------------------------------------------------------------------------

    \3\ Cf. BNS, 858 F.2d at 464 (holding that the court's 
``ultimate authority under the [APPA] is limited to approving or 
disapproving the consent decree''); Nat'l Broad. Co., 449 F. Supp. 
at 1142 (under the APPA, ``a court's power to do very much about the 
terms of a particular decree, even after it has given the decree 
maximum, rather that minimum, judicial scrutiny, is a decidedly 
limited power'' (citation omitted)); United States v. Gillette Co., 
406 F. Supp. 713, 716 (D. Mass. 1975) (noting that, in this way, the 
court is constrained to ``look at the overall picture not 
hypercritically, nor with a microscope, but with an artist's 
reducing glass''). See generally Microsoft, 56 F.3d at 1461 
(discussing whether ``the remedies [obtained in the decree are] so 
inconsonant with the allegations charged as to fall outside of the 
`reaches of the public interest' '').
---------------------------------------------------------------------------

    In determining whether a proposed settlement is in the public 
interest, a district court ``must accord deference to the government's 
predictions about the efficacy of its remedies, and may not require 
that the remedies perfectly match the alleged violations.'' SBC 
Commc'ns, 489 F. Supp. 2d at 17; see also U.S. Airways, 38 F. Supp. 3d 
at 75 (noting that a court should not reject the proposed remedies 
because it believes others are preferable); Microsoft, 56 F.3d at 1461 
(noting the need for courts to be ``deferential to the government's 
predictions as to the effect of the proposed remedies''); United States 
v. Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) 
(noting that the court should grant due respect to the United States' 
prediction as to the effect of proposed remedies, its perception of the 
market structure, and its views of the nature of the case). Courts have 
greater flexibility in approving proposed consent decrees than in 
crafting their own decrees following a finding of liability in a 
litigated matter. ``[A] proposed decree must be approved even if it 
falls short of the remedy the court would impose on its own, as long as 
it falls within the range of acceptability or is `within the reaches of 
public interest.' '' United States v. Am. Tel. & Tel. Co., 552 F. Supp. 
131, 151 (D.D.C. 1982) (citations omitted) (quoting United States v. 
Gillette Co., 406 F. Supp. 713, 716 (D. Mass. 1975)), aff'd sub nom. 
Maryland v. United States, 460 U.S. 1001 (1983).\4\ To meet this 
standard, the United States ``need only provide a factual basis for 
concluding that the settlements are reasonably adequate remedies for 
the alleged harms.'' SBC Commc'ns, 489 F. Supp. 2d at 17 (citation 
omitted).
---------------------------------------------------------------------------

    \4\ See also U.S. Airways, 38 F. Supp. 3d at 75 (noting that 
``room must be made for the government to grant concessions in the 
negotiation process for settlements'' (quoting SBC Commc'ns, 489 F. 
Supp. 2d at 1461) (citing Microsoft, 56 F.3d at 1461)); United 
States v. Alcan Aluminum Ltd., 605 F. Supp. 619, 622 (W.D. Ky. 1985) 
(approving consent decree even though the court would have imposed a 
greater remedy).
---------------------------------------------------------------------------

    Moreover, the court's role under the APPA is limited to reviewing 
the remedy in relationship to the violations that the United States has 
alleged in its Complaint, and does not authorize the court to 
``construct [its] own hypothetical case and then evaluate the decree 
against that case.'' Microsoft, 56 F.3d at 1459; see also U.S. Airways, 
38 F. Supp. 3d at 75 (noting that the court must simply determine 
whether there is a factual foundation for the government's decisions 
such that its conclusions regarding the proposed settlements are 
reasonable); InBev, 2009 U.S. Dist. LEXIS 84787, at *20 (``[T]he 
`public interest' is not to be measured by comparing the violations 
alleged in the complaint against those the court believes could have, 
or even should have, been alleged.''). Because the ``court's authority 
to review the decree depends entirely on the government's exercising 
its prosecutorial discretion by bringing a case in the first place,'' 
it follows that ``the court is only authorized to review the decree 
itself'' and not to ``effectively redraft the complaint'' to inquire 
into other matters that the United States did not pursue. Microsoft, 56 
F.3d at 1459-60. Courts ``cannot look beyond the complaint in making 
the public interest determination unless the complaint is drafted so 
narrowly as to make a mockery of judicial power.'' SBC Commc'ns, 489 F. 
Supp. 2d at 15.\5\
---------------------------------------------------------------------------

    \5\ See also United States v. Mid-Am. Dairymen, Inc., No. 73-CV-
681-W-1, 1977 U.S. Dist. LEXIS 15858, at *22 (W.D. Mo. May 17, 1977) 
(``Absent a showing of corrupt failure of the government to 
discharge its duty, the Court, in making its public interest 
finding, should . . . carefully consider the explanations of the 
government in the competitive impact statement and its responses to 
comments in order to determine whether those explanations are 
reasonable under the circumstances.''); S. Rep. No. 93-298, at 6 
(1973) (``Where the public interest can be meaningfully evaluated 
simply on the basis of briefs and oral arguments, that is the 
approach that should be utilized.'').
---------------------------------------------------------------------------

    In its 2004 amendments, Congress made clear its intent to preserve 
the practical benefits of utilizing consent decrees in antitrust 
enforcement, adding the unambiguous instruction that ``[n]othing in 
this section shall be construed to require the court to conduct an 
evidentiary hearing or to require the court to permit anyone to 
intervene.'' 15 U.S.C. 16(e)(2); see also U.S. Airways, 38 F. Supp. 3d 
at 76 (indicating that a court is not required to hold an evidentiary 
hearing or to permit intervenors as part of its review under the Tunney 
Act). This is what Congress intended when it enacted the Tunney Act in 
1974. As Senator Tunney explained: ``[t]he court is nowhere compelled 
to go to trial or to engage in extended proceedings which might have 
the effect of vitiating the benefits of prompt and less costly 
settlement through the consent decree process.'' 119 Cong. Rec. 24,598 
(1973) (statement of Sen. Tunney). Rather, the procedure for the public 
interest determination is left to the discretion of the court, with the 
recognition that the court's ``scope of review remains sharply 
proscribed by precedent and the nature of Tunney Act proceedings.'' SBC 
Commc'ns, 489 F. Supp. 2d at 11. ``A court can make its public interest 
determination based on the competitive impact statement and response to 
public comments alone.'' U.S. Airways, 38 F. Supp. 3d at 76 (citation 
omitted).

CONCLUSION

    After reviewing the public comment, the United States continues to 
believe that the proposed Final Judgment, as drafted, provides an 
effective and appropriate remedy for the antitrust violations alleged 
in the Complaint, and is therefore in the public interest. The United 
States will move this Court to enter the proposed Final Judgment after 
the comment and this response are published in the Federal Register.

Dated: August 10, 2017.

Respectfully submitted,

PLAINTIFF UNITED STATES OF AMERICA
By: /s/FREDERICK S.YOUNG
FREDERICK S. YOUNG,

Attorney for the United States, U.S. Department of Justice, 
Antitrust Division, 450 5th Street NW., Washington, DC 20530, 
Telephone: 202-307-2869, Facsimile: 202-514-6381, Email: 
frederick.young@usdoj.gov.

Exhibit 1

From: Joe Macera
To: ATR-Antitrust--Internet
Subject: AT&T and DirecTV Case Settlement
Date: Friday, March 24, 2017 12:10:45 p.m.
I am very disappointed with the DOJ decision to settle the AT&T and 
DirecTV case without affirmative action to end

[[Page 40601]]

the blackout of Dodger games. In my opinion collusion has occurred 
between DirecTV and Time Warner Cable (TWC) which was apparent in the 
filing of this case. The sharing of inside, confidential information 
between the parties has put TWC in the position to control their 
monopoly for the broadcast of Dodger games by knowing where all the 
competitors stand, giving them an unfair advantage in their 
negotiations. A settlement in favor of the public would be punishment 
of the parties either through a fine or requirement to carry the 
broadcasts and a separate suit against TWC for unfair business 
practices.

Joe Macera
Email:
Work Cell:
Personal Cell:

[FR Doc. 2017-18091 Filed 8-24-17; 8:45 am]
 BILLING CODE P