[Federal Register Volume 84, Number 163 (Thursday, August 22, 2019)]
[Notices]
[Pages 44124-44159]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-17987]
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Vol. 84
Thursday,
No. 163
August 22, 2019
Part IV
Department of Justice
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Antitrust Division
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United States v. Sinclair Broadcast Group, Inc., et al.; Proposed
Final Judgments and Competitive Impact Statement; Notice
Federal Register / Vol. 84, No. 163 / Thursday, August 22, 2019 /
Notices
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DEPARTMENT OF JUSTICE
Antitrust Division
United States v. Sinclair Broadcast Group, Inc., et al., Proposed
Final Judgments and Competitive Impact Statement
Notice is hereby given pursuant to the Antitrust Procedures and
Penalties Act, 15 U.S.C. 16(b)-(h), that proposed Final Judgments,
Stipulations, and a Competitive Impact Statement as to CBS Corporation
(``CBS''), Cox Enterprises, Inc. (``Cox''), The E.W. Scripps Company
(``Scripps''), Fox Corporation (``Fox''), and TEGNA Inc. (``TEGNA'')
have been filed with the United States District Court for the District
of Columbia in United States of America v. Sinclair Broadcast Group,
Inc., et al., Civil Action No. 1:18-cv-2609. On August 1, 2019, a
Second Amended Complaint was filed, alleging that CBS, Cox, Scripps,
Fox, and TEGNA, among others, violated Section 1 of the Sherman Act, 15
U.S.C. 1, by agreeing to unlawfully exchange station-specific,
competitively sensitive information regarding spot advertising
revenues. The proposed Final Judgments, filed on August 13, 2019,
prohibit sharing of competitively sensitive information, require
Defendants to implement antitrust compliance training programs, and
impose cooperation and reporting requirements on Defendants.
Copies of the Complaint, proposed Final Judgments, and Competitive
Impact Statement are available for inspection on the Antitrust
Division's website at http://www.justice.gov/atr and at the Office of
the Clerk of the United States District Court for the District of
Columbia. Copies of these materials may be obtained from the Antitrust
Division upon request and payment of the copying fee set by Department
of Justice regulations.
Public comment is invited within 60 days of the date of this
notice. Such comments, including the name of the submitter, and
responses thereto, will be posted on the Antitrust Division's website,
filed with the Court, and, under certain circumstances, published in
the Federal Register. Comments should be directed to Owen Kendler,
Chief, Media, Entertainment, and Professional Services Section,
Antitrust Division, Department of Justice, 450 Fifth Street NW, Suite
4000, Washington, DC 20530 (telephone: 202-616-5935).
Amy R. Fitzpatrick,
Counsel to the Director of Civil Enforcement.
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
United States Of America, 450 Fifth Street NW, Washington, DC
20530; Plaintiff, v. Sinclair Broadcast Group, Inc., 10706 Beaver
Dam Road, Hunt Valley, MD 21030; Raycom Media, Inc., 201 Monroe
Street, Montgomery, AL 36104; Tribune Media Company, 435 North
Michigan Avenue, Chicago, IL 60611; Meredith Corporation, 1716
Locust Street, Des Moines, IA 50309; Griffin Communications, LLC,
7401 N. Kelley Avenue, Oklahoma City, OK 73111; Dreamcatcher
Broadcasting, LLC, 2016 Broadway, Santa Monica, CA 90404; Nexstar
Media Group, Inc., 545 E. John Carpenter Freeway, Suite 700, Irving,
TX 75062; CBS Corporation, 51 West 52nd Street, New York, NY 10019;
Cox Enterprises, Inc., 6205-A Peachtree Dunwoody Road, Atlanta, GA
30328;, The E.W. Scripps Company, Scripps Center, 312 Walnut Street,
Suite 2800, Cincinnati, OH 45202; Fox Corporation, 1211 Avenue of
the Americas, New York, NY 10036; and, TEGNA Inc., 8350 Broad
Street, Suite 2000, McLean, VA 22102, Defendants.
Case No. 1:18-cv-2609-TSC
SECOND AMENDED COMPLAINT
The United States of America, acting under the direction of the
Attorney General of the United States, brings this civil antitrust
action to obtain equitable relief against Defendants Sinclair Broadcast
Group, Inc. (``Sinclair''), Raycom Media, Inc. (``Raycom''), Tribune
Media Company (``Tribune''), Meredith Corporation (``Meredith''),
Griffin Communications, LLC (``Griffin''), Dreamcatcher Broadcasting,
LLC (``Dreamcatcher''), Nexstar Media Group, Inc. (``Nexstar''), CBS
Corporation (``CBS''), Cox Enterprises, Inc. (``Cox''), The E.W.
Scripps Company (``Scripps''), Fox Corporation (``Fox''), and TEGNA
Inc. (``TEGNA'') alleging as follows:
I. NATURE OF THE ACTION
1. This action challenges under Section 1 of the Sherman Act
Defendants' agreements to unlawfully exchange competitively sensitive
information among broadcast television stations.
2. Sinclair, Raycom, Tribune, Meredith, Griffin, Dreamcatcher,
Nexstar, CBS, Cox, Scripps, Fox, and TEGNA (``Defendants'') and certain
other television broadcast station groups (``Other Broadcasters'')
compete in various configurations in a number of designated marketing
areas (``DMAs'') in the market for broadcast television spot
advertising. Certain national sales representation firms (``Sales Rep
Firms''), including Cox subsidiary Cox Reps, Inc. (``Cox Reps'')
represent broadcast station groups, including the Defendants, in their
sales of spot advertising to advertisers. Defendants', Other
Broadcasters', and Sales Rep Firms' concerted behavior in exchanging
competitively sensitive information has enabled the Defendants and
Other Broadcasters to reduce competition in the sale of broadcast
television spot advertising where they purport to compete head to head.
3. Defendants' agreements are restraints of trade that are unlawful
under Section 1 of the Sherman Act, 15 U.S.C. Sec. 1. The Court should
therefore enjoin Defendants from exchanging competitively sensitive
information with and among competing broadcast television stations.
II. JURISDICTION AND VENUE
4. Each Defendant sells spot advertising to advertisers throughout
the United States, or owns and operates broadcast television stations
in multiple states or in DMAs that cross state lines. Sales Rep Firms
represent broadcast stations throughout the United States, including
each of the Defendants, in the sale of spot advertising to advertisers
throughout the United States. Such activities, including the exchanges
of competitively sensitive information featured in this Complaint, are
in the flow of and substantially affect interstate commerce. The Court
has subject matter jurisdiction under Section 4 of the Sherman Act, 15
U.S.C. Sec. 4, and under 28 U.S.C. Sec. Sec. 1331 and 1337, to
prevent and restrain the Defendants from violating Section 1 of the
Sherman Act, 15 U.S.C. Sec. 1.
5. Defendants have consented to venue and personal jurisdiction in
this District. Venue is proper in this judicial district under Section
12 of the Clayton Act, 15 U.S.C. Sec. 22, and 28 U.S.C. Sec. 1391.
III. DEFENDANTS
6. Defendant Sinclair is a Maryland corporation with its principal
place of business in Hunt Valley, Maryland. Sinclair owns or operates
191 television stations in 89 DMAs and had over $3.0 billion in
revenues in 2018.
7. Defendant Raycom was a Delaware corporation with its principal
place of business in Montgomery, Alabama. Raycom owned or operated 55
television stations in 43 DMAs and had over $670 million in revenues in
2017. On January 2, 2019, Gray Television, Inc. closed on its
acquisition of Raycom.
8. Defendant Tribune is a Delaware corporation with its principal
place of business in Chicago, Illinois. Tribune
[[Page 44125]]
owns or operates 44 television stations in 33 DMAs and had over $2.0
billion in revenues in 2018.
9. Defendant Meredith is an Iowa corporation with its principal
place of business in Des Moines, Iowa. Meredith owns or operates 17
television stations in 12 DMAs and had over $2.2 billion in revenues in
2018.
10. Defendant Griffin is an Oklahoma corporation with its principal
place of business in Oklahoma City, Oklahoma. Griffin owns or operates
four television stations in two DMAs and had over $74 million in
revenues in 2018.
11. Defendant Dreamcatcher is a Delaware limited liability company
with its principal place of business in Santa Monica, California.
Dreamcatcher owns or operates three television stations in two DMAs and
had over $50 million in revenues in 2017.
12. Defendant Nexstar is a Delaware corporation with its principal
place of business in Irving, Texas. Nexstar owns or operates 171
television stations in 100 DMAs and had over $2.8 billion in revenues
in 2018.
13. Defendant CBS is a Delaware corporation with its principal
place of business in New York, New York. CBS owns or operates 28
television stations in 18 DMAs, and had over $14.5 billion in revenues
in 2018.
14. Defendant Cox is a Delaware corporation with its principal
place of business in Atlanta, Georgia. Cox owns or operates 14
television stations in 10 DMAs, owns Cox Reps, and had an estimated $20
billion in revenues in 2018.
15. Defendant Scripps is an Ohio corporation with its principal
place of business in Cincinnati, Ohio. Scripps owns or operates 60
television stations in 42 DMAs, and had over $917 million in revenues
in 2018.
16. Defendant Fox is a Delaware corporation with its principal
place of business in New York, New York. Fox owns or operates 17
television stations in 17 DMAs. Fox is a corporate entity recently
created from certain former 21st Century Fox assets, including its
broadcast station assets, after The Walt Disney Company acquired 21\st\
Century Fox and spun-out Fox. 21\st\ Century Fox's television segment
earned over $5 billion in 2017.
17. Defendant TEGNA is a Delaware corporation with its principal
place of business in McLean, Virginia. TEGNA owns or operates 49
television stations in 41 DMAs, and had $2.2 billion in revenues in
2018.
IV. INDUSTRY BACKGROUND
18. Broadcast television is important to both viewers and
advertisers. For viewers, broadcast stations, including local
affiliates of the networks ABC, CBS, FOX, and NBC (collectively, the
``Big 4'' stations), offer not only highly rated entertainment and
sports programming, but also local reporting of the news and events in
their own communities and regions. The wide popularity of broadcast
station programming--and the concomitant opportunity to reach a large
local audience--also make broadcast television critical to advertisers,
including local businesses that seek to reach potential customers in
their own communities.
19. Broadcast stations sell advertising ``spots'' during breaks in
their programming. An advertiser purchases spots from a broadcast
station to communicate its message to viewers within the DMA in which
the broadcast television station is located.
20. Broadcast stations typically divide their sale of spot
advertising into two categories: local sales and national sales. Local
sales are sales a broadcast station makes through its own local sales
staff, typically to advertisers located within the DMA. National sales
are sales a broadcast station makes through either a Sales Rep Firm or
through a centrally located broadcast group staff, typically to
regional or national advertisers.
21. Sales Rep Firms represent broadcast stations in negotiations
with advertisers' or advertisers' agents regarding the sale of
broadcast stations' spot advertising. There are two primary Sales Rep
Firms in the United States, including Cox Reps. Often a Sales Rep Firm
represents two or more competing stations in the same DMA. In those
cases, the Sales Rep Firms purportedly erect firewalls to prevent
coordination and information sharing between sales teams representing
competing stations.
V. THE UNLAWFUL AGREEMENTS
22. Defendants, Other Broadcasters, and Sales Rep Firms have agreed
in many DMAs across the United States to reciprocally exchange revenue
pacing information. Certain Defendants also engaged in the exchange of
other forms of competitively sensitive sales information in certain
DMAs. Pacing compares a broadcast station's revenues booked for a
certain time period to the revenues booked for the same point in time
in the previous year. Pacing indicates how each station is performing
versus the rest of the market and provides insight into each station's
remaining spot advertising inventory for the period.
23. Defendants' exchange of competitively sensitive information has
taken at least two forms.
24. First, Defendants and Other Broadcasters regularly exchanged
pacing information through the Sales Rep Firms, exchanges which the
Sales Rep Firms agreed to facilitate or knowingly facilitated. At least
once per quarter, but frequently more often, the Sales Rep Firms
representing the Big 4 stations in a DMA exchanged real-time pacing
information regarding each station's revenues, and reported the
information to the Defendants and the other Big 4 station owners in the
DMA. Typically, the exchanges included data on individual stations'
booked sales for current and future months as well as a comparison to
past periods. To the extent a Sales Rep Firm represents more than one
Big 4 station in a DMA through sales teams separated by a supposed
firewall, the exchange of pacing and other competitively sensitive
information occurred between the sales teams and through those
firewalls. Once given to the Defendants and Other Broadcasters in the
DMA, the competitors' pacing information was then disseminated to the
stations' sales managers and other individuals with authority over
pricing and sales for the broadcast stations. These exchanges occurred
with Defendants' knowledge and frequently at Defendants' instruction,
and occurred in DMAs across the United States.
25. Second, in some DMAs, Defendants and Other Broadcasters
exchanged competitively sensitive information, including real-time
pacing information for booked sales for current and future months,
directly between broadcast station employees. These exchanges
predominantly concerned local sales, but sometimes pertained to all
sales or national sales.
26. These exchanges of pacing information allowed stations to
better understand, in real time, the availability of inventory on
competitors' stations, which is often a key factor affecting
negotiations with buyers over spot advertising prices. The exchanges
also helped stations to anticipate whether competitors were likely to
raise, maintain, or lower spot advertising prices. Understanding
competitors' pacing can help stations gauge competitors' and
advertisers' negotiation strategies, inform their own pricing
strategies, and help them resist more effectively advertisers' attempts
to obtain lower prices by playing stations off of one another.
Defendants' information exchanges therefore distorted the normal price-
setting mechanism in the spot advertising market and harmed the
competitive process.
[[Page 44126]]
27. Defendants' and Other Broadcasters' regular information
exchanges, directly and through the Sales Rep Firms, reflect concerted
action between horizontal competitors in the broadcast television spot
advertising market.
VI. VIOLATION ALLEGED
(Violation of Section 1 of the Sherman Act)
28. The United States repeats and realleges paragraphs 1 through 26
as if fully set forth herein.
29. Defendants violated Section 1 of the Sherman Act, 15 U.S.C.
Sec. 1, by agreeing to exchange competitively sensitive information,
either directly or through Sales Rep Firms. Cox Reps also violated
Section 1 of the Sherman Act, 15 U.S.C. Sec. 1, by agreeing to or
knowingly facilitating the exchange of competitively sensitive
information among another Sales Rep Firm, certain Defendants, and Other
Broadcasters. Defendants' exchange of pacing information resulted in
anticompetitive effects in the broadcast television spot advertising
markets in many DMAs throughout the United States.
30. The scheme consists of exchanges between Defendants and Other
Broadcasters, either directly or through the Sales Rep Firms, in many
DMAs, of their stations' revenue pacing information or, for certain
Defendants in certain DMAs, other competitively sensitive information
concerning spot advertising sales.
31. These unlawful information sharing agreements between
Defendants, Other Broadcasters, and Sales Rep Firms have had, and
likely will continue to have, anticompetitive effects in spot
advertising markets by disrupting the normal mechanisms for negotiating
and setting prices and harming the competitive process.
32. Defendants' agreements to exchange competitively sensitive
information are unreasonable restraints of interstate trade and
commerce. This offense is likely to continue and recur unless the
requested relief is granted.
VII. REQUESTED RELIEF
33. The United States requests that the Court:
a. adjudge that the information sharing agreements unreasonably
restrain trade and are unlawful under Section 1 of the Sherman Act, 15
U.S.C. Sec. 1;
b. permanently enjoin and restrain Defendants from sharing pacing
or other competitively sensitive information or agreeing to share such
information with any other broadcast station or broadcast station
group, directly or indirectly, and requiring Defendants to take such
internal measures as are necessary to ensure compliance with that
injunction;
c. permanently enjoin and restrain Cox, acting through Cox Reps,
from sharing competitively sensitive information, agreeing to share
competitively sensitive information, facilitating the sharing of pacing
or other competitively sensitive information or agreeing to facilitate
the sharing of such information among any broadcast stations or
broadcast station groups, directly or indirectly, and requiring Cox to
take such internal measures as are necessary to ensure compliance with
that injunction;
d. award the United States the costs of this action; and
e. award such other relief to the United States as the Court may
deem just and proper.
Dated: June 17, 2019
Respectfully submitted,
FOR PLAINTIFF UNITED STATES OF AMERICA,
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MAKAN DELRAHIM (D.C. Bar 457795),
Assistant Attorney General for Antitrust.
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WILLIAM J. RINNER,
Chief of Staff and Senior Counsel.
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PATRICIA A. BRINK,
Director of Civil Enforcement.
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OWEN M. KENDLER,
Chief, Media, Entertainment & Professional Services Section.
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YVETTE TARLOV (D.C. Bar 442452),
Assistant Chief, Media, Entertainment & Professional Services
Section.
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LEE F. BERGER (D.C. Bar 482435),
MEAGAN K. BELLSHAW,
GREGG MALAWER (D.C. Bar 481685),
BENNETT J. MATELSON (D.C. Bar 454551),
KATE M. RIGGS (D.C. Bar 984784),
ETHAN D. STEVENSON,
United States Department of Justice, Antitrust Division, Media,
Entertainment & Professional Services Section, 450 Fifth Street NW,
Suite 4000, Washington, DC 20530, Telephone: (202) 514-0230,
Facsimile: (202) 514-730.
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
United States of America; Plaintiff, v. Sinclair Broadcast
Group, Inc., et al., Defendants.
Case No.
[PROPOSED] FINAL JUDGMENT
WHEREAS, Plaintiff, United States of America, filed its Second
Amended Complaint on ___, 2019, alleging that Defendant CBS
Corporation, among others, violated Section 1 of the Sherman Act, 15
U.S.C. Sec. 1, the United States and Defendant, by their respective
attorneys, have consented to the entry of this Final Judgment without
trial or adjudication of any issue of fact or law;
AND WHEREAS, this Final Judgment does not constitute any evidence
against or admission by any party regarding any issue of fact or law;
AND WHEREAS, the United States and Defendant agree to be bound by
the provisions of this Final Judgment pending its approval by this
Court;
AND WHEREAS, the Defendant agrees to undertake certain actions and
to refrain from engaging in certain forms of information sharing with
its competitors;
NOW THEREFORE, before any testimony is taken, without trial or
adjudication of any issue of fact or law, and upon consent of the
parties, it is ORDERED, ADJUDGED, AND DECREED:
I. JURISDICTION
This Court has jurisdiction over the subject matter and each of the
parties to this action. The allegations in the Second Amended Complaint
arise under Section 1 of the Sherman Act, as amended, 15 U.S.C. Sec.
1. See 28 U.S.C. Sec. 1331.
II. DEFINITIONS
As used in this Final Judgment:
A. ``Advertiser'' means an advertiser, an advertiser's buying
agent, or an advertiser's representative.
B. ``Agreement'' means any agreement, understanding, pact,
contract, or arrangement, formal or informal, oral or written, between
two or more Persons.
C. ``Communicate,'' ``Communicating,'' and ``Communication(s)''
means to provide, send, discuss, circulate, exchange, request, or
solicit information, whether directly or indirectly, and regardless of
the means by which it is accomplished, including orally or by written
means of any kind, such as electronic communications, e-mails,
facsimiles, telephone communications, voicemails, text messages, audio
recordings, meetings, interviews, correspondence, exchange of written
or recorded information, or face-to-face meetings.
D. ``Competitively Sensitive Information'' means any of the
following information, less than eighteen months old, of Defendant, or
any broadcast television station regarding the sale of spot advertising
on broadcast television stations: Non-Public Information relating to
pricing or
[[Page 44127]]
pricing strategies, pacing, holding capacity, revenues, or market
shares. Reports containing only aggregated market-level or national
data are not Competitively Sensitive Information, but reports
(including by paid subscription) that are customized or confidential to
a particular Station or broadcast television station group are
Competitively Sensitive Information. For the avoidance of doubt, spot
advertising does not include network television advertising sold by the
Defendant or television advertising sold by the Defendant in its
capacity as an agent of the owners of syndicated programming.
E. ``Cooperative Agreement'' means (1) joint sales agreements,
joint operating agreements, local marketing agreements, news share
agreements, or shared services agreements, or (2) any agreement through
which a Person exercises control over any broadcast television station
not owned by the Person.
F. ``CTS'' means the CBS Television Stations group, its successors
and assigns, and its officers and employees. CTS is an unincorporated
division of CBS Corporation that consists of Defendant's 29 owned-and-
operated broadcast television stations. CTS functions as an independent
operating group within Defendant with its own officers and directors.
To the extent any Defendant-owned broadcast television station comes
under the control or operation of a division or subsidiary of Defendant
other than the CBS Television Stations group, that other division or
subsidiary is included in the definition of ``CTS.''
G. ``CTS Management'' means all directors and officers of CTS, or
any other Defendant employee with management or supervisory
responsibilities for CTS's business or operations related to the sale
of spot advertising on any Station.
H. ``Defendant'' means CBS Corporation, a Delaware corporation with
its headquarters in New York, New York, its successors and assigns, and
its subsidiaries, divisions, and Stations, and their directors,
officers, and employees.
I. ``DMA'' means Designated Market Area as defined by A.C. Nielsen
Company and used by the Investing in Television BIA Market Report 2018.
J. ``Management'' means all directors and executive officers of
Defendant, or any other employee with management or supervisory
responsibilities for Defendant's business or operations related to the
sale of spot advertising on any Station.
K. ``Non-Public Information'' means information that is not
available from public sources or generally available to the public.
Measurement or quantification of a Station's future holding capacity is
Non-Public Information, but measurement or quantification of a
Station's past holding capacity is not Non-Public Information. For the
avoidance of doubt, the fact that information is available by paid
subscription does not on its own render the information public.
L. ``Person'' means any natural person, corporation, company,
partnership, joint venture, firm, association, proprietorship, agency,
board, authority, commission, office, or other business or legal
entity, whether private or governmental.
M. ``Sales Representative Firm'' means any organization, including
without limitation Katz Media Group, Inc. and Cox Reps, Inc., and their
respective subsidiaries and divisions, that represents a Station or its
owner in the sale of spot advertising.
N. ``Sales Staff'' means Defendant's employees with responsibility
for the sale of spot advertising on any Station.
O. ``Station'' means any broadcast television station, its
successors and assigns, and its subsidiaries, divisions, groups, and
its owner or operator and its directors, officers, managers, and
employees, unless a Station owns, is owned by, or is under common
ownership with a Sales Representative Firm, in which case that Sales
Representative Firm will not be considered a Station.
III. APPLICABILITY
This Final Judgment applies to Defendant, other Persons in active
concert or participation with Defendant who receive actual notice of
this Final Judgment by personal service or otherwise, and any Person
that signs an Acknowledgment of Applicability, attached as Exhibit 2,
to the extent set forth therein, as a condition of the purchase of a
Station owned by Defendant as of February 1, 2019. This Final Judgment
applies to Defendant's actions performed under any Cooperative
Agreement, even if those actions are taken on behalf of a third party.
This Final Judgment is fully enforceable, including by penalty of
contempt, against all of the foregoing.
IV. PROHIBITED CONDUCT
A. Defendant's Management and Sales Staff shall not, directly or
indirectly:
1. Communicate Competitively Sensitive Information to any Station
in the same DMA Defendant does not own or operate;
2. Knowingly use Competitively Sensitive Information from or
regarding any Station in the same DMA Defendant does not own or
operate;
3. Encourage or facilitate the Communication of Competitively
Sensitive Information to or from any Station in the same DMA Defendant
does not own or operate; or
4. Attempt to enter into, enter into, maintain, or enforce any
agreement to Communicate Competitively Sensitive Information with any
Station in the same DMA Defendant does not own or operate.
B. The prohibitions under Paragraph IV(A) apply to Defendant's
Communicating or agreeing to Communicate through a Sales Representative
Firm or a third-party agent at Defendant's instruction or request.
C. Defendant shall not sell any Station owned by the Defendant as
of February 1, 2019 to any Person unless that Person has first executed
the Acknowledgment of Applicability, attached as Exhibit 2. Defendant
shall submit any Acknowledgement of Applicability to the United States
within 15 days of consummating the sale of such Station. The United
States, in its sole discretion, may waive the prohibition in this
Paragraph IV(C) on a Station-by-Station basis. Alternatively, the
United States and the Person signing the Acknowledgement of
Applicability may agree to void the Acknowledgement of Applicability at
any time. The first sentence of this paragraph shall not apply to the
sale of any Station to a Person already bound to a final judgment
entered by a court regarding the Communication of Competitively
Sensitive Information.
V. CONDUCT NOT PROHIBITED
A. Nothing in Section IV shall prohibit Defendant from
Communicating, using, or encouraging or facilitating the Communication
of, Competitively Sensitive Information with an actual or prospective
Advertiser, except that, if the Advertiser is another Station,
Defendant's Communicating, using, or encouraging or facilitating the
Communication of, Competitively Sensitive Information is excluded from
the prohibitions of Section IV only insofar as is reasonably necessary
to negotiate the sale of spot advertising on broadcast television
stations. For the avoidance of doubt, Defendant is not prohibited from
internally using Competitively Sensitive Information received from an
Advertiser that is a Station under the preceding sentence, but
Defendant is prohibited from Communicating that Competitively
[[Page 44128]]
Sensitive Information to a Station in the same DMA that it does not own
or operate.
B. Nothing in Section IV shall prohibit Defendant from, after
securing advice of counsel and in consultation with the Antitrust
Compliance Officer, Communicating, using, encouraging or facilitating
the Communication of, or attempting to enter into, entering into,
maintaining, or enforcing any agreement to Communicate Competitively
Sensitive Information with any Station when such Communication or use
is (a) for the purpose of evaluating or effectuating a bona fide
acquisition, disposition, or exchange of Stations or related assets, or
(b) reasonably necessary for achieving the efficiencies of any other
legitimate competitor collaboration. With respect to any such
agreement:
1. For all agreements under Part V(B)(a) with any other Station to
Communicate Competitively Sensitive Information that Defendant enters
into, renews, or affirmatively extends after the date of entry of this
Final Judgment, Defendant shall maintain documents sufficient to show:
i. the specific transaction or proposed transaction to which the
sharing of Competitively Sensitive Information relates;
ii. the employees, identified with reasonable specificity, who are
involved in the sharing of Competitively Sensitive Information; and
iii. the termination date or event of the sharing of Competitively
Sensitive Information.
2. All agreements under Part V(B)(b) with any other Station to
Communicate Competitively Sensitive Information that Defendant enters
into, renews, or affirmatively extends after the date of entry of this
Final Judgment shall be in writing, and shall:
i. identify and describe, with specificity, the collaboration to
which it is ancillary;
ii. be narrowly tailored to permit the Communication of
Competitively Sensitive Information only when reasonably necessary and
only to the employees reasonably necessary to effectuate the
collaboration;
iii. identify with reasonable specificity the Competitively
Sensitive Information Communicated pursuant to the agreement and
identify the employees to receive the Competitively Sensitive
Information;
iv. contain a specific termination date or event; and
v. be signed by all parties to the agreement, including any
modifications to the agreement.
3. For Communications under Part V(B)(a) above, Defendant shall
maintain copies of all materials required under Paragraph V(B)(1) for
five years or the duration of the Final Judgment, whichever is shorter,
following entry into any agreement to Communicate or receive
Competitively Sensitive Information, and Defendant shall make such
documents available to the United States upon request, if such request
is made during the preservation period.
4. For Communications under Part V(B)(b) above, Defendant shall
furnish a copy of all materials required under Paragraph V(B)(2) to the
United States within thirty days of the entry, renewal, or extension of
the agreement.
5. For purposes of this Section V(B) only, a joint sales agreement,
local marketing agreement, or similar agreement pursuant to which
Defendant Communicates, uses, encourages or facilitates the
Communication of, or attempts to enter into, enters into, maintains, or
enforces any agreement to Communicate Competitively Sensitive
Information related solely to the sale of spot advertising for which
Defendant is responsible on a Station, shall be considered a
``legitimate competitor collaboration'' under Part V(B)(b).
C. Nothing in Section IV shall prohibit Defendant from engaging in
conduct in accordance with the doctrine established in Eastern Railroad
Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127
(1961), United Mine Workers v. Pennington, 381 U.S. 657 (1965), and
their progeny.
D. Nothing in Section IV prohibits Defendant from (1)
Communicating, encouraging or facilitating the Communication of, or
attempting to enter into, entering into, maintaining, or enforcing any
agreement to Communicate Competitively Sensitive Information for the
purpose of aggregation if (a) Competitively Sensitive Information is
sent to or received from, and the aggregation is managed by, a third
party not owned or operated by any Station; (b) the information
disseminated by the aggregator is limited to historical total broadcast
television station revenue or other geographic or characteristic
categorization (e.g., national, local, or political sales revenue); and
(c) any information disseminated is sufficiently aggregated such that
it would not allow a recipient to identify, deduce, or estimate the
prices or pacing of any individual broadcast television station not
owned or operated by that recipient; or (2) using information that
meets the requirements of Parts V(D)(1)(a)-(c).
VI. REQUIRED CONDUCT
A. Within ten days of entry of this Final Judgment, Defendant shall
appoint an Antitrust Compliance Officer who is an internal employee or
officer of Defendant, and identify to the United States the Antitrust
Compliance Officer's name, business address, telephone number, and
email address. Within forty-five days of a vacancy in the Antitrust
Compliance Officer position, Defendant shall appoint a replacement, and
shall identify to the United States the Antitrust Compliance Officer's
name, business address, telephone number, and email address.
Defendant's initial or replacement appointment of an Antitrust
Compliance Officer is subject to the approval of the United States, in
its sole discretion.
B. The Antitrust Compliance Officer shall have, or shall retain
outside counsel who has, the following minimum qualifications:
1. be an active member in good standing of the bar in any U.S.
jurisdiction; and
2. have at least five years' experience in legal practice,
including experience with antitrust matters, unless finding an
Antitrust Compliance Officer or outside counsel meeting this experience
requirement is a hardship on or is not reasonably available to
Defendant, under which circumstances Defendant may select an Antitrust
Compliance Officer or shall retain outside counsel who has at least
five years' experience in legal practice, including experience with
regulatory or compliance matters.
C. The Antitrust Compliance Officer shall, directly or through the
employees or counsel working at the Antitrust Compliance Officer's
responsibility and direction:
1. within fourteen days of entry of the Final Judgment, furnish to
all of Defendant's Management and Sales Staff a copy of this Final
Judgment, the Competitive Impact Statement filed by the United States
with the Court, and a cover letter in a form attached as Exhibit 1;
2. within fourteen days of entry of the Final Judgment, in a manner
to be devised by Defendant and approved by the United States, provide
Defendant's Management and Sales Staff reasonable notice of the meaning
and requirements of this Final Judgment;
3. annually brief CTS Management and Sales Staff on the meaning and
requirements of this Final Judgment and the U.S. antitrust laws;
4. brief any Person who succeeds a Person in any position
identified in Paragraph VI(C)(3), within sixty days of such succession;
[[Page 44129]]
5. obtain from each Person designated in Paragraph VI(C)(3) or
VI(C)(4), within thirty days of that Person's receipt of the Final
Judgment, a certification that the Person (i) has read and understands
and agrees to abide by the terms of this Final Judgment; (ii) is not
aware of any violation of the Final Judgment that has not been reported
to Defendant; and (iii) understands that failure to comply with this
Final Judgment may result in an enforcement action for civil or
criminal contempt of court;
6. annually communicate to Defendant's Management and Sales Staff
that they may disclose to the Antitrust Compliance Officer, without
reprisal for such disclosure, information concerning any violation or
potential violation of this Final Judgment or the U.S. antitrust laws
by Defendant;
7. within thirty days of the latest filing of the Second Amended
Complaint, Proposed Final Judgment, or Competitive Impact Statement in
this action, Defendant shall provide notice, in each DMA in which
Defendant owns or operates a Station, to every full power Station in
that DMA that sells broadcast television spot advertising that
Defendant does not own or operate of the Second Amended Complaint,
Proposed Final Judgment, and Competitive Impact Statement in a form and
manner to be proposed by Defendant and approved by the United States in
its sole discretion. Defendant shall provide the United States with its
proposal, including the list of recipients, within ten days of the
filing of the Second Amended Complaint; and
8. maintain for five years or until expiration of the Final
Judgment, whichever is shorter, a copy of all materials required to be
issued under Paragraph VI(C), and furnish them to the United States
within ten days if requested to do so, except documents protected under
the attorney-client privilege or the attorney work-product doctrine.
For all materials required to be furnished under Paragraph VI(C) which
Defendant claims are protected under the attorney-client privilege or
the attorney work-product doctrine, Defendant shall furnish to the
United States a privilege log.
D. Defendant shall:
1. upon Management (including CTS Management) or the Antitrust
Compliance Officer learning of any violation or potential violation of
any of the terms and conditions contained in this Final Judgment, (i)
promptly take appropriate action to investigate, and in the event of a
violation, terminate or modify the activity so as to comply with this
Final Judgment,
(ii) maintain all documents related to any violation or potential
violation of this Final Judgment for a period of five years or the
duration of this Final Judgment, whichever is shorter, and (iii)
maintain, and furnish to the United States at the United States'
request, a log of (a) all such documents and documents for which
Defendant claims protection under the attorney- client privilege or the
attorney work product doctrine, and (b) all potential and actual
violations, even if no documentary evidence regarding the violations
exist;
2. within thirty days of Management or the Antitrust Compliance
Officer learning of any such violation or potential violation of any of
the terms and conditions contained in this Final Judgment, file with
the United States a statement describing any violation or potential
violation of any of the terms and conditions contained in this Final
Judgment, which shall include a description of any Communications
constituting the violation or potential violation, including the date
and place of the Communication, the Persons involved, and the subject
matter of the Communication;
3. establish a whistleblower protection policy, which provides that
any employee may disclose, without reprisal for such disclosure, to the
Antitrust Compliance Officer information concerning any violation or
potential violation by the Defendant of this Final Judgment or U.S.
antitrust laws;
4. have Defendant's CEO, President, or Executive Vice President,
General Counsel certify in writing to the United States annually on the
anniversary date of the entry of this Final Judgment that CTS has
complied with the provisions of this Final Judgment;
5. maintain and produce to the United States upon request: (i) a
list identifying all employees having received the annual antitrust
briefing required under Paragraphs VI(C)(3) and VI(C)(4); and (ii)
copies of all materials distributed as part of the annual antitrust
briefing required under Paragraphs VI(C)(3) and VI(C)(4). For all
materials requested to be produced under this Paragraph VI(D)(5) for
which Defendant claims is protected under the attorney-client privilege
or the attorney work-product doctrine, Defendant shall furnish to the
United States a privilege log; and
E. For the avoidance of doubt, the term ``potential violation'' as
used in Paragraph VI(D) does not include the discussion of future
conduct.
F. If Defendant acquires a Station after entry of this Final
Judgment, this Section VI will not apply to that acquired Station or
the employees of that acquired Station until 120 days after closing of
the acquisition of that acquired Station.
VII. DEFENDANT'S COOPERATION
A. Defendant shall cooperate fully and truthfully with the United
States in any investigation or litigation concerning whether or
alleging that Defendant, any Station that Defendant does not own or
operate, or any Sales Representative Firm Communicated Competitively
Sensitive Information with or among Defendant or any other Station or
any Sales Representative Firm in violation of Section 1 of the Sherman
Act, as amended, 15 U.S.C. Sec. 1. Defendant shall use its best
efforts to ensure that all current and former officers, directors,
employees, and agents also fully and promptly cooperate with the United
States, as described herein. The full, truthful, and continuing
cooperation of Defendant shall include, but not be limited to:
1. providing sworn testimony, that is not protected by the
attorney-client privilege or the attorney work product doctrine, to the
United States regarding the Communicating of Competitively Sensitive
Information or any agreement with any other Station Defendant does not
own or such other Station's Sales Representative Firm to Communicate
Competitively Sensitive Information while an employee of the Defendant;
2. producing, upon request of the United States, all documents,
data, and other materials, wherever located, to the extent not
protected under the attorney-client privilege or the attorney work-
product doctrine, in the possession, custody, or control of Defendant,
that relate to the Communication of Competitively Sensitive Information
or any agreement with any other Station or such other Station's Sales
Representative Firm to Communicate Competitively Sensitive Information,
and a log of documents protected by the attorney-client privilege or
the attorney work product doctrine;
3. making available for interview any officers, directors, and
employees of Defendant if so requested on reasonable notice by the
United States; and
4. testifying at trial and other judicial proceedings fully,
truthfully, and under oath, when called upon to do so by the United
States;
5. provided however, that the obligations of Defendant to cooperate
fully with the United States as described in this Section VII shall
cease upon the conclusion of all of the United States' investigations
and the United States' litigations examining whether or alleging that
Defendant, any Station that Defendant does not own or operate or
[[Page 44130]]
such other Station's Sales Representative Firm Communicated
Competitively Sensitive Information with or among Defendant or any
other Station or any Sales Representative Firm in violation of Section
1 of the Sherman Act, as amended, 15 U.S.C. Sec. 1, including
exhaustion of all appeals or expiration of time for all appeals of any
Court ruling in each such matter, at which point the United States will
provide written notice to Defendant that its obligations under this
Section VII have expired.
B. Defendant is obligated to impose a litigation hold until the
United States provides written notice to the Defendant that its
obligations under this Section VII have expired. This Paragraph VII(B)
does not apply to documents created after entry of this Final Judgment.
C. Subject to the full, truthful, and continuing cooperation of
Defendant, as defined in Paragraph VII(A), the United States will not
bring any further civil action or any criminal charges against
Defendant related to any Communication of Competitively Sensitive
Information or any agreement to Communicate Competitively Sensitive
Information with any other Station it does not own or operate or such
other Station's Sales Representative Firm when that Communication or
agreement:
1. was Communicated, entered into and terminated on or before the
date of the filing of the Second Amended Complaint in this action (or
in the case of a Station that is acquired by Defendant after entry of
this Final Judgment, was Communicated or entered into before the
acquisition and terminated within 120 days after the closing of the
acquisition); and
2. does not constitute or include an agreement to fix prices or
divide markets.
D. The United States' agreement set forth in Paragraph VII(C) does
not apply to any acts of perjury or subornation of perjury (18 U.S.C.
Sec. Sec. 1621-22), making a false statement or declaration (18 U.S.C.
Sec. Sec. 1001, 1623), contempt (18 U.S.C. Sec. Sec. 401-402), or
obstruction of justice (18 U.S.C. Sec. 1503, et seq.) by the Defendant
or its officers, directors, and employees. The United States' agreement
set forth in Paragraph VII(C) does not release any claims against any
Sales Representative Firm.
VIII. COMPLIANCE INSPECTION
A. For the purposes of determining or securing compliance with this
Final Judgment or of any related orders, or of determining whether the
Final Judgment should be modified, and subject to any legally
recognized privilege, from time to time authorized representatives of
the United States Department of Justice, including consultants and
other persons retained by the United States, shall, upon written
request of an authorized representative of the Assistant Attorney
General in charge of the Antitrust Division, and on reasonable notice
to Defendant, be permitted:
1. to access during Defendant's office hours to inspect and copy,
or at the option of the United States, to require Defendant to provide
electronic or hard copies of all books, ledgers, accounts, records,
data, and documents in the possession, custody, or control of
Defendant, relating to any matters that are the subject of this Final
Judgment, not protected by the attorney- client privilege or the
attorney work product doctrine; and
2. to interview, either informally or on the record, Defendant's
officers, employees, or agents, who may have their individual counsel
present, regarding such matters. The interviews shall be subject to the
reasonable convenience of the interviewee and without restraint or
interference by Defendant; and
3. to obtain from Defendant written reports or responses to written
interrogatories, of information not protected by the attorney-client
privilege or attorney work product doctrine, under oath if requested,
relating to any matters that are the subject of this Final Judgment as
may be requested.
B. No information or documents obtained by the means provided in
this Section VIII shall be divulged by the United States to any Person
other than an authorized representative of the executive branch of the
United States, except in the course of legal proceedings to which the
United States is a party (including grand jury proceedings), or for the
purpose of securing compliance with this Final Judgment, or for law
enforcement purposes, or as otherwise required by law.
C. If at the time information or documents are furnished by
Defendant to the United States, Defendant represents and identifies in
writing the material in any such information or documents to which a
claim of protection may be asserted under Rule 26(c)(1)(G) of the
Federal Rules of Civil Procedure, and Defendant marks each pertinent
page of such material, ``Subject to claim of protection under Rule
26(c)(1)(G) of the Federal Rules of Civil Procedure,'' then the United
States shall give Defendant ten calendar days' notice prior to
divulging such material in any legal proceeding (other than a grand
jury proceeding).
IX. RETENTION OF JURISDICTION
This Court retains jurisdiction to enable any party to this Final
Judgment to apply to this Court at any time for further orders and
directions as may be necessary or appropriate to carry out or construe
this Final Judgment, to modify any of its provisions, to enforce
compliance, and to punish violations of its provisions.
X. ENFORCEMENT OF FINAL JUDGMENT
A. The United States retains and reserves all rights to enforce the
provisions of this Final Judgment, including its right to seek an order
of contempt from this Court. Defendant agrees that in any civil
contempt action, any motion to show cause, or any similar civil action
brought by the United States regarding an alleged violation of this
Final Judgment, the United States may establish a violation of the
Final Judgment and the appropriateness of any remedy therefor by a
preponderance of the evidence, and Defendant waives any argument that a
different standard of proof should apply.
B. The Final Judgment should be interpreted to give full effect to
the procompetitive purposes of the antitrust laws and to restore all
competition the United States alleged was harmed by the challenged
conduct. Defendant agrees that it may be held in contempt of, and that
the Court may enforce, any provision of this Final Judgment that, as
interpreted by the Court in light of these procompetitive principles
and applying ordinary tools of interpretation, is stated specifically
and in reasonable detail, whether or not it is clear and unambiguous on
its face. In any such interpretation, the terms of this Final Judgment
should not be construed against either party as the drafter.
C. In any enforcement proceeding in which the Court finds that
Defendant has violated this Final Judgment, the United States may apply
to the Court for a one-time extension of this Final Judgment, together
with such other relief as may be appropriate. In connection with any
successful effort by the United States to enforce this Final Judgment
against Defendant, whether litigated or resolved prior to litigation,
Defendant agrees to reimburse the United States for the fees and
expenses of its attorneys, as well as any other costs including
experts' fees, incurred in connection with that enforcement effort,
including in the investigation of the potential violation.
[[Page 44131]]
XI. EXPIRATION OF FINAL JUDGMENT
Unless this Court grants an extension, this Final Judgment shall
expire seven years from the date of its entry, except that after five
years from the date of its entry, this Final Judgment may be terminated
upon notice by the United States to the Court and Defendant that the
continuation of the Final Judgment no longer is necessary or in the
public interest.
XII. NOTICE
For purposes of this Final Judgment, any notice or other
communication required to be provided to the United States shall be
sent to the person at the address set forth below (or such other
addresses as the United States may specify in writing to Defendant):
Chief, Media, Entertainment, and Professional Services Section, U.S.
Department of Justice Antitrust Division, 450 Fifth Street NW, Suite
4000, Washington, DC 20530.
For purposes of this Final Judgment, any notice or other
communication required to be provided to Defendant shall be sent to the
person at the address set forth below (or such other addresses as
Defendant may specify in writing to the United States): Andrew J.
Siegel, Senior Vice President, Law CBS Law Department, CBS Television
Stations, 51 West 52nd Street, New York, NY 10019.
With a courtesy copy sent to: Yehudah L. Buchweitz, Partner, Weil,
Gotshal & Manges LLP, 767 Fifth Avenue, New York, NY 10153. Counsel for
Defendant.
XIII. PUBLIC INTEREST DETERMINATION
Entry of this Final Judgment is in the public interest. The parties
have complied with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16, including making copies available to
the public of this Final Judgment, the Competitive Impact Statement,
and any comments thereon and the United States' responses to comments.
Based upon the record before the Court, which includes the Competitive
Impact Statement and any comments and response to comments filed with
the Court, entry of this Final Judgment is in the public interest.
IT IS SO ORDERED by the Court, this__ day of___, 201_.
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16
-----------------------------------------------------------------------
United States District Judge
EXHIBIT 1
[Company Letterhead]
Andrew J. Siegel
Senior Vice President, Law
CBS Law Department
CBS Television Stations
51 West 52nd Street
New York, NY 10019 T: 212-975-4480
Re: Prohibitions Against Sharing of Competitively Sensitive Information
Dear [XX]:
I provide you this notice regarding a judgment recently entered by
a federal judge in Washington, D.C. prohibiting the sharing of certain
information with other broadcast television station(s).
The judgment applies to our company and all of its employees,
including you, so it is important that you understand the obligations
it imposes on us. CEO or President of CBS Corp. has asked me to let
each of you know that he expects you to take these obligations
seriously and abide by them.
The judgment prohibits us from sharing or receiving, directly or
indirectly (including through a national sales representative firm),
competitively sensitive information with or from any employee, agent,
or representative of another broadcast television station in the same
DMA it does not own or operate. Competitively sensitive information
means any non-public information regarding the sale of spot advertising
on broadcast television stations, including information relating to any
pricing or pricing strategies, pacing, holding capacity, revenues, or
market shares. There are limited exceptions to this restriction, which
are listed in the judgment. We will provide briefing on the legitimate
or illegitimate exchange of information. You must consult with me if
you have any questions on whether a particular circumstance is subject
to an exception under the judgment.
A copy of the judgment is attached. Please read it carefully and
familiarize yourself with its terms. The judgment, rather than the
above description, is controlling. If you have any questions about the
judgment or how it affects your sale of spot advertising, please
contact me as soon as possible.
Please sign and return the attached Employee Certification to
[Defendant's Antitrust Compliance Officer] within thirty days of your
receipt of this letter. Thank you for your cooperation.
Sincerely,
Andrew J. Siegel
Senior Vice President, Law
CBS Law Department
CBS Television Stations
Employee Certification
I,____[name], ____[position] at ____[station or location] do hereby
certify that I (i) have read and understand, and agree to abide by, the
terms of the Final Judgment; (ii) am not aware of any violation of the
Final Judgment that has not been reported to CBS Corporation; and (iii)
understand that my failure to comply with this Final Judgment may
result in an enforcement action for civil or criminal contempt of
court.
-----------------------------------------------------------------------
Name:
Date:
EXHIBIT 2
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
United States of America; Plaintiff, v. Sinclair Broadcast
Group, Inc., et al., Defendants.
Case No.
ACKNOWLEDGEMENT OF APPLICABILITY
The undersigned acknowledges that [Full Buyer Name], including its
successors and assigns, and its subsidiaries, divisions, and broadcast
television stations, and their directors, officers, and employees
(``Acquirer''), following consummation of the Acquirer's acquisition of
[insert names of station or stations acquired] (each, an ``Acquired
Station''), is bound by the Final Judgment entered by this Court in the
above-captioned action (``Final Judgment''), as if the Acquirer were a
Defendant under the Final Judgment, as follows:
1. The Acquirer shall be bound in full by all Sections of the
Consent Decree not specifically discussed below.
2. As to Sections IV, V, and VII of the Final Judgment, the
Acquirer is bound to the Final Judgment only as to (i) each Acquired
Station, each Acquired Station's successors and assigns, and each
Acquired Station's subsidiaries and divisions, and each Acquired
Station's directors, officers, and employees, (ii) Acquirer's officers
and directors only with respect to any responsibilities or actions
regarding any Acquired Stations, and (iii) employees with management or
supervisory responsibilities for Acquirer's business or operations
related to the sale of spot advertising on any Acquired Station, only
with respect to those responsibilities.
3. As to Section VI(C)(3), VI(C)(4), VI(C)(6), VI(C)(8), VI(D),
VI(E), and VIII of the Final Judgment, the Acquirer is bound to the
Final Judgment only as to (i) each Acquired Station, each
[[Page 44132]]
Acquired Station's successors and assigns, and each Acquired Station's
subsidiaries and divisions, and each Acquired Station's directors,
officers, and employees, (ii) Acquirer's officers and directors, and
(iii) employees with management or supervisory responsibilities for
Acquirer's business or operations related to the sale of spot
advertising on any Acquired Station.
4. The release contained in Sections VII(C) and (D) applies to the
Acquirer, but only to civil actions or criminal charges arising from
actions taken by any Acquired Station.
5. The Acquirer shall not be bound by Sections VI(C)(1),
VI(C)(2),VI(C)(5), VI(C)(7), and VI(F) of the Final Judgment at all,
unless the Acquirer acquires the Acquired Stations earlier than 45 days
after entry of the Final Judgment.
6. Section VI(A) applies to the Acquirer, but, unless the Acquirer
acquires the Acquired Stations earlier than 45 days after entry of the
Final Judgment, Section VI(A) is modified to make the initial period
for appointing an Antitrust Compliance Officer in the first sentence
120 days from consummation of the Acquirer's acquisition of the
Acquired Station or Acquired Stations.
This Acknowledgement of Applicability may be voided by a joint
written agreement between the United States and the Acquirer.
Dated: [ ]
Respectfully submitted,
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[Counsel for Acquirer]
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
United States of America; Plaintiff, v. Sinclair Broadcast
Group, Inc., et al., Defendants.
Case No.
[PROPOSED] FINAL JUDGMENT
WHEREAS, Plaintiff, United States of America, filed its Second
Amended Complaint on
___, 2019, alleging that Defendant Cox Enterprises, Inc., among
others, violated Section 1 of the Sherman Act, 15 U.S.C. Sec. 1, the
United States and Defendant, by their respective attorneys, have
consented to the entry of this Final Judgment without trial or
adjudication of any issue of fact or law;
AND WHEREAS, this Final Judgment does not constitute any evidence
against or admission by any party regarding any issue of fact or law;
AND WHEREAS, the United States and Defendant agree to be bound by
the provisions of this Final Judgment pending its approval by this
Court;
AND WHEREAS, the Defendant agrees to undertake certain actions and
to refrain from engaging in certain forms of information sharing with
its competitors and with its clients' competitors referenced herein;
NOW THEREFORE, before any testimony is taken, without trial or
adjudication of any issue of fact or law, and upon consent of the
parties, it is ORDERED, ADJUDGED, AND DECREED:
I. JURISDICTION
This Court has jurisdiction over the subject matter and each of the
parties to this action. The allegations in the Second Amended Complaint
arise under Section 1 of the Sherman Act, as amended, 15 U.S.C. Sec.
1. See 28 U.S.C. Sec. 1331.
II. DEFINITIONS
As used in this Final Judgment:
A. ``Advertiser'' means an advertiser, an advertiser's buying
agent, or an advertiser's representative.
B. ``Agreement'' means any agreement, understanding, pact,
contract, or arrangement, formal or informal, oral or written, between
two or more Persons.
C. ``Client Station'' means a Station for which Defendant,
including through Cox Reps, acts as a Sales Representative Firm. If
Defendant, including through Cox Reps, represents a Cox Station, the
Cox Station is a Client Station, notwithstanding any corporate
relationship between Defendant and the Cox Station.
D. ``Client Station Group'' means a broadcast station group that
owns or operates one or more Client Stations, including all, each and
any of the stations the broadcast station group owns.
E. ``Communicate,'' ``Communicating,'' and ``Communication(s)''
means to provide, send, discuss, circulate, exchange, request, or
solicit information, whether directly or indirectly, and regardless of
the means by which it is accomplished, including orally or by written
means of any kind, such as electronic communications, e-mails,
facsimiles, telephone communications, voicemails, text messages, audio
recordings, meetings, interviews, correspondence, exchange of written
or recorded information, or face-to-face meetings.
F. ``Competitively Sensitive Information'' means any of the
following information, less than eighteen months old, of Defendant, a
Client Station, a Client Station Group, or any broadcast television
station regarding the sale of spot advertising on broadcast television
stations: Non-Public Information relating to pricing or pricing
strategies, pacing, holding capacity, revenues, or market shares.
Reports containing only aggregated market-level or national data are
not Competitively Sensitive Information, but reports (including by paid
subscription) that are customized or confidential to a particular
Station or broadcast television station group are Competitively
Sensitive Information. For the avoidance of doubt, spot advertising
does not include network television advertising sold by the Defendant
or television advertising sold by the Defendant in its capacity as an
agent of the owners of syndicated programming.
G. ``Cooperative Agreement'' means (1) joint sales agreements,
joint operating agreements, local marketing agreements, news share
agreements, or shared services agreements, or (2) any agreement through
which a Person exercises control over any broadcast television station
not owned by the Person.
H. ``Cox Media Group'' means Defendant's subsidiary Cox Media
Group, LLC, a Delaware corporation with its headquarters in Atlanta,
Georgia, its successors and assigns, and its subsidiaries, divisions,
and groups, and their directors, officers, and employees, including
without limitation each Cox Station.
I. ``Cox Station'' means any Station owned or operated by
Defendant.
J. ``Cox Reps'' means Defendant's indirect subsidiary Cox Reps,
Inc., a Delaware corporation with its headquarters in New York, its
successors and assigns, and its subsidiaries, divisions, and groups,
and their directors, officers, and employees, including Harrington
Richter & Parsons LLC, MMT Sales, LLC, and Telerep, LLC.
K. ``Defendant'' means Cox Enterprises, Inc., a Delaware
corporation with its headquarters in Atlanta, Georgia, its successors
and assigns, and its subsidiaries, divisions, and Stations, and their
directors, officers, and employees, including without limitation Cox
Media Group, each Cox Station, and Cox Reps.
L. ``DMA'' means Designated Market Area as defined by A.C. Nielsen
Company and used by the Investing in Television BIA Market Report 2018.
M. ``Management'' means all directors and executive officers of
Defendant, or any other employee with management or supervisory
responsibilities for Defendant's business or operations related to the
sale of spot advertising on any Cox Station or Client Station.
[[Page 44133]]
N. ``Non-Public Information'' means information that is not
available from public sources or generally available to the public.
Measurement or quantification of a Station's future holding capacity is
Non-Public Information, but measurement or quantification of a
Station's past holding capacity is not Non-Public Information. For the
avoidance of doubt, the fact that information is available by paid
subscription does not on its own render the information public.
O. ``Person'' means any natural person, corporation, company,
partnership, joint venture, firm, association, proprietorship, agency,
board, authority, commission, office, or other business or legal
entity, whether private or governmental.
P. ``Sales Representative Firm'' means any organization, including
without limitation Katz Media Group, Inc. and Cox Reps, Inc., and their
respective subsidiaries and divisions, that represents or assists a
Station or its owner in the sale of spot advertising.
Q. ``Sales Staff'' means Defendant's employees or contractors with
responsibility for
(1) the sale of spot advertising on any Station, or (2)
representation of a Client Station or Client Station Group in the sale
of spot advertising on any Station.
R. ``Station'' means any broadcast television station, its
successors and assigns, and its subsidiaries, divisions, groups, and
its owner or operator and its directors, officers, managers, and
employees.
S. ``Station Group'' means a broadcast station group that owns one
or more Stations, including all, each and any of the Stations the
broadcast station group owns.
III. APPLICABILITY
This Final Judgment applies to Defendant, other Persons in active
concert or participation with Defendant who receive actual notice of
this Final Judgment by personal service or otherwise, and any Person
that signs an Acknowledgment of Applicability, attached as Exhibit 2,
to the extent set forth therein, as a condition of the purchase of
either Cox Reps or a Station owned by Defendant as of February 1, 2019.
This Final Judgment applies to Defendant's actions performed under any
Cooperative Agreement of Defendant, a Client Station, or a Client
Station Group, even if those actions are taken on behalf of a third
party or a party that is not a Client Station or Client Station Group.
This Final Judgment is fully enforceable, including by penalty of
contempt, against all of the foregoing.
IV. PROHIBITED CONDUCT
A. As to any Cox Station, Defendant's Management and Sales Staff
shall not, directly or indirectly:
1. Communicate Competitively Sensitive Information to any Station
in the same DMA it does not own or operate;
2. Knowingly use Competitively Sensitive Information from or
regarding any Station in the same DMA it does not own or operate;
3. Encourage or facilitate the Communication of Competitively
Sensitive Information to or from any Station in the same DMA it does
not own or operate; or
4. Attempt to enter into, enter into, maintain, or enforce any
Agreement to Communicate Competitively Sensitive Information with any
Station in the same DMA it does not own or operate.
B. As to Cox Reps, Defendant's Management and Sales Staff shall
not, directly or indirectly:
1. Communicate to any Station, or to any Sales Staff or other Sales
Representative Firm representing that Station, Competitively Sensitive
Information from or regarding another Station in the same DMA that is
not part of the same Station Group;
2. Communicate to any Station Group, or to any Sales Staff or other
Sales Representative Firm representing that Station Group,
Competitively Sensitive Information from or regarding any Station, not
part of that Station Group, that operates in the same DMA as one or
more of that Station Group's Stations;
3. Communicate Competitively Sensitive Information to any other
Sales Representative Firm;
4. Knowingly use Competitively Sensitive Information on behalf of
any Station operating in a given DMA from or regarding any other
Station in that same DMA that is not within the same Client Station
Group;
5. Encourage or facilitate the Communication of Competitively
Sensitive Information between two or more Stations in the same DMA that
are not part of the same Client Station Group; or
6. Attempt to enter into, enter into, maintain, or enforce any
agreement to Communicate Competitively Sensitive Information between
two or more Stations in the same DMA that are not part of the same
Client Station Group.
C. The prohibitions under Paragraph IV(A) apply to Cox Media
Group's Communicating or agreeing to Communicate through a Sales
Representative Firm or a third- party agent at Cox Media Group's
instruction or request. The prohibitions of Paragraph IV(A) do not
apply to Cox Reps' Management and Sales Staff to the extent Cox Reps'
Management or Sales Staff acts in their capacity as representatives of
a Client Station other than a Cox Station.
D. Defendant shall not sell Cox Reps or any Station owned by
Defendant as of February 1, 2019 to any Person unless that Person has
first executed the Acknowledgment of Applicability, attached as Exhibit
2. Defendant shall submit any Acknowledgement of Applicability to the
United States within 15 days of consummating the sale of such Station.
The United States, in its sole discretion, may waive the prohibition in
this Paragraph IV(D) as to Cox Reps or as to any Cox Station on a
Station-by-Station basis. Alternatively, the United States and the
Person signing the Acknowledgement of Applicability may agree to void
the Acknowledgement of Applicability at any time. The first sentence of
this paragraph shall not apply to the sale of Cox Reps or any Station
to a Person already bound to a final judgment entered by a court
regarding the Communication of Competitively Sensitive Information.
V. CONDUCT NOT PROHIBITED
A. Nothing in Section IV shall prohibit Defendant from
Communicating, using, or encouraging or facilitating the Communication
of, Competitively Sensitive Information with an actual or prospective
Advertiser, except that, if the Advertiser is a Station, Defendant's
Communicating, using, or encouraging or facilitating the Communication
of, Competitively Sensitive Information is excluded from the
prohibitions of Section IV only insofar as is reasonably necessary to
negotiate the sale of spot advertising on broadcast television
stations. Nothing in Section IV shall prohibit a Cox Station's
Management and Sales Staff from internally using Competitively
Sensitive Information received from an Advertiser, but Defendant is
prohibited from Communicating that Competitively Sensitive Information
to a Station in the same DMA that, with respect to Cox Media, it does
not own or operate or, with respect to Cox Reps, is not part of the
same Client Station Group. Nothing in Section IV shall prohibit Cox
Reps' Management and Sales Staff from internally using Competitively
Sensitive Information received from an Advertiser for purposes of the
Client Station or Client Station Group they represented when receiving
that Competitively Sensitive Information, but Defendant is prohibited
from Communicating that
[[Page 44134]]
Competitively Sensitive Information to any other Station that is not
part of the same Client Station Group Cox Reps represented when
receiving that Competitively Sensitive Information and that operates in
the same DMA(s) as the Client Station or Client Station Group that Cox
Reps represented when receiving the Competitively Sensitive
Information.
B. Nothing in Section IV shall prohibit Defendant from, after
securing advice of counsel and in consultation with the Antitrust
Compliance Officer, Communicating, using, encouraging or facilitating
the Communication of, or attempting to enter into, entering into,
maintaining, or enforcing any Agreement to Communicate Competitively
Sensitive Information with any Station when such Communication or use
is (a) for the purpose of evaluating or effectuating a bona fide
acquisition, disposition, or exchange of Stations or related assets, or
(b) reasonably necessary for achieving the efficiencies of any other
legitimate competitor collaboration. With respect to any such
agreement:
1. For all Agreements under Part V(B)(a) with any other Station to
Communicate Competitively Sensitive Information that Defendant enters
into, renews, or affirmatively extends after the date of entry of this
Final Judgment, Defendant shall maintain documents sufficient to show:
i. the specific transaction or proposed transaction to which the
sharing of Competitively Sensitive Information relates;
ii. the employees, identified with reasonable specificity, who are
involved in the sharing of Competitively Sensitive Information; and
iii. the termination date or event of the sharing of Competitively
Sensitive Information.
2. All Agreements under Part V(B)(b) with any other Station to
Communicate Competitively Sensitive Information that Defendant enters
into, renews, or affirmatively extends after the date of entry of this
Final Judgment shall be in writing, and shall:
i. identify and describe, with specificity, the collaboration to
which it is ancillary;
ii. be narrowly tailored to permit the Communication of
Competitively Sensitive Information only when reasonably necessary and
only to the employees reasonably necessary to effectuate the
collaboration;
iii. identify with reasonable specificity the Competitively
Sensitive Information Communicated pursuant to the agreement and
identify the employees to receive the Competitively Sensitive
Information;
iv. contain a specific termination date or event; and
v. be signed by all parties to the agreement, including any
modifications to the agreement.
3. For Communications under Part V(B)(a) above, Defendant shall
maintain copies of all materials required under Paragraph V(B)(1) for
five years or the duration of the Final Judgment, whichever is shorter,
following entry into any agreement to Communicate or receive
Competitively Sensitive Information, and Defendant shall make such
documents available to the United States upon request, if such request
is made during the preservation period.
4. For Communications under Part V(B)(b) above, Defendant shall
furnish a copy of all materials required under Paragraph V(B)(2) to the
United States within thirty days of the entry, renewal, or extension of
the agreement.
5. For purposes of this Section V(B) only, a Joint Sales Agreement,
Local Marketing Agreement, or similar Agreement pursuant to which the
Defendant Communicates, uses, encourages or facilitates the
Communication of, or attempts to enter into, enters into, maintains, or
enforces any Agreement to Communicate Competitively Sensitive
Information related solely to the sale of spot advertising for which
Defendant is responsible on a Station, shall be considered a
``legitimate competitor collaboration'' under Part V(B)(b).
C. Nothing in Section IV shall prohibit Defendant from engaging in
conduct in accordance with the doctrine established in Eastern Railroad
Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127
(1961), United Mine Workers v. Pennington, 381 U.S. 657 (1965), and
their progeny.
D. Nothing in Section IV prohibits Defendant from (1)
Communicating, encouraging or facilitating the Communication of, or
attempting to enter into, entering into, maintaining, or enforcing any
Agreement to Communicate Competitively Sensitive Information for the
purpose of aggregation if (a) Competitively Sensitive Information is
sent to or received from, and the aggregation is managed by, a third
party not owned or operated by any Station; (b) the information
disseminated by the aggregator is limited to historical total broadcast
television station revenue or other geographic or characteristic
categorization (e.g., national, local, or political sales revenue); and
(c) any information disseminated is sufficiently aggregated such that
it would not allow a recipient to identify, deduce, or estimate the
prices or pacing of any individual broadcast television station not
owned or operated by that recipient; or (2) using information that
meets the requirements of Parts V(D)(1)(a)-(c).
VI. REQUIRED CONDUCT
A. Within ten days of entry of this Final Judgment, Defendant shall
appoint an Antitrust Compliance Officer who is an internal employee or
Officer of Defendant, and identify to the United States the Antitrust
Compliance Officer's name, business address, telephone number, and
email address. Within forty-five days of a vacancy in the Antitrust
Compliance Officer position, Defendant shall appoint a replacement, and
shall identify to the United States the Antitrust Compliance Officer's
name, business address, telephone number, and email address.
Defendant's initial or replacement appointment of an Antitrust
Compliance Officer is subject to the approval of the United States, in
its sole discretion.
B. The Antitrust Compliance Officer shall have, or shall retain
outside counsel who has, the following minimum qualifications:
1. be an active member in good standing of the bar in any U.S.
jurisdiction; and
2. have at least five years' experience in legal practice,
including experience with antitrust matters, unless finding an
Antitrust Compliance Officer or outside counsel meeting this experience
requirement is a hardship on or is not reasonably available to
Defendant, under which circumstances Defendant may select an Antitrust
Compliance Officer or shall retain outside counsel who has at least
five years' experience in legal practice, including experience with
regulatory or compliance matters.
C. The Antitrust Compliance Officer shall, directly or through the
employees or counsel working at the Antitrust Compliance Officer's
responsibility and direction:
1. within fourteen days of entry of the Final Judgment, furnish to
all of Defendant's Management and Sales Staff a copy of this Final
Judgment, the Competitive Impact Statement filed by the United States
with the Court, and a cover letter in a form attached as Exhibit 1(A),
and to Defendant's Client Stations and Client Station Groups a copy of
this Final Judgment, the Competitive Impact Statement filed by the
United States with the Court, and a cover letter in a form attached as
Exhibit 1(B);
2. within fourteen days of entry of the Final Judgment, in a manner
to be devised by Defendant and approved by the United States, provide
Defendant's
[[Page 44135]]
Management and Sales Staff reasonable notice of the meaning and
requirements of this Final Judgment;
3. annually brief (i) Management of Cox Media Group, (ii)
Management of Cox Reps, and (iii) Sales Staff on the meaning and
requirements of this Final Judgment and the U.S. antitrust laws;
4. brief any Person who succeeds a Person in any position
identified in Paragraph VI(C)(3), within sixty days of such succession;
5. obtain from each Person designated in Paragraph VI(C)(3) or
VI(C)(4), within thirty days of that Person's receipt of the Final
Judgment, a certification that the Person (i) has read and understands
and agrees to abide by the terms of this Final Judgment; (ii) is not
aware of any violation of the Final Judgment that has not been reported
to Defendant; and (iii) understands that failure to comply with this
Final Judgment may result in an enforcement action for civil or
criminal contempt of court;
6. annually communicate to Defendant's Management and Sales Staff
that they may disclose to the Antitrust Compliance Officer, without
reprisal for such disclosure, information concerning any violation or
potential violation of this Final Judgment or the U.S. antitrust laws
by Defendant;
7. within thirty days of the latest filing of the Second Amended
Complaint, Proposed Final Judgment, or Competitive Impact Statement in
this action, Defendant shall provide notice of the Second Amended
Complaint, Proposed Final Judgment, and Competitive Impact Statement,
in each DMA in which Defendant owns or operates a Station or in which
Defendant's Client Station operates, to every full power Station in
that DMA that sells broadcast television spot advertising. Excluded
from the preceding sentence is any Cox Station or Client Station. Such
notice shall be in a form and manner to be proposed by Defendant and
approved by the United States in its sole discretion. Defendant shall
provide the United States with its proposal, including the list of
recipients, within ten days of the filing of the Second Amended
Complaint; and
8. maintain for five years or until expiration of the Final
Judgment, whichever is shorter, a copy of all materials required to be
issued under Paragraph VI(C), and furnish them to the United States
within ten days if requested to do so, except documents protected under
the attorney-client privilege or the attorney work-product doctrine.
For all materials required to be furnished under Paragraph VI(C) which
Defendant claims are protected under the attorney-client privilege or
the attorney work-product doctrine, Defendant shall furnish to the
United States a privilege log.
D. Defendant shall:
1. upon Management or the Antitrust Compliance Officer learning of
any violation or potential violation of any of the terms and conditions
contained in this Final Judgment involving a Station or Sales
Representative Firm in which Defendant has a controlling interest at
the time of the violation or potential violation, (i) promptly take
appropriate action to investigate, and in the event of a violation,
terminate or modify the activity so as to comply with this Final
Judgment, (ii) maintain all documents related to any violation or
potential violation of this Final Judgment for a period of five years
or the duration of this Final Judgment, whichever is shorter, and (iii)
maintain, and furnish to the United States at the United States'
request, a log of (a) all such documents and documents for which
Defendant claims protection under the attorney-client privilege or the
attorney work product doctrine, and (b) all potential and actual
violations, even if no documentary evidence regarding the violations
exist;
2. within thirty days of Management or the Antitrust Compliance
Officer learning of any such violation or potential violation of any of
the terms and conditions contained in this Final Judgment, file with
the United States a statement describing any violation or potential
violation of any of the terms and conditions contained in this Final
Judgment, which shall include a description of any Communications
constituting the violation or potential violation, including the date
and place of the Communication, the Persons involved, and the subject
matter of the Communication;
3. establish a whistleblower protection policy, which provides that
any employee may disclose, without reprisal for such disclosure, to the
Antitrust Compliance Officer information concerning any violation or
potential violation by the Defendant of this Final Judgment or U.S.
antitrust laws;
4. put into place, maintain, and monitor policies and procedures at
Cox Reps that ensure that Management and Sales Staff representing a
Client Station do not have access to the Competitively Sensitive
Information of any other Client Station Group operating in the same DMA
as the Client Station, including without limitation database access
restrictions;
5. have its CEO, General Counsel or Chief Legal Officer certify in
writing to the United States annually on the anniversary date of the
entry of this Final Judgment that Defendant has complied with the
provisions of this Final Judgment;
6. maintain and produce to the United States upon request: (i) a
list identifying all employees having received the annual antitrust
briefing required under Paragraphs VI(C)(3) and VI(C)(4); (ii) copies
of all materials distributed as part of the annual antitrust briefing
required under Paragraphs VI(C)(3) and VI(C)(4); and (iii) copies of
policies and procedures, or descriptions of policies and procedures not
documented in writing, required under Paragraph VI(D)(4). For all
materials requested to be produced under this Paragraph VI(D)(6) for
which Defendant claims is protected under the attorney-client privilege
or the attorney work-product doctrine, Defendant shall furnish to the
United States a privilege log; and
7. in a form and manner to be proposed by Defendant and approved by
the United States in its sole discretion, maintained and produced to
the United States upon request, notify each Client Station and Client
Station Group that the Defendant will refuse any explicit or implicit
instruction or request to Communicate any of the Client Station's or
Client Station Group's Competitively Sensitive Information or
Communicate another Station's Competitively Sensitive Information in a
way that would violate Sections IV and V of this Final Judgment, within
14 days of entry of the Final Judgment.
E. For the avoidance of doubt, the term ``potential violation'' as
used in Paragraph VI(D) does not include the discussion of future
conduct.
F. If Defendant acquires a Station after entry of this Final
Judgment, this Section VI will not apply to that acquired Station or
the employees of that acquired Station until 120 days after closing of
the acquisition of that acquired Station.
G. Subsections (i), (ii) and (iii) of Paragraph VI(C)(3), and the
provisions of Paragraphs VI(C)(4), VI(C)(5), and VI(D)(4) shall not
apply if (1) Defendant no longer has a controlling interest in Cox
Reps, Cox Media Group, or a Cox Station, as specified in those
subsections or paragraphs, and (2) the Person acquiring the controlling
interest in Cox Reps, Cox Media Group, or a Cox Station, as specified
in those subsections or paragraphs, has executed the Acknowledgement of
Applicability as to those entities.
VII. DEFENDANT'S COOPERATION
A. Defendant shall cooperate fully and truthfully with the United
States in any investigation or litigation
[[Page 44136]]
concerning whether or alleging that Defendant, any Station that
Defendant does not own or operate, or any Sales Representative Firm
Communicated Competitively Sensitive Information or agreed to
Communicate Competitively Sensitive Information, in a manner that
violated Section 1 of the Sherman Act, as amended, 15 U.S.C. Sec. 1.
Defendant shall use its best efforts to ensure that all current and
former officers, directors, employees, and agents also fully and
promptly cooperate with the United States. The full, truthful, and
continuing cooperation of Defendant shall include, but not be limited
to:
1. providing sworn testimony, excluding testimony that is protected
by the attorney-client privilege or the attorney work product doctrine,
to the United States regarding the Communicating of Competitively
Sensitive Information or any Agreement to Communicate Competitively
Sensitive Information;
2. producing, upon request of the United States, all documents,
data, and other materials, wherever located, to the extent not
protected under the attorney-client privilege or the attorney work-
product doctrine, in the possession, custody, or control of Defendant,
that relate to the Communication of Competitively Sensitive Information
or any Agreement to Communicate Competitively Sensitive Information,
and a log of any such documents protected by the attorney-client
privilege or the attorney work product doctrine;
3. making available for interview any officers, directors,
employees, and agents of Defendant if so requested on reasonable notice
by the United States; and
4. testifying at trial and other judicial proceedings fully,
truthfully, and under oath, when called upon to do so by the United
States;
5. provided however, that the obligations of Defendant to cooperate
fully with the United States as described in this Section VII shall
cease upon the conclusion of all of the United States' investigations
and the United States' litigations examining whether or alleging that
Defendant, any Station that Defendant does not own or operate, or any
Sales Representative Firm Communicated Competitively Sensitive
Information or agreed to Communicate Competitively Sensitive
Information, in violation of Section 1 of the Sherman Act, as amended,
15 U.S.C. Sec. 1, including exhaustion of all appeals or expiration of
time for all appeals of any Court ruling in each such matter, at which
point the United States will provide written notice to Defendant that
its obligations under this Section VII have expired.
B. Defendant is obligated to impose a litigation hold until the
United States provides written notice to the Defendant that its
obligations under this Section VII have expired. This Paragraph VII(B)
does not apply to documents created after entry of this Final Judgment.
C. Subject to the full, truthful, and continuing cooperation of
Defendant, as defined in Paragraph VII(A), the United States will not
bring any further civil action or any criminal charges against
Defendant related to any Communication of Competitively Sensitive
Information or any Agreement to Communicate Competitively Sensitive
Information provided such Communication or Agreement:
1. occurred before the date of the filing of the Second Amended
Complaint in this action (or in the case of a Station that is acquired
by Defendant after entry of this Final Judgment, was Communicated or
entered into before the acquisition and terminated within 120 days
after the closing of the acquisition);
2. does not involve the Defendant acting as a joint sales agent for
Stations from different Station Groups competing in the same DMA; and
3. does not constitute or include an agreement to fix prices or
divide markets.
D. The United States' agreement set forth in Paragraph VII(C) does
not apply to any acts of perjury or subornation of perjury (18 U.S.C.
Sec. Sec. 1621-22), making a false statement or declaration (18 U.S.C.
Sec. Sec. 1001, 1623), contempt (18 U.S.C. Sec. Sec. 401-402), or
obstruction of justice (18 U.S.C. Sec. 1503, et seq.) by the Defendant
or its officers, directors, and employees. The United States' agreement
set forth in Paragraph VII(C) does not release any claims against any
Client Station (except any Cox Station), Client Station Group (except
Cox Media Group), any Station that is not a Cox Station, or any Sales
Representative Firm (except Cox Reps).
VIII. COMPLIANCE INSPECTION
A. For the purposes of determining or securing compliance with this
Final Judgment or of any related orders, or of determining whether the
Final Judgment should be modified, and subject to any legally
recognized privilege, from time to time authorized representatives of
the United States Department of Justice, including consultants and
other persons retained by the United States, shall, upon written
request of an authorized representative of the Assistant Attorney
General in charge of the Antitrust Division, and on reasonable notice
to Defendant, be permitted:
1. to access during Defendant's office hours to inspect and copy,
or at the option of the United States, to require Defendant to provide
electronic or hard copies of all books, ledgers, accounts, records,
data, and documents in the possession, custody, or control of
Defendant, relating to any matters that are the subject of this Final
Judgment, not protected by the attorney- client privilege or the
attorney work product doctrine; and
2. to interview, either informally or on the record, Defendant's
officers, employees, or agents, who may have their individual counsel
present, regarding such matters. The interviews shall be subject to the
reasonable convenience of the interviewee and without restraint or
interference by Defendant; and
3. to obtain from Defendant written reports or responses to written
interrogatories, of information not protected by the attorney-client
privilege or attorney work product doctrine, under oath if requested,
relating to any matters that are the subject of this Final Judgment as
may be requested.
B. No information or documents obtained by the means provided in
this Section VIII shall be divulged by the United States to any Person
other than an authorized representative of the executive branch of the
United States, except in the course of legal proceedings to which the
United States is a party (including grand jury proceedings), or for the
purpose of securing compliance with this Final Judgment, or for law
enforcement purposes, or as otherwise required by law.
C. If at the time information or documents are furnished by
Defendant to the United States, Defendant represents and identifies in
writing the material in any such information or documents to which a
claim of protection may be asserted under Rule 26(c)(1)(G) of the
Federal Rules of Civil Procedure, and Defendant marks each pertinent
page of such material, ``Subject to claim of protection under Rule
26(c)(1)(G) of the Federal Rules of Civil Procedure,'' then the United
States shall give Defendant ten calendar days' notice prior to
divulging such material in any legal proceeding (other than a grand
jury proceeding).
IX. RETENTION OF JURISDICTION
This Court retains jurisdiction to enable any party to this Final
Judgment to apply to this Court at any time for further orders and
directions as may be necessary or appropriate to carry out or
[[Page 44137]]
construe this Final Judgment, to modify any of its provisions, to
enforce compliance, and to punish violations of its provisions.
X. ENFORCEMENT OF FINAL JUDGMENT
A. The United States retains and reserves all rights to enforce the
provisions of this Final Judgment, including its right to seek an order
of contempt from this Court. Defendant agrees that in any civil
contempt action, any motion to show cause, or any similar civil action
brought by the United States regarding an alleged violation of this
Final Judgment, the United States may establish a violation of the
Final Judgment and the appropriateness of any remedy therefor by a
preponderance of the evidence, and Defendant waives any argument that a
different standard of proof should apply.
B. The Final Judgment should be interpreted to give full effect to
the procompetitive purposes of the antitrust laws and to restore all
competition the United States alleged was harmed by the challenged
conduct. Defendant agrees that it may be held in contempt of, and that
the Court may enforce, any provision of this Final Judgment that, as
interpreted by the Court in light of these procompetitive principles
and applying ordinary tools of interpretation, is stated specifically
and in reasonable detail, whether or not it is clear and unambiguous on
its face. In any such interpretation, the terms of this Final Judgment
should not be construed against either party as the drafter.
C. In any enforcement proceeding in which the Court finds that
Defendant has violated this Final Judgment, the United States may apply
to the Court for a one-time extension of this Final Judgment, together
with such other relief as may be appropriate. In connection with any
successful effort by the United States to enforce this Final Judgment
against Defendant, whether litigated or resolved prior to litigation,
Defendant agrees to reimburse the United States for the fees and
expenses of its attorneys, as well as any other costs including
experts' fees, incurred in connection with that enforcement effort,
including in the investigation of the potential violation.
XI. EXPIRATION OF FINAL JUDGMENT
Unless this Court grants an extension, this Final Judgment shall
expire seven years from the date of its entry, except that after five
years from the date of its entry, this Final Judgment may be terminated
upon notice by the United States to the Court and Defendant that the
continuation of the Final Judgment no longer is necessary or in the
public interest.
XII. NOTICE
For purposes of this Final Judgment, any notice or other
communication required to be provided to the United States shall be
sent to the person at the address set forth below (or such other
addresses as the United States may specify in writing to Defendant):
Chief, Media, Entertainment, and Professional Services Section, U.S.
Department of Justice Antitrust Division, 450 Fifth Street NW, Suite
4000, Washington, DC 20530.
XIII. PUBLIC INTEREST DETERMINATION
Entry of this Final Judgment is in the public interest. The parties
have complied with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16, including making copies available to
the public of this Final Judgment, the Competitive Impact Statement,
and any comments thereon and the United States' responses to comments.
Based upon the record before the Court, which includes the Competitive
Impact Statement and any comments and response to comments filed with
the Court, entry of this Final Judgment is in the public interest.
IT IS SO ORDERED by the Court, this __ day of __, 201_.
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16
-----------------------------------------------------------------------
United States District Judge
EXHIBIT 1(A)
[Company Letterhead]
[Name and Address of Antitrust Compliance Officer]
Re: Prohibitions Against Sharing of Competitively Sensitive Information
Dear [XX]:
I provide you this notice regarding a judgment recently entered by
a federal judge in Washington, D.C. prohibiting the sharing of certain
information with or among stations competing in the same DMA, other
national sales representative firms, or Cox Reps' sales staff
representing client stations in the same DMA that are not part of the
same station group.
The judgment applies to our company and all of its employees,
including you, so it is important that you understand the obligations
it imposes on us. [CEO Name] has asked me to let each of you know that
[s/he] expects you to take these obligations seriously and abide by
them.
The judgment prohibits us from sharing or receiving, directly or
indirectly, including through another national sales representative
firm, competitively sensitive information with or from any employee,
agent, or representative of another broadcast television station in the
same DMA we do not own or operate or that Cox Reps does not represent.
In addition, while the judgment does not prevent Cox Reps from
obtaining competitively sensitive information from our client stations,
we cannot share client's competitively sensitive information with
another station in the same DMA that is not part of the same station
group, even if that other station is also a client of Cox Reps.
Competitively sensitive information means any non-public information
regarding the sale of spot advertising on broadcast television
stations, including information relating to any pricing or pricing
strategies, pacing, holding capacity, revenues, or market shares. There
are limited exceptions to this restriction, which are listed in the
judgment. The company will provide further training on what exchanges
of information are appropriate. You must consult with me if you have
any questions on whether a particular circumstance is subject to an
exception under the judgment.
A copy of the judgment is attached. Please read it carefully and
familiarize yourself with its terms. The judgment, rather than the
above description, is controlling. If you have any questions about the
judgment or how it affects your sale of spot advertising or
representation of our client broadcast stations, please contact me as
soon as possible.
Please sign and return the attached Employee Certification to
[Defendant's Antitrust Compliance Officer] within thirty days of your
receipt of this letter. Thank you for your cooperation.
Sincerely,
[Defendant's Antitrust Compliance Officer]
Employee Certification
I, ____ [name], ____ [position] at ____ [station or location] do
hereby certify that I (i) have read and understand, and agree to abide
by, the terms of the Final Judgment; (ii) am not aware of any violation
of the Final Judgment that has not been reported to [Defendant]; and
(iii) understand that my failure to comply with this Final Judgment may
result in an enforcement action for civil or criminal contempt of
court.
-----------------------------------------------------------------------
[[Page 44138]]
Name:
Date:
EXHIBIT 1(B)
[Company Letterhead]
[Name and Address of Antitrust Compliance Officer]
Re: Prohibitions Against Sharing of Competitively Sensitive Information
Dear [XX]:
I provide you this notice regarding a judgment recently entered by
a federal judge in Washington, D.C. prohibiting the sharing of certain
information with or among stations competing in the same DMA, other
national sales representative firms, or Cox Reps' sales staff
representing client stations in the same DMA that are not part of the
same station group.
The judgment prohibits Cox Reps from sharing with or receiving from
any employee, agent, or representative of a broadcast television
station--whether directly or indirectly, including through another
national sales representative firm--competitively sensitive information
from or regarding another station in the same DMA that is not part of
the same broadcast station group. In addition, while the judgment does
not prevent Cox Reps from obtaining competitively sensitive information
from its client stations, Cox Reps cannot share a client's
competitively sensitive information with another station in the same
DMA that is not part of the same station group, even if that other
station is also a client of Cox Reps. Competitively sensitive
information means any non-public information regarding the sale of spot
advertising on broadcast television stations, including information
relating to any pricing or pricing strategies, pacing, holding
capacity, revenues, or market shares. There are limited exceptions to
this restriction, which are listed in the judgment.
A copy of the judgment is attached. The judgment, rather than the
above description, is controlling. If you have any questions about this
letter, please feel free to contact me.
Sincerely,
[Defendant's Antitrust Compliance Officer]
EXHIBIT 2
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
United States of America; Plaintiff, v. Sinclair Broadcast
Group, Inc., et al., Defendants.
Case No.
ACKNOWLEDGEMENT OF APPLICABILITY
The undersigned acknowledges that [Full Buyer Name], including its
successors and assigns, and its subsidiaries, divisions, and broadcast
television stations, and their directors, officers, and employees
(``Acquirer''), following consummation of the Acquirer's acquisition of
[insert names of Cox Reps or station or stations acquired] (each, an
``Acquired Station'' \1\), is bound by the Final Judgment entered by
this Court in the above-captioned action against Cox Enterprises, Inc.
(``Final Judgment''), as if the Acquirer were a Defendant under the
Final Judgment, as follows:
---------------------------------------------------------------------------
\1\ The term ``Cox Reps'' can be substituted for ``Acquired
Station'' throughout this Acknowledgement if the acquired asset is
Cox Reps. If both Cox Reps and a Cox Station are acquired, use both
terms.
---------------------------------------------------------------------------
1. The Acquirer shall be bound in full by all Sections of the
Consent Decree not specifically discussed below.
2. As to Sections IV, V, and VII of the Final Judgment, the
Acquirer is bound to the Final Judgment only as to (i) each Acquired
Station, each Acquired Station's successors and assigns, and each
Acquired Station's subsidiaries and divisions, and each Acquired
Station's directors, officers, and employees, (ii) Acquirer's officers
and directors only with respect to any responsibilities or actions
regarding any Acquired Stations, and (iii) employees with management or
supervisory responsibilities for Acquirer's business or operations
related to the sale of spot advertising on any Acquired Station, only
with respect to those responsibilities.
3. As to Sections VI(C)(3), VI(C)(4), VI(C)(6), VI(C)(8), VI(D),
VI(E), and VIII of the Final Judgment, the Acquirer is bound to the
Final Judgment only as to (i) each Acquired Station, each Acquired
Station's successors and assigns, and each Acquired Station's
subsidiaries and divisions, and each Acquired Station's directors,
officers, and employees, (ii) Acquirer's officers and directors, and
(iii) employees with management or supervisory responsibilities for
Acquirer's business or operations related to the sale of spot
advertising on any Acquired Station.
4. The release contained in Sections VII(C) and (D) applies to the
Acquirer, but only to civil actions or criminal charges arising from
actions taken by any Acquired Station.
5. The Acquirer shall not be bound by Sections VI(C)(1), VI(C)(2),
VI(C)(5), VI(C)(7), and VI(F) of the Final Judgment at all, unless the
Acquirer acquires the Acquired Stations earlier than 45 days after
entry of the Final Judgment.
6. Section VI(A) applies to the Acquirer, but, unless the Acquirer
acquires the Acquired Stations earlier than 45 days after entry of the
Final Judgment, Section VI(A) is modified to make the initial period
for appointing an Antitrust Compliance Officer in the first sentence
120 days from consummation of the Acquirer's acquisition of the
Acquired Station or Acquired Stations.
This Acknowledgement of Applicability may be voided by a joint
written agreement between the United States and the Acquirer.
Dated: [ ]
Respectfully submitted,
/s/--------------------------------------------------------------------
[Counsel for Acquirer]
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
United States Of America; Plaintiff, v. Sinclair Broadcast
Group, Inc., et al., Defendants.
Case No.
[PROPOSED] FINAL JUDGMENT
WHEREAS, Plaintiff, United States of America, filed its Amended
Complaint on ___, 2019, alleging that Defendant Fox Corporation, among
others, violated Section 1 of the Sherman Act, 15 U.S.C. Sec. 1, the
United States and Defendant, by their respective attorneys, have
consented to the entry of this Final Judgment without trial or
adjudication of any issue of fact or law;
AND WHEREAS, this Final Judgment does not constitute any evidence
against or admission by any party regarding any issue of fact or law;
AND WHEREAS, the United States and Defendant agree to be bound by
the provisions of this Final Judgment pending its approval by this
Court;
AND WHEREAS, the Defendant agrees to undertake certain actions and
to refrain from engaging in certain forms of information sharing with
its competitors;
NOW THEREFORE, before any testimony is taken, without trial or
adjudication of any issue of fact or law, and upon consent of the
parties, it is ORDERED, ADJUDGED, AND DECREED:
I. JURISDICTION
This Court has jurisdiction over the subject matter and each of the
parties to this action.
The allegations in the Complaint arise under Section 1 of the
Sherman Act, as amended, 15 U.S.C. Sec. 1. See 28 U.S.C. Sec. 1331.
[[Page 44139]]
II. DEFINITIONS
As used in this Final Judgment:
A. ``Advertiser'' means an advertiser, an advertiser's buying
agent, or an advertiser's representative.
B. ``Agreement'' means any agreement, understanding, pact,
contract, or arrangement, formal or informal, oral or written, between
two or more Persons.
C. ``Communicate,'' ``Communicating,'' and ``Communication(s)''
means to provide, send, discuss, circulate, exchange, request, or
solicit information, whether directly or indirectly, and regardless of
the means by which it is accomplished, including orally or by written
means of any kind, such as electronic communications, e-mails,
facsimiles, telephone communications, voicemails, text messages, audio
recordings, meetings, interviews, correspondence, exchange of written
or recorded information, or face-to-face meetings.
D. ``Competitively Sensitive Information'' means any of the
following information, less than eighteen months old, of Defendant or
any broadcast television station regarding the sale of spot advertising
on broadcast television stations: Non-Public Information relating to
pricing or pricing strategies, pacing, holding capacity, revenues, or
market shares. Reports containing only aggregated market-level or
national data are not Competitively Sensitive Information, but reports
(including by paid subscription) that are customized or confidential to
a particular Station or broadcast television station group are
Competitively Sensitive Information. For the avoidance of doubt, spot
advertising does not include network television advertising sold by the
Defendant or television advertising sold by the Defendant in its
capacity as an agent of the owners of syndicated programming.
E. ``Cooperative Agreement'' means (1) joint sales agreements,
joint operating agreements, local marketing agreements, news share
agreements, or shared services agreements, or (2) any agreement through
which a Person exercises control over any broadcast television station
not owned by the Person.
F. ``Defendant'' means Fox Corporation, a Delaware corporation with
its headquarters in New York, New York, its successors and assigns, and
its subsidiaries, divisions, and Stations, and their directors,
officers, and employees.
G. ``DMA'' means Designated Market Area as defined by A.C. Nielsen
Company and used by the Investing in Television BIA Market Report 2018.
H. ``Management'' means all directors and executive officers of
Defendant, or any other employee with management or supervisory
responsibilities for Defendant's business or operations related to the
sale of spot advertising on any Station.
I. ``Non-Public Information'' means information that is not
available from public sources or generally available to the public.
Measurement or quantification of a Station's future holding capacity is
Non-Public Information, but measurement or quantification of a
Station's past holding capacity is not Non-Public Information. For the
avoidance of doubt, the fact that information is available by paid
subscription does not on its own render the information public.
J. ``Person'' means any natural person, corporation, company,
partnership, joint venture, firm, association, proprietorship, agency,
board, authority, commission, office, or other business or legal
entity, whether private or governmental.
K. ``Sales Representative Firm'' means any organization, including
without limitation Katz Media Group, Inc. and Cox Reps, Inc., and their
respective subsidiaries and divisions, that represents a Station or its
owner in the sale of spot advertising.
L. ``Sales Staff'' means Defendant's employees with responsibility
for the sale of spot advertising on any Station.
M. ``Station'' means any broadcast television station, its
successors and assigns, and its subsidiaries, divisions, groups, and
its owner or operator and its directors, officers, managers, and
employees, unless a Station owns, is owned by, or is under common
ownership with a Sales Representative Firm, in which case that Sales
Representative Firm will not be considered a Station.
III. APPLICABILITY
This Final Judgment applies to Defendant, other Persons in active
concert or participation with Defendant who receive actual notice of
this Final Judgment by personal service or otherwise, and any Person
that signs an Acknowledgment of Applicability, attached as Exhibit 2,
to the extent set forth therein, as a condition of the purchase of a
Station owned by Defendant as of February 1, 2019. This Final Judgment
applies to Defendant's actions performed under any Cooperative
Agreement, even if those actions are taken on behalf of a third party.
This Final Judgment is fully enforceable, including by penalty of
contempt, against all of the foregoing.
IV. PROHIBITED CONDUCT
A. Defendant's Management and Sales Staff shall not, directly or
indirectly: Communicate Competitively Sensitive Information to any
Station in the same DMA it does not own or operate;
1. Knowingly use Competitively Sensitive Information from or
regarding any Station in the same DMA it does not own or operate;
2. Encourage or facilitate the Communication of Competitively
Sensitive Information to or from any Station in the same DMA it does
not own or operate; or
3. Attempt to enter into, enter into, maintain, or enforce any
agreement to Communicate Competitively Sensitive Information with any
Station in the same DMA it does not own or operate.
B. The prohibitions under Paragraph IV(A) apply to Defendant's
Communicating or agreeing to Communicate through a Sales Representative
Firm or a third-party agent at Defendant's instruction or request.
C. Defendant shall not sell any Station owned by the Defendant as
of February 1, 2019 to any Person unless that Person has first executed
the Acknowledgment of Applicability, attached as Exhibit 2. Defendant
shall submit any Acknowledgement of Applicability to the United States
within 15 days of consummating the sale of such Station. The United
States, in its sole discretion, may waive the prohibition in this
Paragraph IV(C) on a Station-by-Station basis. Alternatively, the
United States and the Person signing the Acknowledgement of
Applicability may agree to void the Acknowledgement of Applicability at
any time. The first sentence of this paragraph shall not apply to the
sale of any Station to a Person already bound to a final judgment
entered by a court regarding the Communication of Competitively
Sensitive Information.
V. CONDUCT NOT PROHIBITED
A. Nothing in Section IV shall prohibit Defendant from
Communicating, using, or encouraging or facilitating the Communication
of, Competitively Sensitive Information with an actual or prospective
Advertiser, except that, if the Advertiser is another Station,
Defendant's Communicating, using, or encouraging or facilitating the
Communication of, Competitively Sensitive Information is excluded from
the prohibitions of Section IV only insofar as is reasonably necessary
to negotiate the sale of spot
[[Page 44140]]
advertising on broadcast television stations. For the avoidance of
doubt, Defendant is not prohibited from internally using Competitively
Sensitive Information received from an Advertiser that is a Station
under the preceding sentence, but Defendant is prohibited from
Communicating that Competitively Sensitive Information to a Station in
the same DMA that it does not own or operate.
B. Nothing in Section IV shall prohibit Defendant from, after
securing advice of counsel and in consultation with the Antitrust
Compliance Officer, Communicating, using, encouraging or facilitating
the Communication of, or attempting to enter into, entering into,
maintaining, or enforcing any agreement to Communicate Competitively
Sensitive Information with any Station when such Communication or use
is (a) for the purpose of evaluating or effectuating a bona fide
acquisition, disposition, or exchange of Stations or related assets, or
(b) reasonably necessary for achieving the efficiencies of any other
legitimate competitor collaboration. With respect to any such
agreement:
1. For all agreements under Part V(B)(a) with any other Station to
Communicate Competitively Sensitive Information that Defendant enters
into, renews, or affirmatively extends after the date of entry of this
Final Judgment, Defendant shall maintain documents sufficient to show:
i. the specific transaction or proposed transaction to which the
sharing of Competitively Sensitive Information relates;
ii. the employees, identified with reasonable specificity, who are
involved in the sharing of Competitively Sensitive Information; and
iii. the termination date or event of the sharing of Competitively
Sensitive Information.
2. All agreements under Part V(B)(b) with any other Station to
Communicate Competitively Sensitive Information that Defendant enters
into, renews, or affirmatively extends after the date of entry of this
Final Judgment shall be in writing, and shall:
i. identify and describe, with specificity, the collaboration to
which it is ancillary;
ii. be narrowly tailored to permit the Communication of
Competitively Sensitive Information only when reasonably necessary and
only to the employees reasonably necessary to effectuate the
collaboration;
iii. identify with reasonable specificity the Competitively
Sensitive Information Communicated pursuant to the agreement and
identify the employees to receive the Competitively Sensitive
Information;
iv. contain a specific termination date or event; and
v. be signed by all parties to the agreement, including any
modifications to the agreement.
3. For Communications under Part V(B)(a) above, Defendant shall
maintain copies of all materials required under Paragraph V(B)(1) for
five years or the duration of the Final Judgment, whichever is shorter,
following entry into any agreement to Communicate or receive
Competitively Sensitive Information, and Defendant shall make such
documents available to the United States upon request, if such request
is made during the preservation period.
4. For Communications under Part V(B)(b) above, Defendant shall
furnish a copy of all materials required under Paragraph V(B)(2) to the
United States within thirty days of the entry, renewal, or extension of
the agreement.
5. For purposes of this Section V(B) only, a Joint Sales Agreement,
Local Marketing Agreement, or similar agreement pursuant to which the
Defendant Communicates, uses, encourages or facilitates the
Communication of, or attempts to enter into, enters into, maintains, or
enforces any agreement to Communicate Competitively Sensitive
Information related solely to the sale of spot advertising for which
Defendant is responsible on a Station, shall be considered a
``legitimate competitor collaboration'' under Part V(B)(b).
C. Nothing in Section IV shall prohibit Defendant from engaging in
conduct in accordance with the doctrine established in Eastern Railroad
Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127
(1961), United Mine Workers v. Pennington, 381 U.S. 657 (1965), and
their progeny.
D. Nothing in Section IV prohibits Defendant from (1)
Communicating, encouraging or facilitating the Communication of, or
attempting to enter into, entering into, maintaining, or enforcing any
agreement to Communicate Competitively Sensitive Information for the
purpose of aggregation if (a) Competitively Sensitive Information is
sent to or received from, and the aggregation is managed by, a third
party not owned or operated by any Station; (b) the information
disseminated by the aggregator is limited to historical total broadcast
television station revenue or other geographic or characteristic
categorization (e.g., national, local, or political sales revenue); and
(c) any information disseminated is sufficiently aggregated such that
it would not allow a recipient to identify, deduce, or estimate the
prices or pacing of any individual broadcast television station not
owned or operated by that recipient; or (2) using information that
meets the requirements of Parts V(D)(1)(a)-(c).
VI. REQUIRED CONDUCT
A. Within ten days of entry of this Final Judgment, Defendant shall
appoint an Antitrust Compliance Officer who is an internal employee or
Officer of the Defendant, and identify to the United States the
Antitrust Compliance Officer's name, business address, telephone
number, and email address. Within forty-five days of a vacancy in the
Antitrust Compliance Officer position, Defendant shall appoint a
replacement, and shall identify to the United States the Antitrust
Compliance Officer's name, business address, telephone number, and
email address. Defendant's initial or replacement appointment of an
Antitrust Compliance Officer is subject to the approval of the United
States, in its sole discretion.
B. The Antitrust Compliance Officer shall have, or shall retain
outside counsel who has, the following minimum qualifications:
1. be an active member in good standing of the bar in any U.S.
jurisdiction; and
2. have at least five years' experience in legal practice,
including experience with antitrust matters, unless finding an
Antitrust Compliance Officer or outside counsel meeting this experience
requirement is a hardship on or is not reasonably available to the
Defendant, under which circumstances the Defendant may select an
Antitrust Compliance Officer or shall retain outside counsel who has at
least five years' experience in legal practice, including experience
with regulatory or compliance matters.
C. The Antitrust Compliance Officer shall, directly or through the
employees or counsel working at the Antitrust Compliance Officer's
responsibility and direction:
1. within fourteen days of entry of the Final Judgment, furnish to
all of Defendant's Management and Sales Staff a copy of this Final
Judgment, the Competitive Impact Statement filed by the United States
with the Court, and a cover letter in a form attached as Exhibit 1;
2. within fourteen days of entry of the Final Judgment, in a manner
to be devised by Defendant and approved by the United States, provide
Defendant's Management and Sales Staff reasonable notice of the meaning
and requirements of this Final Judgment;
[[Page 44141]]
3. annually brief Defendant's Management and Sales Staff on the
meaning and requirements of this Final Judgment and the U.S. antitrust
laws;
4. brief any Person who succeeds a Person in any position
identified in Paragraph VI(C)(3), within sixty days of such succession;
5. obtain from each Person designated in Paragraph VI(C)(3) or
VI(C)(4), within thirty days of that Person's receipt of the Final
Judgment, a certification that the Person (i) has read and understands
and agrees to abide by the terms of this Final Judgment; (ii) is not
aware of any violation of the Final Judgment that has not been reported
to Defendant; and (iii) understands that failure to comply with this
Final Judgment may result in an enforcement action for civil or
criminal contempt of court;
6. annually communicate to Defendant's Management and Sales Staff
that they may disclose to the Antitrust Compliance Officer, without
reprisal for such disclosure, information concerning any violation or
potential violation of this Final Judgment or the U.S. antitrust laws
by Defendant;
7. within thirty days of the latest filing of the Complaint,
Proposed Final Judgment, or Competitive Impact Statement in this
action, Defendant shall provide notice, in each DMA in which Defendant
owns or operates a Station, to every full power Station in that DMA
that sells broadcast television spot advertising that Defendant does
not own or operate, of the Complaint, Proposed Final Judgment, and
Competitive Impact Statement in a form and manner to be proposed by
Defendant and approved by the United States in its sole discretion.
Defendant shall provide the United States with its proposal, including
the list of recipients, within ten days of the filing of the Complaint;
and
8. maintain for five years or until expiration of the Final
Judgment, whichever is shorter, a copy of all materials required to be
issued under Paragraph VI(C), and furnish them to the United States
within ten days if requested to do so, except documents protected under
the attorney-client privilege or the attorney work-product doctrine.
For all materials required to be furnished under Paragraph VI(C) which
Defendant claims are protected under the attorney-client privilege or
the attorney work-product doctrine, Defendant shall furnish to the
United States a privilege log.
D. Defendant shall:
1. upon Management or the Antitrust Compliance Officer learning of
any violation or potential violation of any of the terms and conditions
contained in this Final Judgment, (i) promptly take appropriate action
to investigate, and in the event of a violation, terminate or modify
the activity so as to comply with this Final Judgment, (ii) maintain
all documents related to any violation or potential violation of this
Final Judgment for a period of five years or the duration of this Final
Judgment, whichever is shorter, and (iii) maintain, and furnish to the
United States at the United States' request, a log of (a) all such
documents and documents for which Defendant claims protection under the
attorney-client privilege or the attorney work product doctrine, and
(b) all potential and actual violations, even if no documentary
evidence regarding the violations exist;
2. within thirty days of Management or the Antitrust Compliance
Officer learning of any such violation or potential violation of any of
the terms and conditions contained in this Final Judgment, file with
the United States a statement describing any violation or potential
violation of any of the terms and conditions contained in this Final
Judgment, which shall include a description of any Communications
constituting the violation or potential violation, including the date
and place of the Communication, the Persons involved, and the subject
matter of the Communication;
3. establish a whistleblower protection policy, which provides that
any employee may disclose, without reprisal for such disclosure, to the
Antitrust Compliance Officer information concerning any violation or
potential violation by the Defendant of this Final Judgment or U.S.
antitrust laws;
4. have its CEO, General Counsel or Chief Legal Officer certify in
writing to the United States annually on the anniversary date of the
entry of this Final Judgment that Defendant has complied with the
provisions of this Final Judgment; and
5. maintain and produce to the United States upon request: (i) a
list identifying all employees having received the annual antitrust
briefing required under Paragraphs VI(C)(3) and VI(C)(4); and (ii)
copies of all materials distributed as part of the annual antitrust
briefing required under Paragraphs VI(C)(3) and VI(C)(4). For all
materials requested to be produced under this Paragraph VI(D)(5) for
which Defendant claims is protected under the attorney-client privilege
or the attorney work-product doctrine, Defendant shall furnish to the
United States a privilege log.
E. For the avoidance of doubt, the term ``potential violation'' as
used in Paragraph VI(D) does not include the discussion of future
conduct.
F. If Defendant acquires a Station after entry of this Final
Judgment, this Section VI will not apply to that acquired Station or
the employees of that acquired Station until 120 days after closing of
the acquisition of that acquired Station.
VII. DEFENDANT'S COOPERATION
A. Defendant shall cooperate fully and truthfully with the United
States in any investigation or litigation concerning whether or
alleging that Defendant, any Station that Defendant does not own or
operate, or any Sales Representative Firm Communicated Competitively
Sensitive Information with or among Defendant or any other Station or
any Sales Representative Firm in violation of Section 1 of the Sherman
Act, as amended, 15 U.S.C. Sec. 1. Defendant shall use its best
efforts to ensure that all current and former officers, directors,
employees, and agents also fully and promptly cooperate with the United
States. The full, truthful, and continuing cooperation of Defendant
shall include, but not be limited to:
1. providing sworn testimony, that is not protected by the
attorney-client privilege or the attorney work product doctrine, to the
United States regarding the Communicating of Competitively Sensitive
Information or any agreement with any other Station it does not own or
such other Station's Sales Representative Firm to Communicate
Competitively Sensitive Information while an employee of the Defendant;
2. producing, upon request of the United States, all documents,
data, and other materials, wherever located, to the extent not
protected under the attorney-client privilege or the attorney work-
product doctrine, in the possession, custody, or control of Defendant,
that relate to the Communication of Competitively Sensitive Information
or any agreement with any other Station or such other Station's Sales
Representative Firm to Communicate Competitively Sensitive Information,
and a log of documents protected by the attorney-client privilege or
the attorney work product doctrine;
3. making available for interview any officers, directors,
employees, and agents of Defendant if so requested on reasonable notice
by the United States; and
4. testifying at trial and other judicial proceedings fully,
truthfully, and under oath, when called upon to do so by the United
States;
5. provided however, that the obligations of Defendant to cooperate
[[Page 44142]]
fully with the United States as described in this Section VII shall
cease upon the conclusion of all of the United States' investigations
and the United States' litigations examining whether or alleging that
Defendant, any Station that Defendant does not own or operate or such
other Station's Sales Representative Firm Communicated Competitively
Sensitive Information or with or among Defendant or any other Station
or any Sales Representative Firm in violation of Section 1 of the
Sherman Act, as amended, 15 U.S.C. Sec. 1, including exhaustion of all
appeals or expiration of time for all appeals of any Court ruling in
each such matter, at which point the United States will provide written
notice to Defendant that its obligations under this Section VII have
expired.
B. Defendant is obligated to impose a litigation hold until the
United States provides written notice to the Defendant that its
obligations under this Section VII have expired. This Paragraph VII(B)
does not apply to documents created after entry of this Final Judgment.
C. Subject to the full, truthful, and continuing cooperation of
Defendant, as defined in Paragraph VII(A), the United States will not
bring any further civil action or any criminal charges against
Defendant related to any Communication of Competitively Sensitive
Information or any agreement to Communicate Competitively Sensitive
Information with any other Station it does not own or operate or such
other Station's Sales Representative Firm when that agreement:
1. was Communicated, entered into and terminated on or before the
date of the filing of the Complaint in this action (or in the case of a
Station that is acquired by Defendant after entry of this Final
Judgment, was Communicated or entered into before the acquisition and
terminated within 120 days after the closing of the acquisition); and
2. does not constitute or include an agreement to fix prices or
divide markets.
D. The United States' agreement set forth in Paragraph VII(C) does
not apply to any acts of perjury or subornation of perjury (18 U.S.C.
Sec. Sec. 1621-22), making a false statement or declaration (18 U.S.C.
Sec. Sec. 1001, 1623), contempt (18 U.S.C. Sec. Sec. 401-402), or
obstruction of justice (18 U.S.C. Sec. 1503, et seq.) by the Defendant
or its officers, directors, and employees. The United States' agreement
set forth in Paragraph VII(C) does not release any claims against any
Sales Representative Firm.
VIII. COMPLIANCE INSPECTION
A. For the purposes of determining or securing compliance with this
Final Judgment or of any related orders, or of determining whether the
Final Judgment should be modified, and subject to any legally
recognized privilege, from time to time authorized representatives of
the United States Department of Justice, including consultants and
other persons retained by the United States, shall, upon written
request of an authorized representative of the Assistant Attorney
General in charge of the Antitrust Division, and on reasonable notice
to Defendant, be permitted:
1. to access during Defendant's office hours to inspect and copy,
or at the option of the United States, to require Defendant to provide
electronic or hard copies of all books, ledgers, accounts, records,
data, and documents in the possession, custody, or control of
Defendant, relating to any matters that are the subject of this Final
Judgment, not protected by the attorney- client privilege or the
attorney work product doctrine; and
2. to interview, either informally or on the record, Defendant's
officers, employees, or agents, who may have their individual counsel
present, regarding such matters. The interviews shall be subject to the
reasonable convenience of the interviewee and without restraint or
interference by Defendant; and
3. to obtain from Defendant written reports or responses to written
interrogatories, of information not protected by the attorney-client
privilege or attorney work product doctrine, under oath if requested,
relating to any matters that are the subject of this Final Judgment as
may be requested.
B. No information or documents obtained by the means provided in
this Section VIII shall be divulged by the United States to any Person
other than an authorized representative of the executive branch of the
United States, except in the course of legal proceedings to which the
United States is a party (including grand jury proceedings), or for the
purpose of securing compliance with this Final Judgment, or for law
enforcement purposes, or as otherwise required by law.
C. If at the time information or documents are furnished by
Defendant to the United States, Defendant represents and identifies in
writing the material in any such information or documents to which a
claim of protection may be asserted under Rule 26(c)(1)(G) of the
Federal Rules of Civil Procedure, and Defendant marks each pertinent
page of such material, ``Subject to claim of protection under Rule
26(c)(1)(G) of the Federal Rules of Civil Procedure,'' then the United
States shall give Defendant ten calendar days' notice prior to
divulging such material in any legal proceeding (other than a grand
jury proceeding).
IX. RETENTION OF JURISDICTION
This Court retains jurisdiction to enable any party to this Final
Judgment to apply to this Court at any time for further orders and
directions as may be necessary or appropriate to carry out or construe
this Final Judgment, to modify any of its provisions, to enforce
compliance, and to punish violations of its provisions.
X. ENFORCEMENT OF FINAL JUDGMENT
A. The United States retains and reserves all rights to enforce the
provisions of this Final Judgment, including its right to seek an order
of contempt from this Court. Defendant agrees that in any civil
contempt action, any motion to show cause, or any similar civil action
brought by the United States regarding an alleged violation of this
Final Judgment, the United States may establish a violation of the
Final Judgment and the appropriateness of any remedy therefor by a
preponderance of the evidence, and Defendant waives any argument that a
different standard of proof should apply.
B. The Final Judgment should be interpreted to give full effect to
the procompetitive purposes of the antitrust laws and to restore all
competition the United States alleged was harmed by the challenged
conduct. Defendant agrees that it may be held in contempt of, and that
the Court may enforce, any provision of this Final Judgment that, as
interpreted by the Court in light of these procompetitive principles
and applying ordinary tools of interpretation, is stated specifically
and in reasonable detail, whether or not it is clear and unambiguous on
its face. In any such interpretation, the terms of this Final Judgment
should not be construed against either party as the drafter.
C. In any enforcement proceeding in which the Court finds that
Defendant has violated this Final Judgment, the United States may apply
to the Court for a one-time extension of this Final Judgment, together
with such other relief as may be appropriate. In connection with any
successful effort by the United States to enforce this Final Judgment
against Defendant, whether litigated or resolved prior to litigation,
[[Page 44143]]
Defendant agrees to reimburse the United States for the fees and
expenses of its attorneys, as well as any other costs including
experts' fees, incurred in connection with that enforcement effort,
including in the investigation of the potential violation.
XI. EXPIRATION OF FINAL JUDGMENT
Unless this Court grants an extension, this Final Judgment shall
expire seven years from the date of its entry, except that after five
years from the date of its entry, this Final Judgment may be terminated
upon notice by the United States to the Court and Defendant that the
continuation of the Final Judgment no longer is necessary or in the
public interest.
XII. NOTICE
For purposes of this Final Judgment, any notice or other
communication required to be provided to the United States shall be
sent to the person at the address set forth below (or such other
addresses as the United States may specify in writing to Defendant):
Chief, Media, Entertainment, and Professional Services Section, U.S.
Department of Justice Antitrust Division, 450 Fifth Street NW, Suite
4000, Washington, DC 20530.
XIII. PUBLIC INTEREST DETERMINATION
Entry of this Final Judgment is in the public interest. The parties
have complied with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16, including making copies available to
the public of this Final Judgment, the Competitive Impact Statement,
and any comments thereon and the United States' responses to comments.
Based upon the record before the Court, which includes the Competitive
Impact Statement and any comments and response to comments filed with
the Court, entry of this Final Judgment is in the public interest.
IT IS SO ORDERED by the Court, this __ day of ___, 201_.
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16
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United States District Judge
EXHIBIT 1
[Company Letterhead]
[Name and Address of Antitrust Compliance Officer]
Re: Prohibitions Against Sharing of Competitively Sensitive Information
Dear [XX]:
I provide you this notice regarding a judgment recently entered by
a federal judge in Washington, D.C. prohibiting the sharing of certain
information with other broadcast television station(s).
The judgment applies to our company and all of its employees,
including you, so it is important that you understand the obligations
it imposes on us. [CEO Name] has asked me to let each of you know that
[s/he] expects you to take these obligations seriously and abide by
them.
The judgment prohibits us from sharing or receiving, directly or
indirectly (including through a national sales representative firm),
competitively sensitive information with or from any employee, agent,
or representative of another broadcast television station in the same
DMA it does not own or operate. Competitively sensitive information
means any non-public information regarding the sale of spot advertising
on broadcast television stations, including information relating to any
pricing or pricing strategies, pacing, holding capacity, revenues, or
market shares. There are limited exceptions to this restriction, which
are listed in the judgment. The company will provide briefing on the
legitimate or illegitimate exchange of information.
You must consult with me if you have any questions on whether a
particular circumstance is subject to an exception under the judgment.
A copy of the judgment is attached. Please read it carefully and
familiarize yourself with its terms. The judgment, rather than the
above description, is controlling. If you have any questions about the
judgment or how it affects your sale of spot advertising, please
contact me as soon as possible.
Please sign and return the attached Employee Certification to
[Defendant's Antitrust Compliance Officer] within thirty days of your
receipt of this letter. Thank you for your cooperation.
Sincerely,
[Defendant's Antitrust Compliance Officer]
Employee Certification
I, ____ [name], ____ [position] at ____ [station or location] do
hereby certify that I (i) have read and understand, and agree to abide
by, the terms of the Final Judgment; (ii) am not aware of any violation
of the Final Judgment that has not been reported to [Defendant]; and
(iii) understand that my failure to comply with this Final Judgment may
result in an enforcement action for civil or criminal contempt of
court.
Name:
Date:
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EXHIBIT 2
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
United States of America; Plaintiff, v. Sinclair Broadcast
Group, Inc., et al., Defendants.
Case No.
ACKNOWLEDGEMENT OF APPLICABILITY
The undersigned acknowledges that [Full Buyer Name], including its
successors and assigns, and its subsidiaries, divisions, and broadcast
television stations, and their directors, officers, and employees
(``Acquirer''), following consummation of the Acquirer's acquisition of
[insert names of station or stations acquired] (each, an ``Acquired
Station''), is bound by the Final Judgment entered by this Court in the
above-captioned action (``Final Judgment''), as if the Acquirer were a
Defendant under the Final Judgment, as follows:
1. The Acquirer shall be bound in full by all Sections of the
Consent Decree not specifically discussed below.
2. As to Sections IV, V, and VII of the Final Judgment, the
Acquirer is bound to the Final Judgment only as to (i) each Acquired
Station, each Acquired Station's successors and assigns, and each
Acquired Station's subsidiaries and divisions, and each Acquired
Station's directors, officers, and employees, (ii) Acquirer's officers
and directors only with respect to any responsibilities or actions
regarding any Acquired Stations, and (iii) employees with management or
supervisory responsibilities for Acquirer's business or operations
related to the sale of spot advertising on any Acquired Station, only
with respect to those responsibilities.
3. As to Section VI(C)(3), VI(C)(4), VI(C)(6), VI(C)(8), VI(D),
VI(E), and VIII of the Final Judgment, the Acquirer is bound to the
Final Judgment only as to (i) each Acquired Station, each Acquired
Station's successors and assigns, and each Acquired Station's
subsidiaries and divisions, and each Acquired Station's directors,
officers, and employees, (ii) Acquirer's officers and directors, and
(iii) employees with management or supervisory responsibilities for
Acquirer's business or operations related to the sale of spot
advertising on any Acquired Station.
4. The release contained in Sections VII(C) and (D) applies to the
Acquirer, but only to civil actions or criminal charges arising from
actions taken by any Acquired Station.
[[Page 44144]]
5. The Acquirer shall not be bound by Sections VI(C)(1),
VI(C)(2),VI(C)(5), VI(C)(7), and VI(F) of the Final Judgment at all,
unless the Acquirer acquires the Acquired Stations earlier than 45 days
after entry of the Final Judgment.
6. Section VI(A) applies to the Acquirer, but, unless the Acquirer
acquires the Acquired Stations earlier than 45 days after entry of the
Final Judgment, Section VI(A) is modified to make the initial period
for appointing an Antitrust Compliance Officer in the first sentence
120 days from consummation of the Acquirer's acquisition of the
Acquired Station or Acquired Stations.
This Acknowledgement of Applicability may be voided by a joint
written agreement between the United States and the Acquirer.
Dated: [ ]
Respectfully submitted,
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[Counsel for Acquirer]
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
United States of America; Plaintiff, v. Sinclair Broadcast
Group, Inc., et al., Defendants.
Case No.
[PROPOSED] FINAL JUDGMENT
WHEREAS, Plaintiff, United States of America, filed its Amended
Complaint on___, 2019, alleging that Defendant The E.W. Scripps
Company, among others, violated Section 1 of the Sherman Act, 15 U.S.C.
Sec. 1, the United States and Defendant, by their respective
attorneys, have consented to the entry of this Final Judgment without
trial or adjudication of any issue of fact or law;
AND WHEREAS, this Final Judgment does not constitute any evidence
against or admission by any party regarding any issue of fact or law;
AND WHEREAS, the United States and Defendant agree to be bound by
the provisions of this Final Judgment pending its approval by this
Court;
AND WHEREAS, the Defendant agrees to undertake certain actions and
to refrain from engaging in certain forms of information sharing with
its competitors;
NOW THEREFORE, before any testimony is taken, without trial or
adjudication of any issue of fact or law, and upon consent of the
parties, it is ORDERED, ADJUDGED, AND DECREED:
I. JURISDICTION
This Court has jurisdiction over the subject matter and each of the
parties to this action. The allegations in the Complaint arise under
Section 1 of the Sherman Act, as amended, 15 U.S.C. Sec. 1. See 28
U.S.C. Sec. 1331.
II. DEFINITIONS
As used in this Final Judgment:
A. ``Advertiser'' means an advertiser, an advertiser's buying
agent, or an advertiser's representative.
B. ``Agreement'' means any agreement, understanding, pact,
contract, or arrangement, formal or informal, oral or written, between
two or more Persons.
C. ``Communicate,'' ``Communicating,'' and ``Communication(s)''
means to provide, send, discuss, circulate, exchange, request, or
solicit information, whether directly or indirectly, and regardless of
the means by which it is accomplished, including orally or by written
means of any kind, such as electronic communications, e-mails,
facsimiles, telephone communications, voicemails, text messages, audio
recordings, meetings, interviews, correspondence, exchange of written
or recorded information, or face-to-face meetings.
D. ``Competitively Sensitive Information'' means any of the
following information, less than eighteen months old, of Defendant or
any broadcast television station regarding the sale of spot advertising
on broadcast television stations: Non-Public Information relating to
pricing or pricing strategies, pacing, holding capacity, revenues, or
market shares. Reports containing only aggregated market-level or
national data are not Competitively Sensitive Information, but reports
(including by paid subscription) that are customized or confidential to
a particular Station or broadcast television station group are
Competitively Sensitive Information. For the avoidance of doubt, spot
advertising does not include network television advertising sold by the
Defendant or television advertising sold by the Defendant in its
capacity as an agent of the owners of syndicated programming.
E. ``Cooperative Agreement'' means (1) joint sales agreements,
joint operating agreements, local marketing agreements, news share
agreements, or shared services agreements, or (2) any agreement through
which a Person exercises control over any broadcast television station
not owned by the Person.
F. ``Defendant'' means The E.W. Scripps Company, an Ohio
corporation with its headquarters in Cincinnati, Ohio, its successors
and assigns, and its subsidiaries, divisions, and Stations, and their
directors, officers, and employees.
G. ``DMA'' means Designated Market Area as defined by A.C. Nielsen
Company and used by the Investing in Television BIA Market Report 2018.
H. ``Management'' means all directors and executive officers of
Defendant, or any other employee with management or supervisory
responsibilities for Defendant's business or operations related to the
sale of spot advertising on any Station.
I. ``Non-Public Information'' means information that is not
available from public sources or generally available to the public.
Measurement or quantification of a Station's future holding capacity is
Non-Public Information, but measurement or quantification of a
Station's past holding capacity is not Non-Public Information. For the
avoidance of doubt, the fact that information is available by paid
subscription does not on its own render the information public.
J. ``Person'' means any natural person, corporation, company,
partnership, joint venture, firm, association, proprietorship, agency,
board, authority, commission, office, or other business or legal
entity, whether private or governmental.
K. ``Sales Representative Firm'' means any organization, including
without limitation Katz Media Group, Inc. and Cox Reps, Inc., and their
respective subsidiaries and divisions, that represents a Station or its
owner in the sale of spot advertising.
L. ``Sales Representative Firm Manager'' means, for each of
Defendant's Sales Representative Firms, the employee of the Sales
Representative Firm with primary responsibility for the relationship
with Defendant.
M. ``Sales Staff'' means Defendant's employees with responsibility
for the sale of spot advertising on any Station.
N. ``Station'' means any broadcast television station, its
successors and assigns, and its subsidiaries, divisions, groups, and
its owner or operator and its directors, officers, managers, and
employees, unless a Station owns, is owned by, or is under common
ownership with a Sales Representative Firm, in which case that Sales
Representative Firm will not be considered a Station.
III. APPLICABILITY
This Final Judgment applies to Defendant, other Persons in active
concert or participation with Defendant who receive actual notice of
this Final Judgment by personal service or otherwise, and any Person
that signs an
[[Page 44145]]
Acknowledgment of Applicability, attached as Exhibit 2, to the extent
set forth therein, as a condition of the purchase of a Station owned by
Defendant as of February 1, 2019. This Final Judgment applies to
Defendant's actions performed under any Cooperative Agreement, even if
those actions are taken on behalf of a third party. This Final Judgment
is fully enforceable, including by penalty of contempt, against all of
the foregoing.
IV. PROHIBITED CONDUCT
A. Defendant's Management and Sales Staff shall not, directly or
indirectly:
1. Communicate Competitively Sensitive Information to any Station
in the same DMA it does not own or operate;
2. Knowingly use Competitively Sensitive Information from or
regarding any Station in the same DMA it does not own or operate;
3. Encourage or facilitate the Communication of Competitively
Sensitive Information to or from any Station in the same DMA it does
not own or operate; or
4. Attempt to enter into, enter into, maintain, or enforce any
agreement to Communicate Competitively Sensitive Information with any
Station in the same DMA it does not own or operate.
B. The prohibitions under Paragraph IV(A) apply to Defendant's
Communicating or agreeing to Communicate through a Sales Representative
Firm or a third-party agent at Defendant's instruction or request.
C. Defendant shall not sell any Station owned by the Defendant as
of February 1, 2019 to any Person unless that Person has first executed
the Acknowledgment of Applicability, attached as Exhibit 2. Defendant
shall submit any Acknowledgement of Applicability to the United States
within 15 days of consummating the sale of such Station. The United
States, in its sole discretion, may waive the prohibition in this
Paragraph IV(C) on a Station-by-Station basis. Alternatively, the
United States and the Person signing the Acknowledgement of
Applicability may agree to void the Acknowledgement of Applicability at
any time. The first sentence of this paragraph shall not apply to the
sale of any Station to a Person already bound to a final judgment
entered by a court regarding the Communication of Competitively
Sensitive Information.
V. CONDUCT NOT PROHIBITED
A. Nothing in Section IV shall prohibit Defendant from
Communicating, using, or encouraging or facilitating the Communication
of, Competitively Sensitive Information with an actual or prospective
Advertiser, except that, if the Advertiser is another Station,
Defendant's Communicating, using, or encouraging or facilitating the
Communication of, Competitively Sensitive Information is excluded from
the prohibitions of Section IV only insofar as is reasonably necessary
to negotiate the sale of spot advertising on broadcast television
stations. For the avoidance of doubt, Defendant is not prohibited from
internally using Competitively Sensitive Information received from an
Advertiser that is a Station under the preceding sentence, but
Defendant is prohibited from Communicating that Competitively Sensitive
Information to a Station in the same DMA that it does not own or
operate.
B. Nothing in Section IV shall prohibit Defendant from, after
securing advice of counsel and in consultation with the Antitrust
Compliance Officer, Communicating, using, encouraging or facilitating
the Communication of, or attempting to enter into, entering into,
maintaining, or enforcing any agreement to Communicate Competitively
Sensitive Information with any Station when such Communication or use
is (a) for the purpose of evaluating or effectuating a bona fide
acquisition, disposition, or exchange of Stations or related assets, or
(b) reasonably necessary for achieving the efficiencies of any other
legitimate competitor collaboration. With respect to any such
agreement:
1. For all agreements under Part V(B)(a) with any other Station to
Communicate Competitively Sensitive Information that Defendant enters
into, renews, or affirmatively extends after the date of entry of this
Final Judgment, Defendant shall maintain documents sufficient to show:
i. the specific transaction or proposed transaction to which the
sharing of Competitively Sensitive Information relates;
ii. the employees, identified with reasonable specificity, who are
involved in the sharing of Competitively Sensitive Information; and
iii. the termination date or event of the sharing of Competitively
Sensitive Information.
2. All agreements under Part V(B)(b) with any other Station to
Communicate Competitively Sensitive Information that Defendant enters
into, renews, or affirmatively extends after the date of entry of this
Final Judgment shall be in writing, and shall:
i. identify and describe, with specificity, the collaboration to
which it is ancillary;
ii. be narrowly tailored to permit the Communication of
Competitively Sensitive Information only when reasonably necessary and
only to the employees reasonably necessary to effectuate the
collaboration;
iii. identify with reasonable specificity the Competitively
Sensitive Information Communicated pursuant to the agreement and
identify the employees to receive the Competitively Sensitive
Information;
iv. contain a specific termination date or event; and
v. be signed by all parties to the agreement, including any
modifications to the agreement.
3. For Communications under Part V(B)(a) above, Defendant shall
maintain copies of all materials required under Paragraph V(B)(1) for
five years or the duration of the Final Judgment, whichever is shorter,
following entry into any agreement to Communicate or receive
Competitively Sensitive Information, and Defendant shall make such
documents available to the United States upon request, if such request
is made during the preservation period.
4. For Communications under Part V(B)(b) above, Defendant shall
furnish a copy of all materials required under Paragraph V(B)(2) to the
United States within thirty days of the entry, renewal, or extension of
the agreement.
5. For purposes of this Section V(B) only, a Joint Sales Agreement,
Local Marketing Agreement, or similar agreement pursuant to which the
Defendant Communicates, uses, encourages or facilitates the
Communication of, or attempts to enter into, enters into, maintains, or
enforces any agreement to Communicate Competitively Sensitive
Information related solely to the sale of spot advertising for which
Defendant is responsible on a Station, shall be considered a
``legitimate competitor collaboration'' under Part V(B)(b).
C. Nothing in Section IV shall prohibit Defendant from engaging in
conduct in accordance with the doctrine established in Eastern Railroad
Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127
(1961), United Mine Workers v. Pennington, 381 U.S. 657 (1965), and
their progeny.
D. Nothing in Section IV prohibits Defendant from (1)
Communicating, encouraging or facilitating the Communication of, or
attempting to enter into, entering into, maintaining, or enforcing any
agreement to Communicate Competitively Sensitive Information for the
purpose of
[[Page 44146]]
aggregation if (a) Competitively Sensitive Information is sent to or
received from, and the aggregation is managed by, a third party not
owned or operated by any Station; (b) the information disseminated by
the aggregator is limited to historical total broadcast television
station revenue or other geographic or characteristic categorization
(e.g., national, local, or political sales revenue); and (c) any
information disseminated is sufficiently aggregated such that it would
not allow a recipient to identify, deduce, or estimate the prices or
pacing of any individual broadcast television station not owned or
operated by that recipient; or (2) using information that meets the
requirements of Parts V(D)(1)(a)-(c).
VI. REQUIRED CONDUCT
A. Within ten days of entry of this Final Judgment, Defendant shall
appoint an Antitrust Compliance Officer who is an internal employee or
Officer of the Defendant, and identify to the United States the
Antitrust Compliance Officer's name, business address, telephone
number, and email address. Within forty-five days of a vacancy in the
Antitrust Compliance Officer position, Defendant shall appoint a
replacement, and shall identify to the United States the Antitrust
Compliance Officer's name, business address, telephone number, and
email address. Defendant's initial or replacement appointment of an
Antitrust Compliance Officer is subject to the approval of the United
States, in its sole discretion.
B. The Antitrust Compliance Officer shall have, or shall retain
outside counsel who has, the following minimum qualifications:
1. be an active member in good standing of the bar in any U.S.
jurisdiction; and
2. have at least five years' experience in legal practice,
including experience with antitrust matters, unless finding an
Antitrust Compliance Officer or outside counsel meeting this experience
requirement is a hardship on or is not reasonably available to the
Defendant, under which circumstances the Defendant may select an
Antitrust Compliance Officer or shall retain outside counsel who has at
least five years' experience in legal practice, including experience
with regulatory or compliance matters.
C. The Antitrust Compliance Officer shall, directly or through the
employees or counsel working at the Antitrust Compliance Officer's
responsibility and direction:
1. within fourteen days of entry of the Final Judgment, furnish to
all of Defendant's Management and Sales Staff and Sales Representative
Firm Managers a copy of this Final Judgment, the Competitive Impact
Statement filed by the United States with the Court, and a cover letter
in a form attached as Exhibit 1;
2. within fourteen days of entry of the Final Judgment, in a manner
to be devised by Defendant and approved by the United States, provide
Defendant's Management and Sales Staff reasonable notice of the meaning
and requirements of this Final Judgment;
3. annually brief Defendant's Management and Sales Staff on the
meaning and requirements of this Final Judgment and the U.S. antitrust
laws;
4. brief any Person who succeeds a Person in any position
identified in Paragraph VI(C)(3), within sixty days of such succession;
5. obtain from each Person designated in Paragraph VI(C)(3) or
VI(C)(4), within thirty days of that Person's receipt of the Final
Judgment, a certification that the Person (i) has read and understands
and agrees to abide by the terms of this Final Judgment; (ii) is not
aware of any violation of the Final Judgment that has not been reported
to Defendant; and (iii) understands that failure to comply with this
Final Judgment may result in an enforcement action for civil or
criminal contempt of court;
6. annually communicate to Defendant's Management and Sales Staff
that they may disclose to the Antitrust Compliance Officer, without
reprisal for such disclosure, information concerning any violation or
potential violation of this Final Judgment or the U.S. antitrust laws
by Defendant;
7. within thirty days of the latest filing of the Complaint,
Proposed Final Judgment, or Competitive Impact Statement in this
action, Defendant shall provide notice, in each DMA in which Defendant
owns or operates a Station, to (i) every full power Station in that DMA
that sells broadcast television spot advertising that Defendant does
not own or operate and (ii) any Sales Representative Firm selling
advertising in that DMA on behalf of Defendant, of the Complaint,
Proposed Final Judgment, and Competitive Impact Statement in a form and
manner to be proposed by Defendant and approved by the United States in
its sole discretion. Defendant shall provide the United States with its
proposal, including the list of recipients, within ten days of the
filing of the Complaint; and
8. maintain for five years or until expiration of the Final
Judgment, whichever is shorter, a copy of all materials required to be
issued under Paragraph VI(C), and furnish them to the United States
within ten days if requested to do so, except documents protected under
the attorney-client privilege or the attorney work-product doctrine.
For all materials required to be furnished under Paragraph VI(C) which
Defendant claims are protected under the attorney-client privilege or
the attorney work-product doctrine, Defendant shall furnish to the
United States a privilege log.
D. Defendant shall:
1. upon Management or the Antitrust Compliance Officer learning of
any violation or potential violation of any of the terms and conditions
contained in this Final Judgment, (i) promptly take appropriate action
to investigate, and in the event of a violation, terminate or modify
the activity so as to comply with this Final Judgment, (ii) maintain
all documents related to any violation or potential violation of this
Final Judgment for a period of five years or the duration of this Final
Judgment, whichever is shorter, and (iii) maintain, and furnish to the
United States at the United States' request, a log of (a) all such
documents and documents for which Defendant claims protection under the
attorney-client privilege or the attorney work product doctrine, and
(b) all potential and actual violations, even if no documentary
evidence regarding the violations exist;
2. within thirty days of Management or the Antitrust Compliance
Officer learning of any such violation or potential violation of any of
the terms and conditions contained in this Final Judgment, file with
the United States a statement describing any violation or potential
violation of any of the terms and conditions contained in this Final
Judgment, which shall include a description of any Communications
constituting the violation or potential violation, including the date
and place of the Communication, the Persons involved, and the subject
matter of the Communication;
3. establish a whistleblower protection policy, which provides that
any employee may disclose, without reprisal for such disclosure, to the
Antitrust Compliance Officer information concerning any violation or
potential violation by the Defendant of this Final Judgment or U.S.
antitrust laws;
4. have its CEO, General Counsel or Chief Legal Officer certify in
writing to the United States annually on the anniversary date of the
entry of this Final Judgment that Defendant has complied with the
provisions of this Final Judgment;
5. maintain and produce to the United States upon request: (i) a
list identifying
[[Page 44147]]
all employees having received the annual antitrust briefing required
under Paragraphs VI(C)(3) and VI(C)(4); and (ii) copies of all
materials distributed as part of the annual antitrust briefing required
under Paragraphs VI(C)(3) and V(C)(4). For all materials requested to
be produced under this Paragraph VI(D)(5) for which Defendant claims is
protected under the attorney-client privilege or the attorney work-
product doctrine, Defendant shall furnish to the United States a
privilege log; and
6. within 14 days of entry of the Final Judgment, instruct each
Sales Representative Firm Manager that the Sales Representative Firm
shall not Communicate any of Defendant's Competitively Sensitive
Information in a way that would violate Sections IV and V of this Final
Judgment if the Sales Representative Firm were included in the
definition of ``Defendant'' in Paragraph II(F), in a form and manner to
be proposed by Defendant and approved by the United States in its sole
discretion, maintained and produced to the United States upon request.
E. For the avoidance of doubt, the term ``potential violation'' as
used in Paragraph VI(D) does not include the discussion of future
conduct.
F. If Defendant acquires a Station after entry of this Final
Judgment, this Section VI will not apply to that acquired Station or
the employees of that acquired Station until 120 days after closing of
the acquisition of that acquired Station.
VII. DEFENDANT'S COOPERATION
A. Defendant shall cooperate fully and truthfully with the United
States in any investigation or litigation concerning whether or
alleging that Defendant, any Station that Defendant does not own or
operate, or any Sales Representative Firm Communicated Competitively
Sensitive Information with or among Defendant or any other Station or
any Sales Representative Firm in violation of Section 1 of the Sherman
Act, as amended, 15 U.S.C. Sec. 1.
Defendant shall use its best efforts to ensure that all current and
former officers, directors, employees, and agents also fully and
promptly cooperate with the United States. The full, truthful, and
continuing cooperation of Defendant shall include, but not be limited
to:
1. providing sworn testimony, that is not protected by the
attorney-client privilege or the attorney work product doctrine, to the
United States regarding the Communicating of Competitively Sensitive
Information or any agreement with any other Station it does not own or
such other Station's Sales Representative Firm to Communicate
Competitively Sensitive Information while an employee of the Defendant;
2. producing, upon request of the United States, all documents,
data, and other materials, wherever located, to the extent not
protected under the attorney-client privilege or the attorney work-
product doctrine, in the possession, custody, or control of Defendant,
that relate to the Communication of Competitively Sensitive Information
or any agreement with any other Station or such other Station's Sales
Representative Firm to Communicate Competitively Sensitive Information,
and a log of documents protected by the attorney-client privilege or
the attorney work product doctrine;
3. making available for interview any officers, directors,
employees, and agents of Defendant if so requested on reasonable notice
by the United States; and
4. testifying at trial and other judicial proceedings fully,
truthfully, and under oath, when called upon to do so by the United
States;
5. provided however, that the obligations of Defendant to cooperate
fully with the United States as described in this Section VII shall
cease upon the conclusion of all of the United States' investigations
and the United States' litigations examining whether or alleging that
Defendant, any Station that Defendant does not own or operate or such
other Station's Sales Representative Firm Communicated Competitively
Sensitive Information or with or among Defendant or any other Station
or any Sales Representative Firm in violation of Section 1 of the
Sherman Act, as amended, 15 U.S.C. Sec. 1, including exhaustion of all
appeals or expiration of time for all appeals of any Court ruling in
each such matter, at which point the United States will provide written
notice to Defendant that its obligations under this Section VII have
expired.
B. Defendant is obligated to impose a litigation hold until the
United States provides written notice to the Defendant that its
obligations under this Section VII have expired. This Paragraph VII(B)
does not apply to documents created after entry of this Final Judgment.
C. Subject to the full, truthful, and continuing cooperation of
Defendant, as defined in Paragraph VII(A), the United States will not
bring any further civil action or any criminal charges against
Defendant related to any Communication of Competitively Sensitive
Information or any agreement to Communicate Competitively Sensitive
Information with any other Station it does not own or operate or such
other Station's Sales Representative Firm when that agreement:
1. was Communicated, entered into and terminated on or before the
date of the filing of the Complaint in this action (or in the case of a
Station that is acquired by Defendant after entry of this Final
Judgment, was Communicated or entered into before the acquisition and
terminated within 120 days after the closing of the acquisition); and
2. does not constitute or include an agreement to fix prices or
divide markets.
D. The United States' agreement set forth in Paragraph VII(C) does
not apply to any acts of perjury or subornation of perjury (18 U.S.C.
Sec. Sec. 1621-22), making a false statement or declaration (18 U.S.C.
Sec. Sec. 1001, 1623), contempt (18 U.S.C. Sec. Sec. 401-402), or
obstruction of justice (18 U.S.C. Sec. 1503, et seq.) by the Defendant
or its officers, directors, and employees. The United States' agreement
set forth in Paragraph VII(C) does not release any claims against any
Sales Representative Firm.
VIII. COMPLIANCE INSPECTION
A. For the purposes of determining or securing compliance with this
Final Judgment or of any related orders, or of determining whether the
Final Judgment should be modified, and subject to any legally
recognized privilege, from time to time authorized representatives of
the United States Department of Justice, including consultants and
other persons retained by the United States, shall, upon written
request of an authorized representative of the Assistant Attorney
General in charge of the Antitrust Division, and on reasonable notice
to Defendant, be permitted:
1. to access during Defendant's office hours to inspect and copy,
or at the option of the United States, to require Defendant to provide
electronic or hard copies of all books, ledgers, accounts, records,
data, and documents in the possession, custody, or control of
Defendant, relating to any matters that are the subject of this Final
Judgment, not protected by the attorney-client privilege or the
attorney work product doctrine; and
2. to interview, either informally or on the record, Defendant's
officers, employees, or agents, who may have their individual counsel
present, regarding such matters. The interviews shall be subject to the
reasonable convenience of the interviewee and without restraint or
interference by Defendant; and
3. to obtain from Defendant written reports or responses to written
[[Page 44148]]
interrogatories, of information not protected by the attorney-client
privilege or attorney work product doctrine, under oath if requested,
relating to any matters that are the subject of this Final Judgment as
may be requested.
B. No information or documents obtained by the means provided in
this Section VIII shall be divulged by the United States to any Person
other than an authorized representative of the executive branch of the
United States, except in the course of legal proceedings to which the
United States is a party (including grand jury proceedings), or for the
purpose of securing compliance with this Final Judgment, or for law
enforcement purposes, or as otherwise required by law.
C. If at the time information or documents are furnished by
Defendant to the United States, Defendant represents and identifies in
writing the material in any such information or documents to which a
claim of protection may be asserted under Rule 26(c)(1)(G) of the
Federal Rules of Civil Procedure, and Defendant marks each pertinent
page of such material, ``Subject to claim of protection under Rule
26(c)(1)(G) of the Federal Rules of Civil Procedure,'' then the United
States shall give Defendant ten calendar days' notice prior to
divulging such material in any legal proceeding (other than a grand
jury proceeding).
IX. RETENTION OF JURISDICTION
This Court retains jurisdiction to enable any party to this Final
Judgment to apply to this Court at any time for further orders and
directions as may be necessary or appropriate to carry out or construe
this Final Judgment, to modify any of its provisions, to enforce
compliance, and to punish violations of its provisions.
X. ENFORCEMENT OF FINAL JUDGMENT
A. The United States retains and reserves all rights to enforce the
provisions of this Final Judgment, including its right to seek an order
of contempt from this Court. Defendant agrees that in any civil
contempt action, any motion to show cause, or any similar civil action
brought by the United States regarding an alleged violation of this
Final Judgment, the United States may establish a violation of the
Final Judgment and the appropriateness of any remedy therefor by a
preponderance of the evidence, and Defendant waives any argument that a
different standard of proof should apply.
B. The Final Judgment should be interpreted to give full effect to
the procompetitive purposes of the antitrust laws and to restore all
competition the United States alleged was harmed by the challenged
conduct. Defendant agrees that it may be held in contempt of, and that
the Court may enforce, any provision of this Final Judgment that, as
interpreted by the Court in light of these procompetitive principles
and applying ordinary tools of interpretation, is stated specifically
and in reasonable detail, whether or not it is clear and unambiguous on
its face. In any such interpretation, the terms of this Final Judgment
should not be construed against either party as the drafter.
C. In any enforcement proceeding in which the Court finds that
Defendant has violated this Final Judgment, the United States may apply
to the Court for a one-time extension of this Final Judgment, together
with such other relief as may be appropriate. In connection with any
successful effort by the United States to enforce this Final Judgment
against Defendant, whether litigated or resolved prior to litigation,
Defendant agrees to reimburse the United States for the fees and
expenses of its attorneys, as well as any other costs including
experts' fees, incurred in connection with that enforcement effort,
including in the investigation of the potential violation.
XI. EXPIRATION OF FINAL JUDGMENT
Unless this Court grants an extension, this Final Judgment shall
expire seven years from the date of its entry, except that after five
years from the date of its entry, this Final Judgment may be terminated
upon notice by the United States to the Court and Defendant that the
continuation of the Final Judgment no longer is necessary or in the
public interest.
XII. NOTICE
For purposes of this Final Judgment, any notice or other
communication required to be provided to the United States shall be
sent to the person at the address set forth below (or such other
addresses as the United States may specify in writing to Defendant):
Chief, Media, Entertainment, and Professional Services Section, U.S.
Department of Justice Antitrust Division, 450 Fifth Street NW, Suite
4000, Washington, DC 20530.
XIII. PUBLIC INTEREST DETERMINATION
Entry of this Final Judgment is in the public interest. The parties
have complied with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16, including making copies available to
the public of this Final Judgment, the Competitive Impact Statement,
and any comments thereon and the United States' responses to comments.
Based upon the record before the Court, which includes the Competitive
Impact Statement and any comments and response to comments filed with
the Court, entry of this Final Judgment is in the public interest.
IT IS SO ORDERED by the Court, this __ day of ___, 201_.
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16
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United States District Judge
EXHIBIT 1
[Company Letterhead]
[Name and Address of Antitrust Compliance Officer]
Re: Prohibitions Against Sharing of Competitively Sensitive Information
Dear [XX]:
I provide you this notice regarding a judgment recently entered by
a federal judge in Washington, D.C. prohibiting the sharing of certain
information with other broadcast television station(s).
The judgment applies to our company and all of its employees,
including you, so it is important that you understand the obligations
it imposes on us. [CEO Name] has asked me to let each of you know that
[s/he] expects you to take these obligations seriously and abide by
them.
The judgment prohibits us from sharing or receiving, directly or
indirectly (including through our national sales representative firm),
competitively sensitive information with or from any employee, agent,
or representative of another broadcast television station in the same
DMA it does not own or operate. Competitively sensitive information
means any non-public information regarding the sale of spot advertising
on broadcast television stations, including information relating to any
pricing or pricing strategies, pacing, holding capacity, revenues, or
market shares. There are limited exceptions to this restriction, which
are listed in the judgment. The company will provide briefing on the
legitimate or illegitimate exchange of information.
You must consult with me if you have any questions on whether a
particular circumstance is subject to an exception under the judgment.
A copy of the judgment is attached. Please read it carefully and
familiarize yourself with its terms. The judgment,
[[Page 44149]]
rather than the above description, is controlling. If you have any
questions about the judgment or how it affects your sale of spot
advertising, please contact me as soon as possible.
Please sign and return the attached Employee Certification to
[Defendant's Antitrust Compliance Officer] within thirty days of your
receipt of this letter. Thank you for your cooperation.
Sincerely,
[Defendant's Antitrust Compliance Officer]
Employee Certification
I, ____[name], ____[position] at ____ [station or location] do
hereby certify that I (i) have read and understand, and agree to abide
by, the terms of the Final Judgment; (ii) am not aware of any violation
of the Final Judgment that has not been reported to [Defendant]; and
(iii) understand that my failure to comply with this Final Judgment may
result in an enforcement action for civil or criminal contempt of
court.
-----------------------------------------------------------------------
Name:
Date:
EXHIBIT 2
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
United States of America; Plaintiff, v. Sinclair Broadcast
Group, Inc., et al., Defendants.
Case No.
ACKNOWLEDGEMENT OF APPLICABILITY
The undersigned acknowledges that [Full Buyer Name], including its
successors and assigns, and its subsidiaries, divisions, and broadcast
television stations, and their directors, officers, and employees
(``Acquirer''), following consummation of the Acquirer's acquisition of
[insert names of station or stations acquired] (each, an ``Acquired
Station''), is bound by the Final Judgment entered by this Court in the
above-captioned action (``Final Judgment''), as if the Acquirer were a
Defendant under the Final Judgment, as follows:
1. The Acquirer shall be bound in full by all Sections of the
Consent Decree not specifically discussed below.
2. As to Sections IV, V, and VII of the Final Judgment, the
Acquirer is bound to the Final Judgment only as to (i) each Acquired
Station, each Acquired Station's successors and assigns, and each
Acquired Station's subsidiaries and divisions, and each Acquired
Station's directors, officers, and employees, (ii) Acquirer's officers
and directors only with respect to any responsibilities or actions
regarding any Acquired Stations, and (iii) employees with management or
supervisory responsibilities for Acquirer's business or operations
related to the sale of spot advertising on any Acquired Station, only
with respect to those responsibilities.
3. As to Section VI(C)(3), VI(C)(4), VI(C)(6), VI(C)(8), VI(D),
VI(E), and VIII of the Final Judgment, the Acquirer is bound to the
Final Judgment only as to (i) each Acquired Station, each Acquired
Station's successors and assigns, and each Acquired Station's
subsidiaries and divisions, and each Acquired Station's directors,
officers, and employees, (ii) Acquirer's officers and directors, and
(iii) employees with management or supervisory responsibilities for
Acquirer's business or operations related to the sale of spot
advertising on any Acquired Station.
4. The release contained in Sections VII(C) and (D) applies to the
Acquirer, but only to civil actions or criminal charges arising from
actions taken by any Acquired Station.
5. The Acquirer shall not be bound by Sections VI(C)(1),
VI(C)(2),VI(C)(5), VI(C)(7), and VI(F) of the Final Judgment at all,
unless the Acquirer acquires the Acquired Stations earlier than 45 days
after entry of the Final Judgment.
6. Section VI(A) applies to the Acquirer, but, unless the Acquirer
acquires the Acquired Stations earlier than 45 days after entry of the
Final Judgment, Section VI(A) is modified to make the initial period
for appointing an Antitrust Compliance Officer in the first sentence
120 days from consummation of the Acquirer's acquisition of the
Acquired Station or Acquired Stations.
This Acknowledgement of Applicability may be voided by a joint
written agreement between the United States and the Acquirer.
Dated: [ ]
Respectfully submitted,
-----------------------------------------------------------------------
[Counsel for Acquirer]
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
United States of America; Plaintiff, v. Sinclair Broadcast
Group, Inc., et al., Defendants.
Case No.
[PROPOSED] FINAL JUDGMENT
WHEREAS, Plaintiff, United States of America, filed its Amended
Complaint on__, 2019, alleging that Defendant TEGNA Inc., among others,
violated Section 1 of the Sherman Act, 15 U.S.C. Sec. 1, the United
States and Defendant, by their respective attorneys, have consented to
the entry of this Final Judgment without trial or adjudication of any
issue of fact or law;
AND WHEREAS, this Final Judgment does not constitute any evidence
against or admission by any party regarding any issue of fact or law;
AND WHEREAS, the United States and Defendant agree to be bound by
the provisions of this Final Judgment pending its approval by this
Court;
AND WHEREAS, the Defendant agrees to undertake certain actions and
to refrain from engaging in certain forms of information sharing with
its competitors;
NOW THEREFORE, before any testimony is taken, without trial or
adjudication of any issue of fact or law, and upon consent of the
parties, it is ORDERED, ADJUDGED, AND DECREED:
I. JURISDICTION
This Court has jurisdiction over the subject matter and each of the
parties to this action. The allegations in the Complaint arise under
Section 1 of the Sherman Act, as amended, 15 U.S.C. Sec. 1. See 28
U.S.C. Sec. 1331.
II. DEFINITIONS
As used in this Final Judgment:
A. ``Advertiser'' means an advertiser, an advertiser's buying
agent, or an advertiser's representative.
B. ``Agreement'' means any agreement, understanding, pact,
contract, or arrangement, formal or informal, oral or written, between
two or more Persons.
C. ``Communicate,'' ``Communicating,'' and ``Communication(s)''
means to provide, send, discuss, circulate, exchange, request, or
solicit information, whether directly or indirectly, and regardless of
the means by which it is accomplished, including orally or by written
means of any kind, such as electronic communications, e-mails,
facsimiles, telephone communications, voicemails, text messages, audio
recordings, meetings, interviews, correspondence, exchange of written
or recorded information, or face-to-face meetings.
D. ``Competitively Sensitive Information'' means any of the
following information, less than eighteen months old, of Defendant or
any broadcast television station regarding the sale of spot advertising
on broadcast television stations: Non-Public Information relating to
pricing or pricing strategies, pacing, holding capacity, revenues, or
market shares. Reports containing only aggregated market-level or
national data are not
[[Page 44150]]
Competitively Sensitive Information, but reports (including by paid
subscription) that are customized or confidential to a particular
Station or broadcast television station group are Competitively
Sensitive Information. For the avoidance of doubt, spot advertising
does not include network television advertising sold by the Defendant
or television advertising sold by the Defendant in its capacity as an
agent of the owners of syndicated programming.
E. ``Cooperative Agreement'' means (1) joint sales agreements,
joint operating agreements, local marketing agreements, news share
agreements, or shared services agreements, or (2) any agreement through
which a Person exercises control over any broadcast television station
not owned by the Person.
F. ``Defendant'' means TEGNA Inc., a Delaware corporation with its
headquarters in McLean, Virginia, its successors and assigns, and its
subsidiaries, divisions, and Stations, and their directors, officers,
and employees.
G. ``DMA'' means Designated Market Area as defined by A.C. Nielsen
Company and used by the Investing in Television BIA Market Report 2018.
H. ``Management'' means all directors and executive officers of
Defendant, or any other employee with management or supervisory
responsibilities for Defendant's business or operations related to the
sale of spot advertising on any Station.
I. ``Non-Public Information'' means information that is not
available from public sources or generally available to the public.
Measurement or quantification of a Station's future holding capacity is
Non-Public Information, but measurement or quantification of a
Station's past holding capacity is not Non-Public Information. For the
avoidance of doubt, the fact that information is available by paid
subscription does not on its own render the information public.
J. ``Person'' means any natural person, corporation, company,
partnership, joint venture, firm, association, proprietorship, agency,
board, authority, commission, office, or other business or legal
entity, whether private or governmental.
K. ``Sales Representative Firm'' means any organization, including
without limitation Katz Media Group, Inc. and Cox Reps, Inc., and their
respective subsidiaries and divisions, that represents a Station or its
owner in the sale of spot advertising.
L. ``Sales Representative Firm Manager'' means, for each of
Defendant's Sales Representative Firms, the employee of the Sales
Representative Firm with primary responsibility for the relationship
with Defendant.
M. ``Sales Staff'' means Defendant's employees with responsibility
for the sale of spot advertising on any Station.
N. ``Station'' means any broadcast television station, its
successors and assigns, and its subsidiaries, divisions, groups, and
its owner or operator and its directors, officers, managers, and
employees, unless a Station owns, is owned by, or is under common
ownership with a Sales Representative Firm, in which case that Sales
Representative Firm will not be considered a Station.
III. APPLICABILITY
This Final Judgment applies to Defendant, other Persons in active
concert or participation with Defendant who receive actual notice of
this Final Judgment by personal service or otherwise, and any Person
that signs an Acknowledgment of Applicability, attached as Exhibit 2,
to the extent set forth therein, as a condition of the purchase of a
Station owned by Defendant as of February 1, 2019. This Final Judgment
applies to Defendant's actions performed under any Cooperative
Agreement, even if those actions are taken on behalf of a third party.
This Final Judgment is fully enforceable, including by penalty of
contempt, against all of the foregoing.
IV. PROHIBITED CONDUCT
A. Defendant's Management and Sales Staff shall not, directly or
indirectly:
1. Communicate Competitively Sensitive Information to any Station
in the same DMA it does not own or operate;
2. Knowingly use Competitively Sensitive Information from or
regarding any Station in the same DMA it does not own or operate;
3. Encourage or facilitate the Communication of Competitively
Sensitive Information to or from any Station in the same DMA it does
not own or operate; or
4. Attempt to enter into, enter into, maintain, or enforce any
agreement to Communicate Competitively Sensitive Information with any
Station in the same DMA it does not own or operate.
B. The prohibitions under Paragraph IV(A) apply to Defendant's
Communicating or agreeing to Communicate through a Sales Representative
Firm or a third-party agent at Defendant's instruction or request.
C. Defendant shall not sell any Station owned by the Defendant as
of February 1, 2019 to any Person unless that Person has first executed
the Acknowledgment of Applicability, attached as Exhibit 2. Defendant
shall submit any Acknowledgement of Applicability to the United States
within 15 days of consummating the sale of such Station. The United
States, in its sole discretion, may waive the prohibition in this
Paragraph IV(C) on a Station-by-Station basis. Alternatively, the
United States and the Person signing the Acknowledgement of
Applicability may agree to void the Acknowledgement of Applicability at
any time. The first sentence of this paragraph shall not apply to the
sale of any Station to a Person already bound to a final judgment
entered by a court regarding the Communication of Competitively
Sensitive Information.
V. CONDUCT NOT PROHIBITED
A. Nothing in Section IV shall prohibit Defendant from
Communicating, using, or encouraging or facilitating the Communication
of, Competitively Sensitive Information with an actual or prospective
Advertiser, except that, if the Advertiser is another Station,
Defendant's Communicating, using, or encouraging or facilitating the
Communication of, Competitively Sensitive Information is excluded from
the prohibitions of Section IV only insofar as is reasonably necessary
to negotiate the sale of spot advertising on broadcast television
stations. For the avoidance of doubt, Defendant is not prohibited from
internally using Competitively Sensitive Information received from an
Advertiser that is a Station under the preceding sentence, but
Defendant is prohibited from Communicating that Competitively Sensitive
Information to a Station in the same DMA that it does not own or
operate.
B. Nothing in Section IV shall prohibit Defendant from, after
securing advice of counsel and in consultation with the Antitrust
Compliance Officer, Communicating, using, encouraging or facilitating
the Communication of, or attempting to enter into, entering into,
maintaining, or enforcing any agreement to Communicate Competitively
Sensitive Information with any Station when such Communication or use
is (a) for the purpose of evaluating or effectuating a bona fide
acquisition, disposition, or exchange of Stations or related assets, or
(b) reasonably necessary for achieving the efficiencies of any other
legitimate competitor collaboration. With respect to any such
agreement:
[[Page 44151]]
1. For all agreements under Part V(B)(a) with any other Station to
Communicate Competitively Sensitive Information that Defendant enters
into, renews, or affirmatively extends after the date of entry of this
Final Judgment, Defendant shall maintain documents sufficient to show:
i. the specific transaction or proposed transaction to which the
sharing of Competitively Sensitive Information relates;
ii. the employees, identified with reasonable specificity, who are
involved in the sharing of Competitively Sensitive Information; and
iii. the termination date or event of the sharing of Competitively
Sensitive Information.
2. All agreements under Part V(B)(b) with any other Station to
Communicate Competitively Sensitive Information that Defendant enters
into, renews, or affirmatively extends after the date of entry of this
Final Judgment shall be in writing, and shall:
i. identify and describe, with specificity, the collaboration to
which it is ancillary;
ii. be narrowly tailored to permit the Communication of
Competitively Sensitive Information only when reasonably necessary and
only to the employees reasonably necessary to effectuate the
collaboration;
iii. identify with reasonable specificity the Competitively
Sensitive Information Communicated pursuant to the agreement and
identify the employees to receive the Competitively Sensitive
Information;
iv. contain a specific termination date or event; and
v. be signed by all parties to the agreement, including any
modifications to the agreement.
3. For Communications under Part V(B)(a) above, Defendant shall
maintain copies of all materials required under Paragraph V(B)(1) for
five years or the duration of the Final Judgment, whichever is shorter,
following entry into any agreement to Communicate or receive
Competitively Sensitive Information, and Defendant shall make such
documents available to the United States upon request, if such request
is made during the preservation period.
4. For Communications under Part V(B)(b) above, Defendant shall
furnish a copy of all materials required under Paragraph V(B)(2) to the
United States within thirty days of the entry, renewal, or extension of
the agreement.
5. For purposes of this Section V(B) only, a Joint Sales Agreement,
Local Marketing Agreement, or similar agreement pursuant to which the
Defendant Communicates, uses, encourages or facilitates the
Communication of, or attempts to enter into, enters into, maintains, or
enforces any agreement to Communicate Competitively Sensitive
Information related solely to the sale of spot advertising for which
Defendant is responsible on a Station, shall be considered a
``legitimate competitor collaboration'' under Part V(B)(b).
C. Nothing in Section IV shall prohibit Defendant from engaging in
conduct in accordance with the doctrine established in Eastern Railroad
Presidents Conference v. Noerr Motor Freight, Inc., 365 U.S. 127
(1961), United Mine Workers v. Pennington, 381 U.S. 657 (1965), and
their progeny.
D. Nothing in Section IV prohibits Defendant from (1)
Communicating, encouraging or facilitating the Communication of, or
attempting to enter into, entering into, maintaining, or enforcing any
agreement to Communicate Competitively Sensitive Information for the
purpose of aggregation if (a) Competitively Sensitive Information is
sent to or received from, and the aggregation is managed by, a third
party not owned or operated by any Station; (b) the information
disseminated by the aggregator is limited to historical total broadcast
television station revenue or other geographic or characteristic
categorization (e.g., national, local, or political sales revenue); and
(c) any information disseminated is sufficiently aggregated such that
it would not allow a recipient to identify, deduce, or estimate the
prices or pacing of any individual broadcast television station not
owned or operated by that recipient; or (2) using information that
meets the requirements of Parts V(D)(1)(a)-(c).
VI. REQUIRED CONDUCT
A. Within ten days of entry of this Final Judgment, Defendant shall
appoint an Antitrust Compliance Officer who is an internal employee or
Officer of the Defendant, and identify to the United States the
Antitrust Compliance Officer's name, business address, telephone
number, and email address. Within forty-five days of a vacancy in the
Antitrust Compliance Officer position, Defendant shall appoint a
replacement, and shall identify to the United States the Antitrust
Compliance Officer's name, business address, telephone number, and
email address. Defendant's initial or replacement appointment of an
Antitrust Compliance Officer is subject to the approval of the United
States, in its sole discretion.
B. The Antitrust Compliance Officer shall have, or shall retain
outside counsel who has, the following minimum qualifications:
1. be an active member in good standing of the bar in any U.S.
jurisdiction; and
2. have at least five years' experience in legal practice,
including experience with antitrust matters, unless finding an
Antitrust Compliance Officer or outside counsel meeting this experience
requirement is a hardship on or is not reasonably available to the
Defendant, under which circumstances the Defendant may select an
Antitrust Compliance Officer or shall retain outside counsel who has at
least five years' experience in legal practice, including experience
with regulatory or compliance matters.
C. The Antitrust Compliance Officer shall, directly or through the
employees or counsel working at the Antitrust Compliance Officer's
responsibility and direction:
1. within fourteen days of entry of the Final Judgment, furnish to
all of Defendant's Management and Sales Staff and Sales Representative
Firm Managers a copy of this Final Judgment, the Competitive Impact
Statement filed by the United States with the Court, and a cover letter
in a form attached as Exhibit 1;
2. within fourteen days of entry of the Final Judgment, in a manner
to be devised by Defendant and approved by the United States, provide
Defendant's Management and Sales Staff reasonable notice of the meaning
and requirements of this Final Judgment;
3. annually brief Defendant's Management and Sales Staff on the
meaning and requirements of this Final Judgment and the U.S. antitrust
laws;
4. brief any Person who succeeds a Person in any position
identified in Paragraph VI(C)(3), within sixty days of such succession;
5. obtain from each Person designated in Paragraph VI(C)(3) or
VI(C)(4), within thirty days of that Person's receipt of the Final
Judgment, a certification that the Person (i) has read and understands
and agrees to abide by the terms of this Final Judgment; (ii) is not
aware of any violation of the Final Judgment that has not been reported
to Defendant; and (iii) understands that failure to comply with this
Final Judgment may result in an enforcement action for civil or
criminal contempt of court;
6. annually communicate to Defendant's Management and Sales Staff
that they may disclose to the Antitrust Compliance Officer, without
reprisal for such disclosure, information concerning any violation or
potential violation of this Final Judgment or the U.S. antitrust laws
by Defendant;
[[Page 44152]]
7. within thirty days of the latest filing of the Complaint,
Proposed Final Judgment, or Competitive Impact Statement in this
action, Defendant shall provide notice, in each DMA in which Defendant
owns or operates a Station, to (i) every full power Station in that DMA
that sells broadcast television spot advertising that Defendant does
not own or operate and (ii) any Sales Representative Firm selling
advertising in that DMA on behalf of Defendant, of the Complaint,
Proposed Final Judgment, and Competitive Impact Statement in a form and
manner to be proposed by Defendant and approved by the United States in
its sole discretion. Defendant shall provide the United States with its
proposal, including the list of recipients, within ten days of the
filing of the Complaint; and
8. maintain for five years or until expiration of the Final
Judgment, whichever is shorter, a copy of all materials required to be
issued under Paragraph VI(C), and furnish them to the United States
within ten days if requested to do so, except documents protected under
the attorney-client privilege or the attorney work-product doctrine.
For all materials required to be furnished under Paragraph VI(C) which
Defendant claims are protected under the attorney-client privilege or
the attorney work-product doctrine, Defendant shall furnish to the
United States a privilege log.
D. Defendant shall:
1. upon Management or the Antitrust Compliance Officer learning of
any violation or potential violation of any of the terms and conditions
contained in this Final Judgment, (i) promptly take appropriate action
to investigate, and in the event of a violation, terminate or modify
the activity so as to comply with this Final Judgment, (ii) maintain
all documents related to any violation or potential violation of this
Final Judgment for a period of five years or the duration of this Final
Judgment, whichever is shorter, and (iii) maintain, and furnish to the
United States at the United States' request, a log of (a) all such
documents and documents for which Defendant claims protection under the
attorney-client privilege or the attorney work product doctrine, and
(b) all potential and actual violations, even if no documentary
evidence regarding the violations exist;
2. within thirty days of Management or the Antitrust Compliance
Officer learning of any such violation or potential violation of any of
the terms and conditions contained in this Final Judgment, file with
the United States a statement describing any violation or potential
violation of any of the terms and conditions contained in this Final
Judgment, which shall include a description of any Communications
constituting the violation or potential violation, including the date
and place of the Communication, the Persons involved, and the subject
matter of the Communication;
3. establish a whistleblower protection policy, which provides that
any employee may disclose, without reprisal for such disclosure, to the
Antitrust Compliance Officer information concerning any violation or
potential violation by the Defendant of this Final Judgment or U.S.
antitrust laws;
4. have its CEO, General Counsel or Chief Legal Officer certify in
writing to the United States annually on the anniversary date of the
entry of this Final Judgment that Defendant has complied with the
provisions of this Final Judgment;
5. maintain and produce to the United States upon request: (i) a
list identifying all employees having received the annual antitrust
briefing required under Paragraphs VI(C)(3) and VI(C)(4); and (ii)
copies of all materials distributed as part of the annual antitrust
briefing required under Paragraphs VI(C)(3) and V(C)(4). For all
materials requested to be produced under this Paragraph VI(D)(5) for
which Defendant claims is protected under the attorney-client privilege
or the attorney work-product doctrine, Defendant shall furnish to the
United States a privilege log; and
6. within 14 days of entry of the Final Judgment, instruct each
Sales Representative Firm Manager that the Sales Representative Firm
shall not Communicate any of Defendant's Competitively Sensitive
Information in a way that would violate Sections IV and V of this Final
Judgment if the Sales Representative Firm were included in the
definition of ``Defendant'' in Paragraph II(F), in a form and manner to
be proposed by Defendant and approved by the United States in its sole
discretion, maintained and produced to the United States upon request.
E. For the avoidance of doubt, the term ``potential violation'' as
used in Paragraph VI(D) does not include the discussion of future
conduct.
F. If Defendant acquires a Station after entry of this Final
Judgment, this Section VI will not apply to that acquired Station or
the employees of that acquired Station until 120 days after closing of
the acquisition of that acquired Station.
VII. DEFENDANT'S COOPERATION
A. Defendant shall cooperate fully and truthfully with the United
States in any investigation or litigation concerning whether or
alleging that Defendant, any Station that Defendant does not own or
operate, or any Sales Representative Firm Communicated Competitively
Sensitive Information with or among Defendant or any other Station or
any Sales Representative Firm in violation of Section 1 of the Sherman
Act, as amended, 15 U.S.C. Sec. 1. Defendant shall use its best
efforts to ensure that all current and former officers, directors,
employees, and agents also fully and promptly cooperate with the United
States. The full, truthful, and continuing cooperation of Defendant
shall include, but not be limited to:
1. providing sworn testimony, that is not protected by the
attorney-client privilege or the attorney work product doctrine, to the
United States regarding the Communicating of Competitively Sensitive
Information or any agreement with any other Station it does not own or
such other Station's Sales Representative Firm to Communicate
Competitively Sensitive Information while an employee of the Defendant;
2. producing, upon request of the United States, all documents,
data, and other materials, wherever located, to the extent not
protected under the attorney-client privilege or the attorney work-
product doctrine, in the possession, custody, or control of Defendant,
that relate to the Communication of Competitively Sensitive Information
or any agreement with any other Station or such other Station's Sales
Representative Firm to Communicate Competitively Sensitive Information,
and a log of documents protected by the attorney-client privilege or
the attorney work product doctrine;
3. making available for interview any officers, directors,
employees, and agents of Defendant if so requested on reasonable notice
by the United States; and
4. testifying at trial and other judicial proceedings fully,
truthfully, and under oath, when called upon to do so by the United
States; provided however, that the obligations of Defendant to
cooperate fully with the United States as described in this Section VII
shall cease upon the conclusion of all of the United States'
investigations and the United States' litigations examining whether or
alleging that Defendant, any Station that Defendant does not own or
operate or such other Station's Sales Representative Firm Communicated
Competitively Sensitive Information or
[[Page 44153]]
with or among Defendant or any other Station or any Sales
Representative Firm in violation of Section 1 of the Sherman Act, as
amended, 15 U.S.C. Sec. 1, including exhaustion of all appeals or
expiration of time for all appeals of any Court ruling in each such
matter, at which point the United States will provide written notice to
Defendant that its obligations under this Section VII have expired.
B. Defendant is obligated to impose a litigation hold until the
United States provides written notice to the Defendant that its
obligations under this Section VII have expired. This Paragraph VII(B)
does not apply to documents created after entry of this Final Judgment.
C. Subject to the full, truthful, and continuing cooperation of
Defendant, as defined in Paragraph VII(A), the United States will not
bring any further civil action or any criminal charges against
Defendant related to any Communication of Competitively Sensitive
Information or any agreement to Communicate Competitively Sensitive
Information with any other Station it does not own or operate or such
other Station's Sales Representative Firm when that agreement:
1. was Communicated, entered into and terminated on or before the
date of the filing of the Complaint in this action (or in the case of a
Station that is acquired by Defendant after entry of this Final
Judgment, was Communicated or entered into before the acquisition and
terminated within 120 days after the closing of the acquisition); and
2. does not constitute or include an agreement to fix prices or
divide markets.
D. The United States' agreement set forth in Paragraph VII(C) does
not apply to any acts of perjury or subornation of perjury (18 U.S.C.
Sec. Sec. 1621-22), making a false statement or declaration (18 U.S.C.
Sec. Sec. 1001, 1623), contempt (18 U.S.C. Sec. Sec. 401-402), or
obstruction of justice (18 U.S.C. Sec. 1503, et seq.) by the Defendant
or its officers, directors, and employees. The United States' agreement
set forth in Paragraph VII(C) does not release any claims against any
Sales Representative Firm.
VIII. COMPLIANCE INSPECTION
A. For the purposes of determining or securing compliance with this
Final Judgment or of any related orders, or of determining whether the
Final Judgment should be modified, and subject to any legally
recognized privilege, from time to time authorized representatives of
the United States Department of Justice, including consultants and
other persons retained by the United States, shall, upon written
request of an authorized representative of the Assistant Attorney
General in charge of the Antitrust Division, and on reasonable notice
to Defendant, be permitted:
1. to access during Defendant's office hours to inspect and copy,
or at the option of the United States, to require Defendant to provide
electronic or hard copies of all books, ledgers, accounts, records,
data, and documents in the possession, custody, or control of
Defendant, relating to any matters that are the subject of this Final
Judgment, not protected by the attorney- client privilege or the
attorney work product doctrine; and
2. to interview, either informally or on the record, Defendant's
officers, employees, or agents, who may have their individual counsel
present, regarding such matters. The interviews shall be subject to the
reasonable convenience of the interviewee and without restraint or
interference by Defendant; and
3. to obtain from Defendant written reports or responses to written
interrogatories, of information not protected by the attorney-client
privilege or attorney work product doctrine, under oath if requested,
relating to any matters that are the subject of this Final Judgment as
may be requested.
B. No information or documents obtained by the means provided in
this Section VIII shall be divulged by the United States to any Person
other than an authorized representative of the executive branch of the
United States, except in the course of legal proceedings to which the
United States is a party (including grand jury proceedings), or for the
purpose of securing compliance with this Final Judgment, or for law
enforcement purposes, or as otherwise required by law.
C. If at the time information or documents are furnished by
Defendant to the United States, Defendant represents and identifies in
writing the material in any such information or documents to which a
claim of protection may be asserted under Rule 26(c)(1)(G) of the
Federal Rules of Civil Procedure, and Defendant marks each pertinent
page of such material, ``Subject to claim of protection under Rule
26(c)(1)(G) of the Federal Rules of Civil Procedure,'' then the United
States shall give Defendant ten calendar days' notice prior to
divulging such material in any legal proceeding (other than a grand
jury proceeding).
IX. RETENTION OF JURISDICTION
This Court retains jurisdiction to enable any party to this Final
Judgment to apply to this Court at any time for further orders and
directions as may be necessary or appropriate to carry out or construe
this Final Judgment, to modify any of its provisions, to enforce
compliance, and to punish violations of its provisions.
X. ENFORCEMENT OF FINAL JUDGMENT
A. The United States retains and reserves all rights to enforce the
provisions of this Final Judgment, including its right to seek an order
of contempt from this Court. Defendant agrees that in any civil
contempt action, any motion to show cause, or any similar civil action
brought by the United States regarding an alleged violation of this
Final Judgment, the United States may establish a violation of the
Final Judgment and the appropriateness of any remedy therefor by a
preponderance of the evidence, and Defendant waives any argument that a
different standard of proof should apply.
B. The Final Judgment should be interpreted to give full effect to
the procompetitive purposes of the antitrust laws and to restore all
competition the United States alleged was harmed by the challenged
conduct. Defendant agrees that it may be held in contempt of, and that
the Court may enforce, any provision of this Final Judgment that, as
interpreted by the Court in light of these procompetitive principles
and applying ordinary tools of interpretation, is stated specifically
and in reasonable detail, whether or not it is clear and unambiguous on
its face. In any such interpretation, the terms of this Final Judgment
should not be construed against either party as the drafter.
C. In any enforcement proceeding in which the Court finds that
Defendant has violated this Final Judgment, the United States may apply
to the Court for a one-time extension of this Final Judgment, together
with such other relief as may be appropriate. In connection with any
successful effort by the United States to enforce this Final Judgment
against Defendant, whether litigated or resolved prior to litigation,
Defendant agrees to reimburse the United States for the fees and
expenses of its attorneys, as well as any other costs including
experts' fees, incurred in connection with that enforcement effort,
including in the investigation of the potential violation.
[[Page 44154]]
XI. EXPIRATION OF FINAL JUDGMENT
Unless this Court grants an extension, this Final Judgment shall
expire seven years from the date of its entry, except that after five
years from the date of its entry, this Final Judgment may be terminated
upon notice by the United States to the Court and Defendant that the
continuation of the Final Judgment no longer is necessary or in the
public interest.
XII. NOTICE
For purposes of this Final Judgment, any notice or other
communication required to be provided to the United States shall be
sent to the person at the address set forth below (or such other
addresses as the United States may specify in writing to Defendant):
Chief, Media, Entertainment, and Professional Services Section, U.S.
Department of Justice Antitrust Division, 450 Fifth Street NW, Suite
4000, Washington, DC 20530.
XIII. PUBLIC INTEREST DETERMINATION
Entry of this Final Judgment is in the public interest. The parties
have complied with the requirements of the Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16, including making copies available to
the public of this Final Judgment, the Competitive Impact Statement,
and any comments thereon and the United States' responses to comments.
Based upon the record before the Court, which includes the Competitive
Impact Statement and any comments and response to comments filed with
the Court, entry of this Final Judgment is in the public interest.
IT IS SO ORDERED by the Court, this __ day of ___, 201_.
Court approval subject to procedures of Antitrust Procedures and
Penalties Act, 15 U.S.C. Sec. 16
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United States District Judge
EXHIBIT 1
[Company Letterhead]
[Name and Address of Antitrust Compliance Officer]
Re: Prohibitions Against Sharing of Competitively Sensitive Information
Dear [XX]:
I provide you this notice regarding a judgment recently entered by
a federal judge in Washington, D.C. prohibiting the sharing of certain
information with other broadcast television station(s).
The judgment applies to our company and all of its employees,
including you, so it is important that you understand the obligations
it imposes on us. [CEO Name] has asked me to let each of you know that
[s/he] expects you to take these obligations seriously and abide by
them.
The judgment prohibits us from sharing or receiving, directly or
indirectly (including through our national sales representative firm),
competitively sensitive information with or from any employee, agent,
or representative of another broadcast television station in the same
DMA it does not own or operate. Competitively sensitive information
means any non-public information regarding the sale of spot advertising
on broadcast television stations, including information relating to any
pricing or pricing strategies, pacing, holding capacity, revenues, or
market shares. There are limited exceptions to this restriction, which
are listed in the judgment. The company will provide briefing on the
legitimate or illegitimate exchange of information.
You must consult with me if you have any questions on whether a
particular circumstance is subject to an exception under the judgment.
A copy of the judgment is attached. Please read it carefully and
familiarize yourself with its terms. The judgment, rather than the
above description, is controlling. If you have any questions about the
judgment or how it affects your sale of spot advertising, please
contact me as soon as possible.
Please sign and return the attached Employee Certification to
[Defendant's Antitrust Compliance Officer] within thirty days of your
receipt of this letter. Thank you for your cooperation.
Sincerely,
[Defendant's Antitrust Compliance Officer]
Employee Certification
I, ____ [name], ____ [position] at ____ [station or location] do
hereby certify that I (i) have read and understand, and agree to abide
by, the terms of the Final Judgment; (ii) am not aware of any violation
of the Final Judgment that has not been reported to [Defendant]; and
(iii) understand that my failure to comply with this Final Judgment may
result in an enforcement action for civil or criminal contempt of
court.
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Name:
Date:
EXHIBIT 2
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
United States of America; Plaintiff, v. Sinclair Broadcast
Group, Inc., et al., Defendants.
Case No.
ACKNOWLEDGEMENT OF APPLICABILITY
The undersigned acknowledges that [Full Buyer Name], including its
successors and assigns, and its subsidiaries, divisions, and broadcast
television stations, and their directors, officers, and employees
(``Acquirer''), following consummation of the Acquirer's acquisition of
[insert names of station or stations acquired] (each, an ``Acquired
Station''), is bound by the Final Judgment entered by this Court in the
above-captioned action (``Final Judgment''), as if the Acquirer were a
Defendant under the Final Judgment, as follows:
1. The Acquirer shall be bound in full by all Sections of the
Consent Decree not specifically discussed below.
2. As to Sections IV, V, and VII of the Final Judgment, the
Acquirer is bound to the Final Judgment only as to (i) each Acquired
Station, each Acquired Station's successors and assigns, and each
Acquired Station's subsidiaries and divisions, and each Acquired
Station's directors, officers, and employees, (ii) Acquirer's officers
and directors only with respect to any responsibilities or actions
regarding any Acquired Stations, and (iii) employees with management or
supervisory responsibilities for Acquirer's business or operations
related to the sale of spot advertising on any Acquired Station, only
with respect to those responsibilities.
3. As to Section VI(C)(3), VI(C)(4), VI(C)(6), VI(C)(8), VI(D),
VI(E), and VIII of the Final Judgment, the Acquirer is bound to the
Final Judgment only as to (i) each Acquired Station, each Acquired
Station's successors and assigns, and each Acquired Station's
subsidiaries and divisions, and each Acquired Station's directors,
officers, and employees, (ii) Acquirer's officers and directors, and
(iii) employees with management or supervisory responsibilities for
Acquirer's business or operations related to the sale of spot
advertising on any Acquired Station.
4. The release contained in Sections VII(C) and (D) applies to the
Acquirer, but only to civil actions or criminal charges arising from
actions taken by any Acquired Station.
5. The Acquirer shall not be bound by Sections VI(C)(1),
VI(C)(2),VI(C)(5), VI(C)(7), and VI(F) of the Final Judgment at all,
unless the Acquirer acquires the Acquired Stations earlier than 45 days
after entry of the Final Judgment.
6. Section VI(A) applies to the Acquirer, but, unless the Acquirer
[[Page 44155]]
acquires the Acquired Stations earlier than 45 days after entry of the
Final Judgment, Section VI(A) is modified to make the initial period
for appointing an Antitrust Compliance Officer in the first sentence
120 days from consummation of the Acquirer's acquisition of the
Acquired Station or Acquired Stations.
This Acknowledgement of Applicability may be voided by a joint
written agreement between the United States and the Acquirer.
Dated: [ ]
Respectfully submitted,
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[Counsel for Acquirer]
UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA
United States of America; Plaintiff, v. Sinclair Broadcast
Group, Inc.; Raycom Media, Inc.; Tribune Media Company; Meredith
Corporation; Griffin Communications, LLC; Dreamcatcher Broadcasting,
LLC, Nexstar Media Group, Inc.; CBS Corporation; Cox Enterprises,
Inc.; The E.W. Scripps Company; Fox Corporation; and TEGNA Inc.,
Defendants.
Case No. 1:18-cv-2609-TSC
COMPETITIVE IMPACT STATEMENT
Plaintiff United States of America (``United States''), pursuant to
Section 2(b) of the Antitrust Procedures and Penalties Act, 15 U.S.C.
Sec. 16(b)-(h) (``APPA'' or ``Tunney Act''), files this Competitive
Impact Statement relating to the proposed Final Judgments against
Defendants CBS Corporation (``CBS''), Cox Enterprises, Inc. (``Cox''),
The E.W. Scripps Company (``Scripps''), Fox Corporation (``Fox''), and
TEGNA Inc. (``TEGNA'') submitted for entry in this civil antitrust
proceeding.
I. Nature and Purpose of the Proceeding
On November 13, 2018, the United States filed a civil antitrust
complaint alleging that six Defendants agreed among themselves and
other broadcast television stations in many local markets to
reciprocally exchange station-specific, competitively sensitive
information regarding spot advertising revenues. The Complaint alleges
those Defendants' agreements are unreasonable restraints of trade that
are unlawful under Section 1 of the Sherman Act, 15 U.S.C. Sec. 1. The
Complaint seeks injunctive relief to prevent those Defendants from
exchanging competitively sensitive information with and among competing
broadcast television stations. On December 13, 2018, the United States
filed an Amended Complaint, adding a seventh defendant. On June 17,
2019, the United States filed a Second Amended Complaint, adding CBS,
Cox, Scripps, Fox, and TEGNA as defendants. Besides these additions and
some additional allegations regarding agreements with certain national
sales representation firms, the Second Amended Complaint is the same as
the Amended Complaint in all material respects.
Along with the Second Amended Complaint, the United States filed
proposed Final Judgments for CBS, Cox, Scripps, Fox, and TEGNA.\2\ The
proposed Final Judgments prohibit sharing of competitively sensitive
information, require CBS, Cox, Scripps, Fox, and TEGNA to implement
antitrust compliance training programs, and impose cooperation and
reporting requirements.
---------------------------------------------------------------------------
\2\ On May 22, 2019, the Court issued orders granting Final
Judgment with respect to the seven other defendants. See U.S. v.
Sinclair, No. 1:18-cv-02609-TSC, Dkt. Nos. 34-40 (May 22, 2019).
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The United States and each of CBS, Cox, Scripps, Fox, and TEGNA
have stipulated that the proposed Final Judgments may be entered after
compliance with the APPA, unless the United States withdraws its
consent. Entry of the proposed Final Judgments would terminate this
action, except that the Court would retain jurisdiction to construe,
modify, or enforce the provisions of the proposed Final Judgments and
to punish violations thereof.
II. Description of the Events Giving Rise to the Alleged Violation
A. Industry Background
Broadcast television stations sell advertising time to businesses
that want to advertise their products to television viewers. Broadcast
television ``spot'' advertising,\3\ which typically comprises the
majority of a station's revenues, is sold directly by the station
itself or through its sales representatives to advertisers who want to
target viewers in specific geographic areas called Designated Market
Areas (``DMAs'').\4\
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\3\ Spot advertising differs from other types of television
advertising, such as network and syndicated television advertising,
which are sold by television networks and producers of syndicated
programs on a nationwide basis and broadcast in every market where
the network or syndicated program is aired.
\4\ A DMA is a geographical unit designated by the A.C. Nielsen
Company, a company that surveys television viewers and furnishes
data to aid in evaluating television audiences. There are 210 DMAs
in the United States. DMAs are widely accepted by television
stations, advertisers, and advertising agencies as the standard
geographic area to use in evaluating television audience size and
demographic composition.
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Broadcast stations typically make their spot advertising sales
through two channels: (1) local sales, which are sales made by the
station's own local sales staff to advertisers who are usually located
within the DMA; and (2) national sales, which are sales made either by
the broadcast group's national sales staff or by a national sales
representative firm (``Sales Rep Firm'') to regional or national
advertisers.
CBS is a Delaware corporation with its principal place of business
in New York, New York. CBS owns or operates 28 television stations in
18 DMAs, and had over $14.5 billion in revenues in 2018.
Cox is a Delaware corporation with its principal place of business
in Atlanta, Georgia. Cox owns or operates 14 television stations in 10
DMAs, owns Cox Reps, and had an estimated $20 billion in revenues in
2018.
Scripps is an Ohio corporation with its principal place of business
in Cincinnati, Ohio. Scripps owns or operates 60 television stations in
42 DMAs, and had over $917 million in revenues in 2018.
Fox is a Delaware corporation with its principal place of business
in New York, New York. Fox owns or operates 17 television stations in
17 DMAs. Fox is a corporate entity recently created from certain former
21st Century Fox assets, including its broadcast station assets, after
The Walt Disney Company acquired 21st Century Fox and spun-out Fox.
21st Century Fox's television segment earned over $5 billion in 2017.
Defendant TEGNA is a Delaware corporation with its principal place
of business in McLean, Virginia. TEGNA owns or operates 49 television
stations in 41 DMAs, and had $2.2 billion in revenues in 2018.
CBS, Cox, Scripps, Fox, and TEGNA, along with certain other
television broadcast station groups, compete in various configurations
in multiple DMAs across the United States. CBS, Cox, Scripps, Fox, and
TEGNA sell spot advertising time to advertisers that seek to target
viewers in the DMAs in which they operate. Prices are individually
negotiated with advertisers, and advertisers are able to ``play off''
the stations against each other to obtain competitive rates.
There are two primary Sales Rep Firms in the United States today,
including Cox's subsidiary Cox Reps, Inc. (``Cox Reps''), and each
represents hundreds of television stations throughout the country in
the sale of national advertising time. It is common for one Sales Rep
Firm to represent multiple competing stations in the same DMA. In such
cases, the stations and the Sales Rep Firms purportedly create
firewalls to prevent coordination and
[[Page 44156]]
information sharing between the sales teams representing competing
stations.
B. The Exchanges of Competitively Sensitive Information
The Second Amended Complaint alleges that CBS, Cox, Scripps, Fox,
and TEGNA and other broadcasters and Sales Rep Firms have agreed in
many DMAs to reciprocally exchange station-specific revenue pacing
data. Revenue pacing data compares a station's revenues booked for a
certain time period to the revenues booked for the same point in time
in the previous year, indicating how each station is performing versus
the rest of the market and providing insight into each station's
remaining spot advertising inventory for the current period or future
periods. The exchanges were systematic and typically included non-
public pacing data on national revenues, local revenues, or both,
depending on the DMA. The Second Amended Complaint further alleges that
CBS, Cox, Scripps, Fox, and TEGNA engaged in the exchange of other
forms of competitively sensitive information relating to spot
advertising in certain DMAs.
The Second Amended Complaint alleges that CBS, Cox, Scripps, Fox,
and TEGNA exchanged pacing information in at least two ways. First,
CBS, Cox, Scripps, Fox, and TEGNA and other television broadcast
stations exchanged information through the Sales Rep Firms, exchanges
which the Sales Rep Firms agreed to facilitate or knowingly
facilitated. The information was passed both within and between Sales
Rep Firms representing competing stations, and was done with CBS's,
Cox's, Scripps', Fox's, and TEGNA's knowledge and frequently at those
Defendants' instruction. Second, in some DMAs, CBS, Cox, Scripps, Fox,
and TEGNA and other broadcasters exchanged pacing information directly
between local station employees.
The Second Amended Complaint alleges that these exchanges of pacing
information allowed stations to better understand, in real time, the
availability of inventory on competitors' stations, which is often a
key factor affecting negotiations with buyers over spot advertising
prices. The exchanges also helped stations to anticipate whether
competitors were likely to raise, maintain, or lower spot advertising
prices. Understanding competitors' pacing can help stations gauge
competitors' and advertisers' negotiation strategies, inform their own
pricing strategies, and help them resist more effectively advertisers'
attempts to obtain lower prices by playing stations off of one another.
CBS's, Cox's, Scripps', Fox's, and TEGNA's information exchanges
therefore distorted the normal price-setting mechanism in the spot
advertising market and harmed the competitive process within the
affected DMAs.
III. Explanation of the Proposed Final Judgments
The provisions of the proposed Final Judgments closely track the
relief sought in the Second Amended Complaint and are intended to
provide prompt, certain, and effective remedies that will ensure that
CBS, Cox, Scripps, Fox, and TEGNA and their employees and Sales Rep
Firms will not impede competition by sharing competitively sensitive
information, directly or indirectly, including through Sales Rep Firms,
with its rival broadcast television stations. The requirements and
prohibitions in the proposed Final Judgments will terminate CBS's,
Cox's, Scripps', Fox's, and TEGNA's illegal conduct, prevent recurrence
of the same or similar conduct, ensure that CBS, Cox, Scripps, Fox, and
TEGNA establish antitrust compliance programs, and provide the United
States with cooperation in its ongoing investigation. The proposed
Final Judgments protect competition and consumers by putting a stop to
the anticompetitive information sharing alleged in the Second Amended
Complaint.
A. Prohibited Conduct
The proposed Final Judgments broadly prohibit CBS, Cox, Scripps,
Fox, and TEGNA from sharing competitively sensitive information with
rival broadcast television stations in the same DMA. Specifically,
Section IV ensures that CBS, Cox, Scripps, Fox, and TEGNA will not,
directly or indirectly, communicate competitively sensitive
information, including pricing or pricing strategies, pacing, holding
capacity, revenues, or market shares, to broadcast television stations
in the same DMA or to those stations' sales representatives and agents.
Regarding Cox, Section IV of the proposed Final Judgment also ensures
that Cox will not facilitate the communication of competitively
sensitive information between rival broadcast television stations
through Cox Reps.
The proposed Final Judgments provide that their provisions will
apply to stations owned by CBS, Cox, Scripps, Fox, and TEGNA even if
they sell those stations to new buyers. In particular, Paragraph IV(C)
provides that each of CBS, Cox, Scripps, Fox, and TEGNA may not sell
any stations it owns as of October 1, 2018, unless the buyer has
executed an Acknowledgement that each station will continue to be bound
by the terms of the proposed Final Judgment. The United States, in its
discretion, may waive this requirement on a station-by-station basis,
or alternatively the buyer and the United States may agree to void the
Acknowledgement after the sale has been consummated.
B. Conduct Not Prohibited
Section V makes clear that the proposed Final Judgments do not
prohibit CBS, Cox, Scripps, Fox, and TEGNA from sharing or receiving
competitively sensitive information in certain specified circumstances
where the information sharing appears unlikely to cause harm to
competition. Paragraph V(A) allows CBS, Cox, Scripps, Fox, and TEGNA to
communicate competitively sensitive information to advertising
customers or prospective customers. Paragraph V(B) allows for the
communication of competitively sensitive information with other
broadcasters (i) for purposes of evaluating or effectuating a
transaction, such as the purchase or sale of a station; or (ii) when
reasonably necessary for achieving the efficiencies of a legitimate
collaboration among competitors, such as a lawful joint venture.\5\
Paragraph V(C) confirms that the proposed Final Judgments do not
prohibit petitioning conduct protected by the Noerr-Pennington
doctrine. Paragraph V(D) permits the exchange of competitively
sensitive information through certain third-party aggregation services
under the conditions listed in that paragraph, including that the
aggregated data does not permit individual stations to identify,
deduce, or estimate the prices or pacing of their competitors.
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\5\ Paragraph V(B)(5) states that, for purposes of Paragraph
V(B) only, certain types of Joint Sales Agreements, Local Marketing
Agreements, and similar agreements qualify as a ``legitimate
competitor collaboration'' under Paragraph V(B)(b). Paragraph
V(B)(5) was included in recognition of the fact that some
broadcasters have entered into a number of these agreements in
various DMAs. The question of whether these agreements have any
effect on competition was outside the scope of the United States'
investigation in this matter. Accordingly, Paragraph V(B)(5) should
not be read as an admission that such agreements otherwise comply
with the antitrust laws, and the United States takes no position on
that question for purposes of this proceeding.
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C. Antitrust Compliance Obligations
Under Section VI of the proposed Final Judgments, CBS, Cox,
Scripps, Fox, and TEGNA each must designate an Antitrust Compliance
Officer who is responsible for implementing training and antitrust
compliance programs and ensuring compliance with the Final
[[Page 44157]]
Judgments. Among other duties, each Antitrust Compliance Officer will
be required to distribute copies of that Defendant's Final Judgment and
ensure that training on the Final Judgment and the antitrust laws is
provided to each of CBS's, Cox's, Scripps', Fox's, and TEGNA's
respective management and sales staff. Section VI also requires CBS,
Cox, Scripps, Fox, and TEGNA each to establish an antitrust
whistleblower policy and remedy and report violations of the Final
Judgment. Under Paragraph VI(D)(5) of Cox's proposed Final Judgment,
Cox is required to establish policies and procedures at Cox Reps that
ensure employees representing one station do not have access to the
competitively sensitive information of any other client station
operating in the same DMA, including database access restrictions.
Under Section VI, CBS, Cox, Scripps, Fox, and TEGNA, through their
respective CEO, General Counsel, or Chief Legal Officer, must certify
annual compliance with the Final Judgments. This compliance program is
necessary in light of the extensive history of communications among
rival stations that facilitated CBS's, Cox's, Scripps', Fox's, and
TEGNA's agreements.
D. Defendants' Cooperation
As outlined in Section VII, CBS, Cox, Scripps, Fox, and TEGNA must
cooperate fully and truthfully with the United States in any
investigation or litigation relating to the sharing of competitively
sensitive information in the broadcast television industry. The
required cooperation may include providing sworn testimony, employee
interviews, and/or documents and data.
Paragraph VII(C) provides that, subject to each of CBS's, Cox's,
Scripps', Fox's, and TEGNA's truthful and continuing cooperation as
defined in Paragraphs VII(A) and (B), the United States will not bring
further civil actions or criminal charges against that Defendant for
any agreement to share competitively sensitive information with any
other station or Sales Rep Firm when the agreement: (1) was entered
into and terminated before the date of the filing of the Complaint and
(2) does not constitute or include an agreement to fix prices or divide
markets. As to Cox, an additional requirement for application of this
release is that the agreement not involve Cox, including through Cox
Reps, acting as a joint sales agent for Stations from different
broadcast station groups competing in the same DMA.
E. Enforcement of Final Judgments
The proposed Final Judgments contain provisions designed to promote
compliance and make the enforcement of Division consent decrees as
effective as possible. Paragraph X(A) provides that the United States
retains and reserves all rights to enforce the provisions of the
proposed Final Judgments, including its rights to seek an order of
contempt from the Court. CBS, Cox, Scripps, Fox, and TEGNA have agreed
that in any civil contempt action, any motion to show cause, or any
similar action brought by the United States regarding an alleged
violation of the Final Judgment, the United States may establish the
violation and the appropriateness of any remedy by a preponderance of
the evidence and that CBS, Cox, Scripps, Fox, and TEGNA have waived any
argument that a different standard of proof should apply. This
provision aligns the standard for compliance obligations with the
standard of proof that applies to the underlying offense that the
compliance commitments address.
Paragraph X(B) provides additional clarification regarding the
interpretation of the provisions of the proposed Final Judgments. The
proposed Final Judgments were drafted to restore all competition the
United States alleged was harmed by CBS's, Cox's, Scripps', Fox's, and
TEGNA's challenged conduct. CBS, Cox, Scripps, Fox, and TEGNA agree
that they will abide by the proposed Final Judgments, and that they may
be held in contempt of this Court for failing to comply with any
provision of the proposed Final Judgments that is stated specifically
and in reasonable detail, whether or not it is clear and unambiguous on
its face, and as interpreted in light of this procompetitive purpose.
Paragraph X(C) further provides that, should the Court find in an
enforcement proceeding that CBS, Cox, Scripps, Fox, or TEGNA has
violated the Final Judgment, the United States may apply to the Court
for a one-time extension of the respective Final Judgment, together
with such other relief as may be appropriate. In addition, in order to
compensate American taxpayers for any costs associated with the
investigation and enforcement of violations of a proposed Final
Judgment, Paragraph X(C) provides that in any successful effort by the
United States to enforce a Final Judgment against CBS, Cox, Scripps,
Fox, or TEGNA whether litigated or resolved before litigation, each
respective Defendant agrees to reimburse the United States for any
attorneys' fees, experts' fees, or costs incurred in connection with
any enforcement effort against that particular Defendant, including the
investigation of the potential violation.
Finally, Section XI of the proposed Final Judgments provides that
each Final Judgment shall expire seven years from the date of its
entry, except that after five years from the date of its entry, the
Final Judgment may be terminated upon notice by the United States to
the Court and CBS, Cox, Scripps, Fox, or TEGNA, respectively, that the
continuation of the Final Judgments is no longer necessary or in the
public interest.
IV. Remedies Available to Potential Private Litigants
Section 4 of the Clayton Act, 15 U.S.C. Sec. 15, provides that any
person who has been injured as a result of conduct prohibited by the
antitrust laws may bring suit in federal court to recover three times
the damages the person has suffered, as well as costs and reasonable
attorneys' fees. Entry of the proposed Final Judgments will neither
impair nor assist the bringing of any private antitrust damage action.
Under the provisions of Section 5(a) of the Clayton Act, 15 U.S.C.
Sec. 16(a), the proposed Final Judgments have no prima facie effect in
any subsequent private lawsuit that may be brought against CBS, Cox,
Scripps, Fox, or TEGNA.
V. Procedures Available for Modification of the Proposed Final
Judgments
The United States and CBS, Cox, Scripps, Fox, and TEGNA have
stipulated that the Court may enter the proposed Final Judgments after
compliance with the provisions of the APPA, provided that the United
States has not withdrawn its consent. The APPA conditions entry upon
the Court's determination that the proposed Final Judgments are in the
public interest.
The APPA provides a period of at least sixty days preceding the
effective date of the proposed Final Judgments within which any person
may submit to the United States written comments regarding the proposed
Final Judgments. Any person who wishes to comment should do so within
sixty days of the date of publication of this Competitive Impact
Statement in the Federal Register, or the last date of publication in a
newspaper of the summary of this Competitive Impact Statement,
whichever is later. All comments received during this period will be
considered by the United States Department of Justice, which remains
free to withdraw its consent to the
[[Page 44158]]
proposed Final Judgments at any time before the Court's entry of
judgment. The comments and the response of the United States will be
filed with the Court. In addition, comments will be posted on the U.S.
Department of Justice, Antitrust Division's website and, under certain
circumstances, published in the Federal Register.
Written comments should be submitted to: Owen M. Kendler, Chief,
Media, Entertainment, & Professional Services Section, Antitrust
Division, United States Department of Justice, 450 5th Street NW, Suite
4000, Washington, DC 20530.
Under Section IX, the proposed Final Judgments provide that the
Court retains jurisdiction over this action, and the parties may apply
to the Court for any order necessary or appropriate for the
modification, interpretation, or enforcement of the Final Judgments.
VI. Alternatives to the Proposed Final Judgments
The United States considered, as an alternative to the proposed
Final Judgments, seeking injunctive relief against CBS's, Cox's,
Scripps', Fox's, and TEGNA's conduct through a full trial on the
merits. The United States is satisfied, however, that the relief sought
in the proposed Final Judgments will terminate the anticompetitive
conduct alleged in the Second Amended Complaint and more quickly
restore the benefits of competition to advertisers. Thus, the proposed
Final Judgments would achieve the relief the United States might have
obtained through litigation, but avoid the time, expense, and
uncertainty of a full trial on the merits.
VII. Standard of Review Under the APPA for the Proposed Final Judgments
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 60-day comment period, after which the court shall
determine whether entry of the proposed Final Judgments ``is in the
public interest.'' 15 U.S.C. Sec. 16(e)(1). In making that
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.'' United States v.
Microsoft Corp., 56 F.3d 1448, 1461 (D.C. Cir. 1995); United States v.
U.S. Airways Grp., Inc., 38 F. Supp. 3d 69, 75 (D.D.C. 2014)
(explaining that the ``court's inquiry is limited'' in Tunney Act
settlements); United States v. InBev N.V./S.A., No. 08-1965 (JR), 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 mechanism to enforce the final judgment
are clear and manageable'').
As the United States Court of Appeals for the District of Columbia
Circuit has held, under the APPA a court considers, among other things,
the relationship between the remedy secured and the specific
allegations in the government's complaint, whether the decree is
sufficiently clear, whether its enforcement mechanisms are sufficient,
and whether the decree may positively harm third parties. See
Microsoft, 56 F.3d at 1458-62. 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.''
United States v. BNS, Inc., 858 F.2d 456, 462 (9th Cir. 1988) (quoting
United States v. Bechtel Corp., 648 F.2d 660, 666 (9th Cir. 1981)); see
also Microsoft, 56 F.3d at 1460-62; United States v. Alcoa, Inc., 152
F. Supp. 2d 37, 40 (D.D.C. 2001); InBev, 2009 U.S. Dist. LEXIS 84787,
at *3. Instead:
[t]he balancing of competing social and political interests affected
by a proposed antitrust consent decree must be left, in the first
instance, to the discretion of the Attorney General. 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) (citations omitted).\6\
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\6\ See also 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''); 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'').
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The United States' predictions with respect to the efficacy of the
remedy are to be afforded deference by the Court. See, e.g., Microsoft,
56 F.3d at 1461 (recognizing courts should give ``due respect to the
Justice Department's . . . view of the nature of its case'''); United
States v. Iron Mountain, Inc., 217 F. Supp. 3d 146, 152-53 (D.D.C.
2016) (``In evaluating objections to settlement agreements under the
Tunney Act, a court must be mindful that [t]he government need not
prove that the settlements will perfectly remedy the alleged antitrust
harms[;] it need only provide a factual basis for concluding that the
settlements are reasonably adequate remedies for the alleged harms.''
(internal citations omitted)); United States v. Republic Servs., Inc.,
723 F. Supp. 2d 157, 160 (D.D.C. 2010) (noting ``the deferential review
to which the government's proposed remedy is accorded''); United States
v. Archer-Daniels-Midland Co., 272 F. Supp. 2d 1, 6 (D.D.C. 2003) (``A
district court must accord due respect to the government's prediction
as to the effect of proposed remedies, its perception of the market
structure, and its view of the nature of the case.''). The ultimate
question is 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.''' Microsoft, 56 F.3d at 1461 (quoting
United States v. Western Elec. Co., 900 F.2d 283, 309 (D.C. Cir.
1990)).
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 (``the `public
interest' is not to be measured by comparing the violations alleged in
the complaint against those the court
[[Page 44159]]
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.
In its 2004 amendments to the APPA,\7\ 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. Sec. 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 language explicitly wrote into the statute
what Congress intended when it first 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). ``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 (citing United
States v. Enova Corp., 107 F. Supp. 2d 10, 17 (D.D.C. 2000)).
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\7\ Pub. L. 108-237, Sec. 221.
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VIII. Determinative Documents
There are no determinative materials or documents within the
meaning of the APPA that were considered by the United States in
formulating the proposed Final Judgments.
Dated: June 17, 2019
Respectfully submitted,
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Lee F. Berger * (D.C. Bar #482435),
Trial Attorney.
U.S. Department of Justice, Antitrust Division, Media,
Entertainment, and Professional Services Section, 450 Fifth Street
NW, Suite 4000, Washington, DC 20530, Phone: 202-598-2698,
Facsimile: 202-514-7308, Email: [email protected].
* Attorney of Record
[FR Doc. 2019-17987 Filed 8-21-19; 8:45 am]
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