The Justice Department is apparently giving broadcasters some help with one of their top Washington priorities — Big Tech's dominance as an ad platform.

As expected, the DOJ on Tuesday (January 24) said it was filing an antitrust suit against one of the biggest of Big Tech — Google parent Alphabet — over its online ad practices, a move that could lead to Google divesting its ad business and aid TV stations in what the National Association of Broadcasters has called Big Tech’s “stranglehold” on digital advertising and ad rates.

Attorney General Merrick Garland said Tuesday that the suit was necessary to combat Google's 15-year record of anticompetitive, exclusionary and unlawful conduct in the automated ad tech sector to severely weaken, “if not destroy,” its competitors.

Garland said the U.S., as an advertiser, has incurred damages. The complaint seeks compensation, an injunction against challenged practices and divestitures.

According to CNBC, the suit alleges Google “sought to control all sides of the market,” realizing “it could become ‘the be-all, and end-all location for all ad serving,’ ” to the detriment of broadcast and print competitors for ad dollars and eyeballs.

NAB said, through senior communications strategist Alex Siciliano, that it's carefully reviewing the complaint. "For years, broadcasters have been sounding the alarm over the anti-competitive practices of the Big Tech platforms, including Google. Their dominant role in the marketplace has come at a steep price for local news broadcasters, who lose an estimated $2 billion annually by providing their content to these platforms under ‘take it or leave it’ terms. We continue to work with our congressional allies to address these inequities and urge Congress to move swiftly to level the playing field.” 

Reportedly the states of California, Colorado, Connecticut, New Jersey, New York, Rhode Island, Tennessee and Virginia have joined the suit.

A Google spokesperson told CNBC: “DOJ is doubling down on a flawed argument that would slow innovation, raise advertising fees, and make it harder for thousands of small businesses and publishers to grow.”

It is the second antitrust suit the DOJ has filed against Google. The first was filed under the Trump administration in 2020 and claimed the company unlawfully maintained its search and search advertising monopoly through exclusionary practices. 

Also: Meta's Targeted Ad System Now Under Court Oversight

Earlier this month, Google critic and DOJ antitrust division chief Jonathan Kanter was reportedly cleared by the Justice Department to work on cases involving Google, something Alphabet had opposed given that past criticism.

As founding partner of the Kanter Law Group, his online biography boasted that he was “a leader in the effort to advocate for antitrust enforcement actions against big tech companies by federal and state authorities.”

Big Tech also wanted Biden-appointed Federal Trade Commission chair Lina Khan to have to recuse herself from antitrust-related Big Tech issues given her past criticisms, but that didn’t happen either.

The Computer & Communications Industry Association, whose members include a Who's Who of Big Tech, found the proposed remedies too much to swallow.

“Competition for advertising dollars is fierce both on and offline, growing even more so as the global ad market evolves with new competitors and technology,” it said. “The government’s contention that digital ads aren’t in competition with print, broadcast, and outdoor advertising defies reason.

“As an association that has supported government intervention in appropriate technology cases in the past, we find this lawsuit and the radical structural remedies that it proposes unjustified,” CCIA said. “Digital services are competing vigorously for advertising dollars on screens of all sizes, and the complaint appears to disregard these dynamics as well as the macro trends of the global ad market.”

Ditto the Big Tech-backed and funded trade group the Chamber of Progress, which was not pleased with the suit.

The chamber argued Google is not the dominant ad market platform DOJ supposes. “Google’s online ad market share is now at an all-time low, and it just laid off 12,000 employees in the midst of a declining advertising market —so this DOJ case seems pretty disconnected from economic reality,” said chamber CEO and former Google exec Adam Kovacevich. ▪️

The Department of Justice says its June settlement with Meta (formerly Facebook) over discriminatory targeting of online housing ads has met a "key" milestone with Meta's completion of a new system to "address algorithmic discrimination."

The agreement marks "the first time that Meta is subject to court oversight for its advertisement targeting and delivery system," DOJ said, and ensures that it will be subject to that court oversight through June 2026.

DOJ said the settlement had held Meta accountable for "unlawful algorithmic bias and discriminatory ad delivery on its platforms."

Also: Meta May Not Be Betta, But It Still Matters to Streaming Video’s Future

The Biden Administration had alleged that Meta algorithms targeting housing ads relied on protected characteristics including a recipient's age, sex and race to gauge relevance.

Meta's new system, dubbed the Variance Reduction System (VRS) reduces the difference between an eligible audience's racial/ethnic/gender makeup and an actual audience. That system will get a third-party review to verify whether VRS is actually meeting specific compliance metrics. ■

In a warning shot across the bow to all online information gatherers, the Federal Trade Commission and Justice Department say they have struck an agreement with Fortnite creator Epic Games that will see the online gaming giant pay $520 million to settle allegations it broke the law by designing "dark patterns" that tricked game players into make millions of unintended in-game purchases like costumes and dance moves.

Associate Attorney General Vanita Gupta said the settlement should send a message to all online providers that collecting personal information from children without parental consent "will not be tolerated."

The settlement is divided into a $275 million payment to the Treasury, the largest such penalty in FTC history, and $245 million in consumer refunds for its billing practices, the biggest refund in an FTC gaming case.

The FTC alleged that Epic used "privacy-invasive default settings and deceptive interfaces that tricked Fortnite users, including teenagers and children," according to FTC chair Lina Khan.

As part of the agreement, Epic will have to employ "strong privacy default settings for children and teens," including that voice communications and texting are turned off by default, the FTC said.

The FTC said the game violated the Children's Online Privacy Protection Act (COPPA) by failing to notify parents about the data collection from their children, then requiring parents to "jump through unreasonable hoops" if they wanted that data deleted.

In a separate complaint, it said Epic used dark patterns -- including confusing button configurations, which tricked players into hundreds of millions of dollars worth of unwanted purchases -- as the game was loading or being awakened from sleep mode.

The FTC said the company had been put on notice of problems by some of the people working for it. "As early as 2017, Epic employees urged the company to change the default settings to require users to opt in for voice chat, citing concern about the impact on children in particular," the FTC said. It also said the company had ignored over a million consumer complaints as well as the repeated employee concerns.

The FTC referred the complaint to Justice (the vote was 4-0), which then proposed the settlement.

Sen. Ed Markey (D-Mass.), a member of the Commerce Committee who authored COPPA, signaled the issue went beyond Epic and put in a plug for passing his update to COPPA that would extend its protections to teens.

"Congress must meet this moment in history by stepping up and stepping in for the wellbeing of young people across America," said Markey in a statement. "Without immediate action to thwart the pernicious threats facing young people, we will fail to safeguard them in the face of a generation-defining mental health and privacy crisis. This is a bipartisan issue for American families, and I won’t stop fighting until we pass updated legislation for kids' and teens' privacy protections online."Sen. Maria Cantwell (D-Wash.), chair of the Commerce Committee, agreed.

“The FTC’s lawsuit against Epic proves we need stronger online privacy protections for children and teens," she said in response to the settlement. "Kids were bullied, harassed, and threated because Epic designed its games to let them communicate with strangers from all over the world.  It’s time for Congress to step up for kids and protect them from online harms and to make sure we have a stronger FTC to enforce against bad actors.”

Sen. Mark Warner (D-Va.) similarly promoted his legislative effort to weed out dark patterns.

“I’m glad to see the FTC cracking down on the use of manipulative dark patterns against children. Companies and platforms that cater to young people have a responsibility to protect their users — not to target them with deceptive interfaces that manipulate them into ceding their personal information or making unwanted purchases," Warner said in a statement. "I will continue working to pass my DETOUR Act in order to establish greater safeguards for users of all ages.”

Dark patterns are online interfaces designed to trick users into taking actions they might not ordinarily take. Examples include: 1) simple buttons that say "yes" to user data collection while the "no" button is tiny or hidden or several steps removed; 2) suggesting others are about to buy an item to try to close the sale; or 3) deliberately obscuring alternative choices or settings. Then there are the online game designs that lure kids into in-app purchases their parents have to either pay for or seek refunds. ■

Attorney General Merrick Garland told news media execs in a meeting Tuesday (Sept. 13) that his department was committed to protecting a free and independent press, including ensuring that journalists are not compelled to reveal their sources or information as part of law enforcement investigations.

In July 2021, Garland announced a new policy to restrict compulsory processes to get information collected in the "scope of newsgathering activities." Those protections are necessary in the absence of a federal shield law and include a prohibition on subpoenas, warrants, certain court orders, and "civil investigative demands."

Also: Journalists Press for Shield Law

Garland told the news executives, which included execs from CBS, NBC, CNN and NPR, that the act of codifying that July 2021 policy shift, which was announced in a memo, would be ready and posted online in the next three months.

The prohibition does not apply if a journalist is him or herself being investigated for criminal conduct, such as insider trading, or to a journalist who used criminal methods -- breaking and entering, for example, to obtain information. But the prohibition does apply if a journalist has obtained and published government information, including classified information, in the course of their reporting.

There is also the traditional carveout -- typical for state shield laws -- for subpoenas or warrants or other legal processes employed to prevent imminent risk of death or serious harm to people or critical infrastructure.

Justice also supported a federal shield law as part of that July 2021 rethink, but none has yet to make it through the Congress despite multiple attempts over many years. 

A judge has told the Justice Department to make public redacted copies of some documents involving the FBI search/raid on former President Donald Trump's Mar-a-Lago resort, which allegedly turned up boxes of classified documents that should have gone to the National Archives.

CNN et al. had asked the U.S. District Court for the Southern District of Florida to unseal all documents related to the raid, including probable cause support for the warrant. The Justice Department had not wanted those documents made public as it did some other related documents.

In a hearing Thursday, Judge Bruce Reinhart said he was not convinced the FBI search affidavit should remain fully sealed, as Justice had wanted, according to CNN. ■

Citing Elon Musk's ownership of satellite internet platform Starlink, the Open Markets Institute says that the FCC, Justice Department and Federal Trade Commission all have the power to block his purchase of social media giant Twitter.

In a statement following the deal announcement, OMI, a liberal think tank that has big issues with perceived monopolies, sees Musk's Twitter takeover as just that, and says the FCC, for one, can block it based on the Communications Act of 1934 and even the Telegraph Act of 1860, given that the deal would give a single person "direct control over one of the world's most important platforms for public communications and debate."

Also: Warner Warns Musk Against Twitter Backslide

DOJ and the FTC certainly have a role in reviewing the $40 billion-plus deal, but the FCC's role is less clear, particularly since it basically shed itself of broadband access oversight -- beyond service transparency obligations -- when it reclassified internet as an information service.

OMI also says the deal would be a merger between essential platforms -- Starlink and Twitter -- that the government routinely acts to prevent.

Interestingly, the group cites for example the DOJ's effort to block the ATT&T/Time Warner deal, which actually failed after a court refused to block that merger.

OMI suggests that Starlink, which has yet to become a major internet player (though it did get a lot of press for Musk's effort to use the satellites to provide internet access to war-torn Ukraine) is comparable to the largest media operations. 

"[J]ust as we would now expect the U.S. government to block a takeover of Twitter by Google, Facebook, Comcast, or Verizon, the same rules apply to the owners of Starlink," it said in a statement.

Many Democrats are concerned that Musk's pledge of reduced content moderation on the platform -- in the name of free speech -- will lead to an increase in disinformation and misinformation. 

FCC Commissioner Brendan Carr, who has been crticial of what Republicans see as Twitter's censorship of conservative speech, including that of former President Donald Trump, was unconvinced.

“The FCC has no authority to block Elon Musk’s purchase of Twitter, and to suggest otherwise is absurd," said Carr in a statement. "I would welcome the full FCC making it clear that we will not entertain these types of frivolous arguments.”■

Some Democratic senators are backing a bill that would severely limit the ability of large companies to merge, including by disallowing any deals valued at over $5 billion.

That would, had it been in effect at the time, allow the Department of Justice or Federal Trade Commission to have immediately blocked the mergers of Time and Warner, Viacom and CBS, Comcast and AT&T, Comcast and NBCUniversal, AT&T and Time Warner, Charter Communications and Time Warner Cable, The Walt Disney Co. and 21st Century Fox, AT&T and DirecTV, Discovery and WarnerMedia, and Facebook and WhatsApp, among many others.

The Prohibiting Anticompetitive Mergers Act would also allow them to retroactively block “certain mergers” that had led to greater than a 50% market share.

Washington has been looking at unwinding Big Tech mergers, which many Democrats see as companies buying their way to monopoly by purchasing competitors before they get big enough to trigger serious antitrust scrutiny.

Also: Klobuchar Introducing Big Tech Antitrust Bill

The Computer and Communications Industry Association, whose members include a lot of those big Big Tech players, was not pleased with the latest salvo from Washington.

“This preemptive ban on mergers over an arbitrary size would harm both competition and consumers,” CCIA president Matt Schruers said. “Instead of enforcers continuing to evaluate transactions based upon whether they would substantially lessen competition, the bill would arbitrarily prohibit transactions that can bring significant benefits to consumers and the economy. This approach is ill-advised as it would eliminate judicial checks and balances that courts provide to ensure the merger review process remains apolitical.”

There is actually pretty much of a laundry list of things the new bill would do, including:

• 1.) “Allowing the agencies to reject mergers in the first instance without court orders;
•  2.) “Requiring the agencies to reject certain mergers, including prohibited mergers; 
• 3.) “Prohibiting firms with a history of corporate crime or antitrust violations in the last 10 years from acquiring other companies; 
• 4.) “Prohibiting the agencies from negotiating remedies with the merging parties; 
• 5.) “Directing the agencies to scrutinize the labor impacts of each deal and reject mergers harmful to workers ;
• 6.) “Prohibiting private-equity “roll up” strategies that quickly consolidate industries 
• 7.) “Giving a greater role to other relevant agencies and state attorneys general; 
• 8.) “Requiring courts to defer to certain agency determinations; 
• 9.) “Stripping merger litigation from the appellate jurisdiction of the Supreme Court;
• 10.)  “Establish procedures for the antitrust agencies to conduct retrospective reviews and break up harmful deals that have destroyed competition.”

The bill is spearheaded by Sen. Elizabeth Warren (D-Mass.) and a House version by Rep. Mondaire Jones (D-N.Y.). Co-sponsors include Sens. Cory Booker (D-N.J.), Bernie Sanders (I-Vt.), Tammy Baldwin (D-Minn.), Brian Schatz (D-Hawaii), Sheldon Whitehouse (D-R.I.), Richard Blumenthal (D-Conn.), Jeff Merkley (D-Ore.), and Edward J Markey (D-Mass.), and in the House by Cori Bush (D-Mo.), Mark Pocan (D-Wis.), Alexandria Ocasio-Cortez (D-N.Y.), Katie Porter (D-Calif.), Jesús “Chuy” García (D-Ill.), Andy Levin (D-Mich.), Adriano Espaillat (D-N.Y.), Ayanna Pressley (D-Mass.), Rashida Tlaib (D-Mich.), Mark Takano (D-Calif.) and Eleanor Holmes Norton (D-D.C.).

“For the last five decades, big companies have had almost free reign over our economy, squashing competitors, growing bigger and bigger, and abusing their market power to price gouge consumers and crush workers and small businesses,” Warren said. “This unconstitutional behavior has to stop.” ■

A Washington State man has been sentenced to seven years in prison for plotting to threaten and intimidate journalists who were trying to expose anti-semitism.

Kaleb Cole, who lead the neo-Nazi Atomwaffen Division, was convicted by a Washington District Court of threatening communications and conspiring with other neo-Nazis to commit "interference with federally-protected activities because of religion, mailing threatening communications and cyberstalking."

Kristen Clarke, assistant attorney general of DOJ's Civil Rights Division, said that Cole had led a multistate plot to threaten and intimidate journalists who were Jewish or of color by mailing posters or gluing them to the homes of the journalists. The posters featured images of a hooded figure about to throw a molotov cocktail at a house and said “you have been visited by your local Nazis.”

The journalists targeted had told at trial how the intimidation had affected them, including moving out of their house for a while, or buying a security system, buying a gun and learning how to use it, and one even quit the journalism business.

“The defendant sought to intimidate journalists and advocates working to expose anti-Semitism, but that effort failed,” said Timothy Langan, assistant director of the FBI’s Counterterrorism Division. “Cole’s intended victims fought back but not with threats of violence; they fought back in a court of law. The FBI will continue to do our part by aggressively investigating cases involving threats or acts of violence.” ■

Steve Bannon, adviser to Donald Trump and longtime media figure, has been indicted on two counts of contempt of Congress because of his refusal to comply with a subpoena issued by the House Select Committee investigating the Jan. 6 Capitol insurrection, which the Justice Department calls a Capitol ”Breach.“

One contempt charge is for refusing to appear for a deposition and another is for refusing to produce relevant documents. Conviction on each charge carriers a minimum of 30 days and a maximum of one year in jail and a bit of a slap-on-the-wrist fine — as little as $100 and no more than $1,000 for each.

The committee had said it had reason to believe Bannon, formerly a chief strategist for President Trump, had information relevant to its investigation. Bannon had not been a member of the administration since leaving the White House in 2017.

“Since my first day in office, I have promised Justice Department employees that together we would show the American people by word and deed that the department adheres to the rule of law, follows the facts and the law and pursues equal justice under the law,” said Attorney General Merrick Garland Friday (Nov. 12). “Today’s charges reflect the department’s steadfast commitment to these principles.”

Bannon's media history, according to Brittanica.com, includes co-founding Bannon & Co., whose clients included MGM, Samsung and Polygram and which negotiated the sale of Castle Rock Entertainment, for which it received a stake in a number of TV shows including a then relatively new Seinfeld. Seinfeld has since been a gold mine in syndication, including for Bannon Inc.

Bannon became a Trump associate through his running of conservative/alt-right web site Breitbart.com, which he took over when his friend, Andrew Breitbart, died in 2012. Bannon backed Trump and was repaid by access to the president as senior counselor and chief strategist. Rep. Adam Kinzinger (R-Ill.), one of only two GOP members of the Select Committee, said he hoped DOJ's action would encourage others to cooperate. “We just want answers,” he told CNN‘s Jake Tapper.

The House voted back in October along mostly party lines to indict Bannon for criminal contempt.

Bannon is no stranger to federal indictment. In August 2020 he was among a number of people arrested and indicted on charges they defrauded hundreds of thousands of donors to "We Build the Wall," a campaign to help build a wall on the southern border.

The Justice Department has signed off on the first $32.3 million tranche of over $200 million in forfeited funds to FIFA and others from widespread corruption in the securing of TV and other media and marketing rights for international soccer.

Justice said well over that initial amount has been seized as part of the government's prosecution of that corruption. The money is being remitted to FIFA, the world soccer organizing body; CONCACAF, which oversees soccer in North and Central America; and CONMEBOL, which oversees South America, as well as various other soccer federations.

According to Justice, sports marketing companies paid bribes and kickbacks to soccer officials in exchange for the rights to various tournaments and events.

The $32.3 million is the beginning of the process of getting funds to the victims of the FIFA bribery scandal and out of the hands of the corrupt officials that took it.

“Not one official in this investigation seemed to care about the damage being done to a sport that millions around the world revere," said Michael J. Driscoll, assistant director-in-charge of the FBI’s New York Field Office. "The only silver lining is the money will now help underprivileged people who need it, not the wealthy executives who just wanted it to get richer. Our work isn’t finished, and our promise to those who love the game – we won’t give up until everyone sees justice for what they’ve done.”

This week's initial tranche of money comes from the forfeited assets and stems from a May 2015 indictment of 14 FIFA officials and sports marketing executives with racketeering, wire fraud and money laundering, plus a follow-on indictment of even more officials.

Many of the defendants were ordered to forfeit their ill-gotten gains and Justice is authorized to distribute forfeited assets through a remission process to victims of the crimes, including to the soccer organizations defrauded by corrupt executives.

The Department of Justice said Saturday (June 5) that, going forward, it will not be issuing subpoenas for reporters' records in leak investigations.

That came after the New York Times reported that not only was the Biden White House continuing the pursuit of such records from its reporters, a hold-over from a Trump era investigation, but that it had issued a gag order preventing the paper's executives from talking about it, even to its own staff.

"While the Trump administration never informed The Times about the effort," said Times attorney David McCraw, according to the paper. "[T]he Biden administration continued waging the fight this year, telling a handful of top Times executives about it but imposing a gag order to shield it from public view." McCaw called that gag order unprecedented.

Also Read: Trump Suggests NBC Licenses Should Be Challenged

"As appropriate given the independence of the Justice Department in specific criminal cases, no one at the White House was aware of the gag order until Friday night," said Biden Press Secretary Jen Psaki in a statement. "While the White House does not intervene in criminal investigations, the issuing of subpoenas for the records of reporters in leak investigations is not consistent with the President’s policy direction to the Department, and the Department of Justice has reconfirmed it will not be used moving forward."

CNN reported last month that the Trump Administration had obtained phone records and e-mails of CNN correspondents as part of leak investigations.

Also Read: Trump Pumps Up Attacks with CNN Claims

Trump spent much of his administration attacking the Times, CNN, NBC and others who wrote negative stories about him as his enemies — and enemies of the people — in league with Democrats to un-elect him. In the case of NBC, he suggested the FCC should investigate whether it should continue to hold broadcast licenses.

Department of Justice Antitrust Chief Makan Delrahim said that if the government does not find a way to harness the massive market power of those platforms to democratic policies, the country risks "devastating outcomes for our civil democratic society."

He suggested one solution could be a new "public-private" agency, the Digital Markets Rulemaking Board, with the power to regulate edge providers like social media sites.

Also Read: Delrahim Seeks Examples of Online Platform Anticompetitive Conduct

"The single greatest issues facing my successors, the new Congress, and the public relate to concerns of market integrity and market power in the increasingly concentrated digital marketplace," he said. "These issues include data portability, non-discrimination and interoperability of digital products and services."

Delrahim was delivering some sobering final thoughts about Big Tech in a speech to the Duke’s Center on Science & Technology Policy on his last day as, he pointed out, the Senate-confirmed assistant attorney general in the Antitrust Division.

He said that policy solutions in the current debate over the power of online platforms and digital markets have ranged from "command and control" regulations from a new agency charged with overseeing digital technology to breaking up companies with a certain size (like Google and Facebook and Twitter), to laissez-faire self regulation.

Delrahim instead suggested a hybrid public-private rulemaking body with "limited" oversight to increase both competition among and trust in online platforms.

He said that agency could come up with rules to prevent discrimination by larger platforms against products or services either because they compete with them or because they "espouse viewpoints inconsistent with those of the platform operators."

Also Read: DOJ OK With Online Ad Production Services Market

That new Digital Markets Rulemaking Board (DMRB) would be "a private/public self-regulatory board consisting of industry and public members with technical and policy expertise with the mission to develop and propose market-based, non-discriminatory rules to promote market integrity."

He said a public-private hybrid would help gain the trust of the public while letting government tap into the tech savvy of private industry. 

He said it would be the most appropriate regulatory model because it would have the flexibility to adapt to swiftly changing technology that a "rigid command-and-control" regime lacks. 

He also said the DMRB's rulemaking authority should cover things including "interoperability, self-preferencing, non-discrimination and data portability."

He said the resulting rules would need "limited" review and sign-off by DOJ or some other agency. 

Delrahim also had some legislative proposals on the merger front. 

Also Read: FTC, DOJ Big Tech Investigations Suffer Overlap Issues

He said that Congress should pass a new law that any further acquisitions in a market by a firm with more than 50% market share in that market be presumptively anticompetitive, rebuttable only by a showing that the merged company could not exercise market power or that the anticompetitive effects are outweighed by pro-competitive benefits.

One of Justice's concerns about Big Tech is that it got and stayed that way by buying up competitors before they raised red flags on antitrust grounds. He said the presumption should apply "regardless of the size of the target company," which would help address that concern.

The Judge hearing the Department of Justice's challenge to California's net neutrality law has rescheduled a Jan. 26 hearing, citing the caseload of the court and the complexity of the issue.

Also Read: House Dems Press Biden AG Nominee to Drop Suit

The new date is Feb. 23, which will give the new Biden Justice Department, which takes over after the Jan. 20 inauguration, a chance to decide whether it wants to continue the challenge. 

The court made it clear it wanted an answer to that pressing question. "The Court orders the parties to meet and confer (after January 20, 2021) and to file a status conference statement by February 9, 2021, informing the Court whether the United States of America intends to pursue this case further, or whether, upon review by the Biden Administration, it will file a stipulation or motion to dismiss this lawsuit. 

Also Read: California Committee Approves Tough New Net Neutrality Bill

The law was passed after the FCC's Restoring Internet Freedom (RIF) order scrapped its net neutrality rules banning blocking, throttling and paid prioritization. The FCC's RIF deregulation of internet access included a preemption of state regs that conflicted with that decision. But in 2018, California passed its own tough net neutrality rules anyway to fill what it saw as a regulatory void.

The FCC, backed by Justice, filed suit, as did ISPs.

The law's implementation was stayed pending resolution of those legal challenges.

Big Tech took another hit in Washington Friday as six people were indicted for bribing Amazon employees to get sales advantages and to disadvantage competitors in the powerhouse online market. It was an unfair competitive advantage the Justice Department said was worth in excess of $100 million and included reinstating suspect products like dietary supplements and potentially dangerous electronics.

The defendants were charged with conspiracy to use a communications facility to commit commercial bribery, as well as conspiracy to access a protected computer without authorization, conspiracy to commit wire fraud, and wire fraud itself.

According to Justice, the accused paid over $100,000 to corrupt most of a dozen Amazon employees and contractors, who proceeded to facilitate attacks on competitors' accounts and listings, provide information on Amazon's internal algorithms and to benefit the defendants by reinstating products that had been suspended or blocked from Amazon, including dietary supplements that were the subject of consumer complaints, electronics identified as flammable, and products flagged for IP violations.

They also reinstated accounts that had been identified as deceiving consumers.

Also, in exchange for bribes the employees and contractors increased the defendant's storage limits in Amazon warehouses and provided insider information of the most successful online ad campaigns and product listings.

The defendants will make their initial appearances in a U.S. District Court in Seattle Oct. 15. They face up to a $250,000 fine and 15 years in prison on the bribery and unauthorized access charges and up to $250,000 and 20 years in prison for the conspiracy and wire fraud.

“As the world moves increasingly to online commerce [propelled in part by the COVID-10 pandemic], we must ensure that the marketplace is not corrupted with unfair advantages obtained by bribes and kick‑backs,” said U.S. Attorney Brian T. Moran in a statement. “The ultimate victim from this criminal conduct is the buying public who get inferior or even dangerous goods that should have been removed from the marketplace. I commend the investigators and cybersecurity experts who have worked to identify and indict those engaged in these illegal schemes.”

The Justice Department said that it believes Avanci's 5G connected car licensing platform passes antitrust muster.

Justice signaled its sign-off in a business review letter. Essentially Avanci sought the review from Justice, outlining what its platform does, which is essentially provide licensing for IP from many different patent holders into a single licensing transaction, in this case for car systems connected by 5G, and asking for DOJ's seal of approval, as it were. 

Justice concluded that Avanci's bundling of standard-essential patents into one agreement could make licensing those patents "related to vehicle connectivity more efficient by providing automakers with a 'one stop shop' for licensing 5G technology." 

"The Department has concluded that, on balance, and based on the representations in Avanci’s letter request, Avanci’s proposed 5G Platform is unlikely to harm competition," DOJ said. But it reserved the right to challenge the platform if, in actual operation, it is anticompetitive "in purpose or effect." 

Not the White House's problem. That was basically the Justice Department's answer to Playboy reporter and CNN analyst Brian Karem, according to a letter to his lawyers dated April 5. 

Karem had complained that he and other journalists were being excluded from daily White House COVID-19 press conferences while a reporter from One American News (OAN) Network (Chanel Rion) was allowed in, saying that the White House press secretary was engaging in content- and viewpoint discrimination in violation of the First Amendment. 

Related: Shelley Calls Out Trump and OAN Reporter

Karem had his hard passed revoked by the White House last summer but eventually returned at a court's directive after he sued President Trump and White House press secretary Stephanie Grisham. He said his treatment by the press office also violated that court directive.  

But in a letter to Karem's attorney, Ashley Cheung, an attorney in the civil division at the Justice Department, said that it was Justice's understanding that while the Press Briefing Room was White House property, by custom the White House correspondents association determines seating, and that it was WHCA's new virus-related social distancing guidelines--the three-empty-chairs distance between reporters severely cuts down on capacity--that was the culprit, and which was adopted solely by the WHCA.  

"To the extent Mr. Karem has been excluded from the seating rotations, he should direct his complaints to the WHCA, not to the Press Secretary, who has merely acquiesced in this practice," Cheung wrote, according to a copy of the letter.  

Cheung pointed out that the OAN reporter had been invited by the press secretary, while "nothing in the First Amendment or the Due Process Clause requires the White House Press Secretary to extend a personal invitation to Mr. Karem to be her guest." 

As to violating the judge's order, she said the hard pass has been fully restored with "full privileges" and that any restrictions are not based on any actions of the press secretary.

INCOMPAS, which represents edge providers as well as competitive carriers, has added a top antitrust official to the lineup for its annual Policy Summit March 3 in Washington.

David Lawrence, chief of the competition policy and advocacy section at the Department of Justice, has been added as a speaker. 

He joins a lineup that includes Rep. Mike Doyle (D-Pa.), chairman of the House Communications Subcommittee, Rep. Bob Latta, ranking member of the subcommittee, and FCC commissioners Jessica Rosenworcel (Democrat) and Brendan Carr (Republican). 

Currently both Justice and the Federal Trade Commission are investigating edge provider activity and the FTC just announced it is seeking information on the smaller companies tech giants have bought on their way to becoming dominant players in the U.S. economy.

The prospect that "third parties [could] undercut...federal enforcement decisions" - such as the pending T-Mobile/Sprint merger - is one of the greatest concerns in the new antitrust environment, Assistant Attorney General Makan Delrahim explained in remarks to the monthly luncheon of the Media Institute in Washington on Wednesday (Feb. 5). He reminded the policy-centric audience that the Federal Communications Commission, the Department of Justice and many states approved the merger last year. But then attorneys general from 10 states and the District of Columbia sued to prevent the alliance; a decision is still pending.

"So, we have two specialized federal agencies reviewing the T-Mobile/Sprint transaction" and deeming it legal, Delrahim said. "Yet, we have a minority of states and the District of Columbia trying to undo that relief across the entire country. If you find this situation odd, you’re not alone."

"We often work closely with our state attorneys general partners in enforcement actions," he continued. "Here, however, a small group of state attorneys general did not reach consensus." Delrahim contended that such actions are "incompatible with the orderly operation of our antitrust merger laws and telecommunications regulations. It creates the risk that a small subset of states, or even perhaps just one, could undermine beneficial transactions and settlements nationwide."

Delrahim fretted, "That any state, or even any individual, can undo the nationwide relief secured by the federal government and approved by a federal court."

"That would wreak havoc on parties’ ability to merge, on the government’s ability to settle cases, and cause real uncertainty in the market for mergers and acquisitions," he added, noting that "Permitting states to undermine federal enforcement also would be contrary to congressional intent."

The AAG's passionate example emphasized the core of his remarks, which focused on DoJ's efforts to "reform" and "modernize" the Antitrust Division's merger review process.

"As a benchmark to measure success, we committed that we would aim to resolve most merger investigations within six months of filing," Delrahim said. After about 18 months of efforts, he said current initial merger reviews take about 5.4 months, and for cases that involve any challenge "the average time to notification is 5.7 months."

Steering Clear of Tech Examination and Media Issues

Delrahim ducked questions about DoJ's broad antitrust investigation of major digital platform firms (Google, Amazon, Apple and Facebook), announced in July. Initially, the agency expected to complete that probe by the end of 2019.

Early this week, Delrahim was recused from the Google portion that probe because of a potential conflict of interest. Before joining DoJ, Delrahim in private practice represented Google in its 2007 acquisition of DoubleClick, an ad-tech firm.

Separately, Delrahim touched briefly on the long-pending examination of the 1941 consent decrees affecting BMI and ASCAP music licensing agreements. Last year, he said that DoJ expected to decide by the end of 2019 whether those restrictions should be amended, eliminated or maintained as is.

On Wednesday he would only say that the agency's review is not comparable to its November 2019 termination of the half-century-old Paramount consent decree affecting studio ownership of exhibition facilities.

An alleged member of The Dark Overlord hacking group has been extradited from the United Kingdom to St. Louis to face charges. 

That is according to the Justice Department, which secured an indictment of Nathan Wyatt before a federal grand jury in 2017. 

Wyatt was arraigned Dec. 18 in the Eastern District of Missouri. He pleaded not guilty and was detained pending further proceedings. 

That six-count indictment comprised one count of conspiracy, two counts of aggravated identify theft, and three counts of threatening to damage a protected computer. 

As a member of The Dark Overlord, Wyatt was implicated in remotely accessing computer networks of multiple U.S. companies without authorization, stealing sensitive records and info and threatening to release it unless they paid a bitcoin ransom. 

Wyatt was accused of creating email and phone accounts used to make those extortionate threats. 

“Today’s extradition shows that the hackers hiding behind The Dark Overlord moniker will be held accountable for their alleged extortion of American companies,” said Assistant Attorney General Brian A. Benczkowski of DOJ's Criminal Division, in a statement. “We are thankful for the close cooperation of our partners in the United Kingdom in ensuring that the defendant will face justice in U.S. court.”

The Justice Department is looking into whether the Administrative Procedure Act needs reforming, which would have to come from Congress. 

The APA is basically the Robert Rules of Order for federal agencies, or what DOJ likened to the "fundamental charter" of the administrative state. 

For example, when an FCC decision is challenged in court for being arbitrary and capricious, it is being accused of violating the APA. 

DOJ has scheduled a summit Dec. 6 to look at how the "administrative state" has developed in unforeseen ways and "what the Trump Administration has done to make the administrative state operate more fairly and effectively." 

The Department of Justice is ending a two-year investigation into the standard-setting process for mobile device eSIMS, imbedable SIM cards that can be reprogrammed remotely and that its backers say are a key to the growth of the internet of things (IoT). 

The mobile industry is moving away from those tiny plastic removeable sim cards to move between networks. 

DOJ signaled its decision in a letter to GSM Association, the global mobile operator trade association whose members include a laundry list of tech companies here and abroad. 

DOJ said it would not be taking any enforcement action against GSMA after the association agreed to change the standards-setting process so that it will include more imput from non-operator members and produce standards that supercede their problematic predecessor. 

DOJ launched the investigation out of concern, which bore out, that GSMA "used its industry influence to steer the design of eSIMs technology in mobile devices," concerns it said appeared to be allayed by GSMA's changes.  

"The new standard-setting process will have a greater likelihood of creating procompetitive benefits for consumers of mobile devices; it will also curb the ability of mobile network operators to use the GSMA standard as a way to avoid new forms of disruptive competition that the embedded SIMs (eSIMs) technology may unleash," said Justice. "In light of these planned changes, the Antitrust Division has no present intention to bring an enforcement action against the GSMA or its mobile network operator members." 

Antitrust chief Makan Delrahim said he was looking for GSMA to deliver on a more "consumer friendly" eSIM standard. “The GSMA’s old procedures resulted in certain eSIMs rules that benefited only its incumbent mobile network operators at the risk of innovation and American consumers," he said. "The new procedures proposed going forward significantly reduce that risk and should result in new innovative offerings for consumers.”  

But GSMA is not out of the woods entirely. 

DOJ was responding to a GSMA proffering of the new standards process. Justice said it would not challenge it, but said it remains to be seen if the standard does insure meaningful participation by nonoperators and added that it still has issues with standards set within a trade association controlled by a "single constituency of competitors"--operators. 

As a result, Justice said it would be monitoring the standard "closely." 

GSMA was interpreting the Justice letter as vindication and victory. 

“The Justice Department reviewed millions of documents covering a multi-year and complex process to establish common standards for eSIM technologies," said GSMA. "Its Business Review Letter is conclusive that the agency found no violation of antitrust laws. eSIM is a global specification by the GSMA which enables remote SIM provisioning of any mobile device. Its universal approach will grow the Internet of Things by allowing manufacturers to build a new range of products for global deployment based on a common embedded SIM architecture. With eSIM it will become easier to extend mobile connectivity to devices such as tablets, smart watches, fitness bands, portable health systems and various other devices." 

WASHINGTON — The Department of Justice this week will launch its deep dive into the impact of online advertising on the local broadcast-TV market, an issue that came up in an investigation related to the failed Sinclair Broadcast Group-Tribune Media merger but has widened to a general review of the ad marketplace.

If the DOJ concludes that online is grabbing ad dollars from local stations, it could boost broadcasting’s deregulatory efforts against limits on both national reach and local-market duopolies. Cable operators have been pushing back on that sort of relief, concerned about broadcasters using added clout to boost retransmission-consent fees, particularly if Congress does not step in via the STELAR satellite license-renewal legislation to prevent blackouts or mandate arbitration.

Department of Justice antitrust chief Makan Delrahim signaled the investigation into broadcasters’ competitive market was coming, stemming both from Sinclair-Tribune and the Nexstar Media Group-Tribune merger that came after the first deal tanked.

Public Workshop Coming Up

A two-day workshop (May 2-3) in D.C. will look at online and mobile advertising, including “how each type of advertising may fit into an advertising campaign, how inventory is priced, the economics of advertising, developments in advertising technologies, the effects from changes in consumer behavior and the competitive dynamics of media advertising in general, in light of the rise of digital advertising.”

Delrahim has said the DOJ is contemplating whether to adjust its merger reviews given the argument that edge providers are now, for example, competing for local car dealer ads — a bread-and-butter category for broadcast — and thus should be considered part of the relevant competitive market.

Following its investigation into the broadcast ad market, Justice struck settlements with a number of broadcasters stemming from ad-related information exchanges. That inquiry grew out of the Sinclair-Tribune review.

Delrahim has said that, in some ways, Google is not so different from broadcasters. Stations have long argued Google’s competitive market has widened considerably and that should be taken into account in mergers, as well as in determining if broadcast should continue to be subject to local and national ownership limits. The more competitors in a market, the less Justice needs to worry about the anti-competitive effects of mergers.

Delrahim said that when DOJ does broadcast antitrust analysis it currently looks at spot ad rates, but ultimately the viewer — “the eyeballs” — is part of the product, since the service is free, just as it is with Google. “So, you try to make better [broadcast] programming to attract more users by which you can charge higher advertising rates,” he said. “In some ways, Google isn’t too different from that. You try to pass on a product, but ultimately that consumer isn’t the customer of that product. It is the advertisers who buy on that platform.”

Those are issues on which DOJ will gather string during the two-day workshop. A former ad association lawyer suggested it is about time.

“I cannot remember the last time DOJ had such a public forum — this is a timely and necessary workshop,” Adonis Hoffman, former general counsel for the American Association of Advertising Agencies and currently chairman of Business in the Public Interest, said.

“We are in a competitive environment where convergence has companies from across the telecom, media and technology spectrum crossing traditional boundaries and competing with one another,” Hoffman said. “As DOJ looks into this new video/television market, hopefully they will come up with a definition of the market that reflects the new realities.

“It is impossible to separate the advertising issues from the regulatory concerns, so it is good that DOJ will be looking at that critical component of the media ecosystem,” he said.

NAB Says: Count Web Players

The National Association of Broadcasters has long argued that the government should include web players in broadcasters’ competitive market.

For example, in seeking relief from the eight-voices test for local-market ownership — a broadcast-TV merger, for instance, must leave at least eight independent stations in the relevant market post-merger — the NAB said websites that can geo-target should also be considered a “voice.” It made the same argument for loosening the duopoly rules.

In 2017, following the FCC’s deregulation of some local ownership rules, NAB reiterated the need for taking the web into account as a competitor for ads: “As competition from unregulated outlets continues to grow, policymakers should support the FCC’s modernization of radio and TV ownership rules to reflect the current marketplace. To continue offering free, over-the-air service, broadcasters must be able to compete on a level playing field for audiences, advertising and investment.”

More recently, in calling for the FCC to raise the 39% national audience reach cap, which the FCC is currently mulling, NAB again raised the issue of including online in its competitive marketplace, as did Nexstar chairman and CEO Perry Sook in an April 23 speech to the Media Institute in Washington.

NAB general counsel Rick Kaplan, in a meeting with FCC chairman Ajit Pai (according to FCC documents), said that for TV stations to remain viable, they need to boost their reach to effectively compete for ad revenues with “digital advertising platforms and social media giants that dwarf broadcast TV groups in scale and scope.” Sook seconded that. Justice is seeking comment on the issue through June 15.

MORE ONLINE The DOJ workshop is open to the public. For more information, go to multichannel.com/april29

AT&T and Time Warner will have to wait at least another day to begin the defense of their proposed merger in a D.C Court.

Judge Richard Leon rescheduled opening arguments from Wednesday (March 21) to Thursday due to the predicted snowstorm. He has also rejected a request by former Justice officials to make possible Presidential interference part of the trial.

DOJ v. AT&T/TW: Battle Lines Drawn

The Justice Department is suing to block the deal, arguing that without spin-offs or programming assets it violates antitrust laws, giving the combined company the incentive and opportunity to raise prices and reduce competition from competing distributors.

AT&T/TW have offered to accept baseball style arbitration of any program carriage disputes and say there is no reason to expect the company to withold programming, like HBO or college basketball or CNN, from the many distributors that pay for that programming, and whose payments comprise much of the value they are placing on the deal.

Leon has rejected a request by some former Justice Officials to reconsider his earlier decision not to force the White House and Justice Department to produce records of communications between the two as part of the case.

They were, and are, concerned the Trump Administration may have "interfered" in DOJ's vetting of the AT&T-Time Warner merger and say, if so, it was likely unconstitutional selective enforcement and a violation of the First Amendment.

Candidate Trump said his administration would block the deal if he were elected.

Then-candidate Donald Trump signaled he thought the merged company would be too big--Time Warner owns CNN, one of the news outlets Trump has accused of teaming up with Democrats to undermine him--and said his administration, if he were elected, would block the deal.

AT&T and Time Warner have already told the court they think it is selective enforcement.

The timetable for the government's suitagainst the proposed AT&T-Time Warner merger in the U.S. District Court for the District of Columbia is taking shape.

Related: DOJ Suing to Block AT&T-Time Warner Deal

There will be a Dec. 21 status hearing before Judge Richard Leon to go over scheduling issues, procedures and the like.

No big news is expected out of that hearing.

The trial is scheduled to begin March 19, 2018, unless the sides can settle before then.

Justice wants AT&T to spin off the Turner programming assets, arguing they give the combined company the incentive and opportunity to disfavor competitors.

AT&T and Time Warner have signaled such a spinoff is a nonstarter and offered up what amounts to their own behavioral conditions, though Makan Delrahim, who heads the antitrust division signaled Justice would be looking for more divestitures and fewer behavioral conditions, suggesting the latter remedy was over-regulatory, as well as essentially allowing an illegal merger under conditions that were hard to monitor.

More than a dozen media consolidation critics, including Common Cause, Consumers Union and the Writers Guild of America West, have told U.S. Attorney General Jeff Sessions that, from all appearances, the proposed AT&T-Time Warner merger cannot pass muster by "conditions and piecemeal divestitures" and should be blocked.

The Department of Justice is the only authority vetting the deal, which was structured to avoid the license transfers that would have triggered FCC review on public interest grounds.

Related: FCC Approves Sale of Time Warner Station WPCH-TV to Meredith

"Because this merger poses such grave dangers to consumers and creators in mature and emerging markets, we urge the Department to investigate the merger thoroughly, and take whatever action is warranted, based on the evidence uncovered in your investigation, to prevent harm to competition and consumers," the group wrote. "And if you conclude, as appears to us from the available information, that conditions and piecemeal divestitures will not be sufficient, then we hope you will challenge the merger in its entirety."

The groups talked about the ability and incentive of the combined company to harm competition.

"Buying Time Warner would incentivize and enable AT&T to cement its dominance and benefit itself, at the expense of pro-consumer competition in the video distribution market, by raising the cost of Time Warner programming to its rivals," they said. "It would also incentivize and enable AT&T to put onerous restrictions on programming availability, such as device or windowing restrictions, which are another way of raising the costs of its rivals."

Related: EU OKs AT&T-Time Warner Merger

Also signing on to the letter were Public Knowledge, Alliance for Community Media, Media Alliance, National Hispanic Media Coalition, Consumer Action, Open MIC (Open Media and Information Companies Initiative), Consumer Federation of America, Open Technology Institute at New America, Courage Campaign, The Utility Reform Network and Free Press.

Viamedia is seeking $75 million in damages via a lawsuit lobbed at Comcast over allegations that the MSO is monopolizing the $5 billion “spot” ad business, The Wall Street Journal reported Monday.

Viamedia’s lawsuit, filed today in federal court in the Northern District of Illinois, followed the launch of a probe late last year by the Department of Justice that looked into whether Comcast’s role in the spot cable ad sales market hinders competition and violates antitrust law.

At the time, Comcast said it would cooperate fully with the DoJ inquiry. 

Update: Comcast issued this statement in response to the Viamedia lawsuit: "The American advertising market is robustly competitive, and advertisers have never had more choices to reach consumers.  Local cable advertising competes with local broadcast TV, radio, newspapers, outdoor display, and the rapidly growing digital marketplace.  All multichannel-video providers - or MVPDs - account for only about 7% of local advertising sales. In the top 50 DMAs, nearly half of the interconnects, including those in the country’s two largest markets, New York and Los Angeles, for local cable advertising are not run by Comcast.  We are currently reviewing the suit and generally do not comment on pending litigation."

Viamedia reportedly lost business when former partner RCN picked Comcast Spotlight to handle its local ad sales in several markets, and, per a report last year by The Wall Street Journal, Wide Open West also recently struck a deal with Comcast Spotlight that was to become active in 2016.

 Viamedia previously came out against the earlier, and since-scuttled, proposed merger of Comcast and Time Warner Cable, over claims that the combo stood to control $4.5 billion out of the $5.4 billion spot cable market, and called for conditions that would insure that NCC Media interconnects were independently managed.

NCC is jointly owned by Comcast, Cox Media and  Time Warner Cable, and has a several “affiliates” that include AT&T U-verse, Buckeye CableSystem, Cable One, Cablevision Systems, CenturyLink, DirecTV, Dish Network, Grande Communications, Verizon FiOS, RCN, Viamedia, and WOW.

Yet another front has opened in the tug-of-war among computer companies, Congress and the Obama Administration over cybersecurity versus privacy.

Sens. Ron Wyden (D-Ore.) and Rand Paul (R-Ky.) were feeling the love from tech companies and others Thursday (May 19) for introducing the Stopping Mass Hack Act, which is targeted not at shady offshore Web denizens but U.S. law enforcement.

The senators introduced the bill to block recently approved changes to government surveillance rules that would allow the government, with a single warrant, to "hack an unlimited number of computers" if those computers had been "affected by criminals," even without letting the computer owners know the government was accessing their computers. Sens. Tammy Baldwin (D-Wisc.), Steve Daines (R-Mont.) and Jon Tester (D-Mont.) are original co-sponsors of the bill.

The senators say those changes should have been debated by Congress. They go into effect Dec. 1 unless Congress steps in.

The Justice Department requested the change to Rule 41 of the Federal Rules of Criminal Procedure, which the Supreme Court approved. The main changes, according to the Senators, are the single warrant for multiple -- potentially millions -- of searches, and allowing remote searches when law enforcement doesn't know the location of a device.

“The government hacking proposal that will automatically go into effect unless Congress passes the Stopping Mass Hacking Act represents a serious expansion of law enforcement powers," said Kevin Bankston, director of New America’s Open Technology Institute, "yet Congress has never had a chance to consider the complex issues raised by such a significant change to the law. Unless Congress acts now, these new government hacking rules will grant the Justice Department dangerous and unprecedented authority to hack millions of Americans, many of whom may only be guilty of being the victim of a malicious cyber attack themselves.”

Ross Schulman, Open Technology Institute senior counsel, added, “We thank Senators Wyden and Paul for introducing this important bill." New America funders include Google, Netflix, Comcast and Dish.

“We welcome Senators Wyden and Paul’s efforts to prevent this highly controversial rule change from taking effect," said Computer and Communications Industry Association president Ed Black. "They recognize that the far-reaching implications of the government’s proposed changes merit the full attention of their colleagues in Congress. There are constitutional, international, and technological questions that ought to be addressed transparently before such a broad rule change.

CCIA's members, in addition to Google, Netflix and Dish, include Amazon, Yahoo, eBay, Microsoft, and Sprint.

Arris said Tuesday that the U.S. Department of Justice has closed its investigation into the vendor’s proposed $2.1 billion acquisition of U.K.-based set-top and access network supplier Pace plc. “without condition,” under the Hart-Scott Rodino Antitrust Improvement Act of 1976.

In June, Arris and Pace said they had each received requests for additional info from the DoJ in connection with the proposed deal. There were concerns that the DoJ could pin conditions on the deal that would call on Arris to divest part of the optical transmission business of the combined company.

Arris and Pace shareholders have already approved the deal, which was announced April and has also been cleared by regulators in Colombia, Germany, Portugal and South Africa. The transaction remains subject to approval in Brazil and other “customary closing conditions,” Arris noted.

Arris has been steadfast in its expectation that it will close the Pace deal in late December or the first quarter of 2016.

Once completed, the deal will result in the formation of  “New Arris,”  a holding company that will be incorporated in the U.K., and have its operational and worldwide headquarters based in Suwanee, Ga. Arris shareholders are to hold about 76% of New Arris, compared to 24% of Pace shareholders.

The proposed $2.1 billion merger of Arris and Pace Plc took a step forward after receiving unconditional clearance from The Superintendence of Industry and Commerce in Colombia.

Arris said that approval follows pre-conditional clearance in Germany, South Africa, and Portugal. Arris and Pace shareholders have already approved the deal.

Arris said completion of the deal remains subject to the expiration or termination of the waiting period under the United States Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the satisfaction of similar merger control requirements in Brazil, along with the satisfaction of other customary closing conditions.

Arris expects the deal to close in late December or or the first quarter of 2016 amid additional requests from the U.S. Department of Justicethat could pin conditions on the deal that call on Arris to divest part of the optical transmission business of the combined company. 

Arris’s pending $2.1 billion acquisition of U.K.-based Pace plc took a step forward Wednesday as shareholders stamped the deal. 

At a special meeting of stockholders held  today, the proposal was approved by stockholders holding 129,714,934 shares, representing approximately 88% of outstanding Arris shares as of the record date (September 10, 2015), with more than 99% of the shares voted at the meeting, Arris said. 

Per English law, Pace is required to hold two special meetings to approve the scheme of arrangement -- a court-ordered meeting and a general meeting,  both of which are scheduled to be held on October 22. 

Arris now believes it won’t be able to close the deal until “late December or the first quarter of 2016” amid additional requests from the U.S. Department of Justice and regulators in Brazil and Colombia that could pave the way for conditions that Arris divest part of the optical transmission business of the combined company. 

“We see the sale of the Pace transmission unit as the most logical scenario,” Raymond James analyst Simon Leopold said in a research note this week, noting that it would not represent a “show stopper.” 

"We are pleased to complete another condition to the closing of the combination,” Arris chairmand and CEO Bob Stanzione said, in a statement. “ We continue to believe that our strong, complementary businesses provide expanded opportunities to support our customers and increase our speed of innovation as we collaborate to invent the future."

A delay in Arris’s proposed $2.1 billion merger with Pace plc isn’t a “show stopper,” as Arris has “viable options to modify the deal” that could alleviate concerns raised by the U.S. Department of Justice, Raymond James analyst Simon Leopold said in a research note released Monday.

Arris announced on Friday (October 17) that the deal might not close until late December or the first quarter of 2016 amid additional requests from the Antitrust Division of the DoJ and regulators in Brazil and Colombia. Arris said the Antitrust Division’s focus appears to be on their optical transmission products, which include node equipment. Pace strengthened its position in this area in 2013 when it acquired Aurora Networks for $310 million.

“We do not consider the optical transmission products as the primary focus for ARRIS' Pace acquisition and believe options exist to consummate a transaction,” Leopold wrote. “We see the sale of the Pace transmission unit as the most logical scenario.”

He said possible buyers could include CommScope, Harmonic and Casa Systems, with Emore and Applied Optoelectronics and Ericsson to be among those “less likely” to make a play for the Pace unit.

“Although we are uncertain if the unit would be divested in its entirety, we imagine it might be valued near 1x sales or $300-$350 million,” Leopold added.

The divestiture of the networks business of Pace, he said, would bring the combined CY16 sales estimate to $7.48 billion, down from $7.80 billion, and earnings per share to $3.27, versus $3.41, with accretion of $0.51, down from the analyst’s prior $0.66 estimate.

Leopold maintained a “strong buy” rating on Arris as well as his $41 target price on the stock.

Regulators in Portugal, Germany and South Africa have already cleared the Arris-Pace  agreement.

Democratic senators who don't like the proposed Comcast-Time Warner Cable merger reminded the FCC of that fact in advance of a planned meeting on Wednesday between Justice Department officials and the companies.

The senators were buoyed by reports that Justice was leaning against approving the deal.

Sens. Al Franken (D-Minn.), Bernard Sanders (I-Vt.), Ed Markey (D-Mass.), Ron Wyden (D-Ore.), Elizabeth Warren (D-Mass.) and Richard Blumenthal (D-Conn.) sent letters to FCC chairman Tom Wheeler and the Justice Department saying the deal would give the combined companies too much market power and the public fewer choices.

Read more at Broadcastingcable.com.