ATandT Pays $2M in DOJ Settlement

AT&T agreed Jan. 14 to pay $2 million to settle a civil complaint by the Department of Justice that the nation’s settlement provider of mobile wireless voice and data services failed to fulfill its divestiture obligations in connection with AT&T’s acquisition of Dobson Communications. AT&T bought Dobson, a regional carrier based in Oklahoma City, for $2.8 billion in 2007.
According to the Department of Justice, AT&T failed to fulfill its obligations to separate confidential customer account information from the divested businesses from its own customer records and to take other actions needed to prevent unauthorized disclosure. Furthermore, the Department of Justice said AT&T obtained unauthorized access to the divested businesses’ competitively sensitive customer information and used the data to solicit and win away the divested businesses’ customers.
In addition, the Department of Justice said AT&T did not seek authorization from the management trustee overseeing the divestiture before waiving early termination fees for several customers of the divested businesses to facilitate switching their wireless service from the divested businesses to AT&T.
“It is imperative that companies fully abide by their court-ordered obligations in order for our settlements to be effective in preserving competition and protecting consumers,” Deborah A. Garza, acting assistant attorney general in charge of the Department of Justice’s Antitrust Division, said in a statement. “When companies fail to comply with a court order, the Antitrust Division will take swift and certain action to ensure that companies fulfill their responsibilities.”
Under the consent decree approving AT&T’s purchase of Dobson, AT&T was required to divest mobile wireless telecommunications businesses in two rural service areas in Kentucky and one in Oklahoma. A management trustee was appointed to oversee the businesses to be divested.
Under the consent decree and a related court order, AT&T agreed to take all necessary steps to ensure that the divested businesses were operated independently of AT&T and that AT&T would not influence how the divested companies were managed. AT&T was also required to take reasonable efforts to preserve the confidentiality of information material to the operation of the divested businesses and not give unauthorized personnel access to such information.