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The U.S. Department of Justice (DOJ) commenced an enforcement action against Centurylink (NYSE: CTL) for violating the terms of their agreement designed to prevent anti-competitive impacts arising from its acquisition of Level 3 Communications.

In 2016, Centurylink entered into a deal to acquire Level 3 Communications. The Justice Department investigated the proposed acquisition and concluded that I would harm competition in the markets for fiber-based enterprise and wholesale telecommunications providing local connectivity in three Metropolitan Statistical Areas (MSAs) including the Boise MSA. The deal would also harm markets for Intercity Dark Fiber connecting thirty city pairs within the United States.

Allegations against Centurylink

In 2017, the DOJ filed an antitrust complaint to stop Centurylink’s acquisition of Level 3 Communications. During the same year, the parties agreed to a court-approved Final Judgment to eliminate the anti-competitive impacts of the acquisition.

Centurylink and Level 3 agreed to comply with all the terms of the Final Judgment including releasing MSA customers from their contractual obligations and not to solicit any MSA customer who switched to the buyer of the divestiture assets for two years.

The Justice Department alleged that Centurylink violated the non-solicitation provision of the Final Judgment as early as May 2018. The company’s employees contacted former Level 3 customers in the Boise MSA on more than 70 occasions.

Centurylink’s settlement with the DOJ

CenturyLink did not deny the DOJ’s allegations and decided to settle its violation. The company agreed to an Amended Final Judgment.

As part of the settlement, CenturyLink has agreed to:

• extend the non-solicitation period by two years for the Boise MSA;
• the appointment of an independent monitoring trustee; and
• pay the United States to defray the costs of the department’s investigation of CenturyLink’s violations of the court order.

The company also agreed to pay $250,000 to cover the legal fees and reasonable costs incurred by the Justice Department in investigating Centurylink’s violations.

In a statement, DOJ Antitrust Division Chief Makan Delrahim said,“When a defendant violates the terms of a settlement decree, it must be held accountable to its obligations to the department and the American consumer”

“Today’s motion to amend the Final Judgment ensures that consumers get the benefit of competition otherwise lost by CenturyLink’s acquisition of Level 3 Communications.  I also commend CenturyLink for its cooperation in resolving the department’s concerns,” he added.

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