Justice Settles Antitrust Case Against 6 TV Groups
The Department of Justice announced today that it has reached a settlement with six broadcast television companies — Sinclair Broadcast Group, Raycom Media, Tribune Media, Meredith Corp., Griffin Communications and Dreamcatcher Broadcasting (a sidecar company to Tribune Media) — to resolve a DOJ lawsuit alleging that the companies engaged in unlawful agreements to share non-public competitively sensitive information with their broadcast television competitors.
The Justice Department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia to challenge the unlawful exchange of competitively sensitive information among these six broadcast television companies, their sales representatives, and other broadcast television groups. At the same time, the DOJ filed proposed settlements that, if approved by the court, would resolve the lawsuit’s alleged competitive harm alleged in the complaint.
“The unlawful exchange of competitively sensitive information allowed these television broadcast companies to disrupt the normal competitive process of spot advertising in markets across the United States,” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “Advertisers rely on competition among owners of broadcast television stations to obtain reasonable advertising rates, but this unlawful sharing of information lessened that competition and thereby harmed the local businesses and the consumers they serve.”
According to the complaint, the six broadcast television companies agreed in many metropolitan areas across the United States to exchange revenue pacing information, and certain defendants also engaged in the exchange of other forms of non-public sales information in certain metropolitan areas.
Pacing compares a broadcast station’s revenues booked for a certain time period to the revenues booked in the same point 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 for the period.
By exchanging pacing information, the DOJ said, the broadcasters were better able to anticipate whether their competitors were likely to raise, maintain, or lower spot advertising prices, which in turn helped inform the stations’ own pricing strategies and negotiations with advertisers. As a result, the information exchanges harmed the competitive price–setting process.
The proposed settlement prohibits the direct or indirect sharing of such competitively sensitive information. Justice said it has determined that prohibiting this conduct would resolve the antitrust concerns raised as a result of the conduct of these defendants. The proposed settlement further requires defendants to cooperate in the department’s ongoing investigation, and to adopt rigorous antitrust compliance and reporting measures to prevent similar anticompetitive conduct in the future.
The settlement has a seven-year term, and it will continue to apply to stations currently owned by defendants, even if those stations are acquired by another company.