Antitrust Law Daily Six broadcast TV companies settle DOJ’s antitrust charges
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Tuesday, November 13, 2018

Six broadcast TV companies settle DOJ’s antitrust charges

By J. Preston Carter, J.D., LL.M.

The Department of Justice has reached a settlement with six broadcast television companies to resolve a lawsuit alleging that the companies engaged in unlawful agreements to share non-public competitively sensitive advertising market information with their broadcast television competitors. The six companies are Sinclair Broadcast Group Inc., Raycom Media Inc., Tribune Media Company, Meredith Corporation, Griffin Communications, and Dreamcatcher Broadcasting LLC (United States of America v. Sinclair Broadcast Group, Inc., D.D.C., Case No. 1:18-cv-02609, November 13, 2018).

Complaint. On November 13, the DOJ’s Antitrust Division filed a civil antitrust lawsuit in the federal district court in the District of Columbia challenging the alleged unlawful exchange of "revenue pacing information" among the companies. Pacing information compares how each station is performing versus the rest of the market over a certain time period and provides insight into each station’s remaining spot advertising for the period. The DOJ’s complaint alleges that by exchanging pacing information, 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 DOJ contends, the information exchanges harmed the competitive price-setting process.

"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 Makan Delrahim, Assistant Attorney General in charge of the DOJ 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."

Settlement. At the same time the Department filed the complaint, it filed proposed settlements that, if approved by the court, would resolve the complaint’s alleged competitive harm. The DOJ noted in its press releasethat the proposed settlement prohibits the direct or indirect sharing of such competitively sensitive information. The DOJ said that prohibiting this conduct would resolve the antitrust concerns that the conduct raised. The proposed settlement further requires the companies to cooperate in the DOJ’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 would continue to apply to stations currently owned by the companies, even if those stations are acquired by another company.

Companies: Dreamcatcher Broadcasting LLC; Griffin Communications; Meredith Corporation; Raycom Media Inc.; Sinclair Broadcast Group Inc.; Tribune Media Company

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