Six television broadcasters have agreed to settle an antitrust lawsuit brought by the Justice Department, which alleged that the stations shared information about advertising.
The proposed settlement requires the television companies -- Sinclair Broadcast Group, Raycom Media, Tribune Media Company, Meredith Corporation, Griffin Communications; and Dreamcatcher Broadcasting -- to refrain from sharing sensitive information in the future. It also requires the companies to cooperate with an ongoing investigation and adopt antitrust compliance measures.
“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,” Assistant Attorney General Makan Delrahim stated Tuesday. “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.”
The companies allegedly shared “pacing” information, including data comparing year-over-year ad revenues. That data “indicates how each station is performing versus the rest of the market and provides insight into each station’s remaining spot advertising inventory,” the DOJ alleged in its complaint, unveiled Tuesday.
“These exchanges of pacing information allowed stations to better understand, in real time, the availability of inventory on competitors’ stations, which is often a key factor affecting negotiations with buyers over spot advertising prices,” the DOJ alleged.
The government added that the information “distorted the normal price-setting mechanism in the spot advertising market and harmed the competitive process.”
The antitrust case apparently grows out of the Justice Department's investigation of Sinclair's proposed $3.9 billion merger with Tribune. That merger did not go through. During the investigation, the government uncovered evidence that ad sales representatives at the companies engaged in discussions that may have resulted in higher ad prices, The Wall Street Journalreported this summer.