Media Company Settles Claims It Used Monopoly Power to Overcharge Advertisers
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Media Company Settles Claims It Used Monopoly Power to Overcharge Advertisers

On February 29, 2016, News Corporation reached a $244 million settlement with a consumer product manufacturer class to end claims that it monopolized the market for third-party, in-store promotions by entering into long-term, exclusive contracts, and that it overcharged its advertisers by over $674 million in the last seven years. News Corp. acts as an intermediary between retailers and consumer product manufacturers by buying up advertising space on shelves and store floors and then reselling that space to consumer product manufacturers. Plaintiffs alleged that News Corp. used exclusive contracts to tie up nearly 90 percent of the in-store promotions market, and manufacturers, including Dial and Heinz, claimed News Corp. used that monopoly power to extract unfairly high prices.

A jury was empaneled and opening statements were about to begin when the parties notified the judge that they had struck a confidential settlement. U.S. District Court Judge Pauley of the Southern District of New York, however, refused to cancel the start of the trial unless the parties disclosed the terms of the settlement in open court. After extensive opening arguments, the parties disclosed the terms of the settlement.

News Corp. settled claims with all plaintiffs for $244 million with an agreement to change its contracting with retailers, agreeing not to enter into exclusive contracts with retailers lasting longer than 30 months, unless the retailer specifically requested a longer exclusivity period. The settlement follows on the heels of several class members – including Dannon, General Mills and Johnson & Johnson – settling out of the case in the last few weeks.


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