The Department of Justice said today that it has reached a settlement with six broadcast television companies, including Sinclair Broadcast Group Inc. and Tribune Media Company, to end the unlawful agreements to share non-public competitive information.
The Justice Department’s Antitrust Division filed a civil antitrust lawsuit today in the U.S. District Court for the District of Columbia alleging these broadcast television groups shared information that would help set advertising rates — harming competition.
“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, head 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, Sinclair, Tribune, Meredith Corp., Raycom Media, Griffin Communications and Dreamcatcher Broadcasting, agreed to exchange revenue pacing information in certain metropolitan markets.
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 says 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.
That hurt the competitive price–setting process, the DOJ alleged in its complaint.
The proposed settlement prohibits the direct or indirect sharing of such competitively sensitive information. The proposed also 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.