The Justice Department yesterday filed a civil antitrust suit charging the National Association of Broadcasters with restraint of trade through the rules of NAB's Television Code on advertising.
John H. Shenefield, assistant attorney general in charge of the Antitrust Division, said the NAB's "overcomercialization" rules regulate the amount and format of television advertising for stations reaching approximately 70 percent of all U.S. households.
The NAB, a broadcasting industry trade association, sets industry-wide standards for television programming and advertising through its "Television Code." The code is not mandatory, but is widely adhered to, and non-compliance can result in the station being prohibited from displaying the code's seal of approval on the air.
The Justice Department complaint, filed in U.S. District Court in the District of Columbia - where the NAB is based - charges that the NAB code" has had the effect of artificially curtailing and restricting the quantity of broadcast time available for television advertising and the number and format of advertisements that may be broadcast."
Such limitations restrain price competition, the complaint alleges.
Reacting quickly to the suit, the NAB called the justice action "ironic - it flies in the face of overwhelming support from the public, the Congress, the courts and the regulatory agencies for the concept of the broadcast industry regulating itself, in lieu of government controls."
"We have always believed that the industry-imposed limitations on the amount of advertising in regular and children's television programming are in the public interest," said NAB president Vincent T. Wasilewski.