Some of the biggest names in broadcast television have reached a settlement with government regulators after the Justice Department filed a lawsuit alleging that the companies shared private information with one another in ways that allowed them to subtly manipulate TV ad prices.
The settlement covers six companies: Sinclair Broadcast Group, Raycom Media, Tribune Media, Meredith Corp., Griffin Communications and Dreamcatcher Broadcasting. It forbids them to share nonpublic information about ad sales for seven years.
“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,” Makan Delrahim, the Justice Department’s antitrust chief, said in a statement.
By sharing advertising sales data, the companies gained insight into each other’s operations that they would not have had otherwise, according to the Justice Department’s lawsuit. The added information gave them the ability to develop specialized pricing strategies and exercise greater leverage over advertisers when negotiating with them for deals.
The settlement follows a class-action suit filed by advertisers in August claiming that the media companies had conspired to fix the price of TV advertising.
It reflects the Justice Department’s heightened scrutiny of the increasingly concentrated media industry. In recent months, the agency has continued to fight its initially unsuccessful lawsuit to block AT&T’s merger with Time Warner (now renamed WarnerMedia) and warned Comcast that it will continue to monitor the company’s behavior now that a number of regulatory conditions imposed on its 2011 acquisition of NBCUniversal have expired.
Three of the companies did not immediately respond to a request for comment. Meredith said it disagreed with the allegations but thought it was in the company’s interest to enter into the settlement.
“Importantly, the settlement does not require Meredith to pay any penalty, includes no admission that any law has been violated, and will not require us to change our current business practices,” the company said in a statement.
Tribune called the issue a “distraction” and said it was glad to move beyond the matter “in a way that has no operational effect.”
Echoing the two other companies' comments, Raycom Media added that despite the Justice Department suit, “we have seen no evidence that the alleged information sharing had any actual competitive impact in any advertising market.”