The Trump administration’s chief antitrust enforcer had a message for broadcasters who might be sharing certain competitive advertising information: Think twice.
Justice Department antitrust chief Makan Delrahim reminded businesses — broadcast and otherwise — that “agreements between competitors to exchange competitively sensitive information can violate the antitrust laws and lead to a civil enforcement action even if the conduct does not amount to the type of hard-core cartel conduct that the Antitrust Division prosecutes criminally.”
His warning came in a speech to the American Bar Association’s Antitrust Section Fall Forum on Nov. 15 and underscored the department’s just-concluded settlement with six broadcast groups over alleged illegal sharing of competitive information.
Justice’s interest in the practices arose from its investigation of the proposed Sinclair Broadcast Group-Tribune Media merger, which the companies abandoned after the FCC designated it for hearing.
If more broadcasters are sharing such information, and the DOJ is still investigating the practice, Delrahim’s warning is clearly directed at them. Broadcast groups settling with DOJ — including Raycom, Meredith, Griffin Communications and Dreamcatcher Broadcasting — agreed to stop the sharing and confirm compliance with periodic reports over the next seven years.
Delrahim said DOJ “discovered that the defendants had been exchanging pacing information either directly between stations or corporate headquarters, or indirectly through national representatives that help local stations sell advertisements to national advertisers.”
He said the practices harmed competition and competitive pricing, but stopped short of calling them price fixing. “By exchanging this information, the 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,” he said.
Delrahim’s bar speeches have resonated before. At the same forum a year ago, he signaled that DOJ frowned on behavioral conditions and favored spinoffs. Soon after, the DOJ filed suit against AT&T’s acquisition of Time Warner because, while the firms offered behavioral conditions, they refused to spin off programming assets.
If past is prologue, Delrahim’s warning is one broadcasters need to factor into their next sales strategy meeting.
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