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Justice Settles Investigations of TV Ad Communications

The Justice Department has settled with six groups of broadcasters over what DOJ said was the "unlawful sharing of competitively sensitive" information on advertising that reduced competition and harmed local business. It also signaled its continues to investigate.

Sinclair had already signaled it had settled with Justice.

DOJ filed an antitrust suit against the companies--Sinclair Broadcast Group Inc.; Raycom Media Inc.; Tribune Media Company; Meredith Corporation; Griffin Communications; and Dreamcatcher Broadcasting LLC--with the U.S. District Court for the District of Columbia, then immediately filed the proposed settlement that it said would "resolve the lawsuit’s alleged competitive harm alleged in the complaint."

“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 assistant Attorney General Makan Delrahim 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.

Justice said the stations "agreed in many metropolitan areas across the United States to exchange revenue pacing information, and certain defendants also engaged in the exchange of other forms of non-public sales information in certain metropolitan areas. 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 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," DOJ said. "As a result, the information exchanges harmed the competitive price–setting process."

The settlement did not include any fine. But the broadcasters agreed "not to directly or indirectly share competitively sensitive information, to cooperate with an ongoing investigation--so the issue on an industry wide basis has not been resolved--and to adopt rigorous antitrust compliance and reporting measures to prevent similar anticompetitive conduct in the future."

The settlement applies to the stations owned by those six groups even if they are sold to a new company.