WASHINGTON — Six broadcast station groups have reached a settlement with the Justice Department over the sharing of competitively sensitive advertising rate information in violation of antitrust laws.
The companies— Sinclair Broadcast Group Inc., Raycom Media Inc., Tribune Media Company, Meredith Corp., Griffin Communications, and Dreamcatcher Broadcasting — will be prohibited from direct or indirect sharing of information under the terms of the settlement.
A source said that the Justice Department’s case arose out of its review of Sinclair’s proposed merger with Tribune Media. That transaction ultimately was abandoned after the FCC sent it to an administrative law judge for review.
“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, the chief of the Justice Department’s Antitrust Division, above. “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 Justice Department, the companies exchanged “revenue pacing information” in many metro areas across the country, and some of the companies exchanged non-public sales information. The pacing information is a comparison of a station’s revenues booked for a certain time period to the revenues booked in the previous year.
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“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,” the Justice Department said. “As a result, the information exchanges harmed the competitive price–setting process.”
The companies also will be required to adopt antitrust compliance and reporting measures and to cooperate in an ongoing investigation by the DOJ. The settlement has a seven year term, and will apply to stations even if they are sold to another owner.