Justice Looks Into Detroit Dailies’ Pact

In the wake of charges filed by striking unions, the U.S. Justice Department said Tuesday it has opened an antitrust investigation of the joint-operating agreement between Detroit’s two daily newspapers.

“We are actively reviewing the legal status of the JOA and whether any action under the antitrust laws would be appropriate,” said Bill Brooks, spokesman for the Justice Department’s antitrust division. He would not elaborate.

The action comes nearly a month after lawyers for six striking unions petitioned U.S. Atty. Gen. Janet Reno to probe alleged violations of antitrust laws by the Detroit Free Press and Detroit News.

The unions alleged that the newspapers, which share business operations but maintain separate editorial staffs, have used the joint operating agreement “to illegally fix prices and as a strike-breaking device.”

Newspaper executives acknowledged that the Justice Department had requested information from the papers and Detroit Newspapers Agency, a unit that runs the joint-operating agreement.

Timothy Kelleher, senior vice president for the agency, said negotiations with the striking unions had been canceled this week in order to focus on a response to the government investigation.

About 2,500 workers--truckers, reporters, mailers and other employees--walked out July 13 in contract disputes involving wages, work rules and job security. The increasingly bitter strike has been marked by picket-line violence, threats of permanent replacements and union defections.

The unions complained to the Justice Department on Aug. 15 that the newspapers had violated the joint-operating agreement by publishing a combined strike edition. The agreement is meant to maintain editorial competition.

The newspapers claim they are allowed to put out one paper under an amendment to the joint operating agreement submitted to the Justice Department in 1992. The department took no action on the amendment, which the newspapers interpret as approval.

The unions, however, said the joint-operating agreement can only be changed after public hearings. By publishing a joint strike paper, the unions claim the joint-operating agreement has been violated and should be voided.

The joint-operating agreement was approved in 1988 by Atty. Gen. Edwin Meese, who found that at least one of the papers was in imminent danger of failing. The controversial decision was opposed by the Justice Department’s antitrust division.

Since the agreement went into effect, the circulations of both papers have fallen. But they have imposed higher advertising and subscription rates. Last year the papers earned $46 million.