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 enabled 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 from sharing 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 one another’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 greater leverage over advertisers when negotiating with them for deals.
In August, advertisers filed a class-action suit alleging that the media companies had conspired to fix the price of TV advertising. The settlement announced Tuesday does not resolve that suit.
The settlement reflects the Justice Department’s heightened scrutiny of the increasingly concentrated media industry. In recent months, the agency has continued to fight its unsuccessful lawsuit to block AT&T’s merger with Time Warner (now renamed WarnerMedia) and warned Comcast that it would continue to monitor its behavior now that a number of regulatory conditions imposed on its 2011 acquisition of NBCUniversal have expired.
Meredith said it disagreed with the Justice Department’s allegations but thought it was in the company’s best 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 Media, whose stations include Los Angeles’ KTLA, called the issue a “distraction” and said it was glad to put the issue behind it “in a way that has no operational effect.”
The other four companies didn’t immediately respond to requests for comment.
Fung writes for the Washington Post.