DiCello Levitt & Casey Files Suit on Behalf of Bon-Ton Against Media Conglomerates for Fixing TV Ad Rates
October 08, 2018 at 12:06 PM EDT
The Bon-Ton Stores Inc., one of the country’s best-known department store companies, is the latest, and by far the largest, plaintiff to file suit against major U.S. media conglomerates, alleging a massive conspiracy to drive up the price of local television advertising. National plaintiffs’ law firm, DiCello Levitt & Casey, filed the class action lawsuit today on Bon-Ton’s behalf in federal court in the Northern District of Illinois.
The suit, which names Sinclair Broadcast Group, Tribune Media Company and several other “John Doe” defendant co-conspirators, alleges that the companies violated federal antitrust laws by colluding to fix the rates TV stations charge for advertising airtime. Bon-Ton’s complaint is the newest in a series of suits brought against the media industry giants and is notable given the department store chain’s size relative to previous plaintiffs, most of whom are small regional businesses.
The suit alleges that Sinclair and Tribune, who are both owners of dozens of local television stations, while ostensibly competitors in the market for local spot television advertising, have instead conspired to reduce or eliminate competition by sharing information and coordinating pricing in various Designated Market Areas (DMAs), resulting in artificially inflated prices for local spot advertising in violation of federal antitrust laws.
“Through their price-fixing scheme, Tribune, Sinclair, and their co-conspirators have monopolized the airwaves and extorted millions of dollars from businesses like Bon-Ton,” said Adam J. Levitt, co-counsel for Bon-Ton and a founding partner of DiCello Levitt & Casey. “This lawsuit aims to hold these powerful companies accountable and restore free and fair competition.”
Bon-Ton’s complaint alleges that station owners have shared their pricing information and coordinated efforts to stabilize or inflate spot prices, including setting a “floor” for all spot pricing. It also claims that, within a DMA, no station owner that is party to the conspiracy was permitted to reduce spot prices below a certain cost-per-point. By setting such a floor, but then still negotiating with individual advertisers, stations were able to maintain the façade of a competitive market when in reality they had fixed prices.
Despite the significant number of local broadcast stations operated across 210 different DMAs, ownership is highly concentrated in the hands of a small number of media companies. In recent years, mergers between television station owners have increased market concentration and thereby decreased competition in many DMAs. Further, the Federal Communications Commission has recently loosened certain restrictions on television station ownership and opened the door to larger mergers, including the ill-fated $4 billion merger of Sinclair and Tribune. Notably, the Department of Justice’s Antitrust Division is actively investigating the conduct of both companies after its recent review of their now-defunct merger.
“The consolidation of the television industry has enabled a pattern of illegal, anti-competitive conduct, which we are confident this lawsuit will bring to light,” said John E. Tangren, co-counsel for Plaintiff and partner at DiCello Levitt & Casey.
DiCello Levitt and Casey has teamed with another renowned antitrust class action firm, Labaton Sucharow LLP, on this matter – The Bon-Ton Stores Inc. v. Sinclair Broadcast Group Inc., et. al., Civil Action No. 1:18-cv-06758, in the U.S. District Court for the Northern District of Illinois.
“Given our two firms’ track record of success representing plaintiffs in antitrust class actions and our considerable experience leading complex MDLs across the United States, we believe we are well-positioned to help manage this national effort to stop blatant collusion in the TV ad buying chain,” Levitt said.
About DiCello Levitt & Casey
DiCello Levitt & Casey is a different kind of law firm – one that combines excellence in commercial litigation, class action litigation, mass tort litigation, catastrophic injury litigation, labor and employment litigation, and civil rights litigation. Practicing nationwide – and internationally – from offices in Chicago and Cleveland, we are an aggressive, attentive, and creative plaintiffs’ firm whose work speaks for itself – billions of dollars in recoveries in some of the highest-profile matters in U.S. history. Revered by clients and respected by defense counsel, our team gets results.