The US Department of Justice (DOJ) has reached a settlement with six major American broadcast television companies over an alleged unlawful sharing of non-public, competitively sensitive information to gouge local advertisers.
The companies are Sinclair Broadcast Group, Tribune Media Company, Meredith Corporation, Raycom Media, Griffin Communications, and Dreamcatcher Broadcasting.
According to today's (13 November) announcement, the DOJ is requiring the companies to "terminate and refrain from unlawful sharing of competitively sensitive information," which allowed the companies to gain insights into the others' operations.
This information sharing allowed the broadcasters to anticipate competitors' pricing strategies and leverage that information when negotiating deals in local markets, according to the DOJ.
“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 DOJ'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.”
A spokesperson from Tribune said the company is pleased to move on from the issue in a way that has no operational effect. This speaks for Dreamcaster Broadcasting, whose stations Tribune operates under shared services agreements.
"The consent decree, which involves neither an admission of culpability nor a monetary penalty, prohibits the sharing of certain information with our competitors in a manner consistent with existing Tribune policy," said the spokesperson.
According to a statement from Raycom, the company has seen no evidence that the alleged information sharing had a competitive impact in any advertising market.
"The consent decree is not an admission of any wrongdoing by Raycom, and it does not impose any monetary penalties or damages. Neither the impact of the consent decree nor the now-concluded investigation are material to Raycom," the statement read.
According to a company statement from Meredith, the broadcaster is moving forward though it disagrees with the allegations.
"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 statement reads.
Sinclair and Griffin have not yet responded to The Drum's request for comment.