Anti-competitive behavior

From a Rupert Murdoch Company? how could that be?

Crain's Detroit Business: Valassis vs. News America
Valassis Communications Inc. filed suit in federal court Wednesday alleging various antitrust practices by its No. 1 rival, News America Marketing Group of New York City.

The suit alleges that News America threatened to raise prices to manufacturers on in-store coupons and advertising unless they also agreed to exclusive contracts to use News America for newspaper-insert coupons.

...Valassis claims it is illegal for News America to use pricing on one line of the coupon business to get customers to agree to contracts on the other line.

Valassis also claims News America has offered contracts for the freestanding newspaper inserts at below cost, “with the intent of driving Valassis, their only significant competitor in the FSI market, out of the FSI market.”

In November 2004, Valassis (NYSE: VCI) disclosed that the Federal Trade Commission was investigating it for “unfair methods of competition or unfair acts and practices.” That investigation is ongoing, said Sherry Lauderback, Valassis' director of investor relations and communications.
The brief in the case begins with a description of a sales meeting led by Paul Carlucci, News America’s chairman and CEO. That description was used as the opening of a profile of News America on on Oct. 31.

Carlucci showed a clip from the film

The Untouchables

The Untouchables

where Al Capone beats a man to death with a baseball bat. “This message is obvious and irrefutable,” said the Valassis suit. “The News’ employees will operate in the business world with unbridled aggression.

”The selected scene is a perfect metaphor for the business practices both expected and in fact being employed by the News’ defendants.“

Phone and e-mail messages to Laura Richards, News America’s vice president of marketing, have not been returned.

...News America recorded $1.1 billion in sales for the year ended that June 30, up 9 percent, and is one of the most profitable pieces of Murdoch’s $24 billion media conglomerate.

In October 2004, another in-store marketer, New Jersey-based FLOORgraphics Inc., filed a federal suit in New Jersey alleging that News America offered to pay retailers not to do business with the company [FLOORgraphics].

, such as Safeway and Winn-Dixie.

This suit we've heard of. Note: we personally know employees of all three of these companies.

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This page contains a single entry by Seth A. published on January 20, 2006 11:40 AM.

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