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From Investigation to Consumer Litigation: Major Broadcasters Broadsided

By George Khoury, Esq. on August 08, 2018 | Last updated on March 21, 2019

Unfortunately, across industries, when a corporation is targeted for a government investigation, you can almost expect that consumer class actions will follow. For in-house and general counsel, it's basically the epitome of going from bad to worse.

After all, often a government investigation will result in the publication of notices or announcements by the government agencies involved, which then results in press, which then results in consumers finding out and filing lawsuits, with ultimately results in potential dips in investor confidence and financial losses (and then actually finally investor lawsuits). Taking a look at the recent TV advertising cases that have been filed provides a good example of this phenomenon.

Major Broadcasters Facing Antitrust TV Advertising Class Actions

In a few jurisdictions now, major broadcasters, like Sinclair, Hearst, and Tribune, have been hit with prospective class action lawsuits alleging price-fixing for television advertisements.

These lawsuits were filed after the DOJ revealed that it is investigating similar claims related to the Sinclair and Tribune merger. The lawsuits assert that the broadcasters shared proprietary information about advertising rates, which effectively harmed advertising customers by decreasing competition in the TV advertising market.

(Anti)Trust TV

Notably, these lawsuits assert claims under the Sherman Antitrust Act, and seek class action status. And while it might make sense for television advertising to be getting more expensive as traditional broadcast media continues to lose market-share to new-media, these lawsuits allege coordinated and conspiratorial conduct designed to manipulate the market.

One case identifies times when the broadcaster could have actually shared this information, as there was recently a meeting where representatives from major broadcasters met to discuss "standard-based interfaces to accelerate electronic advertising transactions for local TV broadcasters and their media agency partners."

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