Media group News Corp is set to shell out $US280 million on Monday to settle the allegations brought by consumer packed goods companies. The companies claimed that it has a monopoly on in-store advertising in the United States.
According to Reuters, News Corp is alleged of having a monopoly in the U.S. market for in-store promotion services. The media group is acting as a middleman to help companies sponsor goods through coupon dispensers, electronic signs, end-of-aisle displays, and shopping cart ads.
The complainants said that the News Corp's News America Marketing division had strongly taken over this market since 2004. This is through looking up exclusive long term contracts with retailers, and by 2009, it had garnered a 90.5 percent market share.
Channel News Asia claimed that the plaintiffs had been asking US$674.6 million, a sum that could have been tripled up to US$2 billion under the federal anti-trust law. As part of the settlement of the petitioners of the court case, who consist of consumer packed goods companies, like Dial Corp and Kraft Heinz Co, News Corp noted that it will agree to pay US$250 million for the settlement of the case. Then, they will also pay another $30 million to resolve the related claims.
The settlement with Rupert Murdoch's company immediately concluded a trial that had begun earlier in the day. It ended when the jurors in Manhattan federal court heard the opening opinions in what had been a $2 billion ligitation. News Corp stated that it "had full confidence in our case, we believe this decision is in the best interests of our company and stockholders."
The Media group was alleged of monopolizing the U.S. market for in-store promotion services. It has aided the consumer packed goods companies to promote their goods through their different means. The court papers even revealed that in 2014, News Corp's last rival, Valassis Communications, left the business, as reported by Fortune.
They also stated that the News Corp's anti-competitive ways required them to pay artificially high prices just to endorse goods, such as Dial soap and Heinz ketchup. This resulted in the overcharges, which booted from 29.9 percent to 39.6 percent from 2009 to 2016.
Meanwhile, under the arrangement between the parties involved, a lawyer of the plaintiffs revealed that the News Corp agreed not to enter exclusive contracts with retailers lasting more than two and a half years, unless retailers first ask for such contracts in writing. This agreement will remain in action for five years.
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