News Corp faces U.S. trial over monopoly of in-store ads

Reuters News
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Posted: Feb 29, 2016 10:46 AM

By Nate Raymond

NEW YORK (Reuters) - News Corp went to trial on Monday in a class action lawsuit that accuses the company of monopolizing the market for in-store promotions at some 52,500 retail stores across the United States.

Jury selection got underway in federal court in Manhattan in an antitrust lawsuit filed by consumer packaged goods companies including Dial Corp, Kraft Heinz Foods Co and Smithfield Foods Inc.

The lawsuit claims News Corp has monopolized the U.S. market for in-store promotion services, where it acts as a middleman to help companies promote goods through coupon dispensers, electronic signs, end-of-aisle displays and shopping cart ads.

The plaintiffs said News Corp, which is controlled by billionaire Rupert Murdoch, has dominated this market since 2004 by locking up exclusive long-term contracts with retailers.

By 2009, the plaintiffs said News Corp controlled 90.5 percent of the market. In 2014, its sole remaining competitor, Valassis Communications Inc, abandoned the business, according to court papers.

The plaintiffs said News Corp's anti-competitive conduct forced them to pay artificially high prices to promote such goods as Dial soap and Heinz ketchup.

It's unclear from court records how much in damages News Corp could face.

While the plaintiffs had until recently been seeking damages that could reach $2.5 billion if tripled by a federal judge under U.S. antitrust law, pre-trial rulings have recently limited News Corp's potential liability.

News Corp has denied the plaintiffs' allegations, and says it has "acted lawfully at all times, and caused no harm to competition or the competitive process."

The litigation is part of a long-running battle over News Corp's marketing operations.

In January 2010, the New York-based company agreed to pay $500 million to end rival Valassis's antitrust lawsuit over the newspaper coupon market.

The case is Dial Corp et al v. News Corp et al, U.S. District Court, Southern District of New York, No. 13-06802.

(Editing by Bernadette Baum)


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