Justice Department Reaches Settlement with Five Additional Broadcast Television Companies, Including One National Sales Representative Firm, In Ongoing Information Sharing Investigation
The Department of Justice has reached settlements with CBS, Cox, EW Scripps, Fox, and TEGNA Inc. to resolve a Department lawsuit brought as part of its ongoing investigation into exchanges of competitively sensitive information in the broadcast television industry. All five companies are alleged to have engaged in unlawful information sharing among their owned broadcast television stations. Cox also owns Cox Reps, one of two large “Rep Firms” in the industry that assist broadcast stations in sales to national advertisers. The Rep Firms are alleged to have participated in the unlawful information sharing conduct. CBS, Cox, Scripps, Fox, and TEGNA agreed with other entities in many metropolitan areas across the United States to exchange revenue pacing information, and also engaged in the exchange of other forms of non-public sales information in certain metropolitan areas. The complaint further alleges that Cox Reps also facilitated and participated in this exchange of pacing information by its broadcast-station clients that operated in the same metropolitan areas. Pacing compares a broadcast station’s revenues booked for a certain time period to the revenues booked in the same point in the previous year. Pacing indicates how each station is performing versus the rest of the market and provides insight into each station’s remaining spot advertising for the period. By exchanging pacing information, the five new defendants and other broadcasters were better able to anticipate whether their competitors were likely to raise, maintain, or lower spot advertising prices, which in turn helped inform their stations’ own pricing strategies and negotiations with advertisers. As a result, the information exchanges harmed the competitive price-setting process in markets for the sale of spot advertisements.
The proposed settlements with CBS, Cox, Scripps, Fox, and TEGNA prohibit the direct or indirect sharing of such competitively sensitive information. Additionally, the Department’s proposed settlement with Cox requires that Cox Reps implements firewalls in markets where it represents more than one broadcast station. The Department has determined that these provisions would resolve the antitrust concerns raised as a result of the defendants’ alleged conduct. The proposed settlements further require these five defendants to adopt rigorous antitrust compliance and reporting measures to prevent similar anticompetitive conduct in the future. The settlements have a seven-year term, and they will continue to apply to stations currently owned by CBS, Cox, Scripps, Fox, and TEGNA even if those stations are acquired by another company. Finally, the settlements require that the five defendants cooperate in the Department’s ongoing investigation.
Justice Department Reaches Settlement with Five Additional Broadcast Television Companies, Including One National Sales Representative Firm, In Ongoing Information Sharing Investigation Justice Settles With More Broadcasters Over Spot Ad Info Exchanges (B&C)