The Wall Street Journal reports that Valassis communications has won $300 million in a lawsuit that charged News America’s News Corp. unit with unfair competitive practices and using “its dominant market position in its in-store marketing business to undercut Valassis in its freestanding insert, or newspaper coupon, business.”
This is just the first of three lawsuits filed by Valassis against News Corp.. The other two are a federal antitrust suit and an unfair competition lawsuit in California.
News America has denied the charges and said it will appeal the decision.
Chris Mixson, president of News America Marketing, issued the following statement:
“We are disappointed with today`s decision, which rewards a company that turned to litigation as its business strategy rather than compete. Although we are sure that the Michigan state court jury did their best to reach a fair conclusion, we recognize that they were hampered by the court`s decision not to allow a key piece of information to be introduced: the legal analysis by the Federal Trade Commission that Valassis had made ‘an effort to induce collusion’ when it announced its new pricing policy in a public investor call. This information would have shown that this lawsuit was merely part of a larger strategy to get News America Marketing to raise its prices, a move that would have affected both our clients and their consumers by reducing the number of coupons available - a consequence that would be extremely unfortunate in this economy.”
The Journal notes that another in-store marketing company, Insignia Systems, “which has some business relationships with Valassis, also has filed suit against News America for unfair competition in federal district court in Minneapolis.”
This is just the first of three lawsuits filed by Valassis against News Corp.. The other two are a federal antitrust suit and an unfair competition lawsuit in California.
News America has denied the charges and said it will appeal the decision.
Chris Mixson, president of News America Marketing, issued the following statement:
“We are disappointed with today`s decision, which rewards a company that turned to litigation as its business strategy rather than compete. Although we are sure that the Michigan state court jury did their best to reach a fair conclusion, we recognize that they were hampered by the court`s decision not to allow a key piece of information to be introduced: the legal analysis by the Federal Trade Commission that Valassis had made ‘an effort to induce collusion’ when it announced its new pricing policy in a public investor call. This information would have shown that this lawsuit was merely part of a larger strategy to get News America Marketing to raise its prices, a move that would have affected both our clients and their consumers by reducing the number of coupons available - a consequence that would be extremely unfortunate in this economy.”
The Journal notes that another in-store marketing company, Insignia Systems, “which has some business relationships with Valassis, also has filed suit against News America for unfair competition in federal district court in Minneapolis.”
- KC's View:
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To put this as charitably as I can, almost everyone I have ever talked to in this segment of the business says that News America is a tough and ruthless competitor that will do anything and everything to build market share and put its rivals out of business.
It does not come as a surprise to me that News America lost this suit, nor does it shock me that it is likely to remain in the court system for years as appeals are filed.
One can only hope that justice will be served in the long run.
