News Corp. Slapped With $560 Million Lawsuit by Valassis Communications

The plaintiff claims that News America, a marketing subsidiary of the media giant, continues unethical and unfair practices in spite of a previous half-billion dollar settlement

Last Updated: July 10, 2014 @ 8:14 PM

Valassis Communications filed a complaint in Michigan District Court against News Corp. and its marketing subsidiary, asking for damages in excess of $560 million and injunctive relief.

The two companies have a rich (pun allowed) litigation history. In 2009, a Michigan jury found News America Marketing, a branch of News Corporation, had engaged in unfair competition with regards to coupon distribution and in-store display advertising. That decision awarded Valassis $300 million in damages.

But before a federal trial, News America actually agreed to pay Valassis $500 million and signed a 10-year mail distribution agreement with the company to settle the claims. A latter order established a code of practices to limit monopoly practices in the space. Valassis contends that News Corp. has not lived up its end of the ageement and is still monopolizing the industry, pushing Valassis out. This time the company wants $560 million from another Michigan jury.

Also read: Netflix Emerges Victorious in $10M Lawsuit Over Film It Refused to Carry

The filing accuses News Corp. of practicing “unethical, unfair and anti-competitive strategies to prevent Valassis from gaining a foothold in the market for in-store advertising and promotions.” The accusation goes further, saying that News Corp. wants “to eliminate Valassis from the ISP market completely.”

ISPs, the filing explains, are products that place messages promoting consumer package goods in the aisle space of supermarkets, grocery stores, drug stores and other retailers. Examples of ISPs include shelf coupon dispensers, floor displays and shopping cart advertisements.

Valassis also says that News Corp continues to practice methods that were the subject of prior litigation to “maintain its ill-gotten dominance” of the free-standing insert (FSI) market. FSIs are booklets of coupons delivered directly to consumer homes.

News Corp. has not yet responded in court. When contacted, News Corp. had no comment on the pending litigation.

Pamela Chelin contributed to this report.

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