Antitrust Suit Accuses Sinclair, Tribune of Fixing Television Ad Prices

Sinclair Broadcasting In Spotlight After Viral Video Shows Local TV Anchors Reading Identical Script Lambasting Fake News
HUNT VALLEY, MD - APRIL 03: The headquarters of the Sinclair Broadcast Group is shown April 3, 2018 in Hunt Valley, Maryland. The company, the largest owner of local television stations in the United States, has drawn attention recently for repeating claims by U.S President Donald Trump that traditional television and print publications offer "fake" or biased news. (Photo by Win McNamee/Getty Images)
Win McNamee—Getty Images

Powerful TV giants including Sinclair Broadcast Group and Tribune Media violated antitrust law by collaborating to set advertising prices, according to a lawsuit filed Wednesday in federal court. The proposed class-action suit, which was filed on behalf of advertisers nationwide, claims broadcasters colluded to fix prices on what television stations charge for airtime ad buys, according to the Washington Post.

It’s unclear the effect such a suit could have on the proposed Sinclair-Tribune merger, which is facing a further uphill battle following a vote by the U.S. Federal Communications Commission (FCC) last month. In fact, the suit takes aim at the FCC’s recent decisions to further deregulate an already consolidated market, noting this has encouraged an environment in which it is easier for dominant firms to coordinate on price manipulation. The lawsuit also alleges that this type of collusion between existing broadcast groups makes it nearly impossible for smaller firms to gain market foothold.

In an interesting bit of timing, the FCC announced on Thursday its intention to establish an incubator program aimed at increasing ownership diversity across broadcasting companies. The agency called the initiative a “historic and long overdue step” toward making it easier for underrepresented groups to overcome the industry’s barriers to entry.

Additional broadcasters named in the lawsuit filed Wednesday in U.S. District Court for the Northern District of Illinois include Hearst, Nexstar Media Group, Gray Television, and Tegna.

Subscribe to Well Adjusted, our newsletter full of simple strategies to work smarter and live better, from the Fortune Well team. Sign up today.