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News Corp Settles Antitrust Suit for $280 Million

By Ephrat Livni, Esq. on March 03, 2016 | Last updated on March 21, 2019

After years of legal wrangling with major packaged goods brands over antitrust claims, News Corporation has agreed to pay a $280 million settlement to Dial, Kraft Heinz Company, and others. The plaintiffs were seeking a lot more money -- $674.6 million in damages -- arguing that News Corp quelled competition with exclusionary and illegal practices.

Considering that those damages sought, if proven, could reportedly have tripled to more than $2 billion under federal antitrust law, the announced settlement sounds like a steal for News Corp. The company, headed by Rupert Murdoch, was sued in 2012 for alleged market violations in previous years (pre-Fox split). Let's look at antitrust law briefly and the claims the company faced, according to Business Insider.

Squeezing the Competition

Antitrust law, essentially, is a set of rules regarding competition in business. The regulations exist to ensure that monopolies don't stifle innovation and that the markets remain lively, responding to consumer needs.

For example, when two large companies in the same industry announce a merger, antitrust regulators will then review the two institutions' holdings and finances, and the industry as a whole to determine whether a merger will harms the market.

But when businesses get really big, they do have more power, and they often use it to do the very things antitrust law was created to prevent, squeeze the competition. The brands suing News Corp accuse the corporation of just that.

The Allegations and Settlement

What does news have to do with supermarkets anyway? Reportedly News Corp paid supermarkets to agree they would not go to competitors for advertising and coupons, circulars, and the like. The packaged goods dealers suing News Corp say they locked up over 95 percent of contracts in supermarkets and even tore down signs from rival advertising clients in supermarkets.

The company is settling to end the litigation, it claims, and not because it admits wrongdoing. In a statement to reporters, it said, "News America Marketing has consistently denied any wrongdoing in this case ... We are pleased to have concluded this settlement, which allows us to avoid the expense and uncertainty of further litigating this matter. While we had full confidence in our case, we believe this decision is in the best interests of our company and stockholders."

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