Sinclair Broadcast Group is being sued for allegedly colluding with Tribune Media Co. to inflate television ad rates.
The potential class-action lawsuit, filed last week with an Arkansas law firm as lead plaintiff, accuses the media companies of “stifling competition” and raising, fixing or stabilizing television advertising prices across the country, making the prices higher than they would have been in a competitive market.
The Law Offices of Peter Miller P.A. bought its ads from Hunt Valley-based Sinclair, according to the lawsuit, filed in U.S. District Court in Baltimore.
“The impact of Defendants’ unlawful and anticompetitive conduct is ongoing and continues to this day,” the lawsuit states. The firm is seeking an injunction to stop the alleged practice.
Alicia Leigh Shelton and Cyril Vincent Smith III of Zuckerman Spaeder LLP in Baltimore, lawyers for the plaintiffs, declined to comment on the case. Co-counsel Kimberly A. Justice of Kessler, Topaz, Meltzer & Check LLP in Pennsylvania, also declined to comment on the case.
Officials from Sinclair could not be reached for comment.
The lawsuit alleges the TV advertising market is susceptible to collusion because there are a limited number of station owners selling advertising; the barriers to entry are high; the products are similar; the stations have a common motive to maintain and increase their profits; and the stations had ample opportunities to conspire through industry associations and other interactions.
Sinclair- and Tribune-owned stations reach 38 and 43 percent of American homes respectively, the lawsuit states.
The plaintiffs seek injunctive relief, treble damages, costs of suit, and reasonable attorneys’ fees on behalf of itself and the similarly situated direct purchasers of TV ads, under the Sherman Antitrust Act, the lawsuit states.
The case is Law Offices of Peter Miller, P.A. v. Sinclair Broadcast Group, Inc. et al, No. 1:18-cv-02316-TDC.
A similar lawsuit was filed in federal court in Illinois this week by Robins Kaplan, a national trial firm, against the five largest owners of local television stations in the country, including Sinclair and Tribune. Other defendants include Gray Television Inc., Hearst Corp., Nexstar Media Group Inc. and Tegna Inc.
Both lawsuits note The Wall Street Journal has reported the Department of Justice is investigating potential antitrust violations in local television ad sales.
Last month, the Federal Communications Commission sent Sinclair’s $3.8 billion proposal to purchase Tribune to an administrative hearing that is expected to take several months and could torpedo the deal.
Bloomberg News contributed to this article.