Tuesday, June 25, 2013

Examiner sues Chronicle, alleging anticompetitive ad-pricing scheme

The parent company of the San Francisco Examiner, SF Weekly and Bay Guardian filed a lawsuit today (June 25) alleging the Chronicle slashed advertising prices to stifle competition, according to a report in the Examiner.

The suit says Chronicle owner Hearst Corp. took advantage of greater corporate resources to offer discounts to Examiner advertisers if they would quit advertising in the Ex and buy ads in the Chronicle instead. In one such instance, the suit says the Chronicle threw in $200,000 worth of free ad space in a deal with an advertiser.

The California Unfair Practices Act prohibits a business from selling goods or advertising below cost in an attempt to harm a competitor.

In 2007, the Bay Guardian, when it was owned by Bruce Brugmann, successfully sued the SF Weekly for violating the same law. After a trial, the Guardian ultimately was awarded $21 million with interest — though later accepted a much smaller, undisclosed settlement.

Ironically, both the Weekly and Guardian were subsequently acquired by the Examiner's owner, the San Francisco Newspaper Company, headed by Todd Vogt.

The Examiner's lead counsel in this suit is Ralph Alldredge, who represented the Guardian in its lawsuit.

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