Valassis, #2 in the FSI business with 47%,
is suing #1 News America for violating the Sherman Anti-Trust Act, alleging predatory pricing acts.
The 26-page suit claims News America has threatened grocery store chains with sharply higher prices on in-store coupons if it didn't agree to distribute newspaper coupons. The suit says threatened penalties have routinely exceeded $1 million.
News America holds pretty much a monopoly on in-store couponing, and Valassis says they are using that power illegally.
"News is presently using its market power in the in-store advertising and promotions market to solidify and expand its position in the FSI market," the suit said. Valassis claims News is threatening to raise prices charged grocery chains if they don't "sign long-term exclusive contracts" for newspaper insert service. "Ultimately, News will possess the unfettered monopoly power to raise prices and lower output in the FSI market beyond competitive levels."
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