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Attorney General Lockyer Announces Settlement of Antitrust Action Against Alternative Weekly Newspaper Publishers in Los Angeles and Ohio
Collusive Agreement Left LA Weekly With No Competition
(SACRAMENTO) – Attorney General Bill Lockyer today announced the settlement of a major antitrust action against two alternative newspaper owners, Village Voice Media (VVM), publisher of LA Weekly, and New Times Media (NTM), publisher of New Times Los Angeles.
The settlement, entered jointly by Lockyer and Los Angeles County District Attorney Steve Cooley, resolves allegations of antitrust violations and unfair competition against the two companies.
"These two companies entered into an unlawful agreement to swap markets and customers by shutting down two weekly newspapers in the only two cities in which they competed head to head," said Lockyer. "By eliminating competition between two major Los Angeles alternative weeklies, the anti-competitive agreement harms local readers, and also hurts area businesses by inflating advertising rates."
The complaint alleged VVM and NTM in October 2002 entered into an agreement to end competition between themselves in Los Angeles and Cleveland, Ohio. Under the agreement, NTM ceased publication of New Times Los Angeles, ending competition for VVM's LA Weekly, and VVM shut down Cleveland Free Times, leaving NTM's Cleveland Scene as that area's sole alternative weekly.
The lawsuit and settlement resulted from a joint investigation by the California and Ohio Attorney General's Offices, the Los Angeles County District Attorney's Office and the U.S. Department of Justice. The Ohio Attorney General and U.S. Department of Justice entered into separate settlements.
The settlements seek to restore competition in the two communities by requiring the companies to sell the now-defunct weeklies to new publishers and prohibiting them from enforcing the collusive agreement. In addition, the California settlement requires NTM and VVM to pay $610,000 in civil penalties and $140,000 for attorneys fees ands costs. The civil penalties are among the highest ever obtained in a state antitrust action.
See the following page for key provisions of the settlement.
NTM must divest the assets of New Times LA to a buyer acceptable to the Attorney General and Los Angeles County District Attorney.
NTM and VVM are prohibited from taking any further action to implement the market allocation agreement.
NTM and VVM cannot enforce certain agreements that restrict advertisers and employees from doing business with new alternative newspapers.
NTM and VVM each must pay $305,000 in civil penalties.
VVM and NTM each must pay $70,000 to cover attorneys fees and costs for the Attorney General's Office and Los Angeles County District Attorney.