Evil Empire buys rival, quashes anticompetition suit
News Corp, through its News America Marketing unit, recently bought out competitor Floorgraphics for an undisclosed sum. Both companies are in the businesses of selling coupon inserts and in-store advertising.
The deal is to in itself remarkable or very big. But the interesting point is that Floorgraphics had sued NewsCorp for anticompetitive behavior and corporate spying. The lawsuit was about to go to trial when the deal was announced.
According to a New York Times story ("News Corp. Unit Buys Rival After Settling a Suit With It", 3/13/09), the lawsuit
had claimed that the NewsCorp division "illegally accessed plaintiff's computer system and obtained proprietary information from the computer system; disseminated false, misleading and malicious information about the plaintiff; and incorrect information about themselves to plaintiff's existing and prospective clients, in an effort to induce retailers and clients to avoid doing further business with plaintiff.
News America Marketing has also been is also being sued by another rival, Valassis Inserts on similar charges.
Well, it's one way to get rid of the very competition you are trying to drive out of business. Any follow-up from the Justice Department?
Bonus detail : The same Times story reports that "An article in Forbes in 2005 reported that the head of the unit liked to motivate the sales staff by showing a clip from the film "The Untouchables," depicting Al Capone beating a man with a baseball bat."
