Last Updated Jul 23, 2009 12:04 PM EDT
The swift decision came after a trial that took all of June and parts of May and July, suggesting that the jurors had made up their minds in favor of Valassis days ago.
The win is less than what Valassis had sought -- the agency believed its damages, in terms of market share illegally taken by News America, were nearer $1 billion. Nonetheless, it's a significant victory for Valassis that will boost its stock considerably (see image below) in addition to its cash balance. Valassis argued that News America used its virtual monopoly of supermarket advertising to force clients to take cheap, bundled deals that included newspaper coupons. Any client that wanted to give Valassis coupon business, or wanted to take a supermarket deal alone, faced higher prices from News America. That strategy effectively forced customers to leave Valassis in favor of News America.
CEO Alan F. Schultz (pictured) said:
We are pleased with the jury's verdict, and we look forward to moving ahead with our two other cases, including the antitrust case in the Eastern District of Michigan where any compensatory damages will be trebled.You can tell by his quote that for Schultz, this verdict is merely leverage for future litigation against News America. Valassis noted in the same release that it has similar lawsuits pending in:
- United States District Court, Eastern District of Michigan
- Supreme Court of the State of California for the County of Los Angeles
Insignia Systems, a smaller supermarket agency that has similar claims pending against News America, also recieved an immediate uptick in its stock (see image below).
There are some questions that could remain unanswered from the trial, or at least not publicly discussed. First among them: Now that Valassis has proved as a matter of law that News America abused its monopoly position -- and jacked up prices for advertisers that declined to take the bundled deal -- will those clients demand their money back?. Among those who saw price increases that, arguably, turned out to be illegal were Conagra (up 27 percent) Kraft (up 20 percent) and Unilever (up 3 to 5 percent). Lastly: Expect News America to file an appeal of the verdict while it considers its options.
Valassis stock reacts to the verdict: Insignia stock reacts to the verdict:
- See BNET's previous coverage of the in-store marketing wars:
- Valassis Trial: Land O'Lakes Exec Says She Wasn't Coerced by News America But Did Overpay
- Valassis v. News America Closing Arguments: Why the Jury May Hand a Monopoly to Murdoch
- Valassis' Brown Says She Used Same Monopoly Tactics as News America
- Valassis Wins Directed Verdict Motion in News America Trial
- News America's Carlucci Again Accused of Threatening to "Destroy" Floorgraphics
- Valassis Exec Testifies on Anti-News America "Sock Puppets"; Paid Wyeth $1M to Stay
- News America's Emmel Testifies on Exclusivity Payments to Eckerd, Ahold, Harris Teeter
- Del Monte Allegedly "Held Hostage" by News America; Heinz Wanted to Rip Agency a "New A Hole"
- Nestle Exec Had "Tirade" Over News America's Pricing; Mixson Says He Always Does That
- News America Threatened to "Crush" Agency That Worked for Kroger
- News America Irked by Portrayal at Valassis Trial
- PepsiCo Exec: News America Charged an Extra $18 Mil. If We Didn't Take Bundled Deal
- 450 Jobs at Stake in Valassis Trial; Is This All CEO Schultz's Fault?
- News America's Carlucci Admits He's a "Godfather" Fan; Denies Unannounced Price Rises
- Murdoch Quoted at Valassis Trial: "Now You Have to Really Go After Them"
- UPDATED: News America Marketing's Acquisition of Floorgraphics Not Big Enough to Show Up in Q1 Numbers