Valassis' Brown Says She Used Same Monopoly Tactics as News America

Suzanne Brown, the chief marketing officer at newspaper coupon agency Valassis, told a Michigan state court that the agency's corporate strategy was to increase market share using the same tactics as its rival, News America Marketing. The admission was potentially important because Valassis is alleging in the case that News America was restricting its market share illegally by bundling or cross-selling newspaper coupon deals with its in-store supermarket ad offers.

Brown's testimony came regarding a Sept. 24, 2008, 8-K filing that contained a presentation to investors. One bullet point regarding Valassis' 2008 strategy says:

Increase share by cross selling and new client acquisition

A News America lawyer grilled Brown on that item:

Q: Where it says increase share, I assume that means market share? Answer: I think in this context it refers to increase share of dollars being spent, with products and services that we sell. Question: So this would be increased share of the dollars spent by the customers whether it's a consumer packaged direct mail advertiser or retailer? Answer: Correct. Question: And by cross-selling, that means selling more than one product or platform, correct? Answer: Yes.

The exchange came during a lengthy and, frankly, rather dull examination of Brown. At another point, Brown told the court that Valassis had discussed creating a relationship with Floorgraphics, an agency bought by News America earlier this year. That exchange appeared to demonstrate, again, that Valassis was not above using the same tactics as News America in order to dominate the supermarket/newspaper coupon business:

Question: Do you recall having a discussion with FGI at a meeting that took place in January of 2006? Answer: I can't testify to the timing. I have a recollection of having a meeting with some one or two people from Floorgraphics. Question: And was the purpose of the meeting to discuss a joint strategy to blunt News America's market share? Answer: Not that I recall. Question: What was the point of the meeting? Answer: I believe the meeting was to discuss whether or not there might be a business relationship between Floorgraphics and Valassis in order to allow Valassis to compete against News America's monopoly.

The trial continues.

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