Valassis awarded $300 million in suit against News America Marketing

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Media and marketing services company Valassis has been awarded $300 million for compensatory damages in its lawsuit against News America Marketing, a subsidiary of News Corporation.

Valassis originally filed the action in the State of Michigan Wayne County Circuit Court on March 9, 2007, claiming unfair competition and tortious interference by News America Marketing. The jury's verdict found News America Marketing liable for both counts.

Valassis has additional lawsuits pending against News America Marketing in the United States District Court, Eastern District of Michigan, asserting violations of the Sherman Act, and in the Supreme Court of the State of California for the County of Los Angeles raising claims under California's Cartwright, Unfair Competition and Unfair Practices Acts. The Michigan and California cases are currently not scheduled for trial.

“We are disappointed with today's decision, which rewards a company that turned to litigation as its business strategy rather than compete,” said Chris Mixson, president of News America Marketing, in a statement.

In its annual report, Valassis claims that News America Marketing has been competing aggressively for FSI business, forcing prices down across the industry. This coupled with flat sales resulted in “decreasing revenues and profitability” for Valassis' FSI segment.

In the Michigan case, which was filed on January 18, 2006, Valassis alleges that News America Marketing tied the purchase of in-store promotion and advertising services to space in its FSI, and that the company attempted to monopolize the FSI market.

Valassis is asking for damages in excess of $1.5 billion, injunctive relief and other costs under the three cases.

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