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Valassis Settles Collusion CHarges

Doyle, Barlow & Mazard PLLC

On March 14th, the FTC announced that Valassis Communications, Inc., a leading producer of free-standing newspaper inserts (“FSIs”) in the United States, has settled charges that it attempted to collude with News America Marketing, its only FSI rival, to eliminate competition between the two companies. Under the consent order settling the FTC’s complaint, Valassis is barred from engaging in, or attempting to engage in, similar anticompetitive conduct in the future. FSIs are multi-page booklets containing discount coupons for the products sold by various firms. They are inserted into newspapers for distribution to consumers. For the manufacturers of consumer-packaged goods and others, FSIs are a uniquely efficient way to distribute coupons on a mass scale. On a typical Sunday, Valassis’ and News America’s FSIs are distributed to more than 50 million households in hundreds of newspapers nationwide.
Valassis, a publicly traded company based in Michigan, holds conference calls with securities analysts on a quarterly basis. The calls are open to the public and can be heard live on the Internet. According to the FTC, during such a call in July 2004, Valassis invited its direct competitor, News America, to join in a scheme to allocate FSI customers and fix FSI prices and thereby end an ongoing price war between the two companies. Valassis’ goal, the FTC contends, was to raise FSI prices, which had decreased from about $6.00 per full page per thousand booklets in 2001, to less than $5.00 per full page per thousand booklets in 2004.

Andre Barlow

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