Brooklyn Park-based Insignia Systems is again claiming unfair play by News Corp.'s division that places in-store signage and other pieces of advertising in grocery stores, drugstores and dollar stores on behalf of consumer packaged-goods companies.
The company has filed an antitrust lawsuit against Rupert Murdoch's company and its News America Marketing subsidiary in U.S. District Court in Minneapolis.
News Corp. paid Insignia $125 million in 2011 to settle a similar legal battle in which Insignia accused News America Marketing of bad-mouthing its products and engaging in other anticompetitive tactics. As part of that agreement, Insignia gained the right to sell products to parts of News America's retail network for 10 years.
But in its suit filed Thursday, Insignia alleges News America Marketing has still "acquired and maintained a monopoly in this market through exclusionary agreements" with retailers and consumer packaged good companies, and other anticompetitive strategies.
In 2009, News America had 84% share of the market with $392 million in revenue, while 12 competitors made up the remaining 16%, according to the suit.
Today, only one competitor remains: Insignia, which has 3% of the market while News America Marketing's 97% share will give it a projected $440 million in revenue this year, the suit said.
A spokesman for News Corp. on Friday declined to comment on the case.
In the suit, Insignia said News Corp. often uses "overly broad" terms to define exclusivity in its contracts such as "shelf messaging" or "general advertising" that could preclude any competitors' products from being placed with a retailer even if that product already was in use at the time the retailer agreed to exclusivity or if the company doesn't offer a comparable product.
In one instance, Insignia was in late-stage negotiations with a major retailer on a contract for signage that encourages shoppers to interact through their smartphones.
"However, News swooped in to torpedo the deal," the suit said. "How? News exercised existing right-of-refusal rights in bad faith to pressure the retailer to cancel the deal, even though News did not have products and processes comparable to what Insignia was offering at the time of the negotiations."
The suit also alleges News has often threatened bringing forth breach-of-contract litigation against retailers who explored relationships with competitors. In 2018, it did so to a major grocery chain after it realized it was in serious negotiations with Insignia, the lawsuit said.
Insignia, a nearly 30-year-old public company, has 57 employees and last year had revenue of $33 million.
Kavita Kumar • 612-673-4113
