Antitrust case brought against U.S. publishers thrown out

A group of large U.S. magazine publishers won a 5-year-old antitrust case brought by the now bankrupt wholesaler Anderson News LLC. According to a story in WWD,  Time Inc, Hearst Corp., American Media Inc. and Rodale Inc. had been sued for $371 million, for banding together to reject its increase in distribution pricing. Further, on appeal, Anderson alleged that the publishers had choked off its supply of magazines and, in retaliation, tried to force its warehouses not to make deliveries to them.

Judge Paul Crotty of the Second Circuit dismissing the antitrust claims and suggested that by trying to persuade big retailers like Wal-Mart Stores Inc. and The Kroger Co., to not handle magazines from the publishers' group, Anderson may have been the one open to antitrust action.

“If there were ever an antitrust case of the pot calling the kettle black, this is it,” Crotty said in his judgment.

Anderson had tried to increase prices to publishers by 7% in 2009 but the publishers pushed back, saying they couldn't afford the increases

Anderson then tried to “take advantage” of its controlling position in ProLogix East, a company that delivered magazines to retailers, by refusing to open its warehouse to make deliveries for Anderson News’ competitors, according to court papers. The wholesaler’s threat to stop deliveries was enjoined by a federal court in the District of Delaware, and when Anderson received word of the decision, it chose to go out of business. It filed the lawsuit shortly after it filed for bankruptcy in early 2009.