Monday, February 9, 2009

Source Interlink Files Suit Vs Publishers, Rivals

Source Interlink Cos. (SORC), the publishers of Soap Opera Digest and Soap Opera Weekly, sued a group of publishers, distributors and rival wholesalers on Monday, saying its magazine wholesaler has been cut off from its supply of popular titles after trying unsuccessfully to implement a per-copy distribution fee last month.

The antitrust lawsuit, filed in U.S. District Court in Manhattan, alleges the magazine publishers and distributors, along with two wholesalers, are trying to destroy Source's business and monopolize the U.S. wholesale magazine distribution market. has more:
"Defendants' indisputable goal is to destroy Source's business so that defendants - through Hudson and News Group, the two remaining wholesalers - will monopolize the wholesale market and use that monopoly power to shift to retailers and consumers - and away from publishers - the entire financial burden resulting from worsening market conditions and publisher-induced inefficiencies in the distribution system," the complaint said.

The lawsuit names as defendants magazine publishers American Media Inc., Bauer Publishing Co., Hachette Filipacchi Media, and units of Time Warner Inc. (TWX).

It also names as defendants: magazine distributors Curtis Circulation Co., Kable Distribution Services Inc., and Distribution Services Inc.; and wholesalers Hudson News Co. and The News Group LP.

The lawsuit is seeking an injunction to stop the alleged anticompetitive behavior and damages.

The lawsuit claims the collusive actions of the publishers, distributors and other wholesalers has caused wholesaler Anderson News Co. to go out of business.

The lawsuit also alleges the defendants launched a campaign to spread false rumors to Source's customers and others that "Source was in deep financial trouble and had ceased operations or was exiting the magazine wholesale business."

"The goal of that coordinated campaign was to do just that - to put Source out of business," the complaint said.

So far Time Inc. and Bauer Publishing are declining to comment on the story. Stay tuned.

1 comment:

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