Case Profile Valassis v. News America Marketing
The Case
Valassis and News America provide coupons to consumers. Valassis sued News America, claiming that News America had an unfair advantage when negotiating with Consumer Packaged Goods (CPG) companies to sell Free-Standing Insert (FSI) coupons, because News America bundled the FSI with in-store coupon tactics. Valassis accused News America of selling these bundles at “below cost” prices, and of having a “monopoly” on in-store tactics. Valassis further argued that its loss of market share was directly attributable to News America bundling.
The Challenge
Teach jurors about the coupon business, including the relationship between coupon providers like Valassis and News America with the CPGs and the retailers who allow coupons at the shelf. Valassis made its “below cost” argument through economists who took whatever discount a customer received from bundling, and applied that discount to the cost of FSI, but not to the cost of in-store coupons/advertising. Fulcrum needed to help the trial team explain bundled discounts. In addition, we needed to show that News America did not have a “monopoly” on in-store tactics. We also needed a timeline to show that business conditions, not News America bundling, caused the decline in Valassis sales.
The Approach
Fulcrum designed and implemented interactive 2D animations which showed all of the advertising that a patron sees “in store.” By clicking on a tactic, a window opened with a picture of that tactic. In addition, all of the News America tactics could be selected, and all of the tactics from other companies could be separately selected. To show how Valassis was misleading jurors with its “below cost” analysis, Fulcrum worked with the trial team to develop demonstratives using a “McDonald’s” meal deal bundle to show that taking the bundled discount and applying it to only one item was misleading. Finally, Fulcrum designed an animated timeline that demonstrated that the fall in Valassis sales corresponded to Valassis business decisions, not News America bundling.
The Result
After a multi-week trial in Detroit, Valassis received a verdict in its favor, which was subsequently negotiated into a settlement where News America and Valassis would partner in the coupon space.
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