Justice Dept. files lawsuit to block Register sale to Tribune

latimes-building-from-above.jpgLos Angeles Times building in Los Angeles from the tower of City Hall. LA Observed file photo.

The head of the Justice Department's antitrust division wasn't kidding. The department just filed a civil lawsuit seeking to block Tribune Publishing from acquiring control of the Orange County Register and Riverside County's largest newspaper, the Press-Enterprise. Tribune won the bidding last night over rivals Digital First Media and a group of Freedom Communications executives.

The DOJ news release, which just landed:

The Department of Justice filed a civil antitrust lawsuit today seeking to block the acquisition by Tribune Publishing Company, publisher of the Los Angeles Times, of Freedom Communications Inc., publisher of the Register in Orange County, California, and the Press-Enterprise in Riverside County, California. Tribune was selected as purchaser of Freedom’s newspapers following a bankruptcy auction and will seek bankruptcy court approval of its acquisition on March 21. The department is seeking a temporary restraining order to prevent the sale to Tribune from proceeding.

According to the department’s complaint, filed in federal district court in Los Angeles, the Los Angeles Times and the Register together account for 98 percent of newspaper sales in Orange County and the Los Angeles Times and Freedom’s newspapers together account for 81 percent of English-language newspaper sales in Riverside County. Tribune’s acquisition of its most significant competitor would give it a monopoly over newspaper sales in each county and allow it to increase subscription prices, raise advertising rates and invest less to maintain the quality of its newspapers.

“If this acquisition is allowed to proceed, newspaper competition will be eliminated and readers and advertisers in Orange and Riverside Counties will suffer,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division. “Newspapers continue to play an important role in the dissemination of news and information to readers and remain an important vehicle for advertisers. The Antitrust Division is committed to ensuring that competition in this important industry is protected.”

Tribune Publishing Company is a Delaware corporation headquartered in Chicago. It publishes 11 major daily newspapers across California, Illinois, Florida, Maryland, Connecticut, Virginia and Pennsylvania.

A story in the Times says that Tribune Publishing will oppose the antitrust action.

Tribune Publishing spokeswoman Dana Meyer said the company is prepared to defend the legality of the sale.

"The division is living in a time capsule, with a framework that predates the arrival of iPhones, Google, Facebook, and modern media outlets that are killing the traditional newspaper industry," Meyer said. "It wasn’t competition from the L.A. Times that forced the Register into bankruptcy. It was the Internet and related technology."

Daniel Lazaroff, professor emeritus at Loyola Law School, said the Justice Department's argument is harder to make today than decades ago because consumers and advertisers have more choices, including websites and cable news stations.

“If this was 25, 30 years ago, the anti-competitive potential would be much greater,” he said.

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