On May 22, the DOJ filed a civil antitrust lawsuit that required the Daily Gazette Company and MediaNews to undo their transaction and restore the competition that existed before May 2004, alleging that the Daily Gazette Company violated the antitrust laws when it acquired the Daily Mail newspaper from MediaNews. Daily Gazette Company is a privately-held corporation based in Charleston, West Virginia. MediaNews Group is based in Denver and is the fourth largest newspaper company in the United States.
The Charleston Gazette and the Daily Mail are the only two daily newspapers in Charleston, West Virginia. The DOJ alleged that Daily Gazette Company, owner and publisher of The Charleston Gazette, bought the Daily Mail with the purpose and intent to shut it down, and began using its new control over that newspaper to initiate the termination of the second paper, but suspended those actions in December 2004 when the DOJ learned of the transactions and began an investigation.
Until 2004, Daily Gazette Company and MediaNews operated within a joint operating agreement (“JOA”) and each owned a 50 percent interest in an entity called, Charleston Newspapers, which performed many of the commercial functions of The Charleston Gazette and Daily Mail. In May 2004, Daily Gazette Company acquired MediaNews’ ownership interest in the JOA and ownership of the Daily Mail. As a result, Daily Gazette Company now owns all of the assets and controls all of the business operations of the only two daily newspapers in Charleston, West Virginia.
The DOJ alleged that readers and advertisers in the Charleston area were harmed when the Daily Gazette Company acquired the Daily Mail. The investigation restored competition by prohibiting the parties from resuming an anticompetitive course in the future.
The May 2004 transactions were not required to be reported under the Hart-Scott-Rodino (“HSR”) Antitrust Improvements Act of 1976, which requires companies to notify and provide information to the DOJ and the FTC before consummating certain acquisitions. As a result, the DOJ did not learn about the transactions until after they had been consummated.