McDonald’s faces $10 billion discrimination lawsuit from media group

New York
CNN Business

McDonald’s will have to defend itself against a $10 billion lawsuit from media mogul Byron Allen over an allegation that the fast-food chain does not advertise to black-owned media.

A federal court ruled last week that Allen and his company, Allen Media Group, could try to prove in court that McDonald’s violated civil rights laws.

Allen said in a press release that only a small portion — about $5 million of McDonald’s $1.6 billion annual advertising budget — goes to black-owned media and that the company has “refused to make any advertising” on its networks, which include Weather Channel and Comedy. .TV.

He also accuses McDonald’s of relegating its TV channels to an “African American level” which has a smaller advertising budget and robs the channels of millions of dollars in annual revenue.

“It’s about the economic inclusion of African-American-owned businesses in the American economy,” Allen said in the press release. “McDonald’s takes billions from African American consumers and gives next to nothing in return. The biggest trade deficit in America is the trade deficit between white corporate America and black America, and McDonald’s is guilty of perpetuating this disparity.

In response, McDonald’s attorney Loretta Lynch, who served as U.S. Attorney General during the Obama administration, said the evidence will show the company does not discriminate and that Allen’s claims are ” unfounded”.

“Their complaint is about income, not race, and the plaintiffs’ baseless allegations ignore both McDonald’s legitimate business reasons for not investing more in their chains and the company’s longstanding business relationship with many other partners from various owners,” said Lynch, who is now in private practice with the Paul Weiss law firm.

The case will go to trial in May 2023.

McDonald’s (MCD) announced earlier this year that it would increase advertising with black-owned businesses by 2% to 5% by 2024. The company has a troubled history with lawsuits involving race, including in 2021, when she settled a lawsuit brought by a black franchise owner who alleged the company directed him to less profitable restaurants in low-income, predominantly black neighborhoods because of his race.

“Discrimination has no place at McDonald’s,” the company said in December 2021. “While we are confident in the strength of our case, this resolution aligns with McDonald’s values ​​and allows us to continue to focus on our commitments to the communities we serve.”

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