McDonald’s will have to defend itself against a $10 billion lawsuit from media mogul Byron Allen over allegations that the fast food chain does not advertise in black-owned media.
A federal court ruled last week that Allen and his 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 annual advertising budget of $1.6 billion – goes to black-owned media and that the company has “declined advertising” on its networks, including Weather Channel and Comedy. .TELEVISION.
He also accuses McDonald’s of downgrading its TV channels to an “African-American level” that has a smaller advertising budget and deprives the channels of millions of dollars in annual revenue.
“It’s about economic incorporation of African American-owned businesses into the US economy,” Allen said in a press release. “McDonald’s takes billions from African American consumers and gives back almost nothing. 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 inequality.”
In response, McDonald’s attorney Loretta Lynch, who was U.S. Attorney General during the Obama administration, said the evidence would show the company does not discriminate and that Allen’s claims are “baseless.”
“Their complaint is about income, not race, and plaintiffs’ baseless allegations ignore both McDonald’s legitimate business reasons for not investing more in its channels and the company’s long-standing business relationships with many other multi-owned partners,” Lynch said. now in private practice at the law firm of Paul Weiss.
The case will go to trial in May 2023.
McDonald’s (MCD) announced earlier this year that it will increase advertising in black-owned businesses from 2% to 5% by 2024. A black franchise owner who claimed the company referred 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 were confident in the strength of our case, this resolution is in line with McDonald’s values and allows us to continue to focus on our commitment to the communities we serve. ”