McDonald’s is facing a $10 billion lawsuit brought by media mogul Byron Allen over claims that the fast-food chain doesn’t advertise with black-run media.
A federal court ruled last week that Allen and his company, Allen Media Group, can attempt 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 media and that the company “has refused to appear on its networks.” to advertise,” which includes the Weather Channel and Comedy.TV.
He also accuses McDonald’s of relegating its TV stations to an “African-American tier” that has a smaller advertising budget and robs stations of millions of dollars in annual revenue.
“This is about the economic incorporation of African-American owned companies into the US economy,” Allen said in the release. “McDonald’s takes billions of African American consumers and gives back almost nothing. America’s largest trade deficit is the trade deficit between white America’s businesses and black America, and McDonald’s is guilty of perpetuating that disparity.”
In response, McDonald’s attorney Loretta Lynch, who was US Attorney General during the Obama administration, said the evidence showed the company did not discriminate and that Allen’s claims were “baseless.”
“Their complaint is about sales, not race, and the 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 partners of varying ownership,” said Lynch now in private practice at the law firm Paul Weiss.
The case will go to court in May 2023.
McDonald’s announced earlier this year that it would increase advertising featuring black-owned businesses from 2 percent to 5 percent by 2024. The company has a troubled history of race-related lawsuits, including in 2021 when it settled a lawsuit filed by a black franchise owner who claimed the company moved him to less profitable restaurants in lower-income, mostly black, communities because of his race steered quarters.
“Discrimination has no place at McDonald’s,” the company said in December 2021. “While we were convinced of the strength of our arguments, this resolution is consistent with McDonald’s values and allows us to remain committed to our commitments to communities focus on whom we serve. “