McDonald’s will have to defend itself against a $10 trillion lawsuit from media mogul Byron Allen over allegations that the fast-food chain does not advertise in Black-owned media.
A federal court ruling last week said Allen and his company, Allen Media Group, can 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 advertise” on its networks, including the Weather Channel and Comedy . .TV.
He also accuses McDonald’s of relegating its television networks to an “African-American tier,” which has a smaller advertising budget and deprives the networks of millions of dollars in annual revenue.
“This is about the inclusion of African-American-owned businesses in the U.S. economy,” Allen said in the press release. “McDonald’s takes billions from African-American consumers and gives almost nothing back. The biggest trade deficit in America is the trade deficit between white corporate America and black America, and McDonald’s is to blame for perpetuating that disparity.”
In response, McDonald’s lawyer Loretta Lynch, who was the US attorney general in the Obama administration, said that the evidence will show that the company does not discriminate and that Allen’s claims are “without merit”.
“Their complaint is about income, not race, and plaintiffs’ baseless allegations ignore McDonald’s legitimate business reasons for investing more in their channels and the company’s business relationships with many other diverse partners,” Lynch said. by, who is now in private practice with 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 its advertising for Black-owned businesses from 2% to 5% by 2024. The company has a troubled history with race-related lawsuits, including in 2021 when it settled a lawsuit filed by one. He alleged that the company targeted less profitable restaurants by black franchise owners in lower-income, primarily 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 aligns with McDonald’s values and allows us to continue to focus on our commitments to the communities we serve.”