[Promo Xtra] Marketing giant Valassis Communications is claiming that its top competitor is using brutal images of beatings from an Al Capone movie as one way to gain an unfair advantage in the sale of both newspaper freestanding inserts and in-store ads and promotions.

The lawsuit, filed Jan. 18 in U.S. District Court Eastern District of Michigan Southern Division, claims that rival News America Marketing Group has embarked on an anti-competitive, predatory pricing scheme to gain a monopoly over these two tactics. FSIs reach as many as 70 million households weekly.

The suit also claims that News America has obtained exclusive long-term contracts with retailers, including Safeway, Kroger, Albertsons, Ahold and Winn Dixie, to market its in-store advertising and promotions, effectively precluding competitors, according to documents filed with the Securities and Exchange Commission.

Valassis, based in Livonia, MI, is seeking damages in excess of $1.5 billion.

Valassis also claims that News America is tying the sale of FSI coupons to the sale of its in-store marketing products. Valassis said that News America has “coerced” consumer packaged goods companies (CPGs) to sign long-term exclusive contracts for FSI service by threatening to penalize the CPGs on prices for in-store marketing. Valassis said that the penalties have routinely exceeded $1 million for individual customers and $5 million for a single FSI deal. Valassis claims that CGPs have told it that they have been “economically coerced” to sign these contracts with News America, the documents said.

A spokesperson for Valassis said the company had no comment. Calls to News America were not returned.

In its introduction in the lawsuit, Valassis said that News America COO Paul Carlucci shows his sales force a vignette from The Untouchables that shows Al Capone beating one of his enemies to death with a baseball bat. Valassis claims the scene is a metaphor for the business practices that News America expects of its sales force and employees to illegally leverage its market dominance in the in-store advertising and promotions market to gain an unfair advantage in the coupon market, the documents said.

In a Jan. 20 article, The Detroit News reported that Valassis controls about 47% of the $1 billion newspaper insert market, with News American controlling the rest.

Marketing giant Valassis Communications is claiming that its top competitor is using brutal images of beatings from an Al Capone flick as one way to gain an unfair advantage in the sale of both newspaper FSIs and in-store ads and promotions.

The lawsuit, filed Jan. 18 in the United States District Court Eastern District of Michigan Southern Division, claims that rival News America Marketing Group has embarked on an anti-competitive, predatory pricing scheme to gain a monopoly over these two tactics. FSIs reach as many as 70 million households weekly.

The suit also claims that News America has obtained exclusive long-term contracts with retailers, including Safeway, Kroeger, Albertsons, Ahold and Winn Dixie, to market its in-store advertising and promotions, effectively precluding competitors, according to documents filed with the Securities and Exchange Commission.

Valassis, based in Livonia, MI, is seeking damages in excess of $1.5 billion.

Valassis also claims that News America is tying the sale of FSI coupons to the sale of its in-store marketing products. Valassis said that News America has “coerced” consumer packaged goods companies (CPGs) to sign long-term exclusive contracts for FSI service by threatening to penalize the CPGs on prices for in-store marketing. Valassis said that the penalties have routinely exceeded $1 million for individual customers and $5 million for a single FSI deal. Valassis claims that CGPs have told it that they have been “economically coerced” to sign these contracts with News America, the documents said.

A spokesperson for Valassis said the company had no comment. Calls to News America were not returned.

In its introduction in the lawsuit, Valassis said that News America COO Paul Carlucci shows his sales force a vignette from The Untouchables that shows Al Capone beating one of his enemies to death with a baseball bat. Valassis claims the scene is a metaphor for the business practices that News America expects of its sales force and employees to illegally leverage its market dominance in the in-store advertising and promotions market to gain an unfair advantage in the coupon market, the documents said.

In a Jan. 20 article, The Detroit News reported that Valassis controls about 47% of the $1 billion newspaper insert market, with News American controlling the rest.

In addition to newspaper advertising and inserts, Valassis offers sampling, direct mail, 1-to-1 marketing programs, coupon clearing, consulting and analytic services. In November, Valassis revealed that the Federal Trade Commission is investigating it for unfair methods of competition; the investigation is ongoing. News America Marketing provides newspaper-delivered and in-store advertising and promotion, as well as retail merchandising and interactive marketing services.