McDonald's is back in the news this week, as it faces a slew of very serious allegations about how it spends its advertising budget.
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As reported by Fortune, McDonald’s is facing some serious accusations from Byron Allen, who is a media mogul and Chairman and CEO of Allen Media Group. Not only that, McDonald's is also facing a historic $10 billion-dollar lawsuit from Allen and his company.
McDonald’s ad-spending has been questioned
Allen and his lawsuit questions how McDonald’s spends its advertising budget and what that says about the company’s stand. According to him, while McDonald’s has an annual advertising budget of $1.6 billion, it spends only $5 million of that on African American media.
This small sliver of the total spending has been described by Allen as McDonald’s 'African American tier' which has a very small budget.
In his press release, Allen says,
This is about economic inclusion of African American–owned businesses in the U.S. economy.
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 guilty of perpetuating this disparity… The economic exclusion must stop immediately.
Allen argues that McDonald’s is violating federal and civil rights laws
The court case will be moving forward, after receiving the go-ahead from U.S. District Judge Fernando Olguin in Los Angeles. Allen and his company are suing McDonald’s for violating federal and civil rights laws.
McDonald’s legal counsel has called the allegations ‘meritless.’
She is further quoted by Fortune as saying,
Their complaint is about revenue, not race, and plaintiffs’ groundless allegations ignore both McDonald’s legitimate business reasons for not investing more on their channels and the company’s long-standing business relationships with many other diverse-owned partners.
Sources used:
Fortune: Black media mogul Byron Allen sues McDonald’s for a whopping $10 billion, arguing it cuts out African American–owned business
Business Insider: ‘ Media mogul Byron Allen is suing McDonald's for $10 billion, claiming it overlooks Black-owned media for its advertising’
Cision PR Newswire: ' BYRON ALLEN'S ALLEN MEDIA GROUP WINS SIGNIFICANT LEGAL VICTORY IN RACIAL DISCRIMINATION-BASED LAWSUIT AGAINST MCDONALD'S CORPORATION IN U.S. FEDERAL COURT'
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