McDonald's is sued for $10 billion for alleged bias against Black-owned media
McDonald's Corp (MCD.N) has been sued for at least $10 billion by two firms controlled by media mogul Byron Allen, who allege racial discrimination by the fast-food business.
McDonald's allegedly broke federal and state civil rights laws by allocating ad revenue based on "racial animus and racial stereotyping," according to the suit filed in Los Angeles County Superior Court.
McDonald's in Chicago has refused to advertise with Allen's Entertainment Studios Networks, which owns multiple lifestyle channels, or his Weather Group, which owns The Weather Channel, according to the suit.
According to the suit, Blacks make up around 40% of McDonald's consumers, yet the business spent less than $5 million of its $1.6 billion ad budget in the United States in 2019. "McDonald's, like most of corporate America these days, publicises its dedication to diversity and inclusion, but this is little more than hollow talk," according to the lawsuit.
Allen filed his lawsuit on the same day that McDonald's announced it will increase its national ad spending with Black-owned media to 5% from 2% by 2024, as well as increase advertising on Hispanic-, Asian-American-, women-, and LGBTQ-owned platforms.
McDonald's stated in a statement, "We've doubled down on our connections with diverse-owned businesses." Allen's case will be "reviewed and responded to properly," according to the company.