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Byron Allen sues McDonald's for a whopping $10 billion over "intentional discrimination"

Fortune 9/26/2022 Alice Hearing
Byron Allen on stage during the live auction at Byron Allen's 4th Annual Oscar Gala to Benefit Children's Hospital Los Angeles © Greg Doherty—Getty Images Byron Allen on stage during the live auction at Byron Allen's 4th Annual Oscar Gala to Benefit Children's Hospital Los Angeles

Mcdonald's is facing a massive lawsuit following an accusation by media mogul Byron Allen that they are purposely excluding black-owned media in their advertising campaigns. 

Allen, owner of Allen Media Group, is suing the fast-food chain for $10 billion, and has said they have refused to advertise on his networks Entertainment Studios Networks and Weather Group, which include the Weather Channel and Comedy.TV.

While McDonald's has an annual advertising budget of $1.6 billion, Allen claimed that the company only spends $5 million of that total on African-American media. He also said that McDonald's had created an "African-American tier" with a smaller budget—a tier in which he believes his TV networks have been categorized.

"This is about economic inclusion of African American-owned businesses in the U.S. economy," Allen said in a press release last week.

"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."

"Intentional discrimination"

In his court case, Allen will argue that McDonald's is violating federal and California civil rights laws. U.S. District Judge Fernando Olguin in Los Angeles ruled last week that the case could move forward.

“Taken together, and construed in the light most favorable to plaintiffs, plaintiffs have alleged sufficient facts to support an inference of intentional discrimination,” Olguin wrote.

Allen's claims are "meritless," Loretta Lynch, a lawyer for McDonald's court representatives Paul Weiss, told CNN in response.

"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," she said.

Last year, McDonald's announced it will increase advertising with Black-owned companies from 2% to 5% of its total budget by 2024.

McDonald's did not immediately respond to request for comment.

The case is due to be heard in May 2023.

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