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(Reuters) — McDonald's Corp. has been ordered by a U.S. judge to defend against media entrepreneur Byron Allen’s $10 billion lawsuit accusing the fast-food chain of “racial stereotyping” by not advertising with Black-owned media.
In a decision Friday, U.S. District Judge Fernando Olguin in Los Angeles said Mr. Allen could try to prove that McDonald's violated federal and California civil rights laws by deeming his networks ineligible for the “vast majority” of its advertising dollars.
Mr. Allen accused McDonald's of relegating his Entertainment Studios Networks Inc. and Weather Group LLC, which owns the Weather Channel, to an “African American tier” with a separate ad agency and much smaller ad budget, depriving them of tens of millions of dollars of annual revenue.
In a statement Tuesday, McDonald's lawyer Loretta Lynch maintained that the Chicago-based company viewed the lawsuit as “about revenue, not race,” and believed the evidence would show there was no discrimination.
The lawsuit said Blacks represent 40% of fast food customers, but McDonald's spent just 0.3% of its $1.6 billion U.S. ad budget in 2019 on Black-owned media.
In May 2021, McDonald's pledged to boost national ad spending with Black-owned media to 5% from 2% by 2024.
Judge Olguin dismissed an earlier version of Mr. Allen's lawsuit last November, finding no proof of intentional and purposeful discrimination against his companies.