Friday, April 21, 2006

Focus Media sued for unfair competition

Focus is clearly one of the digital signage industry's biggest players, so it's not too surprising to see them throwing their weight around to win deals, especially in light of China's... um... interesting approach to public-private interaction. Reuters reports that:

A Shanghai advertising firm has sued rival Focus Media for $1.7 million, accusing the Nasdaq-listed company of using unfair competition to lure one of its clients in violation of a contract.

In its lawsuit filed last month in Shanghai, CGEN Digital Media Network Co. Ltd. said it signed a contract in 2004 to provide in-store advertising services to 13 outlets of Hymart-Hymall, a Taiwanese hypermarket chain 50 percent owned by Britain's Tesco Plc .

The suit alleges that Focus used unfairly competitive practices the following year to win over Hymart-Hymall, inducing it to break its contract with CGEN and promising to pay any penalty the Taiwanese retailer might incur in the process.

CGEN is asking the court to make Focus cease its unfairly competitive behaviour, as well as issue an apology and provide economic compensation of 13.57 million yuan ($1.7 million).

A spokeswoman for Focus Media said the company was aware of the lawsuit, but had no further comment.

I'm quite curious to see how this turns out, especially since CGEN has already sued Focus and won (albeit a much smaller amount) for the same claim in the past.

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