The Reason McDonald's Is Being Sued For $10 Billion

McDonald's is no stranger to litigation. Recently, for example, there has been talk of a class action lawsuit against McDonald's for selling "vanilla" ice cream cones that may contain only trace amounts, if any, of vanilla. In 2020, McDonald's was also sued for more than $1 million by a customer who claimed they had cracked a tooth on an errant bone in a chicken McNugget. Not all McLitigation concerns McDonald's food items, however. 

In February 2021, a Herbert Washington, a former professional baseball player and McDonald's franchisee, filed a lawsuit against McDonald's alleging racial discrimination in denying Washington the opportunity to acquire franchises in affluent communities and then forcing him to sell franchises he already owned in retaliation for complaining about the situation (via CNBC). This was the third lawsuit filed against McDonald's by a franchisee alleging racial discrimination. Now, McDonald's faces another lawsuit involving alleged racial discrimination, this one brought not by a franchisee, but by two companies owned by Black media mogul Byron Allen. Allen is suing McDonald's Corp for $10 billion in damages, alleging racial discrimination in how it allocates its advertising budget, according to Deadline. Here's the deal. 

In mid-May, two companies owned by Black media mogul Byron Allen filed a complaint with the Superior Court of California seeking $10 billion in damages. The lawsuit "accuses the fast-food giant of racial stereotyping and refusals to contract with [Allen's] AMG's Entertainment Studios and Weather Group in violation of federal and state law," according to Deadline. According to papers filed McDonald's allocated only .31% of it $1.6 billion U.S. advertising budget on Black-owned media in 2019, representing a pattern of discriminatory contracting procedures. 

Specifically, and among other claims made, the complaint alleges that McDonald's has repeatedly declined to advertise on Entertainment Studios' lifestyle networks, while purchasing significant advertising on "similarly situated white-owned networks," according to the Wall Street Journal, which also stated that the lawsuit "marks the latest move by Mr. Allen ... to pressure large U.S. corporations to spend more ad dollars on Black-owned media companies." Allen, together with other Black media owners, "joined forces last month to put pressure on automaker GM for the same reason," Deadline noted.