A U.S. district judge has ordered $McDonald's (MCD.US)$ to defend itself against a racial discrimination lawsuit filed by media baron Byron Allen.
Allen's $10 billion lawsuit accuses McDonald's of marginalizing his company into an "African American tier" which uses a separate ad agency and a smaller budget.
According to Judge Fernando Olguin, Allen could try to prove that McDonald's violated federal and California civil rights laws.
Olguin said that Entertainment Studios Networks Inc had tried repeatedly and unsuccessfully since its 2009 founding to obtain a contract with McDonald's.
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The lawsuit claims that McDonald's has refused to advertise on Entertainment Studios networks or The Weather Channel since Allen acquired the network in 2018.
The suit mentioned that McDonald's spent only 0.3% of its $1.6 billion U.S. ad budget on Black-owned media in 2019. African Americans represent 40% of fast-food customers.
According to McDonald's lawyer Loretta Lynch, the company viewed the lawsuit as "about revenue, not a race" and said there was no discrimination.
Last May, McDonald's pledged to boost national ad spending with Black-owned media to 5% from 2% by 2024.
McDonald's is the world's leading global food service retailer, with over 39,000 locations that generate over $100 billion in annual revenue.
