Reference no: EM133533225

Question: A federal judge has allowed a discrimination lawsuit to proceed that argues that McDonald's refuses to advertise on Blackowned media networks. Media entrepreneur Byron Allen, who is Black, has accused McDonald's of instituting a "racially discriminatory contracting process" in a lawsuit first filed in May 2021. As the owner of Entertainment Studios Networks and the Weather Group, which includes the Weather Channel, he sought $10 billion in damages alleging that McDonald's established "a two-tiered, race based system and shut plaintiff out of the general market (i.e. white-owned media) tier." However, a federal judge dismissed the suit in December, saying that the allegations were not sufficiently supported. Following a legal back-and-forth, the same judge on Friday denied a request by McDonald's to dismiss the case, thereby allowing it to proceed. Allen alleged that were his company white-owned it "would have received tens of millions of dollars in advertising revenue from McDonald's on an annual basis." He also alleged that McDonald's contracts with a separate advertising agency for "African-American media" with an aim of spending a budget that "is de minimis compared to the general market budget." Allen argues his company had programming geared towards a variety of viewers, especially after its 2018 purchase of the Weather Channel, and that McDonald's has advertised on "similarly situated, white-owned networks." Loretta Lynch, the former US attorney general who is now a partner at law firm Paul, Weiss representing McDonald's, said Allen's complaint was "about revenue, not race." The "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.

In South Africa, the legislation within which organisations need to comply focuses to a large degree on the social and economic transformation of the organisation, the industry in which it operates and the country as a whole. Provide a comprehensive discussion on the Broad Based Black Economic Empowerment Act (No 53 of 2006) which could counter actions that McDonald is being accused of.