Broadcaster launches legal action against Nielsen ‘monopoly'

US-- Florida-based Sunbeam Television has launched anti-trust proceedings against Nielsen, alleging that the ratings giant has an illegal monopoly and has breached its contract with the broadcaster.

Sunbeam is seeking damages from the firm, claiming Nielsen's conduct has violated federal and state anti-trust laws and Florida's unfair practice laws.

The broadcaster accused Nielsen of maintaining a monopoly position by tying customers to staggered, long-term contracts – a point that was the basis of similar proceedings launched against the ratings firm by rival Erinmedia in 2005. That complaint was settled out of court last year.

Sunbeam claims Nielsen used its dominant market position to force local people meters (LPMs) on customers in the Miami and Fort Lauderdale markets, replacing the old paper diary system of audience measurement.

It contends that the new system produces “defective, wildly inaccurate ratings data” which is costing it around $1m a month in lost advertising revenue, and cites a large drop in American Idol viewing figures for its WSVN station as an example.

Sunbeam said the introduction of LPMs, the failure to provide reliable data and Nielsen's failure to exercise due care and good industry practices amounted to a breach of the contract agreed between the two in November 2007.

The broadcaster claims that LPMs “significantly undercount” minority viewers – echoing concerns that were raised several years when the technology was first being introduced. A News Corporation-backed campaign group created such a furore at the time that Senate hearings were convened and legislation was mooted.

Nielsen eventually placated its critics by implementing a number of steps recommended by an independent task force.

Speaking today, a spokesman for the research firm said Sunbeam's case was “utterly without merit”.

“The TV ratings we are providing to Miami are more accurate than any previous measurement of this market and our sample is representative of the Miami population,” the spokesman said.

“We believe that WSVN [Sunbeam] had other reasons for bringing this case than the ones stated in the complaint and we will be responding to it vigorously.”

Author: James Verrinder