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NEWS13 March 2012

Affinity sues GfK MRI claiming ‘theft’ of trade secrets

Legal North America

US— Print audience researcher Affinity is suing rival GfK Mediamark Research and Intelligence (MRI) alleging that it stole trade secrets and used the information to deliver a cut-price alternative to Affinity’s own ad effectiveness service, putting it out of business.

Affinity closed its doors in February. In a complaint filed with the Southern District Court of New York, the firm claims that GfK MRI obtained trade secrets and confidential business information “under cover of a potential acquisition” before implementing “predatory pricing that has now destroyed Affinity’s business”.

According to the complaint, Affinity held discussions with GfK MRI in early 2008 about a “potential business relationship” after it launched its new Vista ad effectiveness tracking service. Over the course of these discussions, Affinity said that it divulged “every aspect” of the Vista product as part of the due diligence process.

GfK MRI then “represented that it sought to acquire” Affinity in order for Affinity to assume responsibility for the management of GfK Starch Communications and fold its custom research offerings into the Vista tool, the complaint alleges.

However, no deal was ever made and Affinity claims GfK MRI executives “were engaged in a deliberate scheme to string Affinity along in acquisition talks” using details of the Vista product to launch Starch Syndicated, a magazine advertising research service to compete with the Vista product.

In 2009, the Starch Syndicated product was offered to clients alongside GfK MRI’s new Ad Measure tool, which used survey data to normalise Starch Syndicated’s results for a particular magazine title – something Vista was unable to do.

Affinity claims these products were offered to the market “below cost” as GfK “reasonably anticipated that the vast resources of its $1.7bn parent guaranteed that it could absorb the losses”.

The company says it shut down after losing a string of clients to GfK MRI. Affinity is seeking to recover statutory, compensatory and punitive damages from the lawsuit.

GfK MRI president Kathi Love told Research: “The allegations have no merit. We can document that each of their claims has no merit.”

@RESEARCH LIVE

1 Comment

6 years ago

The federal court judge dismissed this case.

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