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Nielsen faces $1.3-bn legal blow from NDTV

Source : BUSINESS_STANDARD
Last Updated: Tue, Jul 31, 2012 19:32 hrs
NDTV

New Delhi Television Limited (NDTV), India's oldest news television network, has dropped a $1.3-billion bomb on The Nielsen Co, accusing the global leader in market research of fudging viewership data in favour of other networks willing to bribe its officials in India.

This would be one of the largest corporate lawsuits involving an Indian company. In a 194-page lawsuit filed in New York, the broadcaster said Nielsen violated the Foreign Corrupt Practices Act. NDTV claimed widespread data manipulation had been going on over eight years despite repeated attempts and even after evidence was presented earlier this year about the malpractices, Nielsen did not mend its ways, though its top officials had pledged to make the relevant changes.

Other than the financial damages - at least $810 million for fraud, at least $580 million for negligence plus millions more - NDTV has said Nielsen along with affiliates TAM Media Research and Kantar be banned in India.

Nielsen, a global leader in market research since 1923, earns more than $5 billion annually by selling reams of data on viewership patterns and ratings of broadcasters used by advertisers for marketing and advertising plans in over 100 countries. Nielsen came out with a statement saying the company "has a long-standing policy of not commenting on any litigation". NDTV's spokesperson, too, did not wish to comment as the matter was sub-judice. NDTV, however, has upped the ante by alleging abuse of monopoly by Nielsen's group of companies in India. In its petition, it has targeted TAM (Television Audience Measurement), a 50:50 JV between Nielsen and Kantar, saying the two decided to team up and monopolise the market for TV viewership data.

NDTV has blamed the preparation of an "exit strategy" of Nielsen's sponsors - PE giant KKR, The Blackstone Group, The Carlyle Group, Thomas H Lee Partners, Alpinvest Partners, Hellman & Friedman and Centerview Partners - for Nielsen's slack performance and governance failures. Elaborating in the court, NDTV has said the PE giants, keen on maintaining Nielsen's stock price for a better return, embarked on a massive cost-cutting exercise. That led to Nielsen's officers "recklessly disregarding their responsibilities to laws" and customers. Such cost-cutting measures are responsible for data manipulation, it has said.


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