Kantar Media, WPP Attempt to Escape Billion Dollar Lawsuit Over Manipulated TV Ratings

Kantar Media Research Logo - P 2012

Kantar Media Research Logo - P 2012

At the end of July, New Dehli TV, India's oldest and largest news network, filed a multi-billion dollar lawsuit that alleged that TV ratings data was manipulated in favor of channels that were willing to provide bribes to officials.

The lawsuit targeted purported corruption by a joint venture called "TAM" (Television Audience Measurement), a joint venture between Nielsen and Kantar Media Research, both of whom were named as defendants.

On Tuesday, Kantar along with its parent company WPP, the multinational advertising giant, filed a motion to dismiss, that accuses NDTV of traveling thousands of miles to lodge insufficient claims.

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"This case is nothing more than a desperate attempt by the plaintiff...to drum up media coverage in India to divert attention from the real reasons its programs have had low audience ratings and its financial performance has been abysmal for five years," says the motion to dismiss.

In the lawsuit, NDTV accused Nielsen and Kantar Media of being once rivals which decided to operate jointly within India to monopolize the market for TV viewership data. The plaintiff claims billions of dollars in damages from a multitude of defendants in the TV ratings business for "recklessly disregarding" their responsibilities to laws and their customers by failing to exercise proper "systems/quality/security procedures" and for allowing themselves to get caught up in rampant political corruption.

The 194-page lawsuit (which can be read here) has prompted a 159-page response (which can be read in full on the next page) from Kantar, WPP, and a few other defendants represented by a legal team at Davis & Gilbert.

These defendants don't address in any substantial detail whether the allegations are true or not, but attack the foundation of a lawsuit that was filed in New York Superior Court and has become a huge deal in the world's second most populous country.

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Kantar and WPP are now asking for dismissal on several grounds, the first being the way the lawsuit was served to them -- purportedly in a ripped Whole Foods bag containing summonses and complaints, dropped off with a facilities employee at a building where Kantar and WPP don't do business. The documents were also mailed, but the defendants say that isn't enough.

Next, Kantar and WPP wonder why the lawsuit should be litigated in New York and not India, pointing out that "virtually all" of the allegations and material witnesses reside in India. "What is most shocking...this case has nothing to do with New York," says the motion.

The defendants also tick off the reasons why despite the lengthy 194 pages, NDTV's complaint insufficiently supports the causes of actions alleged. For example, the defendants say they owed no duty to NDTV, there has been no suggestion that action was taken against advertisers or service providers, nor any showing of fiduciary duty.

Perhaps one of the more important dramas at the threshold stage is whether NDTV has in naming defendants, pierced the corporate veil, which the defendants say hasn't been done. AC Nielsen Research Services Private Limited owns 50% of TAM; Kantar India controls 20% of shares. The moving defendants say the alleged culprit of NDTV's claims is an "independent corporate entity" which does not direct or control TAM.

"The real dispute in this action is simple: at best, it is a basic breach of contract action between New Delhi TV, an Indian corporation, on the [one] hand, and TAM, another Indian corporation, on the other hand, concerning the provision of viewership rating services in India under contracts executed and entered into in India," say the defendants, adding that the lawsuit contains "red herrings in a desperate attempt to concoct baseless claims" to litigate in New York.

Nielsen thus far hasn't provided its own response to claims.

E-mail: eriq.gardner@thr.com; Twitter: @eriqgardner