Three media companies - owned by media mogul Byron Allen - have filed a lawsuit against Nielsen over alleged fraudulent misrepresentation of ratings and fraud by concealment.
The lawsuit was filed in the Circuit Court of Cook County, Ill., on March 16. In it, the companies, Weather Group, Entertainment Studio Networks (ESN) and CF Entertainment, claim Nielsen was knowingly dishonest about how unreliable its rating measurement service was for Allen's ESN networks.
The companies state the suit is centered around Nielsen's alleged "outdated" television ratings service. Nielsen collects and measures audience engagement data through surveys, a panel system and proprietary electronic measuring software to gather the content, network or stations audiences are watching on television or digital devices.
"This lawsuit is about Nielsen's outdated, unreliable and broken television ratings service, and the resulting harm suffered by media companies who rely on Nielsen to sell ad time." Allen's companies claim Nielsen knew its system was unreliable, concealed that fact and continued business with them, costing them millions for the service.
"Plaintiffs' damages include millions of dollars in fees paid to Nielsen for shoddy and unreliably services, millions of dollars in lost advertising revenue and profits, lost business value and other consequential harms that are estimated to be in the billions of dollars," reads the complaint. "Plaintiffs seek compensatory, special and consequential damages in an amount that will conform to proof at trial."
The companies also say other media businesses have been affected.
"Plaintiffs are not alone. Many other media companies have been led astray and have paid millions of dollars to Nielsen in exchange for unreliable and flawed services. It is estimated that Nielsen caused these media companies billions of dollars in damages," the suit reads.
This isn't the first time Nielsen has been the subject of scrutiny over its alleged obsolete rating service. Back in September 2021, the Media Rating Council (MRC) suspended Nielsen's accreditation for national TV ratings. The MRC states that a company will endure suspension if it is found that it has "material standards non-compliance or operational issues that are deemed to have exerted an adverse effect on the service."
The suit mentions Nielsen's alleged previous shortcomings in the legal document, saying Nielsen has "admitted" to undercounting out-of-home viewers in its national rating service between September 2020 to December 2021. The complaint claims Nielsen's alleged flawed system led to the industry losing out on approximately 60 billion TV impressions and $700 million in revenue.
No dollar amount has been named, but the suit states the plaintiffs are seeking billions of dollars in damages. Nielsen declined to comment on the lawsuit.
