Radio broadcaster Cumulus Media has filed a federal antitrust lawsuit against measurement firm Nielsen, accusing the ratings giant of abusing its dominance in the radio audience evaluation market to suppress competition and force broadcasters to pay inflated prices for data.
The complaint, filed this week in the U.S. District Court for the Southern District of New York, alleges that Nielsen’s business practices violate federal and state antitrust laws by conditioning access to national radio ratings on the purchase of expensive, and often unnecessary, local market data.
Cumulus is one of the largest commercial radio broadcasters in the country, with nearly 400 local radio stations in more than 80 regional markets. It also operates Westwood One, a radio syndication service that offers live national talk show programs and sports from the National Football League (NFL) and other athletic organizations.
Cumulus depends on national ratings data to help effectuate advertising sales for Westwood One, and it receives that data from Nielsen. But Cumulus says Nielsen also forces it to pay for local ratings data in all 80 markets where it operates at least one radio station — even if it doesn’t want or need that information.
That practice, Cumulus claims, amounts to an illegal tying arrangement that harms competition, stifles innovation and inflates costs for broadcasters and advertisers.
“Cumulus is suing over anticompetitive conduct that we believe is unlawful and damaging,” the company said in a statement. It added that Nielsen’s actions have affected hundreds of millions of dollars in commerce across the radio industry.
A spokesperson for Nielsen said the company was “aware of Cumulus’s filing and believe it is entirely without merit.”
“We will respond accordingly,” the spokesperson said, without offering additional details.
In its complaint, Cumulus accused Nielsen of leveraging its market dominance to “degrade product quality, raise prices without justification and block competitors from gaining footholds” in the ratings business. The lawsuit argues that these tactics have entrenched Nielsen’s monopoly power over both national and local radio audience measurement.
Cumulus warned that if Nielsen’s conduct continues unchecked, advertisers and radio networks could face fewer choices, higher costs and diminished innovation in a critical area of media measurement. Audience ratings are a key factor in how radio stations and syndicators set advertising rates and prove the value of their reach to clients.
Cumulus is seeking unspecified monetary damages and a permanent injunction to bar Nielsen from continuing what it describes as unfair business practices.
Radio measurement data was previously handled by Arbitron, which was acquired by Nielsen and rebranded as “Nielsen Audio” in 2012.
