A federal judge has thrown out the most sweeping claims of a lawsuit by the owners of South Florida's WSVN-Fox 7 that could have remapped the television industry, ruling that TV ratings giant Nielsen is not an illegal monopoly.
U.S. District Judge Paul C. Huck ruled Thursday that while some of Nielsen's practices might be anti-competitive, WSVN's owner Sunbeam Television failed to prove that the Nielsen Company was blocking any "willing and able competitor'' from the TV-ratings business.
Huck's summary judgment dismissing accusations that Nielsen violated federal and state laws strips Sunbeam's 2009 lawsuit of the potential to trigger revolutionary changes in the television business. The two companies are still submitting arguments on other counts in the lawsuit that accuse Nielsen of breach of contract and deceptive business practices.
Sunbeam officials said they will appeal the dismissal of the anti-trust portion of the lawsuit.
Nielsen's ratings, which measure TV audiences and determine how much advertisers pay for commercials, are the bedrock of the industry, affecting nearly every business decision and most of the creative ones, too. Sunbeam's lawsuit sent shockwaves throughout the industry when it was filed in Miami in April 2009.
The suit was triggered by Nielsen's decision to change the way it counts television audiences. Instead of asking viewers to write down the names of programs they watched in little paper diaries, the company equipped sample homes with so-called people meters: set-top boxes that recorded what channel was being viewed, with each household member clicking buttons to register who was actually watching.
When the people meters were introduced in South Florida in October 2008, they produced wildly different results than the paper diaries had. Cable-network ratings soared and broadcast-channel ratings plummeted. WSVN's numbers dropped by nearly half in some time slots.
Sunbeam's lawsuit called the new ratings results "obviously -- and dramatically -- defective," costing it $1 million a month in advertising revenue. "As a result of its monopoly, Nielsen is able to charge supracompetive prices for poor quality services," the lawsuit said.
But Huck's 23-page ruling said that Sunbeam didn't offer any evidence that there's a better way to compile TV ratings than with people meters -- or, "more importantly, that such ratings would benefit Sunbeam."
And while some Nielsen business practices, including the timing of its contracts with TV stations, might discourage competition, Huck ruled, Sunbeam failed to show that any other company was interested in providing local TV ratings.
"Though there is evidence of exclusionary contracting practices'' by Nielsen, the judge wrote, "Sunbeam has not established the existence of a ‘willing and able' competitor," as required by anti-trust law.