A federal appeals court has upheld an injunction preventing Nielsen from enforcing a disputed radio ratings policy, handing a significant interim victory to broadcaster Cumulus Media in a closely watched antitrust case centered on competition in audience measurement markets.
The U.S. Court of Appeals for the Second Circuit ruled Monday that Nielsen must continue to refrain from requiring customers seeking its national radio ratings data to also purchase local market ratings products while litigation proceeds. The decision leaves in place a preliminary injunction issued earlier this year by the U.S. District Court for the Southern District of New York.
According to Courthouse News Service reporter Erik Uebelacker, the three-judge panel concluded that the lower court did not abuse its discretion in finding that Cumulus faced irreparable harm and that Nielsen’s conduct could have anticompetitive effects in the market for local radio ratings services.
The dispute centers on allegations by Cumulus that Nielsen, long the dominant provider of radio audience measurement data in the United States, unlawfully tied access to its nationwide ratings product to the purchase of separate local audience data offerings. Cumulus argues that the arrangement limits broadcasters’ ability to choose competing providers for local analytics and forces customers to buy services they do not want.
In its opinion, the appeals court found support for the district court’s conclusion that Nielsen had effectively coerced Cumulus into purchasing local ratings products in certain markets. The panel also agreed that Nielsen had failed to establish a sufficiently persuasive procompetitive justification for the challenged policy, according to Courthouse News Service.
The litigation raises issues commonly associated with tying claims under U.S. antitrust law, in which a company with market power in one product market is accused of conditioning access to that product on the purchase of another. Such practices can violate federal antitrust statutes if they substantially restrict competition or maintain monopoly power.
Court filings indicate that Cumulus sought to continue purchasing Nielsen’s national ratings information while obtaining local audience data from rival providers. The broadcaster alleged that Nielsen’s pricing and contractual changes effectively foreclosed that option.
The district court previously found that Nielsen’s offer of a standalone national product was priced at a level that did not provide customers with a meaningful alternative. In January, Judge Jeannette Vargas granted a preliminary injunction under Section 16 of the Clayton Act, concluding that Cumulus was likely to succeed on aspects of its claims that Nielsen’s policy could constitute unlawful tying and monopolization under Section 2 of the Sherman Act. Court records show the injunction barred Nielsen from enforcing the policy and from charging commercially unreasonable rates for its standalone nationwide ratings product. The order remains in effect during the litigation.
Nielsen has argued that the dispute is fundamentally a contractual disagreement rather than an antitrust violation and has denied causing antitrust injury. The company previously sought to stay the injunction pending appeal, but the district court rejected that request before the matter proceeded to the Second Circuit.
The case arrives amid broader regulatory and judicial attention to market concentration and the use of tying arrangements across industries, including technology, digital platforms and media services. U.S. antitrust enforcers in recent years have increasingly scrutinized conduct by companies that hold substantial positions in specialized data and measurement markets, arguing that access to essential information products can have significant competitive implications.
Audience measurement data plays a central role in the radio advertising business because broadcasters and advertisers rely on ratings information to determine advertising prices and evaluate audience reach. Cumulus, one of the nation’s largest radio operators, owns and operates hundreds of stations across dozens of media markets.
According to Courthouse News Service, Cumulus contends that Nielsen’s policy has affected hundreds of millions of dollars in commerce. The broadcaster is seeking damages as well as a permanent injunction prohibiting Nielsen from implementing the challenged practices.
The dispute also unfolds as Cumulus undergoes financial restructuring. The company disclosed earlier this year that a bankruptcy court approved a reorganization plan designed to reduce its debt burden and transfer control to lenders.
Source: Courthouse News
