Federal Court of Appeals sides with Nielsen on Antitrust suit

The US Court of Appeals for the Eleventh Circuit affirmed the dismissal of Sunbeam Television’s antitrust suit against Nielsen on 3/4. The District Court had found that Sunbeam (WSVN-TV Miami—Fox) failed to show that Nielsen blocked any competitor from establishing a syndicated television audience measurement service in the Miami market and lacked antitrust standing to assert its Sherman Act and Florida Antitrust Act claims against Nielsen. The court also found that Nielsen was justified in rolling out its Local People Meter service in Miami, replacing the previous Meter-Diary system. The 11th Circuit agreed.

Sunbeam originally complained that Nielsen’s latest method for surveying households, the Local People Meter (LPM) method, cut WSVN’s ratings by 50% immediately upon implementation. Sunbeam complained that the LPM method is flawed and inferior to Nielson’s older meter-diary method of counting eyeballs on a given television program and that the LPM method dramatically understates WSVN’s actual viewership.

Sunbeam contended that it has been injured not just by introduction of the LPM method of ratings but also by other anticompetitive conduct undertaken by Nielsen to maintain its monopoly status in television audience measurement. As a result, Sunbeam insisted, it paid supracompetitive prices for inferior audience measuring.

Sunbeam alleged that there were three companies willing and able to supply superior audience measurement but for Nielsen’s exclusionary conduct: Arbitron; ADcom Information Services Company; and erinMedia, LLC. Each of these companies is engaged in a different type of audience measuring, and Sunbeam argued that they could jump to providing services measuring local television audiences.

The district court, agreeing with Nielsen that Sunbeam lacks standing to pursue its monopolization claim, granted Nielsen’s motion for partial summary judgment. The court concluded that Sunbeam failed to raise an issue of material fact as to whether any of the potential competitors alleged in Sunbeam’s complaint is willing and able to provide local television ratings service that could have substituted for Nielsen’s service in Miami.

Judge James C. Hill, joined by Chief Judge Joel F. Dubina and Judge William H. Pryor, Jr., upheld the district court’s determination that Sunbeam lacks antitrust standing to pursue its claims. The Eleventh Circuit, Judge Hill noted, employs a two-prong test for antitrust standing: a plaintiff must not only establish that it has suffered an antitrust injury but also must demonstrate that it is an efficient enforcer of antitrust law. The court, noting that the district court jumped right to the second prong, examined whether Sunbeam is an “efficient enforcer” under these circumstances and found that it is not, reported Bloomberg BNA.