Attorneys General of New York, New Jersey sue Arbitron over PPM issues

From Radio Ink
(October 10, 2008) New York Attorney General Andrew Cuomo has followed up on last week's warning letter to Arbitron by filing suit against Arbitron over the Portable People Meter, in New York County Supreme Court. Among other things, Cuomo is seeking to make Arbitron pay restitution to minority broadcasters for any PPM-related revenue losses.

Cuomo said, "Arbitron's rush to commercialize the PPM system without curing known flaws in the service distorts the marketplace, and threatens to drive minority broadcasters out of business. Arbitron must refrain from using this flawed product in New York until it is truly a reliable and fair service."

Cuomo is alleging that Arbitron misrepresented that the PPM is "valid, fair and representative of the diversity of the New York radio market"; failed to disclose in selling PPM ratings that the service has "serious methodological flaws"; created a false impression that the PPM is generally accredited by the Media Rating Council when the PPM is not accredited in New York; mispresenting that the PPM meets MRC "minimum standards" for commercial use; and misrepresenting that it adheres to the MRC Voluntary Code of Conduct while "failing to adhere to important code preferences."

On the same day New York Attorney General Andrew Cuomo filed suit against Arbitron over the PPM, New Jersey AG Anne Milgram has done the same, alleging that the PPM harms minority consumers and violates New Jersey's consumer fraud, advertising, and anti-discrimination laws. The Philadelphia and New York PPM markets include parts of New Jersey.

Milgram said, "The existence and survival of radio stations is premised on advertising revenue, and advertisers rely heavily on Arbitron's ratings in deciding where to place advertisements. The state's position is that these new, unreliable ratings being generated by Arbitron severely harm those radio stations serving minorities, as well as minority listeners themselves."

The suit, filed in the Law Division of Superior Court in Middlesex County, says Arbitron produced the PPM ratings released October 6 "despite methodological flaws that undercount radio listeners in certain racial and ethnic groups," including black and Hispanic listeners.

Cuomo is also alleging that Arbitron executives brought the PPM to market before it was ready in order to reap the financial benefits, without regard to the PPM's impact on broadcasters or Arbitron's own long-term interests. The AG's office said, "Although MRC and minority broadcasters repeatedly contacted Arbitron to advise it of the flaws in the PPM methodology and their likely effect on minority broadcasters, Arbitron did not suspend the commercialization schedule and failed to acknowledge the flaws, even after assuring the public that it would use best efforts to obtain MRC accreditation."

Arbitron acknowledged the lawsuits filed Friday in New York and New Jersey over the Portable People Meter and said in regard to both suits, "Arbitron denies all such allegations and intends to defend itself and its interests vigorously."

The suit filed by New York Attorney General Andrew Cuomo alleges that the PPM methodology violates the state's consumer protection and civil rights laws, while New Jersey AG Anne Milgram's suit alleges that the PPM methodology violates civil rights and consumer fraud laws.

Arbitron Chairman/President/CEO Steve Morris said, "We are asking the United States District Court to uphold our First Amendment rights and to prevent the New Jersey Attorney General from attempting to restrain publication of our Portable People Meter listening estimates."


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