MacKenzie left with £700k bill as TWG loses Rajar case
LONDON - Kelvin MacKenzie's The Wireless Group has lost its court battle with Rajar over digital measurement, which has been struck out of court leaving the TalkSPORT owners with an estimated £700,000 legal bill.
The legal battle centred on Rajar's choice of digital measurement system for radio audiences. The Wireless Group held that Rajar's current diary-based system puts it at a commercial disadvantage because it does not accurately reflect its listening figures.
MacKenzie said: "Rajar may have won a legal skirmish, but the war goes on until technology-based audience measurement is adopted."
TWG had contended that Rajar abused its market power under the competition laws when it decided against the immediate introduction of audiometers in June 2003.
In the High Court, Mr Justice Lloyd ruled that TWG's description of Rajar's decision "does not match the reality of the case". He described Rajar's decision as a "rational commercial approach" and said that the court must allow undertakings to take business decisions on "normal commercial bases and in a normal way".
The judge concluded: "[It] seems to me that the claimant [TWG] faces two difficulties. First, the allegations it makes about the nature of the defendant's [Rajar's] decision simply do not correspond with the facts... and do not address an essential part of the question which the defendant had to face, namely, if it was to favour an audiometer system, which of two should it choose. Secondly, when the true nature of the decision is considered... I find it impossible to see how that decision could be said to be an abuse of a dominant position, as lacking objective justification."
Sally de la Bedoyere, managing director of Rajar, said that the comments vindicated the radio body.
"We have always strongly refuted TWG's accusation and considered this case to be without foundation, as well as an utter waste of time and resources. Today, Rajar has been proved right. It is good news for the radio industry and Rajar, which has had to endure wholly unwarranted allegations against it over the past few years."
The BBC, which along with the CRCA jointly owns Rajar, welcomed the decision.
Jenny Abramsky, director of radio and music, and Paul Brown, chief executive of CRCA, said in a joint statement: "We are delighted this case has been rejected. Rajar represents, skilfully and honestly, the interests of more than 300 UK radio stations. That their time and resources have been sidetracked by legal challenge in this way has been unfair to other subscribers. The whole industry must now move forward without delay in order to meet the timetable to a new research contract published by Rajar in September 2004."
In response to Rajar's statement, MacKenzie said that the whole industry must now move forward without delay to meet the timetable to a new research contract published by Rajar in September 2004.
However, he is sceptical of Rajar's ability to stick to its own timetable.
"I should point out that there is as much chance of Rajar sticking to its timetable as there is of Bin Laden being found in Deptford," he said.
While down, MacKenzie is not out. He is promising further legal action if Rajar does not bring in electronic measurement by January 2007.
TWG has been pushing Rajar for faster progress in the introduction of an electronic measurement system, using audiometer technology. Rajar has committed to using the diary system until the end of 2005 and is working towards the introduction of an audiometer-based methodology by 2007.
The radio industry body is currently analysing the results of tests on electronic systems conducted in November. It tested the Arbitron Portable People Meter, the Eurisko NOP World Media Monitor and the GfK/Telecontrol MediaWatch.
TWG favours GfK/Telecontrol MediaWatch and it began to publish an alternative set of audience figures based on measurements from GfK's technology in August 2003.
TWG maintained prior to today's court ruling that if damages were claimed from August 2000, when it first requested that Rajar introduce electronic measurement, then it would have amounted to more than £66m together with interest up to judgment, which it had expected to be in March next year.
Despite the defeat MacKenzie will be able to find some comfort in Mr Justice Lloyd's judgment because he acknowledged that the electronic was better than the current diary system.
"It may be fair to say that each of the audiometers is much better than the diary system, but that does not help with the decision which of the audiometers to adopt," Justice Lloyd said.
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