• by Steve McClellan  @mp_mcclellan, August 22, 2012

Last month, New Delhi Television sued WPP and Nielsen in a New York Court, alleging that the duo’s joint venture ratings system in India, known as TAM, was underfunded, corrupt, spewing out false data and costing the Indian TV company hundreds of millions of dollars in lost revenue. It asked for $1 billion-plus in damages.

Now WPP has fired back, challenging NDTV’s right to sue in a New York court, and calling the suit “theoretical,” because the holding company and other WPP subsidiaries named in the suit, including Kantar Media, have yet to be served with legal papers notifying it that it’s being sued. The ad holding company also said that it was preparing a motion to have the case thrown out and says that it is giving “active consideration” to a counter lawsuit against NDTV for defamation.

In the original lawsuit, filed July 26 in New York State Supreme Court, NDTV alleged that Nielsen and Kantar underfunded the TAM service to such an egregious degree that competitors -- some owned or partially owned by unnamed Indian politicians – took steps to manipulate the ratings data, often with bribes to household members where TAM ratings meters are located. According to the suit, some households, for example, would tune sets linked to meters to channels other than NDTV and then actually watch TV on sets not connected to the meters.

"The lack of funding by Nielsen and Kantar is the underlying cause that has led to the corruption of TAM data," the suit alleges.

WPP denied the charge in a lengthy statement issued early Wednesday.

“The legal issues aside, TAM India is proud of the service it has been delivering to the market for 14 years, and the way in which investment in technology has been applied to the service,” WPP stated. “TAM is committed to working with the industry to continuously improve the use of technology, coverage and transparency. “

In its suit, NDTV stated that WPP CEO Sir Martin Sorrell was briefed on numerous problems with the ratings system at a meeting in New Delhi last fall. The suit alleges that Sorrell made promises to look into the problems, but also suggested that he didn't follow up, given the fact that TAM kept issuing what the suit alleges were reports with inaccurate and falsified data.

In its statement today, WPP countered that “TAM has taken and continues to take stringent measures to protect the panel against repeated attempts at tampering by currently unknown parties and has recently agreed to a series of additional steps with the industry to remove any question marks about the quality and reliability of the TAM data.”

When the suit was first filed, WPP issued a terse one-sentence response indicating that its lawyers were looking into the matter, but the company felt there was no merit to the charges. The company said it decided to elaborate today, given the press coverage of the suit.