NY State sues Arbitron over radio ratings system

NEW YORK (Reuters) - New York State Attorney General Andrew Cuomo on Friday sued Arbitron Inc, the largest ratings company for radio in the United States, accusing it of false advertising and deceptive business practices.

The lawsuit said the company's new electronic radio ratings system in New York, called the Portable People Meter, may reduce advertising revenues for black and Hispanic broadcasters. The system was put to commercial use for the first time on Monday.

"The lawsuit accuses Arbitron of deceptively claiming that its Portable People Meter system is valid, fair, and representative of diverse radio markets," Cuomo's office said in a statement.

A spokesman for Arbitron declined comment because he had not seen the lawsuit, which was filed in New York State Supreme Court.

Cuomo's office said the lawsuit "also charges Arbitron with failing to disclose important flaws in the PPM methodology to broadcasters, advertisers, shareholders and the public, including serious shortcomings in the accuracy of the new system and its inadequate representation of African-Americans and Latinos."

The electronic system is different from the paper and pencil diaries that Arbitron has distributed for 40 years so that listeners can keep a written record of radio broadcasts they hear over a one-week period. Listeners mail the diaries back to the company for analysis.

Arbitron sued the attorney general's office on Monday in U.S. District Court in Manhattan seeking to prevent it from stopping Arbitron from publishing its audience estimates based on the PPM.

(Reporting by Grant McCool; Editing by Derek Caney)