OFT backs ITV over higher ad rates

The Office of Fair Trading has recommended a relaxation of the contracts rights renewal (CRR) mechanism, which could pave the way for ITV1 charging more for its advertising. The mechanism was put in place to protect advertisers following the merger of Carlton and Granada in 2003.

The OFT has published a consultation document today (January 15) following a review into CRR, conducted with media regulator Ofcom.

It says that since CRR was introduced in 2003, ITV1’s market position has declined but the channel remains “almost the only provider of very large commercial audiences, which are of particular value to some advertisers”.

The OFT provisionally concludes that the detrimental effects of the merger on the advertising market appear to have reduced but may not have been eroded completely.

It adds that it considers “easing” CRR if there is an “effective remedy” addressing any remaining issues arising from the merger between Carlton and Granada. Its suggestions include removing the requirement that ITV1 rolls over contracts, with safeguards in place.

Following the consultation, the OFT may send the matter to the Competition Commission.

ITV says that it “warmly welcomes” the OFT’s recommendation. In a statement, it says: “We will now be studying the detail of the recommendations and will work constructively with the OFT during the public consultation as it formulates its final recommendations to the Competition Commission.”

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