ITV Regulatory News (ITV)

19 Jan 2010 08:53



19 January 2010

ITV Statement on Competition Commission's provisional decision on CRR remedy variations

There is an overwhelming case for the abolition of CRR as a disproportionate remedy, justified by the clear economic evidence of changes in the television advertising market since 2003. ITV believes CRR distorts the market and the fundamental relationship between advertisers and free-to-air broadcasters. Moreover it is highly detrimental to continued investment in original programme production and to the health of the UK creative industries. This decision confirms the urgent need for a thorough and comprehensive review of the cumulative impact of regulation of the independent broadcasting sector. 

 This latest decision is based on the same misconception set out in the Competition Commission's previous Provisional Decision last September, namely that the "competitive environment is still very similar to that identified in the CC's 2003 report , " a view shared by very few people familiar with today's media landscape and a conclusion that is contradicted by all available evidence. Only yesterday industry regulator, Ofcom, said in a statement regarding UK television advertising rules "in the last few years the TV sector has moved on with substantial increases in the take-up of digital services and in the number of available channels, and consolidation in the advertising buying sector". 

The changes described by Ofcom above and the arrival of unregulated global competitors such as Google have transformed the market in which ITV operates beyond recognition and hugely increased competitive intensity since 2003. CRR is now an outdated remedy and should be removed in its entirety. Because the Competition Commission has failed to appreciate the seismic changes in the market over the last seven years it presumes that advertisers require the same level of protection and certainty that they enjoyed in 2003. This is clearly at odds with the overwhelming scale of change in the marketplace.

In its provisional decision, published on 15 September 2009, the Competition Commission set out a number of "possible variations to the undertakings". In response to this ITV put forward a proposal to replace CRR with a new set of rules for advertisers (the Rules for the Protection of Advertisers - RPA), which would have provided more than sufficient protection and certainty. 

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