OFT Recommends Relaxation Of CRR

The Office of Fair Trading has reached a preliminary view to recommend to the Competition Commission that it relaxes ITV1's Contract Rights Renewal (CRR) Undertakings.
The CRR was introduced in 2003, following the merger of Carlton and Granada, creating the unified ITV company to ensure that it could not unfairly dominate the television advertising market.
The consultation document, which was published in January, follows the OFT's in-depth review into CRR, conducted with the assistance of Ofcom.
The OFT highlighted that, since CRR was introduced in 2003, ITV1's market position has declined, but the channel remained almost the only provider of very large commercial audiences, which, the OFT said, were "of particular value to come advertisers".
The OFT provisionally concluded that the detrimental effects of the merger on the advertising market appeared to have "reduced, but may not have been eroded completely".
The OFT's consultation document explore a range of possible outcomes from, at one end of the scale, the removal of CRR in its entirety to retaining CRR largely as it is today, and various easements and modifications in between the two extremes.
On the basis of the evidence collected so far, the OFT's preliminary assessment is that:

• It may be appropriate to ease CRR if there is an effective remedy which addresses any remaining detriments arising from the merger between Carlton and Granada
• One such easement could be to remove the requirement that ITV1 rolls over contracts, while retaining effective safeguards to prevent discrimination against those advertisers which still rely heavily on ITV1

Following the consultation the OFT may remit the matter to the Competition Commission, which makes the final decision on whether change to CRR is appropriate or not and, if it is, what form it should take.
John Fingleton, OFT Chief Executive, said: "Since the remedy was introduced in 2003, ITV's position has changed and so has the wider market. This means it is now the right time to ask whether the remedy remains proportionate or could be eased or removed.
"Our provisional view is that we should recommend to the Competition Commission relaxation of the CRR Undertakings, whilst retaining safeguards for advertisers and media buyers. However, we are keen to hear any new evidence or data during consultation before formally advising the Commission."
Interested parties can submit their views or evidence by February 27, 2009 to: [email protected].
(KMcA/BMcC)