The Office of Fair Trading has allowed advertisers to join its negotiations with Carlton and Granada over the conditions that will prevent the merged ITV from monopolising the market for airtime sales.
The OFT had originally planned to confine negotiations over the suggested behavioural remedies to the merging parties and the advertising industry’s representative bodies. However, the discussions have now been widened to allow agencies and media owners to raise their concerns directly, before the merger can proceed.
ISBA has welcomed the decision as ‘encouraging’ and claims it provides further reassurance that the Government is genuinely focussed on ensuring that a single ITV, controlling more than 50% of the television advertising market, will not use its dominance to push up prices.
The most controversial of the Competition Commission’s recommended conditions is the contract rights renewal remedy, which allows advertisers to roll over the discounts on their current ITV contracts for the next three years.
However, it is understood that some media agencies are unhappy with the terms of their existing 2003 contracts and are unwilling to have them set as the base year for the contract rights renewal remedy (see Advertisers Give Mixed Reaction To ITV Merger).
Advertisers have been given until 3 November to respond to the OFT, which will then have just four days to incorporate their views into the remedies. Trade and Industry Secretary, Patricia Hewitt, has set a deadline of 7 November for a package of behavioural conditions to be implemented.
Recent research commissioned by the Financial Times suggests that the majority of advertisers and media buyers fear that the creation of a single ITV sales house will drive up the cost of airtime (see Advertisers Fear ITV Sales House Will Push Up Airtime Costs).
