Competition Commission rules in favour of CRR system
The Competition Commission has ruled that the CRR rules which govern ITV’s ad sales will stay in place for now.
The Commission stood by its provisional ruling to retain the contracts rights renewal system, which was put in place to restrict ITV from abusing its power in the commercial television market.
However, the Commission said the entire UK TV ad sales market needs a review and confirmed it has “no wish to see CRR in place for ever”, suggesting the system could be dropped following a review of the market.
ITV has consistently argued against the CRR restrictions, which were established in 2003 following the Carlton and Granada merger.
The broadcaster claims that CRR is an out of date solution, which distorts the market and the relationship between advertisers and free-to-air broadcasters, and should be removed.
However, it’s proposed remedy, which would effectively introduce greater flexibility into negotiations whilst retaining some protection for advertisers, as a middle ground to appease the CC after it unveiled its provisional findings from the CRR review last September, has failed to alter the Commission’s original decision.
Diana Guy, chairman of the CRR review group at the Competition Commission, said today: “ITV1 remains a ‘must have’ for certain advertisers and certain types of campaign. Despite all the changes in this market, no other channel or medium can come close to matching the size of audience that ITV regularly provides. So the essential reason for the CRR undertakings remains: to protect advertisers and other commercial broadcasters.”
The Commission said there was “virtual unanimity” among advertisers, media agencies, commercial broadcasters and trade bodies that CRR should be kept “in some form”.
“We believe that ITV has overstated the cost and distortions imposed by CRR,” Guy added. “When it succeeds in making popular programmes which attract large audiences, CRR does not prevent ITV from reaping the rewards”.
In response, ITV’s new chief executive Adam Crozier argued that the ruling was “out of touch and damaging for the interests of a creative Britain”.
Crozier confirmed that ITV would continue to fight for an “urgent modernisation” of competition law.
The Commission also concluded that the CRR system should be broadened to include both ITV+1 and the broadcaster’s HD channels, which it believes will benefit ITV.
“Although we rejected ITV’s alternative remedy proposals as ineffective to prevent ITV from worsening, we have no wish to see CRR in place for ever,” Guy said. “Many participants have told us that the system of selling television airtime is far from perfect and we repeat our concerns, also raised in 2003, about the potential anti-competitive effects of ‘share of broadcasting’ and agency ‘umbrella’ deals between broadcasters and media agencies. We continue to believe it for there to be a wider review of the whole system for selling TV advertising.”