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The Office of Fair Trading is to consult on its preliminary view that the controversial Contract Rights Renewal mechanism, which reduces the amount ITV1 can charge advertisers when its audience share falls, be eased.
CRR was implemented as a condition of the merger between Carlton and Granada that created the unified ITV company in 2004, as a method of ensuring that ITV1 would not be able to unfairly dominate the television advertising market.
By 2007, with the UK's adoption of multichannel far ahead of 2004 levels, ITV was clamouring for the CRR mechanism to be reviewed on the basis that it was "damaging... the overall UK television advertising market" and preventing ITV1 "from receiving fair value for the mass audiences it delivers". It was not until last January, however, that the OFT and Ofcom commenced the review.
"Since the remedy was introduced in 2003, ITV's position has changed and so has the wider market," said John Fingleton, chief executive of the OFT. "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."
