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Tuesday 24 May, 2005

Office of Fair Trade

Statement re TV Eye

Office of Fair Trading
24 May 2005



93/05                                                                24 May 2005


                        OFT ACCEPTS COMMITMENTS FROM TV EYE

                  First commitments case under UK competition law



The OFT has accepted binding commitments from TV Eye and its member broadcasters
to amend certain arrangements regarding the sale of advertising airtime. This is
the first time the OFT has accepted binding commitments following a Competition
Act investigation.

          TV Eye is owned by ITV, GMTV, Channel 4 and Channel 5 and provides
services to them and a number of smaller broadcasters. The OFT had concerns that
some of the arrangements put in place by TV Eye enabled those broadcasters
collectively to agree some of the terms and conditions under which they sell
advertising airtime to media agencies, thereby placing media agencies in an
unduly weak bargaining position. The OFT launched an investigation into TV Eye
following a complaint by the Institute of Practitioners in Advertising (IPA).

          Following discussions with TV Eye and its member broadcasters the OFT
provisionally concluded that the commitments offered addressed its competition
concerns and should therefore be accepted. A formal consultation process, which
sought the views of interested parties as well as the European Commission, has
confirmed this view. The OFT has therefore decided to accept the commitments and
to close its file on the case (see note 3).

          Sir John Vickers, OFT Chairman, said:

          'In some circumstances the acceptance of formal commitments is the
best way to resolve a competition case. The Competition Act was amended last
year to make this possible and the TV Eye case is the first of its kind in the
UK.'



NOTES

1. TV Eye was formed in 2003 to take over certain functions previously
   undertaken by ITV Network Limited.



2. The Competition Act 1998 gives the OFT powers to investigate suspected
   infringements of the Act's prohibitions (which mirror the EC competition 
   rules:

i) the Chapter I prohibition prohibits agreements between undertakings,
   decisions by associations of undertakings or concerted practices which have 
   the object or effect of preventing, restricting or distorting competition in 
   the UK (or any part of it) and which may affect trade within the UK (or any 
   part of it)

ii)the Chapter II prohibition prohibits conduct by one or more undertakings
   which amounts to the abuse of a dominant position in a market which may 
   affect trade within the UK (or any part of it).


3.  The Competition Act 1998 has been amended, with effect from 1 May 2004,
to allow the OFT to accept binding commitments from those under investigation.
The formal acceptance of such commitments, which must address the OFT's
competition concerns, requires the OFT to close its investigation into the
conduct addressed by the commitments. A commitments decision does not include
any statement as to the legality or otherwise of the parties' actions either
prior to acceptance of the commitments or once the commitments are in place.
Accordingly, the offer of commitments does not necessarily imply acceptance of
an infringement on behalf of the parties.



4.  The OFT published its intention to accept commitments from TV Eye on 21
January 2005. See PN 7/05 for further details. The consultation ran from 2 to 31
March 2005 (see http://www.oft.gov.uk/NR/rdonlyres/
63C79FEC-652D-4570-AEB3-FB083B301F01/0/oft777.pdf). The OFT consulted with the
European Commission within the framework created by EC Modernisation. The
Commission's comments, which TV Eye and its members accepted, helped to clarify
and strengthen the wording of the commitments on certain points.



5.  In light of the positive consultation, the OFT requested TV Eye and its
member broadcasters formally to execute and submit the commitments. The OFT's
decision accepting the commitments, which includes the full text of the
commitments, can be downloaded from the OFT website www.oft.gov.uk.



6.   The OFT is currently considering the acceptance of commitments in other
cases, including BHB (see PN 94/04) and London Newspaper Distribution (see PN 
66/05).


                      This information is provided by RNS
            The company news service from the London Stock Exchange