OFT ACCEPTS COMMITMENTS FROM TV EYE

OFT ACCEPTS COMMITMENTS FROM TV EYE

London, 24 May/GNN/ --

OFFICE OF FAIR TRADING News Release (93/05) issued by the Government News Network on 24 May 2005 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).

MEDIA enquiries: 020 7211+ Rachel Clark 8899 Julia Smith 8898 Roger Hislop 8133 Kate Wilcox 8901 Mark Kram 8900 Mike Ricketts 8904 press@oft.gov.uk Out of hours: mobile: 07774 134814 messages: 020 7211 8961 Copies of press notices: Ext. 8993 http://www.oft.gov.uk

PUBLIC enquiries: 0845 7224499 enquiries@oft.gov.uk OFT reports and consumer information leaflets are available free from: OFT, PO Box 366, Hayes UB3 1XB 0800 389 3158 oft@eclogistics.co.uk

Source: OFFICE OF FAIR TRADING

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