Britain's competition authority is calling for a review of the way television advertising is sold.
Fresh from approving the merger of Carlton Communications and Granada [WAMN: 07-Oct-03] – whose sales houses combined will control over 50% of the TV ad market – the Competition Commission has expressed "disquiet" about how the industry works.
It is calling for an investigation by the Office of Fair Trading or the Independent Television Commission and forthcoming communications super-regulator Ofcom. This probe would ask whether "the nature of the deals struck, the trading mechanism, and the overall market structure substantially lessen competition" in the airtime sales sector.
The Commission is unhappy with the existing, "highly opaque" system, in which negotiations between TV firms and media buyers are often conducted in private and the contract details kept secret. It believes there is "potential for price discrimination … on the part of both the sales houses and media buyers."
Ofcom and the ITC are already reviewing airtime sales rules across the TV industry. The regulators are investigating whether the existing code needs to be altered in the wake of the Carlton/Granada deal. This review could lead to a wider probe by the OFT, though a decision to do so is yet to be taken.
The news comes amid criticism of the Competition Commission from the ad industry, which lobbied against the pooling of Carlton and Granada's sales operations.
The Institute of Practitioners in Advertising declared its "disappointment" at the move, arguing that the merger may force rival broadcasters to combine their sales houses, leaving just two players in the market.
However, ISBA (Incorporated Society of British Advertisers) said it was "extremely keen" to work with regulators to hammer out the restrictions by which the merged Carlton/Granada will be bound.
Data sourced from: MediaGuardian.co.uk; additional content by WARC staff