24th May 2005 11:00
Office of Fair Trading24 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 broadcastersto amend certain arrangements regarding the sale of advertising airtime. This isthe first time the OFT has accepted binding commitments following a CompetitionAct investigation. TV Eye is owned by ITV, GMTV, Channel 4 and Channel 5 and providesservices to them and a number of smaller broadcasters. The OFT had concerns thatsome of the arrangements put in place by TV Eye enabled those broadcasterscollectively to agree some of the terms and conditions under which they selladvertising airtime to media agencies, thereby placing media agencies in anunduly weak bargaining position. The OFT launched an investigation into TV Eyefollowing a complaint by the Institute of Practitioners in Advertising (IPA). Following discussions with TV Eye and its member broadcasters the OFTprovisionally concluded that the commitments offered addressed its competitionconcerns and should therefore be accepted. A formal consultation process, whichsought the views of interested parties as well as the European Commission, hasconfirmed this view. The OFT has therefore decided to accept the commitments andto close its file on the case (see note 3). Sir John Vickers, OFT Chairman, said: 'In some circumstances the acceptance of formal commitments is thebest way to resolve a competition case. The Competition Act was amended lastyear to make this possible and the TV Eye case is the first of its kind in theUK.' 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'scompetition concerns, requires the OFT to close its investigation into theconduct addressed by the commitments. A commitments decision does not includeany statement as to the legality or otherwise of the parties' actions eitherprior to acceptance of the commitments or once the commitments are in place.Accordingly, the offer of commitments does not necessarily imply acceptance ofan infringement on behalf of the parties. 4. The OFT published its intention to accept commitments from TV Eye on 21January 2005. See PN 7/05 for further details. The consultation ran from 2 to 31March 2005 (see http://www.oft.gov.uk/NR/rdonlyres/63C79FEC-652D-4570-AEB3-FB083B301F01/0/oft777.pdf). The OFT consulted with theEuropean Commission within the framework created by EC Modernisation. TheCommission's comments, which TV Eye and its members accepted, helped to clarifyand strengthen the wording of the commitments on certain points. 5. In light of the positive consultation, the OFT requested TV Eye and itsmember broadcasters formally to execute and submit the commitments. The OFT'sdecision accepting the commitments, which includes the full text of thecommitments, can be downloaded from the OFT website www.oft.gov.uk. 6. The OFT is currently considering the acceptance of commitments in othercases, 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 ExchangeRelated Shares:
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