Advertisers reject compromise plan for ITV merger

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The Independent Online

Advertisers will this week tell the Competition Commission that they are still opposed to the proposed merger of ITV giants Carlton and Granada, despite a last-minute compromise plan.

Large advertisers like consumer products group Procter & Gamble and COI Com- munications, the Government agency, fear they would have to pay more to advertise on the network should the two companies form a union that would control more than 50 per cent of the TV advertising market.

Last week, the Competition Commission proposed two compromises: either the merged company should auction part of its advertising airtime, or ITV should be forced to stick with its current advertising deals for three years, preventing any price rises. The Commission extended its inquiry for a fortnight to allow further consultation.

However, the Institute of Practitioners in Advertising (IPA), which represents media buyers, will tomorrow tell the Commission that the new proposals won't work. On Tuesday, the Incorporated Society of British Advertisers will deliver a similar message.

"We don't feel either of the remedies really address the key debate of how ITV can be allowed to have sales concentration of more than 50 per cent," said Bernard Balderston, head of UK media at Procter & Gamble.

"We still believe behavioural remedies won't work," said Jim Marshall, chairman of the IPA's policy forum and chairman of media buying firm MediaVest.

Remedies such as selling off the sales houses have already been ruled out by Carlton and Granada.

"There are still fundamental concerns over the issue of ITV commanding an anti-competitive level of power in the market," said Mr Marshall.

Both the IPA and Procter & Gamble fear that forcing ITV to auction off part of the airtime could lead to opaque brokering behind the scenes, which could be anti-competitive, and are still not happy that a merged ITV would control the remaining slots.

Advertisers believe the proposal to hold ITV to the same deals for three years may be impractical as ITV, the industry and the market could change during the period. In addition, the prospect of another review in three years is daunting. "I don't think anyone would go through this all over again," said Mr Marshall.