Ofcom calls for end to ITV ad 'straitjacket'
Friday 02 April 2010
Ofcom, the communications watchdog, has called for the controversial rules governing ITV's advertising to be torn up following a rise of competition in the industry.
The Contract Rights Renewal (CRR) remedy was introduced by the Competition Commission to protect advertisers in the wake of the merger between Carlton and Granada to form ITV in 2003.
Ofcom sent a submission to the Commission's recent review over the ongoing need for CRR, which limits the money ITV can receive if its audience falls, saying there was a "strong case for relaxation".
However a spokesman added: "Whilst we have acknowledged there may now be a case for relaxation of it, we acknowledge that the safeguards to ensure effective competition may still be necessary."
The Commission ruled last year that CRR should remain in place as ITV remained "crucial" for advertising looking to reach a mass market. Deputy chairman Diana Guy said the changes in the market had not increased the advertising agencies' bargaining strength.
The reason Ofcom believes CRR should be relaxed was its belief "that competition has increased since 2003". The news emerged following a Freedom of Information request.
Former executive chairman Michael Grade railed against the measure calling it a regulatory "straitjacket" in 2007.
Earlier this week Ofcom, Ofcom launched a consultation into the TV Airtime Sales Rules, a potential boost to ITV, Channel 4, and Five. It examining whether to scrap the "must sell" rule that ensured the broadcasters didn't limit advertising and drive up the price.
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