Rivals press for inquiry over Capital-GWR deal

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The Independent Online

Advertisers and radio groups will this week call for a Competition Commission inquiry into the proposed merger between Capital Radio and GWR. This could delay the deal by up to six months.

Powerful industry groups, including ISBA, the advertisers' association, are worried that the new group, with David Mansfield as chief executive, would dominate the radio industry and raise advertising rates. The combined group would command about 40 per cent of national radio advertising revenue.

Some of the conditions, outlined in submissions made to the Office of Fair Trading ahead of Tuesday's deadline, include restrictions on any future expansion of the merged group.

According to industry sources, Emap is one of the rival radio groups asking the regulator to prevent GWR/Capital from acquiring any new radio licences for the next five years.

Media regulator Ofcom has already announced 40 new analogue licences which companies will be able to bid for in the next couple of years. Some companies also want restrictions on the combined group expanding its digital radio interests.

Other conditions being requested by some respondents include sales of some of GWR/Capital's licences in areas where they overlap and where market dominance would be particularly acute. These include the East Midlands.

If Ofcom and OFT are unable to impose these conditions, some advertisers and radio groups are calling for the proposed merger to be referred to the Competition Commission for a full review.

One advertising source said: "If no restrictions are placed on the merger, what kind of signal does that send to the market?"