Getty pulls out of deal to buy Rex

The press photography agency Getty Images has dropped plans to buy its rival Rex Features after the Office of Fair Trading (OFT) referred the proposal to competition commissioners.

The OFT expressed concern that Getty's absorption of Rex could give the newly enlarged company enough power to raise prices for publications buying its photographic images. The OFT said it had "heard a significant number of concerns from third parties" supporting the view that the two companies are close competitors. The evidence was inconclusive, but there remains a "realistic prospect" of a "substantial" impact on competition, the OFT said.

Getty Images disputed the suggestion but nonetheless pulled out of the deal. "Given the distraction that this next phase could potentially bring to both Getty Images and Rex Features and the parties' desire to focus their resources on the production and delivery of high quality services, we have decided not to pursue this acquisition any further," a spokeswoman said.