OFT ACCEPTS COMMITMENTS FROM TV EYE

OFT ACCEPTS COMMITMENTS FROM TV EYE

London, 24 May/GNN/ --

OFFICE OF FAIR TRADING News Release (93/05) issued by the Government News
Network on 24 May 2005
First commitments case under UK competition law

The OFT has accepted binding commitments from TV Eye and its member
broadcasters to amend certain arrangements regarding the sale of advertising
airtime. This is the first time the OFT has accepted binding commitments
following a Competition Act investigation.

TV Eye is owned by ITV, GMTV, Channel 4 and Channel 5 and provides services
to them and a number of smaller broadcasters. The OFT had concerns that
some of the arrangements put in place by TV Eye enabled those broadcasters
collectively to agree some of the terms and conditions under which they sell
advertising airtime to media agencies, thereby placing media agencies in an
unduly weak bargaining position. The OFT launched an investigation into TV Eye
following a complaint by the Institute of Practitioners in Advertising (IPA).

Following discussions with TV Eye and its member broadcasters the OFT
provisionally concluded that the commitments offered addressed its competition
concerns and should therefore be accepted. A formal consultation process, which
sought the views of interested parties as well as the European Commission, has
confirmed this view. The OFT has therefore decided to accept the commitments
and to close its file on the case (see note 3).

Sir John Vickers, OFT Chairman, said:

'In some circumstances the acceptance of formal commitments is the best way
to resolve a competition case. The Competition Act was amended last year to
make this possible and the TV Eye case is the first of its kind in the UK.'

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's competition concerns, requires the OFT to close its investigation
into the conduct addressed by the commitments. A commitments decision does
not include any statement as to the legality or otherwise of the parties'
actions either prior to acceptance of the commitments or once the commitments
are in place. Accordingly, the offer of commitments does not necessarily
imply acceptance of an infringement on behalf of the parties.

4. The OFT published its intention to accept commitments
from TV Eye on 21 January 2005. See PN 7/05 for further
details. The consultation ran from 2 to 31 March 2005 (see
http://www.oft.gov.uk/NR/rdonlyres/63C79FEC-652D-4570-AEB3-FB083B301F01/0/oft777.pdf).
The OFT consulted with the European Commission within the framework created
by EC Modernisation. The Commission's comments, which TV Eye and its members
accepted, helped to clarify and strengthen the wording of the commitments
on certain points.

5. In light of the positive consultation, the OFT requested TV Eye and its
member broadcasters formally to execute and submit the commitments. The
OFT's decision accepting the commitments, which includes the full text of
the commitments, can be downloaded from the OFT website www.oft.gov.uk.

6. The OFT is currently considering the acceptance of commitments in other
cases, including BHB (see PN 94/04) and London Newspaper Distribution (see
PN 66/05).

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Source: OFFICE OF FAIR TRADING

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