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First Commitments Case under UK Competition Law - OFT Accepts Commitments from TV Eye
The Institute of Practitioners in Advertising (the "IPA") which is the trade body and professional institute for media agencies, represented by partner Stephen Kon and senior assistant Sarah Turnbull of SJ Berwin, advising Marina Palomba, Legal Director of the IPA, complained to the OFT that broadcasters through TV Eye were collectively agreeing to certain terms and conditions for the sale of advertising time, in particular the terms relating to credit and recognition criteria.
TV Eye is owned by ITV, GMTV, Channel 4 and Channel 5 and it provides services to these broadcasters and a number of smaller broadcasters. The operation of TV Eye enabled member broadcasters to coordinate certain trading terms and conditions for selling advertising airtime to media agencies, in particular in relation to credit listing and the form of security for credit. The OFT raised concerns that this restricted competition in the market. The IPA had complained, in particular, that TV Eye's operation resulted in the broadcasters collectively imposing an unfair financial burden on many IPA members.
After launching an investigation, and following discussions with TV Eye and its member broadcasters, TV Eye proposed to meet these concerns by giving the OFT formal commitments, including a commitment that TV Eye will leave it to broadcasters to choose what type of security they wish to use. 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 close its file. This is the first case of its kind in the UK, and was made possible by the changes made to the Competition Act last year.
The conclusion of this case, and the acceptance of binding commitments by the OFT from TV Eye was welcomed by the IPA.
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Wednesday 25th May 2005
The Office of Fair Trading ("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.The Institute of Practitioners in Advertising (the "IPA") which is the trade body and professional institute for media agencies, represented by partner Stephen Kon and senior assistant Sarah Turnbull of SJ Berwin, advising Marina Palomba, Legal Director of the IPA, complained to the OFT that broadcasters through TV Eye were collectively agreeing to certain terms and conditions for the sale of advertising time, in particular the terms relating to credit and recognition criteria.
TV Eye is owned by ITV, GMTV, Channel 4 and Channel 5 and it provides services to these broadcasters and a number of smaller broadcasters. The operation of TV Eye enabled member broadcasters to coordinate certain trading terms and conditions for selling advertising airtime to media agencies, in particular in relation to credit listing and the form of security for credit. The OFT raised concerns that this restricted competition in the market. The IPA had complained, in particular, that TV Eye's operation resulted in the broadcasters collectively imposing an unfair financial burden on many IPA members.
After launching an investigation, and following discussions with TV Eye and its member broadcasters, TV Eye proposed to meet these concerns by giving the OFT formal commitments, including a commitment that TV Eye will leave it to broadcasters to choose what type of security they wish to use. 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 close its file. This is the first case of its kind in the UK, and was made possible by the changes made to the Competition Act last year.
The conclusion of this case, and the acceptance of binding commitments by the OFT from TV Eye was welcomed by the IPA.
Notes:
- SJ Berwin is a full-service international legal practice with more than 450 lawyers across its offices in London, Brussels, Frankfurt, Berlin, Munich, Madrid and Paris.
- The EU & Competition Department of European law firm, SJ Berwin is one of the leading UK and EU competition practices in Europe with strong working relationships with the European Commission and in the UK with the Office of Fair Trading ("OFT") and the Competition Commission. It has been a core practice area of the firm since its establishment in 1982.
- The EU & Competition department of SJ Berwin advises on mergers and JVs; state aid, cartel and monopoly enquiries; UK/EC complaints and litigation; notifications to competition authorities; regulatory work; IP and competition interface issues; advisory and compliance work; trade and customs; lobbying and Arbitrage.
- Clients include: Associated British Foods, AES, AKZO Nobel, Alcan, Apax Partners, Blockbuster, British Land, Carlton TV, Channel 4, Coca Cola Enterprises, CSFB, Diageo, Dixons, Gullane, Guardian IT, Hilton Group, JVC, Mediaset, Metronet, Mmo2, Morgan Stanley Dean Witter, M&S, Pearson TV, Proctor & Gamble; Reckitt Benckiser, RBS/Natwest, Swedish Match, UCI/UGC Cinemas, Universal Pictures and William Hill.
- The department consistently features amongst the leaders in this field of expertise in major legal directories - Legal 500 ranks the department in the top tier in the UK. It is also acknowledged as an expert in Germany, Brussels and Spain and is only one of two Law firms ever to have been twice named 'Competition Team of the Year' by Legal Business magazine.
- The team comprises 12 partners and over 25 other lawyers in London, Brussels, Munich, Madrid and Paris, with London and Brussels operating symbiotically. This pan-European team is headed up by Stephen Kon, who has over twenty years experience, specialising in advising on all aspects of EU law (particularly EU and UK Competition law) and appears regularly before the European Commission.
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