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Box on, ITV: OFCOM knocks out TV advertising industry review and regulatory change

16 December 2011

In contrast to this week's OFT decision that it was an 'administrative priority' to conduct a market study into aspects of the UK private motor insurance industry, OFCOM has declined to launch a similar market investigation into TV advertising for reasons of proportionality.

Having carried out a consultation on the way in which TV advertising is traded, OFCOM found no clear proof that this is harming consumers (whether TV viewers, advertisers or end users of products advertised on TV).

It specifically referred to the significant costs of further investigation, and the potentially destabilising effects on industry, in concluding that it would not be 'proportionate' to refer the TV advertising market to the CC for a full industry review.

This decision on the mechanism for trading TV advertising is set out in OFCOM's statement on competition issues in the UK.  This makes clear that, while some concerns remain around larger broadcasters bundling advertising across their schedule, OFCOM does not consider that there is a strong case to suggest significant consumer detriment from such airtime bundling, or from other TV advertising trading practices.

This will be welcome news for ITV, the UK's largest broadcaster by advertising revenues, and for the large media agencies.  It comes on the back of the OFT's decision in February, concluding that the market for outdoor advertising was broadly competitive and that a reference to the CC was not therefore merited.

Separately, OFCOM has published a statement on regulating the quantity of TV advertising, where again it found insufficient evidence to justify amending UK implementation of the European regulatory framework, or for consulting on the number of minutes of advertising that should be permitted on TV.

However, it did note that this decision could be revisited if the overarching regulatory framework were in future to be revised.