UK media regulator Ofcom is to review how advertising deals are handled. The review is the first in-depth look at the UK airtime trading system as Ofcom admits there has been “perennial anxiety” over whether the system is being abused.
Ed Richards, Ofcom CEO, said “The time is now right to consider whether there are reasonable grounds for suspecting that the trading mechanism prevents, restricts or distorts competition in the sale of TV advertising airtime.” Richards said that in Ofcom’s advertising sales review last year the media regulator agreed that the model is “complex and that the pricing is opaque” and “some features of the market may interact with market power in such a way that restricts competition in the sector”.
If the Ofcom review “finds cause for concern” it will refer the issue to the Competition Commission to carry out a formal review as part of a full market investigation. Last year the commission ruled that CRR – which was designed to prevent ITV abusing its dominant market position – should remain in place, for now, but that a full TV ad market review was required.