Watchdog rejects ITV plea over adverts

The watchdog was asked to consider whether ITV should be allowed to introduce a greater degree of flexibility into negotiations with advertisers.

The Competition Commission examined the proposal, but said it would not provide adequate protection for advertisers and would result in "too many uncertainties and questions".

The Commission told ITV in September that it planned to keep the Contract Rights Renewal (CRR) system, which was introduced to protect advertisers from the broadcaster's dominant position when Carlton and Granada merged to form ITV in 2003.

However, the Commission offered a concession yesterday as it proposed relaxing the regime by widening the definition of ITV1 to include its timeshift and high definition channels.

The change will allow ITV to launch these new channels without being inadvertently penalised, as they would be under the current undertakings.

Diana Guy, chairman of the CRR review, said other variations were not likely to be either practicable or effective.

She added: "We looked carefully at a new proposal from ITV aimed at introducing greater flexibility into negotiations whilst retaining some protection for advertisers.

"We found that it would not provide adequate protection for advertisers and its practical application would raise too many uncertainties and questions."

CRR cuts the amount advertisers have to pay if ITV1's audience shrinks, which has hit ITV hard in recent years, adding to an already depressed ad market.

ITV wants the rules to be scrapped altogether, arguing it is no longer appropriate in a world of digital TV and leads to a risk-averse attitude among programmers and production teams.

ITV – home to shows such as X Factor and I'm A Celebrity... Get Me Out Of Here! – attacked the Competition Commission's stance following the ruling on possible CRR remedies.

It said: "There is an overwhelming case for the abolition of CRR as a disproportionate remedy, justified by the clear economic evidence of changes in the television advertising market since 2003."