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1. What is CRR?

• In late 2003 the Competition Commission cleared the merger of Carlton and Granada to form ITV plc.
• Recognising the concerns of the advertising community about the extent of market power ITV plc could have post merger, the Competition Commission put in place the Contracts Rights Renewal (CRR) remedy, overseen by an independent Adjudicator (currently Robert Ditcham).

2. What is the purpose of CRR?

• CRR is intended to protect the advertising market: a) by guaranteeing that advertisers and media buyers are no worse off following the merger of Carlton and Granada; and b)by putting in place an automatic ‘ratchet’ which reduces the amount advertisers have to commit if ITV’s audience shrinks
• The CRR sets out a number of rights that advertisers and media buyers have when buying advertising time from Carlton/Granada, and in particular, gives advertisers and media buyers the right to renew their contracts on a rolling annual basis, adjusted for changes in ITV’s audiences, with no reduction in the discounts they receive.
• Until the remedy is no longer necessary, the share of revenue committed by advertisers/media buyers on television advertising to Carlton/Granda need not increase above 2003 levels.

3. What has CRR achieved?

• The Adjudicator began work in time to oversee the CRR remedy’s operation over the first main market dealing season.
• The Adjudicator has successfully resolved the limited number of formal disputes that have been brought.
• His role in responding to guidance enquiries has enabled companies to resolve differences themselves within the framework of CRR, without the need to bring formal disputes.

4. Who is responsible for a review of the CRR remedy?

The Office of Fair Trading (OFT) is responsible for the CRR remedy, supported by Ofcom. The decision as to whether the CRR remedy should be reviewed – and if so when – rests with the OFT. As the sector regulator, Ofcom will continue in its role of monitoring the CRR remedy and assessing its impact on the wider industry.

5. Will Ofcom review the TV advertising market again?

Ofcom proposed a review of the TV ad market in its 2005/06 annual plan but after undertaking preliminary analysis concluded that the case supporting the need for a full review of the entire market had not been made.Ofcom has no current plans to conduct a review of this market. Further details can be found within the following news release: http://www.ofcom.org.uk/media/news/2005/12/nr_20051213_2.

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