08 May 2008
Ofcom has informed ITV plc this morning that it is imposing a fine totalling £5,675,000 for some of the most serious breaches of Ofcom's Broadcasting Code concerning the abuse of premium rate services (PRS) in its programming(-1-).
The fine, which is by far the highest imposed by Ofcom or any of the previous regulators, reflects not only the seriousness of ITV's failures but also their repeated nature. The previous highest fine imposed by Ofcom was £2 million on GMTV in September 2007.
Separately, ITV plc has pledged an additional £7.8 million for viewer compensation and to charity. This fact was taken into account by Ofcom in reaching its decision on the level of the fines.
Ofcom's investigation considered information voluntarily supplied by ITV plc from its review by auditors Deloitte and also material obtained by Ofcom during its own investigations.
Ofcom has imposed a financial penalty on LWT Ltd of £3 million and has directed it to broadcast a summary of Ofcom's findings on two occasions on ITV1.
In summary, Ofcom's investigation found the following conduct in breach of its Codes in three competitions within this programme:
Ant & Dec's Gameshow Marathon:
17 September - 29 October 2005
Ofcom has imposed a financial penalty on LWT Ltd of £1.2 million and has directed it to broadcast a summary of Ofcom's findings on two occasions on ITV1 relating to the following conduct:
5 - 13 January 2007
Ofcom has imposed a financial penalty on Granada Television Ltd of £1.2 million and directed it to broadcast a summary of Ofcom's findings on two occasions on ITV1 relating to the following conduct:
12 December 2006 - 24 October 2007
Ofcom has imposed a financial penalty on ITV2 Ltd of £275,000 relating to the following conduct:
The Chairman of Ofcom's Content Sanctions Committee, Philip Graf, said: "ITV programme makers totally disregarded their own published terms and conditions and Ofcom Codes. Further there was a completely inadequate compliance system in place. The result was that millions of paying entrants were misled into believing they could fairly interact with some of ITV's most popular programmes."
Commenting on today's decision to sanction ITV, Ofcom Chief Executive Ed Richards said: "This was a thorough set of investigations which uncovered institutionalised failure within ITV that enabled the broadcaster to make money from misconduct on mass audience programmes. The industry can be in no doubt how seriously Ofcom takes the issue of audience trust. Our new licence conditions requiring broadcasters, who operate in this area, to conduct third party audits will ensure that consumers are protected."
ITV's review of PRS by Deloitte covered key findings on networked ITV programmes. However, no reference was made to ITV's regional programming where PRS was also used. Ofcom therefore requested further information and details on potential issues relating to regional programming.
Due to its inadequate systems, ITV was unable to provide Ofcom with sufficient data and evidence to enable Ofcom to carry out fully an investigation into these cases. Ofcom considers that this lack of information appears to indicate an absence of robust systems in place in the operation of PRS in regional programming. ITV plc appeared to have introduced the use of PRS in ITV regional programming with little or no assessment of the associated risks and with poor levels of supervision.
In addition to the above, the following were found to be in breach of the Code but no sanction was imposed:
ITV1: I'm A Celebrity Get Me Out of Here! (LWT Limited): 30 November 2006
ITV1: People's Court: 17 March 2008
ITV Play: ITV Playalong (16 November 2006), The Mint (7 December 2006), Glitterball (6 March 2007)
Ofcom also investigated allegations made about the 2005, 2006 and 2007 series of The X Factor. Ofcom found that these programmes did not breach the Code.
In particular, a detailed minute by minute analysis of the call data established that in the 2007 finals Leon Jackson was correctly announced as the winner (over Rhydian Roberts); that ITV did not mislead its audience in claiming that the finalists were "neck and neck"; and the difficulties some viewers found in calling the programme did not result in unfairness.
There are a number of other on-going investigations which Ofcom is conducting. These include the British Comedy Awards (2004 and 2005) broadcast on ITV1, the Secret Sound competition broadcast on a number of GCap radio stations, and a number of programmes on BBC radio and television, some of which are PRS cases.
These investigations are well-advanced, with Ofcom obtaining the reports and information we have requested from broadcasters and the relevant licensee. The results of these investigations will be published in the coming weeks.
1. In the case of programmes shown across the ITV network, the responsibility for compliance (and the liability for a potential financial penalty) falls to the licensee chosen to comply the programme on behalf of the ITV network. In these cases, the compliance licensee for Ant & Dec's Saturday Night Takeaway and Ant & Dec’s Gameshow Marathon was LWT Ltd. In the case of Soapstar Superstar the compliance licensee was Granada Television Ltd. Following the merger in 2004 between Carlton Communications plc and Granada plc, these companies are now part of ITV plc.
2. The following Broadcasting Rules were relevant to these investigations:
3. The procedures for investigating content and content-related cases are available on the Ofcom website. These procedures set out the way Ofcom investigates cases and considers the imposition of statutory sanctions, including fines. The broadcaster is not aware of the level of any sanction imposed until just before it is published by Ofcom.