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02/09/2002

ITV giants face ad sales inquiry

Carlton and Granada are to face an ITC investigation into how they sell advertising on the ITV network.
The ITC chairman, Sir Robin Biggam, wants renewed assurances from the ITV giants that they are not colluding on prices after the Carlton chief executive, Gerry Murphy, said in a newspaper interview that they planned to work closer together to create a "virtual enterprise".
The decision sparked an angry reaction from advertisers concerned the move would reduce competition.
Influential trade body the Incorporated Society of British Advertisers described the plan as a "merger by stealth" and said it could lead to illegal sharing of information about advertisers.
ITV has an estimated 53% share of the television advertising market. Under ITC rules, Carlton and Granada are required to sell advertising separately to avoid distorting the market.
Even if the two companies were to eventually merge, it is thought the two ad sales divisions would have to be kept separate initially in order to satisfy competition regulations.
Mr Biggam, who may also seek advice from the office of fair trading, has written to Mr Murphy and the Granada chairman, Charles Allen, outlining his concerns.
Both companies will be required to hand over documents and financial records detailing airtime sales at the network and meet with ITC officials to discuss the issue.
(GB)
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