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13/10/2011

TV3 Wins Major Competition Authority Complaint Against RTÉ

After lodging a complaint, TV3 today received confirmation from the Competition Authority that it had completed the investigation of RTÉ’s commercial practices over two years.
RTÉ has entered into a settlement with the Authority and been forced to abolish its “share deal” scheme. TV3 had alleged that RTÉ was operating an unfair market and abusing its dominance in TV advertising by demanding advertisers spend a percentage share of their total TV advertising with RTÉ. The Competition Authority will publish RTÉ’s undertakings with the Authority’s Enforcement Decision “in due course”.
TV3 estimates that the operation of unfair share deals may not only have cost TV3 Group directly in excess of €30m over the past five years, but severely and adversely impacted on its employees and its stakeholders.
Independent analysis commissioned by TV3 shows the Irish ad market fell by close to 50% peak to trough, a far greater collapse than for the overall economy. The analysis also shows that a recovery in the market has been stymied by RTÉ’s business practices. RTÉ, in addition to receiving €200m annual funding from the taxpayer also has the highest share of TV advertising in their market of any State broadcaster in the EU.
Commenting on the Competition Authority’s investigation, David McRedmond Chief Executive Officer of TV3 Group said: "The State Aid of RTÉ has led to a shocking abuse of dominance as the broadcaster has been totally unregulated. Government and the regulators must now step in to rescue the ad market. RTÉ’s dual-funding model has failed, and now that this market abuse has been uncovered regulators must ensure transparency and fairness in RTÉ’s commercial operations. We want immediate action."
Pat Kiely, Commercial Director of TV3 Group said: “In our dealings with advertisers and their agencies, the RTE Share Deals have been a grossly unfair impediment. At a time when TV3’s audience has been growing significantly (set against RTE’s decline) advertisers have been massively restricted in allocating their ad spend in line with this trend and punished when they attempted to do so. Nor should RTÉ be allowed to sell below cost to the detriment of the whole industry.”
(BMcN/GK)
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