RTÉ to stop 'share deal' advertising scheme

Thursday 13 October 2011 10.47
RTÉ engaged with the Competition Authority and ultimately agreed to end the "share deal" schene
RTÉ engaged with the Competition Authority and ultimately agreed to end the "share deal" schene

RTÉ is to stop offering bulk-buying discounts that are linked to advertisers' total television budgets following an investigation by the Competition Authority.

TV3 complained to the Competition Authority in 2009 about a "share deal" scheme RTÉ was offering to advertisers, claiming the public service broadcaster was abusing its dominant position.

Under this scheme, an advertiser was offered a loyalty discount if they committed a percentage of their company's total television advertising budget to RTÉ.

The Competition Authority expressed concerns to RTÉ about how this practice could affect competition in the television advertising market.

RTÉ engaged with the Competition Authority and ultimately agreed to end this practice.

In a statement, the Competition Authority said it had not made any finding against RTÉ, nor had it formed any view that RTÉ had abused a dominant position.

No proceedings were issued against RTÉ and the Competition Authority has now closed its investigation on the basis of undertakings received.

RTÉ has given an undertaking to change its practice from 1 July 2012. From that date, a new trading scheme will operate whereby discounts offered will not depend on the percentage of an advertiser's total television budget that it spends with RTÉ.

The Competition Authority said it does not have a formal position on the matter, but it will publish a Decision Note within a month that will outline the issues involved in more detail.

TV3 has welcomed the ending of this 'share deal' scheme and claimed that its operation had cost the TV3 Group in excess of €30m over the past five years.

The CEO of the TV3 Group David McRedmond has called on the Government and the regulators to step in to rescue the television advertising market, which it says has collapsed.

In a statement, RTÉ said it was happy to agree to change the way it traded, and had done so following an overall review of its airtime sales method.

RTÉ reiterated that no finding of anti-competitive behaviour had been made against it.

It rejected as inaccurate and false a claim made earlier by TV3 that RTÉ had been forced to change its advertising trading system.

It added that the Competition Authority had welcomed and agreed to RTÉ's planned actions in respect of its trading system.