Broadcasters cannot unduly discriminate between advertisers under new Ofcom rules

Out-Law News | 29 Feb 2012 | 11:43 am | 2 min. read

Television broadcasters are prohibited from unduly discriminating between advertisers looking to market on their service under new rules introduced by Ofcom.

The broadcasting regulators' new 'Code on the Prevention of Undue Discrimination between Broadcast Advertisers' also applies to radio broadcasters.

Under the UK's Communications Act Ofcom is obliged to set out a code of practice that sets standards on "the content of programmes to be included in television and radio services" that ensure that "there is no undue discrimination between advertisers who seek to have advertisements included in television and radio services". Broadcasters licensed by Ofcom will have to comply with the conditions of the Code under the terms of the Act.

"A television broadcaster must not unduly discriminate between advertisers that seek to have advertising included in its licensed service," the Code said.

Advertising is defined as "any form of announcement broadcast whether in return for payment or for similar consideration or broadcast for self-promotional purposes by a public or private undertaking or natural person in connection with a trade, business, craft or profession in order to promote the supply of goods or services, including immovable property, rights and obligations, in return for payment".

 

The Code also said that radio broadcasters must ensure that they do not unduly discriminate between advertisers. Commercial communications refer to any "spot advertisement or a commercial reference," Ofcom said.

Ofcom said it expects broadcasters and advertisers to try and resolve disputes over whether undue discrimination has taken place before complaints are lodged with it.

Ofcom said discrimination would not automatically be said to have occurred just because broadcasters choose not to include particular content from advertisers or charge them more to market their goods or services than other advertisers.

"Not all forms of different treatment will amount to discrimination since advertisers may not be in comparable positions," Ofcom said.

"The Rules do not therefore mean that licensees are required to have single tariff practices for advertising and Ofcom does not consider this Code should prevent bespoke pricing according to the needs of broadcasters and advertisers, if such contracts are necessary to ensure that advertising needs are met. Prices charged to different advertisers may vary due to a range of factors, including (but not limited to) the level of demand for that particular product, the availability of particular impacts (e.g. peak), demographics or specific slots, and other terms and conditions also included in the contract," Ofcom said.

The regulator also said that not all discrimination between advertisers will be considered to be in breach of its rules as only 'undue' discrimination is prohibited.

"Discrimination will not be undue where it can be objectively justified. There may be various reasons why terms and conditions and access to airtime may differ between advertisers," Ofcom said.

"Every complaint will be dealt with on a case-by-case basis, taking account of the individual circumstances of each case," it said.

Potential cases where broadcasters can legitimately discriminate between advertisers may allow certain charities to advertise with it for free whilst other charities are charged for doing so, providing that it is in line with the broadcasters' "social responsibility policy". Broadcasters can also legitimately discriminate between particular categories of advertising and choose not to carry some for "moral or legal reasons," Ofcom said.

Ofcom said its Code "does not cover commercial relationships between media buyers and advertisers".

Some complaints from advertisers regarding undue discrimination by broadcasters may need to be further investigated on competition grounds under the Competition Act, Ofcom said.

Under the UK's Competition Act companies are generally prohibited from establishing agreements with other UK trading firms that "have as their object or effect the prevention, restriction or distortion of competition within the United Kingdom". Under the Act organisations are also generally prohibited from engaging in activity that amounts to an abuse of a dominant market position.

The Office of Fair Trading currently has general overall responsibility for regulating competition in the UK, but some sectors have additional regulators, such as Ofcom in regulating communications, to oversee compliance with the laws.