MRTPC to probe IBF’s role in ad tarif hike proposal

MRTPC to probe IBF’s role in ad tarif hike proposal


New Delhi: Suspecting cartelisation by broadcasters against advertisers, the Monopolies and Restrictive Trade Practices Commission (MRTPC) has directed its investigative unit DGIR to probe the role of Indian Broadcasting Foundation (IBF).

According to sources, MRTPC has taken a suo moto action after the recent spat between advertisers and broadcasters following the latter’s proposal to impose a 25 % surcharge on existing television advertising rates. IBF had, however, rolled back the proposal temporarily.

MRTPC is of prima facie view that by forming a cartel of broadcasters, IBF is distorting the fair competition in this field, sources said.

The commission has granted 60 days to the Director General of Investigation and Registration (DGIR) to complete its investigation. If DGIR finds evidences against IBF on distorting the fair competition in the television advertising market then it would recommend the Commission to start judicial proceedings against it by issuing Notice of Enquiry.

According to the section 33 (1)(D) any agreement to buy or sell goods or to tender for the sale or purchase of goods only at prices or on terms of condition agreed upon by sellers or purchasers are restrictive trade practice and banned under the MRTP Act, 1969.

Recently, IBF had threatened to blackout advertisers who refused to accept new ad rates fixed by it but temporarily rolled back its decision. Some members of IBF, including Star India, Zee Network and SET India had in fact dropped ads of some big advertisers such as Hindustan Unilever and Marico.

The move was contested strongly by Indian Society of Advertisers saying ad rates should be fixed individually by channel and advertiser and no third party or an industry body should be a party to it.