OPINION: NASH ON ... UNFAIR COMPETITION

In America, Microsoft is threatened with break-up by the courts for contravening fair competition laws. On this side of the water, Stephen Byers, the trade and industry secretary, announces measures to open up the car market and improve price transparency. In the meantime, John Lewis ponders whether it should sue Dixons for anti-competitive practices in the personal computer market.

In America, Microsoft is threatened with break-up by the courts for

contravening fair competition laws. On this side of the water, Stephen

Byers, the trade and industry secretary, announces measures to open up

the car market and improve price transparency. In the meantime, John

Lewis ponders whether it should sue Dixons for anti-competitive

practices in the personal computer market.



All good knockabout stuff. Our media have been in their element,

championing the consumer and roasting one industry after another on

their high moral altar, and not always fairly. Straight price

comparisons with continental Europe make for some easy targets. Perhaps

we should take a look closer to home - at our own advertising industry,

for example, and, while we’re at it, our campaigning media.



Let’s ask, for instance, why national newspapers impose a closed shop of

’accredited’ creative services suppliers. Setting standards is one

thing, but refusing to accept perfectly good copy from other (usually

cheaper) suppliers stifles competition.



The old trade union closed shops were universally condemned by newspaper

proprietors as restrictive practices, designed not to maintain craft

standards but to avoid competition and thereby keep labour costs

artificially high. Fortunately, the Office of Fair Trading is looking

into the practice.



And what of the long-running scandal of huge hidden ’discounts’ between

some advertising agencies and their creative services suppliers? The

frequently blatant price loading that results would lead to many a

collar being felt in countries with stricter commercial laws. In the US,

they’ve had the Sherman Act which outlaws anti-competitive practices,

since 1890.



Hope, however, springs eternal. On 1 March, the new Competition Act,

billed as the most fundamental reform of commercial law in 25 years,

came into force. Whereas, previously, there were only limited powers to

prevent companies rigging the market, the new system allows for fines of

up to 10 per cent of three years’ turnover on offenders.



The Act should be welcomed. Among other things, it will encourage the

long overdue development of independents in our market - companies that

can allow advertisers to see more clearly where their money goes. The

precedent is already there with the growth over the past few years of

media independents.



Many creative services suppliers would welcome such a development - they

are fed up with carrying the can for high costs when the price they

often get paid bears very little resemblance to the price actually

charged to the advertiser.



If it also results in agencies fighting their own corner and being more

candid with clients, so much the better. One thing’s certain: the

transparency and fair competition that a healthy independent sector

would encourage in the creative services market will improve everyone’s

efficiency and lower costs.



As a final thought, let me quote Adam Smith: ’People of the same trade

seldom meet together, even for merriment and diversion, but the

conversation ends in a conspiracy against the public, or in some

contrivance to raise prices.’ It’s time we did something about it.





Have your say at www.campaignlive.com on channel 4.



Topics

Become a member of Campaign from just £46 a quarter

Get the very latest news and insight from Campaign with unrestricted access to campaignlive.co.uk plus get exclusive discounts to Campaign events

Looking for a new job?

Get the latest creative jobs in advertising, media, marketing and digital delivered directly to your inbox each day.

Create an Alert Now

Partner content

Share

1 Job description: Digital marketing executive

Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).