July 8, 2010

Getty Images referred to Competition Commission in Rex Features acquisition

The Office of Fair Trading had been evaluating Getty Images' acquisition of Rex Features since the deal was first announced in April.

Rex Features was founded in 1954 by Frank and Elizabeth Selby as a daily news and entertainment picture agency. Over the years, it represented the work of photographers such as Richard Young, SIPA Press, as well as the archives of the Daily Mail, Mail on Sunday and Evening Standard newspapers.

On 26 April, Rex Features entered into a definitive agreement to sell its assets to Getty. However, the acquisition had first to be approved by the Office of Fair Trading. Now, the deal is likely to be delayed until the end of the year, as Getty must wait for the Competition Commission's report.

In a statement, the Office of Fair Trading says: "Getty and Rex are two of the largest suppliers of photographic images for editorial use by publications in the UK. Getty has significant strength in the supply of both archive and current entertainment-related editorial images. The OFT is concerned that, if the merger is allowed to go ahead, the loss of Rex as an independent competitor could enable Getty to increase prices for customers."
It adds: "During its investigation, the OFT heard a significant number of concerns from third parties, which supported the view that the profiles and extensive image archives of Getty and Rex mean they are close competitors. The OFT considered carefully whether there would be sufficient constraint on Getty from existing agencies and/or new entrants into the market. However, the evidence available on this was inconclusive, and therefore there remains a realistic prospect of a substantial lessening of competition."
Amelia Fletcher, the senior director of mergers at the Office of Fair Trading, adds: "A number of publishers, the key customers in this market, are concerned about the potential impact of the acquisition. Some of the information available to the OFT in this case was patchy and inconsistent. We have not been able to rule out competition concerns on the basis of this evidence, and so the right course of action is to refer the merger for a fuller investigation by the Competition Commission.'

The Competition Commission is expected to report by 23 December 2010.
In April, Jonathan Klein, Getty's co-founder, welcomed the acquisition. "Celebrity and entertainment content is a growing and vital part of the editorial imagery industry and this acquisition positions us to meet and exceed the demand for nearly instantaneous material," he said.

Getty has said that it would retain the Rex Features brand, while combining the agency's resources with the giant stock agency. It added that "Getty Images’ global distribution channels will increase international customers’ access to Rex Features’ products and services."
 
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7 comments:

11吳dennismattie俊易 said...
This comment has been removed by a blog administrator.
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