Office of Fair Trading issues recommendations to Local Authorities and Public Transport Authorities on street furniture advertising procurement

Scotland
he OFT has concluded its investigation started in February 2011 considering whether street furniture advertising contracts (such as advertising on bus shelters and public conveniences as well as free standing advertising and information panels) comply with competition law.  The vast majority of such contracts are concluded between local authorities and either CCUK or JCDecaux and contain restrictions, such as exclusivity clauses, which the OFT felt could restrict competition.  The OFT has accepted voluntary undertakings from CCUK and JCDEcaux which it hopes will improve the situation for both local authorities and other advertisers: the companies have undertaken not to enforce exclusivity clauses preventing competitors advertising on different street furniture over 25 metres away, not to enforce tacit renewal clauses, to include firm end dates in contracts, not to proactively seek contract extensions and to cooperate with the local authorities to transfer to a new operator when a contract comes to an end.

As well as accepting undertakings from the companies, the OFT has also issued recommendations to local authorities that it wants them to consider when procuring street furniture advertising contracts.  The recommendations are not binding, but are the OFT's suggestions of ways in which local authorities can help the market to work more efficiently.  Full details are set out in the OFT's document but the recommendations include, amongst others, suggestions that local authorities should:

Square be aware that long contract durations can limit the scope for competition and be cautious about entering into agreements that run for longer than 10 years;
Square consider separating out contracts for installing and maintaining street furniture from contracts to advertise on that street furniture, with the contracts to advertise being awarded for a shorter duration; and
Square put contracts out to tender at the end of their term rather than renegotiating an extension with the incumbent provider.