GMTV will have to pay the fine and broadcast the
regulator's findings on three separate occasions. Ofcom said that
the penalty would have been higher had GMTV managing director Paul
Corley not resigned and the company revised its processes.
GMTV has the licence to broadcast on ITV in the mornings, and
had hired Opera Telecom to operate phone-in competitions between
2003 and 2007.
BBC investigations programme Panorama exposed flaws in the
competitions earlier this year and yesterday premium phone line
regulator ICSTIS fined Opera £250,000. Ofcom's fine covers the same
competitions.
Ofcom said that the operation of the competitions represented
'gross negligence'. It said that the company breached its
Broadcasting Code and that of the Independent Television
Commission, which ceased to exist in 2003. Rule 2.11 of the Ofcom
code says that "competitions should be conducted fairly, prizes
should be described accurately, and rules should be clear and
appropriately made known".
Ofcom identified three flaws in the operation of the
competitions. It said that competitors were chosen to be finalists
up to three hours before phone lines closed, meaning that many
entrants had no chance to win the competition.
It said that the organisers also used a '15/5' selection
process, meaning that 15 finalists were chosen between 6am and
8.30, and five between 8.30 and 9am. "Viewers calling between 08:30
and 09:00 therefore had significantly less chance of being selected
as a finalist than those who entered before 08:30," said the
judgment.
The third flaw was the 'final five' method, whereby the last
five finalists were selected in the final minutes before 9am,
leaving subsequent callers with no chance to win the
competition.
Ofcom said that 62 million people called the competition lines
in the time covered by its investigation, and that 25 million of
them may be eligible for refunds.
GMTV said that fewer than that number were probably directly
affected, but Ofcom said that the company could not provide
substantiating figures for that claim.
"The [Ofcom Content Sanctions] Committee viewed these breaches
as extremely serious, involving as they did longstanding and
systematic failures in the conduct of broadcast competitions," said
the ruling.
"The Committee took the view that the breaches constituted a
substantial breakdown in the fundamental relationship of trust
between a public service broadcaster and its viewers, millions of
whom ‘purchased’ the right to enter GMTV’s competitions in the
belief that they would have a fair and equal chance of winning," it
said.
Ofcom pointed out how important the competitions were to GMTV.
It said that despite the competitions providing the company with 35
to 40% of its profits, it had never audited Opera's processes.
"Over a period of nearly four years, GMTV made profits running
into millions of pounds from its competitions, but had no adequate
oversight of this operation," said the ruling. "Given the
fundamental role that competitions played in its programming and
the clear significance of the resulting revenue to its
profitability, GMTV’s disregard for the need to operate any
reasonable compliance procedure, verification, oversight or
management of the arrangements for the conduct of these
competitions over such a long period of time could not, in the
Committee’s view, be described as anything other than gross
negligence."
"This resulted in the widespread and systematic deception of
millions of viewers who paid to enter the competitions in the
belief that they had a fair chance of winning when in fact their
chances were diminished or nonexistent," it said.
OUT-LAW is running a series of free breakfast
seminars across the UK in October that explain the
legal regime for free draws and prize competitions.
