The BKartA has blocked plans by the TV-channel operators RTL and Pro7Sat1 to form a joint venture for the provision of an online video platform.
The BKartA this week held that the creation of the joint platform would further strengthen the existing dominant duopoly of the two broadcasting groups on the market for TV advertising. Additionally, the BKartA expressed its concern that a coordination of business interests via the joint venture between the two competitors would also be very likely, which in turn would constitute an infringement against the prohibition of anti-competitive agreements.
RTL and Pro7Sat1 had planned to provide 'catch-up' television through the video platform, enabling viewers to access German- and Austrian-aired television programmes for up to seven days after transmission. It was intended for the service to cover both public and private television channels and to be available free of charge.
The decision marks the latest set-back in a lengthy process, which started with the initial notification of the 'full-function' joint venture to the European Commission on 6 August 2010. Following a downwards referral request from Germany and Austria, the question was referred to the national authorities at the end of August 2010, as the proposed transaction would affect competition in national online TV and advertising markets in Germany and Austria.
In Austria, the parties withdrew the notification on the very same day in late August 2010. The Austrian authority had voiced strong concerns that both parties, together with the former monopolist ORF, held approximately 80% market share in the TV advertising market.
In Germany, the BKartA opened an in-depth investigation into the market in late October 2010, setting the decision deadline on 21 March 2010. On 24 February 2011 the BKartA issued a statement of objection to RTL and Pro7Sat1, setting out the competition concerns it had identified in the planned joint venture. The BKartA was of the opinion that the joint venture in its intended form would strengthen the dominant duopoly of the parties on the market for TV advertising and increase the likelihood of business interests being coordinated.
The possible benefits of the deal, resulting in increased video-on-demand coverage would only outweigh the negative effects, if the platform was open to third parties as well as broadcasters and was purely technical. The parties could not allay these fears and it has been rumoured that third-party access to the platform proved the sticking point.
The BKartA decision is not yet legally binding. The last recourse now available to RTL and Pro7Sat1 is to appeal against the decision, in which case the Federal Court in Düsseldorf would have to decide on the issue. For now, the authority has killed the video star.
To view Community Week, Issue 513; 18th March 2011 in full, Click here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
