The Cartel Office has confirmed that it has issued a warning against the plan of RTL and Pro7Sat.1 to establish a joint venture for the development and operation of an online video platform. Now that the authority has set out its antitrust concerns about the venture, the companies involved have the opportunity to comment. The deadline for a final decision is 21 March 2011.
According to the preliminary results of the review, the Bundeskartellamt is of the opinion that the establishment of the joint platform in the concretely planned form would further strengthen the still existing dominant duopoly of the two broadcasting groups in the market for television advertising. Furthermore, the coordination of business interests via the joint venture, which is to be expected according to the current state of affairs, would constitute a violation of the prohibition of agreements restricting competition.
In its assessment of the transaction, the Bundeskartellamt has extensively dealt with the possible positive effects of a new video-on-demand platform. The authority came to the preliminary conclusion that only in the case of an open, purely technical platform would the advantages resulting from the increased reach for video-on-demand offers and the easier navigation through the content outweigh the disadvantages for competition which would still exist. However, the companies involved were not prepared to open up the planned platform that far.
However, as long as the plans provide for a restriction of access to television channels and restrictive requirements regarding the duration, timing and quality of the offers, in the Bundeskartellamt's current view the restrictive effects on competition of the project clearly outweigh the negative effects. In the Bundeskartellamt's view, such a platform would have the effect of preserving the existing conditions on the television advertising market and transferring them to the segment of video advertising in online video content.
Source: Press release of the Bundeskartellamt
Goldberg Attorneys at Law 2011
Attorney at Law Michael Ullrich, LL.M. (Information Law)
Specialist lawyer for information technology law (IT law)
E-mail: info@goldberg.de
