On 10 July 2017, the Dutch Authority for Consumers and Markets (ACM) discontinued its preliminary investigation into Fox. The investigation followed a complaint by cable company CAIW, alleging that the new conditions imposed by Fox on TV distributors in relation to live-soccer matches were discriminatory. The ACM, however, concluded that there was insufficient evidence to establish that these conditions would result in consumer harm and/or an appreciable restriction of competition.
On 29 November 2012, the ACM approved the acquisition of Eredivisie Media & Marketing (EMM) by Fox. Through EMM Fox holds an exclusive broadcasting licence for live-soccer matches of the Dutch premier league, the Eredivisie. Simultaneously, the ACM issued an 'informal opinion' listing several conditions that Fox should abide by when commercializing the broadcasting rights to avoid potential anticompetitive effects. The ACM also stated that Fox should offer its broadcasting rights to interested TV distributors under non-discriminatory conditions.
In 2016, Fox changed the conditions for the broadcasting of live Eredivisie matches. This led one such distributor (CAIW) to submit a complaint to the ACM. CAIW argued that the new conditions were discriminatory and disadvantageous for smaller distributors. Under the previous system, distributors would pay Fox a percentage for each customer that subscribed to the live Eredivisie matches. However, under the new conditions, distributors are required to pay for each customer, even if the customer has a television subscription that does not include Eredivisie matches.
The ACM acknowledged that Fox provides the same product to its distributors under different conditions, as the change in conditions does not apply to Ziggo which has a contract until 2020. According to the ACM's market investigation, these different conditions lead to substantial price differences. Notwithstanding these findings, the ACM concluded that the new conditions do not appear to appreciably restrict competition between distributors at the expense of consumers.
In fact, the new conditions have in the short term resulted in a cheaper and more varied offering by distributors. The ACM added that Eredivisie matches are only one element in the broader product assortment of distributors. Moreover, the relative importance of the Eredivisie rights was not significant enough to conclude that a change in the conditions would distort competition in the market to the detriment of consumers. Therefore, the ACM decided to discontinue its investigation into Fox.
This article was published in the Competition Law Newsletter of August 2017. Other articles in this newsletter:
1. Court of Justice dismisses Toshiba's appeal against the gas-insulated switchgear fine
2. Recent enforcement action demonstrates an increasing focus on compliance with procedural EU merger rules
3. Trade and Industry Appeals annuls fine imposed on real estate traders
4. District Court of Rotterdam upheld ACM's decision to clear lottery merger
5. District Court of The Hague rules on ACM's powers to select and inspect digital data