BERLIN — The EU’s probe of the proposed Kirch-Bertelsmann digital pay TV alliance in Germany will likely be extended an additional four months.
European Competition Commissioner Karel van Miert said on Thursday that the merger investigation, which could be completed by mid-January, will very likely to “go to a second phase.”
The news was “not unexpected,” Bertelsmann rep Helmut Runde told Daily Variety. The merger contract submitted to the EU at the beginning of December “is very complex, and the Commission will need time to examine it.”
At the same time, Runde called the delay “problematic. The financial damage to CLT-Ufa and Kirch is considerable.”
Ending a battle for control of the German pay TV market, Bavarian media mogul Leo Kirch and Bertelsmann-affiliated CLT-Ufa agreed last summer to combine their digital pay TV activities. But the EU fears that Kirch and CLT-Ufa, who already control Germany’s most popular commercial free-TV webs, will monopolize digital pay TV in Germany. U.S. major Universal and an association of German cable operators have filed complaints with the Commission protesting the merger.
Last week, the EU ordered pay TV web Premiere to stop marketing its digital service to German consumers until the alliance of its shareholders Kirch and CLT-Ufa has been cleared. Since Premiere Digital became available at the start of November, around 100,000 customers have signed up to receive the service via Kirch’s D-Box decoder. The Commission objects to Premiere’s use of the D-Box, which the channel did not adopt until after CLT-Ufa and Kirch had agreed to end their pay TV rivalry. The EU ruled that the stock of 30,000 Premiere Digital packages in German shops may be sold, and that Premiere Digital may continue to broadcast signals to existing customers.
But until the EU has approved the merger, Premiere Digital is not permitted to advertise or add new subscribers. “It is a loss not only for the Premiere shareholders,” said Runde, “but also for the consumer.”