BRUSSELS — European Commission antitrust topper Mario Monti has been spelling out how the EC plans to apply competition policy in Europe’s rapidly changing TV broadcasting market.
In a speech in the Netherlands, Monti addressed the three main antitrust issues facing the industry: state funding of pubcasters, acquisition of sports rights and the need to develop media competition policy for the new economy.
Monti argued that healthy public service broadcasting was a necessity, but warned that member states must not abuse their individual right to define the public service remits of their pubcasters. Nevertheless, Monti defended this right and said Brussels would not look to take control of it.
Monti reiterated that “state aid must be limited to covering the costs incurred by the undertaking for the provision of the public service.” He argued that cross-subsidization was the main antitrust problem facing the industry, with some broadcasters financed by state aid while also competing for market resources.
Monti announced that the EC would prepare guidelines for determining acceptable state aid levels.
Rights make might
He also recognized that sports are the main lure for pay TV subscribers in Europe and warned that rights agreements with a long duration of exclusivity may be anti-competitive.
Monti voiced concern that the acquisition of soccer rights could block new entrants from the pay TV market — he blocked the Telefonica/Sogecable collective purchasing agreement for soccer rights in Spain on these grounds.
The competition commissioner warned that the EC may investigate future cases in which large media groups take stakes in soccer clubs.
Monti concluded with a shot across the bows of the AOL/Time Warner merger, pointing to widespread concern “that control over substantial amounts of content could be used to leverage the parties’ position into downstream markets for the distribution or delivery of that content.”