RTL, Pro7Sat.1 joint venture deemed anti-competitive
Germany’s antitrust watchdog has torpedoed proposals by leading commercial broadcasters RTL and ProSiebenSat.1 to launch a joint online video platform.
The pair had intended to create a Hulu-like platform for their content as well as that of other broadcasters, public and commercial alike.
In February, the Federal Cartel Office expressed misgivings about the venture and informed the companies of the main reasons for a likely prohibition, including its assessment that the joint platform “would further strengthen the still existing dominant duopoly between the two broadcasting groups” in the TV ad market.
In addition, the Cartel Office said “a coordination of business interests via the joint venture would also be very likely, which would in turn constitute a violation of the prohibition of anti-competitive agreements.”
The Cartel Office said on Friday that comments submitted by the broadcasters since last month’s warning hadn’t dispelled its concerns.
The watchdog said the companies “were not prepared to make fundamental changes to the original concept of their project” and had not offered to open up the platform technically and to other television channels.
“The creation of the joint platform would further strengthen the dominant duopoly between the two broadcasting groups on the market for TV advertising,” said Cartel Office prexy Andreas Mundt. “We have given careful attention to the potential advantages of a new video-on-demand platform. However, in its intended form the project provides no guarantee that it will outweigh the expected disadvantages for competition.”
RTL said Friday that it was considering legal action over the decision, adding that it rejected the Cartel Office’s premise of a non-competitive duopoly in the German TV market.
“The broadcasters have always found themselves in an intensive competition for viewers and advertising clients,” RTL said in a statement.
RTL added that despite the fact that the Internet is already “dominated by international players,” the watchdog’s stance would likely make such a local online platform unfeasible.