Pubcaster guilty of abusing market dominance
LONDON — Irish pubcaster RTE has been forced to end the controversial way it sells advertising after competition regulators found it guilty of abusing its market dominance.
Move followed a complaint by rival TV3, which said that RTE’s practice of “share dealing” in relation to selling airtime was an abuse of the market. RTE had insisted that advertisers spend a minimum percentage of their advertising budget with them — in some cases up to 65% — or they would be charged more for buying airtime.
Ross Biggam, director general of the Assn. of Commercial Television, which reps European commercial webs, said: “It is impossible to overstate the significance of this decision.
“Ireland has long been characterized by an extraordinary degree of dominance enjoyed by the dual-financed public broadcaster RTE, whose advertising sales practices have now been found to be an abuse of their dominant position.”
TV3 estimated that “share deals” may have cost it more than €30 million ($41 million) over the past five years, and claims this method of selling airtime stymied a recovery in the local advertising market.
TV3 Group CEO David McRedmond said: “The state aid of RTE has led to a shocking abuse of dominance as the broadcaster has been totally unregulated.
“Government and the regulators must now step in to rescue the advertising market.
“RTE’s dual-funding model has failed, and now that this market abuse has been uncovered regulators must ensure transparency and fairness in RTE’s commercial operations. We want immediate action.”
But RTE rejected TV3’s allegations as “false and misleading,” and claimed the station was attempting to “represent a voluntary and agreed position as a forcible about turn.”
“No finding of anti-competitive behavior has been made against RTE,” the state broadcaster said.
“The investigation initiated by TV3’s complaint has closed on amicable and agreed terms.
“RTE was happy to agree to change the way it traded (and its) willingness to do this was directly informed by its overall review of its airtime sales method,” it concluded.
RTE is funded by a license fee that generates €200 million ($275 million) annually plus advertising revenue.