Boosted by a clutch of recent successes, EU competition chief Karel Van Miert on Wednesday warned German giants Kirch, Bertelsmann and Deutsche Telecom they could face massive fines if they implement a digital TV alliance without seeking his approval.
A spokesman for Van Miert indicated that the commissioner told the three companies that the European Commission would not hesitate to use its right to fine them as much as 10% of their aggregate turnover if they act without first observing their obligations under European Union competition law.
According to EU rules regarding mergers and acquisitions, all deals with a significant impact on European markets must be notified to the commission within one week of their being completed or announced. Kirch and Bertelsmann announced their intention more than three months ago to pool resources to develop digital television in Germany.
Beta research, the company providing the decoder infrastructure technology (the existing Kirch D-box), is intended to be jointly controlled by Bertelsmann, Kirch and Deutsche Telecom, the latter providing its two partners with a technical platform (its phone lines) for the cable network.
In a statement issued Wednesday, Van Miert referred to press reports in Germany that said Bertelsmann and Kirch have begun implementing the deal, broadcasting their respective digital programs Premiere and DF1.
To date, the commission has not yet fined companies for submitting deal plans too late, but this time around Van Miert looks set to play hardball.
“They should be very, very careful. That’s the message,” Van Miert’s spokesman said.