EU Commission rejects plan on German pay TV

Officials feel CLT-UFA, Kirch merger would be a monopoly

BERLIN — The European Commission on Wednesday issues a preliminary rejection of the digital pay TV merger proposal submitted by media giants CLT-UFA and the Kirch Group.

European antitrust authorities fear that Kirch and Bertelsmann-affiliated CLT-UFA — leading players in Germany’s free-TV market — would use their alliance to monopolize German pay-TV.

Commission competition officials have informed antitrust authorities from the 15 European Union member states of the probe’s initial findings, and are requesting additional input on the merger. The commission is expected to reach a final decision by June 3.

In an attempt to win approval for their pay TV union, Kirch and CLT-UFA laid out a modified merger plan before the commission in Brussels last week. Among other concessions, media mogul Leo Kirch offered to sell 25% of his pay TV film rights to third parties. But the commission has said the suggested changes do not sufficiently guarantee free competition. The partners may introduce further concessions in the coming weeks.

Ending a cut-throat struggle for control of the German pay TV market, Kirch and Bertelsmann agreed to join their pay-TV activities last summer. The groups plan to merge Kirch’s DF1 digital pay-TV platform with pay-TV web Premiere, and to create a joint technical platform for digital TV together with cable gatekeeper Deutsche Telekom.