Cartel office fines German broadcasters for anti-competitive practices

Jörn Krieger | 28-12-2012

The German cartel office Bundeskartellamt has imposed fines amounting to around €55 million on the country's two leading commercial TV groups, RTL and ProSiebenSat.1.

The companies are accused of having arranged anti-competitive agreements as part of the deployment of basic encryption on their digital free-to-air channels.
The two TV groups will now have to transmit their main channels in standard definition (SD) unencrypted via cable, satellite and IPTV for a period of ten years. Notably, the penalty does not include transmission in high definition (HD), thus enabling the broadcasters to continue encrypting the HD versions of their free-to-air channels.
"The cartel office has noted that the two TV groups made an arrangement in 2005/2006 to offer their digital free-to-air channels in SD quality only in encrypted form in future and ask for an additional fee for them," Bundeskartellamt's president Andreas Mundt said in Bonn.
"At the same time, the groups intended to restrict the usage possibilities of their programme signals for TV viewers through technical measurements such as anti-commercial blocking and copyright protection functions. The arrangement affected the broadcast infrastructures cable, satellite and IPTV. The arrangement has been in force at least until the cartel office's raid of the companies in May 2010, and on plenty of platforms even beyond this point of time."
The penalty notices are not yet legally valid, with the district court of Düsseldorf having to decide about possible objections. However, all companies involved have agreed to end the proceedings by mutual consent.
Also, the cartel office has received the binding assurance from both TV groups to lift basic encryption of their free-to-air channels in SD quality from 2013 on a nationwide scale. The broadcasters will maintain the unencrypted SD transmission for a period of at least ten years. According to the competition authority, the dropping of encryption also removes the basis for the collection of carriage fees from the operators of cable networks and other broadcast infrastructures for SD transmissions. At the same time, it lifts the basis for the installation of restrictions for signal protection.
The commitment to remove basic encryption from January 2013 had already been made by cable operator Unitymedia as part of the concessions made to gain regulatory approval for the takeover of Kabel BW by its parent company Liberty Global.
"Through the commercial broadcast groups' commitment to maintain unencrypted SD transmissions, TV viewers will benefit from a reception possibility of digital free-to-air television without signal protection measurements and without additional fees in the coming years," explained Mundt.
No doubt the cartel office's ruling ensures that the commercial free-to-air channels' SD signals will not be encrypted for the time being. However, it can be expected that HDTV will become the standard method for TV reception within the next ten years - and on their HD channels, the commercial TV groups impose exactly those measures criticised by viewers, consumer protection organisations and media authorities: basic encryption, additional reception fees and content usage restrictions.
While appearing to be consumer-friendly at first glance, in the long run the decision will mean no less than the end of the free reception of commercial television in Germany.