Archive for December 5th, 2013
Television Rights, Matches – pun intended – and Bad Competition Law
[Guest post by Pablo Ibañez Colomo]
It would seem that the Spanish super-quango is more active than one would have assumed (in particular given what is currently going on within the tax authority of the country). The newly-created CNMC has fined four football teams (including Real Madrid and Barcelona) and the broadcaster Mediapro EUR 15 million for concluding exclusive licensing agreements for a period exceeding three years. Such terms contravened a previous decision adopted by the – then – CNC in 2010.
The case is interesting, first, because the Spanish government passed (in 2010, at pretty much the same time that the original decision was adopted) legislation that set a four-year term for exclusive licensing agreements between teams and broadcasters. One could claim that, insofar as the contentious agreements complied with the relevant sector-specific legislation, they were concluded in good faith. Accordingly, the fine would be unjustified. In light (pun intended) of Consorzio Industrie Fiammiferi (pun intended, I’m on fire!), it is clear, however, that this is not a valid defence. Legislation did not preclude undertakings from concluding agreements for a shorter period and thus from complying with Article 101 TFEU (which was clearly applicable in this case).
A second reason why the case is interesting is because it shows that the three-year limit for exclusive licensing agreements is now set in stone. There is no reason why this should be the case. A three-year term is not necessarily pro-competitive. It all depends on the context in which the licensing agreement is concluded. If the goal of this bright-line rule is (as I assume) to preserve the contestability of markets for the acquisition of television rights, then it may sometimes be too short. A new entrant (as BSkyB was back in the early 1990s) may need a longer period to reduce uncertainty and recoup its investments. By ruling out any flexibility, a rigid interpretation of Article 101(1) TFEU can very well have the perverse effect of protecting the incumbent. These are the problems of applying competition law as regulation, which I highlighted elsewhere, and of assuming that UEFA Champions League, Bundesliga and Premier League were rightly decided, in spite of the overwhelming evidence suggesting the opposite.
An eventful day
On 20 November we wrote a post on cartel fines saying the following:
“In spite of temporary appearances, though, one should not expect these figures to remain as they are. The upcoming LIBOR decision will certainly inject some significant (record breaking?) “capital” into this years’s numbers. On top of that, there appear to be a number of cartel decisions stuck somewhere in the pipeline (interestingly, only one cartel decision has so far been adopted in 2013)!.
We got it right (not that it was very difficult):
On the 27th, the Commission adopted a cartel decision fining North Sea shrimp producers [BAD JOKE ALERT] -what you’d call shellfish cartellists- with 28 million euros.
And yesterday, the Commission imposed the highest fine ever (1.7 billion euros) on a number of banks within the framework of the LIBOR investigation (still ongoing in relation to a number of parties who chose not to settle).
An interesting coincidence: yesterday representatives of the troika “advising” Spain on economic issues recommended that banks avoid any price wars (no kidding). Anyone sees mixed signals??
Also yesterday, the Commission unconditionally authorized the Microsoft/Nokia deal. It’ll be interesting to appeal (this time I’m kidding… or not) read the decision once it’s published 🙂
Finally, yesterday we had a reception to celebrate the launching of the procedural bible. A great evening all round.
Chillin'Competition 