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Archive for February 11th, 2016

Football, TV rights and the ‘single buyer rule’: in a world of commitment decisions, bad policy dies hard

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Bundesliga

Many people love to discuss whether competition law is, or should be, about consumer welfare. Not me. I have never understood people’s mystical fascination with this question. In my view, it is essentially a distraction that is – most of the time – boring and irrelevant. The vast majority of cases can be decided without resorting to consumer welfare considerations. And the issues that really matter in EU competition law do not really need raising abstract questions about consumer welfare or, more generally, the goals of EU competition law.

Every now and then, however, there is an extreme case. Sometimes, things go so wrong that it is relevant to discuss the role of consumers – and their interests – in EU competition law. The Commission policy on the sale of football TV rights is my favourite example in this sense. I find it fascinating for two reasons: Premier League is a decision that not only ignores the features of the relevant markets but is expressly designed to harm consumers.

The star commitment in Premier League was to ensure that at least one package of the TV rights to the English football championship would go to an operator other than Sky (this is the so-called ‘single buyer rule’). The Premier League had already accepted to sell the rights to the championship in several packages. However, simply giving the opportunity to more than one player to buy the TV rights was not sufficient. It was necessary to force, through Article 101 TFEU, a competitive outcome in which there would be at least two broadcasters offering simultaneously this content.

The fundamental problem with the ‘single buyer rule’ is that it is an artificial attempt to change the nature of competition in the relevant market, and as such it is bound to fail. It requires all sorts of distortions to be a meaningful remedy. In the UK, Ofcom has done a good job at introducing additional distortions that have allowed BT to challenge Sky’s position in the UK. But we know that regulatory distortions are never for free.

The second problem is that it penalises consumers in an almost comical way. It is essentially a remedy that requires football fans to subscribe to two different television services to have full access to the televised games of the championship.

I have written about this on the blog already. The reason why I do so again is because I understand that the Bundeskartellamt is keen to introduce the ‘single buyer rule’ in relation to the sale of the TV rights to the Bundesliga (I would in fact be grateful for more info about this, as it is not obvious to find!).

What the news about the licensing of the TV rights to the Bundesliga show is that, in spite of all of the above criticisms, the ‘single buyer rule’ has acquired a life of its own. It seems to have emerged as a default remedy in cases concerning the licensing of TV rights, even though it was adopted in a very peculiar context. This is one of the consequences of the rise of commitments decisions. Some remedies become part of the acquis for no compelling reason. They are simply required without ever discussing whether they are necessary and/or proportionate.

Ben Van Rompuy and Alexandre de Streel have accepted my invitation to talk about these matters in a seminar organised in the context of the EU and Spanish Competition Law Course run by Luis Ortiz Blanco and Alfonso in Madrid.It will take place on 4 March I really look forward to that!

Written by Pablo Ibanez Colomo

11 February 2016 at 1:02 pm

Posted in Uncategorized