Italian Competition Authority finds that Sky Italia did not abuse of its dominant position

On 23 April 2013 the Italian Competition Authority (“AGCM”) decided (the decision is only available in Italian) to close the proceedings against Sky Italia S.r.l. (“Sky Italia”) of The News Corporation Ltd. Group, finding that Sky Italia’s acquisition of exclusive pay-tv rights to broadcast the FIFA World Cup of 2010 and 2014 on all pay-tv platforms (satellite, digital terrestrial television/DTT and internet) did not amount to an abuse of dominant position under Article 102 of the Treaty on the Functioning of the European Union (“TFEU”).

The investigation was prompted by RTI, a company of the Mediaset Group, based on the complaint that Sky Italia’s acquisition of exclusive pay-tv rights to broadcast the FIFA World Cup on pay-tv and refusal to resell the DTT rights was a breach of the commitments it undertook to the European Commission in 2003, when the Commission authorized, subject to conditions, a merger by News Corporation of two Italian pay-tv companies to create Sky Italia. In August 2011 the scope of the AGCM investigation was expanded to include Sky Italia’s acquisition of certain rights to UEFA’s Champions League 2012-2015 seasons.

In 2010, ahead of the FIFA World Cup, RTI initiated arbitration proceedings before the ICC International Court of Arbitration (“ICC tribunal”). In an award dated 20 February, 2012, the ICC tribunal rejected RTI’s claims and confirmed the legitimacy of Sky Italia’s behaviour. In particular, the ICC tribunal held that the broadcasting rights of the FIFA World Cup did not fall within the commitments since the FIFA World Cup was beyond the remit of “world-wide sports rights.” The ICC tribunal further found that the FIFA World Cup was not essential for the competitiveness of a competing pay-TV television operator since it occurred only once every four years.

The AGCM essentially followed the same reasoning of the ICC tribunal, although it made its own further findings as regards the number of new subscribers that the FIFA World Cup would account for, i.e. in order to confirm whether holding such sport rights confers a particular advantage. The AGCM found that it did not, also noting that the main world cup matches are broadcasted on the free to air TV under the Television without borders Directive.

The AGCM further ruled that Sky Italia’s acquisition of rights to the UEFA’s Champions League 2012-2015 seasons did not constitute an abuse, having found, inter alia, that such sport rights have been assigned following an open bidding procedure which allows for the sub-licensing of such rights, and the fact that Sky Italia actually sub-licensed 2 out of the 3 seasons to RTI, noting that the last season may still be sub-licensed to RTI. The AGCM thus concluded that, at this stage, holding exclusive rights for one season may not necessarily lead to a finding of an abuse by Sky Italia. [Gabriele Accardo]

Advertisements