European Commission clears acquisition of Belgian media company by Liberty Global subject to commitments

By Gabriele Accardo

Last 24 February the European Commission cleared Liberty Global’s acquisition of a controlling stake in the Belgian media company De Vijver Media NV (“De Vijver”), subject to commitments.

The Commission originally opened an in-depth investigation alleging that the transaction would create a close relationship between the largest TV retailer in Flanders, Liberty-controlled Telenet, and two of the region’s most popular free-to-air TV channels, Vier and Vijf. In essence, as a result of the transaction, the Commission had concerns that Telenet’s actual or potential competitors for selling TV services to consumers in Flanders could be shut out from accessing these channels. This could concern classical competitors as well as so-called ‘over-the-top’ TV service providers that provide end users access to TV channels via the Internet.

In fact, according to the Commission, TV distributors that compete with Telenet, such as Belgacom and TV Vlaanderen, must have Vier and Vijf in their offer to compete on equal footing with Telenet, while new players, such as Mobistar, would not be able to enter the market at all without Vier and Vijf.

On the other hand, the Commission concluded that Telenet would not have the incentive to remove the channels of Medialaan and VRT (two Flemish broadcasters that compete directly with De Vijver) from its cable platform, as it would make Telenet’s offer less attractive and lead to a loss of subscribers, which therefore would not be a profitable strategy. Moreover, Telenet is obliged to carry VRT’s channels by law. However, the investigation found that Telenet could disadvantage the channels and programs of Medialaan and VRT in more subtle ways, for instance by displaying their video-on-demand content less prominently than that of De Vijver.

Notwithstanding, during the investigation, De Vijver concluded agreements with some TV distributors to license Vier and Vijf and offered to prolong its agreements with others. Similarly, Telenet amended its agreement with VRT and Medialaan to ensure that their respective content would not be disadvantaged compared to that of De Vijver.

The commitments. To address the Commission’s remaining competition concerns, the parties committed –for seven years- to license De Vijver’s channels – Vier, Vijf and any other similar channel it may launch – to TV distributors in Belgium under fair, reasonable and non-discriminatory terms. In particular, the parties committed:

  • to license the channels Vier and Vijf;
  • to license any new basic pay TV channel that De Vijver may launch in the future;
  • De Vijver must also license to distributors-linked services such as catch-up TV and PVR (a service that allows users to record programs and view them at a later stage).

The Commission provided an infographic illustrating the commitments.