Analysis of the Principles Applicable to the Review of Exclusive Broadcasting Licences Under EC Competition Law

Abstract

This article discusses the Commission's review of exclusive broadcasting licences under EC competition law. It concludes that the Commission's practice suffers from a number of inconsistencies both as concerns market definition and substantive analysis. The authors submit that exclusive licensing is a legitimate and recognised practice for the commercial exploitation of broadcasting rights. There should therefore be a presumption in favour of the validity of such licences. Market definition and substantive analysis should be consistent with the competitive issue under examination. If the competitive issue is foreclosure, then competition authorities need to acknowledge the existence of alternative content that serves the needs of competing broadcasters equally well, regardless of the existence of dedicated viewer groups. A particular content's share of the relevant content market should serve primarily as a filter to eliminate licences involving low market shares from further scrutiny. Such licences a priori cannot raise competition issues, irrespective of their duration or scope. High market shares, on the other hand, do not automatically translate into an appreciable restriction of competition. Even in the case of high market shares, right-holders retain the right to grant licences on an exclusive basis. However, in such cases the duration and scope of the licence may need to be assessed in more detail, taking into account the full economic and legal context of the licence. An obligation for right-holders to license their content or to grant licences on a non-exclusive basis can only be contemplated in exceptional cases. Refusal to license, as such, even by a dominant undertaking cannot warrant such an obligation. The assessment of licences for new media rights should follow the same principles as the assessment of licences for traditional broadcasting rights. EC competition law should not be used as an instrument to make media policy. Competition law is platform neutral and does not provide a legal basis to favour or promote certain media platforms over other platforms. Indeed, using competition law as a media policy instrument would distort free competition and create serious legal uncertainties.