Business Law

Competition distortion: Internet platform Germany’s Gold is cause for concern

Germany’s federal cartel office (Bundeskartellamt) has expressed concern about the ARD/ZDF-run video platform Germany’s Gold.

The platform was founded jointly by a number of ARD and ZDF companies and eleven other production and licencing companies.

The Bundeskartellamt is worried that the ARD and ZDF companies, which are funded through licence payers’ fees, would in effect be competing on the private market. This, together with the unique way in which productions are funded, amount to a “massive distortion in competition”.

Andreas Mundt, president of the Bundeskartellamt explained, “ARD and ZDF compete on the video-on-demand market. This means they have to market these products independently of one another. Under the current concept of a jointly operated online platform, prices and choice could be coordinated between the two broadcasters. The implications under competition law are self-evident.”

The Bundeskartellamt believes that as both the video library and the production of its content are funded through licence fees, a stark distortion in competition results. In Mundt’s opinion, “Additional restrictive activities on competition by the broadcasters’ sister companies are not acceptable.”

The cartel office clarified that whether or not it is justifiable to charge a fee to access licence fee-financed content is not for the cartel office to decide. ARD and ZDF both announced that they do not intend to cease using advertising.

According to the Bundeskartellamt, the possibility of coordinating prices and choice arises from the fact that it is subsidiaries of ARD and ZDF which market the priced video content. Furthermore, it is feared that alternative platforms will have little or no access to the content.

If the companies involved were willing to drop the idea of a jointly-marketed video library and restrict cooperation to a purely technical platform, the cartel office says its concerns would be addressed. The companies have signalled their willingness to consider adopting the proposed solution.

These concerns come after the Bundeskartellamt prohibited a proposed jointly-operated video library by the RTL Group and ProSiebenSat.1 in response to suspicions of monopolisation. In reply the private broadcasters threatened to take the case to court.

Rafaela Wilde is a partner at the law firm WILDE BEUGER SOLMECKE.

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