PRESS RELEASE No 80/02
8 October 2002
Judgment of the Court of First Instance in Joined Cases T-185/00, T-299/00
and T-300/00
M6 v Commission, Gestevisión Telecinco v Commission and SIC v Commission
RULES GOVERNING THE ACQUISITION BY THIRD PARTIES OF TELEVISION RIGHTS
FOR SPORTING EVENTS UNDER EUROVISION LEAD TO RESTRICTIONS ON COMPETITION IN
BREACH OF THE PROVISIONS OF THE TREATY
The Commission was wrong to conclude that, even in a market limited to
certain major international sporting events, the sub-licensing system set
up by the EBU guarantees access to Eurovision rights for third parties competing
with EBU members.
Four companies operating free-to-air television channels with national coverage
- the French channel Métropole télévision SA ("M6"),
the Spanish companies Antena 3 de Televisión, SA and Gestevisión Telecinco,
SA and the Portuguese company Sociedade Independente de Comunicação,
SA ("SIC") - are contesting the rules governing the joint acquisition
of television rights for sporting events, the exchange of the signal for sports
broadcasts under Eurovision, and contractual access for third parties
to that system, which gives rise to serious restrictions on competition. The
four applications focus in particular on the sub-licensing system governing
access to the Eurovision system for third parties broadcasting free-to-air.
A 1993 decision by the Commission granting an exemption from the Community
competition rules applying to companies for access (broadly understood) to the
rights held by the EBU was annulled by the Court of First Instance on 11 July
1996. 1 Subsequently, on the Commission's request, the EBU adopted
new provisions, which were the subject of a second Commission exemption decision
covering the period 26 February 1993 to 31 December 2005, inter alia
in the area of sub-licences, considered to offer wide opportunities for live
and deferred transmission for non-members on reasonable terms. That second decision
is the subject of the present actionbefore the Court of First Instance, on the
ground that the condition on which it is based - that is, the non-elimination
of competition for non-members - has not been satisfied and the exemption decision
must therefore be annulled.
The Court of First Instance confirms the position of the applicants: the sub-licensing
system does not guarantee competitors of members of the EBU sufficient access
to the transmission rights for sporting events which members hold by virtue
of their participation in that purchasing association. As a result, the exemption
it enjoys must be annulled.
The Court of First Instance first considers the structure of the markets in
question and the restrictions on competition resulting from the Eurovision system.
That examination reveals the existence of an upstream market, for the acquisition
of rights, and a downstream market, for the televised transmission of sporting
events, and makes clear that television rights to sporting events are granted
for a given territory, normally on an exclusive basis. That exclusivity
is considered necessary by broadcasters in order to guarantee the value of a
given sports programme in terms of viewing figures and advertising revenues.
Analysis of the effects of the Eurovision system on competition shows that
it leads to two types of restriction:
- first, the joint acquisition of television rights
to sporting events, their sharing and the exchange of signal restricts or even
eliminates competition among EBU members which are competitors on both the upstream
and downstream markets;
- second, the system gives rise to restrictions on competition
for third parties, since those rights are generally sold on an exclusive basis,
an "aggravating" circumstance for non- members which are refused access
to them.
While it is true that the joint purchase of televised transmission rights
for an event is not in itself a restriction on competition in breach of the
provisions of the Treaty and may be justified by particular characteristics
of the product and the market in question, the Court of First Instance points
out that the exercise of those rights in a specific legal and economic context
may none the less lead to such a restriction. Barring access to programmes
deprives non-EBU channels of potential revenue and demonstrates Eurovision's
extreme exclusivity: if the same rights were bought by a media group, operators
could negotiate to obtain them for their respective markets.
The Court of First Instance also considers whether the third-party access
scheme to the Eurovision system compensates for those restrictions on competition
for third parties and therefore avoids their being eliminated from competition.
Two cases must be considered: live and deferred transmissions. Even if
it were acceptable for EBU members to reserve the first category for themselves,
nothing justifies their extending that right to all the competitions in a given
event even when they do not intend to broadcast those competitions live. The
possibility of providing deferred coverage or roundups of events is
subject to several restrictions, in particular as regards embargo times and
the editing of programmes.
As a result, both the rules and the operation of that system fail, with a
few exceptions, to allow competitors to EBU members to obtain sub-licences for
the live broadcast of unused Eurovision rights. In reality, the system allows
the transmission of competition roundups only under very restrictive conditions.
The Commission has therefore made a manifest error of assessment in determining
that the sub-licensing system could be granted an exemption.
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1 - See Joined Cases T-528/93, T-542/93, T-543/93, T-543/93 and T-546/93 Métropole Télévision and Others v Commission.