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Polish competition authority uncovers collusion in sports broadcasting

On 21 August, 2013, the President of the Polish Office of Competition and Consumer Protection (“UOKIK” ) fined pay-per-view (PPV) providers a total amount exceeding PLN 3.6 million for setting a minimum resale price for the PPV transmission of sports events. The UOKIK started antitrust proceedings in November 2012 and found that the license agreements concluded between the holder of the broadcast rights (Sportfive) and certain broadcasters (UPC Poland, Cyfrowy Polsat, Vectra, Multimedia Polska, Toya, Inea, Echostar Studio ZTS Tele 4, SGT, ZUA Antserwis, TK Antserwis and Asta-net Asta Group) set a minimum resale price for the PPV transmission of  two 2014 World Cup qualifier matches involving the Polish football team. In the opinion of the UOKIK this constituted anticompetitive collusion. Sportfive submitted a request to the Polish competition authority for the penalty to be withdrawn in the context of a leniency application and subsequently avoided any financial sanction. Multimedia’s fine was reduced by 30% for cooperating with the UOKIK. Sportfive submitted information including  correspondence with the other participants to the agreement, and significantly contributed to proving the existence of prohibited practices.

Sportfive is a company which manages the rights for broadcasting matches of the Polish national team pursuant an agreement with the Polish Football Association. Initially, Sportfive negotiated the sale of the license for the matches to the TVP (the state-owned Polish national channel) in order to broadcast the matches on the free-to-air channel. However, TVP did not agree to the remuneration requested by Sportfive. Thus the company began negotiations with Cyfrowy Polsat and subsequently other operators. As Cyfrowy Polsat was already experienced in PPV transmissions in Poland, it prepared the draft of the license agreement. In the course of negotiations, Cyfrowy Polsat requested that Sportfive provide the prices which the other operators would offer to end-consumers. Moreover, the broadcaster sent to Sportfive a draft of the license agreement including a minimum resale price clause (of PLN 20). Sportfive confirmed the minimum resale price and agreed with Cyfrowy Polsat that it would require the other operators to abide by it too. In fact, throughout the negotiation with the other broadcasters, Sportfive used the model agreement, including the minimum resale price clause, prepared by Cyfrowy Polsat.

Even though this particular license agreement was bilateral (between Sportfive and the particular operator) the UOKIK concluded that all of the license agreements formed a single collusive arrangement. The entire collusion was qualified as a “hub and spoke” cartel, and Sportfive was deemed to be the coordinator of the collusion. However, given the fact that Polsat Cyfrowy prepared the draft of the agreement, and was the first to come up with the minimum resale price it was deemed to be the leader of the collusion. All the others operators, except for Cyfrowy Polsat, were considered passive participants (they did not have the ability to change the agreement as offered by Sportfive). Hence their fines were decreased by the UOKIK.

With regard to the market determination, the UOKIK defined the relevant markets as follows:

(a)          the national market for the trading of TV rights for broadcasting football matches of the Polish national team (market where the collusion was concluded);

(b)          the local market for access to the paid TV services (affected market); and

(c)          the national market for access to the paid broadcast of sport events via the Internet (affected market).