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Competition

PR(04)05: The EFTA Surveillance Authority has decided to launch a sector inquiry into sport content to be distributed via new media

17.3.2004

The EFTA Surveillance Authority has decided to launch a broad investigation in the territory of the EFTA States regarding the sale of sports rights to new media.

The Authority’s decision is prompted by concerns about the market conditions related to the provision of audiovisual sport content for distribution via new media platforms, including the Internet and third generation (3G) mobile phones. Fair, open and non-discriminatory provision of sport content will be crucial to the commercial success of enhanced Internet and 3G mobile telephony services. The Authority wants to ensure that access to such key content is not unduly restricted  to the detriment of the consumers in Iceland, Liechtenstein and Norway.

The inquiry will be conducted in parallel to the one currently being launched by the European Commission (Commission press release IP/04/134).

The Commission has discovered instances of operators refusing to supply content, the bundling of TV rights with new media/3G rights, the existence of embargoes favouring TV coverage over new types of coverage, and the purchase of new media/3G rights on an exclusive basis. In all cases, the Commission has taken care to ensure that access to such popular rights will not be monopolised to the detriment of new competition and, ultimately, the consumer.

The aim of the Authority's inquiry, similar to the Commission's, is to acquire sector-wide information on the commercial practices relating to sports content rights for new media distribution in the EFTA States. On the basis of this information, the Authority aims to establish whether current commercial practices infringe the competition rules of the EEA Agreement, in particular the prohibition of restrictive practices and abuses of dominant position (Articles 53 and 54 of the EEA Agreement).

The Authority shares the views of the Commission that there is a need for a sector-wide approach which would clarify the application of the EEA competition rules and provide guidance to both the owners of the rights and those willing to buy them. Moreover, a sector inquiry would provide comparative data for the entirety of the EEA against which individual behaviour will be assessed more easily.

For the purpose of this inquiry, the Authority's Competition and State Aid Directorate will send out extensive formal requests for information. As part of the first phase of its inquiry, the Authority will send questionnaires to a number of representative sport organisations and other holders of sports rights, including agencies, broadcasters and mobile network operators in Iceland, Liechtenstein and Norway. Depending on the assessment of those replies, the Authority may decide at a later stage whether to open formal proceedings if and where it finds practices or prices that would appear to constitute infringements of the EEA competition rules. 

Legal background and procedure

Under Article 12 of Chapter II of Protocol 4 to the Surveillance and Court Agreement, the Authority may initiate general inquiries into those sectors of the economy where it believes competition might be restricted or distorted within the territory covered by the EEA Agreement. The aim of this provision is to allow the Authority to investigate suspicious pricing structures or other practices indicating a possible anti-competitive situation across a whole industry. No indications that specific companies have infringed the provisions of the EEA Agreement are required.

Once the Authority has decided to start such an inquiry, it has the powers to request and obtain all necessary information from Governments and competent EFTA State authorities, as well as from companies. For instance, Article 11 of Chapter II of Protocol 4 to the Surveillance and Court Agreement empowers the Authority to obtain all necessary information from companies and associations thereof, whether or not they are suspected of any infringement of the EEA competition rules. 

Pursuant to Article 15(1)(b) of Chapter II of Protocol 4 to the Surveillance and Court Agreement, the Authority may fine companies or associations thereof, where they supply incorrect information upon request (Article 11(3) and (5) or Article 12), or do not reply within the deadline set by an Article 11(5) decision.

For further information please contact Ms. Dessy Choumelova of the Competition and State Aid Directorate, tel: (+32)(0)2 286 1859.

17 March 2004




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