216 million euros fine imposed on RTL and Pro7Sat.1 advertising time marketing companies

30.11.2007

The Bundeskartellamt has today imposed fines totalling 216 million euros against the advertising time marketing companies of the two private broadcasting groups RTL and Pro7Sat.1. On the grounds of anti-competitive discount agreements, which the marketing companies IP Deutschland GmbH, active for RTL, and SevenOne Media GmbH, active for Pro7Sat.1, concluded with media agencies or the advertising industry in the form of contracts for the broadcasting of television advertising spots, the Bundeskartellamt has issued orders imposing fines of 96 million euros (RTL) and 120 million euros (Pro7Sat.1).

Firstly, the discounts concerned are so-called proportional or share discounts. Under these agreements the media agencies are granted substantial discounts and other refunds if they place certain large proportions of their advertising budget with the respective broadcasting group. Due to these discounts the media agencies have a strong economic incentive to place the respective proportion of their advertising budget with the two large marketing companies and not with smaller broadcasters because the discounts are granted retrospectively for the entire budget, i.e. not only for the amount in excess of the discount thresholds. This incentive effect forecloses the TV advertising market to smaller, less powerful broadcasters and generally makes access to the market more difficult. Secondly, the anticompetitive discounts are in the form of retroactive quantity discounts which have their own negative effect on competition. In view of the companies’ joint market share of more than 80 per cent on the television advertising market affected, the discount system practised by RTL and Pro7Sat.1. violates German and European competition law.

The proceedings were based on a search of the premises of both advertising time marketing companies and a number of media agencies on 19 June 2007. During the search substantial evidence was seized which proved the existence of the anticompetitive agreements.

RTL and Pro7Sat.1 already announced their acceptance of the fines at the beginning of October this year. Since then both broadcasters have introduced new discount systems.

Use of cookies

Cookies help us to provide our services. By using our website you agree that we can use cookies. Read more about our Privacy Policy and visit the following link: Privacy Policy

OK