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Central Marketing: DFL has to improve consumer involvement

Date of issue: 17.07.2008

The Bundeskartellamt has informed the German Football League (DFL) that in its current form the model, which DFL proposes for marketing TV broadcasting rights for the football league, does not meet competition law requirements for adequate consumer involvement.

The combined marketing scheme for the broadcasting rights (“central marketing”) represents an anticompetitive agreement, which falls under the ban on cartels in German and European competition law (The relevant provisions in this case are Article 81 of the EC Treaty and Sections 1 and 2 of the German Act against Restraints of Competition (ARC)).The scheme is only admissible if it ensures that consumers receive a fair share of the benefit resulting from the central marketing scheme.

The Bundeskartellamt envisages this requirement as being satisfied if end consumers still have the opportunity to choose between combined pay TV live coverage and prompt free-to-air coverage of the highlights of the games. In this way consumers benefit from both free-to-air and pay television.

According to the assessment of the market participants, which is also shared by the Bundeskartellamt, a key advantage of central marketing is that it enables combined coverage of the highlights. Firstly, this enhances product diversity by allowing the TV viewer to gain a general picture of the matchday in a manageable timeframe. Above all, the availability of prompt free-to-air highlight coverage following the games limits the scope of the acquirer of the combined live pay TV broadcasting rights for setting prices. Offering the end consumer a sufficiently attractive opportunity to switch to free-to-air TV would prevent any paramount market position associated with an exclusive combination of live broadcasting rights from being abused by charging excessive pay TV subscription fees.

The Bundeskartellamt sees such freedom of choice as guaranteed if highlights coverage constitutes an integral part of the match day, is broadcast shortly following the games and at a time when a wide section of the population can be accessed. This requires that the core of the matchday, i.e. the Saturday games, can be broadcast in a free-to-air TV round-up in a broadcasting slot before 8 p.m. Either public or private TV stations could provide this service.

By contrast, the tendering procedure proposed by DFL would most probably have resulted in the exclusion of free-to-air TV highlight coverage on Saturdays before 10 p.m. The possibility envisaged by DFL of the free-to-air live broadcast of a single game every second Sunday is not adequate to offer the consumers a fair share of the benefit of central marketing. Above all, the live broadcasting of single games on Sundays would be inadequate to limit the scope of pay TV to increase its prices.