The Competition Authority has taken provisional measures concerning alleged breaches of competition law by 365 Media Ltd, and a breach of a Competition Board decision from 2005. The alleged breaches by 365 Media consist of the company refusing Canal Digital Íslandi ehf. (Canal Digital), which intends to engage in the distribution of television content in Iceland, about the distribution of 365's Icelandic television channels, but only on the condition of being granted access to Canal Digital's customer base. The Competition Authority considers that 365 Media's demand for access to its competitor's customer base is in all likelihood significantly anti-competitive, as 365 Media holds a unique, dominant position in the Icelandic pay-TV market. It may therefore constitute an abuse of the company's dominant market position.
The background to the case
This case began last October when the Competition Authority received a complaint from Canal Digital, which complained that the 365 media outlets had refused to supply its television signals. It was requested that the Competition Authority rule that 365 Media would be required to supply Canal Digital with the television and radio signals of its domestic channels, without further conditions than those permitted in Competition Council Decision No. 12 of 2005, which was issued in connection with the merger of Og Fjarskipti and 365 Midlar. It had also been considered that the merger would limit the ability of new entrants to enter, for example, the television and radio markets. It was also considered that, if nothing was done, consumer choice would be reduced in the future. From a consumer perspective, the merger could create a situation where their choice of telecommunications provider would affect their access to television and radio content. For this reason, it was considered necessary to intervene in the merger.
Alleged abuse of a dominant position by 365 Media in the subscription television market
In its interim decision, the Competition Authority concludes that the position taken by 365 Media, not to supply the company's television signal to Canal Digital unless it retains a direct business relationship with subscribers who wish to switch to Canal Digital, probably constitutes an refusal of supply which contravenes Article 11 of the Competition Act and Competition Council Decision No. 12/2005. Specifically, this refers to 365's condition of having access to information on the names and addresses of those who purchase a subscription to 365's channels from Canal Digital. The Competition Authority considers that 365 Media's access to Canal Digital's customer list could enable the dominant undertaking to direct its marketing efforts directly at Canal Digital's customers and thereby distort competition.
In the opinion of the Competition Authority, 365 Media's requirement will likely significantly limit competition and have an exclusionary effect on markets where the company is in a uniquely dominant position.
Instructions addressed to 365 Media Ltd.
The interim decision states that consideration must be given to the fact that Canal Digital is entering the market for subscription television broadcasting in Iceland. The dominant player in this market is 365 Media, with its television channels Stöð 2, Sýn and Sýn 2. 365 Media therefore enjoys a unique, dominant position in the subscription television market.
According to the evidence in the case, Canal Digital had reserved capacity for the 365 media television channels on a satellite. The company cannot keep those slots open for long and, furthermore, incurs significant costs as a result. It follows that Canal Digital could suffer significant damage if the matter is not resolved quickly. Furthermore, there are significant commercial interests for CDI in being able to commence its marketing activities as soon as possible. It follows that a wait for the Competition Authority's final decision could lead to a significant disruption of competition and even to Canal Digital abandoning its attempts to establish itself in the distribution of television content in this country. In light of all this, the Competition Authority considers it urgently necessary to direct 365 to immediately supply the television signals of its channels to Canal Digital, on the condition that the latter company fulfils the substantive requirements that 365 is authorised to impose without... they do not contravene competition law.
The provisional decision of the Competition Authority is valid until 1 April 2008.
Decision No. 1/2007.
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