On 11 June, the Competition Authority received a complaint on behalf of Síminn hf. concerning the conduct of Ríkisútvarpið ohf. in the advertising market in connection with the Football World Cup (WM). The Competition Authority also received informal complaints of a similar nature from other RÚV competitors.
In Siminn's submission, complaint is made, among other things, about the following alleged conduct of RÚV:
1. About a possible investigation
The Competition Authority has been considering whether to initiate a formal investigation on the basis of the aforementioned complaint, pursuant to Article 3. paragraph 8 of Article 8 of the Competition Act No. 44/2005, as amended, and Article 9 of Regulation No. 880/2005 on the procedure of the Competition Authority. Furthermore, the Authority has considered whether there is cause for an interim decision pursuant to paragraph 3 of Article 16 of the same Act, as Síminn has requested that an interim decision be taken in the matter.
The case concerns, on the one hand, whether there are grounds to initiate an investigation and, if appropriate, to make a decision under Article 11 of the Competition Act, which prohibits the abuse of a dominant position in the market. In that case, it would be investigated, among other things, whether RÚV was considered to have a dominant position in the defined market. Information gathering in the run-up to decision no. 42/2017, Merger of Fjarskipta hf. and 365 miðla hf., indicated that in 2016 RÚV had a 45-50% share of the television advertising market, but such a market share can indicate a dominant market position.
However, it is considered that the investigation could be based on Article 8(3)(c) of the Competition Act, which provides that the Competition Authority shall ensure that the actions of public authorities do not restrict competition, see also Article 16(1)(b). of the Competition Act, which empowers the Competition Authority to take binding action against the actions of public authorities. The condition for such intervention is that the conduct in question distorts competition and is not supported by an adequate legal basis.
In the course of its examination of this matter, the Competition Authority has twice requested information and explanations from RÚV. In its responses, RÚV has confirmed, among other things, the following:
RÚV's responses also include a description of the company's contracts and contracting, the publication of price lists, etc. It is stated, among other things, that in the run-up to a transaction, communications are usually verbal or take the form of email correspondence, but it is the orders, together with subsequent confirmations from RÚV, that are binding when the time comes. Regarding the provision of information on the ordering process and price list, it is stated that in future, the advertising price list for general programming and events will be published earlier than has been the case, and clarity on the RÚV website will be increased to improve accessibility. Furthermore, RÚV will publish rate cards and similar schedules on its website in future, to ensure even greater transparency.
The present complaint refers to the applicable laws and regulations concerning the conduct of RÚV in the advertising market, such as the provisions of Article 7 of Act No. 23/2013 on the National Broadcasting Service, as well as the provisions of the Media Act No. 38/2011 on sponsorship, etc. The Ríkisútvarpið's compliance with laws and regulations in the media market can be relevant, for instance, when assessing whether competition law is being followed. On the other hand, the Media Commission is responsible for monitoring compliance with the Media Act and the Ríkisútvarpið Act.
The Competition Authority has been in contact with the Media Commission regarding this. The Media Commission has stated, among other things, that it received a complaint from Síminn hf. concerning the same matter on 25 May. The matter is under review, but a decision has not yet been reached.
From the above, it is clear that it is the role of the Media Commission to determine whether the Broadcasting Act, the Media Act and the regulations made thereunder have been complied with. It is also noted that a complaint concerning the matter is currently under consideration by the Commission.
In accordance with the 3rd paragraph of Article 8 of the Competition Act, the Competition Authority is tasked with assessing whether any submissions received provide sufficient grounds for an investigation and with prioritising matters. Having considered the submitted evidence and information, it is the Competition Authority's preliminary assessment that there is insufficient indication that RÚV has, through its conduct, contravened Article 11 of the Competition Act, even if the company were to be considered dominant in the advertising market. In assessing this, the Competition Authority has taken into account, inter alia, RÚV's statements regarding the content of the relevant contracts, see section 2 above.
Furthermore, the Competition Authority is of the preliminary view, having considered the information submitted, that at this stage there is no basis for further investigation under its powers to intervene against the actions of public authorities, pursuant to paragraph b of the first sub-paragraph of Article 16 of the Competition Act. In this regard, the Authority refers, inter alia, to the fact that the Media Commission supervises RÚV's compliance with the Media Act, the Act on the National Broadcasting Service, and regulations issued thereunder, as well as to the fact that the Commission is currently reviewing the matter.
In this regard, the Competition Authority reminds that it has previously addressed the position of the National Broadcasting Service in the advertising market. The Authority has repeatedly drawn attention to the competitive distortion resulting from the current legislation, which arises from RÚV's participation in the advertising market alongside the financial contributions to the company from public funds. In 2008, the Competition Authority addressed a specific opinion to the Minister of Education, No. 4/2008, which proposed that RÚV's participation in the advertising market should be reviewed. Since then, the supervisory authority has repeatedly addressed this issue, including in its opinions on draft bills in this area. Among other things, in light of comments from the competition authorities and the EFTA Surveillance Authority, RÚV's conduct in the advertising market was subject to certain restrictions by the Act on the National Broadcasting Service in 2013. It is appropriate for the ministry and the authorities responsible for RÚV's affairs to review the aforementioned discrimination in this light, as well as the rules that have been established to address it.
From all of the above, it also follows that there are no grounds for an interim decision under Article 16(3) of the Competition Act, as the conditions laid down in that provision are not met. The requirement by Síminn is therefore rejected.
In light of the aforementioned informal notices received by the supervisory authority, market participants are hereby given the opportunity to submit further comments on the matter, before a final decision is taken as to whether a formal investigation will be opened or the matter closed without further review. Comments must be received no later than 20th July. The parties are given the opportunity to present their views, in a letter, by email (samkeppni@samkeppni.is) or telephone (585-0700).
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