Regulating Access to Content in the European Union

Abstract

The paper reviews European competition law and policy, and certain aspects of regulation,relating to access to content in the European broadcasting sector. It begins by setting out a value chain within which broadcasting content is located, comprising content generation, wholesaling of programme rights, channel packaging,delivery or transmission and revenue generation or retailing. Two types of competition problems involving content arise in this framework. The first arises from monopolisation of content generation and/or wholesale programming markets; the second involves leveraging market power (in either direction) between wholesale programming and the delivery system. The starting point for an analysis of broadcasting markets in Europe is market definition. The paper reviews definitions which have emerged in competition cases in Europe, notably in programming rights, where sports and more particularly soccer rights have been separately as distinct markets. The relationship between pay and free to air content is also important. Many European competition cases revolve around the collective selling of rights by, for example, the clubs in a sports league. The European Commission, acting as a competition authority, has imposed a range of restrictions on such sales, including limiting the period over which rights are sold, and requiring the rights to be sold in several packages. Different restrictions have also been imposed on film rights sold by Hollywood studios. In the United Kingdom, the competition authority investigated a possible margin squeeze between the retail prices charged by leading pay-TV operator and wholesale programming charges which it imposed on a retail competitor. In order to carry out the analysis, the competition authority notionally separated the company into a wholesale activity and a distribution company. The result of the analysis was borderline, and the authority had insufficient grounds for finding an abuse. As part of mergers involving pay-TV companies in Europe, national competition authorities or the Commission have required the combined entity to make programming available to actual or potential retail rivals, usually operating on different platforms. Here the question of pricing is key, and alternative pricing approaches include cost-based prices, retail minus prices and reliance on negotiation. A disputes resolution procedure is usually put in place. The paper also describes the background to current regulatory proceedings in the UK, where the regulator has mandated the access to certain premium sports channels by retail competitors to the leading pay-TV operator. Finally, regulatory arrangements in the European Union can also require providers of transmission services to carry certain channels, in order to provide universal access to content in the interest of legitimate public policy considerations. These are known as must-carry rules. Must-offer rules, requiring (normally public service) broadcasters to make channels available on different platforms are less common. In summary, the most prominent competition issues which have arisen in Europe in the field of broadcasting relate to the collective selling of rights and mandatory access to programming held by a firm which is dominant in wholesale markets. However, the video content industry is changing rapidly, and new issues are likely to emerge over the coming years.