27 March 2015

CNMC confirms the repeated breach of Telecinco/Cuatro merger commitments by Mediaset

On 24 March 2015, the Spanish Competition Authority (CNMC) announced a new resolution to open an inquiry into the fulfilment of the commitments imposed on Mediaset España Comunicación S.A. (Mediaset) in the merger between Telecinco and Cuatro, two Spanish television channels.

On 28 April 2010, Mediaset, the owner of Telecinco, notified the Spanish authorities of its intention to acquire 100% of the shares of Sociedad General de Televisión Cuatro S.A.U., the owner of Cuatro. On 28 October 2010, the merger filing was conditionally cleared, subject to commitments, in Phase II. The acquisition was eventually executed on 23 December 2010.

One of the commitments stipulated that Mediaset should not develop commercial policies, particularly regarding prices, which directly or indirectly would consist of the linked sale of advertisement packages for the different TV channels.

On 24 May 2011, the Spanish Federation of Autonomic Radio and Television Bodies (FORTA) submitted a complaint to the CNC, arguing that Mediaset could not be fulfilling certain commitments in relation to the sale of television advertising packages, as the number of advertisements on Cuatro had increased, while its audience share had decreased.

In February 2013, the Spanish watchdog fined Mediaset €15.6 million for failing to comply with the commitments. Now, the CNMC considers again that there is strong evidence to support the argument that Mediaset is linking the advertisement packages of Telecinco and Cuatro channels whilst applying a discount policy based on a global investment quota in the group.

The CNMC’s intention to initiate infringement proceedings could result in the imposition of an additional fine on Mediaset. The decision cannot be challenged via an administrative review. However, Mediaset may challenge the decision before the Audiencia Nacional, the judicial body in charge of reviewing administrative decisions issued by the CNMC, within two months of receiving the notification of the resolution.

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