25 September 2015

Spanish Competition Authority fines Mediaset €3 million for breaching conditions of a 2010 merger

On 15 September 2015, the Spanish Competition Authority (CNMC) announced that it has imposed a €3 million fine on Mediaset, the parent company of television channels such as Telecinco and Cuatro.

In 2010, the now-extinct Comisión Nacional de Competencia (CNC) cleared the merger of Telecinco and Cuatro subject to certain remedies, including the prohibition of offering bundled advertisement packages for the two channels (case no. C/0230/10TELECINCO/CUATRO). These remedies were imposed to mitigate the risk of the common management of networks having an adverse effect in the market of advertising on television channels via price as a result of the reduction of competition after the transaction. Under Spanish law, undertakings must ensure that they comply with the commitments made to the CNMC for merger clearance and if the watchdog sees that they have failed to do so this may lead to fines. It should be borne in mind that the CNMC will probably only consider its own interpretation of the merger provisions and the company’s actions, even though the company may have a legitimate different interpretation of the content and obligations included in the commitments.

This is the third time that the CNMC has fined Mediaset for a breach of commitments entered into as part of the 2010 merger clearance remedies. In 2011, Mediaset was fined €3.6 million for failing to submit an action plan setting out how the group planned to meet the commitments. The CNC considered this conduct to be a very serious infringement of article 62.4 c) of the Spanish Competition Act 15/2007. In February 2013, the CNC fined Mediaset a further €15.6 million for failing to comply with the aforementioned commitments, which was also considered to be a very serious breach of article 62.4c).

On 24 March 2015, the CNMC announced that it had resolved to open an inquiry into Mediaset’s compliance with these commitments. The CNMC once more considered that there was strong evidence to suggest that Mediaset was linking the advertisement packages of the Telecinco and Cuatro channels whilst applying a discount policy based on a global investment quota in the group. This inquiry led the watchdog to consider that at least between 6 February 2013 and 31 March 2014, a very serious breach of Spanish competition law took place. The CNMC therefore imposed a further €3 million fine on Mediaset for failing to keep its advertising offers for both channels separate.

It is important to note that according to article 63 of the Spanish Competition Act, any conduct considered to be a very serious breach of competition law will be fined up to 10% of the turnover of the company. Further, the CNMC’s decisions cannot be challenged through administrative review. However, the company that has been fined may bring a complaint before the Audiencia Nacional (AN), which is the judicial body in charge of reviewing the CNMC’s administrative decisions. Such a complaint must be brought within two months of the fine recipient being notified of the CNMC’s resolution. The AN will then decide whether the interpretation of the company’s actions in relation to the commitments by the CNMC is valid or whether any appeal raised by the company is legitimate. The AN will also confirm, or may modify, the level of fine imposed.

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