Liberty Global is willing to make considerable concessions in order to make the acquisition of German cable operator Kabel BW possible. Last Friday, the competition commission Bundeskartelamt issued its preliminary findings raising competitive concerns about the takeover.
In its preliminary assessment, the competition commission came to the conclusion the German cable market is controlled jointly by the three major operators (KDG, Unitymedia and Kabel BW). Technically and commercially, these three operators could roll out their services across all of Germany and compete with each other.
As a result of the merger, it would narrow the field from three to two companies. Under these circumstances it would be in futurebe even more unlikely that the remaining companies KDG and Unitymedia/KabelBW would compete directly with each other.
The second issue is the wholesale market for channel distribution: broadcasters rely on a single distributor in each regional network.
The Bundeskartelamt said it has not yet taken a decision and has extended the deadline until December 15. Until that time, a market test should evaluate the concessions promised by Liberty Global.
Competitive concerns also exist in the input market, ie in proportion to the cable operator to the TV stations that rely on the supply in each regional network.
In a market test, the competition watchdog will now seek the views of the various parties involved and determine whether the commitments are appropriate to address the competition concerns.
One of the concessions is the offer from Unitymedia to distribute all the digital signals from German free-to-air private channels unencrypted over its network to third parties.
Speaking to Welt am Sonntag Unitymedia CEO Lutz Schüler said he hoped this would solve one of the main concerns. “In this way, even small cable TV companies and telecom providers would be able to access these signals.”
