Poland’s Office of Competition and Consumer protection (UOKiK) has initiated separate antitrust proceeding against Telewizja Polsat and four companies from the Discovery group.
In a statement, UOKiK says that Polsat and the four companies (Discovery Communications Europe, Discovery Communications Benelux, Discovery Polska and Eurosport) distribute TV channels produced by themselves or within their capital groups. These channels are sold to TV operators, including cable networks.
UOKIK adds that it has recently received many complaints from operators, industry associations and consumers regarding restrictions on the freedom to shape the programming offer or the choice of TV channels. The initiation of the antimonopoly proceedings was preceded by an intensive investigation, under which, while determining the functioning of the market, UOKiK collected information from representatives of the industry and other regulators.
UOKiK’s president Tomasz Chróstny said: “The voice from the market was unambiguous and pointed to the deepening imbalance between broadcasters or distributors and operators, for which consumers are paying. Our findings as part of the investigation show that the above situation is a consequence of the sales policy of TV broadcasters or distributors – Telewizja Polsat and companies from the Discovery group”.
UOKIK adds that its information shows that operators have the option of purchasing channels in a package – 28 from Telewizja Polsat and at least six in the case of companies from the Discovery group. Although they can also buy individual channels, it is absolutely unprofitable for them. For example, the purchase of only two channels from Telewizja Polsat may be more expensive than the entire package of channels, which also includes these two channels. Conversely, in the case of the Discovery group, the purchase of the three TV channels may be more expensive than the purchase of any of the packages offered by the Discovery group. In addition, package purchase agreements stipulate that pay-TV operators have to include a certain proportion of their programming in the basic, i.e. most common, packages that they offer to their customers.
Chróstny continued: “The activities of Telewizja Polsat and companies from the Discovery capital group may constitute an unlawful use of the position of the companies on the TV channel distribution market. Cable TV operators, who have limited possibilities to freely create an offer for their recipients, may lose out on their practices, because they are forced to buy many channels and place them in specific packages which are then sold to viewers”.
UOKIK says that a dominant position means that an entrepreneur can operate independently of consumers, contractors and competitors. Having such significant market power is not prohibited, but it must not be abused. In the case of Telewizja Polsat and companies from the Discovery group, their strong position is determined by the fact that they offer channels that are perceived as necessary by consumers and cable operators. Their absence may result in the consumer’s choice of an offer from another operator. Abuse of a dominant position may consist in forcing TV operators to purchase multiple channels and include them in specific packages offered to viewers. This may also translate into a more difficult development of smaller broadcasters, as well as a privileged position in the advertising revenues of Telewizja Polsat and the Discovery group.
Chróstny concluded by saying: “The method of selling channels to cable operators also affects the situation of consumers who receive an offer that differs from their actual needs. If they want to watch their favourite shows, they also have to pay for those that don’t interest them at all. This limitation does not have a technical dimension, but results from the sales policy of broadcasters or distributors. The necessity to include a certain part of channels by cable TV stations in basic packages may increase their prices”.
The companies face the prospect of being fined up to 10% of their annual turnover for abusing their dominant position.
