The Spanish regulator CNMC has fined Telefónica €5 million for again failing to comply with the commitments it accepted for its acquisition of the DTH platform DTS in 2015.
According to CNMC, the telco voluntarily presented a series of commitments to be able to acquire DTS and preserve competition in the market.
However, the agreement between DAZN and Telefónica whereby the former exclusively acquired the Formula 1 broadcast rights for the 2021, 2022 and 2023 seasons, and which allowed Telefónica to access all DAZN content, violates the following aspects of the commitments. These are as follows:
Commitment 2.9, which obliges Telefónica to make available to other pay-TV operators in Spain a wholesale offer of its own premium channels, considering a premium channel to be one that includes, among other content, a live Formula 1 sporting event.
Commitment 2.10, which prohibits Telefónica from acquiring and exploiting exclusive rights to broadcast TV channels edited by third parties.
Annex 1.1.a) of the commitments, which includes a system to establish the price of certain channels of Telefónica’s wholesale offer of premium channels; in particular football, Formula 1 and Moto GP. The price for the operators that wish to hire them will be subject to a Guaranteed Minimum Cost (CMG) system that aims to share the risk that Telefónica assumes when acquiring the exclusive broadcast rights in Spain of the aforementioned audiovisual content.
CNMC says that Telefónica has breached commitment 2.9 by excluding Formula 1 premium content from its wholesale offer and having marketed it exclusively in favour of DAZN; commitment 2.9 and Annex 1, having included in the agreement a provision whereby any Telefónica subscriber who receives DAZN content will also count as a DAZN subscriber for the purposes of calculating the CMG (in the framework of the channel offer Telefónica wholesalers in Spain); and commitment 2.10, for including in the agreement clauses that, in one way or another, would have allowed de facto exclusives.
It concludes by saying that Telefónica has two months to appeal the decision to the National Court if it wishes to do so.
Broadband TV News notes this is the second time this year the telco has been fined by CNMC for failing to comply with its commitments when acquiring DTS.
