Successful resolution to complaint against RTÉ
17 January 2012
The Competition Authority has published details of the successful outcome of an investigation involving RTÉ, following a complaint made by TV3.
TV3 had complained that RTÉ’s “share deal” was anti-competitive. The share deal is a scheme used by RTÉ to sell airtime to advertisers. One element of the scheme offers advertisers discounts based on the share of their television advertising budget which they commit to RTÉ.
The Competition Authority investigated the complaint and had concerns that the share deal could be in breach of Irish and European competition law. Rebates and discounts are a common way to attract customers. However, if a dominant player in a market offers conditional rebates calculated on the basis of customer loyalty it may be a breach of competition law.
During the investigation, RTÉ proposed changes to the share deal and have given undertakings to the Authority to change the scheme with effect from July 2012. The Authority is satisfied that the undertakings address its concerns.
Broadcasting and television advertising are closely related. Good programmes attract viewers, high viewer numbers attract advertisers. The revenue broadcasters earn from advertising allows them to invest in better programming. This means that healthy competition in television advertising is important to the health of the broadcasting sector generally.
Commenting on the outcome, Authority Chairperson, Isolde Goggin, said: “This is a good result for consumers and the Authority. We investigated the case and reached a satisfactory conclusion with RTÉ without the significant expense of having to go to court. Helping competition work well in markets ultimately benefits consumers.”
The Competition Authority publishes enforcement decisions in the interest of transparency and to give guidance to other businesses and sectors. This enforcement decision can be read in full on our website by clicking here.
NOTES TO THE EDITOR
· 20 March 2009: TV3 submitted a complaint to the Competition Authority. The Authority assessed the complaint following a request for further information from the complainant. We made additional requests for information from both TV3 and RTÉ to clarify the nature of the allegations and to understand the economic and regulatory context of the markets involved. As part of the assessment, we also considered whether the alleged anti-competitive behaviour was likely to have a significant impact on competition in the State.
· 22 October 2010: On receipt of the information sought, and having assessed the complaint, the Authority decided to open a full investigation into RTÉ’s share deal. As part of the investigation, we contacted a number of sources including television broadcasters (based here and overseas), media agencies, OfCom and other competition authorities.
· 15 March 2011: The Authority wrote to RTÉ expressing concerns about their share deal. In particular, we were concerned that the share deal could amount to an abuse of a dominant position in breach of section 5 of the Competition Act 2002 and/or Article 102 of the Treaty on the Functioning of the European Union.
· 13 May 2011: RTÉ submitted its response to our letter of 15 March disputing our views on market definition, dominance and abuse of dominance.
· 26 August 2011: RTÉ submitted a proposed new scheme for trading television advertising airtime.
· 1 September 2011: The Authority met with RTÉ to discuss their proposal. RTÉ informed the Authority that it had, in any event, intended to review how it sold television advertising airtime and the possibility of introducing a new scheme to, inter alia, improve efficiencies.
· 6 September 2011: Additional information regarding the proposal was submitted by RTÉ, at our request.
· 7 October 2011: The Competition Authority and RTÉ entered into the Agreement and Undertakings.
The Agreement and Undertakings are legally binding on RTÉ and the Competition Authority.
As RTÉ’s proposal addressed the Authority’s concerns regarding the impact of the share deal on competition, the Authority decided to close the investigation. It was not necessary for the Authority to reach a final view on the question of relevant market, dominance or abuse of dominance by RTÉ. For that reason, the enforcement decision is not a final decision on whether or not there was a breach of competition law.
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Contact Information
Clodagh Coffey, Communications Manager, The Competition Authority
Tel: 01 804 5406 Mobile: 087 915 5406 email: cc@tca.ie
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