ITALIAN COMPETITION REPORT
CASE SUMMARY

THE ITALIAN COMPETITION AUTHORITY (AGCM) FINES 4 COMPANIES FOR THEIR PARTICIPATION TO A CARTEL AIMING TO SHARE THE SERIE A MEDIA RIGHTS
CASE I790 – 2015-2018 SERIE A MEDIA RIGHTS

INTRODUCTION

On April 19, 2016, the Italian Competition Authority fined Mediaset RTI/Mediaset Premium, Sky Italia S.r.l., Infront Italy S.r.l. and Lega Calcio for their participation to a cartel thanks to which they shared the rights to broadcast the football matches of Italian Serie A.
The AGCM commenced the investigation in May 2015, after the press published the news that Mediaset and Sky had found an agreement on how to share the rights to broadcast the matches of the Italian Serie A for the years 2015-2018. In the course of the investigation, which lasted less than one year, the Italian Competition Authority took the depositions of several football teams and competitors.

THE LEGAL BACKGROUND OF THE CASE

The Legislative Decree n. 9/2008 has introduced a centralized marketing system of the media rights related to the sport events organized by Lega Calcio. The European Commission has recognized that a centralized marketing system is not in violation of the rules on competition (see UEFA Champions League, Bundesliga, Premier League). However, the commitment to put up diversified packages of rights for auction so that more than one operator may enter the market has generally been held necessary.
Lega Calcio has the exclusive right to sell the league media rights and is required to offer them to all media companies and for all the communication platforms by means of open tender procedures. Fairness, transparency and equal treatment must be guaranteed to all participants to the tendering procedures. To this end, Lega Calcio must predetermine guidelines for the commercialization of the media rights. The Italian Competition Authority and the Italian Authority for the Communications, each for its area of competence, must verify that the proposed guidelines comply with the rules set by the Legislative Decree n. 9/2008. Unless specifically authorized, the winner of the bid cannot sublicense the broadcasting rights.

THE CASE

Lega Calcio, in order to offer diversified bundles of media rights, decided to offer five Packages of rights. The package A comprised the audio visual rights relative to the matches of eight major clubs (248 events) for the satellite, internet, IPTV and mobile platforms. The package B contained the media rights of the same major clubs but relative to digital tv, internet, IPTV and mobile platforms. The package C included the ancillary rights to the above-mentioned matches such as interviews and images from the locker rooms. The package D consisted of the broadcasting rights on all platforms for the remaining clubs (132 matches). The package E comprised the right to broadcast 3 matches to be chosen among the events held on Sundays over the internet.
On the first round of bids, only four bidders participated. Sky and Fox made bids for the Packages A, B, C and D. Eurosport only made a bid for the Package D. RTI/Mediaset made bids for the Packages A, B and D. However, Mediaset made conditional bids: the bid for the Package A was conditional upon losing the tender for the Package B. The bid for the Package B was conditional upon losing the Package A. The bid for the Package D was conditional upon winning at least A or B. It turned out that Sky’s unconditional bids for the Packages A and B were the highest bids except for Mediaset’s conditional bid for the Package B.
Lega Calcio and Infront believed that awarding the Packages A and B to the same operator was against the rules on competition as it could create too dense a market concentration. However, the rules of the tender procedure did not allow conditional offers. Therefore, Lega Calcio did not immediately award the packages A and B to Sky.
At this point, an intense negotiation between RTI/Mediaset and Sky started with the active participation of Lega Calcio and Infront. The negotiation, in the course of which the reaching of an understanding was favored by the concern that Lega Calcio could award the Packages B and D to Mediaset, brought to an agreement between Sky and Mediaset that mirrored the distribution of media rights that was in place during the years 2012-2015.
Lega Calcio awarded the Package A to Sky, the Package B was awarded to Mediaset, the Package D was awarded to Mediaset with the understanding that some rights of the package would be sublicensed to Sky. In support of the agreement, Lega Calcio authorized the sublicense and committed to seek the required authorizations from the AGCOM and the AGCM. During the negotiation, Infront played an important role to broker the deal.

THE AGCM’S CONCLUSION

The Italian Competition Authority has found that the broadcasting rights related to football matches of national club teams that are regularly held over the year such as Serie A , Serie B, Coppa Italia, Europe League or Champions League constitute a single product market. Such a market is different from the one of other sports’ broadcasting rights as well as from the rights for events that are not held on a regular basis such as the World Cup. The geographic market has been identified by the AGCM with the nation as consumers traditionally follow the tournaments of their national club teams. The Italian Competition Authority also analyzed the related market of free-to-air television and pay-tv and concluded along the lines with the consistent Commission practice that FTA-TV and PAY-TV, although related, constitute two different markets.
In the case at hand, two of the four companies are not competing in the same market nor operate in markets that are upstream or downstream one to the other: Infront is an advisory company and Lega Calcio is the association that has the exclusive right to commercialize Serie A media rights. However, the Italian Competition Authority has taken the view that this did not prevent it from reckoning the existence of a cartel between the 4 companies.2
Even though the case brought to the AGCM’s attention refers to a restriction by the object and does not require any proof of the effects of the agreement on the market, the Italian Competition Authority has held that the agreement has created a reputational barrier that may prevent other competitors from entering the market because of the belief that the incumbent licensees control the way media rights are awarded. The AGCM has fined the four companies for a total amount of €66.412.964,06.
The fined companies have the right to appeal the decision within 60 days of its service.

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Avv. Marco Amorese – [email protected] – Tel. +39 035 212175