ProSiebenSat.1 has informed the Bundeskartellamt that it has decided against introducing a new business model according to which it would have its previously unencrypted television programmes encrypted and access to them offered against payment. In the Bundeskartellamt’s view the planned business model constituted an illegal cartel agreement between the two broadcasting groups ProSiebenSat.1 and RTL. It therefore informed the two parties that it would issue a warning letter should they proceed with the project.

The President of the Bundeskartellamt, Dr Böge, stated: “For years the two broadcasting groups have planned to encrypt digital television and distribute it against payment, and it was always to be suspected that this plan constituted a concerted strategy. If only one of the two broadcasting groups were to initiate the encryption of its programmes and the collection of a fee for their reception, it would risk a significant slump in the number of viewers and in advertising revenue.”

A concerted strategy would have enabled RTL and ProSiebenSat.1 to generate a new source of revenue sidestepping competition and avoiding any substantial risk. This revenue was to be achieved through a monthly fee payable by viewers to Astra for granting bundled access to the encrypted programmes of both broadcasting groups. A significant part of the revenue accrued with this fee was to go to the two broadcasting groups.

The coordinated encryption of programmes and generation of a revenue source could not be exempted under competition law, mainly because of the significant burden the fee system would place on consumers.

Moreover, it could not be assumed that the business model would have furthered the digitalisation process which is already well under way in the satellite sector. The objective of the broadcasting groups’ agreement was rather to ensure that households were equipped with receiving devices that would support a form of digitalised television which was beneficial to their business model.

Since one of the two broadcasting groups has abandoned the business model, a suspicion of coordinated action is no longer given which is why the proceedings against RTL and ProSiebenSat.1 can be stayed. Should the parties decide to take up the business model again, the proceedings would be continued.