On 12 December 2020, Italy's highest administrative court, the Council of State, upheld the annulment of the Italian Competition Authority's ("ICA") decision to fine broadcasters Mediaset and Sky Italia, the Italian Football League, and marketing agency Infront a total of €66m for an alleged anti-competitive agreement to rig an auction for pay-TV broadcasting rights for Serie A matches.
| what you need to know - key takeaways |
- The notion of a "by object" restriction of competition must be interpreted restrictively.
- When assessing an anti-competitive agreement the ICA is required to have a clear understanding of the relevant market, and to take due account of its peculiarities, including the regulatory framework.
- The ICA must demonstrate a common interest among the parties to carry out the alleged anticompetitive conduct, and the consequences of this conduct on the market.
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The Council of State fully upheld the ruling of the court of first instance ("TAR Lazio"), which annulled the ICA's decision concerning the tender for the allocation of pay-TV rights relating to the Serie A matches for the 2015-2018 seasons (the judgments can be found here and here).
At the end of that tender, despite Sky having submitted the best offer, the Italian Football League (and its marketing agency, Infront) awarded the main packages of TV rights to both Sky and Mediaset, pursuant to art. 9 of Legislative Decree no 9/2008 which prevents the assignment of all the packages relating to live matches to a single operator. Mediaset subsequently agreed to sub-licence a package to Sky, following authorization granted by the Italian Communications Authority and the request of the Italian Football League.
According to the ICA, this "agreement" between the broadcasters and the Italian Football League affected the outcome of the tender and the allocation of TV rights in breach of Article 101 TFEU.
The Council of State found that the TAR Lazio correctly annulled the ICA's decision, having properly held that the ICA did not provide evidence of anti-competitive collusion between the parties, either in terms of an agreement entered into between the parties prior to, or after, the submission of bids, or a common interest among the parties that would have caused them to enter into the alleged anticompetitive agreement.
The ICA also wrongly assessed the agreement as having the object of determining the outcome of a tender in advance. In particular, the ICA failed to take into account:
- the specific market characteristics (a clearly defined market where a certain number of competitors compete to acquire specific products);
- the sector regulation which prevented allocation of all of the TV rights tendered to a single operator (Legislative Decree no 9/2008); and
- the position of the other competitor (Eurosport) which, according to the administrative courts, would gain no advantage from the re-organisation of the tender, as it was not able to make a competitive offer.
The Council of State recalled that even in case of "by object" restrictions the ICA is always required to assess whether there are specific facts that might cast doubt on the presumed unlawful nature of the alleged agreement. In this case, the allocation of the TV rights packages was affected by the peculiarities of the relevant market, and in particular the specific regulatory framework, rather than by the alleged agreement as found by the ICA.
Once again the administrative courts have thus stressed that, when assessing an anti-competitive agreement, the ICA is required to have a clear understanding of the relevant market, as this is key to identifying the economic and legal context in which the alleged anticompetitive conduct takes place.
With thanks to Sabina Pacifico of Ashurst for her contribution.
