On 13 November 2019, the Spanish Competition Authority ("CNMC") announced that it had fined Mediaset and Atresmedia €77.1 million in total for antitrust practices in the marketing of television advertising. Both companies have been required to cease their behaviour and adapt their commercial and contractual policies within three months.
| what you need to know - key takeaways |
|---|
- The case reflects the CNMC's focus on this sector.
- The case is another sign of CNMC's interest on investigating vertical agreements.
- The decision may mark the start of a long judicial process, as both companies are expected to appeal the decision.
|
The CNMC decision states that both groups have developed commercial policies for the sale of television advertising with the aim of consolidating their position in the market (which amounted to a combined market share that exceeds 85% of the entire market) that were addressed to two market players: advertisers and media agencies.
- regarding advertisers, Atresmedia and Mediaset generally charged their advertisers a high minimum investment fee, which accounted for a significant percentage of their general campaign. Moreover, failure to comply with the aforementioned investment commitment could be penalised, which reinforced the foreclosure effect of the conduct.
- in relation to media agencies, both media groups paid agencies incentives by way of additional premiums ("extraprimas"), conditioned upon each agency reaching a certain investment volume or share of all the advertising billed in Mediaset and Atresmedia.
In both cases, both media groups regularly bundled advertising into channel packages modules. Each of the modules included one of the channels which is appealing and very difficult for advertisers to replace, with other channels with lower viewership. That way, both media groups were able to ascertain a minimum level of advertising even regarding their less popular channels. The abovementioned practice was reinforced by the use of "simulcast" (the broadcasting of a same advertisement simultaneously on many channels of the media group), obliging the advertiser to pay the same price regardless of the channel where the advertisement is broadcasted.
The CNMC considered that such practices could have a foreclosure effect on other competitor media groups as their intended effect was to make more difficult for competitors to capture advertising revenues and, consequently, to acquire appealing audio-visual content that could allow them to improve their ratings.
The case shows the increasing interest of the CNMC on pursuing vertical agreements. In fact, on October 2019, it also fined a corporate group that operates in the sector of products and technology for heating, ventilation and air conditioning for imposing restrictions on its independent repairers network and, last year, started an investigation into Adidas España.
With thanks to Teresa Prado of Ashurst for her contribution.
