Antitrust Law Daily Wrap Up, ANTITRUST NEWS: EC approves Liberty Global’s acquisition of Dutch cable TV operator Ziggo, (Oct 10, 2014)

The European Commission (EC) has announced its approval of the acquisition of Dutch cable TV operator Ziggo by an international cable TV operator Liberty Global plc, headquartered in London.

The Commission had opened an in-depth investigation of the proposed merger on May 8, 2014. Because Liberty Global’s subsidiary UPC and Ziggo were the first and the second largest cable TV networks in The Netherlands, the EC was concerned that competition would have been hindered by (1) removing two close competitors and important competitive forces in the Dutch market for the wholesale of premium Pay TV film channels, and (2) increasing Liberty Global's buyer power vis-à-vis TV channel broadcasters, allowing it to hinder innovation in the delivery of audio visual content over the Internet (so-called over-the-top or "OTT" services).

To address these concerns, Liberty Global committed to divest its Film1 channel to a third-party purchaser. Liberty Global also committed to carry Film1 on its Pay TV network for a period of three years. This will ensure an adequate level of competition on the market for the wholesale of premium Pay TV film channels, since Film1 will remain a viable competitor on the market. In relation to audio-visual OTT services, Liberty Global committed to terminate clauses currently contained in carriage agreements with TV broadcasters that restrict, by direct or indirect means, the ability of broadcasters to offer their channels and their content via OTT services (whether their own or audio-visual OTT services of third parties). Liberty Global also committed not to conclude carriage agreements containing such clauses for a period of eight years.

In order to ensure that this commitment cannot be undermined by congesting Internet interconnection points through which Internet traffic generated by audio-visual OTT services would flow to Liberty Global's Internet network and ultimately to consumers taking Internet subscriptions from Liberty Global, Liberty Global committed to maintain adequate interconnection capacity through at least three uncongested routes into its Internet network in The Netherlands, at least one of which with a large transit provider.

These commitments addressed the Commission's competition concerns, taking in particular into account the evolution that OTT services have brought to the delivery of TV content to consumers. The Commission therefore concluded that the transaction, as modified by the commitments, would not raise competition concerns. This decision is conditional upon full implementation of the commitments.

"The commitments offered by Liberty Global ensure that the acquisition of Ziggo will not be detrimental to Dutch consumers, who will continue to enjoy the benefits of innovative services and choice for watching audio visual content," said Commission Vice President in charge of competition policy Joaquín Almunia.

Companies: Liberty Global; Ziggo

News: Antitrust AcquisitionsMergers