Antitrust Law Daily Wrap Up, ANTITRUST NEWS: European Commission Approves Liberty Global’s Acquisition of Virgin Media, (Apr 15, 2013)
Organizations Mentioned:Liberty Global, Inc. | Virgin Media Inc. | Virgin Media, Inc.
By Tobias J. Gillett, J.D., LL.M.
The European Commission (EC) today announced its approval of U.S.-based Liberty Global, Inc.’s acquisition of United Kingdom cable operator Virgin Media Inc. The €17.2 billion transaction will combine the second-largest pay television operator in the United Kingdom (Virgin Media) with Europe’s largest cable operator (Liberty Global).
Liberty Global is a cable network operator providing television, broadband internet, and telephony services in ten European Union Member States including Ireland, but not currently including the U.K. Liberty does supply television channels through its subsidiary Chellomedia in the U.K. and other countries. Virgin Media owns and operates a cable network in the U.K., and offers television, broadband internet, and fixed and mobile telephony services. Both companies acquire television programs and channels that they then offer to their subscribers.
The EC concluded that the transaction would not unduly restrict competition because television content is generally licensed on a national basis or in "linguistically homogeneous areas," and because the combined entity would still face significant competition from other entities such as television content providers and competing pay television retailers.
The EC also determined that Liberty Global’s wholesale supply of pay television channels would not pose significant competition concerns when combined with Virgin Media’s retail provision of pay television services to U.K. consumers. Liberty Global’s "very limited presence" in the market for the supply of pay television channels, and its substantial incentives to license its television channels as broadly as possible, made the possibility that Liberty Global might attempt to shut out competing pay television retailers by withholding its content from them "unlikely." Moreover, the combined entity would not be likely to attempt to shut out competing television channel broadcasters from the pay television market because a variety of alternative distribution platforms existed, and the ability to offer a wide range of television channels was necessary to attract subscribers.
The EC website provides further information on the case under the number M.6880.
Companies: Virgin Media Inc.; Liberty Global, Inc.
News: Antitrust