On 27 December 2021, the Spanish appeal court confirmed an earlier decision of the Spanish Competition Authority fining Telefónica and Distribuidora de Television Digital (DTS) for colluding in the acquisition of football rights and adjacent downstream markets. The Spanish court also upheld the imposed fine of 15.5 million euros.
According to the decision, Telefónica and DTS colluded during the acquisition and resale of the UEFA Champions League and Spanish national football rights for the seasons between 2012 and 2015. The court found collusive behaviour in two agreements in August 2012. The decision is uncommon because it is based largely on circumstantial evidence for concerted practice between Telefónica and DTS.
Because sports rights are one of the last “crown jewels” of linear television, acquiring them is an important feature of the broadcasting business. When UEFA sold the broadcasting rights of the Champions League for the seasons between 2012 and 2015, Telefónica refrained from bidding to the advantage of DTS (who won the rights). In exchange, when DTS organised a bidding process in Spain, the tender conditions were such that Telefónica was the only broadcasting company that could successfully bid for the rights of the Champions League. The second agreement — on the broadcasting rights of La Liga and Copa del Rey for the same period — had slightly less restrictive features and outcomes. By exploiting the existing business relationship between Telefónica and DTS in 2012, Telefónica also had an informational advantage vis-á-vis other bidders, like Orange or Euskaltel.
The companies coordinated their behaviour in the acquisition, wholesale, and retail parts of the supply chain. According to the court, Telefónica and DTS colluded to jointly increase their economic power and prevent competition from third-party operators, especially in the market for resale of audiovisual football rights. Further effects are identified in the acquisition of broadcasting rights, the pay-TV content market, and the general electronic communications (tv, mobile, internet) market. The concerted practices led to anti-competitively high subscriber revenues for both DTS and Telefónica, while other operators were, consequently, less successful.
Telefónica and DTS argued that their business conduct was rational and did not negatively affect competition. The court, however, did not accept this argument.
Supported by the decision of the court, affected companies, and third-party channel operators, retail telecom services providers can seek damages from the courts. The practice of DTS and Telefónica may have negatively impacted the realised profits of these market players, at least between 2012 and 2015.
We will soon get back to you.