On 17 November 2014, Ofcom commenced an investigation into whether the Premier League’s joint selling arrangements for live AV broadcasting rights in the UK distorted or restricted competition, sparked by a complaint made by Virgin Media.
The Premier League clubs agreed to sell jointly, via the Premier League, their rights to make live broadcasts of matches in the 2016/17 to 2018/19 seasons (“Broadcasting Rights”) and issued an invitation to tender on 12 December 2014 (“ITT”). The ITT requires the first round of bids for the Broadcasting Rights to be made on 6 February 2015.
Virgin Media made an interim measures application on 28 January 2015 urgently requesting Ofcom to issue a direction requiring the Premier League to suspend the auction until Ofcom has made a decision in March 2015 on how it proceeds with the next stage of its investigation. Virgin Media argued that:
- the sale of the Broadcasting Rights under the ITT restricts competition, resulting in significant harm to subscribers of premium sports channels; and the damage to consumers is against the public interest. This is because competition between broadcasters will become distorted, the number of matches broadcast will be restricted and the high cost of the Broadcasting Rights will be passed on to subscribers in retail prices, with a corresponding unmet demand and lack of choice; and
- the outcome of the auction will result in contracts for the Broadcasting Rights being entered into with successful bidders, which would adversely affect Ofcom’s ability to remedy any breach of competition law that Ofcom determines following its investigation.
Ofcom decided that it was not necessary to act urgently and to suspend the auction, even though it considered it possible that the auction may restrict competition and potentially lead to significant harm to consumers and/or the public interest. This is because the Broadcasting Rights are for matches commencing in August 2016, and the impact of any harm to consumers and competition will be observed from the retailing of premium sports channels around that time.
Ofcom will have already reached the next stage of its investigation about 17 months prior to the first kick-off of the 2016/17 season; if it does find any infringement, it has the power to require the Premier League and the clubs to take appropriate action and it would not be hamstrung in imposing appropriate remedies by the fact of contracts having been entered into for the Broadcasting Rights.
Although there is no clear winner yet in this competition law battle, the Premier League is doing what it can to stay on-side, by confirming that its contracts with the successful bidders will address the consequences of any potential infringement decision by Ofcom.