Brussels, 09/05/2014 (Agence Europe) - The European Commission announced on Thursday 8 May that it is making an in-depth investigation into the planned acquisition of Dutch cable operator Ziggo by British telecoms operator Liberty Global.
The investigation will examine whether the deal notified on 14 March meets EU merger rules. Ziggo and Liberty Global both own cable networks in the Netherlands through which they provide various retail pay-TV and telecommunications services. Both companies also operate premium pay-TV film channels in the Netherlands. The Commission's initial market investigation indicated that the proposed acquisition would raise competition concerns in the Dutch markets for (i) the acquisition of individual Dutch language audio visual content, (ii) the acquisition of TV channels, (iii) the wholesale supply of premium pay TV film channels, and (iv) the retail provision of fixed internet access, TV and fixed telephony services.
At the wholesale level, the Commission found that the proposed acquisition could significantly increase the merged entity's negotiation power towards content owners and TV channels suppliers. This could, in turn, negatively affect its competitors in retail pay-TV and Dutch end consumers. Moreover, the proposed transaction could reduce the existing competition for the wholesale supply of premium pay-TV film channels, by combining the only two linear film channels in the Netherlands, Film1 and HBO. At the retail level, Liberty Global and Ziggo exert some indirect competitive pressure on each other, despite the fact that their cable networks do not overlap geographically. The Commission fears that the removal of Ziggo as an autonomous player could lead the remaining competitors, in particular the merged entity and KPN, to coordinate their competitive behaviour and increase prices or delay investments.
The Commission's investigation provided indications that the merged entity might have the ability and incentive to shut out or otherwise hinder so-called “over-the-top” TV service providers - i.e. TV services providing streaming via the internet - from effective access to its internet network, in order to strengthen its own competitive position in various TV-related markets. The merged entity could also have the ability and incentive to shut out its competitors in the Dutch retail TV market from access to its premium film channels. The Commission has until 18 September 2014 to decide on the case. (EL)