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The Danish Competition Appeal Tribunal annuls decision from The Danish Competition Council’s regarding Viasat’s business

27. april 2007

On 27 April 2007 The Danish Appeal Tribunal annulled The Danish Competition Councils decision of 29 March 2006 regarding Viasat’s business terms and remitted the decision to the Council for reconsideration.

The subject matter of the case was a number of business terms laid down by Viasat in order to give Viasat-produced channels the best possible placing when local cable networks allocate tv-channels in so-called channel packages.

In general local cable networks offer the households the choice of two, three or more channel packages – eg. one package with 10, one package with 20 and one package with 40 channels. For technical reasons the package with 20 channels in the example will include the 10 channels from the first package and the package with 40 will include the 20 channels from the second package. Therefore, as far as the broadcasters interests are concerned, placing of channels in smaller packages offers an advantage over placing in larger packages. The business terms in question required that Viasat’s tv-channels were to be placed in the most favourable package after the primary package, which – by law – contains a number of “must carry” channels (public service channels etc.).

The case was initiated by a complaint from the Danish Cable Television Association (DCTA) who found that Viasat’s business terms restricted competition between broadcasters and furthermore reduced local cable networks options as to decide which channels to place in which packages.

The Council did not find sufficient grounds for intervention pursuant to section 6 and 11 of the Danish Competition Act respectively Article 81 or 82 of the Treaty. According to the Council Viasat’s business terms did not have as their effect to restrict competition – inter alia because the business terms did not have an appreciable effect on competition. Moreover the conditions could not be characterized as abuse within the meaning of section 11 of the act or Article 82.

The Tribunal however stated that the Councils decision was unfounded and based on insufficient grounds as to the definition of the relevant market. Moreover the Tribunal declared that the business terms had the distortion of competition as their object. On these grounds (and a few more) the Tribunal annulled the Councils decision and remitted it to the Council for reconsideration.