CNMC fines Telefónica another €5m over DTS acquisition

Spanish market regulator the National Commission for Markets and Competition (CNMC) has fined telco operator Telefónica another €5 million for failing to comply with the commitments following the acquisition of DTS in 2015.

CNMC sanctioned Telefónica with a €6 million fine previously in March over the DTS case.

The Spanish watchdog authorised the acquisition of DTS, on the condition of a series commitments proposed by the telco which were made valid until April 2020 and later extended for an additional three years.

This commitments stated that Telefónica is to make available to other pay television operators in Spain a wholesale offer of its own premium channels , considering a premium channel to be one that includes, among other content, a live Formula 1 sporting event.  Telefónica is prohibited from acquiring and exploiting exclusive rights to broadcast television channels edited by third parties. Lastly, a system is to be created by Telefónica to establish the price of certain channels of its wholesale offer of premium channels; in particular for football, Formula 1 and Moto GP. The price for the operators that wish to hire them will be subject to a Guaranteed Minimum Cost (CMG) system that aims to share the risk that Telefónica assumes when acquiring the exclusive broadcast rights in Spain of the aforementioned audiovisual content.

The DAZN and Telefónica agreement to acquire the exclusive broadcasting rights of Formula 1 for the 2021-2023 seasons, and which allowed Telefónica to access all DAZN content, was a breach of those commitments, according to the CNMC.

In a statement the CNMC said: “Failure to comply with the provisions of the commitments of a concentration operation is a very serious infringement under article 62.4.c of the Law for the Defense of Competition (LDC). Therefore, the CNMC has imposed a fine of 5 million on Telefónica.”