Parliamentary committee demands investigation into sports broadcasts after Melita and GO talks prove inconclusive

Resuming the hearing of the SAC at 2:10pm, after a one-and-a-half-hour meeting between representatives of two telecoms’ providers in a separate room in the House of Representatives, Dr Joe Grima, on behalf of the Consumer and Competition Department, told the committee that “the situation was difficult, but I do not exclude that they could continue. However, the CCD representative made the caveat that he could not give “a definite deadline” for the conclusion of these discussions.

Nationalist MP David Agius retorted that the English Premier League would start next month and there “must be a deadline. We cannot continue till December,” he added.

It was at this point that the SAC chairman announced that he would be writing the CCD and the Copyrights Board to investigate the issue of sporting tv rights “according to the Competition Act and the EU Treaties”

The  OFCOM decision
Earlier, during another marathon session of the SAC hearing this morning, which for the third time discussed the issue of sporting TV rights, competition expert Professor Eugene Buttigieg had revealed how the British Premier league had challenged the OFCOM decision on the re-licensing of sporting rights in the UK in front of the Competition Appeals tribunal in the UK, claiming that OFCOM had went beyond its remit.

Buttigieg also revealed that the UK Premier League had been granted temporary relief, therefore suspending the effect of the original OFCOM decision. The OFCOM decision had been cited by Melita when it lost the UK Premier League and Serie A football rights to GO earlier this year.

He also revealed that the UK Premier League had been granted temporary relief, therefore suspending the effect of the original OFCOM decision. Buttigieg explained how OFCOM integrated both the regulatory aspect and the competition authority currently exercised by the MCA, the BA and the OFC respectively.

Before each decision, the OFCOM had to decide whether it was going to decide whether it was going to exercise its rights according to the UK Broadcasting Act or the UK Competition Act.

In its decision, OFCOM had decided that there had been dominant market power rather than issue an infringement under the UK Competition Act.

He explained how the OFCOM decision on re-licensing of sporting rights by BSkyB in the UK was in regulation position under the British Broadcasting Act.

Moreover, Buttigieg also explained how the European Commission had already investigated the UEFA Champions League, the UK Premier league and the German Bundesliga and had decided that there had been no abuse of dominance and permitted the single buyer approach.

The local scenario
Locally, Buttigieg explained that while the Competition Division would examine whether there was a cartel or not now, the MCA would introduce regulation to regulate the behaviour of operators in the future.

He explained how the Maltese Competition Act was modelled on EU competition rules. The OFC could investigate if there was an infringement and there was dominance.

Buttigieg lamented how the MCA did not have the remit to investigate content, while the BA could regulate content but not in its competition aspect, therefore there was a gap in regulation.

The Copyrights board was not concerned with competition, but regulated disputes on IPR matters.

Buttigieg explained how Article 5 of the Competition Act regulated collaboration between operators. Horizontal collaboration involved two operators, like Melita and GO, instead of competing, discussed strategy “You do not need a formal agreement between operators to establish a cartel according to the law,” Buttigieg insisted. You could also have a tacit agreement, whereby one exchanged pricing information.

Vertical collaboration between operators involved licensing between two operators.

The Competition Act also established that certain behaviours, such as price-fixing and market-sharing, were deemed illegal on their own without needing a test as to whether this was detrimental to competition.

He explained how Article 9 of the Competition Act dealt with dominance, which was decided on a number of economic factors. There could be single-frame dominance (one dominant operator only), or collective dominance (two dominant operators).

In this respect, one had to establish whether a company was dominant or not and whether it was abusing from its position or not.

Buttigieg explained how everybody could complain in front of the OFC, including an association or a committee. “In the past, an MP had even lodged a complaint in front of the OFC,” he added.

The OFC could investigate on its own remit or following a request from the Minister responsible for Competition from an other competition authority in the EU, or by the European Commission itself.

“However, in most cases, the EC would ask the Maltese OFC to investigate the case, unless the case had an EU-wide remit,” Buttigieg added.

On his part, MCA Executive Chairman Philip Micallef explained that since Malta joined the EU, the Commission had gradually gone towards a general authorisation framework for telecom operators rather than a licensing regime.

The only areas where the MCA had issued licenses was in the case of mobile operators, since that involved “the use of public spectrum,” Micallef insisted.

BA Chief Executive Pierre Cassar warned how in the near future, with the introduction of linear and non-linear services, there could be a situation where an Internet service provider might acquire the rights for any of these leagues.

Vassallo goes one step further with cartel claims
A substantial part of the discussion was dominated by SAC chairman Edwin Vassallo’s statement branding Melita and GO’s position in the Maltese telecoms’ market as a “cartel”.

This time, Vassallo went a step further, asking whether Melita and GO were “disagreeing in appearance, thus maintaining a cartel”.

This claim led to a very strong retort by both Melita and GO, who denied that they were collaborating. GO legal consultant Andrew Muscat insisted that these were “very serious allegations”.  There are serious fines for companies which engage in anti-competitive acts,” he added. He called on Edwin Vassallo to withdraw his allegation. “There never was any cartel by GO. If there is really a cartel, then the authorities should start an investigation,” the GO legal consultant insisted.

Melita’s legal consultant Theresienne Bezzina insisted that there has “never been a cartel by Melita with GO.  If an investigation is launched, then Melita would cooperate,” she added. Vassallo stood by his position because “as a representative of the people”, he had the right to make such a declaration. “I am ready to drop this allegation once an investigation is launched,” he insisted.

Earlier in the hearing, Nationalist MP David Agius thanked PBS, Melita and the BA for ensuring what everybody has suggested in the previous committee meeting, all the World Cup games from the quarter-finals stage onwards had been shown free-to-air by PBS up till now. Agius also revealed that GO had acquired the rights to show Italian and English football club channels, but was “not showing them”.

On his part, GO Chief Finance Officer Edmond Brincat explained how the channels had only been just acquired by GO after appearing on Melita and three was a “technical period” before they could be broadcast on GO.

Asked by Vassallo whether GO would be broadcasting these channels “soon”, Brincat revealed how they would be broadcast “soon” as part of the GO sports channel.

A CCD representative explained how the CCD yesterday had received two complaints regarding the removal of the Juventus and Milan club channels from Melita.

She explained how the complaints were still in the mediation stage. A meeting between the two operators had been scheduled about the matter.

Besides the Juventus and Milan club channels, a few days ago Melita also pulled out the Inter and Roma club channels as they did not have the rights to show Italian football anymore, leading to furious calls by irate Melita subscribers who could not watch these channels anymore.

Two years ago, GO had already acquired the rights for most of the English club channels, such as MUTV, LFC TV, and Chelsea TV.

Agius also retorted to an editorial which appeared yesterday on www.di-ve.com, which suggested that Agius had claimed that football on tv should be free. “I never said that football should be free, as the di-ve.com editor said,” Agius told the SAC.

“However, the price should be reasonable,” he added.