Private broadcasters receive little sympathy over allegations of unfair competition

Date: 19/11/1998

By Chris Johnstone

THE European Commission is set to reject allegations from private German broadcasters that they are facing unfair competition from their publicly owned rivals.

A preliminary decision drawn up by Competition Commissioner Karel van Miert's officials rejects a complaint from the Verband Privater Rundfunk Und Telekommunikation (VPRT), which claims that licence fees should not be used by public broadcasters ARD and ZDF to support 'thematic' channels. These are channels devoted to specific subjects such as sport, children's entertainment or nature films.

ARD and ZDF last year jointly launched a children's channel and a new documentary channel in direct competition with private companies.

A final ruling on VPRT's complaint is likely to be delivered shortly before private broadcasters meet Commission officials to discuss government support for their public counterparts early next month. They fear that the Commission is shrinking away from taking a tough stand against government subsidies to their competitors and are anticipating a tense meeting.

However, competition officials argue that it is for national governments to decide the scope of public-service broadcasting and which elements of programming should attract subsidies. They reject VPRT's argument that the Commission should have a role in determining where the boundaries for government support stop and start.

The VPRT decision will be examined with interest by other private broadcasters also involved in clashes with their state-owned rivals.

Rupert Murdoch's British Sky Broadcasting (BSB) has lodged a complaint with the Commission against the British Broadcasting Corporation's financing of its round-the-clock news channel, News24. It was offered free to cable companies, whereas they had to pay for Sky News.

The inevitable result was that many cable companies switched to the free programmes.

BSB's complaint focuses on what it claims to be illegal subsidies to the new service and does not currently challenge the scope of the BBC's broadcasting activities, which are increasingly overlapping with those of its commercial rivals. However, that option is being examined.

VPRT argued that the new channels did not offer anything original to viewers, but merely copied what was already being screened by other public and private channels.

It complained that the new services had been offered access to the programme archives and resources of ARD and ZDF for free, or at favourable rates, when these were denied to rivals. Worse still, it claimed, the public broadcasters' network of correspondents was made available to the news channel Phoenix.

“The cooperation between ARD and ZDF is likely to result in a complete elimination of the remaining competition still existing between the two broadcasting organisations,” declared VPRT. “The combination of market power has detrimental effects on private companies.”