Sublicense and cartel enforcement mechanism in first price auction

Abstract:

In 2017, the Italian Competition Authority opened a cartel investigation regarding the auction of international television sport rights. In particular, prior to several auctions, bidders have agreed to sublicense the audio-visual football rights in a reciprocal way.

Without any reference and evaluation on the specific case, this paper aims at showing that a sublicense agreements can modify the outcome of an auction, even in a first price sealed bid version. This is because the sublicense agreement can be used to indirectly implement a “bid submission mechanism” [RC Marshall and LM Marx, ‘Bidder Collusion’ [2007] 133(1) JET 374]. This result strongly supports the idea that such an agreement should be considered as restriction by object under European antitrust law.