Newcomer’sappearance kick-starts online plan

Date: 12/12/1996

By Tim Jones

COMPETITION investigators have come a step closer to resuming their year-old inquiry into the creation of Germany's newest online service.

A probe announced a year ago by the Directorate-General for competition (DGIV) into the formation of AOL Bertelsmann Online Management GmbH had been put on hold as officials awaited the final line-up of shareholders in the enterprise.

However, the decision by publisher Axel Springer Verlag AG to buy into the venture, taking 10&percent; of the company, is finally giving the enterprise the shape needed either for a formal notification to the European Commission or for a resumption of DGIV's inquiry, say officials.

AOL-Bertelsmann provides a 'proprietary' service which is accessed by subscribers via exclusive software.

The service, which already has 200,000 subscribers in Germany alone with another 100,000 each in France and the UK, combined - until last week - the online know-how of America Online (AOL) and Europe's biggest publisher Bertelsmann in a 50/50 joint venture.

Deutsche Telekom had been expected to come into the alliance later, together with Springer, buying a 30&percent; stake in the enterprise via intermediate holding company Videotel. In return, AOL Europe was to buy 30&percent; of T-Online, the largest such service in Germany owned by Deutsche Telekom.

With such huge firms due to take part in a coalition in a nascent market, the Commission became concerned and launched an inquiry into the venture on its own initiative last December.

“This alliance is important due to the size of its partners,” it said in a statement at the time.

The Commission wanted to known whether Deutsche Telekom would make life difficult for new services wanting access to the networks, and whether rival online services would be able to obtain the contents of publications owned by the partners in AOL-Bertelsmann or buy space to advertise their products.

DGIV was concerned that already-large publishing houses were not intending to make the service carry their material exclusively.

However, the creation of the venture did not go to plan and the inquiry was put on hold.

Then, last week, AOL announced that Springer was coming on board with the intention of taking a stake, and also to publish contributions from Bild Zeitung and its magazine offshoots on the online service, along with contributions from the Mirror Group in the UK and the Nouvel Observateur in France.