Poland: UOKiK to examine TV broadcasters' practices

On 5 May 2021 the Office of Competition and Consumer Protection (UOKiK) announced the launch of two anti-monopoly proceedings against:

• Polsat Television; and
• four Discovery Group entities (ie, Discovery Communications Europe, Discovery Communications Benelux, Discovery Polska and Eurosport).

According to the UOKiK, the abovementioned companies may have abused their dominant position on the TV channel distribution market to the detriment of cable TV operators and ultimately consumers by way of bundled sales of TV channels.

The proceedings stem from numerous complaints filed by cable TV operators, branch associations and consumers that the companies restrict their freedom to shape channel offers or choose TV programmes. The launch of the proceedings was preceded by explanatory proceedings, during which the UOKiK collected information from industry representatives and other regulators to determine how the market operates.

UOKiK President Tomasz Chróstny said that:

The voice coming from the market was unambiguous and pointed to the growing imbalance between broadcasters and operators, for which consumers pay as a consequence. Our findings in the course of the investigation indicate that the above state is a consequence of the sales policy of TV broadcasters or distributors – namely of Polsat Television and companies from the Discovery Group.

Based on the UOKiK's findings, cable TV operators can purchase programmes in a package, comprising 28 channels of Polsat Television and at least six channels of companies in the Discovery Group. They can also buy individual channels, but this is uneconomical for them. For example, buying only two channels from Polsat Television may be more expensive than buying the entire package, which also includes these two channels. On the other hand, in the case of the Discovery Group, the purchase of three TV channels may be more expensive than buying any of the packages offered by the group.

According to the UOKiK, the strong position of Polsat Television and the Discovery Group companies is determined by the fact that they offer channels which are perceived as necessary (ie, 'must have') by consumers and cable TV operators. Their absence may result in the consumer choosing another operator's offer. The UOKiK assumes that abuse of a dominant position may consist of forcing TV operators to buy many channels and include them in specific packages offered to viewers. Such practice may also translate into worse development conditions for smaller broadcasters, as well as an advantage for Polsat Television and the Discovery Group in terms of advertising revenues.

The UOKiK can fine companies that abuse a dominant position on the market up to 10% of their annual turnover.

This article was first published on International Law Office, 27.05.2021.
author: Paweł Kułak