Bundeskartellamt prohibits online video platform of RTL and Pro7Sat1

Yesterday the Bundeskartellamt prohibited plans by RTL and Pro7Sat1 to form a joint venture for the creation and operation of an online video platform.

The authority had already informed the companies in February of the main reasons for a possible prohibition (cf. Bundeskartellamt press release of 24 February 2011).

However the comments submitted in the meantime by the broadcasting groups on the Bundeskartellamt's preliminary assessment of the project from February could not dispel the authority's competition concerns. In particular, the companies were not prepared to make fundamental changes to the original concept of their project. The companies have still not offered to further open up the platform technically and to other television channels.

Andreas Mundt, President of the Bundeskartellamt, stated: "The creation of the joint platform would further strengthen the dominant duopoly between the two broadcasting groups on the market for TV advertising. We have given careful attention to the potential advantages of a new video-on-demand platform However, in its intended form the project provides no guarantee that it will outweigh the expected disadvantages for competition."

The decision is not yet final. The companies have a month to appeal the decision.