German authorities raid b'casters' offices
RTL Group, ProSiebenSat.1 suspected of collusionCOLOGNE, Germany -- Germany's anti-trust authority, the Bundeskartellamt has raided the offices of RTL Group and ProSiebenSat.1, the country's two main commercial networks, amid allegation the broadcasters are colluding to jointly encrypt, and charge for, channels that are currently free-to-air.
Authorities raided RTL's offices in Cologne and ProSieben's Munich headquarters on Wednesday, looking for evidence. The allegations are that the two networks -- which between them have a stranglehold on German commercial television -- have agreed together to encrypt the digital broadcasts of their channels and require viewers to pay for them. The Bundeskartellamt is also investigating allegations RTL and ProSieben have colluded in technical measures that would prevent viewers from skipping over commercials as well as limiting recording shows to hard drives.
If the networks are found to have made back-room deals on these measures, they could face major fines for anti-competitive behavior. This isn't the first time the competition watchdog has taken the companies to book. In 2007 ProSieben had to pay fines of €120 million ($148 million) and RTL €96 million ($118.5 million) for anti-competitive behavior in the sale of commercial airtime.
Encrypting free-to-air channels is a contentious issue in Germany. Both RTL and Pro7 have small pay TV channel bouquets and plan to begin charging for HD versions of their channels, but there is opposition to attempts to encrypt regular free-to-air broadcasts. The networks see it as a reasonable way to recoup programming costs now that TV ad sales have slumped. Viewers and the country's powerful public broadcasters, are up in arms, demanding free-to-air channels stay free even after all German networks go digital.