German Regulators Voice Competition Concerns Over New Public VOD Service

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Jiri Hanzl

From left: Vincent Carmichael, Mark Ryder, John Doman, Diarmuid Noyes and Stanley Weber.

Germany's Gold, which is similar to Hulu, was set up by the country's public broadcasters but might violate competition laws.

COLOGNE, Germany -- Germany's cartel office has warned that a new VOD platform proposed by local public broadcasters ARD and ZDF could violate the country's laws governing fair competition.

The platform, Germany's Gold, is an on-demand service similar to Hulu which would aggregate television content from 11 production and rights companies owned by the two tax-financed national public channels. The cartel office ruled last year that ARD and ZDF cooperating on Gold did not constitute a violation of antitrust laws. But cartel office president Andreas Mundt said Monday that he had concerns regarding the plans by the two networks to coordinate the commercial aspects of the service. 

"ARD and ZDF act as entrepreneurs and competitors in the VOD market and therefore have to commercialize their products independently from each other like other companies," Mundt said. "According to the broadcasters' current plans, the joint online platform would, however, comprise coordination in particular regarding the prices and selection of videos. The antitrust problems are obvious."

Mundt added that Germany's public broadcasters already cause "considerable distortion of competition" in the VOD market because they offer free catch-up VOD services and that further "barriers to competition" resulting from a joint VOD service "cannot be accepted." Both ARD and ZDF are financed almost entirely through the local TV tax that all homes in Germany have to pay.

The initial proposal for Germany's Gold would see the ARD and ZDF companies jointly coordinate the fee system for videos offered on-demand online. This sort of "joint commercialization," according to the cartel office, would lead to price fixing and restrict third-party platforms' access to the videos, distorting Germany's nascent VOD market.

However, the cartel office said the ARD and ZDF subsidiaries involved in Germany's Gold have indicated they are open to compromise. The cartel office said it could greenlight the project if the firms dropped joint commercialization and simply ran the service as a joint technical platform.

Ironically, that was exactly the model put forward by Germany's commercial networks RTL and ProSiebenSat.1 for their joint VOD proposal, Amazonas. But the cartel office rejected the plan, saying a joint commercial operation between the two broadcast giants, which together control around 75 percent of the German commercial TV market, would violate antitrust law.