Chapter 4 Denmark
Content 1
A Market definition in competition and media law in Denmark 5
I Introduction 5 1. Relevant legislation 6 2. Relevant institutions 7 3. EC competition rules 9 4. International cooperation 10 II. The general approach to market definition in Danish competition law 10 1. Relevant product market 12 a) Demand side substitution 12 aa. Product characteristics 13 bb. Intended use 15 cc. Price 16 dd. SSNIP test 17 b) Supply-side substitution 18 2. Geographic dimension of the market 20 3. Other criteria 22 a) Structure of the market 22 aa. Market size and shares 23 bb. The relative bargaining power between parties 23 b) Actual or potential competition 24 c) Legal and other entry barriers 25 B Repertoire of relevant product and geographic market in media sector in Denmark 26
I Publishing and books sector 26 1. Daily newspapers, weekly magazines, and monthly magazines 27 2. Freely distributed newspapers 28 3. Books and other publishing markets 28 4. Copyright 29 II. Broadcasting-TV 29 1. Distribution markets 30 2. Sport broadcasting rights 30 3. Cable and other transmission rights 30 4. Other markets 31 III. Advertising in the media 32 1. Press advertising 32 2. TV advertising 34 3. On screen advertising 34
1 4. Other advertising markets 35 IV. Music-copyright 35 1. Recording and distribution 35 2. Music publishing, copyright 36 a) Performance rights 36 b) Mechanical rights 36 c) Music printing rights 36 V Film sector 37 1. Movie distribution and movie showings 37 2. Feature films vs. TV films 37 Feature films shown on Free-TV vs. Pay-TV 38 3. Sale and rental of videograms 38 4. Advertising movies 39 VI. Internet 39 1. Internet access 39 2. Internet content markets 40 a) Internet and e-Commerce specific markets 40 aa. Internet advertising 40 bb. Job portals 41 b) Internet B2C and B2B markets 41 aa. Broadband content 41 bb. Online booking and sale of tickets 41 cc. Online news services 42 VII. Rights to use databases, press cutting and other markets linked to the media sector 42 C Comparative analysis of market definitions adopted by the European Commission and those adopted by Competition Authorities in Denmark 53
I. Comparative analysis 53 1. General remarks 53 2. Publishing and books sector 54 3. Advertising in the media 55 4. Broadcasting 56 5. Music copyright 57 6. Film sector 58 7. Internet 60 II. Conclusions 61 D Impact of Different Regulatory Frameworks on Market Definition 62
I. The regulatory framework for the media sector in Denmark 62 1. Introduction 62 a) Sociological characteristics of Denmark 62
2 b) Main specificity of the Danish media landscape 62 2. Legal framework 64 a) The Constitution of 1953, Article 10, the Media Liability Act Consolidated version of 9 February 1998, Criminal code 64 Definitions 64 Liability 64 Press Ethics 64 Right of Reply 65 The Press Council 65 b) The Danish Radio and Television Broadcasting Act, Act No. 1052 of 17 December 2002 65 aa. Licensing 65 bb. Public Service Broadcasting 67 cc. Advertising and Sponsoring 67 dd. European Programmes 67 ee. Interim Summary 67 c) Legislation on telecommunications 68 aa. General 68 bb. Law on [distribution of] Radiofrequencies No. 421 of 6 July 2002 68 d) Legislation about financial incentives for the audiovisual production 68 f) Copyright law 69 g) VAT 70 3. Administrative regulations 70 4. Other provisions 70 II. Media regulators 70 1. The Press Council („Pressenævnet”) 70 a) Legal basis 70 b) Functions; competence 70 c) Linkage with general competition authorities 71 2. The Radio and TV Board 71 a) Legal basis 71 b) Functions / competencies 71 c) Linkage with general competition authorities 73 3. Local Radio and TV board 73 a) Legal basis 73 a) Functions / competencies 73
3 b) Linkage with general competition authorities 74 4. National IT and Telecom Agency 74 a) Legal basis 74 b) Function 74 c) Linkage with general competition authorities 74 5. Copyright Licence Tribunal 74 a) Legal Basis 74 b) Function 74 III. Market definitions and criteria upheld for market perception in the relevant sector focused legislation 74 1. Publishing 74 a) Books 74 b) Newspapers and magazines 74 2. Music 75 3. Film 75 4. Broadcasting (radio and television) 75 a) Upstream: content, channels, programs, rights 75 b) Downstream: free TV, pay TV, platforms, interactive services 75 aa. Media law 75 bb. Legislation on conditional access 75 cc. TV infrastructure markets (satellite dishes, cable etc.) 76 dd. Law on Radio frequencies 76 ee. Copyright law 76 c) TV advertising market 76 5. Internet 76 a) Content 76 b) Access 76 IV. Market definitions in the media sector, as upheld in sector specific practice of authorities and courts 77 V. Common factors and differences between the media specific market definitions and the market definitions used in application of the competition rules 77 VI. The impact of the non-competition framework and practice on the work of the competition regulator, in particular when defining the relevant markets 77
4 A Market definition in competition and media law in Denmark
The present chapter follows a similar outline pattern as the previous ones. The 4.01 first part (part A) starts with a short introduction of the legal provisions and the main institutions dealing with the implementation of competition law in Denmark. It continues with (i) the general approach of demand and supply side substitutability for defining the relevant market, and (ii) other more specific criteria used to define the market. Then, under section (B) the work portrays the main markets delineated in the media sector by the Danish National Authorities. The third section (C) provides a comparison between market definition applied at the EC level and the approach adopted by the Danish Authorities The last part (part D) provides a detailed analysis of all sector specific regulatory frameworks that may have an impact on market definition in the media sector.
There might be a few differences in the way markets are defined for the 4.02 purposes of different competition law provisions in Denmark, i.e. provisions dealing with infringements (agreements and abuse of dominant position), or provisions dealing with merger control cases. These differences follow from the fact that each provision serves a specific purpose. Thus, market definition is carried out corresponding to the diverse rationales these provisions enclose. However, for the purposes of this work, these peculiarities with respect to market definition linked to different provisions of Danish competition law do not justify a separate analysis of the market definition approach under each provision1. Without suggesting every course of action operates in an identical manner and according to identical standards, it can be said that different procedures do not result in completely different models for market definition. In the end, all competition law provisions reflect the same concern, i.e. the abuse or potential abuse of the economic power of the enterprises in a particular market. Hence, the present work will embrace an all-encompassing scheme while exploring the Danish competition law approach to market definition, and only where it is considered to be significantly imperative it will point out the differences.
I Introduction
Competition policy in Denmark was for a long time based on the principles 4.03 disclosed in London Resolution of 1930. Transparency, control and intervention remained as underlying principles even in the 1989 Competition Act, which replaced the 1955 Monopolies Act. According to these acts, the market participants themselves determine the market conditions, and the respective competition authority intervenes only if it is necessary to bring to a halt severe market distortions. Only in 1995 the Danish government came up with a proposal to replace the existing competition laws by new ones, which would be based on the principle of prohibition of certain restrictive agreements, thus
1 See also Chapter 1 para. 1.3 et seq.
5 bringing the Danish competition legislation in line with that of the Community and other EC countries. The new Danish Competition Act was adopted in 1997, and has been amended twice in May 31, 2000 and June 6, 20022.
The adjustment of the Danish competition legislation to the principles of the EC 4.04 competition law implies that the application and implementation of these new rules shall correspond to the principles laid down by the EC Commission and the European Court of Justice3. Issues related to the determination of the relevant market represent an important phenomenon of the EC competition policy, consequently, it is assumed that they ought to play a great role with regard to the Danish competition policy as well4. The following work will attempt to disclose the development of the competition law application in Denmark with regard to the notion of the relevant market definition, with the media sector being the centre of attention.
1. Relevant legislation
The Danish Competition Act5 aims at promoting efficient resource allocation by 4.05 means of workable competition (Section 1), and it applies to any business [economic] activity and to aid from the public funds granted to business activities (Section 2). The provisions of the Act are similar to the competition rules of the EC Treaty, as they are based to a great extent upon the same principles laid down in the respective anti-infringements provisions (mainly Article 81 and Article 82 of the EC Treaty), merger control, and state aid legislation of the Community. As a result, all agreements and practices restricting the competition in Denmark are as a general principle prohibited, thus replacing the system of interventions and negotiations. This general prohibition can only be bypassed by means of exemptions or authorisations granted by the respective authority (Part 2). With regard to the merger control, margins of discretion and appreciation of the competition authorities are similar to those of the EC Commission under the EC Merger Regulation (Part 4). It is worth mentioning, at this point, an important feature of Danish Competition regime, the domestic state aid control, which is set out in the Competition Act section 11a. The provision was introduced on October 1, 2000, as part of the Danish
2 Act No. 384 of 10 June 1997 as amended by Act No. 416 of 31 May 2000 and Act No. 426 of 6 June 2002. See also Behrens, P. (ed.), EC Competition Rules in National Courts (VI), Part Six: Denmark, Sweden, Finland and Austria, Nomos Verlagsgesellschaft Baden- Baden, p. 47-48; Dyekjær-Hansen, K., Lauridsen, Ch. K., Competition Law in Denmark, in Vogelaar, F.O.W., Stuyck, J., van Reeken, B.L.P., Competition Law in the EU, its Member States and Switzerland, Kluwer Law International, 2002, p. 464. 3 Behrens, P., p. 59. 4 Fejø. J., Monopoly, Restrictive Business Practices and Danish Competition Law, Chapter 17 in Dahl, B., Melchior, T., Tamm, D., Danish Law in a European Perspective, Thomson Publishers, Copenhagen 2002, p. 404. 5 The consolidated version of the Act can be found at the WWW homepage of the Danish National Competition Authority at: http://www.ks.dk/english/regler/kl-eng2002/comp- act539-02/. All WWW addresses were last visited on June 18, 2003; please note that the homepage of the Danish Competition Authority has just recently been revised, so that not all of the original links that this report has been based on have been transferred to the new website. Unless otherwise indicated, all of the links in this report refer to the website in its most recent version.
6 efforts to reduce state aid in the EC, which would only make sense when Denmark sets the example on the field, and is unique in Europe as the other Member States do not normally have "internal" state aid rules. According to these provisions, the Competition Council may issue orders for the termination or repayment of aid granted from the public funds, which has been granted to the benefit of specific forms of business activities. Such an order may be issued when the aid directly or indirectly has as its object or effect the distortion of competition and is not legitimate according to public regulation (Competition Act §11a, (2)).5a Considering all the above, it becomes clear that the general tendency to adjust the Danish competition policy to the principles of the EC competition rules is indisputable6.
Part 1 of the Competition Act states that this law shall apply to both the private 4.06 business activities as well as the practices of the public bodies (with exception of cases of public regulation, wages and labour relations). This means that the Act covers any economic activity, which takes place in a market for goods or services, regardless of its profitability or organisational structure7. Consequently, it is the economic nature of the activity, rather than its form or performer, which determines the application of the competition rules, and the verification of whether or not an activity in question qualifies as economic, shall therefore constitute the initial step of any market analysis.
2. Relevant institutions
There are four main actors in the field of the control and enforcement of the 4.07 national competition rules in Denmark: Competition Council, Competition Authority, Competition Appeals Tribunal, and national courts. All of them can
5a The provision in the Danish Competition Act (§11a) should be seen as a supplement to the EC State aid rules. According to Art. 87 (1) of the EC Treaty, it is required that aid shall influence the intra-Community trade in order for it to fall under the provision of Article 87 whereas this is not a requirement for § 11a, of Danish Competition Act. As a consequence, aid that does not affect trade between Member States, and thereby compatible with the EC Treaty, may still be considered, by an order of the Council, illegal and terminated and/or reimbursed if it directly or indirectly has as its object or effect the distortion of competition and is not legitimate according to public regulation. Thus, Danish Competition Council will focus entirely on cases of state aid that affect only the Danish market whereas aids affecting the trade between Member States will continue to fall under the exclusive powers of the EC Commission. The main difference between the approach of the Danish legislator and the approach held at the EC level vis-à-vis the control of the state aid on their respective field of application is that whereas at the EC level the community legislator has adopted the system of general prohibition, i.e., safe for aid subject to an ex lege exemption or an exemption granted by the Commission, state aid is always incompatible as far as it disturbs trade between Member States, the Danish legislator, however, has left it mostly to the discretion of the national competition authority to decide ex post whether or not an aid measure already in place should be terminated or repaid (Part 3a, Section 11(a)). The difference is comprehensible considering the rationale behind each provision and their respective different fields of application, and Danish legislator should be given credit for the initiative addressed against state aid that may distort competition at the national level. 6 XXXth Report on Competition Policy 2000, European Commission, p. 310; Dyekjær- Hansen, K., Lauridsen, Ch. K., p. 465. 7 Introduction to the Danish Competition Act, http://www.ks.dk/english/competition/guide/ . Also: Background report, p. 25.
7 be confronted with a necessity to conclude a market examination when dealing with the competition cases falling within their competencies.
The Competition Council is the institution responsible for the enforcement of 4.08 the competition rules according to Section 14 (with exceptions mentioned in Section. 2(2) and Section 11(a) (3)). It is an independent “collegiate” body consisting of the Chairman and 18 members (independence implies that other governmental bodies, particularly the Minister of Business and Industry, can not influence the decision-making process of the Council, and the Minister can not change or amend any decisions taken)8. The members of the Council are being selected and appointed by the government (except for the Chairman who is appointed by the King [Queen]) in such a way that the representation of all range of interests, including those of public bodies and organisations, private businesses and trade organisations, consumers and municipalities is secured (Section 15(1))9. The Council may take up cases on its own initiative or upon notification or complaint, and it is responsible for cases referred to it by the European Commission. The Council decides whether a complaint gives sufficient grounds for investigation. If the European Commission is already assessing the case under the EC competition rules, the Council may decide not to initiate a procedure under the national law (Section 14 (1)). The Council may request any information it considers necessary for its activities (Section 17), and has the right, subject to a previously obtained court order, to gain access to the premises and data of the undertakings concerned, if necessary (Section 18). According to Section 16 of the Act, the Competition Council may issue orders for bringing the detrimental effects of an anti-competitive practice to an end, i.e. orders requiring the termination of agreements, orders imposing limitations upon prices and profit, determining sale conditions, granting an access to infrastructure, etc. Moreover, it may impose penalties according to the provisions of Part 8 of the Competition Act.
The Competition Authority is the Council’s secretariat. It is responsible for the 4.09 day-to-day administration of the Competition Act (Section 14(1)). The Authority holds a central, but at the same time somehow contradictory position. On the one hand, it prepares the cases to be submitted to the Council, and on behalf of the Council it decides cases in accordance with the practice or in accordance with the guidelines set out by the Council10. On the other hand, it also acts as a part of the Ministry of Economic and Business Affairs, promoting its policies and objectives, and thus occasionally causing some contradictions with the Council11. Nevertheless, this shortcoming in the institutional structure seems not to influence the overall effectiveness of the Authority, which only in the year 2001, for instance, has made 233 decisions in important competition cases (the Council 22 decisions) and has concluded about 800 minor cases12.
8 Behrens, P., p. 55, 56; Dyekjær-Hansen, K., Lauridsen, Ch. K., p. 472-473. 9 On the shortcomings of this system see: Blomgren-Hansen, N., Mollgaard H.P., The Ineffective Harmonisation of Danish Competition Law, E.C.L.R., 1999, p. 287-291. 10 The Danish Competition Authority, Annual report 2001, p. 6. 11 Background Report on the Role of Competition Policy in Regulatory Reform, www.oecd.org/pdf/m00040000/m00040058.pdf , p. 21. 12 The Danish Competition Authority, Annual report 2001, p. 6.
8 The Competition Appeals Tribunal is according to Section 19(1) of the Act the first level of appeal against most of the decisions made by the Competition 4.10 Council. Decisions made by the Competition Council under the Act cannot be brought before any other administrative authority than the Competition Appeals Tribunal and cannot be brought before the courts of law until the Appeals Tribunal has made its decision (Section 20(1)). The Tribunal, consisting of the Chairman, who is required to possess all the qualifications of a Supreme Court Judge, and two other members, who shall be proficient in economics and law, respectively, shall be independent of commercial interests (Section 21). An appeal to the Tribunal may be lodged by the party to whom the decision is directed, and other parties who have an individual and substantial interest in the case (Section 19(2)). Generally, an appeal against the decision of the Council does not have suspending effect, but the Council or the Tribunal itself can accord such an effect (Section 19(4)). Decision of the Tribunal is final if it is not appealed to the court of law within the prescribed period of time (section 20(3)).
National courts are responsible for appeals against the decisions of the 4.11 Competition Appeals Tribunal. However, there are very few cases when such actions have taken place (e.g., no cases in 200113). The main reason for that is that already the Tribunal, despite its formal status of an administrative institution, fulfils the functions of the judicial body, and therefore, for instance, it can be considered as a “court” for the purposes of Article 234 EC Treaty14. The fact that the Chairman of the Tribunal also takes part in any proceeding before courts of law is an additional factor that makes the possibility of diverging outcome very unlikely15. Nevertheless, the importance of national judiciary cannot be underestimated since one of the main consequences of the new system of the competition control in Denmark is that also the national courts are entrusted with the right to enforce the observance of the competition rules. Thus, for example, the national court can determine the infringement of Section 6 and impose a ban on the activity in question if it finds relevant violations of competition rules while deciding a civil law case under its jurisdiction. Actions for damages under the Civil Code are also available for the private parties (though there have been no such cases for the time being)16.
3. EC competition rules
The decisive feature in determining whether a particular case falls under the 4.12 provisions of national law or Community legislation is the fulfilment or non- fulfilment of the condition that the anti-competitive practice in question may affect trade between Member States. If this condition is fulfilled, the EC rules shall be applied, and the Competition Council is responsible for the handling of the case. It can decide on the direct application and enforcement of prohibitions of Articles 81(1) and 82 EC Treaty, and, having informed the European Commission in advance, it can take respective decisions (Part 9) (administrative enforcement). Additionally, the ordinary Danish provisions on agreements and
13 The Danish Competition Authority, Annual report 2001, p. 6. 14 Behrens, P., p. 58. 15 Background Report, p. 21. 16 Behrens, P., p. 50, 51.
9 invalidity of agreements are sophisticated enough to allow also the private enforcement of the mentioned Articles in national courts17; however, particular aspects of the Danish procedural system – e.g. the underlying “Principle of negotiation” preventing the Court on its own motion to apply the EC rules if the parties to the case do not involve them in their argumentation – may hinder full and effective application of the EC competition law by the national judiciary. These procedural shortcomings at the level of lower courts can also preclude the higher courts to apply the EC competition rules in the appeal cases, as “in many cases the competition law requires extensive factual and economic investigation and thus also extensive factual decisions by the lower courts”18.
4. International cooperation
In open and integrated markets, the economy of one country can easily be 4.13 affected by actions taking place outside its territory. The Danish Competition Act incorporates an “effects” test, which gives possibility to also prohibit actions of firms situated abroad if these actions have an effect on the Danish market. This also implies that the geographical dimension of the relevant markets in many cases can go far beyond the borders of Denmark19. Therefore, an active cooperation between countries is a decisive prerequisite for effective enforcement of the competition rules in the Common Market. The cooperation with the EC institutions, as well as with competition agencies in other European countries (e.g. within the ECA network) has increased, and strong relationships have been established, in particular, with other Nordic competition authorities. The Competition Act explicitly allows the Competition Authority to divulge confidential information to the competition authorities of other countries, if such information can contribute to the enforcement of the competition rules in those countries (Section 18a). The Agreement between Denmark, Iceland and Norway on cooperation in competition cases (of March 16, 2001) is a good example of the step towards international cooperation.
II. The general approach to market definition in Danish competition law
Section 5a § (1) of Danish Competition Act states: 4.14 Under this Act, the definition of the relevant market shall be based on examination of demand substitutability, supply substitutability and potential competition. The potential competition must be examined, once the position of the undertakings concerned has been ascertained and this position raises doubts as to its compatibility with this Act.
It follows clearly from the above that the Act considers two legal tests as the main features for defining the relevant market, i.e. the demand-side and the supply-side substitutability test. With reference to the potential competition, the Danish law seems to take this into consideration after the relevant market and the position of undertakings at issue has been determined, thus placing the
17 Behrens, P., p. 60. 18 Behrens, P., p. 62-63. 19 Background Report, p. 24.
10 potential competition test in a secondary place with regard to the market definition. Nevertheless, the potential competition is considered to be of a greater importance as far as the assessment of competition per se is concerned (for more on potential competition see hereto below para. 4.50).
In its guidelines on the prohibition against anti-competitive agreements 4.15 (Vejledning om forbud mod konkurrencebegrænsende aftaler, from now on refered to as the Agreements Guidelines20), the Competition Council21 states the following regarding the relevant market: “The relevant market consists of a product as well as a geographic dimension. The relevant product market consists of those goods and services which are subject of the agreement, and of other products, which consumers deem identical, and which can replace the products comprised by the agreement – i.e. products, which consumers find to be just as useful when taking into account their characteristics, price and functionality. The relevant geographic market is the area, within which the agreement is effective. The area has to be characterized by the same conditions of competition and must be separable from neighbouring areas, where the conditions of competition are different. The relevant geographic market can in some cases extend across the country’s borders.”22
It becomes clear from the outset that the Danish approach to the definition of relevant markets follows similar patterns as the ones upheld at EC level by encompassing in its analysis of the market under scrutiny its product as well as its geographic dimensions23. The present section analyses the general approach of Danish competition law vis-à-vis the definition of the relevant market, as this is implemented particularly in the media sector, by drawing upon examples from relevant decisions as well as the guidelines issued by the Competition Authority.
20 http://www.ks.dk/konkuromr/regler/aftaler/index.html (old), published on 29.04.1998. In this context, it is appropriate to point out that the very same principles outlined therein also apply to the definition of the relevant market in cases dealing with dominance issues, cf. the guidelines on the prohibition against abuse of a dominant position (vejledning om forbud mod misbrug af dominerende stilling, http://www.ks.dk/konkurrence/regler/vejledninger/dominans/ , published on 27.05.1998). 21 From now on we will refer to the Competition Council as the organ in charge with the implementation of competition law in Denmark. Where appropriate the reference will include activities undertaken by the Danish Competition Authority on behalf of the Council (see above para. 4.7 et seq. for more on the powers of each institution). 22 Unless otherwise stated, all translations from the Danish original are courtesy of Oliver Carsten Füg. With regard to this excerpt from the Agreements Guidelines, it shall be emphasized that their content corresponds to the provisions of the Danish version of the Commission Notice on the definition of relevant market for the purposes of Community competition law (97/C 372/03), Official Journal C 372, 09/12/1997, para. 7 et. seq.; differences in wording derive from the fact that the Agreements Guidelines do not use the exact same wording as the said Danish translation of the Commission Notice. 23 For more details see: Competition Act Section 5a § (1), Agreements Guidelines and Guidelines on the prohibition against abuse of a dominant position (supra note 20), Behrens, P. (supra note 2), p. 404, Dyekjær-Hansen, K., Lauridsen, Ch. K. (supra note 2), p. 507.
11 1. Relevant product market24
According to the Council’s understanding, market definition is an essential tool 4.16 to assess the alternatives available to the consumers, both in terms of product alternatives and of geographic location alternatives25. The latter dimension will be discussed in details in the next section (section 2).
The first step taken when defining the relevant market is usually to determine 4.17 the scope of the market in product terms. The analysis ought to establish whether there exists a possibility for demand-side and/or supply-side substitution between the products in question26. The revised Competition Act includes considerations regarding both the demand-side and the supply-side tests (hereto para. 4.14)27. However, when the Council assesses the scope of the relevant market, the consumers’ point of view seems to be given a bigger weight than the tests focused on the suppliers’ behaviour. The guidelines issued by the Council indicate that demand side substitutability is the factor that has the largest effect on the relevant market definition,28 and only those products will in general be deemed as belonging to the same market, which have in the eyes of the consumers approximately the same characteristics and can be put to identical use29. The following section will deal with the demand-side substitution test. a) Demand side substitution
According to the Danish guidelines, the assessment of demand side substitution 4.18 entails evaluations of the effects a small, but permanent increase in relative prices of 5-10% will have in the market30. This so-called SSNIP test,31 originally devised as part of American anti-trust law and also known under the name “hypothetical monopolist test”, is referred to in a considerable number of decisions rendered by the Council. The first impression one might obtain while reading the guidelines is that SSNIP is to be the single decisive factor in delineating the relevant market under Danish competition law. However, it will become evident from the analysis below that the Competition Council usually attaches greater weight to other factors in determining the scope of the relevant product market although it employs the SSNIP test regularly. These factors are also mentioned in the guidelines and are the following:
• the degree of physical similarity between the goods and services in question.
24 Where appropriate the term “product” refers to “service” as well. For simplicity purposes the work uses for the most part only the term “product”, nevertheless, all said hereto is relevant to services mutatis mutandis, too. 25 See Agreements Guidelines, supra note 20. 26 Ibid. 27 See Competition Act, Section 5a § (1). 28 See Agreements Guidelines, supra note 20. 29 Ibid. 30 See Agreements Guidelines, supra note 20. 31 The acronym stands for “small, but significant non-transitory increase in price.”
12 • differences/similarities with regard to the function/intended use of the products.
• price differences between two products or services.
• Expenses [imposed on the consumers32] associated with a shift between two potentially competitive products.
• established consumer preferences for a certain product type or category rather than others.
• legal requirements imposed on products.
• product classification.
The following sections deal with a number of those factors and present examples for how the Council applies each test in its day-by-day performance, with a view on the media sector in particular. aa. Product characteristics
The degree of similarity between the goods and services in question33 makes for 4.19 the first criterion to be considered when assessing the relevant product market according to the guidelines laid down by the Council. In dealing with such characteristics, the Council recognizes that certain peculiarities of a product not necessarily strictly related to its functionality, such as quality, brand image, and the good’s design can be of decisive importance in delimiting market boundaries because they effectively limit the number of substitution possibilities as they are perceived by the consumer34.
The Council’s decision in the Danish Crown – Steff Houlberg merger case35 4.20 provides for a good illustration of the greater weight attached to product characteristics by the Council in the process of market definition. Although the case does not deal with media related sectors, it possesses a great importance for here the general methodology employed by the Competition Council can be clearly observed. Thus, in analysing the market for the production and selling of pork meat for industrial use, the Council held that certain product characteristics, i.e. taste, colour, nutritional value, functionality and consistency are of such importance in the eyes of the customers so as to make pork products constitute a market distinct from other meat products. In the same decision, the
32 See Agreements Guidelines, supra note 20. 33 Op.cit., p. 4. 34 Ibid. On the other hand, product peculiarities may also be such in character that they prevent effective supply side substitution, for example where specific knowledge is required to imitate certain product characteristics. This will be taken up in Section II, 1(b) devoted to the analysis of supply side substitution. 35 Fusionen mellem Danish Crown og Steff-Houlberg, 24.04.2002 [henceforth: Danish Crown], no journal number provided; the text is directly available from http://www.ks.dk/publikationer/konkurrence/2002/slagteri/ ; an English summary of this case can be found on the homepage of the Danish Competition Authority at: http://www.ks.dk/english/competition/danishCrown/Kap1-danishCrown.htm/ .
13 Council held that brand image and product origin (nationality) play also a crucial role for the demand-side substitution evaluations due to the fact that consumers seem to put a lot of weight on the particular characteristics when deciding to choose between domestic or foreign products36.
In the field of media, factors such as the content of the broadcasted programme 4.21 or publications content, time dimension, frequency and coverage spectrum were taken into consideration by the Council for defining the relevant product market. While evaluating cooperation agreements between two Danish public service broadcasters DR and TV2 concerning the market for purchase and exploitation of broadcasting rights to premium sport events, the Council emphasised that these programmes differ from other types of broadcasting contents due to certain particular characteristics. Sport programmes are considered to differ from other types of programs in at least two crucial aspects: (i) the temporal dimension of the product, i.e. the value of sports programs to broadcasters varies according to whether or not they are being broadcast “live” (i.e., simultaneous to the event in question), or at a later point in time, and (ii) particular content characteristics, e.g. unlike other programmes, sport events exhibit a specific competitive trait giving the audience a possibility of genuine identification with the athletes (which does not seem to occur on other occasions)37.
With regard to the print media, the Competition Council indicated in 4.22 Bladudgivernes Forhandlernævn - Overenskomst three different categories of media products, each of which according to the Council ought to be considered as forming a separate market38. Thus, the Council defined the following three relevant product markets, (i) the market for daily newspapers, (ii) the market for weekly magazines and (iii) the market for monthly magazines. The Council noted that the above mentioned markets should be deemed to be separate from each other because the products they comprise differ with regard to their characteristics, i.e. the content and the publishing frequency. This finding was reaffirmed in Netto I/S' klage over Egmont Magasiner A/S og Aller Press A/S,39 where the Authority held that monthly magazines and weekly magazines of different sorts could not be considered to form part of the same market due to the apparent differences with regard to the content and publishing frequency. In this decision the Council stated the following:
36 The latter conclusion was reached upon a survey done by the Council. 37 Concerning both aspects, see Aftale mellem DBU og TV2/DR om tv- og radiorettigheder til dansk landsholdsfodbold, 31.10.2001 [Journal nr.3:1120-0388-171/mlp/Fødevarer og Finans, henceforth: DBU og TV2/DR], para. 49, and Aftale mellem DR, TV2, Team Danmark og Dansk Håndboldforbund om tv-, radio-, og Internetrettighederne til dansk håndbold, 27.11.2002 [Journal nr.3/1120-0301-0128/Industri/mvn, henceforth: DR/TV2 og DHF], para. 29. Furthermore, both decisions address the question of substitutability among different types of sports programming, see DBU og TV2/DR, para. 50; DR/TV2 og DHF, para. 32 et. seq.; in each of the cases the Competition Council reached to the conclusion that the sporting activities under review were sufficiently distinct, especially with a view to audience popularity, so that they could not be substituted for by means of other sporting events (and the broadcasting rights thereto). 38 Bladudgivernes Forhandlernævn - Overenskomst, 26.05.1999 [jnr.2:8032-132, pr], henceforth: Bladudgivernes Forhandlernævn. 39 Netto I/S' klage over Egmont Magasiner A/S og Aller Press A/S, 16.06.1999 [j. nr. 2:801- 166 bjs], henceforth: Netto I/S' klage.
14 “The Competition Authority is of the opinion that weekly magazines distinguish themselves from those appearing on a monthly basis […] primarily by their content. The former are characterized by articles and reports covering a vast array of issues, which is why they appeal to a broad range of readers. Monthly magazines usually do not contain topicalities such as TV-programs and current events coverage. Furthermore, weekly magazines are published far more frequently than magazines appearing once a month or less. Finally, the prices of weekly magazines are significantly below those of such other magazines.”40
This approach of the Danish Competition Council is similar to the approach held at the EC level and will be discussed in detail later on (see in particular part C). bb. Intended use
Although product characteristics, as outlined in the last section, may indeed 4.23 constitute a crucial factor that would lead the consumers to determine the substitutability between the products, in most cases these characteristics are viewed in a close relation with the aims the products are meant to satisfy. Moreover, the intended use of the products alone is in many occasions the single, most important element that shapes the consumers choice towards alternative products. Consequently, the intended use of the products has been in the Danish Competition Council’s experience a central factor for determining the relevant product market. The Danish Agreements Guidelines recognize accordingly that differences and similarities with regard to the function/intended use of the products are significant factors to be considered in the definition of the relevant product market (see above para. 4.18).
In its decision TV2’s priser og betingelser41, the Council made several 4.24 interesting assessment as regards the advertising markets in the media and the application of the intended use test for the purpose of market definition in this sector. The Council came to the conclusion that with reference to advertising all media means seem to be, at least to a certain degree, of a complementary nature vis-à-vis each other. That means that for advertising purposes, at least, a partial substitutability seems to exist between the different media types. In the light of this, the intended use of the services in question to the Council appeared to be the most appropriate element for assessing the relevant advertising markets. Thus, the Council noted: Choosing the right medium is primarily a question of what target group the advertiser wants to reach and the mode of influencing the customer that he finds the most convenient with regard to the product which is to be promoted by a given advertising campaign42.
After having established this and having compared the major types of 4.25 advertising, i.e. advertisements on television, print advertisements, outdoor, neon signs or cinema advertisements, the Council voiced its opinion that for a substantial group of advertisers the commercials on television differ with regard
40 Ibid. (Emphasis added). 41 TV2’s priser og betingelser, 29.11.2000 [Journal nr.2:801-488,cf/Fødevarer/finans], henceforth: TV2’s priser. 42 Ibid., emphasis added.
15 to the effect on the target group when compared to other media. Consequently, the Council came to the conclusion that the relevant product market in this case ought to be strictly the nationwide market for advertising on television. This finding is largely similar to the approach at the EC level (see hereto below section C)43. cc. Price
Goods that are intended to satisfy the same needs and possibly have similar 4.26 product characteristics may on certain occasions not be considered as being perfectly substitutable due to price differences, which might actually prevent consumers from substituting one of these very goods for another. As a result, these products will lack interchangeability and will not be seen as belonging to the same relevant product market. In a similar manner, convergent or divergent product price movements over time may lead to a more far-reaching or a more restrictive definition of relevant product markets, in which the goods will be considered to fit in.
Accordingly, the Danish Competition Council uses the price factor extensively 4.27 for delineating the relevant markets. According to the guidelines44 issued by the Council, price differences are seen as a major factor for the purposes of market definition. High price differences (of a range of 25%45) have lead the Council to conclude that products, otherwise similar and having identical practical use, ought to be classified as belonging to different markets. However, it must be stressed at this point that price considerations usually enter into the definition of the relevant product market as a supporting argument and in most cases in conjunction with other elements (product characteristic and intended use) 46.
In the media sector, differences in price have been considered in the context of 4.28 product market definition of advertising products in the print and audiovisual media. In its decisions on the cases Bladudgivernes Forhandlernævn – Overenskomst47 and Netto I/S' klage over Egmont Magasiner A/S og Aller Press48, the Competition Council held that when viewed in conjunction with the differences in product characteristics, absolute price differences between weekly and monthly magazines were of such a magnitude as not to allow these products from being considered part of the same market49. Furthermore, in its decision
43 This assessment has subsequently been reaffirmed in MetroXpress Danmark A/S mod Berlingske Gratisaviser, 29.05.2002 [Journal nr.3:1120-0100-404/Fødevarer og Finans/hbs, henceforth: MetroXpress], paras 56, 85. 44 See the Agreements Guidelines and the Guidelines on the prohibition against abuse of a dominant position, supra note 20. 45 Cf. Danish Crown, supra note 35. 46 In the cases analysed no single product market has been delineated based on price difference alone. 47 Bladudgivernes Forhandlernævn, supra note 38. 48 Netto I/S’ klage, supra note 39. 49 Bladudgivernes Forhandlernævn, supra note 38, Section 3.4.1; Netto I/S' klage, supra note 39, Section 3.5.1.
16 Standardoverenskomst mellem DRF og danske biografer,50 while assessing the extent to which alternative forms of advertising could replace advertising in the movie theatres, the Council found that besides the substantial differences in the performance characteristics of the products under scrutiny, the prices of the different advertising means were also so widely divergent that the market for advertising in movie theatres has to be regarded as being separate from other audiovisual advertising markets. dd. SSNIP test
Although the test can be employed to identify the relevant product as well as the 4.29 geographic market taking into consideration the constraints posed by both demand as well as supply side substitution,51 it is analysed in the present section for: (i) it evolves certain similarities with the price test (or the cross price elasticity test), and (ii) it is after all the end-consumers’ reaction towards a small but significant price increase which forms the determinant factor for evaluating how this will affect the firms’ profit.
As mentioned in the introduction to this section, the SSNIP test is seen as the 4.30 central piece of every analysis concerning demand side substitution in the Council’s guidelines. The test seeks to establish whether or not a producer can fully pass on to the consumers a small, but permanent price increase without bringing about a shift of the demand to other products, thus making the increase in price unprofitable. A producer who could enforce a price increase in this manner would have to be considered as exerting substantial market power independent of consumers and competitors, which is why the test is also referred to as the hypothetical monopolist test.
It became evident from the decisions reviewed for the purpose of this work that 4.31 the SSNIP test plays, as a general rule, an important role in the Council’s methodology used for defining the relevant markets52.
A rather brief example of how the SSNIP test has been implemented in the 4.32 media sector is provided for by the decision I/S Danske Filmproducenter53, in which the Competition Council, while considering the substitutability between TV movies54 and feature films from the point of view of TV channels (demand side in this case), found that even if the prices of the feature films were to rise by 5 to 10 percent, this would hardly imply that TV channels would start buying
50 Standardoverenskomst mellem DRF og danske biografer, 16.06.1999 [J.nr. 2:8032-393 pr], henceforth: DRF og danske biografer. 51 See for more on Chapter 1 para. 1.11. et seq. 52 For pertinent examples of the usage of SSNIP in general competition cases, see especially Danish Crown, supra note 35. Furthermore, see also LK A/S’ grossistaftaler, 20.12.2000 [Journal nr.2:8032-1160, 1161, 1162, 1163 og 1164, do/industri, henceforth: LK A/S], para. 68, and Undersøgelse af A/S Em. Z. Svitzers Priser, 27.11.2002 [Journal nr.3/1120-0204- 0069/Infrastruktur/ln, henceforth: Svitzers Priser], para. 35 . 53 I/S Danske Filmproducenter, 29.08.2001 [Journal nr3:1120-0388-81, henceforth: Danske Filmproducenter], para. 58. 54 These are movies produced by TV-channels themselves or TV production companies. As such they are opposed to films intended for a cinematographic audience, which subsequently may be shown on television as well.
17 TV movies instead. Hence, the council concluded the existence of a separate market for the sale of feature films intended for television broadcasting in relation to the market for TV movies.
However, it is noteworthy to mention at this point that the Council does not 4.33 always employ the test in its strict form but rather in a more “loose-fitting” form akin to the cross-price elasticity test. Therefore, in its decision TV2’s priser the Council stated: “When advertisers face marginally rising prices per spot with TV2, they can counteract this by shortening the length of their campaigns placed with TV2 and distribute their spots over a larger range of channels.”55
In the same case the Council reaffirmed its previous finding that different media 4.34 are not substitutable for each other with regard to advertising, i.e. advertising on TV is not a substitute for advertising on newspapers (see above para. 4.25). The Council noted that although advertisers might distribute their spots over a larger range of channels, thus leading to substitution of advertising products between different undertakings of the same media type (e.g. between different TV channels), this trend is still not able to provide for the existence of substitution between different types of media as such. Therefore, the Council came to the same conclusions, it had previously found while relying on intended use test as regards the advertising markets, this time based on the SSNIP test. The Council stated: “It is correct that synergies between print media and TV do exist, but this does not subtract from the finding, supported by advertisers’ behaviour and media agencies’ assessments, that a big group of national advertisers is unwilling to switch a substantial part of TV marketing revenues to other media in response to a 5% price increase on TV commercials.”56
Besides the above mentioned comments, a few additional remarks need be 4.35 revealed at this point in relation to the application of the SSNIP test by the Danish Competition Council. As a general rule, the Council employs the test to a larger extent and in a more precise and technical manner while dealing with cases involving other economic sectors as compared to the mode used in the media sector. It is not the purpose of this work to discover the reasons for that, therefore, it can only be assumed at present that the reasons for this disparity in the SSNIP test usage might be either the lack of available data or the particularities of the media sector, in which other factors such as language features, social-political aspects, quality concerns, etc. have a more significant say than mere price dynamics. b) Supply-side substitution
As mentioned above (see hereto section II), Section 5a § (1) of Danish 4.36 Competition Act requires that the definition of the relevant market be based on examination of demand substitutability as well as supply substitutability. In the Agreements Guidelines, the Council demonstrates how the supply-side
55 TV2’s priser, supra note 41, para 43; see also para 73. 56 Op.cit., para 71.
18 substitution tests shall be implemented in practice. The Council notes that the examination of supply side substitutability aims at providing an answer to the question of to which extent a small but permanent increase in the price of the products or services under scrutiny might lead other potential suppliers to reorganize their production line, thereby offering consumers possibilities for substitution57. In practise this call for answers to more concrete questions, such as how the other suppliers would react to changes in relative prices or whether they would be able or not to rearrange their production in order to supply and promote the same product on a short notice. Other matters to look onto for an answer might evolve assessments of whether such rearrangements are possible in the short run without imposing too large risks and extra costs on the suppliers, or whether a comprehensive reorganization of the company’s production line is worthwhile if it can only be brought about in the long run58.
In the media sector, deliberations linked to supply side substitutability are also 4.37 brought into play by the Council for assessing the relevant market. In its decision Etableringen af FAS59, the Council, while examining the market for information retrieval from news archive databases, held that this market should not be defined extensively so as to comprise all other information data bases in general terms since the providers of such general services were not in a position to simply expand these very services to also include news reporting, as such additional coverage would be conditional upon the granting of the rights necessary by the publishers of the said news media. Therefore, the Council accepted the market for information retrieval from news archive databases to be a separate market.
While assessing the interaction between the markets for information retrieval 4.38 systems and the market for press monitoring in the same decision, the Competition Council conceded that evidence over a certain degree of markets integration did exist, as the news archive databases could provide the basis on which the service for general press monitoring itself could subsequently be provided. However, the Council were of the opinion that weighty arguments indicated that the adaptation from information retrieval systems to press monitoring systems and vice versa could not occur sufficiently fast not allowing therefore the condition for effective supply-side substitution to be fulfilled. Hence, the two markets were deemed to be separate in the case at issue60.
A conclusion can be derived from the cases analysed for the purpose of this 4.39 work that Danish Competition Council does exploit the benefits of supply-side tests for defining the relevant market. As regards the general mode of the tests’ application, it is safe to say that the Council tends to start its analysis of the relevant market definition with deliberations pertaining to demand-side substitutability test and then resorts to the examination of the supply
57 Agreements Guidelines, supra note 20. 58 Ibid. 59 Etableringen af FAS, 25.09.2002 [henceforth: FAS], no journal number provided; the text is directly available from http://www.ks.dk/publikationer/konkurrence/2002/fas/fas- pdf.pdf/ . 60 Op.cit., para. 247 et.seq.
19 substitutability. This does not mean that the Council in all cases starts its analysis with demand-side tests, nor does it mean that the Council will not take into consideration supply-side concerns if the demand-side test provides a good picture of the relevant markets (moreover, section 5a of the Competition Act explicitly requires the supply-side analysis to be conducted). There have been of course cases where supply-side indicators alone or primarily offer reliable evaluations (see above). It only indicates that in most cases factors related to demand substitutability seem to offer adequate, tangible and trustworthy evidence sufficient for an accurate relevant market delineation, thus rendering these tests in a hierarchically preferred position.
2. Geographic dimension of the market
In line with the Commission’s notice on the definition of the relevant market,61 4.40 the Danish Competition Council defines the relevant geographic market as a geographic area characterized by homogeneous conditions of competition which can be separated from other areas, because there different competition conditions prevail62. The Council points to the following factors,63 which it holds to influence the definition of the relevant geographic market:
• possible barriers to market access (e.g. consumer preferences)
• large differences in company market shares
• large price differentials from one area to another
• transportation costs
• distribution
It emphasises that transportation costs shall constitute the single most important factor in defining the relevant geographic market64. It will be shown below that linguistic and cultural factors play a key role in defining the geographic scope of the media markets.
By definition, Danish competition law applies to an area falling within the 4.41 boundaries of Danish state. Therefore, the Council’s assessment on the relevant geographic markets usually yields a scope of the relevant geographic market which coincides with the national borders,65 or sub regions contained therein66.
61 Commission Notice on the definition of relevant market for the purposes of Community competition law (97/C 372/03), Official Journal C 372, 09/12/1997. 62 See Agreements Guidelines, supra note 20, p. 2. 63 Op.cit., p. 5. 64 Ibid. 65 TV2’s priser, supra note 41; DR/TV2 og DHF, supra note 37; LK A/S, supra note 52; moreover, see Fusion mellem Dendek og Ditas, 24.04.2002 [Journal nr 3:1120-0401- 27/Industri/jec, henceforth: Dendek]. 66 MetroXpress, supra note 43; Svitzers Priser, supra note 52. The merger case Fusion mellem Dendek og Ditas, supra note 64, probably also falls into this category, according to para 121 which states that ”[f]or some products there are different geographic markets.“;
20 This may be due to factors such as specific national standards,67 which can be subsumed under the category of barriers to market access, or established market structures, including certain distributional arrangements,68 which oscillate between the categories of distribution and barriers to market access enumerated in the Competition Council’s guidelines69. Cross-border effects on the relevant geographic market are seldom treated in the decisions,70 and although there have occasionally been cases, in which this larger dimension has been briefly elaborated upon71, the Council has on the whole regarded the geographic dimension of the relevant market to be no greater that the national territory of the Danish Kingdom.
In media cases, the Danish Competition Council usually restricts the scope of 4.42 the relevant geographic market to the boundaries of the national territory or to sub regions within these boundaries72. The foundation for such a delimitation is for the most part based on grounds of the distinctness of Danish language and culture,73 and the fact that these media products are mainly addressed to the Danish consumers (Danish audiences or Danish readers) and rarely distributed outside the Danish territory74. Thus in Annonceaftalen,75 the Council stated that the geographic dimension of the market for advertising on the Danish dailies and weeklies is the whole of the Danish territory, which has to be viewed as a special linguistic and cultural district. By emphasizing the distinctness of Danish culture and language,76 thus giving the geographic market a “linguistic-
however, the ensuing analysis does not deal with this issue at any length, focusing on established market structures and power asymmetries flowing therefrom instead. 67 See LK A/S, supra note 52, para 71: „The relevant geographic market is confined to Denmark since the Danish market for socket outlets is limited by the special Danish earthing standard, which contributes to the lack of effective competitive pressure from foreign producers on the Danish market.“ 68 Dendek, supra note 66. 69 The difficulty in passing judgement on this issue stems from the fact that the Danish Competition Authority seemingly ties the category of distribution to that of transportation costs, cf. the example given in the Agreements Guidelines, supra note 20, p. 5f. 70 Dendek, supra note 66, paras 39f, 45; Svitzers Priser, supra note 52, para 41. 71 See Overenskomst for UBOD og aftale mellem UBOD og Copy-Dan Kabel TV, 15.12.1999 [Journal nr. 2:8032-2, 2:8032-1105, henceforth Overenskomst for UBOD]. 72 See MetroXpress, supra note 43, para. 101; FAS, supra note 59, para. 254; Danske Filmproducenter, supra note 53, para. 67; TV2’s priser, supra note 41, para 20; Bladudgivernes Forhandlernævn, supra note 38, section 3.4.2; Netto I/S' klage, supra note 39, section 3.5.2; DRF og danske biografer, supra note 50, section 3.4.2; DBU og TV2/DR, supra note 37, para 56; see also Bogbranchens samhandelsregler mv., 26.04.2000 [Journal nr. 2:8032-141, henceforth: Bogbranchen], para. 34. 73 See e.g. TV2’s priser, supra note 41, para 20; DR/TV2 og DHF, supra note 37, para 39; DBU og TV2/DR, supra note 37, para 57; additionally, see Annonceaftalen, 26.01.2000 [Journal nr. 2:8032-916, henceforth: Annonceaftalen], section 3.4.2. 74 See for example Netto I/S' klage, supra note 39, section 3.5.2; also Annonceaftalen, supra note 73, section 3.4.2. 75 Supra note 74. 76 See e.g. TV2’s priser og betingelser, 29.11.2000, para 20; Aftale mellem DR, TV2, Team Danmark og Dansk Håndboldforbund om tv-, radio-, og Internetrettighederne til dansk håndbold, para 39.
21 dependent dimension”, the Council’s finding conforms to the approach established by the EC Commission in the media sector, which in its Eurovision decision held that “the free-to-air and pay-TV broadcasting markets should be considered, largely for linguistic, cultural, licensing and copyright reasons, generally national or extending to single linguistic areas77.
When the relevant geographic market was found to be smaller than the 4.43 nationwide market, that is based on grounds such as the particular characteristics of the media under consideration and the target group meant to be reached by it. Consequently, the geographic market is given a local size on occasions where local advertisement coverage or ads related to regional activities are at issue although the market participants may carry activities in the overall nationwide market78.
3. Other criteria
The factors discussed in this section, with the exception of potential 4.44 competition, are not employed as often as demand and supply side substitutability tests by the Council in the process of market evaluations. It shall be emphasized that in principle, these factors are not used for strictly market definition purpose per se, but rather serve the assessment of competition in already delineated markets. a) Structure of the market
Considerations related to market structures figure prominently in the decisions 4.45 rendered by the Danish Competition Council. However, they do so in a rather unsystematic manner. This results primarily from the fact that Danish competition act provides no definition of the term79, and the Council has not so far issued any informing material of general nature dealing with the subject.
Apart from a general description of the market in its entirety, which forms part 4.46 of almost every decision, other matters that may be thought as market structure features and might play a role in the analysis of the council can be summarized under one of the following categories:
• market size and shares
• the relative bargaining power between parties
77 Commission Decision, Case IV/32.150, 10 May 2000, Eurovision, recital 48, cited in Aftale mellem DR, TV2, Team Danmark og Dansk Håndboldforbund om tv-, radio-, og Internetrettighederne til dansk håndbold, 27.11.2002, para 39. 78 See e.g. TV2’s priser, supra note 41, para 20; DR/TV2 og DHF, supra note 37, para 39. 79 The Danish Competition Act itself does not make any reference to the concept of market structure. The Danish Competition Authority’s guidelines on the prohibition against abuse of a dominant position contain certain indicators what will be regarded as relevant structural indicators for the purpose of Danish competition law; see immediately below (para. 47 et seq.).
22 aa. Market size and shares
Total market size and market shares are the closest notions to market structures, 4.47 and can be used where an analysis of the consequences of a merger is called for, or where the position of an undertaking in cases of dominance need to be estimated. In estimating the impact a proposed merger will have on the market, the Council will judge the negative effects on competition to be smaller, the lower the combined market share of the founder undertakings involved is. Complementary to the ex-ante perspective of merger control, data on market structure play an equally important role in the ex-post assessment of dominance cases. In its guidelines on the market definition in cases falling within the provisions of Section 11 of the competition act (abuse of a dominant position)80, the Danish Competition Council identifies the number of competitors and relative market shares as well as other specific business data such as capital strength, yearly turnover and profit as examples of structural factors to be reckoned with when assessing the dominance of an undertaking or a group of undertakings. Consequently, information concerning relative market shares has become a routine aspect of all merger and dominance cases81.
In the media sector, the Council’s decision in the dominance proceedings 4.48 against Danish public service broadcaster TV2 demonstrates the importance attributed to historical developments in overall market size and the shares held therein by different market participants. In reaching its conclusion, the Council considered both the historical role played by foreign broadcasters in the Danish national TV advertising market and that of national competitors to TV2 as illustrated by market shares,82 as well as the positive development in overall market size83. In the MetroXpress Danmark A/S mod Berlingske Gratisaviser decision, the Competition Council concentrated on appraising the financial strength of the company for assessing the conditions of competition in the market. Here the Council held that a firm’s strength had to be judged against both its capital strength and market power. bb. The relative bargaining power between parties
The other structural aspect of the market, which has been taken into 4.49 consideration and was unveiled by this work while examining the decisions of the Danish Council, is the relative bargaining power of already established actors. This refers to the fact that the position of certain actors in the market can be amount to an advantage in bargaining situations vis-à-vis other competitors, which will enable the former undertakings to impair competition, actually or potentially (by virtue of an agreement of exclusivity for instance). The
80 See Guidelines on the prohibition against abuse of a dominant position, supra note 20, Section 3.2.3. 81 See e.g. TV2’s Priser, supra note 41, para 24; DBU og TV2/DR, supra note 37, para. 30; Annonceaftalen, supra note 73, section 3.4.3; DRF og danske biografer, supra note 50, section 3.4.3; Netto I/S’ klage, supra note 39, section 3.5.1; for another example of market structure analysis, see also the Danish Competition Report 1999 (Konkurrenceredegørelse 1999), Section 4.3, http://www.ks.dk/publikationer/1999/kr99/Pages/kap043.htm. 82 TV2’s priser, supra note 41, para 21 i.c.w. para 24. 83 Op.cit., para 28; see also para 105.
23 implications of such an exclusivity agreement in the market for sport broadcasting rights were considered by the Competition Council in DR/TV2 og DHF84. Here the Council held that the granting of the transmission rights to handball matches on a five year exclusivity basis to a consortium consisting of Danish public service broadcasters DR and TV2 was admissible, among other things, because the joint bargaining of the two broadcasters had not affected the bargaining power of the seller in a negative manner85. Similarly, in the merger decision Fusion mellem Dendek og Ditas, the Competition Council considered that the power relationships in the market were of decisive importance to the assessment of the case as the competition problems in the sector under scrutiny were to a large degree derived from the exploitation of their key position by the encumber stores and the buying groups vis-à-vis craftsmen and entrepreneurs86. b) Actual or potential competition
Potential competition, according to Article 5a of the Danish Competition Act, 4.50 will be examined in those situations where the standing of the undertakings yielded by competition analysis raises doubts as to its compatibility with the Competition Act87. The category is tightly linked to the concept of supply side substitution, as it can be seen from the definition given in the Danish Competition Council’s guidelines on the prohibition against abuse of a dominant position, which define supply side substitution as the potential competition stemming from a possible adjustment of production facilities88. However, the notion of potential competition goes beyond the adjustment of existing firms to a changed market environment by also considering competitive constrains from undertakings outside the existing market, be it from adjacent geographic or product markets.
Practically, concerns with potential competition have in no way been restricted 4.51 to assessments of dominance alone. The case law of the Competition Council reveals that the Council is equally willing to address this issue in the context of agreements and merger proceedings, where this is deemed appropriate for the case at hand. The following paragraphs provides for insights of how the concept of potential competition has been applied in notification, merger and dominance cases respectively.
In LK A/S’ grossistaftaler, the Competition Council had to assess whether the 4.52 standard agreement notified raised problems from the perspective of competition law. After having established that the notifying company held a market share, which in itself would have allowed for a finding of a dominant position89, it then
84 DR/TV2 og DHF, supra note 37. 85 Op.cit., para 86. 86 Dendek, supra note 64, para 127. 87 Art. 5a: „The potential competition must be examined, once the position of the undertakings concerned has been ascertained and this position raises doubts as to its compatibility with this Act.“ 88 Guidelines on the prohibition against abuse of a dominant position, supra note 20, Section 3.1.1. 89 LK A/S, supra note 52, para 91.
24 went onto considering whether there existed companies “that are not currently present in the relevant market, but might be thought to enter the market within a relative short time frame, approximately one year, and thereby constrain the company’s independence.”90 It concluded that potential competition from new market entrants was limited due to the existence of entry barriers and that LK had therefore to be regarded as being dominant in the market in question.
From the cases analysed so far, it has not been possible to retrieve pertinent 4.53 examples of how the concept of potential competition is applied in the field of media. c) Legal and other entry barriers
Barriers to entry are routinely assessed in the decisions rendered by the Danish 4.54 Competition Council, irrespective of the nature of case under scrutiny. As it was pointed out above, such entry barriers may well arise from structural features of the market itself, e.g. specific institutional arrangements, which are beyond the immediate control of market actors, e.g. a company in a downstream market will not easily be in a position to address supply shortages due to a particular form of organization in the industry upstream. However, they may also result from the deliberate course of action pursued by the very actors already established in the market, either in the form of present or anticipated future behavioural choices or due to the lock-in effects of past behaviour.
The Council held the organization and the institutional setting of the Danish hog 4.55 breeding industry responsible for reducing the degree of supply-side substitution and preventing the potential competition from entering the domestic market. This effect was also seen to be reinforced by Danish legislation on food safety standards and export licensing arrangements, both of which were thought to limit the amount of foreign pigs entering the market91. Even where market access itself remains unregulated, the Council has conceded that legal requirements regarding equipment and education of personnel may imply the need for large fiscal investments that may detract from the attractiveness of market entry or render it altogether impossible92.
On the other hand, strategies of predatory pricing may lead potential competitors 4.56 to abstain from challenging the existing firms especially the incumbent ones, since similar behaviours are expected with some degree of certainty to reoccur in the future. Potential competitors will refrain from entering the market due to the fear that if such practise reoccurs, they will for sure face intolerable losses. The case Undersøgelse af A/S Em. Z. Svitzers Priser provides an example of a case in which the abuse of a dominant position had benefited the dominant undertaking. The ex officio investigation of the general conditions in the market by the Council came too late to discover the practice of anti-competitive
90 Op.cit., para 92, [Emphasis added]. 91 Danish Crown, supra note 35, p. 128. 92 See Aftale mellem Amtsrådsforeningen og Falck, 27.10.1999, no journal number provided; the text is directly available from http://www.ks.dk/konkurrence/afgoerelser/1999/10- 27/pkt6-falck/; for the issue in question, see Section 3.4.
25 behaviour. The case clearly illustrates the crucial importance of timely information being given to the Competition Council by the parties affected for such an outcome to be prevented.93 Loyalty bonuses or progressive quantity discount schemes, such as the ones discussed in TV2’s priser og betingelser,94 may also constitute means of tying the customers thus placing strong entry barriers to competitors willing to enter the market.
It has to be emphasized that besides structural features of the market and 4.57 constraints imposed on market access by the strategic behaviour of incumbent companies, one of the most powerful and indeed rigid barriers to market entry is constituted by consumer preferences. Thus, the Council noted in the DR/TV2 og DHF decision that Danish handball matches enjoy an especially high degree of popularity among Danish viewers95, thus yielding a low degree of demand substitutability and making it difficult for providers of foreign handball matches to enter the market.
B Repertoire of relevant product and geographic market in media sector in Denmark
The purpose of this part is to provide a descriptive picture of the main relevant 4.58 markets in the media sector as they have been defined by the practice of the Danish Competition Council. As it has been described above (see hereto above part A), several decisions have addressed issues related to the media sector, and the Council has had the chance to define a number of relevant media markets. Therefore, this part will endeavour to present these very markets delineated in the media sector so far, and where possible their sub markets as identified by the Council. The analysis covers both product and geographic dimensions of the markets at the same time.
I Publishing and books sector
In the publishing sector, the Council has identified the following markets as 4.59 regards newspapers and magazines: (i) the market for daily newspapers, (ii) the market for weekly magazines and (iii) the market for monthly magazines. These markets are also known as reader markets in order to distinguish them from the advertising markets (see Chapter 1 para. 1.145). Another market identified by the Council within the context of the publishing sector is (iv) the market for freely distributed newspapers [the so-called free-sheets].
93 Svitzers Priser, supra note 52, para. 89 et seq; the ex officio character of the investigation follows from para.s 1 and 15. In the case at hand, the “victim” of the aggressive pricing strategy practised by the dominant incumbent probably did not inform the Council because an agreement was reached between the two competitors, cf. para. 94.. 94 TV2’s priser, supra note 41, para 98 et. seq.; in this case, the Danish Competition Authority confirmed the defendant’s contention that lock-in effects had not been prevalent. 95 DR/TV2 og DHF, supra note 37, para. 29 et.seq. i.c.w. para. 32 et.seq.
26 1. Daily newspapers, weekly magazines, and monthly magazines
The Council indicated in Bladudgivernes Forhandlernævn96 that three different 4.60 categories of media products were at stake, i.e. daily newspapers, weekly magazines, and last but not least monthly magazines. Each of these products ought to be considered, according to the Council, as forming a separate market. The Council noted that the above mentioned products should be deemed not to be perfectly substitutable for they differ with regard to their characteristics, i.e. content and publishing frequency. Moreover, the prices of these products were significantly dissimilar. Another feature that differentiates the above mentioned products is, according to the Council, the fact that they address different groups of readers. Thus, the Council voiced its opinion that these three types of press media products should be considered to belong to three separate markets, namely (i) the market for daily newspapers, (ii) the market for weekly magazines and (iii) the market for monthly magazines.
Furthermore, the dissimilarity between the different modes of distribution of 4.61 these products to ultimate consumers, i.e. general distribution to the retailers vis- à-vis distribution to individual subscribers, in the eyes of the Council merited a further division of these relevant product markets into markets for goods (newspaper, magazines) distributed to retailers and markets for goods distributed upon subscription.
More or less identical conclusions were drawn by the Council in Netto I/S' 4.62 klage97 with regard to magazines appearing on a weekly and monthly basis. Here, the Council was of the opinion that magazines that are being sold on a weekly basis generally constitute a distinct product, i.e. the weekly magazines. Weekly magazines distinguish themselves from those appearing on a monthly basis primarily with regard to their content. These magazines comprise articles and reports that cover a vast array of issues, thus targeting a broad range of readers, as compared to monthly magazines, which usually do not contain topicalities such as TV-programs and current events coverage. On the other hand, the publication frequency of weekly magazines is higher than that of magazines appearing once a month or fewer times, and furthermore, the prices of weekly magazines are set significantly below those of other magazines. On these grounds, the Council judged the market for weekly magazines and the market for monthly magazines to be two separate relevant product markets reaffirming the conclusions previously drawn in the Bladudgivernes Forhandlernævn case.
The Council went on arguing whether or not a further subdivision of the market 4.63 for weekly magazines was possible. For this it investigated whether weekly picture magazines differ from weekly magazines addressing family and woman’s issues. It found that weekly picture magazines contain very short reports, and have very few articles or reading material such as novels or novellas. Moreover, their reports are chiefly presented in picture format with very little accompanying text. Weekly magazines addressing family and
96 Bladudgivernes Forhandlernævn, supra note 38. 97 Netto I/S' klage , supra note 39.
27 woman’s issues on the other hand contain more reading material, and articles concerning issues which specifically target these particular groups of readers (women and families). The company Aller Press argued that all Danish weeklies belonged to the same product market, as all weeklies are substitutable for each other and demand is elastic. The Council’s calculations however had demonstrated that the introduction of discount weekly picture magazines had not affected the sales of weekly magazines addressing woman’s issues, whereas there had been a certain decline in the sales of weekly magazines addressing family issues. However, decline in sales of other weekly picture magazines had been significantly larger. Having that said, the Council noted that there might have been a certain element of uncertainty in these calculations, and as a result, decided to delimit the relevant market to the market for the sales of Danish weeklies to retailers rejecting thus a further narrowing of the market.
The geographic market for Danish weeklies is according to the Council 4.64 national in scope, as these magazines are published in Danish language, and they are not distributed to retailers outside Denmark to any significant extent.
2. Freely distributed newspapers
In its decision Overenskomst mellem Århus Stiftstidende og Jyllands-Posten,98 4.65 the Council agreed with the notifying parties’ submission that there was a separate market for freely distributed newspapers [free-sheets]. However a substantial reasoning for this finding was not provided besides the fact that these publications are mainly based on the sale of advertisements.
The relevant geographic market of these publications is seen to have a local 4.66 scope as a rule. In the case under discussion the Council stated that relevant geographic market is the county of Århus. The freely distributed newspapers address readers and advertisers within a local area roughly equivalent to the households’ normal shopping district. According to the Council, it may be argued that partly overlapping commercial districts do exist, but this does not mean that the market is national in scope. Thus, a small, but significant increase of advertising prices in a free newspaper in the area of Århus would have only affected pricing in the surrounding areas to a minimal extent. Especially papers concentrated around the big commercial districts of Copenhagen, Århus, Ålborg, Odense and Esbjerg are able to have a pricing policy independent of other parts of the country. This can also be seen from the fact that the attempts at “price wars” that have been made, for example around Århus and Odense, have not spread to larger areas.
3. Books and other publishing markets
Besides the markets analysed above, the Competition Council has delineated 4.67 several other relevant markets linked to the publishing sector which are stated below. These delineations were provided without any explicit reasoning and therefore it cannot be said with a high degree of certainty what the attitude of the
98 Overenskomst mellem Århus Stiftstidende og Jyllands-Posten, 21.06.2000 [Journal nr. 2:8032-267/lhh/fødevarer, finans], para. 17; no further reasoning was employed by the Authority in reaching this conclusion.
28 Council will be vis-à-vis the particular markets in the future. In its decisions Bogbranchen and Leverancer af bøger til udenlandsk boghandel,99 the Council identified respectively that (i) the agreements under discussion were to affect the entire market for publishing and sale of books from publishing houses in Denmark to consumers in Denmark (the Council did not examine further the book market to assess whether it consisted of several separate submarkets, for all the books published by publishing houses in Denmark were affected by the rules of the agreement – including publications in other languages than Danish), and (ii) the existence of a separate market for legal and economic literature. In the Distributionsforholdene for filmblade100, case the Council defined the relevant product market as the market for the distribution of free movie magazines in movie theatres. A separate market for the sale of the National Danish Encyclopedia in Denmark was identified in Den Store Danske Nationalencyklopædi afvist101. The market for sale and distribution of newspapers in the omnibuses of a given municipality was also considered to be a separate product market102.
4. Copyright
With regard to copyright issues within the publishing sector, the Council found 4.68 in Statsinstitutioners Kopiering103 that Copy-Dan/Erhvervskopier held a dominant position in the market for the administration of rights touched upon by copying of specialists’ articles in newspapers, magazines and anthologies etc. for internal use in e.g. public institutions.
II. Broadcasting-TV
The available decisions linked to this sector primarily involve questions related 4.69 to copyright issues and sports broadcasting rights. Furthermore, the Council has not provided any reasoning regarding the delineation of most of the relevant markets identified in this sector.103a
99 Bogbranchen, supra note 72; Leverancer af bøger til udenlandsk boghandel, 25.11.1998 [J.nr. 2:801-77 hhk], henceforth: Leverancer af bøger. 100 Klage over distributionsforholdene for filmblade, 24.02.1999 [no j.nr. provided]. 101 Klage over Den Store Danske Nationalencyklopædi afvist, 29.09.1999 [no j.nr. provided], henceforth: Den Store Danske Nationalencyklopædi. 102 See Uddeling af gratis aviser i Århus Sporveje, 24.11.1999 [no j.nr. provided]. 103 Fritagelse til rammeaftale om statsinstitutioners kopiering af ophavsretligt beskyttet materiale. Erklæring efter § 11, stk. 4, 31.05.2000 [Journal nr. 2:8032- 553/lhh/fødevarer/finans]. 103a Lack of available reasoning as regards the relevant market identified does not necessarily mean that the Council wrongly abstained from undertaking a sufficient analysis with reference to the relevant market. It only indicates here that the decisions analysed pertaining to this sector do not contain a large amount of information on the market definition. On occasions, it is not necessary to make a full market analysis prior to a decision. This may include situations, in which it can be concluded that there is an infringement of the competition law even with a relatively broad market definition and/or situations, in which it can be concluded that an infringement has not occurred even with the narrowest market definition.
29 1. Distribution markets
In Tele Danmark Kabel TV’s aftale vedrørende forhandling af radioprogrammet 4.70 Music Choice104 the relevant market was found to be the market for pay-TV and radio. The market for the distribution of encrypted TV-channels to Danish households represents also a separate market, as stated in the decision TV2 - Canal Digital105. In both cases a extensive reasoning for this finding was not provided.
2. Sport broadcasting rights
The Danish Competition Council has twice in the recent past dealt with 4.71 questions relating to the acquisition of sports broadcasting rights. In both cases, the Danish public service broadcasters DR and TV2 had entered into cooperation agreements regarding the purchase and subsequent exploitation of the radio and TV-broadcasting rights to premium sports events, namely the games played by the Danish national soccer team and the matches of the Danish handball teams. The markets identified were the market for TV and radio broadcasting rights for Danish national soccer games106 and the market for the purchase of broadcasting rights to handball matches with the participation of Danish teams in Denmark107. In both cases, the Competition Council compared (a) the sports programmes with other types of TV formats108. Due to factors such as consumer preferences and limited time dimension of the products under scrutiny, the Council reached the conclusion that these programmes could not functionally be replaced by other programming content. Hence, the market for broadcasting rights to premium sports events is distinct from the markets for broadcasting rights to other audiovisual programmes. Then, the Competition Council went on to evaluating the degree of substitutability (b) among different types of sport programmes,109 leading in both cases to similar findings that these types of sport under scrutiny were sufficiently unique so as to merit the definition of distinct markets.
3. Cable and other transmission rights
In Copy-Dan, Kabel-TV’s standardvilkår110, Council defined the market for the 4.72 administration of rights for simultaneous and unedited retransmission of radio and TV programmes via cable as being the relevant product market. This finding was repeated in the Samarbejdsaftale mellem Copy-Dan, KABEL-TV og
104 Tele Danmark Kabel TV’s aftale vedrørende forhandling af radioprogrammet Music Choice, 30.01.2001 [Journal nr. 3:1120-0388-176/infrastruktur/lbr]. 105 TV2 - Canal Digital, 25.04.2001 [Journal nr. 3:1120-0301-106 /fødevarer-finnans/cf]. 106 DBU og TV2/DR, supra note 37, para. 49 and 55. 107 DR/TV2 og DHF, supra note 37, para. 28; see also para 35. 108 DBU og TV2/DR, supra note 37, para. 49; DR/TV2 og DHF, supra note 37, para. 29. 109 DBU og TV2/DR, supra note 37, para. 50 et.seq.; DR/TV2 og DHF, supra note 37, para. 30 et. seq. 110 Copy-Dan, Kabel-TV’s standardvilkår, 21.06.2000 [Journal nr. 2:8032-1029, lhh/fødevarer, finans].
30 KODA111 decision, in which the Council accepted the service market for the exercise of rights to simultaneous, complete and unedited cable transmission of radio and TV signals (according to Danish Copyright Act § 35) to be the relevant product market for the case at hand. In the case Tele Danmark A/S’ aftale med Canal+ Investments112, the Council confirmed the existence of a separate market for the right to distribution of film programmes via cable or community antenna systems for reception by means of analogue decoders. In the case CABs vedtægter113, the Council defined a separate market for the administration of fees collected for the cable retransmission of radio and TV programmes. This conclusion was reaffirmed later on by the decision Aftale mellem AGICOA og CAB114.
Finally, in response to a notification brought up by the Union of Broadcasting 4.73 Organizations regarding Denmark (UBOD)115, the Council accepted the notifying party’s submissions and identified the existence of the following markets, (i) separate service market for the broadcasters` rights to simultaneous, complete and unchanged cable transmission of radio and TV signals, adding to this the markets for (ii) broadcasters` rights to blank media tax, (iii) the market for reproduction of copies for educational purposes, and (iv) reproduction of copies for the partially sighted and the hearing impaired116.
The Competitions Council was of the opinion that the relevant geographic 4.74 market in this case was national in scope, covering the Danish territory. The accord and the agreements addressed the coordination and administration of rights concerning the diffusion by cable of radio- and TV-signals in Denmark, respectively. It was noted that the provisions of the Danish Copyright Act only apply to the carriage of signals in Denmark
4. Other markets
In its decision Fritagelse til aftale om eksemplarfremstilling til 4.75 undervisningsbrug af værker som udsendes i radio og TV117, the Council identified a separate market for the administration of rights to production of copies of radio and TV programmes for teaching purposes.
111 Samarbejdsaftale mellem Copy-Dan, KABEL-TV og KODA, 30.01.2002 [Journal nr. 3:1120-0388-261/Fødevarer & Finans/pr]. 112 Tele Danmark A/S’ aftale med Canal+ Investments vedrørende distribution af filmkanaler, 21.06.2000 [Journal nr. 2:8032-555, lbr/Infrastruktur]. 113 CABs vedtægter med dertil hørende driftsregulativ ikke omfattet af konkurrencelovens § 6, 20.12.2000 [Journal nr. 2:8032-593, lhh/infrastruktur] 114 Aftale mellem AGICOA og CAB, 30.01.2002 [Journal nr. 3:1120-0388-259/Fødevarer & Finans/pr]. 115 Cf. Overenskomst for UBOD, supra note 71, Section 3.4.1. 116 Ibid.; the market delimitations were based on pertinent provisions of the Danish Copyright Act. No further reasoning was employed by the Authority in defining these markets. 117 Fritagelse til aftale om eksemplarfremstilling til undervisningsbrug af værker som udsendes i radio og TV, 21.06.2000 [Journal nr. 2:8032-1023, lhh/fødevarer, finans].
31 In the case Klage over DRs skiltning for egne produkter i forbindelse med børneudsendelser i TV118, the relevant market delineated was the market for 4.76 children’s programmes on TV.
A market for copyright clearance of music videos to be shown on the Danish 4.77 market was identified in the case Aftale mellem IFPI og danske tv-stationer119.
III. Advertising in the media
1. Press advertising
In its decision MetroXpress120, the Competition Council found that daily 4.78 national newspapers and morning newspapers as well as freely distributed newspapers [so-called freesheets] competed on the same market for the sales of advertisements, thus withholding the party’s suggestions for the existence of an all-encompassing advertising market. In this context, the Council put a prime emphasis on the fact that these media could rightfully be said to form part of the same market for they were competing for the same potential advertisers121.
After stressing the complementary nature of all media formats, the Council then 4.79 carried on to consider more closely the market for all print media, and the possibilities for substitution in that market from a geographic perspective. The geographic dimension came to be the crucial factor in determining the degree of substitutability. Thus, whereas local and regional publications were deemed unable to offer the same contact with local addressees as the freely distributed newspapers circulated in the region of the Danish capital, nationwide newspapers were seen capable of offering this contact. Daily nationwide newspapers seemed to be the closest possible substitutes with up to 70% of their readers concentrated in this region122. Taking into account the facts of the case and the substantial overlap in advertising between the freely distributed papers and daily newspapers, a conclusion was reached that both belonged to the same market123.
At a higher level in the value chain, the Competition Council identified, in its 4.80 decision Annonceaftalen124, a market for the mediation of advertisements and commercials in Danish newspapers and weeklies. Here, it was acknowledged that different technical requirements for different print media might affect the
118 Klage over DRs skiltning for egne produkter i forbindelse med børneudsendelser i TV, 30.08.2000 [Journal nr. 2:801-483, lhh/fødevarer og finans]. 119 Aftale mellem IFPI og danske tv-stationer, 30.01.2002 [Journal nr. 3:1120-0388- 270/Fødevarer & Finans/pr], henceforth: IFPI og dansk TV. 120 MetroXpress, supra note 43. 121 Op.cit., para. 55. 122 Op.cit., para. 65. 123 Magazines and other media were excluded from the scope of the product market, cf. para. 79 et.seq. of the decision. 124 Annonceaftalen, supra note 73, Section 3.4.1.
32 act of mediation, however, these were not deemed to be of such importance so as to necessitate a further subdivision of the market.
The Council stated that the geographic dimension of the market for 4.81 advertising on the Danish dailies and weeklies is the whole of the Danish territory, which has to be viewed as a special linguistic and cultural unit. Moreover, Danish dailies are sold according to the Council only to a very limited degree abroad, just as advertisements in these dailies are almost exclusively brokered through domestic agencies, irrespective of the fact that multiple of those are daughter companies of foreign companies.
In its decision EjendomsAvisens annonceaftaler125 the Council defined the 4.82 market for the sale of real estate advertisements in newspapers for property in Århus and the closest neighbouring municipalities. Here, the Council pointed to the particular features of property advertising in newspapers, i.e. it provides the buyer with a comprehensive overview of the current supply of real estate, so that the buyer does not have to collect the individual real estate agents’ sales materials himself. From the point of view of the real-estate agents, it is much more efficient to advertise in a newspaper, which displays a lot of such advertisements, thus increasing the likelihood of reaching the buyer. These unique features distinguish real estate advertising in newspapers from similar advertising in other media, e.g., offices of real estate agents, the Internet, direct mail, direct advertising and advertisements on text-TV126. The fact that advertising costs for newspapers constituted up to 75% of the real estate agents` total marketing budgets was deemed to be an additional argument supporting the Council’s decision.127
The geographic dimension of the market was determined by potential buyers’ 4.83 housing demand which was considered to be concentrated in Århus and the surrounding countryside, thus giving the real estate advertising market a local dimension.
On another occasion, the Council dealt with real estate advertising in local 4.84 newspapers128. The Council noted that the freesheet at issue held more than 50 per cent of the local market for real estate advertisements and therefore occupied a dominant position in the market. It follows from the above examples that real estate advertising market seems to have for the most part a local scope.
The Council has identified a market for advertising of health food products in 4.85 weeklies and newspapers,129 in which neither of the two companies under discussion were considered to have a dominant position.
125 EjendomsAvisens annonceaftaler, 21.06.2000 [Journal nr.2::801-416/lhh/fødevarer, finans], henceforth: EjendomsAvisen. 126 The Council noted that text-TV and Internet offer the same possibilities, but they are currently not being used for real estate advertising in the geographic area in question. 127 EjendomsAvisen, supra note 125, para. 22 et. seq. 128 En gratisavis' prisliste ved boligannoncering, 24.04.2002 [Journal nr. 3:1120-0204- 48/Industri/lsp]. 129 Klage over annoncevilkår i bladet Sund & Rask og bladet Helse, 30.08.2000 [Journal nr. 2:823-621/lhh/fødevarer og finans]
33 2. TV advertising
In the proceedings against Danish public service broadcaster TV2, based on a 4.86 complaint by the private broadcaster TV Danmark130, the Competition Authority identified the nationwide market for TV advertisement as being a separate market of its own, stressing that such advertisement differed considerably with regard to the effect on the target audience from that of possible substitutes such as print advertisements, outdoor advertisements, neon signs or movie theatre advertising131. As advertisers would usually choose the medium according to the desired effect on a specific target group, this meant that there was a market for advertising on TV different from those for other advertising means.
The Council came to the conclusion that with reference to advertising all media 4.87 seem to have – up to a certain degree – a complementary nature vis-à-vis each other. That means that for the purpose of advertising, at least, a partial substitutability exists between the different media types. Nevertheless, the Council noted that choosing the right medium is primarily a question of what target group the advertiser wants to reach and which is the most appropriate way of promoting his product. After having compared the major types of advertising, i.e. advertisements on television, print advertisements, outdoor, neon signs or cinema advertisements, the Council voiced its opinion that for a substantial group of advertisers the commercials on television differ with regard to the effect on the target group when compared to other media. Consequently, the Council came to the conclusion that the relevant product market in this case ought to be the nationwide market for advertising on television.
3. On screen advertising
Finally, with regard to on-screen advertising in movie theatres, the 4.88 Competition Authority in its decision DRF og danske biografer132, held that this type of advertising due to its specific performance characteristics, price, the actors involved and the rules applicable in the sector constitutes a market of its own, distinct from that of other forms of audiovisual advertising. In particular, TV-advertising was not to be regarded as readily substitutable for on-screen advertising. This finding was reaffirmed later on by Competition Council in its decision in RMB Dansk Reklame Film A/S anmoder om forlængelse af fritagelse case133, in which the market for the right to the mediation of on-screen advertisements in movie theatres was deemed to be a separate market.
According to the Council’s judgement, the geographic market was limited to 4.89 Denmark, including the Faeroe Islands and Greenland, because movie theatres are situated in Denmark and the advertising films address the audiences of those movie theatres. The language spoken in the films is for the most part Danish, and accordingly the market was deemed to be national (Denmark).
130 TV2’s priser, supra note 41. 131 Op.cit., para 19. 132 DRF og danske biografer, supra note 50. 133 RMB Dansk Reklame Film A/S anmoder om forlængelse af fritagelse, 29.01.2003 [Journal nr. 3/1120-0301-0245-/Industri/hbs].
34 4. Other advertising markets
In Mostrups annoncepriser134, the Council considered the advertising in phone 4.90 directories at the municipal level to be a separate product market. In Kørelærer- Union og Dansk Trafikskole Materiel135 the Council was of the opinion that the relevant market was the market for advertisements “specifically addressing” driving instructors in Denmark. On the other hand, the Council rejected in the Arte-katalog136 decision to narrow the market for cultural events advertising as to comprise only theatre catalogues. The Council noted that that the relevant market could not be defined in such a restrictive manner, as cultural events could be advertised in other media as well, such as the daily press, other print media, radio and television commercials, on the Internet etc. The Council thus assumed that advertising in the Arte-catalogue constitutes only a small part of the overall market for advertising of cultural events such as musicals.
IV. Music-copyright
It must be stressed at this point that a deep analysis of the music sector was not 4.91 provided by the Council in the decisions described below.
1. Recording and distribution
In its Love for IFPI Danmark137decision, the Council concluded that the relevant 4.92 market should be the market for music recorded on a physical carrier138 .
The Council recognized that as far as the geographic scope of this market was 4.93 concerned, the market might be larger than Denmark due to the fact that media carriers might be ordered via the Internet, yet it did not find it necessary to decide whether or not this actually was the issue, among other things because the firm under investigation recruited its members from among Danish firms and concluded agreements on phonograms in Denmark. Therefore, the relevant geographic market should was seen to be at least national.
Similar conclusions were drawn by the Council with reference to the music 4.94 market in Regelsæt for hitlister139. The Council found the relevant market to be the market for music recorded on a physical carrier. As regards the geographic dimension of the market, the Council concluded that it could not be excluded that the geographic market was slightly larger than Denmark, as consumers had the possibility to purchase CDs via the Internet from e.g. Great Britain, or
134 Mostrups annoncepriser, 25.04.2001 [Journal nr. 3:1120-0100-146 /fødevarer-finans-cf]. 135 Dansk Kørelærer-Union (DKU) og Dansk Trafikskole Materiel A/S’ (DTM) nægtelse af at optage annoncer i "Kørelæreren", 25.04.2001 [Journal nr. 3:1120-0100-123 /service/vis]. 136 Klage over nægtelse af at optage annoncer i Arte-katalog, 30. 05. 2001 [Journal nr. 3:1120-0100-252/fødevarer-finans/che]. 137 Love for IFPI Danmark, 30.05.2001 [Journal nr. 3:1120-0388-267 /fødevarer-finans/pr]. 138 No distinction was made in the decision between different musical genres or different types of recordable media such as CDs, LPs and cassette tapes. 139 Regelsæt for hitlister, 29.08.2001 [Journal nr. 3:1120-0388-271/pr/Fødevarer og Finans].
35 through cross border shopping. Nevertheless, the market was considered to be at least national.
2. Music publishing, copyright a) Performance rights
As regards copyright issues related to the music industry, the Council identified 4.95 in Gramex og Danmarks Radio140 the relevant market as being the market for the administration of the rights of performing artists and phonogram producers to sound recordings which are used in radio and television broadcasts in Denmark. This finding was reaffirmed in the Gramex og TV2141 decision a few months later. On the other hand, the Council found in Aftaler mellem Gramex og en lang række organisationer142 that the relevant product market is limited to the administration of the rights of performing artists and phonogram producers to sound recordings, that are used for public performances other than broadcasting on radio and television. Viewing the latter finding in conjunction with the Council’s two decisions described in the beginning of this paragraph a conclusion can be drawn that the market for the administration of the rights of artists and phonogram producers to sound recordings which are used in radio and television broadcasts is separate from the market for the administration of the rights of the same right holders to sound recordings, that are used for public performances other than transmission on radio and television. b) Mechanical rights
In IFPI's musikvideoaftale med NCB143, the relevant market was considered to be 4.96 the market for the administration and purchase of copyright holders’ mechanical rights to reproduction of musical compositions in Scandinavia and the Baltic countries. It is interesting to note here that the relevant geographic scope of the market so delineated extends beyond the national territory of the Danish Kingdom. c) Music printing rights
In Dansk Musikforlæggerforening144, the Council defined the relevant market as 4.97 the market for the rights to reproduction of musical works and texts in printing, including multimedia (the so-called sheet music145).
140 Administrationsaftale mellem Gramex og Danmarks Radio, 29.08.2001 [Journal nr. 3:1120-0388-126/pr/Fødevarer og Finans], henceforth: Gramex og Danmarks Radio. 141 Administrationsaftale mellem Gramex og TV2, 30.01.2002 [Journal nr. 3:1120-0388- 273/Fødevarer & Finans/pr], henceforth: Gramex og TV2. 142 Aftaler mellem Gramex og en lang række organisationer, 31.10.2001 [Journal nr. 3:1120- 0388-275/pr/Fødevarer og Finans], henceforth: Gramex og en lang række organisationer. 143 IFPI's musikvideoaftale med NCB, 29.08.2001 [Journal nr. 3:1120-0388-269/pr/Fødevarer og Finans]. 144 Dansk Musikforlæggerforenings vejledende tariffer, 30.01.2002 [Journal nr. 3:1120-0388- 73/Fødevarer/Finans/pr]. 145 See Chapter 1, para. 1.135.
36 V Film sector
1. Movie distribution and movie showings
In the decision Almindelige vilkår for Aftaler mellem biografer og 4.98 filmudlejere146, the Competition Council reached the conclusion that the uniform conditions for agreements between movie theatres and movie distributors, which had been notified by the Danish Film Distributors` Association touched upon essentially two markets, i.e. (i) the market for movie distribution and (ii) the market for movie exhibition in theatres. These two markets were regarded to be separate neighbouring markets, yet closely interconnected.
As the conditions laid down regulated all rentals and leasing of movies among 4.99 the parties to the agreement, which aside from the notifying party also consisted of the Danish Movie Theatres (Danske Biografer), its provisions were seen to affect both markets of movie distribution and theatrical movie exhibition, respectively. The latter was defined by the Council as “the market where the movie theatre shows films for the audience, which in exchange provides certain remuneration (the ticket price).”147 As regards the former, the market for movie distribution was said to cover those business relationships where movie distributors act as suppliers of movies and enter into rental agreements with the movie theatres, the provisions of which grant the rights to showing the movie in question148.
Regarding the geographic dimension, both markets formed part of the 4.100 Danish movie theatre market due to the fact that the agreement itself only applied to the distribution of films within the geographic confines of Denmark149. Thus the market was held to be national in scope.
2. Feature films vs. TV films
On another occasion, the Competition Council held that two notified 4.101 agreements, one establishing a syndicate for Danish movie producers and the other regulating the standard movie contracts that third parties need to sign in order to enter into a deal with the syndicate, affected the following markets: (a) the market for rental and sale of feature films to be shown on free-TV and (b) the market for rental and sale of feature films to be shown on pay-TV, respectively150.
In reaching this conclusion, the Authority had to decide first whether Danish 4.102 feature films constituted a product significantly different from other TV programs in order to merit the delimitation of their own market. Although
146 Almindelige vilkår for Aftaler mellem biografer og filmudlejere, 28.11.2001 [Journal nr. Sag 3:1120-0388-123]. 147 Op.cit., para. 56. 148 Ibid.; these market definitions were stated without further reasoning on behalf of the Authority. 149 Op.cit., para. 58. 150 Danske Filmproducenter, supra note 53, para. 53 et. seq.
37 accepting partial substitutability between feature films and TV movies in terms of functionality, the Council stressed that a small, but significant permanent increase in the price of feature films would not lead to any major shift in demand of the affected TV channels towards TV movies151. Hence, the Council concluded the existence of a separate market for the sale of feature films intended for television broadcasting in relation to the market for TV movies.
On the other hand, Danish feature films were not held to be sufficiently distinct 4.103 from feature films of foreign origin as to be viewed as belonging to a different market152.
Feature films shown on Free-TV vs. Pay-TV
Having thus established the existence of a separate market for the sales of 4.104 feature films intended for television broadcasting, the Council proceeded to consider the differences between free-TV and pay-TV. As movies shown on free-TV usually had already been aired several times on pay-TV, the Council concluded that TV services provided free of charge could not compete with subscription based TV in the market for the purchase of TV broadcasting rights to feature films. Hence, the market for rental and sale of feature films to be shown on free-TV is according to the Council separate from the market for rental and sale of feature films to be shown on pay-TV.
3. Sale and rental of videograms
In the case FDV's standardforhandleraftale og standardgrossistaftale153, the 4.105 Council came to the conclusion that the markets for videograms intended for rental in Denmark, and the market for videograms intended for sale in Denmark are not coincident. The market of videograms was also at stake in the case Nordisk Film Video A/S’ rabatvilkår154, where the Council had identified a separate market for movie rentals to video stores. Rental of videograms from public libraries was considered to constitute a sub-market in relation to the market of videograms for commercial rentals in the case FDV's overenskomst med DBC Medier A/S155. In the light of these findings, the market for videograms in Denmark comprises generally speaking the market for videograms intended for sale and the ones intended for rental with the latter further divided according to whether the videograms are provided for at public libraries or leased for general commercial use.
151 Op.cit., para. 58. 152 Op.cit., para. 61. 153 FDV's standardforhandleraftale og standardgrossistaftale, 30.05.2001 [Journal nr. 3:1120- 0388-121, 256 /fødevarer-finans/pr]. 154 Klage over Nordisk Film Video A/S’ rabatvilkår, 25.04.2001 [Journal nr. 3:1120-0100-118 /fødevarer-finans/hbs]. 155 FDV's overenskomst med DBC Medier A/S, 30.05.2001 [Journal nr. 3:1120-0388- 257 /fødevarer-finans/pr].
38 In DVS Entertainment’s leje- og leveringskontrakt156 the Council identified the relevant product market to be the market for wholesale supply of rental video 4.106 tapes to gas stations, kiosks etc. in Denmark. This market comprises the wholesale link between the movie companies and retail outlets.
4. Advertising movies
In Danske Film- og Tv-Producenter og Danske Reklame- og Relationsbureauers 4.107 Brancheforening157 decision, the Council identified the market for the production of advertising movies as a separate relevant product market. On the other hand, the copying and distribution of advertising movies was ruled to be a secondary market in relation to the broadcasting of advertising movies in the Council`s decision regarding the case Aftale mellem Danske Film- og Tv- Producenter og TV2 Reklame158. The relevant geographic market in both cases was determined to be Denmark.
VI. Internet
1. Internet access
In the case TDC’s salg af ADSL159, the Competition Council identified two 4.108 separate relevant markets, (i) the market for the supply of high speed Internet connections via ADSL and cable modem to end consumers (broadband retail access market, and (ii) the market for access to the infrastructure for high speed Internet connections (wholesale market)160. The geographic market in both cases was Denmark, since according to the Council the issue at stake was the sale to and servicing of customers in Denmark.
As the market for access to the infrastructure is regulated by the Danish 4.109 telecommunications legislation (sector specific), the Council went on to consider the market for the provision of Internet connections to end-users in isolation. The Council noted that in the broad sector for Internet access technologies, ASDL competes with other Internet technologies such as PTSN, ISDN, cable modem, or GRPS via cellular phone. ASDL and cable modems resemble each other closely with regard to their performance capability, however, cable modems are available to only a limited number, i.e., 30% of
156 DVS Entertainment’s leje- og leveringskontrakt, 27.11.2002 [Journal nr. 3/1120-0389- 0028/Industri/bsk]. 157 Standardaftale mellem Danske Film- og Tv-Producenter og Danske Reklame- og Relationsbureauers Brancheforening, 30.01.2002 [Journal nr. 3:1120-0388-71/Fødevarer & Finans/pr]. 158 Aftale mellem Danske Film- og Tv-Producenter og TV2 Reklame, 30.01.2002 [Journal nr. 3:1120-0388-71/Fødevarer & Finans/pr]. 159 Cf. Undersøgelse af TDC for misbrug af dominerende stilling ved salg af ADSL, 29.01.2003 [Journal nr. 3/1120-0100-0478/Infrastruktur/ln], henceforth: TDC’s salg af ADSL. 160 This market is an ISPs market and it can fall under the categories of retail ISPs markets or intermediate ISPs markets. For more on the issue and the Internet infrastructure see chapter 1, para 1.166 et seq.
39 households, which limits the competitive pressure the latter technology may exercise.
ADSL and cable modem (high speed Internet connections) differ from 4.110 conventional Internet connections PTSN and GRPS due to their superior capacity for data transfer and therefore address target groups with different needs. On the other hand, high speed Internet connections (ADSL and cable modem) and ISDN might have been considered substitutable to a higher degree, since both are Internet connections that offer relatively high transmission speeds. However, three key differences were identified between the two products with regard to their performance and range of possible applications. First and foremost, high speed Internet connections imply that the customer is always online. Second, in the case of high speed Internet connections, the customer usually does not pay for consumption (as is the case with ISDN), but for capacity, thus giving the consumer bigger flexibility with regard to usage. And last but not least, the smallest ADSL lines achieve speeds which are between two and four times as high as that of ISDN, depending on whether the phone is used simultaneously.
Thus, ISDN and high speed Internet connections have each their 4.111 individual strengths and thus target the satisfaction of different users’ needs, which is confirmed by the fact that the demand for ISDN has declined only marginally after the introduction of ADSL. The Competition Council’s estimation therefore was that high speed Internet connections and IDSN are different products that rather complement than substitute each other. ISDN is deemed not to form part of the same market as ADSL and cable modem.
Thus, the market for high speed Internet connections comprises the ADSL 4.112 products available to end consumers in the market, whether they employ fixed line or cable modem technology, and excludes less powerful connection types such as PTSN, GRPS and ISDN.
2. Internet content markets
Among the cases under review, none has made a comprehensive reference to 4.113 issues related to relevant market definition in the field of Internet content market in general and media related services in particular. a) Internet and e-Commerce specific markets aa. Internet advertising
In Forbrugerrådet og Advokatsamfundets samarbejde161, the Council defined the 4.114 relevant market as the market for real estate advertising on the Internet.
An interesting case with reference to the concept of the leverage of market 4.115 power from one market to another market closely related to the former
161 Klage over Forbrugerrådet og Advokatsamfundets samarbejde om www.bolighandel.dk, 29.11.2000 [Journal nr. 2:801-719, vis/service], henceforth: Forbrugerrådet og Advokatsamfundets samarbejde.
40 (interdependent markets)162 is provided for by Jubii A/S` klage over TV2/Interaktiv163. Jubii and others filed a complaint regarding the prices of TV2/Interaktiv. Moreover, Jubii filed a complaint, claiming that TV2 exploited its power in the market for TV advertisements to facilitate anti-competitive conduct in the market for the sale of Internet advertisements. The Council noted that there were considerable uncertainties connected to the assessment of the development in sales of Internet advertisements, as the market for the sale of Internet advertisements constitutes a wholly new market (emerging market). Consequently, the Council decided not to take a definite position on the matter, but rather to reconsider TV2’s market behaviour again at a later point in time on its own initiative. bb. Job portals
In Fusionen mellem Jyllands-Posten A/S og Metropol Online A/S164 the Council 4.116 noted the existence of a market for Internet job portals. This market is according to the Council a separate market and only a neighbouring market in relation to the market for printed job advertisements.
Last but not least, a separate market for the provision of micro payment services 4.117 for Internet content providers was identified in the case Aftale om mikrobetalingssystemet Valus165. b) Internet B2C and B2B markets aa. Broadband content
In its decision DR/TV2 og DHF166, the Competition Council considered the 4.118 question of the exploitation of the rights to broadcasting sports events via the Internet and via other media, namely radio and television. It found that the market for broadcasting rights to handball matches with the participation of Danish teams in Denmark comprised the rights to the online presentation of footage as well167. bb. Online booking and sale of tickets
In the case Aftale om billetformidling på Internettet168, the Council had to define 4.119 the relevant market for the Internet (online) service designed for the booking and sale of reserved tickets for concerts, theatre plays, sports events, etc. in
162 For more on the concept see Chapter 1 para 1.210 et seq. 163 Jubii A/S ` klage over TV2/Interaktiv, 24.04.2002 [Journal nr. 3:1120-0100-32/Fødevarer og Finans/hbs], henceforth: Jubii A/S’ klage. 164 Fusionen mellem Jyllands-Posten A/S og Metropol Online A/S, 29.08.2001 [Journal nr. 3:1120-0401-17/hbs/Fødevarer og Finans], henceforth: JP og Metropol. 165 Aftale om mikrobetalingssystemet Valus, 26.03.2003 [Journal nr. 3/1120-0301- 0214/Fødevarer og Finans/pr]. This is an online payment system, which can be used to transfer money between the customer and the content provider (e.g., an online store). 166 DR/TV2 og DHF, supra note 37. 167 Op.cit., para. 29. 168 Aftale om billetformidling på Internettet, 29.11.2000 [Journal nr. 2:8032-1130, Lbr/infrastruktur].
41 Denmark. Although it pointed out specific features of the service in question, i.e. its particular suitability for reservation and advance sale of tickets for those events which customers may reasonably expect to be sold-out, or where it may be convenient to reserve a particular seat, it nevertheless decided that online reservation and sale of the tickets for concerts, theatre plays and other events was not a sufficiently distinct market to distinguish it from other possible means of reservation and advance payment. Therefore, the relevant market was defined as the combined market for the reservation and sale of reserved tickets for concerts, theatre plays, sport events, etc. in Denmark169. cc. Online news services
In Ritzaus Bureau170, the Council noted the existence of a relevant product 4.120 market for news, edited in Danish for the Danish market, for immediate redistribution via the Internet, e-mail etc. This product was held to be different from other products of Ritzaus on the grounds of the format’s particular characteristics, i.e. its concise presentation and the fact that it was intended for distribution without additional editing. According to the Council, this market is an emerging market, for the product in question is new and the market is subject to rapid change.
VII. Rights to use databases, press cutting and other markets linked to the media sector
In its decision Etableringen af FAS 171, which dealt with a notification regarding 4.121 the establishment of a joint venture between three Danish newspaper publishers, namely Dagbladet Politiken, Det Berlingske Officin and Jyllands-Posten, the Competition Council identified three markets that would be affected by the setting-up of the new entity, i.e. (i) the market for the rights to make use of the news and other archive articles in electronic form, (ii) the market for press monitoring and (iii) the market for information retrieval from news archive databases. The first was seen as an upstream market in relation to the latter two which were said to be its downstream markets.
First, the Competition Council decided that all media (thus, not only print 4.122 media) were to be seen as being part of the same market for the purpose of the rights to make use of the news databases in the downstream markets for press monitoring and information retrieval from news archive databases, because the customers of the undertakings providing press monitoring services or information retrieval services will be interested in the broadest possible coverage of the subject they request data for. Consequently, all media providing such data are to be seen as relevant although different media might be weighted differently172.
169 Op.cit., para. 65-69. 170 Ritzaus Bureau, 30.09.1998 [no j.nr. provided]. 171 FAS, supra note 59. 172 Op.cit., para. 192.
42 Then the Council turned to the market for press monitoring. The Council discussed first to which degree the four product categories, i.e. (a) physical press 4.123 cuttings, (b) electronic press cuttings, (c) news summary services, and (d) related services (such as opinion research and analysis) could be regarded as forming part of this very market. Physical (a) and electronic press cuttings (b) were perceived by the consumers to fulfil the same functional needs as regards press monitoring services, and differed essentially only in the mode of delivery. On those grounds the Council deemed them to belong to the same overarching market for press monitoring. On the other hand, news summary services (c) were also included in the overall market delimitation due to their complementary character, i.e. their dependence on the original product (the cutting), in the sense that the majority of customers would still request the original article along with the summary. The other related services (d) such as opinions research and opinions’ analysis, based on supply-side considerations, were as well placed on the same market for they constituted natural extensions of the core product of press monitoring173. Hence, the Council identified the following sub markets to the market for press monitoring, the market for (a) physical press cuttings, (b) electronic press cuttings, (c) news summary services, and (d) their related services.
Finally, the delimitation of the market for information retrieval from news 4.124 archive databases was centred on the characteristics that other databases must fulfil in order to be substitutable for the new products expected to be offered by the joint venture. In this context, the Council assessed the importance of certain factors such as the proper meaning of news content, online access and the archive function.
In Distributionssamarbejdet GDC A/S174 the Council identified the relevant 4.125 market to be the market for the distribution of phonograms, videograms, games (incl. hardware).
173 However, the Competition Authority stated that precise delimitation was not strictly necessary, “since it [would be] irrelevant to the outcome of the case, whether there were one or two product markets.”; op.cit., para. 222. 174 Distributionssamarbejdet GDC A/S, 28 August 2002 [Journal nr.3:1120-0301- 0013/Industri/kra].
43 Table
Media Markets
Publishing and Books Sector
Market Main Markets Submarkets Submarkets Submarkets Category (1st Level) (2nd Level) (3rd Level)
Printed Press Market for daily newspapers
Market for weekly magazines
Market for monthly magazines
Market for freely distributed newspapers [free-sheets]
Distribution Market for newspapers Mode and magazines distributed to retailers
Market for newspapers and magazines distributed upon subscription
Market for the distribution of free movie magazines in movie theatres
Market for sale and distribution of newspapers in the omnibuses of a given municipality
44 Book Market Market for publishing and sale of books from publishing houses in Denmark to consumers in Denmark
Market for legal and economic literature
Market for the sale of the National Danish Encyclopaedia in Denmark
Copyright Market for the administration of rights touched upon by copying of specialists’ articles
TV-Broadcasting
Market Main Markets Submarkets Submarkets Submarkets Category (1st Level) (2nd Level) (3rd Level)
Types of Market for pay-TV and Distribution radio
Market for the distribution of encrypted TV-channels to Danish households
Sport Market for TV and Broadcasting radio broadcasting Rights rights for Danish national soccer games
Market for the broadcasting rights to handball matches of Danish teams in Denmark
45 Market Main Markets Submarkets Submarkets Submarkets Category (1st Level) (2nd Level) (3rd Level)
Cable and other Market for the exercise Transmission of rights to Rights simultaneous, complete and unedited cable transmission of radio and TV signals
Market for the right to distribution of film programmes via cable or community antenna systems
Market for the administration of fees collected for the cable retransmission of radio and TV programmes
Separate service market for the broadcasters` rights to simultaneous, complete and unchanged cable transmission of radio and TV signals
Copyright Market for production Related Markets of copies of radio and TV programmes for educational purposes
Market for reproduction of copies for the partially sighted and the hearing impaired
Market for copyright clearance of music videos to be shown on the Danish market
46 Others Market for children’s programmes on TV
Market for broadcasters` rights to blank media tax
Advertising in the media
Market Main Markets Submarkets Submarkets Submarkets Category (1st Level) (2nd Level) (3rd Level)
Press Market for the Advertising mediation of advertisements and commercials in Danish newspapers and weeklies
Market for the sale of Market for the sale advertisements in of real estate printed press advertisements in newspapers
Market for advertising of health food products in weeklies and newspapers
Other Market for advertising Advertising in phone directories at Markets the municipal level
Market for advertise- ments “specifically addressing” driving instructors in Denmark
Market for cultural events advertising
TV Advertising Nationwide market for TV advertisement
47 On-screen Market for the on- Advertising screen advertising in movie theatres
Market for the right to the mediation of on- screen advertisements in movie theatres
Music-Copyright
Market Main Markets Submarkets Submarkets Submarkets Category (1st Level) (2nd Level) (3rd Level)
Recording and Market for music Distribution recorded on a physical carrier
Music Performance rights Market for the Publishing, administration of Copyright rights for sound recordings which are used in radio and television broadcasts in Denmark
Market for administration of rights for sound recordings, that are used for public performances other than broadcasting on radio and television
Mechanical rights Market for the administration and purchase of copyright holders’ mechanical rights to reproduction of musical compositions
48 Music printing rights Market for the rights to reproduction of musical works and texts in printing, including multimedia (sheet music)
Film sector
Market Main Markets Submarkets Submarkets Submarkets Category (1st Level) (2nd Level) (3rd Level)
Movie Market for movie Distribution and distribution Movie Showings
Market for movie exhibition in theatres
Feature Films Market for the sale of Market for rental and TV Films feature films intended and sales of feature for television films to be shown broadcasting on free-TV
Market for rental and sales of feature films to be shown on pay-TV
Market for TV movies
Sale and Market for videograms Market for rental of Rentals of intended for rental videograms from public libraries Videograms
Market for movie rentals to video stores (rental for general commercial use)
Market for videograms intended for sale
49 Market for wholesale supply of rental video tapes to gas stations, kiosks etc.
Advertising Market for the Market for Market for Copying movies production of Broadcasting of and distribution of advertising movies advertising movies advertising movies
Internet
Market Main Markets Submarkets Submarkets Submarkets Category (1st Level) (2nd Level) (3rd Level)
Internet access Market for the Market for the provision of Internet supply of high speed connections to end- Internet connections users via ADSL and cable modem (broadband retail access market)
Market for less powerful Internet connections (PTSN, GRPS, ISDN)
Market for access to the infrastructure for high speed Internet connections (wholesale market)
Internet Content [Emerging market] for Market for real Markets the sale of Internet estate advertising on advertisements the Internet
Market for Internet job portals
Market for the provision of micro payment services for Internet content providers
50 Online booking and Market for the sale of tickets reservation and sale of reserved tickets for concerts, theatre plays, sport events, etc
Online news services [Emerging market] for news, edited in Danish for the Danish market, for immediate redistribution via the Internet, e-mail etc
Rights to use databases, press cutting and other markets linked to the media sector
Market Main Markets Submarkets Submarkets Submarkets Category (1st Level) (2nd Level) (3rd Level)
Upstream market for the rights to make use of the news and other archive articles in electronic form
Downstream market Physical press for press monitoring cuttings
Electronic press cuttings
News summary services
Their related services (such as opinion research and analysis)
Downstream market for information retrieval from news archive databases
51 Other media related markets
Market Main Markets Submarkets Submarkets Submarkets Category (1st Level) (2nd Level) (3rd Level)
Market for the distribution of phonograms, videograms, games (incl. hardware)
52 C Comparative analysis of market definitions adopted by the European Commission and those adopted by Competition Authorities in Denmark
I. Comparative analysis
1. General remarks
Having examined the principles applied and the conclusions drawn by the 4.126 Danish Competition Council as regards the relevant market definition in competition cases, one can easily see that for the most part they reflect the approach adopted by the European Commission in its antitrust and merger control proceedings. The guidelines175 adopted by the Council name in principle the same criteria to be used in determining the relevant market as the ones mentioned in the EC Commission’s Notice on the definition of the relevant market for the purposes of Community competition law176. Moreover, the analysis carried out by the Council in its decisional practise of the relevant markets in different media sectors discloses a general consistency of the Danish approach with the principles applied by the EC Commission. This part of the work is meant to provide a comparative evaluation of the approach of Danish Competition Council with reference to the market definition vis-à-vis the approach held at the EC level.
In defining the product dimension of the market, the Council regards the 4.127 consumer as the main reference point for its findings177 and so does the EC Commission when it emphasises the role of the demand-side substitutability test in its analysis178. Both, the Danish Guidelines as well as the EC Commission notice view the price factor (including the so called SSNIP test) as the most important aspect for this demand side substitutability test. In practice however, the price test does not play more than an equally important role among other factors (such as product characteristics, intended use, and others) despite its considerable value179. This general approach is also valid with regard to the media-sector related cases analysed below. The supply-side substitutability test, on the other hand, is being used by both the Council and the Commission to a limited degree, i.e. either in cases when it is rendered necessary by the facts of
175 Cf. supra note 20. 176 Notice on the definition of the relevant market for the purposes of Community competition law, OJ C 372 9.12.1997. 177 Guidelines on the prohibition against anti-competitive agreements, Part 2.1. 178 Notice on the definition of the relevant market for the purposes of Community competition law, OJ C 372 9.12.1997, Para. 13. 179 See: on Denmark – Part B of this chapter, on EC – see Chapter 1 para. 1.11 et seq.
53 the case180, or as a supplementary test to that of demand-side substitutability, if the latter alone does not provide a clear vision of the situation in the market181.
As far as the geographic dimension of the market in the media sector is 4.128 concerned, it is considered in most cases to be national in scope. The Danish Council in its case-law usually restricts the geographical market to the borders of the national territory or to its sub-regions182. The decisions of the Commission show a great similarity with this approach183.
2. Publishing and books sector
In the cases Bladudgivernes Forhandlernævn184 and Netto I/S' klage185, the 4.129 Competition Council, based on the differences in characteristics of the products in question, e.g. content of the publications, absolute price, and publishing frequency reached the conclusion that daily newspapers, weekly magazines, and monthly magazines shall be defined as separate markets. The EC Commission has come to a similar judgement. It has stated that written press products may be differentiated into daily and non-daily publications (newspapers, and weekly and monthly magazines, respectively), as these product types satisfy different information needs and therefore should be considered as pertaining to different relevant markets186. The price factor was also seen by the Commission as an indicator to separate daily newspapers from magazines, as the former are substantially less expensive than the latter187. In the above mentioned case, however, the Commission did not make a further distinction between weekly magazines and monthly magazines and this issue has therefore remained open.
There is a difference in the outcome of the cases dealt with by the Competition 4.130 Council as compared to the approach of the Commission with regard to the sub- markets for weekly picture-magazines and weekly family and woman’s magazines. Although differences between these types of magazines with regard to such parameters as the length of reports, the number and specificity of articles, the target groups addressed, etc. were in principle accepted by the Council, when the classification of these products into separate sub-markets was
180 For more information see Chapter 1 para. 1.32 et seq.; and para. 1.39 et seq. of this Chapter. 181 For an example, see the decision of the Competition Authority in the case FAS, supra note 59. 182 See Part B of this Chapter. 183 E.g. Commission Decision, Case IV/M.432, 14 March 1994, Newspaper Publishing, Para. 17; Commission Decision, Case IV/M.665, 29 November 1995, CEP/Groupe de la Cite, Para.11; Commission Decision, Case IV/M.1445, 20 April 1999, Gruner + Jahr/Financial Times/JV, Para. 21 (for the market of the sale of newspapers to readers) as well as Commission Decision, Case IV/M.553, 20 September 1995, RTL/Veronica/Endemol, Para. 27-28; Commission Decision, Case IV/M.1401, 1 February 1999, Recoletos/Unedisa, Para. 29 (for the market for television advertising). 184 Bladudgivernes Forhandlernævn, supra note 38. 185 Netto I/S' klage, supra note 39. 186 Commission Decision, Case IV/M.1455, 20 April 1999, Gruner+ Jahr/Financial Times/JV, para 17. 187 Ibid.
54 called for, the Council nevertheless abstained from further subdividing the weekly magazine market because of uncertainties related to the calculations of the inter-elasticity between the two groups of magazines188. The Commission in its turn has acknowledged in a number of decisions that differences in the topics and the category of readers of the magazines are sufficient to uphold the existence of different markets189, e.g. the relevant market for computer magazines according to the EC Commission is considered separate from the market of magazines for women190.
In the cases Leverancer af bøger til udenlandsk boghandel191 and Den Store 4.131 Danske Nationalencyklopædi192, the Council identified two markets, the market for legal and economic literature and for the sale of the National Danish Encyclopaedia in Denmark, respectively. The approach of the EC Commission towards the specialized literature as a separate market is largely similar, with little differences. The EC Commission, in its Bertelsmann/Wissenschafts-verlag Springer193 decision, delineated a market for academic publications and a market for publications related to different professions. It nevertheless left open in both cases the question of whether the markets can be narrowed further according to the academic subject (e.g. maths or economics) or the type of profession194.
3. Advertising in the media
In its decision TV2’s Priser195, the Council recognised the existence of at least a 4.132 partial substitutability between different media types as regards the market for advertising in the media. Based on intended use tests, in particular on differences with regard to the desired effect on the particular target group, the Council concluded that the market for advertising on television differs from the markets for advertising in other media and ought to be considered a separate market196. This is by and large the same definition as the one adopted by the EC Commission, which had previously concluded that the market for television advertising is a separate market from the market for advertising in print media,
188 Cf. Netto I/S' klage, supra note 39. 189 Commission Decision, Case COMP/M.2572, 12 October 2001, Time/IPC. 190 Commission Decision, Case COMP/JV.33, 15 December 1999, Hearst / VNU. However, the difference on the conclusions reached by the Danish Council with regard to the particular markets is given to the peculiarities of the case (uncertainties pertaining to the calculations presented) and to the fact that an infringement of competition law was established even with the broader definition accepted, hence, placing a narrower delineation of the relevant market “unnecessary”. 191 Leverancer af bøger, supra note 99. 192 Den Store Danske Nationalencyklopædi, supra note 101. 193 See Commission Decision, Case IV/M.1377, 15 February 1999, Bertelsmann/ Wissenschaftsverlag Springer, para. 8 et seq. 194 For more information see Chapter 1 para. 1.146 et seq. 195 TV2’s Priser, supra note 41. 196 Ibid.
55 due to considerable price differences and differences with regard to the groups of consumers addressed197.
In the Annonceaftalen198 decision, the Council identified a sole market for the 4.133 buying of advertisements and commercials in Danish newspapers and weeklies, without subdividing this market any further in accordance with the type of print media. Such subdivision was rejected as different technical requirements with regard to different print media are not of such an importance as to justify a further subdivision. This decision is in line with the approach of the EC Commission, which has acknowledged that the market for media buying is a separate market within the advertising sector199, and it has rejected to divide media buying activities into several markets according to the type of media in question (broadcast and cable television, radio, newspapers, magazines, billboards and the Internet)200.
4. Broadcasting
In its decisions DBU og TV2/DR201 and DR/TV2 og DHF202, while relying on the 4.134 product characteristics of the sports programmes, i.e. the time dimension and particular content characteristics, the Competition Council acknowledged that the market for purchase and exploitation of broadcasting rights to premium sport events can be separated from other types of broadcasting contents as well as from other types of sport programmes. It is possible to claim consistency of this finding with the conclusions reached by the EC Commission in a number of its decisions, in which the rights to broadcast major sport events were ruled to constitute a separate market from the markets for other programmes because of their particular characteristics, such as the ability to attract and to keep large audiences, even when other sport events are broadcasted simultaneously 203.
In the I/S Danske Filmproducenter case204, the Competition Council touched 4.135 upon the issue of the differences between the free-to-air television and pay-TV. Although the distinction between the free-TV and pay-TV markets was not the main subject of the case, the Council dealt with that incidentally and arrived at two conclusions worth mentioning, i.e. (i) the existence of a separate market for the sale of feature films intended for television broadcasting in relation to the
197 Commission Decision, Case IV/M.533, 20 September 1995, RTL/Veronica/Endemol, Para. 22-23; Commission Decision, 29 June 2000, Case COMP/M.1958, Bertelsmann/GBL/Pearson TV , Para. 10,. 198 Annonceaftalen, supra note 73, Section 3.4.1 199 Commission Decision, Case IV/M.1529, 10 June 1999, Havas Advertising/ Media Planning, para. 11. 200 Commission Decision, Case IV/M.1529, 10 June 1999, Havas Advertising/ Media Planning, para. 12; Commission Decision, Case COMP/M.2558, 4 September 2001, Havas/Tempus, para. 9. For more information see Chapter 1 para. 1.162 et seq. 201 DBU og TV2/DR, supra note 37. 202 DR/ TV2 og DHF, supra note 37. 203 E.g. Commission Decision, Case IV/32, 10 May 2000, Eurovision. For more information see Chapter 1 para. 1.103 et seq. 204 Danske Filmproducenter, supra note 53.
56 market for the sale of TV movies for the same purpose, and (ii) the distinct character of the market for rental and sale of feature films to be shown on free- TV as compared to the market for rental and sale of feature films to be shown on pay-TV (upon subscription). This approach of the Competition Council is quite similar with the general approach prevailing at the EC level for a distinction between free-TV and pay-TV markets. It raises no doubts that the Council follows closely the development at the EC level as regards the free-TV and pay- TV distinction adopted by the EC Commission205.
5. Music copyright
In its decisions Love for IFPI Danmark206 and Regelsæt for hitlister207, the 4.136 Council defined the relevant market as the one for music recorded on a physical carrier, without distinguishing between different musical genres or different types of recordable media such as CD, LP and cassette tapes. The EC Commission in its turn subdivides the market for music recording and distribution according to the differences in the type and characteristics of the music, e.g. a distinction has been drawn between classical and pop music208. As far as the geographic dimension of the market is concerned, the Council pointed out that the market might have been considered to be larger than Denmark due to the fact that media might be ordered via the Internet or purchased through cross-border shopping. It left, however, the issue open and judged the relevant market to be at least national. In the same manner, the EC Commission has decided that the market for music recording and distribution shows strong indications of being national in scope (although having some international implication) due to a number of reasons, e.g. the distribution has been mainly organized nationally, or the insignificant level of cross-border trade despite considerable price differences209.
In the cases Gramex og Danmarks Radio210, IFPI's musikvideoaftale med 4.137 NCB211, and Gramex og en lang række organisationer212, the Council identified three markets, (i) the market for the administration of the rights of performing artists and phonogram producers to sound recordings which are used in radio and television broadcasts in Denmark, (ii) the market for the administration and
205 For more details on the free-TV/pay-TV market division in the Commission’s practice see Chapter 1 para. 1.66 et seq. 206 Love for IFPI Danmark, supra note 137. 207 Regelsæt for hitlister, supra note 139. 208 See e.g. Commission Decision, Case COMP/M.2883, 2 September 2002, Bertelsmann/Zomba, para. 10. See also Commission Decision, Case IV/26.992, 22 December 1972, WEA-Filipacchi Music S.A, para. 4; Commission Decision, Case IV/29.018, 1 December 1976, Miller International Schallplatten GmbH, para. 12. For more information see Chapter 1 para. 1.132 et seq. 209 See Commission Decision, Case COMP/M.2883, 2 September 2002, Bertelsmann/Zomba, para.19. 210 Gramex og Danmarks Radio, supra note 140. Reaffirmed in Administrationsaftale mellem Gramex og TV2, supra note 141. 211 IFPI's musikvideoaftale med NCB, supra note 143. 212 Gramex og en lang række organisationer, supra note 142.
57 purchase of copyright holders’ rights to mechanical reproduction of a musical compositions in Scandinavia and the Baltic countries, and (iii) the market for the administration of performing artists’ and phonogram producers’ rights to sound recordings, that are used for public performances other than broadcasting on radio and television. The EC Commission has subdivided the market for music publishing in a number of sub-markets with respect to different categories of rights used in the commercial exploitation of musical works, inter alia (i) performance rights (the publisher licenses the performance of copyrighted music to commercial users of music such as radio, television stations and night-clubs), (ii) and mechanical rights (the publisher gives a license to a record company for the reproduction of copyrighted music by mechanical means such as CDs and tapes)213. The approaches adopted by the Council and the Commission are comparable. The only obvious difference is that the Council has made a step further by subdividing the use of sound recordings in two separate markets according to the media they are used in (on the one hand TV and radio, and other media on the other).
As far as the relevant geographic market is concerned, the Council has 4.138 considered it to be national in the case of rights to sound recordings, and to be larger than national in the case of rights to mechanical reproduction. The EC Commission has left this issue open. Nevertheless it has stated that most likely markets with regard to mechanical and performance rights will be national, although the decisive element is the question of whether rights are administered and the associated fees collected on a national or an international basis214.
6. Film sector
In the case Almindelige vilkår for Aftaler mellem biografer og filmudlejere215, 4.139 the Council, while dealing with the uniform conditions for agreements between movie theatres and movie distributors, identified two separate markets i.e. (i) the market for movie distribution and (ii) the market for theatrical movie exhibition. The EC Commission has also dealt quite thoroughly with film-related issues in Seagram/Polygram216. The EC Commission pointed out that the film entertainment can be divided into three principal activities, i.e. the production of feature motion pictures (films), the distribution and licensing of films, and the exhibition of films. According to the notifying party, films are distributed through several so-called exhibition windows, namely theatrical exhibition, video rental and sell-through, pay-per-view ("PPV"), pay-TV, and free-to-air- TV. The Commission accepted this view but left open the question of whether or not the distribution for these windows actually constitute separate product
213 See Commission Decision, Case COMP/M.2883, 2 September 2002, Bertelsmann/Zomba; Commission Decision, Case IV/M.1219, 21 September 1998, Seagram/Polygram. For more information see Chapter 1 para. 1.134 et seq. 214 See Commission Decision, Case COMP/M.2883, 2 September 2002, Bertelsmann/Zomba, para. 20; Commission Decision, Case IV/M.1219, 21 September 1998, Seagram/Polygram, IV A. 2. b. For more information see Chapter 1 para. 1.139 et seq. 215 Almindelige vilkår for Aftaler mellem biografer og filmudlejere, 28.11.2001 [Journal nr. Sag 3:1120-0388-123]. 216 Commission Decision, Case IV/M.1219, 21 September 1998, Seagram/Polygram
58 markets, since the operation would have not led to the reinforcement or creation of a dominant position even on the basis of the narrowest definition of such separate markets. Whilst analysing the theatrical exhibition, the Commission acknowledged that although films may be intended for exhibition in many countries, they are still distributed within national boundaries through national distribution offices of distributors, mainly because distribution licences are granted for a national territory, under the protection of copyright laws. Thus, the marketing campaign for the new film has to take into account the taste of the national audiences. The original film copy either is dubbed or receives subtitles, so that audiences can enjoy a film in their native language. Films which have been successful in one country may however fail in other countries and, therefore, might not be exhibited in such countries. The fact that certain different distributors are present in different countries, that the integrated distributors of the Hollywood majors apply different conditions in different EEA countries, and also that the market shares of the distributors vary from one country to another, are according to the Commission indicators that national markets exist for the distribution of films217. However, the exact definition of the product market was left open since it was considered unnecessary for the case at issue.
The Commission followed consistently this line of reasoning in 4.140 Vivendi/Canal+/Seagram218 where it found that filmed entertainment can be divided into different activities from production to distribution via the licensing of rights. According to the Commission, the distribution of films to theatres is generally carried out at different stages. First, film producers license the distribution rights for one country or a territory to a local distributor or to international distributors who acquire the rights for some countries. Secondly, local distributors or international distributors sub-license directly the exhibition rights to exhibitors, i.e. theatre operators. The Commission noted that the distribution of films to theatres is the last stage of the cinema chain and can be regarded as a separate product market. This market is national in scope essentially because of cultural reasons. As a conclusion, it can be said that the EC Commission’s conclusions and the relevant market definition adopted by the Danish Council seem quite comparable with reference to the existence of national markets for movie distribution and theatrical exhibition.
In the case Danske Filmproducenter219, the Competition Council, based on 4.141 SSNIP test estimations, held that feature films and TV movies do not belong to the same market, as feature films constitute a product that can be distinguished from other TV movies. Although the Council acknowledged partial substitutability between feature films and TV movies in terms of functionality, the outcome of the SSNIP test was a decisive factor that lead the Council to the final conclusion that there is no perfect substitutability between the two products under discussion. As a consequence, the market for the sale of feature films intended for television broadcasting shall be considered a separate market from
217 Ibid. section 2, (aa). 218 Commission Decision, Case IV/M.2050, 13 October 2000, Vivendi/Canal+/Seagram, para. 17. 219 Cf. Danske Filmproducenter, supra note 53.
59 that of TV movies. The approach of the EC Commission shows similar trends. In Vivendi/Canal+/Seagram220 the EC Commission identified the market for broadcasting rights for feature films as a separate market from other made-for- TV programmes (animation, documentaries, fiction). Having assessed the markets from the demand and supply-side point of view, the EC Commission stated that the market for broadcasting rights for feature films shall be separated from other made-for-TV programmes, as the latter do not have the same value in terms of consumer attractiveness and do not possess the same economic value for the suppliers since they are being traded under different pricing structures. The EC Commission also pointed to the fact that the so-called Hollywood majors hold a very strong position on this market, since they are the main source of successful movies.
In the case Seagram/Polygram, which has been discussed earlier, the 4.142 Commission pointed to the distinction between “mainstream” films and other “arthouse” films, which are smaller productions, not necessarily intended for wide (international) audiences. The Council, in its turn, has identified in Danske Filmproducenter decision the relevant market for feature films to encompass both feature films of foreign origin and Danish feature films, as the former are not sufficiently distinct to be considered as belonging to a separate market.
7. Internet
In TDC’s salg af ADSL221 the Council dealt with the issue of the Internet access 4.143 markets. Having identified the particular characteristics of the high speed Internet connections to end consumers, it stated that ADSL and cable modems constitute a market that is separate from less powerful connection types such as PTSN, GRPS and ISDN. This approach taken by the Council basically goes in line with the reasoning employed at the EC level. Thus, the Commission stated in AOL/Time Warner222 that it observed evidence of the existence of a developing demand for the provision of residential broadband Internet access. According to the Commission, broadband access provides high-speed Internet access, usually achieved by using new technological means such as xDSL technology and cable modems. In particular, the Commission pointed to the digital subscriber line (DSL) and cable modems as being the latest generations of broadband alternatives. Nevertheless, the Commission did not conclude on whether the broadband Internet access market is to be considered as a separate market, and whether DSL, cable and other forms of fast Internet access belong to the same relevant product market, as it was not necessary for the appraisal of the case at hand.
The finding of the EC Commission that the market for broadband Internet 4.144 services appears to be essentially national corresponds to that of the Council, which defined the whole of the Danish territory as being the relevant geographic market in its investigation of TDC’s selling of ADSL connections.
220 Commission Decision, Cace IV/M.2050, 13 Oktober 2000, Vivendi/Canal+/Seagram. 221 Cf. TDC’s salg af ADSL, supra note 159. 222 See Commission Decision, Case COMP/M.1845, 11 October 2000, AOL/Time Warner, para. 38 et seq.
60 Additionally, the Council has identified several markets related to Internet advertising although without providing a detailed reasoning for its findings. 4.145 Thus in the case Jubii A/S klage over TV2/Interaktiv223 the Council acknowledged that the sale of Internet advertisements may constitute a separate, although emerging, market in Denmark. This demarcation of the Internet advertising market as a separate Internet related product market corresponds to the approach upheld by the EC Commission. The Commission has on several occasions reminded that the market for Internet advertising represents a market in its own right224. Interestingly, the Danish Council has gone even further by narrowing even more the Internet advertising market whereas the EC Commission practice has not so far attempted to deal with the issue. Thus, in its earlier decision in the case Forbrugerrådet og Advokatsamfundets samarbejde225, the Council had identified the market for real estate advertising on the Internet as a separate market. Relevant decisions rendered by the EC Commission have not yet considered the possibility of further narrowing the Internet advertising market into smaller markets.
Finally, in its decision Fusionen mellem Jyllands-Posten A/S og Metropol 4.146 Online A/S226, the Council identified the market for Internet job portals and distinguished it from the neighbouring market of printed job advertisements. The EC Commission has dealt with Internet portal markets in general, identifying the portal market as a separate Internet content market227 while leaving open the question of possible further segmentation of this market228.
II. Conclusions
In the course of this work no major discrepancies were found in the approach of 4.147 the Danish Competition Council towards relevant market definition in the media sector where compared with the approach of the European Commission towards this sector. On the contrary, there are many features which can be considered as being similar or even identical in the work of both institutions. Cross references to the decisions of the EC Commission or to the case-law of the EC
223 Jubii A/S’ klage, supra note 163. 224 Commission Decision, Case IV/M.0048, 20 July 2000, Vodafone/Vivendi/Canal plus, para.30. See also Commission Decision, Case IV/M.5, 4 August 1998, Cegetel/Canal+/AOL/Bertelsmann, para. 12 (by referring to Commission Decision, Case IV/M.973, 15 September 1997, Bertelsmann/Burda/HOS Lifeline, and Case IV/JV.1, 27 May 1998, Telia/Telenor/Schibsted); Case IV/JV.11, 15 September 1998, @Home Benelux B.V. para. 14; Case IV/M.1551, 23 July 1999, AT&T/Mediaone. For more information see Chapter 1 para. 1.181 et seq. 225 Forbrugerrådet og Advokatsamfundets samarbejde, supra note 161. 226 JP og Metropol, supra note 164. 227 See Commission Decision, Case IV/JV.48, 20 July 2000, Vodafone/Vivendi/Canal plus, para. 52. See also: Commission Decision, Case IV/M.2050, 13 October 2000, Vivendi/Canal+/Segram, para. 25; Commission Decision, Case COMP/M.2222, 24 April 2001, UGC/Liberty media, para. 16. 228 See Commission Decision, Case IV/M.2050, 13 October 2000, Vivendi/Canal+/Segram, para. 25.
61 courts made by Danish Competition Council in its decisions229 are an additional indication, which underlines the willingness and effort of Danish Council to keep the respective case-law in Denmark in conformity and consistency with the principles applied at the EC level. Minor differences, if any, are not systemic in nature, and could be explained either by negligible inconsistency of the approach towards the issue at stake, or by some particular aspects of the given case.
D Impact of Different Regulatory Frameworks on Market Definition
I. The regulatory framework for the media sector in Denmark
1. Introduction a) Sociological characteristics of Denmark230
With its app. 5.200.000 inhabitants living in a territory of app. 43.000 square 4.148 kilometres, Denmark is one of the smaller countries of the European Union, with a very ethnically unified population. There are minor ethnic groups of Turks, Pakistani, residents from the Nordic countries, Former Yugoslavia etc. However, all major media is in the Danish language. b) Main specificity of the Danish media landscape
Denmark has a wide ranging media scene, which in the electronic media area 4.149 has bourgeoning whilst the Danish written press has seen mergers and closures during the years from 2000 to 2003.
The written press was originally closely organised along political party lines. Each of the main parties would have their own newspaper on national as well as regional/local level. This system still forms the basis of the present system. However many newspapers have closed and some have merged wherefore the picture is no longer so clear. Denmark has 3 omnibus dailies Politiken (centre/left), Berlingske Tidende (Centre/right) and Jyllands Posten (Right). It has two main tabloids Ekstra Bladet (Sensationalist, centre/left) and B.T. (calls it self a “Family Paper”, centre/right). In addition the two specialist dailies Information (Centre/left, Intellectualist) and Kristeligt Dagblad (Christian, very focussed on church affairs) should be mentioned. The regions and the bigger
229 E.g. 4/26/2000 Bogbranchens samhandelsregler; 5/29/2002 MetroXpress Danmark A/S mod Berlingske Gratisaviser A/S; 10/31/2001 Aftale mellem DBU og TV2/DR; 11/27/2002 DR/TV2 og DHF. 230 The Kingdom of Denmark comprises of three entities: Greenland, The Faroe Islands and Denmark. The two former countries/territories are subject to the Danish Constitution but have home rule in most areas (primary exception foreign affairs and defence which is still decided (after consultation) by the Danish Government. This report only deals with Denmark.
62 town of Denmark have their own newspapers, inter alia Aarhus Stiftstidende (Right), and the smallest regional Newspaper is Bornholms Tidende (Right). The dailies have a prominent position in the public debate in Denmark. They are privileged by substantial indirect subsidy as they are V.A.T. exempt. 231. Media concentration is taking place within the field of press. The two main players at present are Det Berlingske Officin (owned by the Norwegian Company Orkla) and the recent merger between Politiken/Ekstrabladet and Jyllandsposten (primarily owned by two non-profit foundations). There are many periodicals spanning the whole spectrum from gossip magazines (Se & Hør, Billed Bladet) via special interest magazines to one or two serious current affairs magazines (Børsens Nyhedsmagasin)232.
Electronic media in Denmark is still dominated by public service broadcasters. 4.150 The two main ones being Danmark Radio (Danish Broadcasting corporation, which has two nationwide TV channels – 99,7 % and 81,7 % respectively –, and 4 nationwide radio channels) and TV 2 (1 nationwide channel – 99 % accessibility, and one pay channel – 50,3 % accessibility). Within the TV field these two broadcasters in 2002 had more than 70 % of the audience share. Denmark had in April 2003 no nationwide terrestrially based private broadcaster – neither in Radio or in TV. [This will however change as 1 nationwide radio channel – Radio 5 – and 1 partially nationwide channel – Radio 6 (37 % coverage) was – literally – auctioned off in June 2003 to two (not Danish owned corporations). Satellite and cable carried TV 3 (owned by Swedish MTG – TV 3 and TV 3 + can be watched by app. 68 % of the population) and TV Danmark 1 (owned by American SBS233) are at the present moment the two main competitors within the TV market. Sometime in 2003 the public broadcaster TV 2 will be privatised. It is however the condition that the TV 2 even after privatisation will retain its public service profice. In addition there is a wide array of local radio and TV stations. Whereas the TV stations hardly are significant, local radio (especially in the larger cities and towns) has a major following.
Internet consumption in Denmark is significant. A large majority has access to 4.151 Internet. However there is as yet no significant independent media market on the net. Arguably, Internet is for the majority to be seen as an “add on” to other primary media products. However, even though growth has not been so big as expected, Internet increasingly is a radically source for information.
Denmark has a sound Film industry. More than 27 % of all films watched in 4.152 Danish cinemas in 2002 were of Danish origin. At the same time the Film support from the Danish Government has increased with roughly 50 % in the
231 Figures from The Danish Ministry of Taxation show that the value of this subsidy in 2002 was 984 mill. DKK (app. 132 mill. Euro) 232 Periodicals of ”erotic nature” also exists in abundance. 233 SBS is also via TV Danmark providing non local content to an almost nationwide terrestrially based network of local broadcasters in Denmark. TV Danmark 2 (terrestrial, satellite and cable) can be watched by 75 % of the population and TV Danmark 1 by roughly 50%.
63 later years234. This coupled with winning of prestigious international prizes seems to have made the film industry strong and economically fairly stable.
The advertising market in Denmark corresponded in 2001 to roughly 0,8 percent 4.153 of GDP. Print media still holds more than 50 % of the market share whereas TV holds around 17 – 18 %.
2. Legal framework a) The Constitution of 1953, Article 10, the Media Liability Act Consolidated version of 9 February 1998, Criminal code
The Danish Constitution has a censorship ban in article 77. The ban which has 4.154 been invoked on occasion works finely. As the Danish constitution is not very explicit in this case, Danish courts tend to invoke Article 10 of the European Convention on Human Rights directly as it is more encompassing. The usage of Article 10 has arguably led to a lifting of some restrictions on media.
The Media Liability Act of 1991 with later revisions lays down the fundamental 4.155 principle for who is liable for any statements (articles, programmes, statements etc.) made in the media mentioned in the law235. It furthermore sets down the rules for Right of Reply and for Press Ethics. Finally the law creates a Press Council. The law is the only general media law in existence. Definitions
The law defines who is the publisher and editor and who represents TV outlets. These definitions corresponds to normal perceptions of this matter. They do not seem to have any impact on competitions matters. Liability
Liability lies first and foremost with the author and the editor. Only when the author cannot be identified, the publisher (owner of TV etc.) is directly liable. However, the mass-media is responsible for that fines and compensation is paid.236 For Advertising there is no special protection. Advertisers are basically responsible according to normal rules. Press Ethics
Danish Media is obliged by law to act “in accordance with good press ethics”(§ 34). As a fairly unique feature, as Appendix 3 to the act, a press ethical code is attached and made part of the law. Advertising ethics on Radio and Television is explicitly not part of the remit of this law. See infra.
234 The public service broadcasters have made a deal with the Ministry of Culture to support feature films. 235 Electronic media (Radio and TV, cf. §§ 5-7) and print media is directly catered for in the law. Other media has to register to be part of the law (Cf. § 8). A law – which basically refers to the Media Liability Act – exists for „The Databases of Mass Media“, Law no. 430 of 1 June 2003. 236 This restricted liability is only foreseen when the offence committed can give rise to less than six years imprisonment.
64 Right of Reply
The law sets out the basic rules for right of reply. Right of reply can be enforced by the Press Council237. The Press Council The press council is formed by law. Its president is a Supreme Court judge and furthermore holds representation from editors, journalists and the general public. “It is a requirement for a complaint that the complainant has a legal interest in the matter, meaning that, directly or indirectly, he has been the subject of a printed article, a TV or radio broadcast or been shown on a photograph. The Press Council reviews complaints about DR, TV2 (including the regional channels), local radio and TV channels, radio and TV channels with a licence from the Satellite and Cable Board and the print media (newspapers, magazines, etc.). Complaints may be lodged about alleged breaches of generally accepted press standards and cases in which the complainant feels he should be given an opportunity to reply.”
[Whereas this system – which is in contract to classical self-regulation systems in place in most European countries – might on the face of it seem problematic, the Council is in practise highly respected by most media and the public at large.]
In adjoining legislation there are also rules on protection of sources etc.
The Danish Penal Code provides for rules protecting privacy and protection against libel and slander.
Apart from authors’ rights legislation, and the above mentioned VAT-exemption there is no other legislation pertaining to print media or media as a whole. b) The Danish Radio and Television Broadcasting Act, Act No. 1052 of 17 December 2002238
The present law sets out the rules for basically all broadcasting in Denmark. It 4.156 comprises rules on licensing of programmes (a separate frequency licence is necessary from the PT & T), public service television, must carry obligations, sponsorship, advertising etc. To a great extent it (together with the Executive Orders referring to the law) incorporates the Television Without Frontiers Directive 89/552/EEC as amended by the Directive 97/36 EC into Danish law. aa. Licensing
The law operates with three different levels of licensing. 4.157
237 §§ 36-40. 238 On 10 June 2003 the law was changed with law No. 439. This is to be seen in conjunction with the „Law on TV 2 Denmark“ whereby the 2nd channel public broadcaster is to be (partially) privatised.
65 (1) DR (Danish Broadcasting Corporation), TV 2 Denmark and the Regional TV 2 Outlets239
The first category is basically decided by parliament. The major rules are contained in the law. The statutes of the DR, TV 2 and the 8 TV 2 Regional stations are decided according to this law. DR’ and TV’s statutes are given as Executive orders by The Ministry of Culture240. In June 2003 all these are state owned. However the recent law on TV 2 Denmark (which is adopted but which does not have a fixed day of coming into force) will privatise this station. However, the station will mutatis mutandis still have severe public service requirements attached to its remit. The regional TV 2 outlets will remain as “self-owned enterprises” (Danish: selvejende institutioner) but will still broadcast on the TV2 channel.
The boards of the two nationwide broadcasters are appointed by government and parliament241. The boards then in turn appoint the Diretor Generals of the enterprises.
(2) Nationwide and Regional Licenses for Radio and TV broadcasting242
The Radio and TV board can under certain condition, which may be laid down 4.158 in executive orders by The Ministry of Culture grant nationwide radio and TV licenses as well as licenses for satellite broadcasting243.
Lately however two radio licenses were granted for so-called Radio 5 and Radio 6. Radio 5 (75 % coverage) has limited Public Service obligations whereas Radio 6 (37 %) has none. With the advent of these two stations the Radio and TV board will have to be more active in this field.
The board can revoke or suspend licenses as a consequence of abuse (see more infra).
(3) Local Broadcasting
Local Radio and TV boards can grant licenses to local Radio and Television. 4.159 When granting licenses they have to ensure diversity in the output. Local broadcasters may network.
239 The Regional TV 2 stations broadcast from 30-60 minutes per day on the TV2 channel. Otherwise they are independent legal entities with their own boards, managing directors etc., cfr. §§ 31-38. 240 DR: Executive order No. 350 of 14 May 2003, TV 2 Denmark: TV 2 Executive order No. 1346 of 18 December 2000. 241 This may of course lead to abuse by government, but except for one or two minor cases the system seems to be working fairly well in practice. 242 Cfr. Chapter 7 and 8 of the law. 243 The two main Danish satellite/cable based Radio TV stations operate on British licenses.
66 Denmark has a lively local radio and TV scene. In many areas the local radios are definite players. The Local Radio and TV boards have in several instances revoked licenses due to immoral programming, not enough locally produced programmes etc. bb. Public Service Broadcasting
The licenses mentioned above under (1) are granted on the condition that the 4.160 broadcasting organisations provide public service broadcasting. This has been defined in § 10 of the law: “The overall public service activities shall provide, via television, radio and Internet or similar, the Danish population with a wide selection of programmes and services comprising news coverage, general information, education, art and entertainment. Quality, versatility and diversity must be aimed at in the range of programmes provided. In the planning of programmes freedom of information and of expression shall be a primary concern. Objectivity and impartiality must be sought in the information coverage. The programming shall ensure that the general public has access to important information on society and debate. Furthermore, particular emphasis shall be placed on Danish language and culture. The programming shall cover all genres in the production of art and culture and provide programmes which reflect the diversity of cultural interests in Danish society.”
This definition is of course very wide. But together with the yearly “Public 4.161 Service Accounts of the Broadcasters” it has helped to focus the debate on what is public service broadcasting. In a competition perspective the debate on PBS is of course important. Here the above definition might offer some guidance as to what can reasonably be asked for, without infringing competition rules. cc. Advertising and Sponsoring
Restrictions on advertising and sponsoring is governed by the law244. The rules 4.162 have been liberalised in the last couple of years, inter alia allowing commercials for medicine and (some) alcoholic beverages. Hence, today Denmark more or less follows the minimum requirements laid out in EC-legislation. dd. European Programmes
The statutes of DR and TV 2 quote more or less the definitions contained in 4.163 TVWF-directives. ee. Interim Summary
The Radio and TV law is generally a well working comprehensive tool for 4.164 electronic media in Denmark. In the public debate there is at the moment worry about the very politically appointed boards of the two publicly owned public broadcasters.
As far as the topic for this report is concerned there is only limited help to be received from the law, apart from the definition of PBS as cited above – being
244 Chapter 11 (§§ 72-85) and Executive Order concerning Radio and Television Advertising and Programme Sponsorship No. 194 of 20 March 2003.
67 arguably important to license holders having to provide public service programming.
Of course the distinction between the different kind of obtainable licences and the conditions attached to them is of importance for the development of the media market. However, as licences in general are not transferable without permission the importance does not evolve beyond the scope of the present law. c) Legislation on telecommunications aa. General
The legislation on telecommunications, as presently in force, is largely inspired 4.165 by the sector specific European community law. The telecommunications legislation is aimed at providing as wide as possible access to the Danish telecommunications market for all interested players. Furthermore the legislation is aiming at protecting the consumers in a marketplace which is often very intransparent.
Although of course the convergence with mobile telephony and other services is obvious a detailed discussion of this area is outside the scope of this report. bb. Law on [distribution of] Radiofrequencies No. 421 of 6 July 2002
The present law with a wide array of executive orders distributes radio 4.166 frequencies within Denmark. The rules for allotting frequencies to Radio and TV stations are contained in §§ 31 pp. The law sets out that the PT & T (Telestyrelsen) shall provide frequencies to persons who have received a broadcasting licence from the National or Local Radio & TV board. Furthermore the PT & T are allowed to take media policy priorities into account when they distribute the frequencies245. d) Legislation about financial incentives for the audiovisual production
Denmark has a film act246 which aims at: [promoting] film art, and film and 4.167 cinema culture, in Denmark. “Film” in this Act means motion pictures of any kind, irrespective of their mode of creation or showing, including photographic films and videograms, with the exception of television broadcasts, § 1.
The act is administrated by The Danish Film Institute (Det Danske Filminstitut, DFI) aiming at subsidizing and distributing Danish Films and at spreading knowledge of Danish and foreign films in Denmark.
The subsidizing system is two tiered. 4.168
245 In practise there are no problems as the Radio and TV Board(s) rarely – if at all – grant broadcasting licences where there is no available frequency. The two tier system which does cause problems in some countries is not a problem in this country. 246 Act no. 186 of March 12, 1997
68 • Film consultants provide independently of a board support to films after having assessed closely the artistic quality of the film, and after the economic viability of the project has been checked.
• The so called 60/40 scheme where there is less quality control, but where the producer would have to prove that he or she is coming up for a certain percentage of the financing.
The support covers all fields of filmmaking. The grants are partially repayable but the repayment scheme is generous inasmuch it allows people to recoup 25 % of all support has to go to children/youth films.
As the film support system is all important for feature filmmaking in Denmark (only one film was produced totally without support in the last couple of years), the DFI is an important player. Hence, this institution is very much influencing the whole audiovisual market. In a competition perspective the way these funds are granted (there are no tender procedure; the majority of subsidies are only granted by one person; there are recurrent, but never proven, allegations of foul play). Considering that turnover within film production in Denmark today is around very considerable this might be problematic. However, this support is primarily arts support, and it is the considered view that Denmark these days are producing quite stupendous films for such a small country.
The role and concept of an Independent Producer is as a consequence of the 4.169 same influence very much defined by the DFI. Hence the Danish producer is as a rule more a collector of money from investors and actual maker of the film rather than an actual investor. However, the definition of the producer cannot be said to be stemming from the law, but more from the practise dependent on the law.
[In addition to DFI support, films receive support from the two public service broadcasters, some regional foundation, but more significantly from The Nordic Film- and TV fund.]
There are no tax breaks or similar for people investing in Danish film. f) Copyright law
The Consolidated Act No. 164 of 12 March 2003 on copyright determines the 4.170 rights of authors, performing artists, broadcasters, phonogram and data bases producers, in Denmark and the exceptions thereto. All relevant directives have been incorporated247.
247 Act No. 395 of June 14, 1995 contained provisions implementing Council Directive 92/100/EEC, OJ 1992 L 346/61, Directive 93/83/EEC, OJ 1993 L 248/15, and Directive 93/98/EEC, OJ 1993 L 290/9. This Act re-enacted provisions from Act No. 1010 of December 19, 1992 whereby Council Directive 91/250/EEC, OJ 1991 L 122/42, was implemented. Act No. 1207 of December 27, 1996 contains provisions which in addition implement Council Directive 92/100/EEC, OJ 1992 L 346/61, and 93/83/EEC, OJ 1993 L 248/15. Act No. 407 of June 26, 1998 contains provisions implementing Directive 96/9/EEC of the European Parliament and of the Council, OJ 1996 L 77/20. Act No. 1051 of December 17, 2002 contains provisions implementing Directive 2001/29/EC of the European Parliament and of the Council on the harmonisation of certain aspects of copyright and related rights in the information society, OJ 2001 L 167/10. All these changes are now part of the consolidated act (from the Ministry of Culture homepage www.kum.dk)
69 This law affects the media market in the sense that it sets the framework of legal protection of main contributors or even active players in such market. The management of such rights in Denmark is left partially with the authors themselves but for important areas with various collecting societies. They include KODA/GRAMEX for music rights, NCB for synchronisation rights and COPY-DAN which basically picks up all other rights. Unlike other countries, Denmark does not have a collecting society representing audiovisual authors. Compulsory licenses may be put before the Copyright License Tribunal, which in case of disagreements decides the case.
Some definitions are directly retractable from the Copyright legislation. 4.171
The Danish legislation in this area is (logically) in most places in harmony with the legislation of the European countries. g) VAT
As mentioned the VAT law exempts dailies from value added tax, whereas other 4.172 periodicals are not. This does of course provide the newspapers with a competitive edge towards other media. However, this peculiarity does not seem to have had any effect on the market definitions mentioned above in the previous parts on competition law.
3. Administrative regulations
Nothing known or available in particular, apart from the regulations mentioned 4.173 above in the legislative framework. There are many executive orders etc. connected to this field. You are referred to www.retsinfo.dk for the updated version of the laws and to www.kum.dk where one may consult most of the important orders (and the legislation) in English.
4. Other provisions
There are some agreed documents in existence between publishers and writers, and dramatists and theatres, however they are not fully universally used.
II. Media regulators
1. The Press Council („Pressenævnet”) a) Legal basis
See above. The Media Responsibility Act, the Act on the Databases of Mass 4.174 Media. b) Functions; competence
Its president is a Supreme Court judge and furthermore holds representation 4.175 from editors, journalists and the general public. “It is a requirement for a complaint that the complainant has a legal interest in the matter, meaning that, directly or indirectly, he has been the subject of a printed article, a TV or radio broadcast or been shown on a photograph.
70 The Press Council reviews complaints about DR, TV2 (including the regional channels), local radio and TV channels, radio and TV channels with a licence 4.176 from the Satellite and Cable Board and the print media (newspapers, magazines, etc.). Complaints may be lodged about alleged breaches of generally accepted press standards and cases in which the complainant feels he should be given an opportunity to reply.”
The Press Council may also take up cases on its own accord.248 c) Linkage with general competition authorities
There are no such linkages.
2. The Radio and TV Board a) Legal basis
See above. The Council is founded by virtue of the Radio and TV Broadcasting 4.177 Act. In its present composition it is a fairly new body. b) Functions / competencies
A quote from the law (emphasis added): 4.178 40. “The Radio and Television Board shall be in charge of a number of tasks in relation to radio and television, cf. Sections 41-44. Decisions made by the Board under these provisions may not be brought before any other administrative authority. (2) Furthermore, the Radio and Television Board shall issue opinions on radio and television enterprises' statements on their fulfilment of their public service contracts. (3) The Radio and Television Board shall offer advice to the Minister for Culture on matters concerning radio and television.
41. The Radio and Television Board shall have the following tasks in relation to the distribution of sound and television programmes by means of terrestrial digital broadcasting opportunities:
1) To decide on licences for distribution of Danish and foreign sound and television programmes by means of terrestrial digital television broadcasting networks, to issue such licences and to supervise the activities, cf. Section 3.
2) To protest any infringement of the Act and any provisions pursuant to the Act, as well as terms laid down in connection with the issue of distribution licences.
3) To decide upon revocation of distribution licences, cf. Section 4 (3).
42. The Radio and Television Board shall have the following tasks in relation to national and regional programme services on the basis of a special licence or registration:
248 Which it has only done once to protect the Royal Family, who for reasons of principle did not wish to participate.
71 1) To make decisions concerning licences to provide national and regional programme services by means of terrestrial analogue broadcasting opportunities, grant such licences and supervise the programme services, cf. Section 45.
2) To register enterprises providing programme services by means of satellite, by means of communal aerial installations to areas exceeding one local area, or by means of terrestrial digital television broadcasting opportunities and short-wave broadcasting opportunities, cf. Section 47.
3) To protest any infringement of the Act and any provisions pursuant to the Act, and any terms laid down in connection with the issue of programme licences.
4) To make decisions concerning withdrawal or lapse of licences to provide programme services, cf. Section 50 (1) and Section 51. (2) The Board shall supervise programme services provided by means of satellite, by means of communal aerial installations to areas exceeding one local area, and by means of terrestrial digital television broadcasting opportunities and short-wave broadcasting opportunities. The Board may protest any infringement of the Act and any provisions issued pursuant to the Act and may make decisions concerning discontinuation of programme services, cf. Section 50 (2).
43. The Radio and Television Board shall have the following tasks in relation to local radio and television:
1)The Board shall make decisions concerning local boards' a) rejections of applications for licences to provide local programme services, cf. Section 60 (3), b) withdrawal of licences to provide local programme services, cf. Section 66 (5), and c) decisions concerning discontinuation of programme services provided by means of communal aerial installations, cf. Section 66 (5).
2) The Board shall supervise programmes broadcast simultaneously by several licensees or broadcast under a regular cooperation relationship on programme services with other radio and television enterprises (networking) and protest any infringement of the Act, provisions issued pursuant to the Act and the terms of a licence to provide programme services, and may withdraw the licence and make decisions concerning discontinuation of programme services, cf. Section 65 (2) and 66 (1) to (4).
3) The Board shall distribute subsidies for non-commercial local radio and television stations, etc., cf. Section 68.
4) The Board shall approve the establishment of joint boards covering municipalities with a total population of more than 300,000, cf. Section 64 (2).
5) At the recommendation of the National IT and Telecom Agency, the Board shall decide upon the distribution of broadcasting opportunities in local areas, with due regard for the frequencies available.
6) The Board may furthermore at its own initiative, irrespective of Section 65 (2) and (3), take up a case for consideration. In that connection the Board may a) direct a local board to decide in a case not previously considered, b) direct a local board to reconsider a case previously considered, or
72 c) in special cases itself reach a decision in a case. In cases previously considered by a local board, the Board may on occasion reach a more encumbering decision in relation to the licensee than the decision made by the local board.
44. The Radio and Television Board shall have the following tasks in relation to advertising and programme sponsorship:
1) The Board shall make decisions concerning identification, placement and extent of advertisements, cf. Sections 72-75.
2) The Board shall make decisions concerning the content of radio and television advertisements, cf. Sections 76 and 77. In cases concerning compliance with the Pharmaceuticals Act and the Act on Advertising of Healthcare Services, the Board shall obtain a prior opinion from the Danish Medicines Agency. The Board may protest infringement of the rules and may direct TV 2/DANMARK or the holder of a licence or registration for radio or television services to publish the decision. The Board may decide in which way and in which form this shall be done.
3) The Board shall make decisions concerning right of reply to information of a factual nature broadcast in advertisements. The right of reply presupposes that the information could cause considerable financial or other damage and that its correctness is not indisputable. The Board may order TV 2/DANMARK or the holder of a licence or registration for radio or television services to broadcast a reply. The Board may decide upon the content, form and scheduling of the reply.
4) The Board shall decide upon identification of sponsors and sponsored programmes, cf. Sections 79, 80, 83 and 84.
5) The Board shall decide issues relating to sales encouragement, etc. in sponsored programmes, cf. Sections 82 and 85. (...)
There is no administrative recourse from the Radio and TV board. Hence decisions can only be tested in court.
The Radio and television board has a very wide ranging number of tasks. c) Linkage with general competition authorities
Nothing specific to be reported on, at least on a formal or regular basis, 4.179 according to the data obtained. However it cannot be ruled out that at a later date this may arise, that some decision of the board definitely can have a decisive influence on stations gaining a dominant position etc.
3. Local Radio and TV board a) Legal basis
The Radio and TV Broadcasting act in part. §§ 64 pp. 4.180 a) Functions / competencies
A Local Radio and TV board shall be set up by municipalities or where relevant 4.181 a group of municipalities.
The board grants licences to Local Radio and TV stations.
73 There is recourse from the Local Radio and TV board to the [National] Radio and TV board.
The system ensures a high degree of local influence on licences granted. b) Linkage with general competition authorities
Quite probably none.
4. National IT and Telecom Agency a) Legal basis
For these matters, the Law on Radio Frequencies (esp. §§ 31 pp.). 4.182 b) Function
To grant licences to radio and TV enterprises. To develop a plan for the frequency 4.183 spectrum used by broadcasters. c) Linkage with general competition authorities
For this particular role none, as the primary work is done by the Radio and TV 4.184 board(s).
5. Copyright Licence Tribunal a) Legal Basis
The respective provisions contained in the Copyright Act. 4.185 b) Function
To decide when two parties are in a dispute concerning a compulsory licence. 4.186
III. Market definitions and criteria upheld for market perception in the relevant sector focused legislation
To our knowledge, there are no specific market definitions – as such – in the 4.187 media sector focused legislation in Denmark, but some laws indicate certain criteria which might be helpful when determining the notion of market in a given case involving competition issues in the fields of media.
1. Publishing a) Books
No real meaningful definition added to what might be perceived obvious. b) Newspapers and magazines
The split into the three markets defined by the competition authorities and described above broadly is accepted as useful.
74 2. Music
The copyright law provides scarce definitions. Hence from the law it is difficult 4.188 to apply definitions. However music producer is understood in the way as in most European countries. Therefore, it is not very likely that the law in itself is providing any guidance.
3. Film
Again the Danish law is very reticent249. In §§ 58 and 58a of the Copyright Act 4.189 no definitions are provided of what a film is and who the authors are.
As mentioned above the practises of the Danish Film institute is instrumental in shaping the whole market for feature films. Arguably down to what kind of salaries are accepted etc.
Hence it is clear that the legislative framework – especially application form, guidelines etc. has a strong impact on how the market is defined. However this can probably not be put into a short definition. See also Supra.
4. Broadcasting (radio and television) a) Upstream: content, channels, programs, rights
In the fields of radio or television content acquisition, there are no specific rules 4.190 or definitions under Danish law, besides the general provisions of copyright protection and fair competition.
Denmark has revoked the list of sport events of major interest which should not be excluded from free-TV.
As many other small markets Denmark is facing problems when acquiring rights from especially American majors. Often Danish television stations are forced into alliances with Scandinavian colleagues and often they are forced to buy a substantial number of programmes they do not want to get the few they want.
However the situation is as yet not so bad that competition cases would have been launched. b) Downstream: free TV, pay TV, platforms, interactive services aa. Media law
See supra (D I 2. B). bb. Legislation on conditional access
The Radio and TV broadcasting act on protection of services of conditional 4.191 access has transposed into national law the corresponding EC directive 98/84/EC of 20 November 1998 protecting encrypted pay services against
249 This is a characteristic of much Danish legislation, which for outsiders sometimes seems minimalist.
75 piracy. Such legislation prohibits the possession and the marketing for commercial purposes of decoders without the authorisation of the service provider. cc. TV infrastructure markets (satellite dishes, cable etc.)
Most of Denmark is covered by collective reception antenna networks or cable 4.192 networks. The biggest – catering for something like 1.300.000 households – is based on the almost nationwide fibre-optic cable network which is owned by Tele Denmark, the main Danish telecoms operator.
Again the legislation does not define very well what exactly is a cable network. However from practice the definition has been quite clear. There exists a very elaborated system for choosing the channels which are allowed to be on the fibre-optic network (referenda are held by the customers etc.) However the discussion of this is more pertinent in the competition policy related part. dd. Law on Radio frequencies
The law basically refers to the Radio and TV law. Again it seems pretty difficult 4.193 to assess this specific peculiarity of the influence of laws on market definitions. ee. Copyright law
Cable broadcasting is mentioned but not defined. Hence, the law itself has little or no influence on the regulator. c) TV advertising market
Advertising as such is not defined but sponsorship is in §§ 79 and 80 of the 4.194 Radio and TV Broadcasting Act 79. Programme sponsorship shall mean any contribution, direct or indirect, to the financing of radio or television programmes, including teletext pages, from a natural or legal person not engaged in the broadcasting or production of radio or television programmes, films, phonogrammes, etc., with a view to promoting the name, trademark (logo), image, activities or products of that person.
80. Sponsored programmes shall be clearly identifiable as such by appropriate credits appearing at the beginning or end, or both, of the programme, showing the sponsor's name or trademark (logo). Such credits may not appear in the programme itself. On teletext the sponsor's name or trademark (logo) shall appear on the individual pages sponsored…..
5. Internet a) Content
Internet is at the moment not specifically regulated. 4.195 b) Access
ISP providers do not need authorisation per se. However because of in most 4.196 cases the necessary adjunct to IS providing they must receive authorisation from the telecoms authorities for this processes which is not part of the present study.
76 IV. Market definitions in the media sector, as upheld in sector specific practice of authorities and courts
Nothing of particular importance for present study’s objective has come to the 4.197 knowledge of the researcher. However, in any case obtaining information on relevant cases both from authorities and from courts is due to their respective publishing policy merely feasible.
V. Common factors and differences between the media specific market definitions and the market definitions used in application of the competition rules
As a matter of fact a comparison between specific media market definitions and 4.198 demarcation-criteria used in application of competition rules can, due to the scarcity of practise, not be effected. Again the lack of precise “market definitions” as opposed to legal definitions seems to make it difficult to carry out precise analysis. In general, however, both the competition authorities and the regulators and courts are, when it comes to definitions case by case, view of this field. Doing this research the reaction from several of the persons interviewed has been that the exercise to some extend seems futile.
VI. The impact of the non-competition framework and practice on the work of the competition regulator, in particular when defining the relevant markets
From studying the practise of the regulator it seems that the legal framework 4.199 has received surprisingly little attention when defining markets. This, however, can be seen as the result of the very little precise input to be received from the rules and regulations themselves.
77