Chapter 4 Denmark
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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).