The European Commission has launched an inquiry into the sale of sports rights to Internet companies and 3G mobile operators.
The review will look at the availability of audiovisual sports rights in the European Union amid concerns the market might become the subject of anti-competitive practices.
As the first broad investigation in the area of new media rights, the results of the probe are likely to send ripples throughout the sport, media and technology industries.
Getting the formation right
The Commission notes that sports rights - and in particular football rights - are powerful drivers for the sale of pay-TV subscriptions. The same will apply when sports coverage is made more widely available on the Net and 3G phones, the Commission reasons, hence a need to set up an open competitive marketplace.
Competition Commissioner Mario Monti said: "As the launch of 3G networks enters into full swing and the success of the service weighs heavily on the operators' ability to deliver attractive audiovisual content, it is the task of competition regulators to ensure that access to sports rights remains open and non-discriminatory."
The Commission's experience so far in this field has "highlighted possible anti-competitive commercial arrangements and conduct across the whole industry".
"Such behaviour would chiefly take the form of refusals to supply, the bundling of TV rights with new media/3G rights, the existence of embargoes favouring TV coverage over new types of coverage or the purchase of new media/3G rights on an exclusive basis," it adds.
According to the Commission, arrangements for the sale of the rights to the English and German Premier Leagues and the Champions League have already given rise to concerns.
But the Commission is there to ensure fair play, it says, in what looks like a prelude to an argument for greater regulation.
Did you see that, Ref?
As Internet and 3G rights become more important, the Commission argues for the need to develop a sector-wide approach which would clarify the application of competition rules in content markets opened up by technology advances. The Commission is sending out questionnaires to a number of representative sport organisations and other holders of sports rights, including agencies, broadcasters and mobile network operators in order to better understand market evolutions and practices.
The aim of the Commission's inquiry is to establish whether current commercial practices infringe European competition rules, in particular the prohibition of restrictive practices and abuses of dominant position (Articles 81 and 82 of the EC Treaty).
Game of two halves
So how will the industry respond? Beyond saying it will contribute to the EU inquiry, 3UK, an early entrant in the provision of next generation content services in UK, gave no indication of what it would say.
Other parties in the consultation are also playing their cards to their chest, as well they might when the stakes are so high and important deals are already falling into place.
Last October, 3 and Vodafone UK announced that they had jointly secured mobile content rights for the FA Premier League for the next three seasons starting next year. Running from 2004/05 through to the 2006/07 season, the rights will give both Vodafone and 3 customers access to all 380 FA Premier League matches a season by their mobile phones.
The rights package enables Vodafone and 3 to offer customers a number of mobile services including exclusive video match highlights, previews, archive footage and Premiership round-ups as well as other services such as audio bulletins, 'near-live' picture messages and match scores.
A spokesman for 3 said the deal was an example of how mobile content rights could be shared.
"We'll be competing very vigorously with Vodafone," he added.
According to industry figures, there are currently just over 500,000 subscribers of 3G services in Europe. 3G services have been introduced in five EU countries Sweden, Denmark, United Kingdom, Italy and Austria but 40 new networks are expected to be launched in Europe in the next 12 months.
The provision of a range of new services and, in particular, the transmission of images and sound from sports events or the like is expected to be one of the main selling points for high speed mobile (3G) services in Europe. ®
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