CodesLicensingCompetition and Cross-media Ownership ConcernsComplaints
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Competition and Cross-media Ownership Concerns

Competition Complaints

This year saw a focus on sports broadcasting rights and the important role they play in a competitive broadcasting market. The Authority concluded investigations into three competition complaints on sports broadcasting rights received in 2002 and 2003:

  1. HKCTV's complaint against the joint acquisition of free television broadcasting rights to the FIFA World Cup and the Olympic Games by ATV and TVB;

  2. TVB's cross complaint against HKCTV's acquisition of exclusive broadcasting rights to 2002 World Cup; and

  3. TVB's complaint against HKCTV's acquisition of television broadcasting rights to Spanish League for three seasons.

The Authority obtained vigorous economic analysis by established competition consultants to assist it in forming an opinion as to whether the alleged acts were anti-competitive and in breach of section 13 of the BO. On the complaint against joint acquisition of sports rights by ATV and TVB, the Authority considered that the conduct of ATV and TVB did not have the purpose or effect of preventing, distorting or substantially restricting competition in a television programme service market as prescribed in section 13 of the BO by entering into joint purchasing agreements mainly because the agreements only affected programming shown over approximately four weeks every two years and that there was no evidence of any general collusion between ATV and TVB. Regarding the two complaints against HKCTV's acquisition of exclusive broadcasting rights to football events, the Authority noted that exclusivity was a commonly accepted commercial practice in the broadcasting sector. The concerned football broadcasting rights in effect only affected programming shown over a limited period of time and HKCTV had sub-licensed key matches to free-to-air broadcasters in both cases. The Authority therefore concluded that HKCTV had not breached section 13 of the BO in acquiring exclusive rights.

Enforcement of the TVB - Galaxy's "Firewall" Provisions

The licences of TVB and Galaxy, a subsidiary of TVB, contain a number of special conditions in their respective licences as a safeguard to ensure an effective "firewall" between the operations of the two companies so as to maintain a level playing field for all players in the market. During the year under review, the Authority processed two complaints concerning breach of the firewall provisions of TVB and Galaxy. One involved the failure of TVB and Galaxy to notify other licensees of details of a programme supply transaction between them in 2001 in accordance with the required procedures for implementing the firewall provisions. After investigation, the Authority decided to give TVB and Galaxy each an advice to observe more closely the relevant licence condition and to make a belated notification of the 2001 transaction to other licensees forthwith in accordance with the Authority's approved notification procedures. The other involved the retransmission of TVB's two free-to-air channels on ex-TV's service provided by Galaxy without the Authority's approval. Galaxy was prohibited under its licence from including programmes produced by TVB in its pay TV service within 12 months of the last broadcast date of the programmes on TVB's service without the approval of the Authority. Galaxy was given an advice to observe more closely the relevant licence condition and to cease the retransmission within seven days.