German Antitrust Regulator Rejects RTL-ProSiebenSat.1 Plan

Germany’s antitrust regulator said it won’t approve Bertelsmann AG’s RTL Group and ProSiebenSat.1 Media AG (PSM)’s joint online-video platform, saying the service would help the companies increase their local media-market dominance.

The potential benefits of the new video-on-demand service don’t outweigh the risk that the venture may be “harmful to competition” in Germany, Andreas Mundt, the Federal Cartel Office president, said today in a statement.

“The establishment of a common platform would strengthen the dominant duopoly of the two broadcasting groups in the television advertising market,” Mundt said.

RTL and ProSiebenSat.1 said in August that the Internet platform would be open for public and private channels in Germany and Austria to put content online, against payment for use of the technical infrastructure. The companies have a month to appeal the antitrust office’s decision, and both said they’re considering such a move.

The idea of a “duopoly” isn’t applicable when it comes to the Internet, where video-on-demand is dominated by international companies, RTL’s German division said today.

“The cartel office fails to recognize that the proposed joint venture would be a purely technical service provider, as opposed to the U.S. platform Hulu,” and wouldn’t include marketing activities, Cologne-based RTL Deutschland said in a statement. “Any marketing would be done separately by each of the participating broadcasters.”

RTL Group is Europe’s biggest broadcaster, with 40 television channels and 33 radio stations in 10 countries. ProSiebenSat1 is Germany’s largest private broadcaster.

To contact the reporter on this story: Ragnhild Kjetland in Frankfurt at rkjetland@bloomberg.net

To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net

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