Melita Cable plc was yesterday ordered to immediately stop exercising any rights over Italian television stations transmissions that could be freely received by viewers in Malta having a television antenna.
The ruling, effective for three months, was delivered by the Commission for Fair Trading following a request by the director of the Office of Fair Trading for interim measures in respect of Melita.
The commission was composed of the chairman, Magistrate Silvio Meli, and two members, Carmel Farrugia and Lino Briguglio.
The director told the commission that Melita Cable had entered into an exclusive contract for the transmission and retransmission of certain sporting events, such as the World Cup. Before the contract was concluded, the public could view such sporting events without payment both via local television stations and also foreign stations whose area of transmission extended to Malta.
The local viewer could receive such programmes by means of a television antenna free of charge, save for the payment of the TV licence.
In 1991 Melita Cable was given a monopoly in the cable television market which monopoly ended in 2001 when the market was liberalised.
Another company, Multiplus Ltd, was now on the Maltese market too. Multiplus provided digital transmission services as of last year.
The commission also heard that Multiplus had tried to acquire a considerable portion of the sports market when it acquired exclusive rights to broadcast the championship football games of the Italian Serie A. Once this happened, Melita had stopped broadcasting the retransmission of the Italian football matches and had blocked such games. As a result, Melita had lost a number of subscribers. The commission heard that the complaint raised by the director against Melita was limited to the transmission of the World Cup football games this year, to the UEFA Champions League, to Formula One races, and to the Six Nations Rugby Championships.
Melita had impeded the local consumer from following these sporting events shown on free to air Italian TV stations.
In its ruling, the commission declared it was obvious that Melita occupied a very strong market position, for it had enjoyed a statutory monopoly for many years.
The consumer, on the other hand, was placed in a weak if not insignificant position. In the current situation, the consumer had little option but to accept the directives issued by Melita from time to time without being able to negotiate his position.
The commission added that the Broadcasting Authority had also been involved in this case and had been forced to intervene. The authority had felt that a popular passion for football had been exploited by the dominant position enjoyed by Melita Cable.
The commission noted that the director had been right when he had concluded that up to the end of 2005 Melita had 95 per cent of the local market of cable television, and 75 per cent of the specific market in the transmission or retransmission of sporting events.
The European Court of Justice had accepted that a dominant market position was not a good sign for fair competition, and when a business had a market share of at least 40 per cent, this business was to be considered as occupying an unequivocal position of dominance.
The consumer had been rendered dependent upon Melita's whims. Furthermore, Melita's dominant market position had established an insuperable barrier to other competing businesses in penetrating the market.
The commission added that it was not in any manner criticising Melita for having attempted to acquire exclusive rights in sporting events, for this was an effort aimed at expanding and making profits.
What the commission was fully criticising was the fact that the local situation had not changed and was contrary to the European principles of fair competition. Once Malta was part of a free trade area governed by the principles of fair competition and the interests of the consumer, a situation such as that existing at present was totally condemnable.
The commission added that Melita's submissions had been written in the English language. This was contrary to the law and ought not to be repeated.
The commission concluded by finding in favour of the director, adding that the matter in issue could cause serious damage by limiting the market to the exclusive use of Melita at the exclusion of third parties.
The agreement whereby Melita was authorised to exclusively transmit and retransmit the World Cup football games was counter to the principles of fair competition and was seriously detrimental to the consumer.
The commission ordered Melita Cable to immediately stop exercising its rights over the television programmes aired on Italian television stations that could be freely accessed by local viewers who had an antenna. This order was to remain in force for three months.