Consequently, after receiving a statement of the ICA’s objections in April 2019, which envisaged the imposition of substantive remedies in order to clear the concentration, the parties announced their withdrawal from the merger and organized the return of R2 to Mediaset. However, the agreement with MP provided for a termination condition that could be triggered if there were the imposition of remedies by the ICA. It is notable that the acquisition of R2 by Sky was initially completed on 30 November 2018, immediately after the concentration was notified to the ICA (on 28 November 2018), as permitted by the Italian merger control regime.
Relevant factual and procedural background (which makes this case peculiar and controversial) Considering these interconnected agreements, the ICA has maintained that, overall, this concentration was equivalent in the substance to the suppression of MP as a competitor. These related, in particular, to the licensing of MP’s pay-tv channels to Sky, the transfer to Sky of the rights to the use of DTT’s Logical Channel Numbering (LCN) 301-399, in addition to transitory agreements for the de facto exclusive provision of the MP/R2 technical platform services. However, according to the ICA, the acquisition of R2 was economically and functionally intertwined with a set of commercial agreements that were entered into between the two parties in March 2018.
R2 provides technical and administrative services for the DTT broadcasting of pay-tv channels, which enable the packaging of a retail pay-tv offer, such as the cryptography of the signal (conditional access services), commercial and customer support services (call centers, etc.) and administrative services (activation/de-activation of subscriptions, etc.). (“ Sky”), of the DTT technical platform R2 Srl (“ R2”), from Mediaset Premium S.p.A (“ MP”). On, the Italian Competition Authority (“ ICA”) concluded its Phase II investigation into the acquisition, by Sky Italian Holdings S.p.A. Namely, the decision prohibits Sky to acquire new exclusive licenses over content or channels for distribution online for three years and imposes on Sky the obligation to provide third-party access to its DTT technical platform at FRAND terms. Abstract: the decision rejects the claim from the parties that the concentration was abandoned and therefore imposed on Sky measures to restore effective competition.
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