Discovery and Scripps are both active as providers of basic pay-TV channels to TV distributors in the European Economic Area (EEA). Scripps is particularly active in the UK, where it operates UKTV jointly with the BBC; and in Poland, via TVN, a Polish media company acquired by Scripps in 2015.
The Commission's investigation found that:
- In the UK, the proposed transaction would raise no competition issues given the limited overlap between the companies' activities.
- In Poland, the proposed transaction risked increasing Discovery's bargaining power vis-à-vis TV distributors because of the acquisition of certain channels that are particularly important in distributors' basic pay-TV channel packages. In particular, TVN24, TVN's flagship news channel, was identified as crucial to retail TV offerings. Following the transaction, Discovery would have had the ability and incentive to impose the licensing of its whole TV channel portfolio. This would have allowed it to increase its licensing fees to the detriment of Polish consumers and competition.
The proposed remedies
To address the Commission's competition concerns, Discovery committed to making TVN24 and its sister channel TVN24 Bis available to current and future TV distributors in Poland for a reasonable fee determined by reference to comparable agreements. This commitment will remain in place for a period of 7 years.
The Commission concluded that the proposed transaction, as modifiedby the commitments, would raise no competition concerns. The Commission's decision is conditional upon full compliance with the commitments.
Rejection of referral request
In parallel, the Commission has also rejected a request from Poland to refer the merger to the Polish competition authority for assessment under Polish competition law.
Article 9(2)(a) of the EU Merger Regulation allows the Commission to refer all or part of the assessment of a case to a Member State provided that the competitive effects are restricted to national markets. In deciding whether to refer a case to a Member State under Article 9(2)(a), the Commission particularly takes into account which authority is better placed to deal with the case. The Commission concluded that, given its extensive experience in assessing cases in the media sector, and the need to ensure consistency in the application of merger control rules in this sector across the EEA, it was better placed to deal with this case. The Commission also considered that, to the extent that the transaction raises competition concerns, they are fully addressed by the commitments.
The Commission therefore rejected the request.
Companies and products
Discovery of the US, is a global media company that provides non-fiction TV shows and documentaries, as well as sports entertainment channels (such as Eurosport), across multiple distribution platforms, including linear platforms such as pay television, free-to-air, and various digital distribution platforms around the world.
Scripps of the US, is a global media company providing primarily home, food, travel and other related programming.
Merger control rules and procedures
The transaction was notified to the Commission on 8 December 2017.
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).