EC confirms approval of Liberty Global Ziggo acquisition

The European Commission has confirmed its approval of Liberty Global’s acquisition of Dutch cable operator Ziggo in the Netherlands.

The EC’s move follows annulment of its earlier approval of the 2014 acquisition by the EU General Court last year.

The EC originally approved the merger of UPC Netherlands and Ziggo subject to the condition that it divest its Film1 channel to a third party to assuage concerns that the merger reduced competition in the market for the wholesale of premium pay TV films channels. Film1 was subsequently purchased by Sony.

The General Court annulled the merger following a complaint by KPN, on the grounds that the EC’s original assessment did ot fully state the reasons of its conclusion that the merger would not lead to vertical anti-competitive effects on the potential market for premium pay TV sports channels as well as film channels.

The court’s ruling hinged on the grounds that he EC had failed to provide an analysis to back up its assertion that the merger did not raise competition concerns in the market for premium sports channels. Among other things, it said that the EC’s defence that Liberty did not have market power in premium sports because Sport1 had an effective competitor in the shape of Fox Sports was not backed up by a market analysis.

The EC’s reassessment confirmed that there were no concerns about this market, this time with evidence to support the decision.

Ziggo was subsequently folded into Liberty Global’s VodafoneZiggo joint venture with Vodafone to provide converged services in the Dutch market.

The EC’s new assessment confirmed concerns that the merger would have increased Liberty Global’s negotiating power relative to channel broadcasters and could hinder the delivery of OTT TV services.

Liberty Global offered a series of commitments to meet the Commission’s concerns similar to those offered in 2014. These include an agreement to terminate clauses in channel carriage agreements that limit broadcasters’ ability to offer their channels and content over the internet, and not to include such clauses in future channel carriage agreements for eight years.

Liberty will also maintain adequate interconnection capacity through at least three uncongested routes into its Internet network in the Netherlands, helping to ensure sufficient capacity for competing OTT services, also for eight years.

Finally, the operator agreed not to re-acquire the Film1 channel, to ensure that this divestment is a structural change to the market.