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Competition Authority Decision on RTÉ Share Deal Scheme

Advertisers take heart! Now that RTÉ has agreed to end its share dealing scheme, you may soon be able to shop around for better television advertising rates.

In 2009, TV3 lodged a complaint with the Competition Authority claiming that RTÉ – through its Share Deal Scheme – was engaging in anti-competitive practices by requiring advertisers to spend a minimum percentage of their advertising budget (in some cases, up to 65%) with RTÉ.

The granting of rebates and discounts is not in itself objectionable. It is a common way for suppliers to compete on price and to try to attract customers. However, loyalty rebates given by dominant undertakings risk being prohibited as abuses of a dominant position under Irish and EU competition law because they may limit competition in the marketplace.

The Authority took a preliminary view that the Share Deal Scheme could amount to an abuse of a dominant position by RTÉ in the market for television advertising airtime contrary to Irish and/or EU competition law.

While RTÉ disputed these preliminary findings, it undertook to discontinue the Scheme with effect from 1 July 2012. Since this addressed the Authority’s immediate concern regarding the impact of the Scheme on competition, the Authority decided to close the investigation before reaching a final decision on the relevant market, dominance or abuse of dominance by RTÉ.

While the enforcement decision does not give a final view as to whether there was a competition breach, it serves as a reminder that a dominant undertaking which offers loyalty discounts to customers may be in breach of competition law.

Contributed by Claire Waterson.

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