The Competition Authority has recently published an enforcement decision and guidance note on the provision of pay-TV services to apartment developments. This follows the Authority’s investigation of a number of complaints from apartment residents who, due to exclusivity agreements, were unable to switch to alternative pay-TV providers.
The enforcement decision sets out the Authority’s competition law analysis of pay-TV exclusivity agreements between property developers and service providers. As no single provider of pay-TV services is dominant in the State, no abuse of dominance concerns can arise. However, even if one of the providers was in a dominant position, the exclusivity agreements would not, in most cases, amount to an abuse.
In addition, not all exclusivity agreements between developers and providers are seen as anti-competitive. Without the guaranteed future income resulting from exclusivity, service providers may be unwilling to invest the substantial amount of money needed to establish the relevant infrastructure. Nonetheless, the exclusivity obligations must be proportionate. While the proportionate length for such agreements will vary from development to development, the Authority considers that exclusivity of up to two years is generally unlikely to breach competition law. Longer periods of exclusivity may still be acceptable, where they satisfy the relevant exemption criteria.
The guidance note published alongside the decision provides useful information to apartment residents and prospective purchasers. It explains why the Authority is of the opinion that the exclusivity agreements do not breach competition law, but highlights the types of provisions that would raise competition concerns. It also answers a number of questions frequently received from concerned residents.
Although the enforcement decision relates to a number of specific agreements investigated by the Authority, it clearly sets out the Authority’s view on which practices are likely to comply with competition law. Property developers and pay-TV providers should give consideration to this decision when drafting any exclusivity agreement so as to avoid breaching the competition rules.
