Page 69 - MEDIASET ESPAÑA / 2013. Financial Statements, Management and Corporate Governance Report

69
MEDIASET ESPAÑA COMUNICACIÓN, S.A.
NOTES TOTHE FINANCIAL STATEMENTS FOR THEYEAR ENDED DECEMBER 31, 2013
(Thousands of euros)
Proceedings related to Mediaset España Comunicación, S.A.’s supposed failure to comply with
the Telecinco-Cuatro merger commitments
On February 6, 2013, the el Comisión Nacional de la Competencia (CNC - Anti-trust authorities) handed down a ruling
on Dossier SNC/0024/12 Mediaset (the “resolution”), in which Mediaset España Comunicación, S.A. (“Mediaset España”)
failed to comply with certain commitments and obligations established in the C-0230/09Telecinco/Cuatro merger dossier;
a fine of 15,600 thousand euro was set.
The resolution states that Mediaset España failed to comply with four of the twelve commitments upon which theTelecinco/
Cuatro merger was authorized (commitments (ii), (iii), (vi) and (xii)), as well as different requirements for providing
information to the CNS regarding these obligations.
The commitments set Mediaset España restrictions in order to neutralize or compensate for potential anti-trust issues
arising from the transaction.These include:
• Regarding the sale of TV ad space: Mediaset España agreed that it would not jointly place advertisements with Cuatro
andTelecinco or groups of channels whose overall audience topped 22%. Specifically, commitment (ii) prohibited formal
or de-facto joint sales of advertising space with Telecinco and Cuatro. Among other stipulations, commitment (iii)
established a functional split between Publimedia and Publiespaña, in order to handle free-to-air and payTV separately.
• Limits were imposed for the acquisition of audiovisual contents from third parties.With respect to commitment (vi),
Mediaset España has been charged with delay in granting suppliers the right to reduced contracts, and renouncing
extension or preferential acquisition rights which never really existed, considering the deadlines established to that effect
as well as legal suspension periods, as a result of Mediaset’s legitimately filed appeals.
The commitments were later developed unilaterally as part of the CVC-imposed Action Plan, which also set certain
obligations regarding informing the authorities, to guarantee their compliance.
The Action Plan’s interpretation of the commitments was strict to the point that it substantially modified its content,
thereby significantly making Mediaset España’s commitments more difficult to assume; this affected advertising as well as
content acquisition. For example, the duration of contracts for acquiring content was to be calculated at their signing date,
rather than when the rights commenced; thus, this was legally disputed, and a sentence is still pending.
Mediaset España did not fail to comply with any of its commitments with the CNC.
• Mediaset España did not violate commitment (ii) after the merger finalized: in 2011, it lowered its share of the advertising
market as well as the average per-ad price, while managing to keep its audience numbers constant. Reports prepared
by external advisors conclude that Publiespaña has not failed to meet its commitments, and that it has not violated anti-
trust laws.
• As regards commitment (iii), Mediaset España was careful to ensure that positions in Publimedia and Publiespaña were
not duplicated. Likewise, there has been no indication whatsoever of a failure to meet the obligation to guarantee the
functional or commercial independence of both companies.
• With respect to commitment (xii), Mediaset España was charged with delay in granting suppliers the right to reduced
contracts, renouncing extension or preferential acquisition rights which never really existed, considering the deadlines
established to that effect as well as legal suspension periods, as a result of Mediaset’s legitimately filed appeals. No effect
would have been felt on the market, as no suppliers exercised any of the granted rights.
• With respect to commitment (xii), Mediaset España renounced all the pertinent option rights included in contracts with
producers, while fulfilling its other related obligations; thus, it did not fail to comply with any of the stated conditions.