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MEDIASET ESPAÑA COMUNICACIÓN, S.A. AND SUBSIDIARIES
PROCEEDINGS RELATEDTO MEDIASET ESPAÑA’S SUPPOSED FAILURE TO
COMPLYWITHTHE TELECINCO-CUATRO MERGER COMMITMENTS
On February 6, 2013, the Comisión Nacional de los Mercados y la Competencia (CNMC) 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-0230/10 Telecinco/Cuatro merger
dossier; a fine of 15,600 thousand euros was set.
The resolution states that Mediaset España failed to comply in 2011 and 2012 with four of the twelve commitments
upon which the Telecinco/Cuatro merger was authorized (commitments (ii), (iii), (vi) and (xii)), as well as different
requirements for providing information to the CNMC regarding these commitments.
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 and Telecinco 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 stipula-
tions, commitment (iii) established a functional split between Publimedia and Publiespaña, in order to handle
free-to-air and pay TV separately.
• Limits were imposed for the acquisition of audiovisual contents from third parties. Commitment (vi) limited
exclusive contracts to three year durations (in general terms), also excluding automatic renewal and other
similar terms, while commitment (xii) prevented exclusive rights or first options on the entirety of national
contents production/products.
The commitments were subsequently met unilaterally by the CNMC by an Action Plan imposed on the Company,
with an interpretation of the commitments which was strict to the point that it substantially modified its content,
affecting both advertising as well as content acquisition. For example, the “interpretation” considered that the duration
of contracts for acquiring content should be calculated commencing on their signing date, rather than when the rights
commenced.
Mediaset España did not fail to comply with any of its commitments with the CNMC.
• Regarding the commitment (ii) facts prove that Mediaset España did not commit the alleged infraction: 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 (vi), Mediaset España has been charged with delay in granting suppliers the right
to reduced contracts, and renouncing extension or preferential acquisition rights, which is untrue.
• With respect to commitment (xii), Mediaset España waived all the pertinent option rights included in contracts
with producers.
Therefore, Mediaset España appealed the resolution in time and substance before the National Court of Justice, which
subsequently suspended of the fine.
Recently, on December 15, 2014 and November 2, 2015, the Supreme Court partially upheld two appeals filed by
Mediaset against certain CNMC actions, declaring certain of its interpretations and contents of the action plan null and
void; the alleged infraction served as the basis for imposing the appealed fine.These sentences will have very favorable
effects on the outcome for Mediaset
Thus, the accompanying consolidated statement of financial position does not include a provision for this contingency,
as the directors and legal advisors do not consider it likely that this risk will materialize.