The CNMC fines Telefónica 5 million for selling F1 rights to Dazn

The National Markets and Competition Commission (CNMC) has sanctioned Telefónica with 5 million for a new breach of several clauses of the commitments after the purchase of DTS in 2015. It is the second fine to the company this year (press release) for failing to comply with the commitments of the aforementioned concentration.

The commitments were initially valid until April 2020, but the CNMC extended them in July 2020 for a period of three years. The National Court confirmed the extension in its ruling of February 8, 2023.

In the opinion of Competition, the agreement between Dazn and Telefónica by which the former acquired the exclusive broadcasting rights of Formula 1 for the 2021, 2022 and 2023 seasons, and which allowed Telefónica to access all DAZN content, violates the commitment that obliges the telco to make available to other pay television operators in Spain a wholesale offer of its own premium channels, considering a premium channel to be one that includes, among other content, a live Formula 1 sporting event.

Telefónica was also prohibited from acquiring and exploiting exclusive broadcasting rights for television channels published by third parties.

Lastly, the price for operators Those who wish to hire them will be subject to a Guaranteed Minimum Cost (CMG) system that aims to share the risk that Telefónica assumes when acquiring the exclusive broadcasting rights in Spain of the aforementioned audiovisual content.

For the CNMC, Telefónica has breached commitment 2.9 by having excluded premium Formula 1 content from its wholesale offer and having marketed it exclusively in favor of Dazn; commitment 2.9 and Annex 1, having included in the agreement a provision by which any Telefónica subscriber who receives DAZN content will also count as a DAZN subscriber for the purposes of calculating the CMG (within the framework of Telefónica's wholesale channel offering in Spain); and commitment 2.10, for including clauses in the agreement that, in one way or another, would have allowed de facto exclusives.

Failure to comply with the provisions of the commitments of a concentration operation represents a very serious violation under article 62.4.c of the Competition Defense Law (LDC). For this reason, the CNMC has imposed a fine of 5 million.