EU: German digital venture on or off?

A decision on the planned digital-TV joint venture between Kirch Group and CLT-Ufa, the two German media groups, may be delayed by the European Commission. The German media company Bertelsmann has a 40 per cent stake in CLT-Ufa, and confirmed that the two sides had sought to obtain a compromise with the Commission, which has suggested that the planned venture will have a dominating position in the sector and thus would breach EU regulations on free trade in goods and services. In response to Commission and industry complaints Kirch offered to sell 25 per cent of its Hollywood “output” films, plus a 25 per cent share in BetaResearch, which owns the rights to the digital decoder technology to be used in the joint venture with CLT-Ufa. The two partners also offered to make the decoder technology accessible to other TV companies. These concessions were rejected by a committee of competition experts who looked into the proposal on behalf of the EC, and who recommended that the joint venture be blocked. Karel Van Miert, the competition commissioner, opposes the venture on the grounds that it would hold a dominant position in the German pay-TV sector. The Commission is expected to rule on the case by 3 June.