Pay TV industry

1. Introduction

On January 21, 2010, the Argentine Antitrust Commission (the “Antitrust Commission”) issued Resolution No. 08/2010 (the “Resolution”) by means of which it ordered a preventive measure pursuant to Section 35 of the Argentine Antirust Law No. 25,156 (the “Antitrust Law”) regarding the Pay TV industry.

The Antitrust Commission ordered to the most important operators of the Pay TV market and also to all the members of the Argentine Association of Cable TV (“AACTV”) and the Chamber of Independent Cable Operators (“CCI”) to: (i) refrain from performing collusive conducts, and in particular, not to raise the prices of the services for a period of 60 (sixty) days; and (ii) in the event the prices had already been increased by the Pay TV operators, the latter would have to restore and maintain the same prices as the ones corresponding to November 2009, for a period of 60 (sixty) days.

The Antitrust Commission also ordered AACTV and CCI to refrain from practicing acts in order to organize and/or facilitate any of the forbidden conducts set out by the Antitrust Law.  The Resolution was notified to the Pay TV operators, AACTV and CCI (both entities were obliged to notify the Resolution to all of its members).

On February 2, 2010 the Antitrust Commission issued Resolution No. 13/2010 (the “Complementary Resolution”) to implement the prior resolution.
 
2. Background

On January 19, 2010, the Antitrust Commission initiated an investigation of the Pay TV market, based on certain newspaper stories released in Argentina. Those newspaper stories reflected, as explained by the Antitrust Commission, the simultaneous raise of prices in the sector, as well as the performance of collusive activities by the principal operators and entities of this industry.

The Antitrust Commission was of the opinion that the above mentioned facts proved the existence of collusive activities, performed by the principal operators and entities of the industry, in order to jointly raise the fees in the Pay TV market.

In order to prevent the harm that said coordinated practices would have over consumers, the Antitrust Commission decided to investigate the conducts performed by the principal operators of this industry involved in the alleged practices.

Pursuant to Section 35 of the Antitrust Law, the Antitrust Commission is entitled to issue, during the course of an investigation, preventive measures establishing the compliance of certain conditions or ordering the cease of an anticompetitive behaviour, when said conduct has the potentiality to damage competition. The Antitrust Commission considered that in this case the requirements to issue a preventive measure pursuant to Section 35 of the Antitrust Law were duly evidenced.

In order to guarantee the compliance of the preventive measure, the Antitrust Commission also ordered to notify the Resolution to the members of AACTV and CCI.

On February 2, 2010 the Antitrust Commission issued the Complementary Resolution by means of which ordered the principal operators of the industry that in the event they had already received the payments of the increased prices after being notified of the Resolution, they would have to return to consumers the increase in the fee that had been charged to them. The Antitrust Commission established the method of payment of such amounts (either by discounts or credit notes on the March and April 2010 invoices). Again the Antitrust Commission ordered AACTV and CCI to notify the Complementary Resolution to all of its members.

On February 19, 2010, the Court of Appeals suspended the effects of said resolutions considering that: (i) the Antitrust Commission is not empowered to issue preventive measures pursuant to Section 35 of the Antitrust Law; and (ii) the decision of the Antitrust Commission is based only in media reports and press releases. 

3. Conclusion

This preventive measure evidences that the Antitrust Commission is vigorously implementing the provisions of the Antitrust Law in order to prevent any possible anticompetitive behaviour. It also shows that the Antitrust Commission is closely assessing the competitive conditions in the Pay TV market.

The decision of the Court of Appeals establishes that it would not be sufficient to solely base the issuance of a preventive measure over newspapers articles that informed about the raise of prices in an industry.  Additionally, it confirms that the Court of Appeals understands that the Antitrust Commission is not empowered to issue these types of preventive measures.