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Industry changing too fast to punish Sky NZ

In New Zealand Sky Television have been let off with a warning, after being found to have likely breached section 27 of the Commerce Act.

The punishment was so light (to the point of non-existence) for the singular reason that the alleged breaches were “unlikely to have the effect of substantially lessening competition and are unlikely to cause harm in the future.”

In other words, the market place, at least in the opinion of the Commerce Commission who carried out the investigation, is simply moving too quickly for the “breaches” and any ensuing advantages to stick.

Sky was told by the commission that it would be “put on notice” (specifically concerning whether it was unfairly preventing partners from securing pay-TV content elsewhere) and would be watching future Sky contracts closely, but also assured that “no further action” would be taken for what had already occurred.

Perhaps unsurprisingly, Sky chief executive John Fellet welcomed the end of the investigation, and proclaimed himself “glad a robust decision-making process had taken place”.

Commission chairman Mark Berry said they considered the warning the “most efficient course of action to take”.

“We believe that Sky entered into historical agreements with RSPs that had the purpose, effect, or likely effect of substantially lessening competition,” he announced, citing the exemption Sky had granted Telecom to market English Premier League broadcasts provided by sports pay-TV company Coliseum. “However due to market developments, the key commitments Sky has with RSPs are unlikely to continue to have the same effect.”

He went on: “We reserve the right to draw the warning letter that has been sent to Sky to the attention of a court in any subsequent proceedings against Sky. A case like this could take several years to conclude, costing several million dollars and finish in an era that is likely to be vastly different to the one we lived in when this breach occurred.”

Such, we suppose, is the nature of this industry. (Luckily, some might say, for Sky!)

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