By a preliminary decision issued on 16 August 2013, the UK Competition Commission (CC) confirmed that the British Broadcasting Corporation (BBC) is not allowed to promote on its TV channels magazines for which the public service broadcaster receives sales-related income.
The CC’s decision was delivered following the review of the undertakings offered by the BBC in 1992 regarding magazines promotion. At that time the Monopolies and Mergers Commission (MMC) found that BBC’s publicity for magazines such as Gardeners’ World, by trails and in-programme mentions, was capable of distorting competition in the consumers magazines market. To overcome the MMC’s concerns, the BBC offered the undertakings consisting in stopping the TV promotions unless they were still trails at the end of a programme with a single speaking voice.
From that moment two significant changes of circumstances have occurred, thus requesting the CC’s intervention in view of determining whether the undertakings should be varied or superseded: in 2011 a private equity found acquired the whole of the BBC consumer magazine business except for the rights to publish a limited number (17) of consumer magazines titles (still published by BBC Worldwide that is the “commercial arm” of BBC); moreover, from 1992 the total audience of BBC TV channels drop of around 10%, from 43.3% in 1992 (for BBC1 and BBC2) to 33% in 2011 (considering all BBC TV channels at that moment available).
In confirming the undertakings, the CC considered that the BBC still receives sales-related income in relation to the 17 magazines titles still published by the public service broadcaster, which consequently retains the incentive to maximize their circulation. On the other hand BBC total audience as well as the relative popularity by genre of its programmes are still considerable and provide the BBC with the ability to significantly distort competition in the consumers magazines market.
It is worth noting that in the review procedure the CC took into account also the Competitive Impact Principle (CIP) established by the BBC Fair Trading Guidelines, which requires BBC to endeavour to minimize its negative competitive impacts on the wider markets when carrying out its public service activities. The CIP appears to be consistent with the rule embodied in Article 106(2) of the Treaty on the Functioning of the European Union, which allows EU public service broadcasters (as well as any other EU company undertaking a service of general economic interest) to derogate from competition rules insofar as this is strictly necessary for the fulfilment of the public service mission.
The full text of the CC decision is available here