Competition Council investigates possible abuse on TV services market

The Competition Council in Romania has started an investigation into a possible abuse of dominant position on the market of TV services, according to data in a report of the institution.

“The Competition Council is now carrying out a competition investigation (a possible abuse of dominant position) on the market of broadcasting audio-visual services,” says the report.

The report does not comprise information regarding the companies that are being investigated. However, it mentions that “even though the total number of operators on the market is still high, the degree of concentration of the market also maintains at a very high level, which is due to the fact that the first three operators on the market, RCS&RDS, Romtelecom and UPC hold a cumulated market share of over 90 percent at national level.”

Also, the report does not provide details on the complaints that led to the investigation, saying only that “there is a relatively high incidence of petitions made by consumers on the market of cable television services, even though this number decreased in 2011 compared to the previous year. According to the 2010 activity report of the National Authority of Consumer Protection, cable television services of rank on the 4^th place in the top of the most criticized markets.”

The report also provides an analysis of the evolution of the market of TV services.

“Although initially there were in Romania various small/medium sized players, later there was a drop in their number, once the companies with significant market share increased in size. This evolution is mainly due to the economy of scale of the technology in this industry, which triggers the decrease in the average unitary cost, with the growth in the number of subscribers. For this reason, most small-sized companies could not deal with the competition pressure from large companies which can exploit the economy of scale and the network effect. “

Otilia Haraga