Australian-Media.com.au News

• Seven loses C7 case

  July 27 2007 8:21am (UTC+8)  -  Article by Kevin

  The Seven Network have lost the C7 case against Australia's media organisations. In 2000, Seven launched what is considered to be the largest ever media lawsuit in Australia under the Trade Practices Act, naming Nine, Ten, Optus, Austar, the AFL, the NRL, Fox Sports, PBL and Telstra as defendants.
  
  Among Seven's claims:[list]
  [*]FOXTEL deliberately denied C7 access to Telstra's cable network and FOXTEL's STBs, in order to weaken C7's position when negotiating television deals with the AFL and NRL (which was against an earlier High Court ruling)
  [*]One or more of the named defendants acted illegally to collude in the marketplace and use their combined market power to prevent competition
  [*]FOXTEL's owners (Telstra, News Corporation and PBL) signed an agreement in late 1999 to ensure FOXTEL gained the AFL and NRL rights. (This replaced an earlier claim that News and PBL had agreed in 1996 not to compete with each other in the pay-TV market.)
  [*]Optus' deal to carry Fox Sports was a breach of an 'exclusive' contract it had with Seven for the provision of sports programming.
  [/list]Seven was claiming damages of up to $480 million, amended from the original claim of $1.1 billion. Soon after the case began the suits against Network Ten and the AFL were settled.
  
  Seven's claims were dismissed by Justice Ronald Sackville earlier this morning. He said the anti-competition case brought by Seven could not succeed because Seven had failed to establish the existence of a "wholesale pay television market" or the existence of an "AFL and NRL television rights market".
  
  However, Justice Sackville said that Seven did establish the existence of a retail pay TV market, but that wasn't enough. "I conclude that FOXTEL did not take advantage of its power in the retail pay television market in any of the ways alleged by Seven", he said.
  
  He continued, "In particular I find that Seven has not made out its pleaded case in relation to FOXTEL's refusal to accept so-called offers by Seven to supply its channels and FOXTEL by refusing to negotiate with C7 pending the award of the AFL broadcasting rights did not take advantage of its market power".
  
  "I conclude that Seven's case, based on the anti-competitive purpose of the various provisions, including the master agreement provision, cannot succeed".
  
  "The reason is that even if each of the consortium respondents had the objective attributed to it by Seven - that of killing C7 - achieving that objective could not have substantially lessened competition in the retail television market."
  
  UPDATE | As of 9:09am (WST), Seven Network shares have fallen 47 cents (4.12%) to $10.93.
  
  Australian-Media.com.au

Comments