Date
21 January 2017
Hong Kong's broadcast regulator has dismissed complaints lodged by TVB against Cable TV over alleged anti-competitive conduct. Photos: HKEJ
Hong Kong's broadcast regulator has dismissed complaints lodged by TVB against Cable TV over alleged anti-competitive conduct. Photos: HKEJ

Why TVB’s legal team should do scriptwriting instead

It’s fairly well known that TVB has been suffering a ratings decline. Still, the company’s 2015 results, which showed a loss of HK$4.28 million from continuing operations against a net profit of HK$1.25 billion in the previous year, came as a surprise to many.

I believe Hong Kong’s top television broadcaster is very creative — at least, in certain aspects.

The Communications Authority (CA) recently turned down a complaint made by TVB against Cable TV over alleged anti-competitive conduct in 2010 and 2012.

TVB complained to the regulator in 2012 that Cable TV, after acquiring exclusive broadcasting rights to the 2010 FIFA World Cup and 2012 Olympic Games, had bundled the broadcasting rights to each of the two events with its own commentary, advertising, editing and other promotional content in its sub-licensing offer to TVB.

“Mandatory bundling” is not anti-competitive conduct. If that were the case, buying a car “bundled” with tires could have violated the Competition Law.

Anti-competitive conduct can only come from a company that has sufficient market power through which it can stifle rivals in the marketplace.

But CA noted in its statement that “it is unlikely for iCable to have been able to act to any appreciable extent independently of its rivals, either in the broad TV viewing market, or in the Pay TV viewing market, during the relevant period from 2010 to 2012.”

“The evidence examined does not seem to suggest that iCable could act to any appreciable extent independently of its rivals in the TV advertising market.”

Even if iCable has sufficient market power, will its “mandatory bundling” really have a negative impact on market competition?

The CA’s answer is this: “OFCA considers that the alleged conduct of iCable in 2010 had no substantial effect on competition.”

OFCA refers to the Office of the Communications Authority, the official name of Hong Kong’s regulator for communications and broadcasting sectors.

One of the goals of the city’s Competition Law is to help weaker players stand up against the giants. But TVB is seeking to distort the picture, as it tries to use the rules to beat the weaker competitors.

Given the creativity shown by its legal team, TVB could perhaps consider moving those people to its drama writers’ team. 

That might at least ensure that the company’s TV shows will become more popular.

This article appeared in the Hong Kong Economic Journal on March 29.

Translation by Myssie You

[Chinese version 中文版]

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MY/DY/RC

Assistant Professor at the Department of Economics, The Chinese University of Hong Kong

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