Axel Springer and ProSiebenSat.1 achieve a media law precedent-setting judgment with Hogan Lovells
16 February 2012
In a decision announced on February 15, the Bavarian Higher Administrative Court (BayVGH) overruled a 2006 decision by the German media ownership commission (KEK) to block the proposed acquisition of ProSiebenSat.1 Media AG by Axel Springer AG, holding that the KEK veto was unlawful. The right to further appeals was not granted. Hogan Lovells clients Axel Springer and ProSiebenSat.1 have thereby achieved a landmark decision in German media ownership law. Eckhard Bremer (Partner, TMT, Berlin) acted for Axel Springer, and Andreas Grünwald (Partner, TMT, Berlin) acted for ProSiebenSat.1.
In 2005/2006, Axel Springer, Europe's largest publishing house, had intended to acquire ProSiebenSat.1, Germany's leading commercial broadcaster, in what would have been the largest media merger in German history. However, the KEK as well as the German Federal Cartel Office (FCO) had blocked the merger. Axel Springer had appealed against both vetoes. In the antitrust dispute, the Federal Supreme Court confirmed the FCO's view in June 2010. With respect to the KEK prohibition, the Administrative Court of Munich ruled that the complaint was permissible, but rejected it as being unfounded. The BayVGH then rejected the claim as unacceptable due to an alleged lack of a legitimate interest in a declaratory judgment. The Federal Administrative Court in turn did not share this view in November 2010. It overruled the BayVGH's decision and referred the matter back to them for renewed negotiations and decision. With the judgment handed down today, the BayVGH has now confirmed the view of Axel Springer and ProSiebenSat.1 that the KEK decision was unlawful.
Since the founding of KEK in 1996, this is the first time ever that one of its decisions was the subject of judicial review. For that reason alone, today's judgment is a landmark decision for the interpretation of German media ownership law. In the opinion of the judges, the KEK exceeded its powers in several ways when blocking the proposed merger. In particular, it should not have considered Axel Springer's activities in other media markets but should only have focused on ProSiebenSat.1's television audience share. This, however, was below the statutory thresholds for the KEK to assume an illegitimate "predominant power of opinion".
Hogan Lovells Team:
Counsel to Axel Springer AG:
Eckhard Bremer (Partner, TMT, Berlin)
Counsel to ProSiebenSat.1 Media AG:
Andreas Grünwald (Partner, TMT, Berlin)