Tuesday, October 20, 2009

On EPL and fair competitive practices

Earlier this month, SingTel snatched from StarHub the exclusive right to broadcast the English Premier League (“EPL”) matches in Singapore for the next three years. It did this by significantly outbidding the incumbent StarHub for the right.

EPL fans in Singapore quickly raised concerns as to whether the costs of watching EPL match telecasts would increase (such as, whether there will be additional costs in subscribing to a new provider, whether there will be additional costs in obtaining a new set-top box, and whether the pay-tv costs of subscribing for an EPL channel would go up in order for SingTel to recoup its bid cost). Several opinions were ventured on whether the government should step in to control pay-tv prices in this respect, and not a few expressed scepticism regarding SingTel’s assurances that the prices would not go higher than what subscribers are currently paying for EPL match telecasts via StarHub.

Objectively, EPL match telecasts are considered a luxury good rather than an essential need. Matters concerning the supply of such non-essential goods should generally be left to a free market to determine, and the government should not be unnecessarily concerned.

However, where an issue of unfair competition or abuse of monopoly power arises, the government should intervene to protect consumer interests (even for non-essential goods) as a matter of public policy. In this regard, the Competition Commission of Singapore (“CSS”) has been charged to ensure fair competitive practices in the Singapore markets and to safeguard consumer interests, in accordance with the Competition Act.

In the present EPL case, some competition issues which may merit consideration are:
  • If there are no meaningful substitute products for EPL matches, is it fair to allow multiple companies to bid for a single, exclusive distribution right to broadcast EPL matches?

  • If a person places an extraordinary bid to win exclusive EPL broadcast rights, and then subsequently uses its monopoly position to increase subscription prices in order to recoup its high bid cost and make profits, would such conduct amount to anti-competitive practices and an abuse of its monopoly power?
Incredibly, the government has prohibited the CCS from reviewing competition issues in the media sector, and hence the CCS cannot investigate any potential anti-competitive practices or monopoly abuses involving SingTel’s bid for the EPL match telecasts.

Why is there such a blanket prohibition, and is it justified? It may be conjectured that the original purpose behind the prohibition was to allow telcos, which are entrusted with the operation of services of general economic interest (i.e. services which are different from ordinary services in that public authorities consider they should be provided in all cases, whether or not there is sufficient economic incentive for the private sector to do so), to perform the task entrusted to them in economically unacceptable conditions.

However, can pay-tv (a luxury good) genuinely be considered as a service of general economic interest? Moreover, do pay-tv service providers indeed operate in economically unacceptable conditions in Singapore? The answers to these questions are likely, no. Given that the telcos in Singapore have long since been successfully privatised and ceased to be statutory boards, there does not seem to be any good reason as to why the CCS should not be given jurisdiction over the telcos (just as with any other company in Singapore) to prevent unfair competition and the abuse of dominant power. Conversely, it would likely be for the greater good of Singapore if the government were to rectify the laws to allow the CCS to look into competition issues in the media sector.


  1. For the pay TV segment (media-related), we have the MDA...

    But a fat lot of good the MDA is doing for "competition" in this area...sheesh

  2. It is true that the MDA has taken on the review role, but given the CCS's expertise in competition issues, the CCS is the ideal government authority to investigate the EPL matter, and it may be better (more efficient and transparent) to let the CCS do it? The MDA can always give its input (if any) to the CCS so that it may consider the issues in totality.

  3. Your conjecture is wrong. The principle was that CCS should leave aside the sectors that are already subject to another regulator's overview.

    Addressing your example, telcos have been regulated by IDA and its predecessor TAS. IDA has been enforcing anti-competitive behaviour in telecoms way before CCS was formed - such as prohibiting the dominant operator from bundling for a certain number of years, from predatory pricing, etc.

  4. There are substitute products for EPL. EPL is not a basic necessity. Viewers who want EPL must pay the high fees that the Premier League is trying to earn.