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Spanish watchdog extends pay TV restrictions on Telefónica

Spanish markets regulator the CNMC has extended restrictions placed on Telefónica related to its acquisition of pay TV operation DTS in 2015 by a further three years.

Telefónica is likely to appeal the ruling before the Spanish National Court, the Audencia Nacional.

The CNMC has extended to provisions for the maximum three years allowed, with the exception of those related to the exclusive acquisition of audiovisual rights for content other than sports for the Movistar+ SVOD service, where the regulator said that Telefónica’s market power had declined.

Telefónica will now be allowed to acquire exclusive SVOD rights in a market that is significantly more competitive, with multiple entrants having launched services.

Restrictions related to provision of access to its platform to third-party TV channels have been amended. While contracts in place due to expire within the three-year extension cannot be terminated by the operator, certain exceptions may be made, subject to arbitration.

The restrictions placed on Telefónica at the time of the acquisition fell into three categories: those related to the Spanish pay TV market, those related to the commercialisation of content and TV channels, and those concerning access to the operator’s internet infrastructure.

The CNMC has decided overall that risks to competition persist, with Telefónica continuing to exercise market power in pay TV and counting a growing number of subscribers that take pay TV services packaged with other offerings.

Telefónica will be forced to continue to make its premium pay TV services, including movies, series and live sports available top third-party operators at a regulated rate.

Rival operators will continue to be able to access 50% of the channels to make up Telefónica’s Movistar+ offering at a regulated rate.