AGB appeals competition office's decision to dismiss OBOP case

The UOKiK in mid-January threw out AGB's complaint that affiliated research companies OBOP and Taylor Nelson were blocking competition in the market by combining their media and consumer research. The two companies are combining OBOP's market research which measures viewer share and listener share results for television and radio stations with Taylor Nelson's reports on press readership and consumer behavior.
AGB contends it is virtually impossible to compete against the package, which reportedly sells for $30,000. AGB said it has already lost one client, advertising agency DMB&B - although so far that is the only one.
"Fortunately we did not lose any major clients yet, except for DMB&B," said Ellbieta Gorajewska-Mieciek, general manager of AGB Polska. "But I don't know what will happen at the end of this year."
AGB, which sells the results of its television viewership surveys to most major advertising agencies and stations, has one large hole in its client list, Telewizja Polska (TVP). The public broadcaster, which owns 40% of OBOP, uses that outfit to calculate the viewer share of its two major stations, TVP1 and TVP2. Media sources credited that contract, which is estimated to be worth $2.5 million, with subsidizing the low price of the OBOP and Taylor Nelson Sofres multimedia-package.
In its ruling last month, the UOKiK said that AGB needed to provide more evidence that the price structure of OBOP's multimedia offerings is actually influenced by the TVP contract. But AGB contends that the UOKiK is the only body that has the jurisdiction to actually look at the numbers, and the corresponding paperwork, to see if the claim is correct.
"Such contracts are classified," AGB's Gorajewska-Mieciek said. "I neither can nor want to look at them. But the (UOKiK) can."
But the UOKiK did not find enough evidence to support AGB's claim. The office ruled that OBOP's package was compiled from research conducted on a regular basis by the two companies and therefore did not constitute a monopolistic practice.
The package is "created as a result of contracted media research services," the UOKiK stated in its ruling. "Acting on the basis of agreement given by and knowledge of the contractors of the research, Taylor Nelson and OBOP sell the information included in existing databases to other clients, at the cost of sales."
The policy of charging lower prices than the competition is acceptable in principle. (Having) a leading position as far as total costs go that allow (a company to charge) lower prices than the competition is indeed one of the commonly used competing strategies," the ruling concluded.
"We are appealing," responded Gorajewska-Mieciek. "I will never agree with such a decision."
Cold shoulder
It looks like UOKiK will keep itself busy these coming weeks.
AGB is not the only company upset with its competition. According to some industry sources the country's digital television Wizja TV, operated by @Entertainment, is considering filing a complaint against public broadcaster Telewizja Polska (TVP) and private Polsat because the two stations are reportedly refusing to run Wizja's advertisements.
Wizja officials refused to comment on the issue last week.
Both TVP and Polsat are involved in creating the second digital platform here called Cyfra+. Canal+ Polska and the Polish companies working on the platform have not registered their consortium yet, but that hasn't kept Cyfra from airing for more than two months, carrying both TVP and Polsat as well as a variety of other Polish and foreign channels.
TVP officials said last week that the station indeed blocked Wizja's spots. But the reason, it said, has nothing to do with unfair competition or the ongoing dispute between Cyfra and Wizja, "nor with the monopolistic practices we are being accused of," Pawel Sosnowski, the head of TVP's information bureau, said last week.
TVP claims that the only reason it has refused to sign an advertising placement contract with Wizja is because it is unsure that the digital platform is operating legally here, Sosnowski said. It is an issue the National Radio and Television Council (KRRiTV) has also debated.
Wizja beams its multi-channel digital package using an U.K.-based uplink and operates in accordance with the guidelines of the Trans-Border Television Convention ratified by Poland a few years ago.
Also Polsat television said last week it did not sign any contract with Wizja for this year.
"We did show Wizja's spots last spring and then during fall when it was being launched," said Andrzej Muszynski, head of Polsat's advertising division. "But then we told them it could be the case that we won't sign any new deals and that indeed was the case. It was a decision made by the station's management and I'm not the one to discuss it."
Dwindling cash
Standard & Poor's said Jan. 18 it has put two of its ratings for Central European Media Enterprises (CME) on "credit watch with negative implications." The agency said it might lower its "B+" corporate credit rating and "B" senior unsecured debt rating as a result of the media group's "dwindling cash balances."
The agency said that the ratings could be lowered within the next month if operating cash outflows are not stemmed and further sources of liquidity are not achieved.
Only a month ago the group sold its stake in Poland's private television station tvn to its partner in the venture, ITI Holdings. The deal calls for CME to receive $10 million in cash and $40 million in the form of three-year notes convertible into ITI shares.
CME and ITI separated ways because they disagreed on how to run fledgling tvn. CME, which now operates six regional television stations, is trying to raise more money by selling a 9.6% stake in itself to a mobile telephone network in Romania called MobilRom.