Regina v Independent Television Commission, Ex parte TV Danmark 1 Ltd

The case concerned the interpretation and application of Article 3a(3) of Council Directive 89/552/EEC as amended by Directive 97/36/EC and the operation of Part IV of the Broadcasting Act 1996 (in particular sections 97, 98, 99, 101 and 104) as implemented by regulations inserting section 101B. The House of Lords held that member states must ensure that broadcasters under their jurisdiction do not exercise exclusive rights so as to deprive a substantial proportion of the public in another member state of the possibility of following a designated event, and that the national regulator (the Independent Television Commission) must exercise its discretion under section 101B to secure the result required by Article 3a(3).

The ITC was entitled to have regard to circumstances both at acquisition and after acquisition of exclusive rights, including whether the broadcaster was willing to offer or make arrangements to share rights with qualifying public broadcasters in the other member state and the regulatory arrangements in that other state (in this case Denmark). The ITC code did not create a binding legitimate expectation that consent would be granted simply because rights had been acquired in a fair auction at a market price.

This was an appeal from the Court of Appeal concerning the Independent Television Commission's refusal to grant consent under newly inserted section 101B of the Broadcasting Act 1996 (as effected by the Television Broadcasting Regulations 2000) to TV Danmark 1 Limited to exercise exclusive rights to televise five Denmark away qualifying World Cup matches. Those matches were designated events under Danish law and protected by Article 3a of the Television Without Frontiers Directive (Directive 89/552/EEC as amended by Directive 97/36/EC).

Background and parties:

• TV Danmark 1 (TVD), a UK-based broadcaster transmitting to Denmark, acquired exclusive rights by contract with UFA Sports to broadcast five qualifying matches.
• Under Danish rules, the public broadcasters (DR and TV2) enjoy protection for designated events; coverage of 90% was required under Danish law to avoid depriving a substantial proportion of the public.
• The ITC refused consent under section 101B, concluding that TVD had not given competing Danish public broadcasters a genuine opportunity to acquire the rights on fair and reasonable terms and that permitting exclusive exercise would breach Article 3a(3).

Procedural history: The application for judicial review was dismissed by a deputy High Court judge (Mr Jack Beatson QC). The Court of Appeal reversed that decision ([2001] 1 WLR 74), holding that the domestic scheme focused on fairness of acquisition and did not permit consideration of post-acquisition matters. The ITC appealed to the House of Lords.

Issues for decision:

• Whether Article 3a(3) required national regulators to assess the exercise of exclusive rights at the point of exercise and to take account of post-acquisition arrangements;
• Whether the ITC's code and practice, read as implementing section 101 and 101B, limited the ITC to considering only acquisition procedures (a fair auction) and whether that gave rise to a legitimate expectation of consent;
• How much regard the ITC should give to the regulatory arrangements and decisions of the other member state (Denmark) when assessing compliance with Article 3a(3).

Reasoning and conclusion: The House of Lords (majority speeches delivered by Lord Hoffmann, with concurrences from other members) held that Article 3a(3) required member states to secure the substantive result that exclusive broadcasting rights are not exercised so as to deprive a substantial proportion of the public in another member state of the possibility of following a designated event. That obligation was not qualified by free-market or competition considerations in the recitals. The ITC's discretion under section 101B must therefore be exercised to achieve the Directive's result and it could properly take into account post-acquisition conduct and the regulatory mechanisms of the other member state, including whether a non-qualifying broadcaster had refused to offer non-exclusive arrangements on reasonable terms. The ITC code did not create a binding legitimate expectation that consent would be given merely because rights were acquired in a fair auction. The House of Lords allowed the ITC's appeal and dismissed TVD's application for judicial review.

Appeal allowed. The House of Lords held that Article 3a(3) of the Television Without Frontiers Directive requires member states to ensure that exclusive broadcasting rights are not exercised so as to deprive a substantial proportion of the public in another member state of the possibility of following a designated event. The ITC, exercising its discretion under section 101B, was entitled to consider both how rights were acquired and post-acquisition arrangements, including whether the broadcaster would make sharing arrangements and the regulatory framework of the other member state. The ITC's refusal of consent was lawful and the code did not give TV Danmark a legitimate expectation of consent based solely on a fair auction.

Judicial review heard at first instance before Mr Jack Beatson QC (deputy High Court judge), who rejected the challenge. The Court of Appeal (Kennedy, Waller and Jonathan Parker LJJ) reversed that decision ([2001] 1 WLR 74). The Independent Television Commission appealed to the House of Lords which allowed the appeal ([2001] UKHL 42) and dismissed TV Danmark's application for judicial review.