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

Article 3a(3) of Council Directive 89/552/EEC requires a member state to prevent broadcasters under its jurisdiction from exercising exclusive rights so that a substantial proportion of another member state's public cannot watch a designated event on free television. Competition and free-market considerations do not qualify that required result.

Consent under section 101B of the Broadcasting Act 1996 is not assured merely because rights were acquired through a fair auction at a reasonable market price. The regulator must consider whether the public can in fact watch the event and may consider post-acquisition conduct, the foreign regulatory system and whether qualifying broadcasters received a reasonable opportunity to acquire shared rights.

A United Kingdom broadcaster acquired exclusive rights to transmit Denmark's World Cup qualifying matches. Its service reached only about 60% of the Danish public, below Denmark's required coverage. The Independent Television Commission refused consent under section 101B of the Broadcasting Act 1996 because qualifying public broadcasters had not received a genuine opportunity to acquire non-exclusive rights on fair and reasonable terms.

A deputy High Court judge upheld that decision. The Court of Appeal, reported at [2001] 1 WLR 74, reversed it. The Court of Appeal held that the United Kingdom system regulated the acquisition of rights and that a fair auction gave the public the relevant possibility of watching the events.

The central questions were whether article 3a(3) of Council Directive 89/552/EEC permitted that approach, whether the Commission could consider events after acquisition, and whether its published code created a legitimate expectation that consent would follow a fair auction.

1. Appeal allowed unanimously. Lord Hoffmann delivered the leading speech. Lord Slynn, Lord Nolan, Lord Hutton and Lord Hobhouse agreed with his reasons. The House restored the Commission's decision and dismissed the application for judicial review.

2. Per Lord Hoffmann, article 3a(3) of Council Directive 89/552/EEC requires member states to prevent exclusive rights from being exercised so that a substantial proportion of another member state's public cannot follow a designated event on free television. That obligation is not qualified by competition, free-market economics or contractual interests. The Directive itself has already struck the relevant policy balance by limiting designation to events of major importance and requiring Commission scrutiny of national measures.

3. The required possibility is the practical possibility that a member of the public can watch the event by turning on an accessible television service. An opportunity for a public broadcaster to bid at a fair auction is not equivalent to that possibility. Section 101B of the Broadcasting Act 1996 therefore confers a discretion which the Commission must exercise to achieve the Directive's result.

4. The domestic code did not make the outcome of a fair auction conclusive. The Commission could assess what public broadcasters could reasonably pay and balance the interests of broadcasters, sports organisers and the public. Neither the code nor Part IV required consent for the highest bidder in an open competition. Nor did the code create a legitimate expectation that consent would be granted in those circumstances.

5. Both the domestic legislation and the Directive regulate the exercise of exclusive rights. The Commission could consider acquisition circumstances and later events, including whether the rights-holder offered to share the rights with qualifying broadcasters. It was not bound by the foreign regulator's decision, save that designation and the form of coverage were matters for the designating state. It could nevertheless give substantial weight to the approved Danish regulatory system and to the expertise of the Danish Competition Council. The Commission and the deputy High Court judge had therefore interpreted the scheme correctly.

1. House of Lords: Allowed the Independent Television Commission's appeal unanimously, reversed the Court of Appeal's order and dismissed the application for judicial review: [2001] UKHL 42.
2. Court of Appeal: Kennedy, Waller and Jonathan Parker LJJ reversed the deputy High Court judge and held that the Commission could not consider post-acquisition matters once rights had been obtained through a fair auction: [2001] 1 WLR 74.
3. High Court: Mr Jack Beatson QC, sitting as a deputy High Court judge, upheld the Commission's discretion to consider post-acquisition matters and rejected the legitimate-expectation ground.