UK competition watchdog has launched an investigation into BT’s 50:50 joint venture with US media giant Warner Bros Discovery.
BT announced the deal earlier this month alongside its latest financial results, and the move will bring together BT Sports and Eurosport under one umbrella in the UK and Ireland.
The Competition and Markets Authority (CMA) said this morning that it had until July 28 to make its phase one decision as to whether the joint venture between the two companies will result in lesser competition in the UK.
While BT Sport and Eurosport will continue to operate as two separate brands, it is understood the two will be brought together under one single entity in the future, with BT eventually being bought out by the US giant.
The key question for the CMA is whether combining the biggest broadband and mobile provider in the UK and the American powerhouse will reduce competition, and put rivals such as Sky Sports at an unfair disadvantage.
Commenting on today’s announcement, a BT spokesperson told City A.M.: “The CMA routinely looks at any proposed joint venture of this sort, so this is a normal part of the process”.
Indeed, the CMA has cracked down on a number of transatlantic mega-deals in recent years, as well as Big Tech mergers.
Earlier this year, Facebook’s parent firm Meta started its appeal against the UK’s decision to block its tie-up with Giphy for $315m (£249m).
The watchdog made the initial order for Meta to unwind the deal last year, following the social media giant’s initial acquisition in May 2020. The CMA also ordered Meta to pay £1.5m in fines for breaching regulatory rules.
The main rationale behind the watchdog’s decision was that the combination removed competition in the display advertising space and warning Meta’s ownership could lead to the restriction of GIFs for competitors.
Meanwhile Meta’s argument was that rival Snap offered far less to buy the animated-images provider, undermining the notion that Giphy was a dominating industry force.
For Zuckerberg’s lawyers, Snap’s low valuation indicated that, like Meta, Snap believed Giphy’s ads business did not have real potential, which could be limiting competition in the market if combined with Facebook.