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SSR-SRG Swisscom Ringier advertising joint venture: OFCOM and DETEC Decisions

posted on 13 April, 2016   (public)

SSR-SRG, Swisscom, Ringier advertising joint venture: OFCOM and DETEC Decisions

The Federal Department of the Environment, Transport, Energy and Communications (DETEC) and the Federal Office of Communications (OFCOM) have examined the SSR-SRG's participation in the advertising marketing joint venture with Swisscom and Ringier from the viewpoint of media legislation.

The new joint venture brings together three prominent media enterprises of Switzerland, the publishing company Ringier, the Swiss public service broadcaster SRG, which is the largest audiovisual enterprise of Switzerland, and national incumbent telecom provider Swisscom. In order to make their assessment, DETEC and OFCOM have sought the opinions of the main advertising and media associations and questioned the SSR-SRG in writing. One aim of the alliance is to facilitate the joint development of new advertising forms and technologies in Switzerland in order to strengthen the Swiss advertising market against globalised competition.

Two decisions were published on 29 February 2016: A decision by DETEC on the impact of the advertising alliance on the Swiss media landscape and a decision by OFCOM concerning targeted advertising.

  • In its decision pursuant to Art. 29 of the Swiss Radio and Television Act (RTVA), DETEC concludes that the participation of the SSR-SRG will not substantially restrict the development potential of the other media companies and that it does not jeopardize the implementation of the programme services mandate. While DETEC did not impose any formal conditions on the joint venture, reporting obligations by the SSR-SRG on a twice yearly basis have been introduced. OFCOM, in its capacity as the surveillance authority, will closely monitor future developments. If it should become evident that the SSR-SRG's participation in the joint venture was having significant effects on the provision of the SSR-SRG's services or on other media companies, DETEC could at any time enact a new procedure.
  • In its separate decision, OFCOM states that the current SSR-SRG licence does not allow the broadcasting of targeted advertising in its television programme services. Although the SSR-SRG can be a shareholder in the joint venture, owing to its current licence, it cannot currently insert this type of advertising into its programme services,  unlike private broadcasters. According to the regulator, before introducing this new form of advertising, an appropriate legal framework should be created. The advertising ban applicable to SSR-SRG for its online programmes remains unchanged. 

The decisions which were reached on 29 February 2016 effectively lift the ban on the SSR-SRG to participate in the joint venture, a ban imposed by OFCOM on a provisional basis on 16 December 2015.

The joint venture between the SSR-SRG, Ringier and Swisscom for the marketing of advertising had already received the go-ahead from the Competition Commission (COMCO). In its decision of 14 December 2015, COMCO considers it unlikely that effective competition in relation to advertising marketing will be jeopardised.

The new venture is being established in a rapidly developing media context in which foreign players (search engines, etc.) are capturing a growing share of advertising revenues. In 2014, the total advertising revenue in Switzerland rose to CHF 5 billion. Of this, online advertising was worth some CHF 720 million and television advertising revenues rose to CHF 772 million. Of this amount, the SSR-SRG's share was over 50%, compared to 40% for foreign advertising windows.

The announced partnership had provoked heated debates with Swiss private media operators and some Members of the Parliament who feared that the joint venture would create more market distortion in the media sector, as SRG and Swisscom mostly depend  on public funding.

Source: OFCOM Website