TV advertising blocker Fernsehfee permissible

Television advertising is perceived as disruptive by many viewers. The defendant therefore manufactured and distributed a set-top device intended for television or video recorder, known as "Fernsehfee", which automatically switched to an advertisement-free channel during advertising breaks. The plaintiff, a German private broadcaster, regarded this as anti-competitive conduct by the defendant and filed a lawsuit, which was finally decided in 2004 by the Federal Court of Justice (BGH) in a landmark decision.

The plaintiff demanded that the defendant cease the manufacture, distribution and promotion of the product and refrain from broadcasting or causing to be broadcast command signals that block the plaintiff's advertising breaks. Furthermore, the plaintiff claimed a violation of its fundamental right to broadcasting freedom. The defendant, in turn, disputed the existence of a competitive relationship necessary for an injunction claim, arguing that it operated in a different industry and at a different level of the economy than the plaintiff. The plaintiff was also not impeded in its economic activity, as viewers could still decide for themselves whether they wished to watch advertising or not. Finally, the plaintiff's press freedom was not infringed, as it merely protected against state interference.

Court decision

The Federal Court of Justice (BGH) (Judgment of 24.06.2004, Az.: I ZR 26/02 – Fernsehfee) found that the defendant's conduct was not anti-competitive and consequently denied the injunction claim.

First, the Federal Court of Justice (BGH) established that the plaintiff and the defendant were in a concrete competitive relationship. For this purpose, it was not necessary for them to operate in the same industry; rather, it was sufficient that the parties had entered into competition through an action. The plaintiff offered advertising space for a fee. This was its source of financing. It also offered viewers the free opportunity to watch its programme. The defendant likewise directed its services at television viewers who wished to avoid advertising and wanted to watch a different, advertisement-free channel during advertising breaks. By circumventing advertising breaks, the attractiveness of the television channel to advertisers was reduced, as they sought high viewer reach. This created a concrete competitive relationship.

However, the Federal Court of Justice (BGH) found no anti-competitive conduct on the part of the defendant. Anti-competitive impediment presupposed that a competitor's competitive opportunities were impaired. This could relate to sales, acquisition, advertising, production, financing or personnel. There was, however, no direct impediment, as the defendant did not directly influence broadcast content and advertising. The use of the set-top device was left to the viewers.

The court also rejected any indirect impairment, since the Fernsehfee did not prevent the plaintiff from bringing its service to market in an appropriate manner. While the Fernsehfee offering was not in line with the plaintiff's interests, this was not sufficient to constitute anti-competitive conduct. For this, it was additionally necessary that the defendant did not employ unfair competitive means. While impairment of a competitor's advertising could constitute unfair obstruction, this would require an impairment of advertising effectiveness. In the present case, however, the relevant advertising would only fail to reach those viewers who had consciously decided not to watch advertising in the first place.

General market obstruction was ruled out having regard to the fundamental rights positions of both parties and the interests of the general public, since while the Fernsehfee made the defendant's business activities more difficult, it did not pose an existential threat.

Furthermore, the plaintiff was not violated in its broadcasting freedom. This offered no claim to undisturbed business operations, nor any protection of legal status through the granting of civil law claims. Media companies too must face the challenges of the market.

Conclusion

A competitive relationship can arise from a concrete action and does not presuppose that the parties operate in the same economic sector. Not every conduct that is capable of reducing the revenues of another enterprise necessarily constitutes anti-competitive conduct.