The Justice Ministry?s economic law department (Secretaria de Direito Econômico do Ministério da Justiça, SDE) received Tuesday, April 30, a report from the Finance Ministry?s economic surveillance department (Secretaria de Acompanhamento Econômico do Ministério da Fazenda, SEAE) on ESPN Fox, a joint venture of Globosat, ESPN and Fox, and Globosat?s acquisition of a 25% stake in ESPN Brazil. The SEAE report suggests permission for both deals to go ahead but recommends the following restrictions: (1) no programming resulting from the deals may be sold with exclusivity rights; (2) no discriminatory sales should be allowed, i.e. differentiated pricing or tied sales. It also recommends that CADE, the competition tribunal (Conselho Administrativo de Defesa Econômica, CADE), cancel exclusive rights to sporting events held by Globosat and ESPN Brazil and that the Justice Ministry, through SDE, investigate charges of unfair trading by Globosat and Net Brasil in the sphere of sports programming.
As a department of the Finance Ministry, SEAE is directly subordinated to Finance Minister Pedro Malan. Brazil?s antitrust legislation requires both SDE and SEAE to furnish CADE with documentary and judicial evidence, but SDE can undertake investigations of its own rather than merely ratifying SEAE?s reports. In sum, CADE won?t be ready to judge the cases involving Globosat, ESPN and Fox for some time.
SDE?s file on Globosat?s acquisition of ESPN Brazil dates from the end of 2000 and is numbered 08012.005864/2000-07. The joint-venture case is numbered 08012.005865/2000-43 and was filed at about the same time.
SEAE now has another mission: to produce a technical opinion on SDE?s proceedings against Globosat at the request of Neo TV, which complained about exclusivity for SporTV.