It was a mixed day yesterday for German media giant Kirch which saw its pact with BSkyB waved through by Europe's competition authorities, albeit with significant conditions attached. It lost the latest round in its battle with Universal over film channels, but cemented its alliance with Italy's Mediaset by giving their deal a permanent new name.

UK satellite TV operator BSkyB was given the green light to buy into KirchPayTV. But the European Commission (EC) imposed conditions that require the two companies to open up their pay-TV and interactive platforms.

News Corp-controlled BSkyB agreed in January to pay $1.4bn (DM2.9bn) for a 24% stake in the division of giant Kirch Medien that comprises the merged DF1 and Premiere digital pay-TV operations.

Although the EC is understood to have been encouraged by the AOL-Time Warner merger of the need for European companies to build pan-European operations, it was concerned about strengthening Kirch's already dominant position in the German pay-TV market.

In a statement the commission said: "BSkyB is not likely to enter the pay-TV market in Germany in the short to medium term. However, the proposed operation would have strengthened KirchPayTV's dominant position in that market. KirchPayTV 's position benefits from an influx of financial resources and access to BSkyB's marketing and distribution know-how, which reinforces the existing high barriers to entry."

The commission was concerned that as pay-TV is expected to drive use of interactive services, Kirch's d-box set-top decoder could become the standard device for accessing for interactive services as it already is in pay-TV.

It therefore forced Kirch to agree two conditions; to open its pay-TV platform to competitive services and to make available its conditional access technology.

In a statement, the commission said:

  • "The first [condition] will enable providers of digital interactive television services to establish their own technical platform and to compete with Kirch by giving them access to Kirch's pay-TV services. It will also be possible to manufacture decoder boxes using Kirch's conditional access system in combination with other conditional access systems."
  • "The second set of undertakings will enable providers of digital interactive services to run their services more easily on Kirch's technical platform. This is done via both the implementation of the DVB Multimedia Home Platform (MHP) which will enable operators to develop interactive applications for Kirch's d-box, and a commitment facilitating the negotiation of Simulcrypt arrangements."

    • Meanwhile, a Berlin court issued an injunction preventing Kirch from publishing the results of a survey about the popularity of Universal's channels with pay-TV subscribers. Kirch and Universal are currently suing each other over the value of Universal's output deal with Kirch.

    In addition, the film buying and producing alliance hatched a year ago between Kirch and Mediaset is to be renamed Epsilon Media Group. The alliance had previously been dubbed Eureka and prior to that Traviata. Kirch's powerful BetaFilm production outfit will attend next month's MIP-TV market as a division of Epsilon.