Italy’s antitrust regulator said on Thursday it had opened an inquiry into a deal between sports streaming app DAZN and Telecom Italia (TIM) (TLIT.MI) on Serie A matches, saying it could affect competition.
Betting on soccer to promote its fast broadband and pay-TV services, TIM sealed a technical and distribution agreement with DAZN, which secured the rights to screen the matches of Italy’s top flight soccer league over the next three seasons for 2.5 billion euros ($2.95 billion).
Under the deal, TIM will cover more than 40% of the annual payments DAZN, owned by billionaire Len Blavatnik’s Access Industries, has to make to Serie A.
But the watchdog warned that some aspects of the accord “could lead to significant distortions of competition”, limiting competitive development in the pay-TV market and related businesses, including fixed retail, wholesale broadband services and mobile telecommunications.
The authority said it would assess whether some of the competition concerns might be alleviated by taking steps such as a potential suspension of clauses to limit DAZN’s ability to distribute its services on other platforms.
It said it could impose some precautionary measures if any “irreparable and serious damage” to competition emerge during the probe, which must be concluded by June 30, 2022.
TIM shares were down 3.1% at 1255 GMT compared with a 2.5% fall in Italy’s blue chip index (.FTMIB).
In a detailed response to the watchdog’s move, TIM said it was confident that after discussions with the authority all aspects of the case would be clarified.
It added the deal with DAZN was meant to boost “competition in the pay-TV market, the viewing of streaming content and to accelerate the country’s digitalisation process to the benefit of all customers and telecommunications operators”.
DAZN’s CEO for Italy and Spain, Veronica Diquattro, said during an event in Milan the company was confident it had behaved in a proper manner and had always acted in accordance with market rules.
Comcast-owned pay-TV operator SKY Italia (CMCSA.O), which launched its broadband service last year, and other TIM rivals had challenged the phone group deal with DAZN on antitrust grounds, saying it could strengthen TIM’s already dominant position in the broadband market.