25.11.2020

The Radio Group wins with Schalast at the Federal Court of Justice against RMS Radio Marketing Service, the largest German marketer of radio time

On 24 November 2020, the Cartel Senate of the Federal Supreme Court held oral proceedings on the appeal of two local radio stations Radio Cottbus and Radio Brandenburg, marketed by Schalast client The Radio Group. The subject of the proceedings, which have been ongoing since 2011, is a lawsuit filed by the two radio stations, which feel discriminated against and obstructed under cartel law, against the market leader in the marketing of radio advertising time, RMS Radio Marketing Service. The Schalast clients won the case before the Hamburg Regional Court before the Hanseatic Higher Regional Court of Hamburg overturned this decision. The Cartel Senate of the Federal Court of Justice has now overturned this appeal decision in its essential parts and referred the case back to Hamburg for renegotiation.

The parties: The Radio Group and RMS

The two local radio stations marketed by The Radio Group had already filed a lawsuit against RMS Radio Marketing Service with the Hamburg Regional Court in 2011. The Radio Group was founded in 2001 and consists of 17 radio stations. It is the market leader in several of its broadcasting areas. The defendant RMS is the largest provider of advertising time for private radio stations from all over Germany. Together with the ARD subsidiary AS&S, which is the leading marketer for public service radio stations, it has market shares above 95%.

RMS refused to market the complaining stations of The Radio Group. In our view, this market-separating behaviour by RMS is not in line with the requirements of cartel law and the requirements of the German constitution regarding the freedom of broadcasting.

Legal dispute over marketing in progress since 2011

At the first instance, the Regional Court of Hamburg granted the two radio stations a claim to be included in the marketing. The Hanseatic Higher Regional Court, however, rejected such a claim against the RMS in the second instance and, moreover, did not allow an appeal. The two radio stations, together with Prof. Dr. Matthias Siegmann, attorney at the Federal Court of Justice, and Schalast, defended themselves against this and filed an appeal against denial of leave to appeal with the Federal Court of Justice on 7 March 2019. By decision of 14 July 2020, the Cartel Senate of the Federal Court of Justice allowed the appeal against the main part of the ruling of the Hanseatic Higher Regional Court and heard the appeal orally on 24 November 2020.

The hearing was attended not only by representatives of the two local radio stations and the RMS but also by representatives of the Bundeskartellamt.

BGH and Bundeskartellamt express concerns about marketing criteria

In the course of the oral hearing, the Federal Court of Justice expressed considerable doubts as to the correctness of the appeal judgment. At several points, the Hanseatic Higher Regional Court had reached a conclusion which did not support the findings it had made. In this context, the Cartel Senate also expressed concerns about the criteria applied by the RMS according to which new broadcasters are admitted to marketing. The Cartel Senate was supported in its assessment by representatives of the Bundeskartellamt. Their statements were even clearer than those of the Cartel Senate. Mr. Nothdurft of the Bundeskartellamt expressed serious concerns about the admissibility of some of the criteria used and their non-discriminatory handling by the RMS.

Accordingly, the Federal Court of Justice then also concluded that the judgment of the Hanseatic Higher Regional Court was wrong in law on several points. It therefore set aside the judgment in its essential parts and referred the case back to the Hanseatic Higher Regional Court for a fresh decision.

Legal Represantatives:

Lokal-Radio Cottbus GmbH, Brandenburger Lokalradios GmbH: Prof. Dr. Matthias Siegmann (lawyer at the Federal Court of Justice), Karlsruhe; and Prof. Dr. Andreas Walter, LL.M. (Partner, lead partner), Ramón Glaßl (Partner; cartel law), both SCHALAST Rechtsanwälte Notare, Frankfurt am Main.

RMS Radio Marketing Service GmbH & Co. KG and others: Dr Thomas Winter (lawyer at the Federal Court of Justice), Rohnke Winter, Karlsruhe; and Dr Moritz Holm-Hadulla, Gleiss Lutz, Stuttgart.

Federal Cartel Office: Dr Jörg Nothdurft, Federal Cartel Office, Bonn.