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EU Rejects Kirch-Bertelsmann Deal

May 27, 1998

BRUSSELS, Belgium (AP) _ The 20-member European Union Commission Wednesday unanimously rejected a proposed digital television venture between Germany’s Kirch Group and Bertelsmann AG.

EU Competition Commissioner Karel Van Miert said Bertelsmann rejected a compromise proposal that the Commission had worked out with Kirch and with Deutsche Telekom, which is also involved with the merger.

Furthermore, Van Miert said the Commission denied a request from Kirch for another day to try to reach a solution with Bertelsmann.

``We’ve got to ensure that the (digital TV) market remains an open market,″ Van Miert said.

While the official deadline for a decision on the venture was June 3, Van Miert said the Commission members did not see the point of delaying a decision because ``Bertelsmann clearly confirmed in writing this morning that there was no possibility″ of a compromise.

Van Miert said he took ``extraordinary steps″ in the past few days to try to resolve issues raised by the proposed venture. But he said a verbal proposal agreed by Kirch and Telekom was ``totally refused by Bertelsmann.″

The competition chief said the Commission only would have accepted a compromise that guaranteed the potential for future competition in the German digital TV market ``even if in the immediate period it could lead to a monopoly.″

Van Miert declined to speculate on how the decision might affect the development of digital TV in Germany and in the 15-nation EU.

``If the deal doesn’t go ahead, that opens up other possibilities,″ he said.

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