On August 4 2015 – and in the context of a Phase 1 procedure – the Competition Authority's Competition College conditionally approved De Persgroep's acquisition of control of a number of popular Belgian Dutch-language magazines (Story, Teve-blad, Vitaya and Humo). De Persgroep is a major Belgian media group which publishes newspapers and magazines and has significant interests in radio, television and online services. The four magazines had been put up for sale by Finnish media group Sanoma in the context of a strategic reorganisation of its Belgian media activities. The concentration must be seen in the context of a shrinking market for print magazines in terms of readers and advertising revenue. De Persgroep appeared to be the only credible buyer for the four magazines.
The investigation team made the traditional distinction between reader and advertising markets and found no concerns regarding the advertising market. However, the impact of the concentration on the reader market was significant. The investigation team opted to examine narrow product markets, such as the Belgian market for Dutch-language television and infotainment weekly magazines. The concentration had its main impact on that market. Pre-merger, De Persgroep's market share was already above the 50% threshold and it increased to more than 80% as a result of the concentration. In the market in question, only one other competing title would be left. The investigation team had concerns about media plurality, but also regarding the merger's potential impact on the only other competitor on the market.
An additional concern that the investigation team raised related to maintaining access to information about television programmes from the broadcast group that De Persgroep co-owns. This group is one of the major Belgian Dutch-language television broadcasters. The investigation team established that, post-merger, De Persgroep would have the ability and incentive to limit access to relevant information at the expense of competing publishers.
The Competition College left the issue of market definition open, but it endorsed the competition concerns that the investigation team raised. However, the college noted that in the absence of the merger, there would be a real risk that the four magazines would disappear. It also considered that the survival chances of the magazines would be significantly higher post-merger when compared with a scenario in which they remained in the hands of a publisher for which they would no longer be strategic. The college considered this sufficient grounds to accept high concentration levels.
However, the Competition College imposed a number of conditions on the merger. The first related to the media plurality concerns that the concentration raised. These conditions relate to the format and content of the four television magazines to be acquired by De Persgroep and are designed to maintain the diverse features of the different magazines. The conditions will apply for three years, as long as De Persgroep remains owner of the titles during that period. It must also ensure that the editorial content of the acquired magazines will not discriminate in favour of the broadcast group which De Persgroep co-owns. If De Persgroep decides to discontinue one or more of the television-related titles, it must offer them for sale on reasonable terms.
A second commitment relates to continued access to information regarding programmes on existing and future television channels controlled by De Persgroep. This commitment freezes the existing situation (ie, the existing terms and conditions relating to access to this information will remain unchanged) and will also apply for a three-year term. A monitoring trustee will be appointed to check compliance with these commitments.
Further, the investigation team also highlighted that the behaviour of the seller of the four magazines during the investigation could have amounted to obstruction. The investigators claimed that the alleged behaviour had had a negative impact on the investigation and invited the Competition College to impose a fine. However, in line with the approach taken in similar circumstances in the past, the college decided to look into the issue separately and opened a specific case.
This is another complex merger control case handled by the Competition Authority in the context of a Phase 1 decision. The college imposed remedies, but they are relatively light and will apply only for a short period. The case does not relate to a failing business, but the Competition College did base its clearance decision on a possible 'falling off a cliff' scenario, which could potentially occur in the absence of a merger.
For further information on this topic please contact Koen Platteau at Simmons & Simmons LLP by telephone (+32 2 542 0960) or email (email@example.com). The Simmons & Simmons LLP website can be accessed at www.simmons-simmons.com.
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