The Dutch competition regulator, theACM, has blocked a concentration between two of the biggest media companies in the Netherlands: Talpa Networks ("Talpa") and RTL Netherlands B.V. ("RTL"). RTL Group S.A. intended to acquire Talpa Network B.V. (the "Proposed Concentration"). The regulator believes that the Proposed Concentration would result in an impediment of effective competition as a result of the establishment of a dominant undertaking. Therefore, it decided not to grant a license for the Proposed Concentration
Talpa and RTL are, next to the Dutch public broadcaster NPO, two of the biggest TV and radio broadcasters in the Netherlands. Jointly, they would own eight national TV channels and four national radio stations.
The Dutch regulator announced the merger control notification of the Parties in October 2021. Following an extensive first phase investigation by the ACM, the regulator decided that an in-dept investigation (phase II) was necessary for the concentration due to concerns on the creation of dominance of the future company.
In its phase-I decision, the ACM voiced various concerns that required a more in-depth investigation. The ACM was concerned about higher prices (which in the end harm consumers) since the combination of the two biggest commercial broadcasters would result in the merged entity having an overly strong market position in negotiations with 1) advertisers for TV adds, 2) distributors of TV channels and 3) producers of TV shows. Other concerns related to the reduction of quality of TV shows due to producers investing less in their productions when the joint company would develop more productions in-house. See the full phase I-decision of the ACM here (in Dutch). See the English press release here.
It follows from the phase-I decision and various media reports that the market definition has been heavily debated between the parties and the ACM. Talpa and RTL argued for a broad market for adds including TV, radio, online and printed, while the ACM believes that the market for adds via the TV constitutes a distinct market with a unique audience. When the phase II-decision of the ACM is published, more information on the debate between the parties will become public.
In phase II, in which Talpa and RTL tried to obtain approval from the ACM by offering commitments, the concerns of the ACM and the questions around market definition were heavily discussed. The full decision is not published yet, but from the ACM's press release and various media reports it becomes clear that Talpa and RTL offered commitments which were subsequently tested with various market players such as advertisers and distributors of TV channels. In the end, the ACM reached the conclusion that the commitments offered by the parties were insufficient to remedy the competition law concerns. From news publications in mid-January, it seems that the commitments included the sale of a part of Talpa's add sales branch to Mediahouse. As the Proposed Concentration will not be effected, this transaction between Talpa and Mediahouse is also off the table.
The total process from notification to the ban by the ACM has taken a relatively long time, probably due to the long negotiations on the potential commitments between Talpa and RTL on one side and the ACM and (in the background) market players such as advertisers and distributors of TV channels on the other side. It is not often that the ACM decides to block a merger and certainly not one of this size.
The question remains as to whether Talpa and/or RTL will appeal the decision. On the one hand the parties have decided to blow off the deal. On the other hand, it is very likely that mergers will take place in the future in the Dutch media landscape.
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