A concentration in the press distribution market to be reviewed by the Italian Competition Authority


The Italian Competition Authority (ICA) has opened a second phase investigation into the acquisition of M-DIS Distribuzione Media (M-Dis) and of Servizi Stampa Liguria (SSL) of the joint control of Ge-Dis (Case C11824). M-Dis nationally supplies to retailers press and other products. Ge-Dis is also active in the distribution of the afore mentioned products only in the city of Genoa. SSL is a dealer that provides Genoa-based retailers with press products and phone cards.
The relevant product market is the market for the local distribution of press and non-press product through newsstands and other licensed retailers. The city of Genoa and surrounding areas constitutes the relevant geographic market.
According to the ICA, the notified merger may give raise to horizontal and vertical competition concerns. As for the former, the merging parties would have in aggregate a very high market share in the region of 80-85% in the Genoa local market for the distribution of newspapers and periodicals. The parties’ market share was thought to be four times higher than that of the next competitors. Having said that, can  newspapers and periodicals be considered as differentiated products? If it is the case, market shares may not be the optimal indicator of the market power of the parties. Moreover to study the competition impact of the merger, will the ICA rely on the UPP methodologies as it did in Bolton Alimentari/Simmenthal t?
Then the ICA focused on the vertical problems of the concentration. The acquiring parties are part of vertically integrated groups, which not only publish titles with wide readership but also comprise local distributors. Ge-Dis, the target of the proposed acquisition, is an independent and not vertically integrated firm. In the ICA view the risk is that post-merger the titles of the parties would have access to the Ge-Dis distribution network on more favourable conditions than that that would be offered to competitors with the ensuing risk of foreclosing effects. Considering the paucity of vertical merger cases so far decided by the ICA, the Case C11824 looks quite interesting for the competition law community in that the ICA has now the opportunity to express its fresh views on this type of transactions.
Finally, the ICA  did not rule out the possibility that the transaction may have in the markets for the national distribution and printing of dailies and periodicals.

Comments

Post a Comment

Popular posts from this blog

Aspen: The Italian Competition Authority fines a generic manufacturer of drugs for excessive pricing

By the decision made on 29 September 2016 in Aspen [i] , the Italian Competition Authority (ICA) has imposed a fine of more than EUR 5 million on the Aspen group (Aspen), a South African manufacturer of generic drugs. Aspen violated Article 102 TFEU by imposing excessive prices for the supply of the so-called ‘Cosmos drugs’. These drugs included Leukeran, Alkeran, Purinethol and Tioguanine, which included the active principles of chlorambucil, melphalan, mercaptopurine and tioguanine, respectively. All these drugs were used to treat cancer pathologies and included in a wider package of pharmaceutical products, whose marketing rights had been purchased by Aspen from the originator GlaxoSmithKline (GSK) in 2009. Aspen had a dominant position in the relevant product markets for the commercialization of anti-cancer drugs manufactured using the active principles of alkeran, leukeran, purinethol and tioguanine. It had the only one market authorization for the sale of drugs and potential ...
Read more

Geographical allocation of turnover in aviation mergers: What the European Commission recently hold

The European Merger Control Regulation (ECMR) stipulates that only concentrations with a European dimension fall within the regulatory jurisdiction of the European Commission to review. A concentration is presumed to have such a dimension when it meets the financial threshold in Article 1 of the ECMR. To this end, it is necessary to calculate the turnover generated by the merging parties within the Community or in one or more member states. However, the geographical allocation of the turnover required by Article 1 for the purpose to establish the Commission’s jurisdiction can be a tricky issue in case of mergers between undertakings with a cross-border activity such airliners. In fact, the activities of airlines span several countries as they typically operate flights and sell tickets in many national markets. Recently, the Commission has dealt with the issue at length in the Ryanair/Aer Lingus case. It identified three possible methodologies for geographical allocation of turnover: -...
Read more

The European Commission unconditionally clears the Facebook/WhatsApp merger

By a Phase I decision the Commission unconditionally approved the Facebook $ 19 billion acquisition of WhatsApp ( Case No COMP/M.7217,Facebook/WhatsApp) . The Commission was required by the parties to review the transaction by means of a reasoned submission filed on the basis of Article 4(5) of the EU Merger Regulation. Indeed, the merger was not a concentration with EU dimension within the meaning of Article 1 EUMR falling within the Commission jurisdiction, since the EU turnover of WhatsApp in 2013 failed to met the financial thresholds in that provision. The Commission identified three relevant product markets affected by the concentration. It restrained the first relevant market, the market for consumer communication services, to the communication apps for smartphones, because WhatsApp was available only for this device. Following its approach in Microsoft/Skype (Case M.6281), upheld by the General Court in the case T-79/12, Cisco Systems and Messagenet v Commission, the Com...
Read more