The Italian Competition Authority give an unconditional go-ahead to a media merger

By two decisions made on 6 July 2016 in the I-phase investigation in the cases C-12050 International Acquisitions Holding/RCS Media Group and C-12045 CairoCommunications/RCS Media Group the Italian Competition Authority (ICA) has unconditionally authorized two taker-over bids over a major media company, the RCS Media Group. The proposed merger in C-12050 did not pose whatsoever threat to competition, the acquirer being a financial firm. Instead, the ICA conduct a more careful examination of the competition effects of the notified merger in C-12045 since the bidder, Cairo Communications, was also a media company active in the publishing and TV broadcasting markets.
Then in the case C-12045, first the ICA considered the possible horizontal effects on competition of the Cairo Communications/RCS Media Group merger in the several relevant product markets, such as the markets for the publishing of periodicals and newspapers, the television broadcasting markets and the markets for the provision of advertising services. The shares collectively held by the parties in those market were rather small and the merging parties also had to face a strong competition pressure from large rivals. For those reasons, the ICA took the view that the notified would not restrict competition.
Second, the ICA examined the vertical effects of the merger. Both the merging parties were vertically integrated firms and in particular the RCS Media Group include a network for the distribution of newspapers and periodicals. However, the ICA ruled out that post-merger the merged entity would foreclose rival publishers by imposing on them discriminatory conditions as for the access to its distribution networks. Indeed, in the market there were also strong competing distributors and therefore, the merged entity may no incentive to pursue an exclusionary strategy.
Third and finally, the ICA assessed the possible conglomerate effects of the merger. By acquiring the RCS Media Group, Cairo Communications would extend its activities to fields contiguous to the markets in which it already operated. The ICA said that negative effects on competition were unlikely because Cairo Communications did not have a dominant position to leverage into new markets.
Finally, the shareholders chose the offer made by Cairo Communications that now, relying on the unconditional authorization by the ICA, can proceed by the execution of the notified merger.


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