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This article is brought to you in association with the European Commission.
The European Commission has approved, under the EU Merger Regulation, the proposed acquisition of Bonnier Broadcasting by Telia. The approval is conditional on full compliance with a commitments package offered by Telia.
Commissioner Margrethe Vestager, in charge of competition policy, said: “We have today approved Telia’s acquisition of Bonnier, subject to remedies. With the decision, consumers in Finland and Sweden continue to benefit from a wide range of TV channels and audio-visual content both through traditional TV and over the internet”.
Today’s decision follows an in-depth investigation of the proposed transaction, which focused in particular on the merging companies’ activities in the wholesale supply and retail distribution of TV channels in Finland and Sweden.
The Commission’s investigation
During its in-depth investigation, the Commission gathered extensive information and received feedback from actors at various levels of the TV value chain, in particular TV broadcasters and retail distributors of TV services.
The Commission had concerns that the transaction, as initially notified, would have significantly reduced competition in Finland and Sweden in the following areas:
– Telia’s competitors in TV distribution would be shut out from the market by not having access to the merged entity’s (i) free-to-air and basic pay TV channels; and (ii) premium pay TV sports channels;
– Telia ‘s competitors in telecom services would be shut out from the market by not having access to the merged entity’s streaming services, namely advertising video on demand (AVOD) and subscription video on demand services (SVOD); and
– Telia s competitors in telecom and TV distribution would be shut out from the market by not having access to advertising space on the merged entity’s TV channels.
The proposed remedies
To address the Commission’s competition concerns, Telia offered the following commitments:
Access to free-to-air and basic pay TV channels, as well as to premium pay TV sports channels
– License on fair, reasonable and non-discriminatory (FRAND) terms the merged entity’s free-to-air and basic pay TV channels, as well as premium pay TV sports channels, to rival TV distributors in Finland and Sweden. This would include ancillary rights via which TV distributors can, for instance, offer their customers the option to stream the merged entity’s channels contained in their TV subscription also over the internet;
– License on FRAND terms network personal video recorder (NPVR) rights, in relation to the merged entity’s free-to-air and basic pay TV channels to rival TV distributors in Finland;
– License on FRAND terms any existing over-the-top (OTT) rights (namely distribution of TV services over the open internet) relating to premium pay TV sports channels (or SVOD services with premium sports content), to TV distributors in Finland and Sweden;
– License standalone OTT rights to the merged entity’s free-to-air, basic pay TV and premium pay TV sports channels, to another market player in Finland and Sweden in order to secure competition in TV distribution over the internet.
Access to the merged entity’s streaming services
– Not to limit access to the merged entity’s own streaming services and applications over the internet, namely AVOD and SVOD services, for end users.
Access to TV advertising space
– Not to discriminate rival telecom providers and TV distributors in the sale of TV advertising space on the merged entity’s channels.
Protection of competitors’ confidential information
– Protect confidential information concerning rival TV broadcasters, TV distributors and telecom providers by maintaining information barriers between the merged entity’s wholesale and retail businesses.
The commitments will be applicable in Finland and Sweden and for a duration of 10 years.
The Commission therefore concluded that the transaction, as modified by the commitments, would no longer raise competition concerns. This decision is conditional on full compliance with the commitments.
Companies and products
Telia Company, based in Sweden, is a telecommunication operator and the parent company of the Telia group. The Telia group provides mobile and fixed telecommunications services as well as broadband and television services in Denmark, Estonia, Finland, Lithuania, Norway and Sweden. It provides mobile telecommunications services in Latvia and wholesale network access (carrier services) worldwide. Telia is a publicly listed company. Telia’s largest shareholder is the Swedish state, which has a 38.4% shareholding interest.
Bonnier Broadcasting Holding, based in Sweden, is a TV broadcasting company active primarily in Sweden and Finland, but also to a more limited extent in Denmark and Norway. Bonnier Broadcasting’s TV activities are conducted through TV4 AB, C More Entertainment AB, and MTV Oy. Bonnier Broadcasting also owns the Finnish production company Mediahub and produces news and other journalism content in Sweden and Finland.
Merger control rules and procedures
The transaction was notified to the Commission on 15 March 2019 and the Commission opened an in-depth investigation on 10 May 2019.
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the European Economic Area or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
There are currently three on-going phase II merger investigations: the proposed acquisition of Chantiers de l’Atlantique by Fincantieri,the proposed creation of two joint ventures by Boeing and Embraer and the proposed acquisition of Lotos by PKN Orlen.
More information will be available on the Commission’s competition website, in the public case register under the case number M.9064.
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