Yesterday, ANACOM delivered its opinion to AdC - Autoridade da Concorrência (Portuguese Competition Authority) on the proposed merger between MEO and Media Capital, following a request made to it by this Authority pursuant to article 55/1 of Lei da Concorrência (Competition Law). The request was received on 21 August, after which ANACOM had 20 working days to provide an opinion. This deadline expired yesterday.
The delivered opinion refers to the operation as proposed and examines its impact on the electronic communications market.
The operation in question consists of the acquisition by MEO of exclusive control of Media Capital through the purchase of the entire share capital of Vertix, SGPS, which owns 94.69% of the share capital of Media Capital, and through the launch of a Public Acquisition Operation in relation to Media Capital’s remaining capita.
The acquisition by MEO of exclusive control of Media Capital, under the terms notified to Autoridade da Concorrência (Competition Authority), represents complete vertical integration of the value chain. It internalises, within the same corporate group, the commercial relations between the production of content, the wholesale supply of TV and radio channels, publicity and the distribution of the television service.
The operation involves Plural, the main producer of television content in Portugal; the television channel, TVI, leader in terms of audience share and the main platform of television advertising; the telecommunications operator, MEO, leader in several electronic communications markets (with market shares exceeding 40%), Sapo and IOL, Portugal’s leading Internet portals.
The 30% market share referred to in the European Commission's guidelines on non-horizontal mergers is exceeded in all electronic communications markets affected.
Given the size of the parties involved in the operation, as notified, there are indications that the company which results from the merger will have the capacity and incentive to:
- Completely or partially stop competing operators from accessing their content and their television and radio channels as well as their advertising space.
- Completely or partially stop other channels (e.g. SIC and RTP) from accessing their platforms (subscription television, Internet portals (Sapo and IOL) and OTT services).
- Make use of sensitive or confidential information from competitors for their benefit, particularly in the context of advertising campaigns.
- Introduce less transparency in the prices charged in the DTT service, internally (to TVI) and externally (to other television operators), making it difficult to assess and verify compliance with the regulatory conditions imposed in this area.
- Prevent alternative operators from providing services to TVI in the "760" range, e.g. for tele-voting, participation in television contests and fund-raising.
If allowed to prevail, these incentives could significantly undermine the accomplishment of effective competition in electronic communications markets.
It should also be noted that the notifying undertaking did not specifically identify any benefits from the concentration operation.
The sector instruments at ANACOM's disposal are not sufficient to guard against the impact that might result from the merger, as notified, on electronic communications markets.
In view of the assessment made, and given the risks arising from the merger, as it has been notified, ANACOM concludes that it has potential to create significant impediments to effective competition in the various electronic communications markets, with consequent damage to the consumer. As such, it is the opinion of ANACOM that the merger should not proceed as proposed.
Consult:
- ANACOM's opinion on the MEO/Media Capital concentration operation https://www.anacom.pt/render.jsp?contentId=1496522
