The Competition Authority has today published a decision No. 25/2014, Merger of 365 Media Ltd and The Royal Film Company Ltd. The decision concerns the acquisition by 365 Media of all shares in the Royal Film Company, the latter of which was founded in November 2013 and began broadcasting the television channels Miklagarðs and Bravó in March this year.
In addition to assessing the effects of mergers on competition, the Competition Authority must assess whether competition has a detrimental effect on media pluralism and diversity, in cases where at least one media provider is a party. This is the case here. This is provided for in Article 62(b) of the Media Act. No. 38/2011.
During its investigation of the case, the Competition Authority obtained information and views from the merging parties and their competitor regarding the merger. A legal opinion was also obtained from the Media Commission, as required by law.
The Competition Authority concludes in the case that the merger does not have a detrimental effect on competition or on plurality and diversity in the media. The conclusion is based, in particular, on the fact that the Royal Film Company's revenues in the first five months of this year indicated that its market share in the markets in which it operated was barely significant. Thus, the merger does not result in an increase in 365 Media's market share. There are otherwise no grounds to take action regarding the merger.
However, the decision does repeatedly what is set out in its decision No. 34/2013, Purchase of the assets of D3 Media Ltd. by 365 Media Ltd., The position of 365 Media in various sub-markets of the media market is very strong. The company must therefore be careful, as its agreements and other conduct could prevent its competitors from growing and thriving. and thereby strengthen competition. However, the matter under consideration here is not a case for the Competition Authority to take action on.
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