The Competition Authority has today authorised the acquisition of Póstmiðstöðin ehf. by Árvakur hf. and 365 miðlar hf. The merger is subject to conditions agreed between the Competition Authority and the merging parties. The parties have therefore committed to measures to address the impairment of competition that the merger would otherwise lead to.
Árvakur is the publishing company of Morgunblaðið, and Torg ehf., a subsidiary of 365 miðlar, is the publishing company of Fréttablaðið. These are the country's largest newspapers. Póstmiðstöðin is a company operating in the field of distribution, including for newspapers and bulk mail. Póstmiðstöðin is the distributor for Fréttablaðið and other media. Landsprent ehf. is a subsidiary of Árvakur and has, among other things, handled the distribution of Morgunblaðið and other media. Through the merger, the merging parties intend to combine their distribution systems for newspapers, magazines and bulk mail under the company Póstmiðstöðin, which they intend to operate as a subsidiary.
The Competition Authority investigated the merger under the merger rules of both the competition law and the media law, as the merger rules of the latter are intended to protect diversity and pluralism in the media. The merger investigation revealed that the merger leads to a potential for the exercise of market power in distribution, which may be important for the market for the publication of newspapers, inter alia due to the costs of newspaper distribution. On the other hand, the investigation revealed a specific risk that the merging parties could abuse their position vis-à-vis their competitors, for example, by restricting their access to the Post Office's distribution network and discriminating against them in terms of pricing and service quality.
On 15 October, the Competition Authority sought the views of market participants and the public on the merger parties' proposal for conditions. Following the feedback received, the conditions were amended in a way intended to strengthen their substance and framework.
As previously stated, the Competition Authority has now imposed conditions on the merger intended to address the problems that might otherwise arise from it. The main provisions of the settlement are as follows:
1. Access and equalityThe Postal Centre shall not be permitted to exclude parties who are unrelated to the merger parties from business concerning the distribution of newspapers and printed material. The Postal Centre shall comply with a party's request for service unless there are objective reasons to the contrary.
The Postal Centre shall also ensure equality in the pricing and quality of its service to its customers.
2. General price listThe Postal Centre shall establish a general price list for the distribution of newspapers and printed material. The price list shall apply in the Postal Centre's dealings with its clients, including Árvakur and 365 miðla.
3. Increased demandArticle 4 of the agreement states that the Postal Centre shall endeavour to accommodate a new party's request for services, even if the business requires significant changes, including investment, alterations to the current distribution system or a substantial increase in staff.
4. Ban on the bundling of servicesThe Post Centre and its owners are prohibited from making it a condition that customers of the Post Centre also purchase other services from the owners, such as printing services.
5. Managerial independence and protection of confidential informationThe Managing Director and key personnel of the Postal Centre shall be independent in their work from Árvakur and 365 media.
The agreement also provides for measures to protect the sensitive business information of the Postal Centre's customers.
The Competition Authority's consent to the merger parties is available here .
The Competition Authority will shortly publish a final decision in the matter, which will provide a more detailed account of the handling of the case, the underlying investigations and the measures provided for by the aforementioned settlement.
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