NMa upholds fines imposed on Dutch media company Wegener

Tuesday, 13 September 2011

The Netherlands Competition Authority (‘NMa’) has ruled that it will uphold the fines of more than EUR 20 million imposed on Dutch media company Wegener and on five individuals. The NMa has turned down the objections raised by Wegener and the fined individuals. The NMa imposed fines on Wegener and five directors of the company last year because they did not meet the requirements that were imposed on the acquisition of VNU Dagbladen and Wegener in 2000. 

Background information
After the acquisition of VNU Dagbladen in 2000 Wegener became owner of BN/De Stem. At that time Wegener already owned the regional newspaper Provinciale Zeeuwse Courant (PZC). The activities of PZC and BN/De Stem have an overlap in the region of Zeeuws-Vlaanderen, in the southwestern part of the Netherlands. The acquisition resulted in a dominant position in Zeeuws-Vlaanderen as both of these papers no longer had to compete with each other. This situation could have adverse effects on readers, such as price increases and reader selection reductions of both papers. The instruction that the NMa had attached to the acquisition, and which officially is still in effect, aimed to remove those negative effects.

A request filed by Wegener earlier this year was turned down by the NMa in July. It sought to remove the aforementioned commitment. Wegener failed to convince the NMa that market conditions in Zeeuws-Vlaanderen have changed so much that the commitments would no longer be necessary. If Wegener fails to comply with the commitment, it will owe a penalty payment of EUR 1 million up to a maximum amount of EUR 20 million.

Objections 
Parties made objections against the imposed fines. Unlike the Advisory Committee on Administrative Appeals (‘BAC’), which is an advisory body consisting of independent members, the NMa believes that the aforementioned requirements were clear. Wegener has always known what the NMa was expected from them. Therefore the NMa argues there can be no misunderstanding about the requirement to guarantee PZC and BN/De Stem’s independence. Because of that it was not allowed to merge the regional editorial boards of the competing newspapers or to pursue a joint commercial strategy. There are no reasons for the NMa to reduce the fines.

Appeal 
Objections against this ruling can be filed with the District Court of Rotterdam, and, if needed, appeals can be filed with the Dutch Trade and Industry Appeals Tribunal. Wegener announced on 31 August 2011 to appeal against the decision of the NMa.