On April 29, 2021, the French Competition Authority (“FCA”) unconditionally cleared Vivendi’s acquisition of Prisma Media, a French press publishing group.[1] The FCA found that the proposed transaction did not create any significant impediment to effective competition, despite the existence of conglomerate relationships between the Parties’ activities.
Prisma Media is France’s number one press publishing group, in print and digital, with a portfolio including magazine brands such as Ça m’intéresse, Capital, Cuisine Actuelle, Femme Actuelle, Gala, Geo, National Geographic, Télé 2 Semaines, Télé-Loisirs, TV Grandes Chaînes, and Voici. Although it was hardly present in the press sector prior to the merger,[2] Vivendi is active in related sectors such as advertising and communication (through the Havas Group), pay-tv (through the Canal+ Group) and distribution of video content (through Dailymotion), as well as music recording, book publishing and video games.
During its Phase 1 examination, the FCA excluded any risk of vertical effects in the concerned markets, including in the advertising markets where Prisma is one of Havas’s customers. The FCA considered that the merged entity would only hold significant positions in a limited number of markets for advertising in magazines (e.g., travel magazines), and would not constitute an essential customer in these markets, which ruled out risks of output foreclosure.
The FCA also examined a range of possible conglomerate effects that could result from the merger due to the Parties’ positions in the advertising, pay-tv, and magazine markets, but ultimately concluded that anticompetitive effects were unlikely.
First, the FCA assessed whether the merged entity would be in a position to bundle the various advertising spaces marketed by the Parties. The FCA however ruled out any risk of harm to competition as it took into account the significant buying-power of advertisers and other integrated players (such as TF1, M6 or NRJ Group).
Second, the FCA also assessed whether the merged entity would have the ability to bundle the pay-tv channels owned by Canal+ group and the magazines published by Prisma Media in its offers to consumers. Although the FCA seemingly did not rule out this outcome, it nevertheless noted that when such bundled offers are in fact marketed, magazines have a marginal impact on the attractiveness of the pay-tv offer.
Third, the FCA also considered that the merger would not have any negative impact on digital newsstands. Specifically, the FCA noted that digital newsstands – even though they constitute a marginal distribution channel for press publication to date – would still be able to offer an attractive range of downloadable content even if they were denied access to Prisma Media’s magazines.
Lastly, the FCA assessed whether the merged entity would have the ability to market an integrated offer covering a large range of cultural products (video games, music, newspapers, television channels). However, the FCA took the view that (i) the merger would have a limited impact on Vivendi’s ability to market a bundle of cultural products, as the only merger-specific addition would consist of magazines, and (ii) in any event, such an offer would be of limited interest to consumers.
Following this detailed assessment and a market test, the FCA unconditionally cleared the transaction.
[1] FCA Decision 21-DCC-70 of April 29, 2021.
[2] Prior to the merger, Vivendi only had limited activities in the press sector through CNews, a free French daily newspaper.