ACM attaches strict conditions to acquisition of RTL Nederland by DPG Media

The Netherlands Authority for Consumers and Markets (ACM) has cleared the acquisition of Dutch media company RTL Nederland (RTL) by DPG Media (DPG). However, DPG does need to comply with an extensive set of conditions. These conditions ensure that the acquisition will not have any negative effects on media pluralism, and that news consumers continue to have access to sufficient independent news sources. In its assessment, ACM took into consideration that, as a result of the rise of social media, the news landscape is undergoing major changes. In addition, given the strategy of RTL’s parent company, it is highly uncertain that the current situation will persist.

Martijn Snoep, Chairman of the Board of ACM, adds: “A pluriform news landscape plays a crucial role in our democracy. DPG and RTL are major competitors in the media sector. This acquisition cannot lead to a reduction in media pluralism. News consumers must continue to be able to choose from different, independent news sources. With these conditions, we have safeguarded that.”

DPG and RTL are major competitors on the news market in the Netherlands. DPG publishes various newspapers, such as Algemeen Dagblad, de Volkskrant, Trouw, and Het Parool. In addition, DPG owns free news websites, including NU.nl. RTL Nederland has several commercial television stations. In addition, RTL offers video streaming service Videoland. RTL also offers free news through its television channels, its website rtl.nl, and in the RTL Nieuws app.

Set of conditions

ACM has attached structural conditions to the acquisition of RTL by DPG. These conditions will remain in place indefinitely, even if DPG (or parts thereof) are acquired by another competitor in the future:

Independent foundations

RTL Nieuws and NU.nl will each have, as a co-shareholder, a foundation with priority shares. These foundations will watch over the missions and identities of RTL Nieuws and NU.nl. These priority shares offer the foundations veto powers over:

• Hiring and firing the editor-in-chief
• Implementing changes to the mission and identity
• Seling and ending the broadcast/publication of RTL Nieuws and NU.nl

Directors of these foundations are independent. These two foundations are also charged with enforcing several conditions that have been attached to this acquisition. Both foundations will receive sufficient funding from DPG for their duties.

Democracy & Media Foundation (SDM)

In addition, the rights of the Democracy & Media Foundation (in Dutch: Stichting Democratie en Media, or SDM) will be expanded. SDM is a shareholder of DPG, and is committed to well-functioning, pluriform journalistic media. As a result, DPG cannot sell or end national news brands without SDM approval.

Accessibility of free online news

The news sites of RTL and NU.nl continue to be freely accessible. No paywalls can be created as a result of which free online news would disappear. RTL Nieuws and NU.nl will continue to operate as separate news brands. Both news sites will continue to be created by separate, independent newsrooms, which will not exchange any content (including video) or data. In its app and on its website, RTL will not use content from other DPG-owned national news brands on a structural basis. In that way, RTL’s identity will remain intact.

Editorial independence

DPG will tighten the editorial statutes of all of its news brands in order to strengthen editorial independence.

• The procedure regarding the editorial budget, among other things, will be explained in greater detail in the editorial statutes. For example, the editorial staff can turn to a specially created committee if the editorial staff and management disagree about the budget. This committee subsequently hands down a binding recommendation.
• In addition, the editorial statutes will stipulate that the editorial staff (or editorial board) decides independently on what is published, what the composition of the editorial board is, with whom journalistic collaborations are struck, and to what extent the news content is personalized on the website or in the app. In that context, newsrooms do not exchange any data.

Charter

DPG will draw up a DPG Media Charter, with which all directors, supervisors, and current, future, direct and indirect shareholders of the DPG group commit themselves to important journalistic principles. The goal of this charter is to mandate current and future shareholders (including foreign shareholders) of DPG to respect at all times the governance structure and, more specifically, the editorial independence, and to safeguard a pluriform and diverse media landscape. This charter cannot be amended without the approval of the foundations within the DPG group.

RTL Nederland to fall under Dutch oversight

DPG will have RTL Nederland fall under Dutch oversight by the Dutch Media Authority (CvdM), thus no longer falling under Luxembourgish oversight.

Investigation into the effects on journalists, the advertising market, and news agencies

On the basis of the investigation, ACM does not expect any negative effects on the bargaining positions of both salaried journalists and freelance reporters, compared with the current situation. Journalists will continue to have multiple alternatives to DPG and RTL. In addition, DPG and RTL are not close direct alternatives to each other for journalists: journalists rarely switch from DPG to RTL or vice versa. Moreover, RTL makes limited use of freelance reporters. Finally, journalists are able to negotiate collectively about their terms of employment, thereby creating countervailing power.

ACM does not expect advertisers to be confronted by price increases after the acquisition. Both RTL and DPG offer advertising space, but mostly through different media channels that do not compete directly with each other. RTL particularly focuses on television and online video, whereas DPG is strong in print and online display ads. Within each media channel, multiple alternatives continue to be available for advertisers.

In the investigation, other media companies expressed concerns that they would have a harder time generating advertising revenues than they do today. After the acquisition, DPG will own a broad selection of media channels, and, as a result, might be more attractive to advertisers. However, ACM’s investigation has revealed that the business models of other media companies will not be jeopardized as a result of the acquisition.

Finally, ACM sees no risks that, following the acquisition, DPG will be able to force price reductions for news services of Dutch news agency ANP that subsequently lead to price increases for other media companies, and, by extension, to reductions in quality of their news selections.

Oversight over media mergers

The media sector is of vital importance for the functioning of Dutch democracy. That is why the Ministry of Education, Culture and Science (OCW) is currently working on a specific assessment for media mergers, which is based on European legislation that has not yet come into effect in the Netherlands. At the moment, ACM is the only regulator that is able to assess media mergers. ACM can block a merger only if it restricts competition, for example by having negative effects on the quality of news selections, which includes media pluralism. The media sector currently also does not fall under the scope of the law for assessments of mergers for risks to national security (in Dutch: Wet veiligheidstoets investeringen, fusies en overnames, or Vifo). In that context, think of the risk of acquisitions by foreign media companies with political motives, which may form a threat to democracy. ACM has called for the attention of the Ministry of Economic Affairs (EZ) to this.

Assessment with care

When assessing this acquisition, ACM considered all interests (sometimes opposing interests) and opinions with great care. For example, advice had been sought from various stakeholders, and an extensive investigation had been carried out, including among news consumers in the Netherlands. When assessing the effects on media pluralism and drafting the conditions, ACM used the recommendations from the Dutch Media Authority (CvdM). All input from interested parties have been taken into consideration, including the input provided during a hearing.

This illustration shows the structure of the independent foundations that will watch over the missions and identities of the news brands, after the acquisition of RTL Nederland by DPG Media.