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ACM clears acquisition of publishing company Sanoma Media by rival publisher DPG Media

10-04-2020

The Netherlands Authority for Consumers and Markets (ACM) has cleared the acquisition of publishing company Sanoma Media Netherlands by rival publisher DPG Media (formerly De Persgroep Nederland). After the acquisition, sufficient competition will remain on the market for free online news and on the online-advertising market.

In the Netherlands, DPG Media owns several major newspapers such as de Volkskrant, Algemeen Dagblad, Trouw and Het Parool. In addition, DPG Media also owns technology websites and recruitment-communication websites, price-comparison websites, and national radio station Qmusic. Sanoma Media Netherlands owns, among other businesses, free news website NU.nl and popular magazines such as Autoweek, Donald Duck, Libelle and Margriet.

ACM has in particular looked into the acquisition’s effects on competition between NU.nl and the free online news offered by DPG Media’s national newspapers, as well as into competition on the online-advertising market. These are two areas where the activities of both publishers overlap. ACM has also assessed whether the acquisition would have any significant impact on the position of freelance journalists.

Martijn Snoep, Chairman of the Board of ACM, explains: ‘This is an acquisition that has a tremendous impact on the Netherlands’ highly dynamic media landscape. It reduces the number of competitors on the market for free online news. NU.nl will become part of DPG Media instead of being an independent publisher. However, we do not see any risks of the free online news market becoming poorer. In addition, the acquisition creates a new, major competitor on the online advertising market where Google and Facebook currently play a significant role.’

Supply of free online news is sufficient

Sanoma Media Netherlands owns NU.nl, which is a popular source of free online news in the Netherlands. All newspapers owned by DPG Media each have their own websites that offer free news (to varying degrees). NU.nl and those websites will now be owned by the same company. One of ACM’s conclusions is that, after the acquisition, sufficient other providers of free online news will remain on the market. For example, Dutch public broadcaster NOS and commercial broadcaster RTL, as well as the online newspaper websites owned by publishing company Mediahuis (which owns national newspapers Telegraaf and NRC) also offer free news (to varying degrees), and their websites vie with all of them for the same pool of news consumers. Considering this level of competition on the market, it is not likely that, after the acquisition, DPG Media will reduce its free online news services. After all, it would lose readers and, by extension, advertising revenues.

Sufficient competition on the advertising market

ACM’s investigation has also revealed that, after the acquisition, sufficient competition will remain on the advertising market. The online advertising market has grown considerably over the past few years, and is expected to continue to grow over the next few years. On the online advertising market, competition is fierce, particularly with international companies such as Google and Facebook. In addition, the newspapers and magazines owned by Mediahuis and RTL, but also websites such as Dutch online auction website Marktplaats, provide competition.

Bargaining positions of journalists

Freelance journalists are concerned about their bargaining positions now that two important buyers of journalism services join forces. ACM understands those concerns. That is why ACM has also looked into the acquisition’s effects on that specific market. However, considering the diversity of expertise and positions of journalists in these two companies, this acquisition will not have any significant impact on their bargaining positions. The DPG Media/Sanoma combination only seeks the services of a modest number of freelance reporters when looking at the total number of freelance reporters in the Netherlands. As a result of the acquisition, DPG Media-Sanoma will not gain too strong a position when hiring freelance journalists.

In its recently published Guidelines on price arrangements between self-employed workers, ACM explained what options freelance journalists have for improving their bargaining positions.

ACM’s concentration control

With any merger or acquisition, an investigation is needed into whether sufficient competition will remain on that market. Competition ensures that innovation is promoted, that products are of high quality, and that they are offered on the market at competitive prices. That is why ACM decides in advance whether or not companies are allowed to merge. ACM assesses whether the markets involved will continue to work well for people and businesses after that merger.