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After follow-up investigation, ACM still conditionally clears acquisition of Iddink Group by Sanoma Learning

Publisher Sanoma Learning is allowed to acquire Iddink Group, a distributor of educational materials. Following a court ruling, the Netherlands Authority for Consumers and Markets (ACM) has carried out an additional investigation into the effects of this acquisition. After this follow-up investigation, too, ACM has attached the same conditions to the acquisition. These conditions are aimed at ensuring that innovation is stimulated, but also that a level playing field for publishers continues to exist.

Besides being a distributor of educational materials, Iddink Group also owns Magister, a learning management system that many secondary schools in the Netherlands use. In Magister, high school students are able to access digital learning materials, class schedules, student transcripts, and homework assignments. Sanoma Learning owns publisher Malmberg, a publisher of educational materials (including digital educational materials).

What was this case about?

In 2019, ACM conditionally cleared the acquisition of Iddink Group by Sanoma Learning. After the acquisition, Sanoma had to grant other publishers access to its digital platform Magister under fair, reasonable, and non-discriminatory conditions. Last spring, the court reversed ACM’s decision because ACM’s arguments were insufficiently substantiated with regard to one point. ACM subsequently conducted another investigation. The question was whether, after the acquisition, there was a risk that Sanoma would sell the digital platform and educational materials of its publisher as a bundle, which would have had negative effects on competition between educational publishers.

ACM’s investigation has revealed that it is unlikely that Sanoma would offer products as a bundle in such a way that it would harm competition. For example, the market survey among schools reveals that they do not wish to purchase a digital platform and educational materials as a bundle, and that subject departments are more likely to select educational materials on the basis of quality rather than price. ACM has also assessed what the effect on competition would be if Sanoma were to bundle the products anyway. ACM comes to the conclusion that this effect would be very limited, which means that competitors of the parties involved will not be foreclosed from the market, and that the existing competitive dynamics in the market will be left intact by the acquisition.

ACM has additionally decided to file an appeal against the court’s ruling with the Dutch Trade and Industry Appeals Tribunal (CBb), the highest court in administrative-law matters in the Netherlands. ACM does not agree with the court’s opinion that ACM’s decision lacks an adequate substantiation.

How does ACM assess mergers and acquisitions?

With any merger or acquisition, there is a question of whether sufficient competition will remain on that market directly after the concentration, and in the future. Competition ensures that products are of high quality, that they are offered on the market at competitive prices, and that innovation is stimulated. That is why ACM decides in advance whether or not companies are allowed to merge or acquire other companies. ACM assesses whether the markets involved will continue to work well for people and businesses, now as well as in the future.