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NMa: green light to acquisition Yellow Pages Netherlands by De Telefoongids

Having conducted a detailed investigation, the Netherlands Competition Authority (NMa) sees no impediments to the acquisition of Yellow Pages Netherlands [Gouden Gids], a division of Truvo Netherlands, by De Telefoongids, a division of European Directories.

The results of the investigation show that current competition between the two companies is limited. The number of advertisers who say they will switch to the other competitor if, for example, prices were to be raised is small. The number of advertisers who, in the past, have indeed switched to the other competitor after prices were raised is small as well. Furthermore, a substantial number of advertisers indicate that they will consider switching to other media, including both offline and online media, or that they will completely stop advertising in the business directories of both companies in case of a price increase. The NMa investigation also revealed that the use of paper versions of business directories has considerably decreased in recent years, as users increasingly favor online search alternatives. The NMa expects that, in time, advertisers will follow the users.

The NMa notes that a small group of advertisers might be disadvantaged by the acquisition. 'The group of advertisers who will be disadvantaged by the acquisition is nonetheless smaller than the group of those who will benefit from it,' says Pieter Kalbfleisch, chairman of the Board of the NMa. Part of the equation was that the acquisition will result in consumers receiving Yellow Pages Netherlands and De Telefoongids as one business directory in 2009 at the latest. Their websites will also be integrated into one online directory. 'In practice, the integrated directory will be consulted by more users, which is beneficial to advertisers. In addition, users will receive a single directory with all the information they need,' says Mr. Kalbfleisch.

The companies that are involved in the acquisition offer both paper and online versions of directories with contact details of businesses and individuals. Businesses are offered the opportunity to advertise in these directories. The NMa investigated how the Dutch market would be affected by the intended concentration, taking into account in its assessment the fact that both companies would integrate their directories into a single directory.

Merger review
When reviewing mergers and acquisitions, the NMa assesses whether effective competition in the market is significantly impeded, particularly when a dominant position is created or strengthened. Such a position can have negative effects on prices, quality and range of the products or services in question.