• President of UOKiK Tomasz Chróstny has prohibited the acquisition of Eurozet by Agora.
• The concentration would have resulted in the development of a powerful radio group that would be able to limit competition on the market for radio advertising and broadcasting of radio programmes.
• The transaction might have led to the formation of a duopoly and marginalisation of the remaining groups and radio stations - the two leading radio groups (Eurozet and RMF FM) would have held jointly approximately 70% of the market share.

Agora is at the head of the capital group which mostly operates in the press, publishing and radio industry (major broadcasters are TOK FM, Radio Złote Przeboje, Radio Pogoda, Rock Radio), as well as sells advertisement. Eurozet, inter alia, produces and broadcasts radio programmes (major broadcasters are Radio ZET, Meloradio, Antyradio, Radio Plus, Chili ZET), sells advertising time, and manages websites. The activities of both capital groups overlap first and foremost within the scope of broadcasting radio programmes, selling advertising time as well as intermediation in selling advertising time on the radio.

The application for approval of the concentration was submitted to the Office of Competition and Consumer Protection in October 2019. One month later, the President of UOKiK referred the case to the so-called second stage, which means that it was necessary to conduct market research. In November 2020, President of UOKiK Tomasz Chróstny presented his objections to the concentration. Following a careful market analysis and possible consequences of Agora’s acquisition of Eurozet in January 2021 - he issued a decision prohibiting the concentration.

- A concentration ban is issued when the merger of undertakings will have a serious negative impact on the market and at the same time it is not possible to agree on conditions which would fully and satisfactorily eliminate the resulting distortions of competition. This was the procedure followed in case of the concentration of Agora and Eurozet. The concentration would have resulted in the emergence of a strong radio group and irreversible distortions in the functioning of competition on the local and national markets of radio advertising and broadcasting of radio programmes – says Tomasz Chróstny, President of UOKiK.

The President of UOKiK based his assessment on information and data collected in the course of the proceedings, including in particular those from market research. The said research covered the competitors of the concentration participants that are active in the field of broadcasting radio programmes and radio advertising, as well as the largest entrepreneurs that are active in the field of brokering in advertisement purchases. The NBC also presented its position on the matter. On the basis of the collected information, a multi-faceted analysis of the market for radio programmes broadcasting, radio advertising (horizontal and vertical, local and national) and related markets, as well as other markets on which the participants in the concentration operate, was performed.

In the case of local markets, after the concentration, Agora would have held more than 40 percent of radio frequencies in Poznań, Opole, and Silesian Agglomeration. Moreover, on some of the local radio advertising markets, the percentage share of the merged entity would have been very significant, e.g. in Legnica it was at the level of 80-100%, in Poznań at the level of 40-50%, in Zielona Góra at the level of 30-40% (the aggregated shares from 2019). However, competitors of the company would have had a considerably smaller share. This would have impacted the ability to adjust advertisement to the target audience, thanks to which the company would gain a competitive advantage over other broadcasters of local programmes. As a consequence, the entity would have been able to strengthen its position on local markets of radio advertisement.

On the domestic advertising market, in turn, the concentration could have led to the creation of an entity which would only have one equally strong competitor, i.e. RMF FM. – The situation would be similar to a duopoly, which would have led to the marginalisation of the remaining radio groups and independent stations. Two large radio groups could have effectively driven out of the market the remaining players with a much smaller market share and a more modest offer for advertisers. Concentrating about 70% of the market share in the hands of two entrepreneurs would not have left much room for other, often small entities, so the damage to the market and competition might have been extremely serious – says Tomasz Chróstny, President of UOKiK.

Currently, advertisers need to base their campaign usually on several radio groups in order to reach the optimal audience. After the formation of two strong groups this would not be necessary. Concentration approval would have led to a gradual marginalisation of other radio stations, currently fragmented, and worsened choice for listeners.

During the proceedings, Agora proposed conditions that would enable it to take over Eurozet. However, acceptance of the proposed conditions by the President of the Office would not have prevented a restriction of competition resulting from the concentration. The conditions presented by Agora did not cause any real change in the structure of the markets - the total share of the concentration participants in the domestic radio advertising market would decrease by less than 1 percentage point once the conditions have been applied. What is more, meeting the conditions might have led to the deterioration of the radio market competitiveness, since the proposed termination of the contracts with the entrepreneurs indicated by Agora could lead in a short period of time to a significant deterioration of their financial situation and as a result to their elimination from the market. Therefore, President of UOKiK Tomasz Chróstny rejected Agora’s proposal and issued a concentration prohibition. The decision is not final and may be appealed against to the Court of Competition and Consumer Protection.

- The concentration control carried out by the President of UOKiK cannot constitute only a formality, an activity giving an illusory sense of maintaining equal opportunities for entrepreneurs operating on a given market. It is a crucial dimension of ensuring equal and real opportunities for all participants of the market game, an efficient mechanism of fair competition, which guarantees the delivery of benefits for consumers, entrepreneurs and the Polish economy – notes Tomasz Chróstny, President of UOKiK.

According to the rules, the transaction is subject to notification to UOKiK if it involves entrepreneurs whose total turnover in the preceding year exceeded EUR 1 billion worldwide or EUR 50 million in Poland. When assessing the concentration, the President of the Office may grant consent to the concentration, make it subject to additional conditions or prohibit the transaction. The website of UOKiK publishes information on all concentration-related anti-trust proceedings conducted by the President of the Office.

Additional information for the media:

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