At the notifying party’s request, the examination period was extended by two weeks. After consultation with and the involvement of the Federal Cartel Prosecutor and KommAustria, the merger was approved subject to conditions with effect from 8 July 2024.
The merger was notified on 27 May 2024. Its objective was to increase RH-Bet’s stake in NÖP from previously 20% to up to 28.6%. This increase was to be achieved by converting profit participation rights (Z-6590).
The merger had already been notified once before, with the notification subsequently being withdrawn at that time (Z-6537). It was preceded by a pre-notification procedure. Companies may approach the AFCA for advice before notifying a merger if the case is highly complex or if the market shares involved are very large.
AFCA investigation
The Austrian Federal Competition Authority carried out an in-depth analysis of the merger and a market survey to examine competition concerns.
Market survey
To gain an overview of current developments and trends, the speed and dynamics of adaptation, as well as the potential impact of the merger on the respective advertising markets, the AFCA conducted a three-step market survey:
I. Survey of the target company (NÖP) relating to the structure of its advertising customers
II. Survey of the largest BVZ and NÖN customers in 2023 for the two advertising markets of Lower Austria and Burgenland
III. Survey of competitors for the advertising markets of Lower Austria and Burgenland
The surveys were designed to look into changes and shifts in advertising budgets, the competitive proximity of various different media in the regional advertising markets, as well as the dynamics of change and current trends. In relation to the market definition of online and print advertisements and the distinction between the two, the AFCA found that while BigTech companies were creating high levels of competitive pressure, there were only isolated cases of things have progressed to the extent that a joint market for print and online ads could be identified.
Where advertising customers responded to the question about the expected impact of the merger, they did not seem to expect any major negative effects. Competitors confirmed the high pressure to adapt and the economic challenges, with some individual competitors also viewing these changes as an opportunity to boost their own online offers. Despite the intense pressure of online competition, competitors currently still appear to view the print and online advertising markets as separate markets. Concerns about future pricing were raised as one potential effect of the merger.
Competition concerns
From the AFCA’s perspective, the competition concerns particularly relate to the advertising business, which is handled by Kronen Zeitung and Kurier through Mediaprint. In this context, the market survey identified some concerns that the pricing strategy might be detrimental to competition (price increases, segment specialisation, selective predatory pricing).
The notifying companies addressed these concerns by offering a remedy.
Concerns about media plurality
The planned merger exceeds the threshold of a 25% stake, at which point the Federal Cartel Act (KartG) considers such companies to be formally affiliated with each other. Since RH-Bet and RH‑NÖ‑W already hold equity interests in media companies (such as in the daily Kurier with regional supplements), the merger reduces the diversity of independent media companies that are not affiliated with each other as defined in the KartG (external media pluralism within the meaning of § 13 para. 2 KartG).
Both NÖN and BVZ offer editorial content on politics, business, culture, media, sports, travel, Europe, reader forums etc. as well as many regional editions, so they are closely connected with their readers. Extensive and diverse regional and local reporting in the mentioned fields of interest is the unique selling position of NÖP’s media.
Due to the economic pressure to adapt, there is also a risk of closer collaboration between the media and/or media support companies and media services of RH-NÖ-W and the NÖP media areas. As well as affecting the purchase of services from the other company in each case, this could also affect editorial independence when synergies are effected through cooperation, increased collaboration on editorial news, joint development of new editorial products etc. An expansion of this type of cooperation, which would reduce diversity of media and opinion, should be prevented by remedies.
Market definition
As part of its merger investigation, the AFCA focused on the reader markets and particularly also the advertising markets for Lower Austria and Burgenland.
From the AFCA’s perspective, it should be noted at the outset that media markets are affected by digitalisation in the broadest sense more than almost any other area of the economy. Traditional media companies are coming under increased pressure and are being forced to adopt comprehensive measures to tackle the digital challenges.
To provide a relevant market definition, various issues need to be factored in, such as changed user behaviour (e.g. always on, mobile, social networks), new formats and offers (e.g. e-papers, social networks), but also changed offers where the focus has moved from a specific medium to marketing activities that go hand in hand with the media mix across all media forms. While these developments and other technological opportunities raise some basic questions about the relevant market definition, the regional aspect in this merger can be clearly limited to the affected markets in Lower Austria and Burgenland. The notifying party referred to decisions by the European Commission and the AFCA also drew on Austrian case law, but these decisions do not fully take into account current developments in digitalisation.
The companies involved
The direct acquirer: Raiffeisen-Holding NÖ-Wien Beteiligungs GmbH (RH-Bet)
RH-Bet is a wholly owned subsidiary of RH-NÖ-W and manages the 20% stake in NÖP held to date. The parent company RH-NÖ-W is an indirect co-owner of Medicur Holding Gesellschaft mbH (“Medicur”), holding a number of equity interests in several media companies. This includes an indirect stake in Kurier Zeitungsverlag und Druckerei GmbH (“Kurier”). To understand the outcome of the present proceedings, it is necessary to know the following about Kurier:
Kurier itself operates in the markets for national and regional daily newspapers and also has its own news magazine (Profil) through a subsidiary. In addition, Kurier also offers online services and radio broadcasting. The daily Kurier holds equity interests in Austria Press Agency (“APA”) and in Mediaprint Zeitungs- und Zeitschriftenverlags GmbH (“Mediaprint”). Further shareholders of Mediaprint are KRONE Verlag GmbH & Co Vermögensverwaltung KG (“Kronen Zeitung”) and, indirectly, FUNKE Mediengruppe and Signa Holding. Mediaprint is a service provider (e.g. printing and newspaper delivery) and active in the fields of telephone marketing, advertising and marketing.
RH-NÖ-W also holds an indirect stake in Österreichische Rundfunksender GmbH & Co KG (“ORS”). ORS offers content providers the transmission of audio and audiovisual content via terrestrial, satellite and cable, as well as IP services and streaming solutions. Its services are used by the Austrian Broadcasting Corporation (ORF) but also by private providers such as Krone TV.
The target company: Niederösterreichisches Pressehaus Druck- und Verlagsgesellschaft m.b.H. (NÖP)
NÖP’s areas of business include regional weekly newspapers, freesheets, online services, radiobroadcasting and also publishing. In addition to its presence in Lower Austria through its Niederösterreichische Nachrichten (“NÖN”) and other media products, NÖP is also represented in Burgenland through its BVZ Burgenländische Volkszeitung (“BVZ”).
NÖP and Mediaprint are linked through the latter’s printing and newspaper delivery services. Furthermore, there is some joint business activity with a Kurier subsidiary, such as with the regional TV provider R9. NÖP does not hold a stake in APA but uses the news agency regularly for its own purposes.
Binding remedies
To address these concerns, the following commitments were agreed to be necessary and sufficient:
1. Restriction of the extent of equity interests
RH-Bet undertakes to restrict the increase of its equity interests to the extent given in the merger notification, i.e. that these interests do not exceed 28.6% and do not include more than one single seat in NÖP’s supervisory board.
2. Advertising markets
RH-Bet and NÖP confirmed that the merger would not, and is not intended to, result in combined marketing activities in connection with print and online ads/advertising, and these marketing activities would be kept separate in future too.
3. Guaranteeing media plurality
Internal precautionary measures taken so far to ensure editorial independence and continued transparency will be maintained. This obligation applies particularly to RH-Bet in relation to the media provided by NÖP and its subsidiaries as well as the media of Kurier and its subsidiaries. It also applies to any new media offers that NÖP or its subsidiaries might offer in the future.
Specifically, independence will be secured by maintaining separate editorial teams, a separate management and independent editorial values and standards.
4. Other obligations
To ensure adherence to the first three points, the companies involved are subject to anti-circumvention rules and certain reporting requirements.