The European Commission said it has opened an in-depth investigation into the proposed acquisition of Bonnier Broadcasting by Telia Company under the EU Merger Regulation. It is concerned that the merged entity might shut out competitors from the audio-visual sector in Finland and Sweden. It could hit consumer channel prices, rivals' advertising, and streaming access, it said. Telia said the investigation was expected and it still expects to completes the acquisition.
Commissioner Margrethe Vestager, in charge of competition policy, said competition authorities are looking at whether or not the deal would lead to higher prices, or less choice of TV channels, for viewers in the two countries.
As a retail television distributor, Telia Company licenses channels, including ancillary rights, from broadcasters such as Bonnier Broadcasting, for its TV offering. The acquisition would create a vertically integrated player in the audio-visual sector in Denmark, Finland, Norway and Sweden.
In Sweden and Finland, Bonnier Broadcasting owns channels that are very important for TV distributors to have in the packages they offer consumers, namely its free-to-air and basic pay TV channels and premium pay TV sports channels.
Telia TV distribution rivals in Finland and Sweden could be shut out from accessing Bonnier channels that are important for viewers, said the commission. This could concern any distribution platform, whether satellite, terrestrial networks or the internet.
The merged entity could deny advertising space on its free-to-air and basic pay TV channels to Telia's telecom competitors, too. It might also deny access to its streaming application to customers using competing mobile and fixed internet providers.
The Commission has 90 working days, until 19 September, to make a decision. Opening the in-depth probe does not prejudge the outcome of the investigation, it said.
Insufficient concessions
On 12 April, Telia submitted commitments to address the commission's concerns, but the commission considered them insufficient to clearly dismiss its serious doubts that the deal is compatible with the EU Merger Regulation.
Telia general counsel Jonas Bengtsson said the phase 2 investigation is in line with Telia's expectations, and it will continue its dialogue with the commission. It is confident that any concerns following the in-depth investigation will be resolved, he added.
Telia announced the acquisition of Bonnier Broadcasting, including brands TV4 in Sweden, Finnish MTV and C More which operates in both countries, from Bonnier, in July 2018 for SEK 9.2 billion on a cash and debt-free basis.
The Swedish government has its own concerns about a deal. It owns 37.3 percent of Telia, and the takeover of Bonnier Broadcasting, owner of TV4, would leave the state with almost 100 percent control of terrestrial television.
