Bundeskartellamt clears takeover of the Brockhaus publishing house by Bertelsmann

In main examination proceedings, the Bundeskartellamt has cleared the acquisition of all the shares in F.A. Brockhaus GmbH, Mannheim, by Wissenmedia GmbH, a subsidiary of Bertelsmann AG, Gütersloh.

The planned acquisition concerns the markets for German universal encyclopaedias, German thematic encyclopaedias, German specialized books and German children's and juvenile books. In the course of the examination proceedings it emerged that the markets for reference books are minor markets and therefore not subject to German merger control. The takeover is not expected to create or strengthen a dominant position on one of the other book markets either.

Brockhaus and Bertelsmann have been the major publishers of German universal encyclopaedias and German thematic encyclopaedias for years. However, the turnover achieved with reference books in Germany has significantly decreased in recent years, by more than 50% since 2006. As a consequence, the market for universal encyclopaedias and the market for thematic encyclopaedias have become minor markets within the meaning of Section 35 (2) sentence 2 No 2 ARC with a market volume in Germany of less than 15 million euros each. This development was caused by a structural change in consumer behaviour and the growing significance of online encyclopaedias. This change is based on new technological developments and enhancements (Internet, weblogs, multimedia applications, etc.) their increasing acceptance and proliferation among consumers and the resulting new product offers (online encyclopaedias).

In the course of the market investigation the Bundeskartellamt also gained further insights into consumer behaviour in the relevant markets. Publishing houses and book stores participating in the market investigation expect a further decline in sales and see no scope for price rises, which indicates that the scope for setting prices has decreased for suppliers of printed encyclopaedias. The reason for this is seen almost exclusively in competition from free offers on the Internet and the resulting price sensitivity of consumers.

In the end the question of what effect this structural and consumer behaviour change will have for Bertelsmann’s market position after its acquisition of Brockhaus could remain unanswered since the investigation came to the result that the relevant markets were minor markets.