Bundeskartellamt prohibits complete acquisition of publisher of “Ostthüringer Zeitung” by Funke-Mediengruppe

The Bundeskartellamt has prohibited a company of Funke Mediengruppe from acquiring the sole control of the publishing companies of the daily newspaper “Ostthüringer Zeitung”. Funke publishes the “Thüringische Landeszeitung”, whose circulation area to some extent overlaps that of the “Ostthüringer Zeitung”. With the merger which has now been prohibited, the “Ostthüringer Zeitung” and “Thüringische Landeszeitung” would have been brought together under the sole control of Funke Mediengruppe.

Andreas Mundt, President of the Bundeskartellamt: “The merger between Funke and Ostthüringer Zeitung would have eliminated the last remaining competition between regional dailies in the Jena and Gera regions. Readers benefit from choice, not from newspaper monopolies.” Although the two publishers already cooperate closely together, merger control has to protect existing competition and editorial diversity.”

In their statement to the Bundeskartellamt the publishers argued that the merger would not significantly worsen the conditions of competition because the newspapers are already closely linked in a number of cooperations. So far as these cooperations relate to the newspapers’ publishing activities, they are largely admissible due to a special provision. However this does not apply to the editorial cooperation between the newspapers. In 2016 the newspapers pooled together their local and cross-regional reporting offices. Such cooperation on editorial content is not covered by the special provision. It must be considered on a case by case basis to what extent the possible resulting restriction of competition could be justified for economic or other reasons. In this case the Bundeskartellamt has concluded that the cooperation is anti-competitive. For this reason the cooperation between the newspapers cannot be considered as an argument to put the negative effects of the merger into perspective. Irrespective of this, competitive conditions will be worsened because at the latest with the merger the remaining editorial independence and the potential for reviving competition will be lost.

One particular aspect considered in the examination of the merger project was that Funke Mediengruppe already holds 60 % of the shares in the publishing companies of the “Ostthüringer Zeitung”. However, due to provisions contained in the articles of association, the current minority shareholder, Rheinisch-Westfälische Verlagsgesellschaft, still has joint control of the “Ostthüringer Zeitung”. This joint control means that Funke’s ability to enforce decisions at “Ostthüringer Zeitung” has so far been limited. With the acquisition Funke could have sole control not only of the “Thüringische Landeszeitung” but also of the “Ostthüringer Zeitung”. The merger project was therefore subject to merger control on account of Funke’s strengthened position.

The Funke Mediengruppe and the previous WAZ-Gruppe have had shares in the newspaper publishers in Thuringia since the early 1990s. Already in 2000 the Bundeskartellamt had prohibited the WAZ-Gruppe from acquiring all the shares in “Ostthüringer Zeitung” because the project was not notified under merger control.