Bundeskartellamt prohibits merger of Tagesspiegel/Berliner Zeitung

The Bundeskartellamt has prohibited Holtzbrinck KG, Stuttgart, (which publishes the daily newspaper Tagesspiegel, city magazine Zitty and other publications) from acquiring control of Berliner Verlag KG, Berlin (among other publications daily newspapers Berliner Zeitung, Berliner Kurier and city magazine Tip). The merger would have led to the creation of a dominant position held by Holtzbrinck in the reader market for regional subscription dailies in Berlin and the Berlin reader market for city magazines.

The President of the Bundeskartellamt, Ulf Böge, stated: “After the warning the companies merely offered to sell the city magazines. However, the competition problem in the reader market for regional subscription dailies in Berlin would not have been solved by this step. Against this background a clearance of the merger subject to obligations was ruled out.”

After a merger Holtzbrinck would by far have become the market leader in the Berlin reader market for regional subscription dailies. With more than 60% the company would obtain a market share almost twice as high as the one held by its closest competitor, the publishing company Axel-Springer-Verlag.

Holtzbrinck might secure or even further expand this advance by taking strategic measures such as newspapers specifically designed for the eastern and western parts of Berlin or by advertisement price strategies. This means that with two newspapers differently positioned in the Berlin market Holtzbrinck would be able to make better use of its market potential and to make it considerably more difficult for competitors to win over readers. The only serious competitor, Axel-Springer-Verlag, which owns the dailies Berliner Morgenpost and Welt / Welt am Sonntag, is not in a position to avail itself of comparable strategic measures.

According to general administrative practice and established practice of the courts, over-the-counter newspapers (tabloids) are not to be included in the reader market for regional subscription daily newspapers. They differ in the range and depth of coverage, the manner of representation as well as the main focus of news coverage and reports. According to the Bundeskartellamt’s investigations even intensive sales promotion measures in the case of over-the-counter newspapers in Berlin had no discernible effects on single copy sales of regional subscription dailies.

Holtzbrinck’s dominant position in the reader market is not restricted by the market conditions in the advertising market. Although Axel-Springer-Verlag currently holds a leading position in this market, this has not had any significant influence on the market structure and its development in the reader market concerned. A relativising effect would be even less probable after a concentration and the strengthening of Holtzbrinck’s position in the reader market this would entail.

In the Bundeskartellamt’s opinion the requirements for a reorganisation merger (failing company defence) are not fulfilled. It is not evident that three independent publishing houses with large regional subscription dailies cannot continue to exist in the Berlin market in the long term. Moreover, besides Holtzbrinck, other companies were also interested in an acquisition with the aim of continuing to publish Berliner Zeitung beside Tagesspiegel and Berliner Morgenpost.