Poland’s antitrust authority stops radio group merger over competition concerns

Poland’s antitrust authority has barred the Agora media group, owner of the Gazeta Wyborcza liberal daily as well as several radio stations and an advertising agency, from taking over rival radio broadcaster Eurozet, owner of Radio Zet.

The regulator found that the proposed merger could create a harmful duopoly on the Polish radio market. But Agora today condemned the “arbitrary and selective” decision, which it said “protects Agora’s competitors, not competition”. It pledged to appeal.

The concentration application was filed in October 2019. When Agora first flagged its intention to take over Eurozet earlier that year, the ruling Law and Justice (PiS) party said the move could threaten Poland’s media plurality.

“The state should do everything to prevent stock market speculators from increasing their influence on the media market,” tweeted PiS’s spokeswoman, Beata Mazurek, linking to an article noting that George Soros has backed an investment fund that has shares in both Agora and its Czech partner in the Eurozet buyout.

Agora’s radio empire already includes Radio Złote Przeboje (which had a 3.3% share of listeners in Q3 2020), and TOK FM (2.4%). Meanwhile, the Eurozet group owns, among others, Radio Zet (12.1%), AntyRadio (1.5%) and MeloRadio (1.4%).

The most popular radio station in Poland remains RMF FM, with a 28.5% share of listeners, according to the latest official data from the National Broadcasting Council (KRRiT), published for the third quarter of 2020.

Other radio players in Poland include Time, owner of VOX FM (3.1%), as well as the public broadcaster Polskie Radio, with its flagship Polish Radio One (5.6%) and Polish Radio Three (3.3%) stations.

Source: KRRiT based on Radio Track survey by Kantar Polska

In its decision, which can be appealed, the Office of Competition and Consumer Protection (UOKiK) said that the transaction risked “creating a duopoly” of RMF and Agora-Eurozet. This would “marginalise” other radio groups and stations.

“The operation of the two capital groups overlaps mainly in broadcasting radio programmes as well as sales and brokerage of advertising time,” said UOKiK’s statement on Thursday.

UOKIK’s president, Tomasz Chróstny, added that the “strong” combined new radio group would “cause irreversible disturbance to competition” in both the local and national broadcast and advertising markets.

On Friday Agora issued a market release accusing the regulator of acting “in violation of the law and administrative procedures” and not including submitted economic evidence in its decision. The company said it would take “all legally available” steps.

In a further statement, Agora said UOKiK’s “arbitrary and selective” decision “compromised” its office. The company noted that the combined market share of the two largest groups would reach 65%, rather than UOKiK’s figure of 70%.

It also pointed out that RMF would remain the largest radio group, with a 39% share, compared with Agora-Eurozet’s slice of 25%.

In a statement sent to Reuters on Thursday, however, Chróstny denied Agora’s accusations. He assured that the criteria taken into account to assess the impact on the functioning of competition on the market “would be identical” for any other merger.

In 2019, Agora bought a 40% stake in Eurozet, while the rest was acquired by the Czech SFS Ventures fund. Later the same year, Agora exercised an option to buy out SFS Ventures, reports Reuters.

It followed a failed attempt by Fratria, a conservative media group whose outlets are supportive of PiS, to buy Eurozet with a loand from state-owned bank Pekao, reports Wirtualne Media.

In November 2020, UOKiK notified Agora about its reservations over the deal. At the time, Agora’s CEO, Bartosz Hojka, argued that the company “saw no threats” to competition.

The ruling PiS party has advocated policies of what it calls “deconcentration” and “repolonisation” of the media. It argues that too many outlets are owned by a small number of foreign-owned firms, and notes that they are often critical of the PiS-led government. (Agora, however, is majority Polish owned.)

In December, Poland’s largest energy firm, state-owned Orlen, moved to buy Polska Press – a media firm that owns hundreds of local newspapers and websites – from its German owner, Verlagsgruppe Passau.

UOKiK is currently in the process of analysing that takeover, but has not yet given any indication of what its decision will be. Critics, however, fear the deal is aimed at exerting greater government control over the press.

Main image credit: Adrian Grycuk/Wikimedia Commons (under CC BY-SA 3.0 PL)

Maria Wilczek

Maria Wilczek is deputy editor of Notes from Poland. She is a regular writer for The Times, The Economist and Al Jazeera English, and has also featured in Foreign Policy, Politico Europe, The Spectator and Gazeta Wyborcza.