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Wegener: NMa fine unwarranted and disproportionate
The Netherlands Competition Authority (NMa) has fined Wegener EUR 19 million following the investigation into a possible infringement by Koninklijke Wegener NV of the VNU Dagbladengroep takeover conditions imposed in 2000. In addition, the NMa has imposed an incremental penalty payments order that requires that the conditions are met within a year. The penalty amounts to EUR 1 million per quarter to a maximum of EUR 20 million. Fines amounting to EUR 1.3 million have also been imposed on five (former) BN/De Stem and PZC managers/directors.
In September 2009, the NMa launched an investigation into potential infringements by Wegener of the conditions imposed by the NMa in 2000 relating to Wegener’s takeover of VNU Dagbladen. The alleged infringements concern the obligation to continue publishing the two daily newspapers in Zeeuws-Vlaanderen, namely BN/De Stem and PZC, autonomously and independently of each other. With a combined circulation of 21,000 copies, both daily newspapers still appear in Zeeuws-Vlaanderen as independent titles, but there is editorial cooperation in the Zeeuws-Vlaanderen region. The NMa has now ruled that this cooperation constitutes an infringement of the conditions imposed in 2000 and has, therefore, fined Wegener.
Wegener is of the opinion that the NMa’s ban on both titles cooperating represents a breach of editorial independence and, therefore, a breach of the principles of freedom of the press. The decision to cooperate at an editorial level is one that is at the sole discretion of each editor-in-chief. The NMa should refrain from passing judgement on this, as this means that the NMa is interfering with the content of both daily newspapers.
Wegener also believes that the cooperation between both daily newspapers in Zeeuws-Vlaanderen, to which the NMa has objected, is not an infringement of the conditions imposed, because the editorial independence of both titles is safeguarded by the structure of the two independent editorial teams, each of which has its own editor-in-chief and editorial statute, in which a focus on and distribution in Zeeuws-Vlaanderen is laid down as a basic principle. Wegener also underlines the fact that, from an economic standpoint, the cooperation between the regional editorial teams concerned in Zeeuws-Vlaanderen is essential for the continued existence of both editions in Zeeuws-Vlaanderen. Nevertheless, both editions faced decreasing turnovers and operating results.
Contrary to the NMa’s conclusion, Wegener believes that it is precisely because of the measures taken that readers' freedom of choice and the quality of news services in the region could be maintained, According to Wegener, therefore, there is no question of an abuse of market power, as posited by the NMa.
Furthermore, Wegener is of the opinion that should there be a question of any infringement; the fines imposed are completely disproportionate, considering the scope of activities in Zeeuws-Vlaanderen. The total turnover in 2009 of the editions concerned with a total circulation of 21,000 copies amounted to EUR 8.9 million with a (gross) result of EUR 0.6 million. The amount of the imposed fines, therefore, bears absolutely no relation to this economic interest.
However, considering the fact that the economic situation of the (regional) daily newspaper market is under pressure, as recently pointed out by the Temporary Committee for
Innovation and the Future of the Press (Brinkman Committee), Wegener believes, in a more general sense, that imposing such substantial fines shows no understanding for the sector, the future of regional daily newspapers and, accordingly, the diversity of the press.
Wegener will appeal the imposed fine and trusts in the legal procedures.
Apeldoorn, 14 July 2010
Board of Management
Koninklijke Wegener NV
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