Inquiry into the Competitive Neutrality of the National Broadcasters 17.12.18
On 12 December 2018, the Minister of Communications and the Arts publicly released a report by the Expert Panel, in conclusion to the Inquiry into the Competitive Neutrality of the National Broadcasters. The ABC had commissioned RBB Economics to prepare a report to aid its submission to the inquiry. RBB was asked to explore the effects of the ABC on competition in the Australian media sector, and considered the potential for the ABC’s activities to lead to a ‘crowding out’ of the audiences available to other media operators, as well as the potential for the ABC’s activities to lead to pro-competitive effects. The RBB report considered the differentiation between the ABC and commercial media operators, the nature and scope of initiatives undertaken by the ABC to boost its own audiences, the context of competition for online advertising revenues, and cross-country studies of the effects of public sector broadcasters on commercial media operators, and concluded that there was no evidence of crowding out of the audiences of commercial media operators by the ABC; moreover, the ABC’s activities are likely to have resulted in significant benefits to the wider media industry through licensing, partnerships, and investments in a range of initiatives and types of content. The Expert Panel concluded that “this Inquiry considers the National Broadcasters are not causing significant competitive distortions beyond the public interest”.
Pacific National/Aurizon – RBB expert testifies in Australian Federal Court 13.12.18
RBB has provided expert testimony in the Australian Federal Court hearings into the proposed acquisition by Pacific National, a rail operator, of the Acacia Ridge Terminal in Brisbane, from Aurizon. The ACCC conducted a detailed investigation into several aspects of the transaction. During the trial in the Federal Court, RBB economist Patrick Smith testified a hot tub, in regard to the relevant market definitions, and the likelihood that the transaction would give rise to anti-competitive vertical input foreclosure. An RBB team led by George Siolis, also considered the profitability and sustainability of one of the rail services previously operated by Aurizon, that had used the terminal. RBB was instructed by Clayton Utz, and Ashurst, solicitors acting for Pacific National and Aurizon, respectively.
Commission approves Sony/EMI music publishing deal 10.12.18
On October 26 the European Commission gave unconditional clearance to Sony’s acquisition of sole control over EMI Music Publishing (“EMI MP”). The transaction combines the recorded music activities of Sony, the music publishing activities of its subsidiary Sony/ATV, and the music publishing activities of EMI MP.
Independent music companies association IMPALA raised concerns with the transaction, claiming that Sony would enjoy excessive bargaining power post-transaction. As in previous transactions in music recording and publishing, the Commission’s competitive analysis focused on the scope for the parties to use a strategy of rights withdrawal to exercise bargaining power in negotiating online rights with digital service providers such as Spotify and iTunes. The parties demonstrated that there was no credible basis for this hypothesis for a number of reasons, including pre- and post-transaction corporate governance arrangements for EMI MP, and the scope for authors to switch between music publishers in response to any withdrawal of rights. The parties also extended previous “control share” analyses undertaken by the Commission, using more comprehensive data than previously available to demonstrate that the parties’ position within the European market for rights licensing would not give rise to bargaining power concerns.
RBB worked with Cleary Gottlieb Steen & Hamilton, counsel to Sony, throughout the notification.
Pharma merger cleared unconditionally by the European Commission 07.12.18
Pharma merger cleared unconditionally by the European Commission
On 05 December the European Commission cleared the acquisition of Recordati by CVC, owner of several portfolio companies active in the pharmaceutical sector, including Doc Generici and Alvogen. The transaction was cleared in Phase I without remedies being required. The European Commission focused the analysis on specific markets in Iceland, Italy and Romania, where the transaction created overlaps.
The European Commission found that the transaction would not raise concerns because the merging parties were not close competitors, despite the fact that the merged entity had significant combined market shares in some of these markets. In particular, in these markets, one of the parties supplied a branded originator medicine, while the other party supplied a generic version of the drug. Given the specific features of prescription and reimbursement practices in these markets, the European Commission considered that generic and originator products did not compete closely with each other and that the remaining generic suppliers would continue imposing a strong competitive constraint on the merged entity.
RBB Economics assisted CVC, alongside Clifford Chance.
Public Interest in Merger Control – An Elevated Standard or a Subjective Wish List? ABA Teleconference 06.12.18
The Antitrust Section of the American Bar Association (ABA) has organised a teleconference on Public Interest considerations in merger control on Thursday, December 6, 2018. This teleconference will provide a review of public interest issues in merger control in various jurisdictions around the world, and discuss recent developments in this field. RBB Partner Patrick Smith will discuss the increased focus on public interest considerations in merger reviews, and in particular the differences in approaches, and focal areas, in developed and emerging economies. The conference addresses a topic of enormous practical significance, in light of increasing efforts in multiple jurisdictions—including the US and Europe—to strengthen governmental review of transactions on national security and other public interest grounds.