The President of the Office of Competition and Consumer Protection ordered Polskapresse to sell the enterprise purchased from Dolnośląskie Wydawnictwo Prasowe, including the rights to publish “Słowo Polskie” daily newspaper. Cezary Banasiński imposed on the company a fine of EUR 50 thousand - the highest possible sanction for infringement of the antimonopoly law. The decision ordering the sale of assets of an enterprise is unprecedented in the history of Poland’s antimonopoly authority

The decision to sell the enterprise results from an analysis that it is the only way to return to competition in the regional press market in Lower Silesia - says Cezary Banasiński, the President of the Office of Competition and Consumer Protection. The only alternative would be a possibility of an emergence of a new publisher of regional daily press over the next two-three years in effect of independent operation of market mechanisms. Such a situation can be excluded with a high degree of probability in view of the nature of the press market - in particular the daily regional press market.

On 30 October 2003 the President of the Office of Competition and Consumer Protection initiated antimonopoly proceedings on not executing by Polskapresse the statutory obligation to notify of an intention to take direct control over Dolnośląskie Wydawnictwo Prasowe publishing house (DWP).

Basing on the information received by UOKiK, it was found out that Polskapresse became the owner of three newspapers published in Lower Silesia province. Apart from its existing publication ("Gazeta Wrocławska"), it started to publish two other newspapers belonging to DWP: "Słowo Polskie" and "Wieczór Wrocławia".

Replying to arguments of the Office, the company stated that it had not been obliged to notify of the concentration, as it had purchased from DWP only a part, and not the whole enterprise, where the provisions of the antimonopoly law do not apply.

During its investigation, the Office found out that the transaction concerned the entire enterprise as shown in an analysis of the agreement made by the parties. Under the agreement, both companies decided not to compete with each other in the Lower Silesian press market for five years, and the undertaking referred not only to Polskapresse and DWP, but also to enterprises from the Orkla Media capital group, of which DWP is part.

The office found out that the total sales of the enterprises participating in the concentration exceeded EUR 50 million and therefore there was the obligation to notify the transaction to the President of UOKiK. Polskapresse should have notified the concentration by 12 June 2003, which it failed to do.

As information collected by the Office shows, after taking the control by Polskapresse over DWP, there were only two, out of previously three publishers of regional press in Lower Silesia province. At the same time, the share of Polskapresse in the market of regional daily general information press in Lower Silesia grew from 36.4 percent to 60.8 percent; in the market of advertising space in daily Lower Silesian press, the share grew from 37.7 percent to 53 percent.

The negative effects of the concentration were revealed with reference to the advertising surface market. From 1 December 2003, that is from the day of merger of "Słowo Polskie" and "Gazeta Wrocławska" into one paper "Słowo Polskie Gazeta Wrocławska", the price of a basic advertising module on a classified page grew from 24 percent to as much as 164 percent. Effects of concentration were also visible in the market share of sales of regional press, calculated for the first ten days of the joint publication of the combined title "Gazeta Wrocławska Słowo Polskie", which was 55 percent. The Office is of the opinion that the market share will grow.

All the above values much exceed the levels resulting from the statutory definition of dominant position (i.e. 40 percent). If the enterprise had requested the consent of the President of UOKiK for concentration, it would not have been granted.

In accordance with the Act on competition and consumer protection, if concentration had not been notified and was performed and the reversal to market competition is not possible otherwise, the President of UOKiK may order a split of the merged enterprise, or the sale of all or a part of its assets.

The fact that Polskapresse obtained a strong dominant position in the market of regional daily press and in the market of advertising space in regional daily press in Lower Silesia province, justifies the decision of the President of the Office in accordance with which Polskapresse will have to sell the assets of Dolnośląskie Wydawnictwo Prasowe, acquired in effect of unlawful concentration, within six months from the day the decision become legally binding. The assets can be purchased by any entity that is not member of the Polskapresse capital group. The sale will not cover rights to the title "Wieczór Wrocławia", since in the opinion of the President of UOKiK, the fact that Polskapresse holds those rights will not constitute an abuse of dominating position in the Lower Silesian media market.

For failure to notify its intention to take control over Dolnośląskie Wydawnictwo Prasowe, the President of the Office imposed on Polskapresse a fine in the maximum statutory amount of EUR 50 thousand (235 850 zloty). In the opinion of the President of UOKiK, the amount is equivalent to the extent of guilt and harm of the action, and the sanction is to be of repressive and preventive (disciplinary) character.

The decision of the President of UOKiK may be appealed to the Court of Competition and Consumer Protection.

Additional information:
Elżbieta Anders, Spokesperson of UOKiK
International Relations and Communication Department
Office of Competition and Consumer Protection
Pl. Powstańców Warszawy 1, 00-950 Warsaw
Ph.: (+48 22) 827 28 92, 55 60 106, 55 60 314
E-mail: [SCODE]ZWFuZGVyc0B1b2tpay5nb3YucGw=[ECODE]