On 30 October 2018, Slovenian Competition Protection Agency (» the Agency«) issued a Statement of Objections (»SO«) under Article 49 of the Prevention of Restriction of Competition Act (“Slovenian Competition Act”) in the merger case Slovenia Broadband/Pro Plus. By virtue of provisions of Slovenian Competition Act, the Agency is obliged to inform the notifying party (Slovenia Broadband) in writing of the objections raised, when it intends to issue a decision declaring a concentration incompatible with the competition rules. The SO contains all the facts and evidence that are relevant for the Agency to rely on in its final decision and enables the notifying party to exercise its rights of defence.
In the SO, the Agency has stated facts and evidence, which show that the transaction would lead to horizontal overlaps and links that could restrict competition in closely related markets (vertical and conglomerate links).
The Agency has informed Slovenia Broadband that the transaction would lead to the horizontal effects on the Market of TV advertising, Market for the purchase of TV rights to broadcast sports events and the Market of wholesale provision of children's TV programs. Since the transaction would bring together United Group and Pro Plus TV programs under one roof, the merged entity would have the ability and incentive to carry out bundling or tying of all the TV programs of the merged entity (conglomerate effects). Moreover, the investigation showed that, the transaction would lead to:
a) the possibility of permanent market coordination with other operators on the market;
b) enhancing the ability and incentive of the merged entity to implement input foreclosure in a way of partial input foreclosure (the vertically integrated firm would be willing to supply Pro Plus TV channels to the Notifying Party rivals at significantly higher prices compared to the pre-transaction scenario);
c) enhancing the ability and incentive of the merged entity to exercise customer foreclosure in the form of total customer foreclosure (rival TV channels would not be available to Telemach customers) and in the form of partial customer foreclosure (e.g. by positioning rival TV channels lower in the channel list and positioning them in program schemes accessible to a small number of subscribers);
d) other non-coordinated effects, as the merged entity would gain access to commercially sensitive information of rivals, which would give the merged entity a significant competitive advantage.
The notifying party can reply to the SO within 45 days and indicate the facts and evidence in its favor, and may also propose appropriate and corresponding commitments. However, the Agency may only accept commitments that are comprehensive, effective and sufficient to eliminate a significant impediment to effective competition.
Upon the receipt and examination of the notifying party’s reply, the Agency will issue an appropriate decision in accordance with the provisions of the Slovenian Competition Act. The sending of a SO does not prejudice the outcome of the proceedings in question.