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Financial results of the Agora Group in the 1Q2021

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Financial results of the Agora Group in the 1Q2021

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Kurs akcji [PLN]

11,05 zł

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Company data

AGORA S.A.
Czerska 8/10 Street
00-732 Warszawa

AGO -0,9%
mWIG40 0,15%
WIG-MEDIA 0,54%

Regon: 11559486
Numer KRS: 59944
NIP: 526-030-56-44

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February 8, 2021 / 18:27

Statement of the Management Board of Agora S.A. on the appeal against the decision of the President of the Office of Competition And Consumer Protection

On 8 February 2021, Agora S.A. filed an appeal to the District Court in Warsaw – the Court of Competition and Consumer Protection against the decision of the President of the Office of Competition and Consumer Protection, issued on 7 January 2021, prohibiting Agora from acquiring Eurozet Sp. z o.o.

Agora appealed against the decision of the President of the Office of Competition and Consumer Protection in its entirety, pointing to gross violations of the law that occurred when issuing the decision.

The merger of Eurozet and Agora will not limit competition, as Eurozet is currently the number 2 player on the radio market and will remain so after the transaction. The combined entity's share in the nationwide radio advertising market will amount to approximately 25%. On the other hand, the current market leader (RMF FM group) will still have almost 40% market share.

The President of the Office of Competition and Consumer Protection - contrary to the evidence collected in the course of the long, 15-month-long proceedings - referred to the theory of "quasi-duopoly", unknown in competition law and economics, suggesting the tacit coordination of the merged entity (Agora and Eurozet) with the market leader, RMF FM group. Additionally, against the evidence and recognized economic theories, he arbitrarily decided that such a "quasi-duopoly" would have the possibility to limit competition on the radio market. The disproportion of power between Agora after the acquisition of Eurozet (joint share 25%) and the current market leader (40%) prevents the emergence of any "quasi-duopoly".

The Office of Competition and Consumer Protection ignored numerous arguments, also shared by other market participants, that the planned concentration would create a counterweight to the dominant player, not restricting competition and not threatening the elimination of the remaining competitors. The antimonopoly authority completely overlooked in its considerations the specific features of the radio market, and consequently formulated a series of hypothetical scenarios that have no relation to market realities.

The Company also indicated that both the Office of Competition and Consumer Protection and the European Commission have repeatedly issued permits for concentration in situations where the shares of the merging entities were at the same level or significantly higher, and the market structure was very similar. In this context, the contested decision is an incomprehensible precedent. The appeal additionally indicates numerous shortcomings in the scope of economic analysis of evidence, including, i.a., replacing evidence with speculation supporting pursued theories or mistakes, e.g. in calculating Agora’s market shares.

The President of the Office of Competition and Consumer Protection also violated the procedural provisions and the rights guaranteed to entrepreneurs by issuing a decision prohibiting the concentration in an urgent manner, breaking the dialogue with the Company. This mode of action differs from the practice and obligations of competition authorities, which should seek to ensure that the transaction can be carried out in the first place, and not to prohibit it at any cost.

The allegations of the Company regarding the decision issued by the antimonopoly office are supported by the opinions of recognized experts - lawyers, economists and media experts, confirming that the decision of the President of the Office of Competition and Consumer Protection is incorrect and that there are no substantive arguments in favor of prohibiting the planned concentration.

Having such strong arguments, Agora applied to the Court for unconditional consent to the concentration. The Company is convinced that a positive decision of the Court will be important not only for this particular concentration, but also for all entrepreneurs in Poland, restoring the guarantee that decisions that interfere with the freedom of conducting business activity must be made solely on the basis of legal provisions and have a deep, substantive justification.

On 8 February 2021, Agora S.A. filed an appeal to the District Court in Warsaw – the Court of Competition and Consumer Protection against the decision of the President of the Office of Competition and Consumer Protection, issued on 7 January 2021, prohibiting Agora from acquiring Eurozet Sp. z o.o.

Agora appealed against the decision of the President of the Office of Competition and Consumer Protection in its entirety, pointing to gross violations of the law that occurred when issuing the decision.

The merger of Eurozet and Agora will not limit competition, as Eurozet is currently the number 2 player on the radio market and will remain so after the transaction. The combined entity's share in the nationwide radio advertising market will amount to approximately 25%. On the other hand, the current market leader (RMF FM group) will still have almost 40% market share.

The President of the Office of Competition and Consumer Protection - contrary to the evidence collected in the course of the long, 15-month-long proceedings - referred to the theory of "quasi-duopoly", unknown in competition law and economics, suggesting the tacit coordination of the merged entity (Agora and Eurozet) with the market leader, RMF FM group. Additionally, against the evidence and recognized economic theories, he arbitrarily decided that such a "quasi-duopoly" would have the possibility to limit competition on the radio market. The disproportion of power between Agora after the acquisition of Eurozet (joint share 25%) and the current market leader (40%) prevents the emergence of any "quasi-duopoly".

The Office of Competition and Consumer Protection ignored numerous arguments, also shared by other market participants, that the planned concentration would create a counterweight to the dominant player, not restricting competition and not threatening the elimination of the remaining competitors. The antimonopoly authority completely overlooked in its considerations the specific features of the radio market, and consequently formulated a series of hypothetical scenarios that have no relation to market realities.

The Company also indicated that both the Office of Competition and Consumer Protection and the European Commission have repeatedly issued permits for concentration in situations where the shares of the merging entities were at the same level or significantly higher, and the market structure was very similar. In this context, the contested decision is an incomprehensible precedent. The appeal additionally indicates numerous shortcomings in the scope of economic analysis of evidence, including, i.a., replacing evidence with speculation supporting pursued theories or mistakes, e.g. in calculating Agora’s market shares.

The President of the Office of Competition and Consumer Protection also violated the procedural provisions and the rights guaranteed to entrepreneurs by issuing a decision prohibiting the concentration in an urgent manner, breaking the dialogue with the Company. This mode of action differs from the practice and obligations of competition authorities, which should seek to ensure that the transaction can be carried out in the first place, and not to prohibit it at any cost.

The allegations of the Company regarding the decision issued by the antimonopoly office are supported by the opinions of recognized experts - lawyers, economists and media experts, confirming that the decision of the President of the Office of Competition and Consumer Protection is incorrect and that there are no substantive arguments in favor of prohibiting the planned concentration.

Having such strong arguments, Agora applied to the Court for unconditional consent to the concentration. The Company is convinced that a positive decision of the Court will be important not only for this particular concentration, but also for all entrepreneurs in Poland, restoring the guarantee that decisions that interfere with the freedom of conducting business activity must be made solely on the basis of legal provisions and have a deep, substantive justification.

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