Articles

ACM granted clearance for lottery merger after Phase II investigation

ACM granted clearance for lottery merger after Phase II investigation

ACM granted clearance for lottery merger after Phase II investigation

05.01.2016

On 8 December 2015, the Netherlands Authority for Consumers and Markets ("ACM") granted clearance to the merger between Stichting Exploitatie Nederlandse Staatsloterij ("SENS") and  Stichting Nationale Sporttotalisator ("SNS") after a Phase II investigation.

 SENS and SNS are two Dutch companies offering games of chance (lotteries and lottos). According to the ACM, the companies were not, or almost not, effectively competing with each other on the offline market, and for that reason, it cleared the merger. Post-merger, there will be two parties left on the highly regulated market for lotteries and lottos, both having a market share of approximately fifty percent.

In its Phase I decision of 18 August 2015, the ACM concluded that the concentration could lead to a significant impediment to effective competition on the Dutch market or part thereof. The ACM came to this preliminary conclusion because it considered likely that SENS and SNS were in competition with each other, and even were near competitors. For this reason, a license was required for the concentration, which could be requested in a Phase II procedure.

In the Phase II investigation, the ACM came to a different conclusion. The ACM described that competition in the games of chance market is limited by strict regulations, with specific licenses for every market segment. As a consequence, every license-holder on the market is operating in its own market segment, with its own range of games and target audience, and there are limited incentives to compete with other segments. According to the ACM, due to these strict regulations, the games of chance market is very differentiated, and could not be compared to other markets. 

The ACM's investigation, involving economic experts, distributors and potential competitors, confirmed that competition between the merging parties is very limited and end customers do not easily switch from one party to the other in case of a change of conditions for one of them. For these reasons, the ACM concluded that the merger would not have significant unilateral effects on the offline market. The ACM considered coordinated effects unlikely as well, as the parties are, on the basis of the regulations, active in different market segments with differentiated products. This would make coordination very difficult.

The ACM also assessed what the consequence of the merger would be on the potentially-to-be-legalized online gambling market. The ACM found it possible that the merged entity would be able to leverage its name and reputation on the offline market upon entering the online market. Nevertheless, experiences in other countries led to the conclusion that this effect would be limited, even more so as there will be numerous international competitors and offline gamblers strongly differ from online gamblers.

For these reasons, the ACM concluded that the envisaged merger will not have a significant effect on competition on both the lotteries and lottos market, and the potential online market. Therefore, the merger was cleared.

This article was published in the Competition Law Newsletter of January 2016. Other articles in this newsletter:

Team

Related news

11.01.2022
2022: the big reveal of 2021’s competition law promises

Short Reads - 2021 was riddled with sneak previews of a “review of competition policy tools with unprecedented scope and ambition”. These sneak previews, alongside 2021’s other competition law developments, seem to point in the direction of a more ‘social’ side to competition law in 2022, as well as looming Big Tech and Big Pharma battles, intensified (international) cooperation, more clarity on merger-related obligations for companies, and shiny new vertical and horizontal block exemption regulations. 2022 will reveal how and when the revised tools will materialise.

Read more

02.12.2021
ECJ: private enforcement in aviation sector also a national court's game

Short Reads - Recently, the ECJ ruled that national courts dealing with private enforcement cases are competent to apply EU competition law to historical behaviour in the aviation sector, regardless of public enforcement by the Commission and national competition authorities, and regardless of whether or not such authorities had authority to pursue public enforcement in the relevant period.

Read more

02.12.2021
Google Shopping: self-preferencing is a form of abuse of dominance

Short Reads - On 10 November 2021, the General Court (GC) almost entirely dismissed Google’s action against the European Commission’s Google Shopping decision. According to the European Commission (the Commission), Google illegally favoured its own comparison shopping service by displaying it more prominently in its search results than other comparison shopping services (see our July 2017 Newsletter). The Commission found that Google was abusing its dominant position and imposed a EUR 2.42 billion.

Read more

02.12.2021
Gun jumping: beware, the Commission will take action

Short Reads - The Commission has imposed interim measures on Illumina and GRAIL. These measures include the obligation to run GRAIL by independent management. By adopting interim measures in addition to opening an investigation into whether Illumina and Grail breached the standstill obligation, the Commission has made clear it will not shy away from tough action against gun jumping during an ongoing merger review. 

Read more

02.12.2021
Back to the future – Commission publishes roadmap for green and digital challenges

Short Reads - The Commission’s Communication “A competition policy fit for new challenges” (link) (the “Communication”) identifies key areas in which competition law and policy can support European efforts in dealing with the challenges of the green and digital transitions. The document covers all areas of competition law (antitrust, merger control, and State aid) and identifies various ways in which new and existing tools can contribute to addressing these challenges.

Read more

02.12.2021
Dominant firm may refuse to supply retailer after initial delivery

Articles - The Brussels Court of Appeal has held that a dominant producer firm may have valid reasons to refuse further supplies to a retailer, despite its dominance and despite previous deliveries. The Court of Appeal stressed the freedom for any company, including dominant firms, to choose their trading partners, in particular when there are valid and objective non-discriminatory reasons to refuse further direct supplies and when the retailer has alternative sources of supply.

Read more