On 11 November, the Norwegian Competition Authority (the "NCA") blocked Schibsted's acquisition of Nettbil. At the time when the NCA ordered the parties to notify, the transaction had already been closed, but that did not stop the NCA. It must be noted that Schibsted did not do anything wrong; Nettbil's turnover was below the threshold triggering a mandatory merger notification.
The timing of the decision is interesting for several reasons. First, the acquisition, or rather the target's turnover, was too small to require a mandatory merger notification but the NCA exceptionally ordered the parties to notify the merger anyway (which the law allows). Second, the blocked merger relates to a digital market, namely the market for advertising platforms for used cars. Third, the reason for ordering the parties to notify the acquisition was that the NCA believed that the concentration constituted a "killer acquisition" whereby the burgeoning competition on the fairly new digital market would be severely stifled.
The merger pertained to the market for advertising platforms for used cars. Schibsted is the owner of Finn, the no 1 market player in Norway on this market. Nettbil is a relatively new entrant on the market in question but had positioned itself as the no 2 player with a significant growth during the last year. The market in question in Norway has few market players where Schibsted was, and is, the clear market leader. The transaction meant that Schibsted acquired its main competitor, effectively removing the competitive pressure Nettbil imposed on Schibsted.
Following the imposed notification the NCA subsequently blocked the transaction and ordered Schibsted to sell its stake in Nettbil. The NCA has emphasized the fact that it is possible for a single undertaking, in particular on a digital market, to quickly take a very large share of the market, which may reduce competition. As noted by the NCA, digital platforms are becoming more important for consumers why it is important with healthy competition between market players to ensure innovation and competitive prices for consumers. Moreover, there is also an increasing focus on digital markets, both nationally and internationally, to ensure that the markets do not tip.
The timing of the NCA's decision is interesting as it comes soon after the European Commission's statement that it encourages national competition authorities to have recourse to article 22 of the EU Merger Regulation to allow an investigation of seemingly problematic acquisitions when the national thresholds are not met. It also follows upon the Nordic competition authorities' recently published joint memorandum regarding competition enforcement on digital markets.
Both the Swedish Competition Authority (the "SCA") and the NCA have the possibility under national law to order the notification of transactions under the thresholds if there are reasons for such an order. Article 22 of the EU Merger Regulation provides that national competition authorities can refer cases to the European Commission if it affects trade between member states and threatens to significantly affect competition within the territory of the member state or states making the request. This practice has been criticised by the legal community to provide for legal uncertainty for companies. Especially since the European Commission is supposed to be a one-stop-shop and assess mergers that have a union dimension. Application of this provision leaves companies with a significant uncertainty, which will remain for an uncertain time (as such a request shall be made within 15 working days of the date on which the concentration was "otherwise made known to the Member State concerned" (whenever that occurs)).
The SCA has ordered a handful of notifications during the last year, all of which had non-negligible horizontal and/or vertical links. None of the transactions were blocked or subjected to remedies. It remains to be seen whether the NCA's more active enforcement practice will be adopted also by the SCA in the time to come.
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