Courts To Host Battle Over Media Takeovers

Michael Hedges April 17, 2021 - Follow on Twitter

Two significant media acquisitions in Poland were thrown into disarray this past week. The Polish government, controlled by the right-wing nativist xenophobic Law and Justice party (PiS), announced months ago plans to “repolonize” the country’s media sector to further reduce any critical news reporting. The European Commission has referred Poland to the European Court of Justice (ECJ) for examination of several rule of law issues.

Polish Ombudsman for Citizens Rights Adam Bodnar was dismissed this past week (April 15) after a ruling by the PiS controlled Constitutional Tribunal. Earlier in the week (April 12) the Court of Competition and Consumer Protection affirmed his decision to halt the acquisition of Polska Press by state-controlled oil refiner/distributor PKN Orlen pending judicial review of the Competition Authority (UOKiK) approval. That approval, Mr. Bodner argued, was based on flawed favorable evidence.

Mr. Bodner’s term expired last September but he was allowed by law to continue until a succeeding Ombudsman was named. The Polish Senate refused to confirm the PiS chosen replacement. PiS appointed officials regularly clashed with Mr. Bodner for criticizing their world view and wanted him out. “It’s of great importance to ensure that this institution, which defends citizens’ rights and plays an important role for upholding the rule of law, remains independent,” said Vice-President of the European Commission for Values and Transparency Vera Jourova in a statement following Mr. Bodner’s dismissal.

A financial statement released last week by PKN Orlen showed the book value of the Polska Press asset at PLN 201 million (about €44 million) as of the acquisition date, reported wirtualnemedia.pl (April 17). A day earlier Marcin Dec was appointed acting president of Polska Press, replacing long serving Dorota Stanek. Mr. Dec retains his position as president of PKN Orlen subsidiary media buyer Sigma Bis. Also departing in April was chief editor Pawel Fafara, replaced by Dorota Kania from right-wing broadcaster Telewizja Republika. Polska Press publishes 20 regional and about 100 local newspapers from Polska Press. It was acquired from German publisher Verlagsgruppe Passau in December. “The court’s decision also does not restrict PKN Orlen from exercising ownership rights from shares in Polska Press,” said PKN Orlen chief executive Daniel Obajtek, quoted by Reuters (April 13).

In January the UOKiK blocked the acquisition of radio broadcaster Eurozet by publisher Agora. An outside expert concluded the decision was misinformed and the courts must now decide. Center for Antimonopoly and Regulatory Studies (CARS) of the Faculty of Management of the University of Warsaw published an opinion (April 15) excoriating the UOKiK for lacking “convincing evidence” of the “emergence of collective dominance.” Agora acquired a minority stake in Eurozet with a covenant to raise its stake when French media house Lagardère Group exited its Central and Eastern European assets. Eurozet operates Radio Zet, Meloradio, Antaradio and Radio Plus.

"The indication of a simple probability resulting from a simple change in the market structure (reduction of the number of competitors) is far insufficient to meet the currently applicable standards of evidence,” said the CARS report, reported by press.pl (April 15). "Common in Polish doctrine is the position that the burden of proof in merger control cases rests with the president of UOKiK.” Those outside experts could not find "any decision of the European Commission in which the structure of market shares (even if it is a duopoly) would be an element decisive in the conclusion that competition was significantly restricted.”

In February Agora appealed the UOKiK decision to the Court of Competition and Consumer Protection (SOKiK). The CARS report is seen as supporting the Agora position. The UOKiK has until May 8 to respond.

See also...

• Hot Topics - Media in Poland

• Hot Topics - Mergers and Acquisitions

• Hot Topics - Competition/Antitrust