RTL-Talpa merger was blocked for fear TV subscriptions, advertising cost would rise

The Netherlands Authority for Consumers and Markets (ACM) blocked the proposed merger between RTL Nederland and Talpa due to concerns over increased costs for television subscriptions and higher fees charged to advertisers. This was stated in the official decision released by the regulator on Friday, which had already informed the two media companies in January that permission for the merger plan would not be granted. As a result, RTL and Talpa withdrew their merger proposal. The ACM has formally presented its decision.

According to the ACM, the two media companies would gain too much power with the merger. “Telecom companies such as KPN or VodafoneZiggo include commercial television channels in their television packages. After the acquisition, they would not be able to ignore a combined RTL/Talpa," the ACM said in a statement. "In fact, that is difficult already today, since not including either RTL or Talpa in their packages would mean that consumers switch to a different telecom company. If the acquisition were to go through, the bargaining position of telecom companies would deteriorate. After the acquisition, a combined RTL/Talpa would also be able to charge higher prices. That means that consumers would pay more for their television plans."

The merger would also be bad for advertisers. "If RTL and Talpa were to merge, advertisers would have few other alternatives for advertising on television channels. That would mean that RTL/Talpa could raise prices,” the ACM said.

ACM explained that online advertisements are not yet a full-fledged alternative to television advertisements. "That means that, if prices of television ads go up, advertisers will not be able to switch to online ads. Therefore, the prices of online ads do not keep the prices of television ads in check, at least right now as well as in the next few years. A combined RTL/Talpa would thus be able to raise prices for television ads without any repercussions."

In June 2021, Talpa and RTL Nederland announced their plan to merge, which would have brought television channels RTL 4, RTL 5, RTL 7, RTL Z, SBS6, Net 5, Veronica and SBS9 all under the same umbrella, along with radio stations Sky Radio, Veronica, 538 and Radio10. The media companies stated they intended to stand up to big tech companies such as Google and Facebook in the advertising market.

However, the watchdog expressed concern that the merged entity would have excessive market influence, despite its proposal to divest some advertising activities.