Regulator warns DPG Media, RTL Nederland merger threatens news choice, ad market

The Netherlands Authority for Consumers and Markets (ACM) has cast doubts over the proposed merger of media giants DPG Media and RTL Nederland. The regulator expressed concerns that the deal could significantly limit consumer choice of news sources and create an unfair advantage for the merged entity in the advertising market. It also warned of the impact the deal could have on salaries paid to journalists, and licensing fees paid to news content services.

"Based on its investigation, ACM foresees possible adverse effects of the acquisition on the quantity, quality, and pluralism of the general-news landscape for consumers. Therefore, ACM decided that further investigation is required," the ACM wrote.

The merger would bring together a massive collection of newspapers, radio stations, television channels, magazines and websites. DPG already has control over the newspapers AD, de Volkskrant, Parool, Trouw, websites including Nu.nl and its app, a collection of magazines, and the radio stations Qmusic and JOE. Meanwhile, RTL Nederland holds channels RTL 4, RTL5, RTL7, RTL8, RTLZ and the streaming service Videoland, and the website and app for its national news outlet, RTL Nieuws.

This consolidation of media power is what worries the ACM. DPG's dominance could stifle the diversity of news available to consumers. The ACM said it fears that DPG might choose to merge news operations, potentially leading to less original content being produced and a homogenization of news offerings across the merged company's platforms. This could limit the public's access to a variety of viewpoints and perspectives.

"The acquisition could thus possibly enable DPG to reduce the quality and accessibility of general-news services, for example, by distributing news articles across multiple channels instead of creating separate ones, or by reducing freely available news. If that is the case, it may result in a reduction of the quantity, quality, and pluralism of the general-news landscape for consumers," the ACM wrote.

The specter of an unbalanced advertising market also looms large in the ACM's concerns. With a wider audience reach and a richer pool of user data at its disposal, the merged entity could offer advertisers significantly more attractive packages while potentially pushing down advertising rates. "The question is whether other media companies will still be sufficiently able to compete for these advertising revenues after the acquisition. If this is not the case, it may have adverse effects on competitors, advertisers, and, ultimately, consumers," the ACM stated.

This could squeeze out smaller media companies unable to compete on price or audience size. The result could be reduced competition in the advertising market, giving the merged entity the opportunity to then raise advertising costs for businesses again.

The impact on journalists is another area raising red flags for the ACM. The regulator worries that DPG's increased power could lead to job cuts or decreased bargaining power for journalists, both employed and freelance. This could have a chilling effect on investigative journalism and independent reporting. "The acquisition may have adverse effects on journalists’ employment terms, because DPG might gain or strengthen its buyer power following its acquisition of RTL," the watchdog stated.

"ACM wishes to further investigate the consequences of the acquisition on the position of both employed and freelance journalists."

The proposed merger also raises questions about the future of the ANP news agency. DPG's stronger position could give it more leverage to negotiate lower rates for ANP services or even influence the agency's news selection. This, in turn, could negatively impact other media outlets that rely on ANP for news content.

The fate of the DPG-RTL merger remains uncertain. DPG and RTL must now decide whether to proceed with the deal, and then they would have to apply for a license from the ACM. If they do, the regulator will conduct a thorough investigation, that could be concluded within 13 weeks. Should the regulator request additional information from the companies, the application would be suspended until the material is provided.

"The Dutch Media Authority (CvdM) will also play a role in this investigation," the ACM said.