IP/04/1106
Brussels, 16 September 2004
Commission clears TV ratings joint venture between VNU and WPP
The European Commission has granted regulatory clearance to a proposed joint venture between VNU of the Netherlands and Britain’s WPP which will bring together their television audience measurement (TAM) services outside North America. Although the resulting company will be one of the three leading providers of TV ratings in Europe, the Commission has concluded that there will remain sufficient competition in the market.
Dutch-based VNU NV and WPP Group Plc of the United Kingdom notified the Commission on 11 August of their plans to merge their television audience measurement (TAM) services outside North America.
The deal will bring together AC Nielsen, acquired by VNU in 2001[1], and Italian company AGB, bought by WPP earlier this year[2], thereby creating one of Europe’s biggest companies in the TV ratings market together with Germany’s GfK AG and Taylor Nelson Sofres Plc (UK).
TAM involves the estimation of nationwide or local television audiences on a more or less continuous basis. The resulting information -- so called ‘ratings’ -- and other information on viewing patterns are primarily used by program producers, broadcasters, publishers, media planners and airtime buyers to determine the most effective way of reaching consumers and viewers.
The Commission’s examination has shown that this is a market where the customers, who mainly include TV stations and advertisers, often act together to select, through auctions, a single TAM provider for their country to ensure that the data can be used by all. Indeed, there is only one TAM provider in all EEA countries with the exception of Poland.
The Commission has also established that these winner-take-all auctions occur infrequently and the contracts are for long periods, which means that there is a strong incentive to win. The customers can also exercise significant buyer power by organising joint tenders for the supply of TAM services.
In view of the characteristics of the market, the Commission has concluded that the reduction from four to three of the main players in Europe will not significantly impede effective competition especially as they are all credible bidders with strong technological platforms and a good reputation in the market.
Currently, VNU provides its AC Nielsen service only in Sweden and Ireland as far as the European Economic Area is concerned. WPP’s recently acquired AGB currently operates in Cyprus, Greece, Hungary, Italy, Poland, Slovenia and the UK as well as outside Europe.
Both VNU and WPP offer a number of other market research and other services which remain independent.
[1] See decision M.2291 – VNU/ACNielsen on the Commission’s competition website or press release IP/01/192
[2] The deal was only examined by the Greek competition authorities as it did not qualify for EU review
