Switzerland

[CH] Tamedia AG's Takeover of Belcom Group Approved

IRIS 2001-10:1/34

Oliver Sidler

Medialex

The Eidgenössische Departement für Umwelt, Verkehr, Energie und Kommunikation (Federal Department for the Environment, Transport, Energy and CommunicationUVEK) has decided to allow Tamedia AG to take over Zurich local radio station Radio 24 and local TV channel TeleZüri, both of which belong to radio pioneer Roger Schawinski's Belcom Group. The UVEK recognises that the takeover constitutes another step towards media concentration, a trend which it regrets. However, since many regional and national media will continue to report independently and from different viewpoints about the city of Zurich, the UVEK does not believe the takeover will actually harm diversity of opinion in any way. In order to prevent the co-operation between Radio 24 and another Zurich local radio station, Zürisee (which has economic and operational links with Tamedia AG) from significantly harming the journalistic balance of the Zurich radio landscape, the UVEK imposed the condition that Tamedia AG should, within one year, sell its 26.7% capital share in Radio Zürisee AG and cease its journalistic co-operation with that station. In so doing, it met the demands laid down during the consultation process by the government of the Zurich canton. The approval procedure was made necessary by the transfer of Belcom Holding AG to Tamedia AG. Licensees TeleZüri AG and Radio 24 AG, among others, are part of Belcom Holding AG, 60% of which was owned by Roger Schawinski and 40% by Credit Suisse First Boston before the sale.

The Wettbewerbskommission (Competition Commission - WEKO) has also approved the takeover on condition that Tamedia AG sells its shareholding in Zürisee. The results of the WEKO's preliminary investigation had suggested that the merger could lead to a dominant position in the radio advertisement market in the Zurich area. However, if Tamedia AG were to sell its shares in Radio Zürisee, at least three competitors would remain in the radio advertisement market for the Zurich area. Radio Z and Radio Zürisee would be two strong rivals to Tamedia AG, which would be taking over Radio 24, among others. Advertisers would therefore have just as many alternatives available to them as before the concentration. In the WEKO's view, competition from other radio stations and advertising media, eg direct advertising, poster campaigns, local and regional press, would be sufficient to guarantee fair competition.