Czech Competition Authority Blocks A Merger: Exception Or Start Of New Trend?

Last week, the Czech Competition Authority ("CCA") blocked an acquisition of part of První novinová spolecnost a.s. ("PNS") by Ceská poata, s.p. ("Czech Post"). While it is impossible to foresee the exact future of merger control enforcement in the Czech Republic, what is clear is that the CCA with this decision, whether intentionally or not, has sent a message to the market that it is ready to take the hardest line on a merger if it raises competition concerns. We summarize main details of the case and additional thoughts on its impact below.

Both Czech Post and the acquired part of PNS deliver postal items to final addressees. The CCA reasoned that approving the acquisition would substantially distort market competition on a number of relevant markets: the delivery of ordinary mail, addressed and unaddressed direct mail, subscription distribution, and the delivery of printed items such as magazines.