MM GRUPP VIOLATED THE LAW ON COMPETITION BY ACQUIRING CONTROL OF ITS COMPETITOR WITHOUT PERMISSION 

Estonian company MM Grupp, which owns the Apollo cinema chain, violated the Law on Competition when it acquired control of Forum Cinemas Lithuania and the Forum Cinemas cinema chain from Odeon Cinemas Group without permission of the Competition Council. The Competition Council imposed a fine of €7,507,930 on MM Grupp and obliged it to cease the infringement.

The investigation found that MM Grupp, without permission of the Competition Council, acquired control of Forum Cinemas Lithuania in April 2021 and effectively exercised that control: it divided the acquired business, changed its structure, and sought to integrate the two main cinemas in Vilnius and Kaunas into the Apollo cinema chain. 

At the end of 2021, MM Grupp indirectly through Apollo Kinas acquired the cinema located in Vilnius' Akropolis shopping centre and decided to lease the rest of Forum Cinemas Lithuania's business and assets, including the cinema located in Kaunas’ Akropolis, to another company for a long period. However, the latter became only a temporary operator of the assets, as after a year MM Grupp regained control of the cinema in Kaunas and sought to integrate it into its Apollo cinema chain.

Having assessed all the circumstances, the Competition Council imposed a fine of EUR 7,507,930 on MM Grupp for violating the Law on Competition and obliged it to terminate the violation within the next six months, i.e. either to submit a merger notice to the Authority and obtain a clearance, or to restore the pre-merger situation or eliminate the consequences of the infringement. 

Jolanta Ivanauskienė, the Chairwoman of the Competition Council, emphasised that implementing a merger without the institution's permission is a very serious violation, as the institution's experts are unable to assess the impact of the transaction on competition. If competition in the market is significantly reduced because of companies acquiring each other or merging, consumers may face higher prices for goods or services, less choice, and poorer quality.

The Law on Competition provides for fines of up to 10% of total annual global revenue for implementing a merger without permission. The financial penalty imposed on MM Grupp amounts to 0.8% of the company's total consolidated annual global revenue.

The decision may be appealed to the Regional Administrative Court within one month from the date of its notification or publication on the Competition Council's website.

As a reminder, in March 2021, the Competition Council received a merger notice from MM Grupp with respect to the aforementioned merger. After examining the information received, the institution's experts made preliminary conclusions that the transaction could have a negative impact on competition in the film screening and distribution markets in Lithuania and informed the company thereof. Without waiting for the final decision of the Competition Council, the Estonian company, as mentioned above, implemented the merger in April 2021. As MM Grupp did not provide all the necessary information in time, the assessment of the transaction was terminated on October 14, 2021, and the company did not obtain a clearance to implement the planned purchase of shares.