THE OWNER OF DELFI.LT, WHO DID NOT OBTAIN APPROVAL FROM THE COMPETITION COUNCIL, WILL HAVE TO SELL ONE OF ITS NEWS PORTALS 

The Competition Council has not cleared the transaction by which the Estonian company Ekspress Grupp, which operates the news portal delfi.lt, acquired Lrytas, which operates the news portal lrytas.lt, and has ordered the company to restore the previous situation or remedy the effects of the concentration by selling one of the portals.

In assessing the completed transaction, the Competition Council collected and analysed data from various news portals operating in Lithuania, as well as their traffic and user engagement rates, interviewed advertising buyers (agencies and clients) and other market participants. 

The analysis showed that before the transaction, delfi.lt and lrytas.lt were close competitors and the first and second market players in terms of various traffic indicators, with a combined market share of over 40 %. After the merger, the market share of the two portals also remained high, more than doubling that of the closest competitor, both in terms of the number of user views and visits, and the time spent. The market became highly concentrated after the transaction, as there was no longer main competitor offering exclusively free news, which had previously challenged the ability of the largest player on the market, delfi.lt, to increase the prices of its paid news content.

Internal documents of the transaction participants and the assessment of factual circumstances confirmed that the purpose and effect of this concentration was to eliminate the competitive pressure of lrytas.lt, the main news portal providing only free content. This reduced the number of free alternatives available to users and created an opportunity to increase delfi.lt's revenue from paid news.

According to the Competition Council's assessment, after delfi.lt acquired its main competitor in free content, the remaining news portals exerted insufficient competitive pressure to deter the transaction parties from worsening conditions for users. Delfi.lt significantly increased the volume of paid content while reducing free content, and lrytas.lt placed a substantial portion of its content behind a paywall. The most affected were readers who prefer free news, as some of the content on lrytas.lt and delfi.lt became inaccessible to them. Additionally, delfi.lt’s incentives to attract subscribers through other means—such as improving the quality of paid content or lowering subscription prices—also declined.

Having assessed these and other circumstances, the Competition Council concluded that the merger resulted in a significant restriction of competition between Lithuanian news portals and therefore did not grant clearance for the transaction.

The Competition Council also found that the commitments offered by Ekspress Grupp - to ensure that Lrytas operates separately from delfi.lt and other businesses controlled by the Estonian company, and to offer all of the content of lrytas.lt free of charge - were not sufficient to resolve the competition problems, as they would not allow Lrytas to become an independent competitor of delfi.lt as it had been prior to the transaction. 

Ekspress Grupp is obliged to restore the status quo ante within 6 months at the latest or to eliminate the effects of the concentration by selling one of the portals it owns. The conditions for the fulfilment of these obligations are subject to the agreement of the Competition Council. 

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.

A non-confidential version of the decision (in Lithuanian) is published on the Authority's website.

As a reminder, Ekspress Grupp was found to have infringed the Law on Competition when it acquired 100% of the shares of Lrytas in December 2022 without notifying the Competition Council and obtaining its authorisation.