Ad X is a David and not a Winkelried
Following a year of preliminary investigations, the Competition Commission is now investigating
After a year of preliminary investigations, the Competition Commission(ComCo) is now investigating "whether PubliGroupe is abusing its dominant market position" by discriminating against some competitors and blocking their access to the market through unjustified guidelines (see also page 17).The trigger for these ComCo activities is the small advertising intermediary Ad X in Zollikon. Ad X has been working in the advertising market for two years and had applied to its own titles and to the Association of Swiss Advertising Companies (VSW) for authorization as a professional intermediary and to be granted the Intermediary Commission (IC). "In 2001, we occupied 180 titles throughout Europe; we received the VK authorization from all of the proprietary titles, but not from the VSW," says Werner Baumann, Managing Director of Ad X.
This is significant. VSW unites the four wholly owned PubliGroupe subsidiaries Publicitas, Publimedia, Publimag and Mosse, which lease around 500 titles and control 65% of the advertising market. If Ad X books an advertisement in one of the VSW leased titles, it receives no commission - and thus does free work for PubliGroupe. Around 22% of Ad X sales in 2001 were not commissioned.
The reason for the VK refusal: Ad X does not fulfill the VSW guidelines. However, the VSW did not criticize a lack of professional competence, but rather the fact that Ad X had a volume mix of 80% to 20% instead of a volume mix of 50% classified ads and 50% commercial ads. Which plays no role elsewhere for the UK authorization.
It was clear to Baumann that PubliGroupe wanted to keep Ad X out of the advertising market via VSW. He therefore turned to the Competition Commission with a complaint. "PubliGroupe is an intermediary and lessor in one. It is not acceptable for it to dictate to its competitors via VSW how much turnover they have to make with which advertisements", he says.
Even if the Weko has not yet issued a binding ruling, the VSW guidelines are still wavering. This should also benefit other intermediaries who do not receive a VC from VSW. Even Baumann is surprised by the foreseeable effect of his complaint. "I didn't want to play the Winkelried of the industry, I just wanted to receive the VK from VSW," he explains (mk).
This is significant. VSW unites the four wholly owned PubliGroupe subsidiaries Publicitas, Publimedia, Publimag and Mosse, which lease around 500 titles and control 65% of the advertising market. If Ad X books an advertisement in one of the VSW leased titles, it receives no commission - and thus does free work for PubliGroupe. Around 22% of Ad X sales in 2001 were not commissioned.
The reason for the VK refusal: Ad X does not fulfill the VSW guidelines. However, the VSW did not criticize a lack of professional competence, but rather the fact that Ad X had a volume mix of 80% to 20% instead of a volume mix of 50% classified ads and 50% commercial ads. Which plays no role elsewhere for the UK authorization.
It was clear to Baumann that PubliGroupe wanted to keep Ad X out of the advertising market via VSW. He therefore turned to the Competition Commission with a complaint. "PubliGroupe is an intermediary and lessor in one. It is not acceptable for it to dictate to its competitors via VSW how much turnover they have to make with which advertisements", he says.
Even if the Weko has not yet issued a binding ruling, the VSW guidelines are still wavering. This should also benefit other intermediaries who do not receive a VC from VSW. Even Baumann is surprised by the foreseeable effect of his complaint. "I didn't want to play the Winkelried of the industry, I just wanted to receive the VK from VSW," he explains (mk).
