UOKiK reservations to acquisition of Cinema 3D by Multikino
The Office of Competition and Consumer Protection (UOKiK) has been analyzing the Polish cinema market since July 2018 in connection with the notification by Multikino of the acquisition of Cinema 3D. As a result of the acquisition, Multikino is to increase its cinema portfolio from 25 to 37.
After analyzing the market, UOKiK has stated that the concentration could lead to restriction of competition on three local markets – in Gdańsk, Atrium Reduta Shopping Mall in Warsaw and Młociny Shopping Mall in Warsaw.
As a result of the analysis of the cinema market, UOKiK stated that the network movie market is a separate market from the non-network cinema market. In the opinion of UOKiK, these two types of cinemas do not compete with each other because their offers reach different target groups. It is difficult to disagree with these UOKiK’s findings. It is true that network cinemas show their specificity in terms of location, repertoire, prices and marketing mechanisms – which in turn translates into a different group of clients.
The definition of the relevant market by the UOKiK is somewhat more controversial, i.e. the area on which network cinemas compete with each other. UOKiK found that it is „an area designated as 30 minutes by car”. Even though the determinant of traveling time to the cinema should be considered reasonable to determine the relevant market, the limitation of the means of communication to the car should be considered controversial. It seems that in large cities a much more effective means of communication at rush hour can be a subway or tram, and in the summer time a bicycle (in particular a publicly available city bike). Their introduction to the formula of determining the relevant market will have a significant impact on the size of the relevant market. One should also share the reflection that described market will have a very variable area for a period of time, as 30 minutes driving in rush hour will be radically different than during off-peak hours.
Admittedly, UOKiK’s reservations do not prejudge the final outcome of the proceeding, but they constitute the indication of potential conditional consent to the concentration, e.g. under the condition of the sale of cinemas in areas of limited competition.