Chinese officials conditionally approve Focus Media's acquisition of Xinchao Media's equity

China News Service, Beijing, October 10 (Reporter Liu Liang) China's State Administration for Market Regulation issued an announcement on the 10th, approving the acquisition of equity interests in Chengdu Xinchao Media Group Co., Ltd. (hereinafter referred to as Xinchao Media) by Focus Media Information Technology Co., Ltd. (hereinafter referred to as Focus Media) with additional restrictive conditions.

Xie Fang, deputy director of the Second Anti-Monopoly Department of the State Administration for Market Regulation, introduced at a press conference held in Beijing that day that the case was the first concentration of undertakings approved with additional restrictive conditions in the advertising industry in China. The conditional approval of this case is a further deepening of anti-monopoly law enforcement in the advertising and media, an important people's livelihood service field, and also reflects China's high concern for the competition order in the traditional service industry.

According to reports, during the review process, the market supervision department conducted multiple rounds of on-site surveys, data calculations and market interviews. After review, Focus Media is the leading company in the domestic elevator media advertising market, with a market share of more than 50% and a dominant market position. Xinchao Media ranks second in the market. The concentration will further consolidate Focus Media's market dominance. After the concentration, the entity's bargaining power over downstream advertisers will be further enhanced, which may harm the interests of advertisers and consumers by raising prices, lowering service quality, or attaching unreasonable transaction conditions.

Xie Fang pointed out that during the review, the market regulatory authorities also noted that, judging from the overall operating conditions of the advertising industry, the continued diversion of online advertising channels and the indirect competition constraints formed by other outdoor advertising categories can weaken the adverse impact of this concentration on competition to a certain extent. Taken together, the commitment plan with additional restrictive conditions submitted by the declarer can effectively reduce the competitive impact caused by the concentration, and the State Administration for Market Regulation decided to approve the concentration with additional restrictive conditions.