Global’s GMG competition appeal rejected

Global Radio’s appeal against a Competition Commission ruling that it should have to sell stations in seven areas of the UK in order to complete the takeover of GMG Radio has been dismissed.

The Competition Appeal Tribunal (CAT) has today rejected the appeal, following a hearing last month. It had considered Global’s disagreement with the Competition Commission (CC) decision from earlier this year that the group should have to sell stations in seven areas of the UK in order to take full control of the assets purchased from GMG Radio in June 2012. CAT’s judgment was handed down at a public hearing in central London this afternoon.

Following the initial findings by the CC, Global had offered to sell three stations. The CC’s final report in May ruled that the group must dispose of stations in seven areas – the North West, North East, South/West Yorkshire, East Midlands, Central Scotland, North Wales and Cardiff.

Today’s decision means that the ruling still applies – so Global must sell either a Capital, Heart, Real or Smooth station in each of the seven areas. Only London and the West Midlands didn’t present a problem for the CC, leading to Global taking control of Smooth Radio in the West Midlands and London (and its networked programming) from last month.

Global Radio says it is ‘disappointed’ with the decision to reject the appeal – read more reaction here.

Detail from the appeal hearing

The appeal tribunal decided that it did not accept Global’s interpretation of the meaning of a “substantial lessening on competition.” It also agreed with the Competition Commission that in the North West of England, ‘the loss of Real and Smooth as alternatives for advertisers primarily focussed on Greater Manchester’ would reduce competition, saying there was evidence to support that finding. CAT says it would have been better if the CC had addressed all the available evidence in great depth on the issue but added that it was not bound to do so, with the tribunal deciding that the CC’s approach was not irrational.

On the issue of whether Global selling Gold, Xfm and Real XS in Manchester but keeping Capital, Smooth and Real would satisfy the regulations, the group had argued that the CC had not properly considered the effect of such a sale, choosing instead to compare it with the divestment of Capital alone. The appeal tribunal again sided with the CC, saying that, in its view, the report on the matter doesn’t show that the CC had failed to ask if selling Gold, Xfm and Real XS would suffice.

Read the full CAT judgment here