Estonian Watchdog Orders Apollo Cinema Sale to Restore Market Competition
In a decisive move to protect consumer choice and market fairness, Estonia's Competition Council has ordered MM Grupp, the operator of the Apollo cinema chain, to sell one of its two cinemas in Vilnius shopping centres. The ruling follows an investigation into the company's acquisition of a Forum Cinemas venue, which was found to have significantly restricted competition in the capital.
What did the Competition Council find?
The transaction, completed at the end of 2021 without prior authorisation, gave MM Grupp control over cinemas in both the Akropolis and Outlet shopping centres. The Council's investigation, which examined data from all seven cinemas operating in Vilnius, concluded that this consolidation reduced the competitive pressure that had previously existed between the two venues.
Officials determined that large cinemas showing predominantly commercial films, such as Hollywood productions, hold a substantial share of the market. Following the acquisition, MM Grupp's share of the Vilnius market exceeded 50 per cent, with an even stronger position among the three cinemas located in the capital's major shopping centres.
Why was the merger considered harmful?
The Competition Council found that the cinemas in Akropolis and Outlet were close competitors before the merger. Had they remained under independent operation, they would have competed for audiences through film repertoire, pricing, screening schedules, service quality, and other factors important to consumers.
With Forum Cinemas no longer operating at Akropolis in Vilnius, which would have been the strongest direct competitor to Apollo, located in the Outlet shopping centre, consumers' choices have been significantly reduced, said Jolanta Ivanauskienė, Chairwoman of the Competition Council.
The Council further noted that competitive pressure from other cinemas in the capital does not compensate for the loss of direct competition between the Akropolis and Outlet operators.
What happens next for MM Grupp?
MM Grupp proposed transferring one of its six Apollo screens at the Outlet centre to an independent operator, but the Council deemed this insufficient to restore lost competition. The company now has six months to sell one of its two shopping centre cinemas, with the terms of the sale to be agreed with the authority.
The decision may be appealed to the Regional Administrative Court within one month of its delivery or publication on the Competition Council's website.
Frequently asked questions
Why did the Competition Council reject MM Grupp's proposal?
The Council determined that transferring a single screen would not be enough to restore the competitive pressure lost through the merger, as it would not create a viable independent competitor in the market.
How long does MM Grupp have to comply with the order?
MM Grupp has a maximum of six months to restore the previous situation or eliminate the effects of the merger by selling one of the two Apollo cinemas in the capital's shopping centres.
Can the Competition Council's decision be appealed?
Yes, the decision may be appealed to the Regional Administrative Court within one month of its delivery or publication on the Competition Council's website.
