Estonia's Competition Watchdog Forces Cinema Giant to Sell Vilnius Venue
Estonia's Competition Council has blocked the acquisition of a Vilnius cinema by the Apollo chain operator MM Grupp, ruling that the deal significantly restricted competition in the capital's movie market. The company must now sell one of its two cinemas in Vilnius shopping centres to restore the competitive balance, the regulator announced.
The transaction, completed in late 2021 without prior approval, saw MM Grupp take over a Forum Cinemas venue at the Akropolis shopping centre. Following a thorough investigation, the council found that the merger gave Apollo a market share exceeding 50 percent in Vilnius, effectively eliminating its strongest direct rival.
Why did the Competition Council block the Apollo cinema merger?
The council's analysis covered all seven cinemas operating in Vilnius, with particular focus on three located in the Akropolis, Ozas and Outlet shopping centres. Data on attendance, film schedules and location attractiveness were examined from multiple angles to determine competitive dynamics.
Regulators concluded that large cinemas showing predominantly commercial films, such as Hollywood productions, hold a significant share of the capital's market. Before the merger, the cinemas at Akropolis and Outlet were close competitors, vying for audiences through repertoire, pricing, screening variety and service quality.
“With Forum Cinemas no longer operating at Akropolis, which would have been the strongest direct competitor to Apollo at Outlet, consumers' choices have been significantly reduced,” said Jolanta Ivanauskienė, Chairwoman of the Competition Council. “This also resulted in reduced competitive pressure, which is the main driver encouraging businesses to compete for consumers.”
What remedies did MM Grupp propose, and why were they rejected?
MM Grupp offered to transfer one of its six Apollo screens at the Outlet shopping centre to an independent operator. However, the Competition Council deemed this proposal inadequate, stating it would not sufficiently restore the lost competitive pressure.
The council also determined that other cinemas in the capital cannot compensate for the competitive dynamic that would have existed had the two venues remained under independent ownership.
What happens next for MM Grupp and Apollo cinemas in Vilnius?
MM Grupp has been ordered to either restore the previous situation or eliminate the merger's effects within six months. This means selling one of its two Apollo cinemas in the capital's shopping centres, with the terms of the sale to be agreed with the authority.
The company may appeal the decision to the Regional Administrative Court within one month of its delivery or publication on the Competition Council's website.
Frequently asked questions about the Apollo cinema ruling
What is MM Grupp?
MM Grupp is an Estonian company that operates the Apollo cinema chain across the Baltic states.
Which cinemas are affected by the ruling?
The ruling affects Apollo cinemas at the Akropolis and Outlet shopping centres in Vilnius, Lithuania. One of these two venues must be sold.
When was the merger completed?
The acquisition of the Forum Cinemas venue at Akropolis was implemented at the end of 2021 without prior authorisation from the Competition Council.
How long does MM Grupp have to comply?
The company has a maximum of six months to sell one of the two cinemas, with terms to be agreed with the Competition Council.
