29.5.2015   

EN

Official Journal of the European Union

C 175/1

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in the merger section of the Competition website of the Commission (http://ec.europa.eu/competition/mergers/cases/). This website provides various facilities to help locate individual merger decisions, including company, case number, date and sectoral indexes,

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in electronic form on the EUR-Lex website (http://eur-lex.europa.eu/homepage.html?locale=en) under document number 32015M7597. EUR-Lex is the online access to the European law.

29.5.2015   

EN

Official Journal of the European Union

C 175/2

2.1.

Given the ECB’s consistent contributions to the HICP framework and the importance of high quality HICP statistics for sound monetary policy and, in particular, for the pursuit of the ECB’s primary objective of price stability, the ECB should continue to be consulted on future modifications of this framework (5).

2.2.

In particular, pursuant to Articles 127(4) and 282(5) of the Treaty, the ECB is to be consulted on any implementing and delegated acts, which the Commission may adopt under the revised legal framework for the HICP (6). The obligation to consult, and the benefits of ECB consultation, were underlined by the European Court of Justice in Commission v ECB  (7).

2.3.

Consistent with the existing provisions of Regulation (EC) No 2494/95 (8), and notwithstanding the collaboration in the preparation of legislative acts, Recital 2 of the proposed regulation should reflect the ECB’s competence to be consulted on implementing and delegated acts adopted under the proposed regulation.

3.1.

Regarding the Commission’s power to adopt delegated acts based on Article 290 of the Treaty, the ECB considers the threshold below which there is no obligation for Member States to provide sub-indices of harmonised indices, and the list of sub-indices that need not be produced by Member States (9) to be essential elements of the proposed regulation. These items are fundamental to ensure sound and harmonised consumer price indices. Changes to these parameters have a direct effect on the coverage and on the soundness of the indices. They exert a significant influence on the index quality and reliability. The ECB therefore considers that delegated acts are not the appropriate legal instruments to be used to establish rules governing these key elements of the HICP framework. These issues should be decided and laid down in the proposed regulation. The ECB suggests incorporating in Article 5(6) and (7) the well established thresholds of 1/1 000 weight of the total expenditure covered by the HICP, and 1/100 for owner-occupied housing and house price indices, respectively.

3.2.

The ECB supports the proposed Article 5(1) in connection with Article 2(q) on the collection of information about ‘administered prices’ as part of the ‘basic information’ that should be provided with reference to HICPs (and HICPs at constant tax rates). The ECB monitors price developments that are either set directly, or influenced to a significant extent, by the government (at central, regional or local level, including national regulators), as well as the impact of these developments on the overall HICP. Indeed, this information is very useful for the analysis of inflation developments. However, further guidance is necessary with regard to the classification of prices as either not, mainly or fully administered. This classification is often ambiguous. For indices that refer to, or exclude administered prices, the ECB would welcome if the Commission would provide guidance ensuring the harmonised definition and application of these concepts in an implementing act adopted under Article 4(4) of the proposed regulation.

4.1.

The ECB agrees with the Commission that the new legal framework should not fall behind the current requirements for compiling harmonised indices in terms of quality and consistency assurance. The achievements reached in the past 20 years since the adoption of Regulation (EC) No 2494/95 should be maintained and, where possible, enhanced.

4.2.

Article 4(2)(b) of the proposed regulation introduces a wider margin for systematic differences in annual growth rates of the owner-occupied housing price index (OOH-price index) and of the house price index (HPI) that may result from deviations from the concepts or methods laid down in the proposed Regulation. While Commission Regulation (EU) No 93/2013 (10) is silent on this issue, the ECB strongly suggests applying the standard of 0,1 percentage points that is used for assessing the comparability of sub-indices of the HICP. This could be achieved by dropping Article 4(2)(b) of the proposed Regulation and removing the restriction in the coverage of Article 4(2)(a). Relaxing comparability requirements would deteriorate the quality of the OOH and HPI sub-indices.

4.3.

The production of sub-indices at intervals less frequent than required by the proposed regulation should remain subject to prior approval by the Commission (Eurostat). This is currently ensured by Article 8(2) of Council Regulation (EC) No 2494/95 (11). The same requirement should be reflected in Article 6(3) of the proposed regulation, as well as in the implementing regulation.

29.5.2015   

EN

Official Journal of the European Union

C 175/5

Council of the European Union

General Secretariat

DG C 1C

Rue de la Loi/Wetstraat 175

1048 Bruxelles/Brussel

BELGIQUE/BELGIË

E-mail: sanctions@consilium.europa.eu

29.5.2015   

EN

Official Journal of the European Union

C 175/6

Council of the European Union

General Secretariat

DG C 1C

Rue de la Loi/Wetstraat 175

1048 Bruxelles/Brussel

BELGIQUE/BELGIË

E-mail: sanctions@consilium.europa.eu

29.5.2015   

EN

Official Journal of the European Union

C 175/7

29.5.2015   

EN

Official Journal of the European Union

C 175/8

1.

The Advisory Committee agrees with the Commission that the notified operation constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

2.

The Advisory Committee agrees with the Commission that the notified operation has a Union dimension pursuant to Article 1(2) of the Merger Regulation.

3.

The Advisory Committee agrees with the Commission’s definitions of the relevant product and geographic markets in the draft Decision.

4.

In particular, the Advisory Committee agrees with the Commission that, for the purpose of assessing the proposed concentration, the following markets should be distinguished:

5.

The Advisory Committee agrees with the Commission that the proposed concentration raises concerns as to its compatibility with the internal market or a substantial part thereof:

6.

The Advisory Committee agrees with the Commission that, also in light of the developments after notification summarised in section 6 of the draft decision, the commitments are sufficient to remove the concerns raised by the proposed concentration as to its compatibility with the internal market or a substantial part thereof:

A minority of the Advisory Committee abstains.

7.

The Advisory Committee agrees with the Commission that, subject to full compliance with the commitments offered by the parties, and all commitments considered together, the proposed concentration is unlikely to significantly impede effective competition in the internal market or in a substantial part thereof. A minority of the Advisory Committee abstains.

8.

The Advisory Committee agrees with the Commission’s view that the proposed concentration should be declared compatible with the internal market and the EEA Agreement in accordance with Articles 2(2) and 8(2) of the Merger Regulation. A minority of the Advisory Committee abstains.

29.5.2015   

EN

Official Journal of the European Union

C 175/10

1.

On 18 August 2014, the European Commission (the ‘Commission’) received a notification of a proposed concentration by which Liberty Global plc (‘Liberty Global’), Corelio Publishing NV (‘Corelio’) and Waterman & Waterman NV (‘W&W’) (together the ‘Notifying Parties’) will acquire joint control over De Vijver Media NV (‘De Vijver Media’) within the meaning of Article 3(1)(b) of the Merger Regulation (2) by way of purchase of shares (‘the Proposed Transaction’).

2.

The Proposed Transaction has an EU dimension within the meaning of Article 1(2) of the Merger Regulation.

3.

On 22 September 2014 the Commission adopted a decision initiating proceedings pursuant to Article 6(1)(c) of the Merger Regulation. The Commission preliminarily concluded that the Proposed Transaction raised serious doubts as to its compatibility with the internal market and the functioning of the EEA Agreement as a result of its non-coordinated vertical effects. The Notifying Parties submitted written comments on 6 October 2014.

4.

On 16 October 2014, pursuant to Article 10(3) of the Merger Regulation, the Commission decided to extend the time limit to review the Proposed Transaction by 20 working days.

5.

Belgacom NV demonstrated a ‘sufficient interest’ within the meaning of Article 18(4) of the Merger Regulation and on 9 December 2014 it was recognized as interested third person pursuant to Article 5 of Decision 2011/695/EU.

6.

In order to address the competition concerns identified by the Commission, the Notifying Parties submitted formal commitments on 24 November 2014. The Commission launched a market test on the commitments and concluded that improvements were needed to remove the competitive concerns. The Notifying Parties submitted improved commitments on 9 December 2014 and on 12 December 2014 and a final set of commitments on 9 February 2015. The main element of the final commitments is the commitment to offer TV distributors access to De Vijver Media’s linear basic pay TV channels Vier and Vijf and any other linear basic pay TV channel, together with their ancillary rights, on fair, reasonable and non-discriminatory terms, for their distribution in Belgium.

7.

On the basis of the revised final commitments, the draft decision declares the Proposed Transaction compatible with the internal market and the EEA Agreement.

8.

Pursuant to Article 16 of Decision 2011/695/EU, I have examined whether the draft decision deals only with objections in respect of which the parties have been afforded the opportunity of making known their views. I conclude that it does.

9.

I have not received any other procedural request or complaint from any party. Overall, I conclude that all parties have been able to effectively exercise their procedural rights in this case.

29.5.2015   

EN

Official Journal of the European Union

C 175/11

(1)

Liberty Global plc (‘Liberty Global’) provides TV, internet and telephony services via its cable networks in several countries in Europe. In Belgium, Liberty Global is the controlling shareholder of Telenet. Telenet owns and operates a cable network. The network covers virtually all of Flanders, parts of Brussels and one municipality in Wallonia. Telenet also operates a number of pay TV channels and video-on-demand services.

(2)

Waterman & Waterman NV (‘Waterman & Waterman’) is a financial holding company controlled by two individuals, namely Wouter Vandenhaute and Erik Watté.

(3)

Corelio Publishing NV (‘Corelio Publishing’) publishes newspapers, online news and sells advertising space.

(4)

De Vijver Media NV (‘De Vijver Media’) broadcasts two Dutch-language TV channels, namely ‘Vier’ and ‘Vijf’. It also produces TV content, mostly through its subsidiary Woestijnvis NV. Moreover, De Vijver Media sells advertising space on its channels Vier and Vijf and on some smaller TV channels owned by other broadcasters.

(5)

On 18 August 2014 the Commission received a notification of a proposed concentration pursuant to Article 4 of the Merger Regulation, by which the undertaking Liberty Global, along with the undertakings Waterman & Waterman and Corelio Publishing, acquire within the meaning of Article 3(1)(b) of the Merger Regulation joint control of the undertaking De Vijver Media by way of purchase of shares.

(6)

On 17 June 2014 Telenet, W&W and Corelio entered into an agreement pursuant to which Telenet will acquire 33,33 % of the shares of De Vijver Media and also subscribe to a capital increase of De Vijver Media. As a result, Telenet will hold 50 % of the shares of De Vijver Media while Waterman & Waterman and Corelio Publishing will each hold 25 % of the shares. The three shareholders of De Vijver Media will enter into a shareholders' agreement upon closing of the transaction. Based on their shareholdings and the provisions of the shareholders' agreement, each of the three shareholders will have joint control over De Vijver Media.

(7)

TV broadcasters such as De Vijver Media supply TV channels to TV distributors such as Telenet. The Commission defined the relevant product market on which De Vijver Media operates as the market for the wholesale supply of free-to-air and basic pay TV channels. Basic pay TV channels are channels included in the basic channel package offered by TV distributors. In Belgium, most households pay a monthly fee to a cable company or telephone company in return for such a basic package of TV channels. De Vijver Media's channels Vier and Vijf are included in this basic package and are therefore basic pay TV channels. Only the channels of the public broadcasters are available for free, without any subscription, and therefore qualify as free-to-air channels. Given the limited number of consumers relying solely on free-to-air TV services, the Commission did not need to decide whether the wholesale supply of free-to-air channels and the wholesale supply of basic pay TV channels constitute separate markets, since this would not change the outcome of the competitive assessment. The relevant geographic market for the supply of free-to-air and basic pay TV channels is the footprint of Telenet.

(8)

TV distributors such as Telenet transmit TV channels to their subscribers over a network. The Commission defined the relevant product market on which Telenet is active as TV distributor as the market for the retail provision of TV services. It left open whether this market consists of two separate relevant product markets, namely the market for the retail provision of free-to-air and basic pay TV services and the market for the retail provision of premium pay TV services. The relevant geographic market of these retail markets is the footprint of Telenet.

(9)

The Commission also defined a market for the production of TV content and a market for the licensing/acquisition of broadcasting rights for TV content. It left open whether the relevant geographic scope of these markets is national (Belgium) or narrower (Flanders).

(10)

Finally, the Commission left open whether the market for TV advertising constitutes a distinct market from other forms of advertising. If such a distinct market exists, its geographic scope would be Belgium or narrower (Flanders).

(11)

The transaction does not raise competition concerns regarding the market for the production of TV content and the market for the licensing of broadcasting rights for TV content. De Vijver Media's market share on these markets is low and the content it produces through its subsidiary Woestijnvis NV is not essential for TV broadcasters or TV distributors to compete. The transaction also does not raise competition concerns regarding a possible separate market for TV advertising.

(12)

The transaction does raise competition concerns because De Vijver Media could foreclose TV distributors that compete with Telenet from the channels Vier and Vijf (input foreclosure). The transaction also raises competition concerns because Telenet could foreclose competitors of De Vijver Media from access to Telenet's cable network.

(13)

The channels Vier and Vijf are an important input for TV distributors. Consumers in Flanders and Brussels value Vier and Vijf and frequently watch these channels. Respondents to the market investigation affirmed that TV distributors must be able to offer these channels to their subscribers in order to compete with Telenet.

(14)

Both Telenet and De Vijver Media have the ability to engage in both total and partial input foreclosure. Total input foreclosure means Telenet and De Vijver Media could refuse to license the channels Vier and Vijf to TV distributors that compete with Telenet. Partial input foreclosure means Telenet and De Vijver Media could raise the price for the channels Vier and Vijf or discriminate against competing TV distributors in other ways.

(15)

Apart from Telenet, two other shareholders will have joint control over De Vijver Media after the transaction. The Commission assessed whether those two other shareholders could prevent Telenet from engaging in input foreclosure. Based on an analysis of the shareholders agreement, the Commission concluded that this was not the case and that Telenet would, on its own, have the ability to engage in input foreclosure.

(16)

If the three shareholders of De Vijver Media act together, De Vijver Media also has the ability to engage in input foreclosure. Whether all three shareholders of De Vijver Media would act together depends on whether all three of them would have the incentive to engage in input foreclosure. The other two shareholders of De Vijver Media will have an incentive to engage in partial input foreclosure, as this will result in De Vijver Media receiving higher licence fees (the fees paid by TV distributors to TV broadcasters for the right to transmit the channels). The two other shareholders may not have the incentive to engage in total input foreclosure, but Telenet may align their incentives with those of Telenet by compensating them for any loss in revenue that may result from total input foreclosure.

(17)

To assess whether De Vijver Media would have the incentive to engage in total input foreclosure, the Commission quantified the costs and benefits that such foreclosure would entail. The costs are the advertising revenues and licence fees that De Vijver Media would forego because its channels are no longer offered by TV distributors that compete with Telenet. The benefits are the profits generated by Telenet from the subscribers that switch from competing platforms to Telenet. Based on a comparison of the costs and benefits, the Commission then calculated how many of the subscribers of Telenet's competitors would have to switch for total input foreclosure to be profitable.

(18)

The Commission estimated that, if Vier and Vijf were no longer offered by Telenet's competitors, the number of subscribers that would switch would be significantly higher than the minimum number of subscribers needed to make total foreclosure profitable. Since the benefits of total input foreclosure outweigh the costs, Telenet and De Vijver Media would have a strong incentive to engage in total input foreclosure.

(19)

Telenet and De Vijver Media would also have a strong incentive to engage in partial input foreclosure, as this would result in De Vijver Media receiving higher licence fees.

(20)

Input foreclosure would lead to anticompetitive effects in the market for the retail provision of TV services. Telenet has a dominant position on that market, based on its high market shares and several other factors. Input foreclosure would raise barriers to entry into this market, since new entrants will have difficulty competing with Telenet if they cannot offer the channels Vier and Vijf. Hence, Telenet's dominant position would be strengthened. Input foreclosure would also weaken competition from existing TV distributors, as they will not be able to offer Vier and Vijf.

(21)

In television markets, complete customer foreclosure occurs if a TV broadcaster is denied access to a distributor downstream. This results in blackouts during which subscribers are not able to watch the foreclosed channels. A more subtle form of foreclosure, partial customer foreclosure, occurs if a TV distributor allows a channel on its platform but degrades the quality of the viewing experience of the channel. In particular, a distributor could make rival's content less easily accessible on its platform, e.g. by positioning rival channels lower in the channel list or electronic programming guide, which will increase the likelihood that viewers will instead watch channels belonging to the distributor.

(22)

Telenet is an important customer with a significant degree of market power in the downstream market for the retail provision of TV services. In light of Telenet's high market share on the market for the retail provision of TV services, the Commission considers that broadcasters have to be on Telenet's TV distribution platform to be able to operate in Flanders.

(23)

Telenet has control over the linear channels it carries (subject to must-carry obligations) and can also decide which non-linear content broadcasters can make available on its platform. Telenet therefore has the ability to engage in customer foreclosure.

(24)

Telenet is also likely to have the incentive to engage in customer foreclosure. The target of such a strategy would be the channels that compete closely with the channels of De Vijver Media, that is, channels with similar audience and advertisers. This is because De Vijver Media's gains from customer foreclosure come from increased advertising revenues and these are likely greater in case a channel similar to Vier or Vijf would no longer be available on Telenet's platform. Conversely, foreclosure of a channel with a different profile and audience than that of Vier and Vijf is unlikely to generate any significant revenues. Due to the similarities in audience and type of content, the Commission considers that the likely targets of customer foreclosure are Medialaan's channels 2BE and Vitaya, VRT's channel Canvas, and the non-linear services of these two broadcasters.

(25)

The overall profitability of customer foreclosure for Telenet and De Vijver Media depends on how many customers switch away from Telenet as a result of foreclosure. If customer switching is low, Telenet would not lose many subscribers and hence the costs of customer foreclosure would be limited. Based on the Commission's estimate, customer switching would likely be too high to make total customer foreclosure (meaning the channel is not made available at all on Telenet's platform) profitable for Telenet. However, Telenet would likely have an incentive to engage in partial customer foreclosure in the form of quality degradation of rival broadcasters' channels and non-linear services relative to De Vijver Media. Telenet can also use partial customer foreclosure as a credible threat in negotiations, which will improve Telenet's bargaining position with Medialaan and VRT, and allow Telenet to drive a harder bargain during the negotiations about a carriage agreement.

(26)

Partial customer foreclosure would have anticompetitive effects. Quality degradation by Telenet will reduce the quality of the viewing experience of rival channels on Telenet's platform. Moreover, competition in the market for the wholesale supply of free-to-air and basic pay TV channels would be softened as the broadcasters Medialaan and VRT could be weakened as competitors.

(27)

The concentration gives rise to input foreclosure concerns regarding De Vijver Media's channels Vier and Vijf. It also gives rise to partial customer foreclosure concerns because Telenet has the ability and incentive to degrade the quality of the viewing experience of the channels of VRT and Medialaan. The notified concentration therefore gives rise to concerns that the transaction would lead to a significant impediment to effective competition in the market for the retail provision of TV services in Telenet's footprint and the market for the supply of free-to-air and basic pay TV channels in Telenet's footprint.

(28)

While the Commission was reviewing the concentration, De Vijver Media entered into new carriage agreements with several TV distributors, including Belgacom. De Vijver Media also offered to extend the duration of several carriage agreements with other TV distributors. These carriage agreements reduce the risk of input foreclosure, as they guarantee that TV distributors will have access to the channels Vier and Vijf. They do not, however, entirely remove the Commission's input foreclosure concerns, since the agreements do not cover all rights linked to the broadcast of Vier and Vijf and since potential new entrants do not have a carriage agreement.

(29)

During the Commission's review, Telenet also proposed changes to its carriage agreements with the TV broadcasters VRT and Medialaan. These agreements set the conditions under which Telenet distributes the channels of VRT and Medialaan, including the fees that Telenet must pay. Telenet and VRT amended their carriage agreement and extended the duration of the agreement. The amendment introduced several provisions aimed at protecting VRT from customer foreclosure. Telenet also made a binding and irrevocable offer to Medialaan to extend the duration of its carriage agreement and to amend the agreement to protect Medialaan from customer foreclosure. The notifying parties have made a formal commitment to keep this offer open for six months after closing of the transaction.

(30)

In order to address the competition concerns identified by the Commission, the notifying parties submitted commitments. The central element of these commitments was the commitment to ensure that De Vijver Media will meet all reasonable requests from TV distributors to distribute the channels Vier, Vijf and any future basic pay TV channel on fair, reasonable and non-discriminatory terms. Any TV distributor who intends to offer retail TV services in Telenet's footprint can, if it so wishes, obtain a licence for the entire territory of Belgium. De Vijver Media must not only license the channels, but also ancillary rights. These are the rights to include the TV programmes from the channel in a service that is linked to the channel, such as catch-up TV, multi-screen services or PVR (a service allowing viewers to record and watch programmes when they want). Linked services are offered as part of the viewing experience of channels and are offered to end-users simultaneously or shortly before or after the linear transmission of the channel.

(31)

All providers of TV distribution services can rely on the commitments, regardless of whether they distribute TV channels via cable, satellite, IPTV, DTT, internet or another distribution platform. In case of disputes over the access conditions, the TV distributors can submit the dispute to fast-track arbitration. The commitments will be in place for seven years.

(32)

Apart from the commitment to license Vier and Vijf, the notifying parties also commit to keep the offer to Medialaan open for six months after closing. The context of this offer was described in the section entitled ‘Developments after notification of the concentration’.

(33)

The Commission considers that the commitment to license Vier, Vijf and any other basic pay TV channel, together with their ancillary rights, in combination with the carriage agreements that De Vijver Media has concluded, remove the Commission's input foreclosure concerns. It removes the Commission's total input foreclosure concern because it ensures that current and future TV distributors can include Vier and Vijf in their offer. It also removes the Commission's partial input foreclosure concerns because it ensures that TV distributors will pay fees that are fair, reasonable and non-discriminatory.

(34)

The Commission also considers that the commitments, in combination with the carriage agreements that Telenet has concluded, remove the Commission's customer foreclosure concerns. Telenet's carriage agreements with VRT and Medialaan, and Telenet's offer to amend the agreement with Medialaan as formalised in the commitments, protect VRT and Medialaan from partial customer foreclosure.

(35)

For the reasons mentioned above, the decision concluded that the proposed concentration will not significantly impede effective competition in the internal market or in a substantial part of it.

(36)

Consequently the concentration was declared compatible with the internal market and the EEA Agreement, in accordance with Article 2(2) and Article 8(2) of the Merger Regulation and Article 57 of the EEA Agreement.