Judgments nº T-346/02 of Court of First Instance of the European Communities, September 30, 2003

• Resolution Date: September 30, 2003
• Issuing Organization: Court of First Instance of the European Communities
• Decision Number: T-346/02

JUDGMENT OF THE COURT OF FIRST INSTANCE (Third Chamber)

30 September 2003 (1) (Competition - Control of concentrations between undertakings - Regulation (EEC) No 4064/89 - Decision to refer to national authorities - Concept of ‘distinct market’)

In Joined Cases T-346/02 and T-347/02,

Cableuropa SA, established in Madrid (Spain),

Región de Murcia de Cable SA, established in Murcia (Spain),

Valencia de Cable SA, established in Madrid,

Mediterránea Sur Sistemas de Cable SA, established in Alicante (Spain),

Mediterránea Norte Sistemas de Cable SA, established in Castellón (Spain),

represented by L. Castresana Sánchez and G. Samaniego Bordiu, lawyers, with an address for service in Luxembourg,

applicants in Case T-346/02,

Aunacable SA, established in Madrid (Spain), represented by A. Creus Carreras and N. Lacalle Mangas, lawyers,

Sociedad Operadora de Telecomunicaciones de Castilla y León (Retecal) SA, established in Boecilli (Spain),

Euskaltel SA, established in Zamudio-Bizkaia (Spain),

Telecable de Avilés SA, established in Avilés (Spain),

Telecable de Oviedo SA, established in Oviedo (Spain),

Telecable de Gijón SA, established in Gijón (Spain),

R Cable y Telecomunicaciones Galicia SA, established in La Coruña (Spain),

Tenaria SA, established in Cordovilla (Spain),

represented by J. Jiménez Laiglesia, lawyer,

applicants in Case T-347/02,

v

Commission of the European Communities, represented by F. Castillo de la Torre, acting as Agent, with an address for service in Luxembourg,

defendant,

supported by

Kingdom of Spain, represented by L. Fraguas Gadea, acting as Agent, with an address for service in Luxembourg,

by

Sogecable SA, established in Madrid, represented by S. Martínez Lage and H. Brokelmann, lawyers,

by

DTS Distribuidora de Televisión Digital SA (Vía Digital), established in Madrid,

and by

Telefónica de Contenidos SAU, established in Madrid,

represented by M. Merola and S. Moreno Sanchez, lawyers,

APPLICATION for annulment of the Commission decision of 14 August 2002 referring the examination of the concentration aiming at the merger of DTS Distribuidora de Televisión Digital SA (Vía Digital) and Sogecable SA, to the Spanish competition authorities, pursuant to Article 9 of Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (Case COMP/M.2845 - Sogecable/Canalsatélite Digital/Vía Digital),

THE COURT OF FIRST INSTANCE

OF THE EUROPEAN COMMUNITIES (Third Chamber),

composed of: K. Lenaerts, President, J. Azizi and M. Jaeger, Judges,

Registrar: J. Palacio González, Principal Administrator,

having regard to the written procedure and further to the hearing on 11 June 2003,

gives the following

Judgment

Legal context

1.

Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings (OJ 1989 L 395, p. 1), corrected version in OJ 1990 L 257, p. 13, as amended by Council Regulation (EC) No 1310/97 of 30 June 1997 (OJ 1997 L 180, p. 1), hereinafter ‘Regulation 4064/89’) provides for a system of control by the Commission of concentrations having ‘a Community dimension’ as defined by Article 1(2) and (3) of Regulation No 4064/89.

2.

Article 9 of Regulation No 4064/89 allows the Commission to refer the examination of a concentration to the Member States. In particular, it provides as follows:

‘1. The Commission may, by means of a decision notified without delay to the undertakings concerned and the competent authorities of the other Member States, refer a notified concentration to the competent authorities of the Member State concerned in the following circumstances.

2. Within three weeks of the date of receipt of the copy of the notification a Member State may inform the Commission, which shall inform the undertakings concerned, that:

   (a) a concentration threatens to create or to strengthen a dominant position as a result of which effective competition would be significantly impeded on a market within that Member State, which presents all the characteristics of a distinct market, or

   (b) a concentration affects competition on a market within that Member State, which presents all the characteristics of a distinct market and which does not constitute a substantial part of the common market.

3. If the Commission considers that, having regard to the market for the products or services in question and the geographical reference market within the meaning of paragraph 7, there is such a distinct market and that such a threat exists, either:

   (a) it shall itself deal with the case in order to maintain or restore effective competition on the market concerned, or

   (b) it shall refer the whole or part of the case to the competent authorities of the Member State concerned with a view to the application of that State's national competition law.

   If, however, the Commission considers that such a distinct market or threat does not exist it shall adopt a decision to that effect which it shall address to the Member State concerned.

   In cases where a Member State informs the Commission that a concentration affects competition in a distinct market within its territory that does not form a substantial part of the common market, the Commission shall refer the whole or part of the case relating to the distinct market concerned, if it considers that such a distinct market is affected.

   ...

7. The geographical reference market shall consist of the area in which the undertakings concerned are involved in the supply and demand of products or services, in which the conditions of competition are sufficiently homogeneous and which can be distinguished from neighbouring areas because, in particular, conditions of competition are appreciably different in those areas. This assessment should take account in particular of the nature and characteristics of the products or services concerned, of the existence of entry barriers or of consumer preferences, of appreciable differences of the undertakings' market share between the area concerned and neighbouring areas or of substantial price differences.

8. In applying the provisions of this Article, the Member State concerned may take only the measures strictly necessary to safeguard or restore effective competition on the market concerned.

   ...’

   The undertakings concerned

   3.
   Cableuropa SA (‘Cableuropa’), the first applicant in Case T-346/02, is a cable telecommunications operator (‘cable operator’) active in particular on the pay-TV markets in Spain. It has majority shareholdings in the other applicants in this case, namely Región de Murcia de Cable SA, Valencia de Cable SA, Mediterránea Sur Sistemas de Cable SA, and Mediterránea Norte Sistemas de Cable SA, which are also cable operators active in Spain.
   4.
   Aunacable SAU (‘Aunacable’), the first applicant in Case T-347/02, is a company grouping together five cable operators active in Spain, namely Able in Aragon, Canarias Telecom in the Canary Islands, Madritel in Madrid, Menta in Catalonia and Supercable in the greater part of Andalusia. The other applicants in this case are regional cable operators (‘regional cable operators’) also active in Spain.
   5.
   Sogecable SA (‘Sogecable’) is a commercial limited company whose main activities are essentially the management and operation of an analog pay-TV channel (Canal+) on the Spanish market. Sogecable also operates a platform for digital satellite television, Canalsatélite Digital, of which it controls 83.25%. Its activities also include the provision of technical services and the management of the subscription service, the production and sale of special-interest television channels, the production, distribution and showing of films, the acquisition and sale of sporting rights. Sogecable is, through Canal+ and Canalsatélite Digital, the biggest pay-TV operator in Spain.
   6.
   By virtue of an agreement concluded on 28 June 1999 between the shareholders of Promotora de Informaciones SA (‘Prisa’) and of the Canal+ SA group (‘Canal+ group’) and renewed in 2002, Sogecable is jointly controlled by those two companies, each of which holds 21.27% of the shares, the remainder being held by several minority shareholders and allotted through stock exchanges. Prisa is a Spanish media group with interests in the press, publishing, radio and pay-TV sectors. The Canal+ group heads the European cinema and television division of the Vivendi Universal group (‘Vivendi’). Vivendi works in the sectors of music, television, cinema, telecommunications, internet, publishing and the environment.
   7.
   DTS Distribuidora de Televisión Digital SA (‘Vía Digital’) manages and operates a digital television platform on the Spanish market. It is also active in the production, purchase, sale, reproduction, distribution and showing of all types of audiovisual works. It is the second biggest multi-channel pay-TV operator in Spain.
   8.
   Vía Digital is controlled by Telefónica de Contenidos SAU (‘Telefónica de Contenidos’), a company which, up to 23 October 2002, was called Grupo Admira Media SA (‘Admira’). As a wholly-owned subsidiary of Telefónica SA (‘Telefónica’), the biggest telecommunications operator in the Spanish-speaking world, Telefónica de Contenidos brings together and manages the latter's holdings in the Spanish and Latin American audiovisual services markets.

   Background of the case

   9.
   On 3 July 2002 the Commission received notification pursuant to Regulation No 4064/89 of an agreement concluded between Sogecable and Admira on 8 May 2002 concerning the merger of Vía Digital with Sogecable by means of an exchange of shares. The agreement also provides for the acquisition by Sogecable of Admira's indirect holding in Audiovisual Sport SL (AVS), an undertaking through which Sogecable and Telefónica control the broadcasting rights in football matches of the first and second divisions of the Spanish Football League, other competitions, such...