Judgments nº T-691/18 of Tribunal General de la Unión Europea, January 27, 2021

• Resolution Date: January 27, 2021
• Issuing Organization: Tribunal General de la Unión Europea
• Decision Number: T-691/18

(Competition - Concentrations - Netherlands market for television services and telecommunications services - Decision declaring the concentration compatible with the internal market and the EEA Agreement - Relevant market - Vertical effects - Manifest error of assessment - Obligation to state reasons)

In Case T-691/18,

KPN BV, established in Rotterdam (Netherlands), represented by P. van Ginneken and G. Béquet, lawyers,

applicant,

v

European Commission, represented by H. van Vliet, G. Conte, J. Szczodrowski and F. van Schaik, acting as Agents,

defendant,

supported by

VodafoneZiggo Group Holding BV, established in Amsterdam (Netherlands),

Vodafone Group plc, established in Newbury (United Kingdom),

and

Liberty Global Europe Holding BV, established in Amsterdam,

represented by W. Knibbeler, E. Raedts, A. Pliego Selie and I. Lulof, lawyers,

interveners,

APPLICATION pursuant to Article 263 TFEU for annulment of Commission Decision C(2018) 3569 final of 30 May 2018 declaring the concentration involving the acquisition by Liberty Global of sole control over Ziggo NV to be compatible with the internal market and the Agreement on the European Economic Area (EEA) (Case COMP/M.7000 - Liberty Global/Ziggo),

THE GENERAL COURT (Third Chamber),

composed of A.M. Collins (Rapporteur), President, V. Kreuschitz and Z. Csehi, Judges,

Registrar: P. Cullen, Administrator,

having regard to the written part of the procedure and further to the hearing on 15 September 2020,

gives the following

Judgment

Background to the dispute

The entities concerned and the administrative procedure

1 The applicant, KPN BV, is active in the sector of cable networks for television, broadband internet, fixed telephony and mobile telecommunications services in the Netherlands.

2 Liberty Global Europe Holding BV (‘Liberty Global’), which is part of the international group Liberty Global plc, is a cable operator which owns and operates cable networks offering television, broadband internet and fixed telephony services in the Netherlands.

3 Ziggo NV owned and operated a broadband cable network in the Netherlands. It provided digital and analogue cable video, broadband internet, mobile telecommunications and digital telephony services.

4 On 14 March 2014, in accordance with Article 4(1) of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (OJ 2004 L 24, p. 1), Liberty Global notified to the European Commission a proposed concentration consisting of the acquisition of sole control over Ziggo, of which it already held 28.5% of the capital.

5 On 10 October 2014, the Commission adopted Decision C(2014) 7241 final declaring the concentration involving the acquisition by Liberty Global of sole control over Ziggo to be compatible with the internal market and the Agreement on the European Economic Area (EEA), in the light of the final commitments submitted by the parties (Case COMP/M.7000 - Liberty Global/Ziggo), a summary of which was published in the Official Journal of the European Union (OJ 2015 C 145, p. 7) (‘the 2014 Liberty Global/Ziggo decision’). In particular, given that Ziggo and HBO Inc. each owned 50% of HBO Nederland, a premium pay TV film channel, Liberty Global gave a commitment to divest Film1, the only other premium pay TV film channel in the Netherlands, in order to eliminate the horizontal overlap between the parties’ activities in that market.

6 On 21 November 2014, following the 2014 Liberty Global/Ziggo decision, the proposed transaction was completed.

7 By its judgment of 26 October 2017, KPN v Commission (T-394/15, not published, EU:T:2017:756), the General Court annulled the 2014 Liberty Global/Ziggo decision for failure to state reasons concerning the absence of vertical effects on the possible market for the wholesale supply and acquisition of premium pay TV sports channels.

8 On 4 April 2018, following the General Court’s annulment of the 2014 Liberty Global/Ziggo decision, Liberty Global and Vodafone Group plc, the notifying parties, lodged a supplementary notification with the Commission, providing additional information on the transaction and the changes in market conditions since that decision.

9 It should also be noted that, on 3 August 2016, the Commission adopted Decision C(2016) 5165 final declaring the concentration involving the acquisition by Vodafone and Liberty Global of joint control of a full-function joint venture to be compatible with the internal market and the EEA Agreement, subject to compliance with the commitments given (Case COMP/M.7978 - Vodafone - Liberty Global - Dutch JV) (‘the Vodafone/Liberty Global decision’). By means of that transaction, Vodafone and Liberty Global combined their activities in the Netherlands, affecting a number of markets along the chain for the distribution of television content and the provision of telecommunications services (fixed and mobile telephony and broadband internet) in that country. Liberty Global contributed Ziggo to the full-function joint venture.

10 By judgment of 23 May 2019, KPN v Commission (T-370/17, EU:T:2019:354), the General Court dismissed the action brought against the Vodafone/Liberty Global decision.

The contested decision

11 On 30 May 2018, following the supplementary notification referred to in paragraph 8 above, the Commission adopted Decision C(2018) 3569 final declaring the concentration involving the acquisition by Liberty Global of sole control over Ziggo to be compatible with the internal market and the EEA Agreement (Case COMP/M.7000 - Liberty Global/Ziggo) (‘the contested decision’).

Definition of the relevant markets

12 It is apparent from the contested decision that the Commission considered that the proposed transaction gave rise to certain horizontal overlaps and vertical relationships between the parties’ activities in a number of relevant markets along the chain for the distribution of audiovisual television content and the provision of telecommunications services (fixed and mobile telephony and broadband internet) in the Netherlands.

13 For the purpose of defining the relevant markets, the Commission made a distinction between the following markets relating to television services, all of which it regarded as being of national geographic scope:

- the market for the licensing and acquisition of broadcasting rights for television content;

- the market for the wholesale supply and acquisition of television channels;

- the market for the retail supply of television services.

14 First, as regards the market for the licensing and acquisition of broadcasting rights for television content, the Commission, in recital 79 of the contested decision, further segmented that market into broadcasting rights for sports content, films and series, and any other content. The question as to whether those markets should be further segmented, particularly as regards free-to-air rights and pay TV rights, linear and non-linear broadcasting rights, premium and non-premium content, and also segmented by exhibition window (subscription video-on-demand, transactional video-on-demand, pay-per-view, first pay TV window, second pay TV window and free-to-air television), was left open because the proposed transaction did not raise any competition concerns irrespective of how the market might have been segmented (see also recital 79 of the contested decision).

15 Second, as regards the market for the wholesale supply and acquisition of television channels, the Commission considered, in recitals 112 and 115 of the contested decision, that that market could be further segmented, namely, first, into basic and premium pay TV channels and, second, within the latter, into premium pay TV film channels and premium pay TV sports channels. However, as regards another possible segmentation, in particular between free-to-air television channels and pay TV channels, the Commission considered that the question could be left open since the proposed transaction did not raise any competition concerns irrespective of how the market might have been segmented (recitals 111 and 115 of the contested decision). Last, as far as a possible segmentation according to distribution infrastructure is concerned, the Commission concluded, in recitals 114 and 115 of the contested decision, that at the very least cable, Internet Protocol TV over very high bit-rate Digital Subscriber Line (IPTV over DSL), fibre optic and possibly satellite were interchangeable.

16 Third, as regards the market for the retail supply of television services, the Commission considered that the question of further segmentation into free-to-air and pay TV services, or into linear and non-linear pay TV services, could be left open since the proposed transaction did not raise any competition concerns, irrespective of how the market might have been defined. As regards in particular linear and non-linear television (with its various forms of video-on-demand), the Commission took the view, in recital 135 of the contested decision, that these were complements rather than substitutes. In addition, in recitals 136 and 137 of the contested decision, it considered that segmentation according to distribution technology was inappropriate because of demand-side substitutability.

17 The Commission also set out a series of considerations concerning the markets for fixed telephony and internet access services, mobile telephony services and ‘multiple play’ services (bundles normally comprising three or four types of services including mobile telephony, fixed telephony, internet access and television services), which are irrelevant to the present dispute.

The effects of the concentration on competition

18 As far as the competition analysis of the proposed transaction is concerned, the Commission examined the horizontal and vertical effects, as well as the coordinated effects on competition.

- The market for the licensing and acquisition of broadcasting rights for...