Liberty Global / Ziggo Merger Procedure Regulation
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M.7000 - LIBERTY GLOBAL / ZIGGO (Only the English text is authentic) MERGER PROCEDURE REGULATION (EC) 139/2004 Article 8(2) Regulation (EC) 139/2004 Date: 10/10/2014 This text is made available for information purposes only. A summary of this decision is published in all EU languages in the Official Journal of the European Union. Parts of this text have been edited to ensure that confidential information is not disclosed; those parts are enclosed in square brackets and marked with an asterisk. EN EN EN 1 EN TABLE OF CONTENTS 1. Introduction .................................................................................................................. 5 2. The operation and the concentration ............................................................................ 6 3. EU Dimension .............................................................................................................. 7 4. The procedure ............................................................................................................... 7 5. Referral request ............................................................................................................ 8 6. Relevant Markets ......................................................................................................... 8 6.1. Television services ....................................................................................................... 9 6.1.1. Licensing/acquisition of broadcasting rights for TV content ....................................... 9 6.1.1.1. Product Market Definition ......................................................................................... 10 6.1.1.2. Geographic Market Definition ................................................................................... 16 6.1.1.3. Affected markets ........................................................................................................ 18 6.1.2. Wholesale supply and acquisition of TV channels .................................................... 18 6.1.2.1. Product Market Definition ......................................................................................... 19 6.1.2.2. Geographic Market Definition ................................................................................... 23 6.1.2.3. Affected markets ........................................................................................................ 24 6.1.3. Retail provision of TV services.................................................................................. 25 6.1.3.1. Product market definition ........................................................................................... 25 6.1.3.2. Geographic market definition .................................................................................... 27 6.2. Fixed telephony and Internet services ........................................................................ 28 6.2.1. Retail provision of fixed telephony/voice services .................................................... 29 6.2.1.1. Product market definition ........................................................................................... 29 6.2.1.2. Geographic market definition .................................................................................... 30 6.2.2. Retail supply of fixed Internet access services .......................................................... 31 6.2.2.1. Product market definition ........................................................................................... 31 6.2.2.2. Geographic market definition .................................................................................... 32 6.3. Mobile Services .......................................................................................................... 32 6.3.1. Retail supply of mobile telecommunication services to end customers .................... 32 6.3.1.1. Product market definition ........................................................................................... 33 6.3.1.2. Geographic market definition .................................................................................... 34 6.4. Multiple play .............................................................................................................. 34 6.4.1. Product market definition ........................................................................................... 34 6.4.2. Geographic market definition .................................................................................... 35 7. Competitive assessment ............................................................................................. 35 7.1. Market for the licensing/acquisition of broadcasting rights for TV content .............. 35 7.1.1. The Notifying Party's view ........................................................................................ 36 EN 2 EN 7.1.2. Commission's assessment .......................................................................................... 37 7.2. Market for the supply and acquisition of Premium Pay TV channels (supply side) .. 40 7.2.1. The Notifying Party's view ........................................................................................ 40 7.2.2. Commission's assessment .......................................................................................... 43 7.2.2.1. Non-coordinated effects - Horizontal concerns ......................................................... 43 7.2.2.2. Non-coordinated effects – vertical concerns .............................................................. 46 7.3. Markets for the supply and acquisition of Basic and Premium Pay TV channels (acquisition side) ........................................................................................................ 54 7.3.1. Introduction ................................................................................................................ 54 7.3.2. Effect of the transaction on the merged entity's bargaining power vis-à-vis broadcasters ................................................................................................................ 55 7.3.2.1. The Notifying Party's view ........................................................................................ 55 7.3.2.2. Commission's assessment .......................................................................................... 56 7.3.3. Effect of increased bargaining power on the emergence of OTT services ................ 60 7.3.3.1. The Notifying Party's view ........................................................................................ 60 7.3.3.2. Commission's assessment .......................................................................................... 62 7.3.4. Ability and incentive of the Notifying Party to use its increased buyer power to foreclose TV broadcasters' competing content from having access to its Pay TV distribution platform................................................................................................... 84 7.3.4.1. The Notifying Party's view ........................................................................................ 84 7.3.4.2. Commission's assessment .......................................................................................... 84 7.3.5. Ability and incentive of the Notifying Party post-merger to use its increased buyer power to foreclose its rivals in the retail market for the provision of Pay TV services .................................................................................................................................... 88 7.3.5.1. The Notifying Party's view ........................................................................................ 88 7.3.5.2. Commission's assessment .......................................................................................... 89 7.3.6. Ability and incentive of the Notifying Party post-merger to block TV broadcasters' Hybrid Broadcast Broadband TV signals .................................................................. 91 7.3.6.1. The Notifying Party's view ........................................................................................ 91 7.3.6.2. Commission's assessment .......................................................................................... 92 7.4. The markets for the retail provision of Pay TV services, fixed Internet access services, fixed telephony services and multiple play services ................................... 94 7.4.1. Horizontal concerns – non-coordinated effects .......................................................... 94 7.4.1.1. View of the Notifying Party ....................................................................................... 94 7.4.1.2. Commission's assessment .......................................................................................... 94 7.4.1.3. Conclusion.................................................................................................................. 99 7.4.2. Horizontal concerns – coordinated effects ............................................................... 100 7.4.2.1. View of the Notifying Party ..................................................................................... 100 7.4.2.2. Commission's assessment ........................................................................................ 103 EN 3 EN 7.4.2.3. Conclusion................................................................................................................ 110 7.5. The market for the provision of retail fixed Internet access services