# Arrêt de la Cour

**Case C-12/03 P**

**Commission of the European Communities**

**v**

**Tetra Laval BV**

(Appeal – Competition – Regulation (EEC) No 4064/89 – Decision declaring a ‘conglomerate-type’ concentration incompatible with the common market – Leveraging – Scope of judicial review – Factors to be taken into consideration – Behavioural commitments)

Opinion of Advocate General Tizzano delivered on 25 May 2004

Judgment of the Court (Grand Chamber), 15 Feburary 2005

Summary of the Judgment

1.     *Competition – Concentrations – Examination by the Commission – Assessments of an economic nature – Conglomerate-type concentration
– Discretion as regards assessment – Review by the Court – Limits*

*(Council Regulation No 4064/89, Art. 2)*

2.     *Competition – Concentrations – Assessment of compatibility with the common market – Conglomerate-type concentration – Presentation
of a close prospective examination supported by convincing evidence*

*(Council Regulation No 4064/89, Art. 2(2) and (3))*

3.     *Competition – Concentrations – Assessment of compatibility with the common market – Conglomerate-type concentration – Taking
into account of foreseeable anti‐competitive conduct capable of resulting in leveraging – Whether permissible – No obligation
on the Commission to assess its likelihood having regard to the risks inherent in its adoption by an undertaking*

*(Art. 82 EC; Council Regulation No 4064/89, Art. 2(2) and (3))*

4.     *Competition – Concentrations – Examination by the Commission – Commitments by the undertakings concerned capable of rendering
the notified operation compatible with the common market – Taking into account of behavioural and structural undertakings*

*(Council Regulation No 4064/89 Arts 2(2) and (3) and 8(2))*

5.     *Competition – Concentrations – Assessment of compatibility with the common market – Taking into account of the elimination
or significant reduction of potential competition tending to reinforce a dominant position – Whether permissible – Obligation
of the Commission to establish the alleged reinforcement – Mere finding as to the existence of a clear dominant position on
the part of the acquiring undertaking not sufficient*

*(Council Regulation No 4064/89, Art. 2(1), (2) and (3))*

1.     The basic provisions of Regulation No 4064/89 on the control of concentrations between undertakings, in particular Article
2, confer on the Commission a certain discretion, especially with respect to assessments of an economic nature. Consequently,
review by the Community Courts of the exercise of that discretion, which is essential for defining the rules on concentrations,
must take account of the margin of discretion implicit in the provisions of an economic nature which form part of the rules
on concentrations.

Whilst the Court recognises that the Commission has a margin of discretion with regard to economic matters, that does not
mean that the Community Courts must refrain from reviewing the Commission’s interpretation of information of an economic nature.
Not only must the Community Courts, inter alia, establish whether the evidence relied on is factually accurate, reliable and
consistent but also whether that evidence contains all the information which must be taken into account in order to assess
a complex situation and whether it is capable of substantiating the conclusions drawn from it. Such a review is all the more
necessary in the case of a prospective analysis required when examining a planned merger with conglomerate effect.

(see paras 38-39)

2.     A prospective analysis of the kind necessary in merger control must be carried out with great care since it does not entail
the examination of past events – for which often many items of evidence are available which make it possible to understand
the causes – or of current events, but rather a prediction of events which are more or less likely to occur in future if a
decision prohibiting the planned concentration or laying down the conditions for it is not adopted.

Thus, the prospective analysis consists of an examination of how a concentration might alter the factors determining the state
of competition on a given market in order to establish whether it would give rise to a serious impediment to effective competition.
Such an analysis makes it necessary to envisage various chains of cause and effect with a view to ascertaining which of them
are the most likely.

The analysis of a conglomerate-type concentration is a prospective analysis in which, first, the consideration of a lengthy
period of time in the future and, secondly, the leveraging necessary to give rise to a significant impediment to effective
competition mean that the chains of cause and effect are dimly discernible, uncertain and difficult to establish. That being
so, the quality of the evidence produced by the Commission in order to establish that it is necessary to adopt a decision
declaring the concentration incompatible with the common market is particularly important, since that evidence must support
the Commission’s conclusion that, if such a decision were not adopted, the economic development envisaged by it would be plausible.

(see paras 42-44)

3.     The Commission’s analysis of the effects of a conglomerate-type concentration must comprise a comprehensive examination of
the probability of the adoption of anti-competitive conduct capable of resulting in leveraging, that is to say, it must take
into account both the incentives to adopt such conduct and the factors liable to reduce, or even eliminate, those incentives,
including the possibility that such conduct is unlawful.

However, it would run counter to the purpose of prevention of Regulation No 4064/89 on the control of concentrations between
undertakings to require the Commission to examine, for each proposed merger, the extent to which the incentives to adopt anti-competitive
conduct would be reduced, or even eliminated, as a result of the unlawfulness of the conduct in question, the likelihood of
its detection, the action taken by the competent authorities, both at Community and national level, and the financial penalties
which could ensue.

Such an assessment would make it necessary to carry out an exhaustive and detailed examination of the rules of the various
legal orders which might be applicable and of the enforcement policy practised in them. Moreover, if it is to be relevant,
such an assessment calls for a high probability of the occurrence of the acts envisaged as capable of giving rise to objections
on the ground that they are part of anti-competitive conduct.

It follows that, at the stage of assessing a proposed merger, an assessment intended to establish whether an infringement
of Article 82 EC is likely and to ascertain that it will be penalised in several legal orders would be too speculative and
would not allow the Commission to base its assessment on all of the relevant facts with a view to establishing whether they
support an economic scenario in which a development such as leveraging will occur.

(see paras 74-77)

4.     As regards commitments offered by the undertakings concerned which are capable of rendering the notified concentration compatible
with the common market, the principle is that these must enable the Commission to conclude that the concentration at issue
will not create or strengthen a dominant position within the meaning of Article 2(2) and (3) of Regulation No 4068/89 on the
control of concentrations between undertakings. It is to be inferred from that principle that the categorisation of a proposed
commitment as behavioural or structural is immaterial and that the possibility cannot automatically be ruled out that commitments
which are prima facie behavioural, for instance a commitment not to use a trade mark for a certain period or to make part
of the production capacity of the entity arising from the concentration available to third-party competitors or, more generally,
to grant access to essential facilities on non-discriminatory terms, may also be capable of preventing the emergence or strengthening
of a dominant position.

(see para. 86)

5.     It follows from Article 2(1) of Regulation No 4064/89 on the control of concentrations between undertakings that the Commission,
when assessing the compatibility of a concentration with the common market, must take account of a number of factors, such
as the structure of the relevant markets, actual or potential competition from undertakings, the position of the undertakings
concerned and their economic and financial power, possible options available to suppliers and users, any barriers to entry
and trends in supply and demand.

Accordingly, the mere fact that the acquiring undertaking already holds a clear dominant position on the relevant market,
although constituting an important factor, does not in itself suffice to justify a finding that a reduction in the potential
competition which that undertaking must face constitutes a strengthening of its position.

The potential competition represented by a producer of substitute products on a segment of the relevant market is only one
of the set of factors which must be taken into account when assessing whether there is a risk that a concentration might strengthen
a dominant position. It cannot be ruled out that a reduction in that potential competition might be compensated by other factors,
with the result that the competitive position of the already dominant undertaking remains unchanged.

(see paras 125-127)

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: **Regulation (EEC) No 4064/89**

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‘148
: It is necessary first to determine whether a merger transaction creating a competitive structure which does not immediately
confer on the merged entity a dominant position may nevertheless be prohibited under Article 2(3) of the Regulation, when
in all likelihood it will allow that entity, as a result of leveraging by the acquiring party from a market in which it is
already dominant, to obtain in the relatively near future a dominant position on another market in which the party acquired
currently holds a leading position, and when the acquisition in question has significant anti-competitive effects on the relevant
markets.

150
: The Court observes that, in principle, a merger between undertakings which are active on distinct markets is not usually of
such a nature as immediately to create or strengthen a dominant position due to the combination of the market shares held
by the parties to the merger. The factors which are of significance for the relative positions of competitors within a given
market are generally to be found within the market itself, namely in particular the market shares held by the competitors
and the conditions of competition on the market. It does not follow, however, that the conditions of competition on a market
can never be affected by factors external to that market.

151
: Thus, by way of example, in a case where the markets in question are neighbouring markets and one of the parties to a merger
transaction already holds a dominant position on one of the markets, the means and capacities brought together by the transaction
may immediately create conditions allowing the merged entity to leverage its way so as to acquire, in the relatively near
future, a dominant position on the other market. This could especially be the case where the relevant markets are tending
to converge and where, in addition to the dominant position held by one of the parties to the transaction on a market, the
other party, or one of the other parties, to the transaction holds a leading position on another market.

152
: Any other interpretation of Article 2(3) of the Regulation could deprive the Commission of the power to exercise control over
merger transactions which have solely or principally a conglomerate effect.

153
: Consequently, in a prospective analysis of the effects of a conglomerate-type merger transaction, if the Commission is able
to conclude that a dominant position would, in all likelihood, be created or strengthened in the relatively near future and
would lead to effective competition on the market being significantly impeded, it must prohibit it (see, in this regard, *Kali & Salz* , paragraph 221; *Gencor* v *Commission* , paragraph 162; and *Airtours* v *Commission* , paragraph 63).

154
: In this context, it is also appropriate to distinguish, on the one hand, between a situation where a merger having conglomerate
effects immediately changes the conditions of competition on the second market and results in the creation or strengthening
of a dominant position on that market due to the dominant position already held on the first market and, on the other hand,
a situation where the creation or strengthening of a dominant position on the second market does not immediately result from
the merger, but will occur, in those circumstances, only after a certain time and will result from conduct engaged in by the
merged entity on the first market where it already holds a dominant position. In this latter case, it is not the structure
resulting from the merger transaction itself which creates or strengthens a dominant position within the meaning of Article
2(3) of the Regulation, but rather the future conduct in question.

155
: The Commission’s analysis of a merger producing a conglomerate effect is conditioned by requirements similar to those defined
by the Court with regard to the creation of a situation of collective dominance ( *Kali & Salz* , paragraph 222; and *Airtours* v *Commission* , paragraph 63). Thus the Commission’s analysis of a merger transaction which is expected to have an anti-competitive conglomerate
effect calls for a particularly close examination of the circumstances which are relevant for an assessment of that effect
on the conditions of competition in the reference market. As the Court has already held, where the Commission takes the view
that a merger should be prohibited because it will create or strengthen a dominant position within a foreseeable period, it
is incumbent upon it to produce convincing evidence thereof ( *Airtours* v *Commission* , paragraph 63). Since the effects of a conglomerate-type merger are generally considered to be neutral, or even beneficial,
for competition on the markets concerned, as is recognised in the present case by the economic writings cited in the analyses
annexed to the parties’ written pleadings, the proof of anti-competitive conglomerate effects of such a merger calls for a
precise examination, supported by convincing evidence, of the circumstances which allegedly produce those effects (see, by
analogy, *Airtours* v *Commission* , paragraph 63).’

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‘220
: As stated above, under Article 2(3) of the Regulation, concentrations which create or strengthen a dominant position as a
result of which effective competition would be significantly impeded in the common market or in a substantial part of it must
be declared incompatible with the common market.

222
: Such an approach warrants close examination in particular of the circumstances which, in each individual case, are relevant
for assessing the effects of the concentration on competition in the reference market.

223
: In this respect, however, the basic provisions of the Regulation, in particular Article 2 thereof, confer on the Commission
a certain discretion, especially with respect to assessments of an economic nature.

224
: Consequently, review by the Community judicature of the exercise of that discretion, which is essential for defining the rules
on concentrations, must take account of the discretionary margin implicit in the provisions of an economic nature which form
part of the rules on concentrations.’

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‘210
: At the hearing, the Commission stated that its reasoning is not based on the precise accuracy of its forecasts, inasmuch as
it is accepted that there will be significant future growth. It also acknowledged there that, in the light of the remaining
uncertainties surrounding the commercial applicability of the necessary barrier technologies, it could not assume significant
PET growth for the [non-flavoured] UHT milk market, and that even the weak growth predicted in the contested decision could
turn out to be an overestimation. It did, however, emphasise that its forecasts for probable strong growth in the use of PET
for fresh milk, juices, FFDs and particularly tea/coffee drinks in the period up to 2005 were entirely plausible.

211
: The Court finds that the use of PET will not actually increase for UHT milk and, consequently, for approximately half of the
LDP market.

212
: As regards the rest of the LDP market, it must be found that the PCI report, [entitled “The Potential for PET in the Packaging
of Liquid Dairy Products (2001)”,] the only independent study to concentrate on the LDP market, predicts growth as a result
of which PET use will be 9.2% of the fresh non-flavoured milk market in 2005 (PCI, p. 64). In addition there is the fact that,
for aseptic packaging, the Warrick report [entitled “Warrick Research Report Packaging Markets – Aseptic Packaging Markets
World and Western Europe – 2000”] predicts only minimal growth, of 1%, for flavoured milk, and a slight decline for other
milk-based drinks, whilst the Pictet report [entitled “Analysts’ Report Pictet – European Packaging Machinery, Move into PET”]
does not give any specific forecasts for LDPs. On the basis of that evidence, the Commission has not shown what it claims
to have shown in its defence, namely that its forecasts for LDPs are based on a prudent analysis of the independent studies
or on a solid, coherent body of evidence obtained by it through its market investigation. The growth estimates adopted by
the Commission (paragraph 209 above) are not really very convincing. The PCI report, on the other hand, provides the only
proof which might possibly support the forecast of a 25% market share for PET in other milk-based drinks (namely flavoured
milk and drinks based on milk and yoghurt) by 2005 (PCI, pp. 63 and 64). However, if that growth were to be realised, the
relevant volume would increase only by 62 000 tonnes for 2000, to reach 92 800 tonnes in 2005, an increase which is not very
significant in relation to the roughly 120 million tonnes of milk produced in the Community each year (PCI, p. 9). More generally,
the contested decision does not explain adequately how PET could displace HDPE as the main material competing with carton
by 2005, especially in the important fresh milk packaging segment. It must be pointed out that the Commission does not dispute
either the overall figure of 17.3% for the use of HDPE for LDPs given by [the consulting company] Canadean for 2000 (see table
3 in recital 66) or the forecast that that figure could reach 19.5% by 2005 (see table 5 in recital 105).

213
: As regards juices, the Commission’s forecast is even less convincing. Although the Commission itself acknowledged that the
growth in question would be due mainly to a switch from glass to PET, it did not conduct any analysis of the glass market.
In the absence of such an analysis, the Court is unable to ascertain the accuracy of the Commission’s forecasts for juices.
An analysis of that kind would have been indispensable to enable the Court to determine the likely level of switch from glass
to carton, PET and HDPE. It was all the more indispensable given the differences between the relevant forecasts made in the
Canadean and Warrick studies, on the one hand, and the Pictet study, on the other, as regards levels of growth and the time
periods used in the analyses.

214
: It follows that the growth forecasts for LDPs and juices as stated by the Commission in the contested decision have not been
proven to the requisite legal standard. Although a certain amount of growth in those segments is likely, especially for premium
products, convincing evidence of the extent of the growth is lacking.

215
: By contrast, the independent studies do show that, by 2005, there will in all likelihood be a significant increase in the
use of PET for packaging FFDs and tea/coffee drinks, including isotonic drinks. Since the level of growth forecast in the
contested decision was not seriously called into question by the applicant at the hearing and is not overestimated compared
with the forecast in the studies, the Court finds that the Commission did not commit an error on this point.’

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‘429
: The behavioural commitment, namely the separation of Sidel from Tetra Pak, together with the confirmation of pre-existing
Article 82 undertakings, are submitted in particular with regard to the concerns on the ability of the merged entity to leverage
its dominant position in carton packaging to gain a dominant position in PET packaging equipment. This commitment and the
pre-existing Article 82 commitments are, however, purely behavioural. As such, they are not suitable to restore conditions
of effective competition on a permanent basis, since they do not address the permanent change in the market structure created
by the notified operation that causes these concerns.

430
: The “separation” of Sidel from Tetra Pak companies does not alter the fact that, as expressly acknowledged in the commitment
itself, Sidel’s board will “be held responsible directly by the Tetra Laval Group board”. It cannot be expected that such
separation will prevent Sidel from implementing the commercial strategy of the Tetra Laval Group. In addition Sidel’s legal
status could be changed, i.e. Sidel might be de-listed and turned into a private company like Tetra Laval which would make
monitoring of “firewalls” virtually impossible.

431
: The commitment not to “bundle” as well as the confirmation of the pre-existing Article 82 commitments constitute pure promises
not to act in a certain manner, indeed not to act in contravention of Community law. Such behavioural promises are in contrast
with the Commission’s stated policy on remedies and with the purpose of the Merger Regulation itself ... and are extremely difficult
if not impossible to monitor effectively.

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: Overall, in addition to being complex in their implementation and in their monitoring, these commitments cannot be considered
as capable of removing effectively the competition problems identified.’

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: It should be recalled that, according to settled case-law, where an undertaking is in a dominant position it is in consequence
obliged, where appropriate, to modify its conduct so as not to impair effective competition on the market regardless of whether
the Commission has adopted a decision to that effect (Case 322/81 *Michelin* v *Commission* [1983] ECR 3461, paragraph 57; Case T-51/89 *Tetra Pak* v *Commission* [1990] ECR II-309, paragraph 23; and Joined Cases T-125/97 and T-127/97 *Coca-Cola* v *Commission* [2000] ECR II-1733, paragraph 80).

158
: Moreover, in response to the questions put by the Court at the hearing, the Commission did not deny that leveraging by Tetra
through the conduct described above could constitute abuse of Tetra’s pre-existing dominant position in the aseptic carton
markets. This could also be the case, according to the concerns expressed by the Commission in its defence, in circumstances
where the merged entity refused to participate in the installation and any necessary conversion of Sidel SBM machines, to
provide after-sales service or to honour the guarantees for such machines when sold by converters. However, the Commission
went on to state that the fact that a type of conduct may constitute an independent infringement of Article 82 EC does not
preclude that conduct from being taken into account in the Commission’s assessment of all forms of leveraging made possible
by a merger transaction.

159
: In this regard, it must be stated that, although the Regulation provides for the prohibition of a merger creating or strengthening
a dominant position which has significant anti-competitive effects, these conditions do not require it to be demonstrated
that the merged entity will, as a result of the merger, engage in abusive, and consequently unlawful, conduct. Although it
cannot therefore be presumed that Community law will not be complied with by the parties to a conglomerate-type merger transaction,
such a possibility cannot be excluded by the Commission when it carries out its control of mergers. Accordingly, when the
Commission, in assessing the effects of such a merger, relies on foreseeable conduct which in itself is likely to constitute
abuse of an existing dominant position, it is required to assess whether, despite the prohibition of such conduct, it is none
the less likely that the entity resulting from the merger will act in such a manner or whether, on the contrary, the illegal
nature of the conduct and/or the risk of detection will make such a strategy unlikely. While it is appropriate to take account,
in its assessment, of incentives to engage in anti-competitive practices, such as those resulting in the present case for
Tetra from the commercial advantages which may be foreseen on the PET equipment markets (recital 359), the Commission must
also consider the extent to which those incentives would be reduced, or even eliminated, owing to the illegality of the conduct
in question, the likelihood of its detection, action taken by the competent authorities, both at Community and national level,
and the financial penalties which could ensue.

160
: Since the Commission did not carry out such an assessment in the contested decision, it follows that, in so far as the Commission’s
assessment is based on the possibility, or even the probability, that Tetra will engage in such conduct in the aseptic carton
markets, its findings in this respect cannot be upheld.

161
: Moreover, the fact that the applicant offered commitments regarding its future conduct is also a factor which the Commission
should have taken into account in assessing whether it was likely that the merged entity would act in a manner which could
result in the creation of a dominant position on one or more of the relevant PET equipment markets. There is no indication
in the contested decision that the Commission took account of the implications of those commitments when it assessed the creation
of such a position in future through leveraging.

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: However, the use, by an undertaking with a dominant position like Tetra’s on the aseptic carton markets, of pressure in the
form of tied sales or incentives such as predatory pricing or loyalty rebates that are not objectively justified, would usually
constitute an abuse of that position. As this Court has already held, the possible recourse to such strategies cannot be presumed
by the Commission, as it has done in the contested decision, in order to justify a decision prohibiting a merger transaction
which has been notified to it in accordance with the Regulation (see paragraphs 154 to 162 above). It follows that the leveraging
practices which may be taken into consideration by the Court are limited to those which, at least probably, do not constitute
an abuse of a dominant position on the aseptic carton markets.

219
: It is, therefore, necessary merely to consider strategies for tied or bundled sales which are not in themselves forced, for
loyalty rebates that are objectively justified on the carton markets, and for offers of reduced prices for carton or PET packaging
equipment that are not predatory within the meaning of well-established case-law (Case C-62/86 *AKZO* v *Commission* [1991] ECR I-3359, particularly paragraphs 102, 115, 156 and 157; judgment in Case C-333/94 *Tetra Pak* v *Commission* [[1996] ECR I‐5951], paragraphs 41 to 44, upholding the judgment in Case T-83/91 [ *Tetra* *Pak* v *Commission* [1994] ECR II‐755], and the Opinion of Advocate General Fennelly in Joined Cases C-395/96 P and C-396/96 P *Compagnie maritime belge transports and Others* v *Commission* [2000] ECR I-1365, particularly paragraphs 123 to 130). Against that background, it is necessary to examine whether the Commission
took account of the commitment concerning separation between Sidel and Tetra Pak companies, agreed in principle for a 10-year
period, according to which “no joint offerings of any of Tetra Pak’s carton products together with Sidel’s SBM machines are
to be made”.

220
: It is apparent from the contested decision that Tetra asked the Commission to take note of its existing obligations under
Article 3(3) of ... Decision 92/163 ..., which provides:

221
: It follows that Tetra gave a clear indication of its willingness to comply fully with the special obligations imposed on it
by Article 82 EC as a result of the dominant position it holds on the aseptic carton markets. It also reiterated its acceptance
of all of the relevant obligations imposed on it following the finding in Decision 92/163 of an infringement of Article 82
EC as regards those markets. It also undertook, in the context of the present proceedings, to make no joint offers of its
carton products together with Sidel’s SBM machines.

222
: Consequently, the only methods of tied or bundled sales which would actually be feasible for the merged entity would be offers
made by Tetra to its current customers on the carton markets which would not be compulsory or forced and which would only
be in respect of carton packaging equipment and/or carton products, on the one hand, and PET packaging equipment other than
SBM machines, on the other. It must also be observed that, notwithstanding the emphasis placed by the Commission in the contested
decision (recitals 177 and 369), in its written observations and oral pleadings on the significance of the merged entity’s
ability to offer almost all of the equipment necessary for setting up an integrated PET production line, it is clear from
the commitments that it would not be possible for that entity to make a joint offer to a customer for carton packaging equipment
and an integrated PET production line, at least not one containing a Sidel SBM machine.

223
: Moreover, although the finding in the contested decision regarding the price discrimination allegedly practised in the past
by Sidel is not, having regard to the parties’ written pleadings and the oral pleadings of the Commission concerning the underlying
econometric analysis, vitiated by a manifest error of assessment, it cannot constitute sufficiently convincing evidence that
the merged entity will continue to behave in a similar way. Unlike Sidel prior to the merger, the merged entity would be bound
not only by the commitments but also by the various obligations limiting Tetra’s conduct.

224
: It must therefore be found that the merged entity’s possible means of leveraging would be quite limited. An examination of
the foreseeable consequences of its resorting to such conduct must take account of this.’

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‘260
: The Court finds, firstly, that the emphasis placed in the contested decision on sensitive products belonging to “common product
segments” is based on an objective criterion, namely the fact that these products belong to the category of carton-packaged
products and the possibility, at least from a technical standpoint, of them being packaged in PET, which, in the light of
the growth to be expected (see paragraphs 201 to 216 above), is likely to become a fairly widespread commercial reality by
2005, at least for FFDs and tea/coffee drinks.

262
: As for the alleged specificity of packaging moulds according to the product intended for them, as argued by the Commission,
whilst the applicant does not dispute that the number of moulds determines the capacity of the machine, this specific fact
does not prove that SBM machines, of which moulds are merely a component, differ significantly from each other. It is clear
from the notification that moulds last on average for three years, whilst an SBM machine lasts for up to 15 years (recital
304). Although Sidel makes its own moulds, the contested decision does not dispute the information on the moulds market provided
in the notification, according to which Sidel is not active in that market (that is, as a supplier of moulds to third parties)
and the competition amongst those undertakings which are active is very strong, especially from SIG, which claims on its internet
site that it is a world leader (recital 309).

263
: Nor does the contested decision call into question the statement in the notification that, in a large facility, a customer
can use several SBM machines in order to combine them for its various production needs. The contested decision does not contain
any examination of whether the flexibility required by some customers for SBM machine moulds can be explained by needs relating
to such uses.

264
: In its defence, the Commission refers to a number of changes which can be made to an SBM machine to enhance its performance
or make it more useful in an integrated PET production line, such as the addition of a special blow air filtration system
or ultraviolet treatment to reduce the risk of contamination before the preforms enter the SBM machine. At the hearing, the
Commission stated that these changes are evidence of the very specific characteristics of an SBM machine used in a PET packaging
line to which the contested decision refers (recital 177). Tetra, whilst disputing the Commission’s approach of attributing
specific characteristics of other components of a PET production line to SBM machines, none the less stated that these changes
represented a mere 5% of the cost of an SBM machine.

265
: The Court finds, first, that the contested decision makes no reference to this information. Although the decision correctly
stresses the importance of the individual needs of customers who require an aseptic PET filling line in particular, namely
a basic guarantee of aseptic conditions, this cannot justify the definition of a distinct sub-market for SBM machines used
in filling lines for the sensitive products at issue here. The mere fact that each SBM machine must be installed in a PET
line in order to be useful to its purchaser does not justify that specific characteristics of other PET equipment in that
line should be attributed to the SBM machines themselves.

266
: There is all the more reason to accept the generic nature of SBM machines, inasmuch as at the hearing the Commission was unable
to rebut Tetra’s assertion regarding the relatively low cost, when compared to the cost of a so-called “standard” SBM machine,
especially a high-capacity SBM machine, of making any necessary changes to render the machine more compatible for use with
aseptic and non-aseptic PET filling machines, or possibly with aseptic filling machines capable of conversion from PET to
HDPE.

267
: The parties agree, moreover, that combined machines, which are still only rarely used for aseptic filling (see paragraphs
248 and 249 above), do not constitute a distinct market, as is also clear from the contested decision.

268
: As regards the possibility of determining exactly which group a given customer belongs to when he purchases an SBM machine
and whether or not that customer may, at least currently within the [European Economic Area], be able to find a better price
through arbitrage between the available suppliers, it is clear that those possibilities, if established, would apply as much
to SBM machines used for non-sensitive products as to those used to package sensitive products. The possibility for the merged
entity to identify the group to which a customer belongs is due to the fact that many customers in the carton markets who
will switch to PET will be current Tetra customers. However, this possible benefit, resulting from the first-mover advantage
which the merged entity will foreseeably have, does not preclude those customers from turning to other suppliers of SBM machines
if they become dissatisfied with the conditions offered by the merged entity.

269
: Therefore, on the basis of the evidence in the contested decision, the Commission committed an error, first, by finding that
“the majority of SBM machines are generic” (recital 177) and, second, by distinguishing between them according to end-use.
The contested decision does not provide sufficient evidence to justify the definition of distinct sub-markets among SBM machines
with reference to their end-use. Consequently, the only sub-markets it is necessary to consider are those for low- and high-capacity
machines.’

95
:

96
:

97
:

98
:

99
:

100
:

101
:

102
:

103
:

104
:

105
:

106
:

107
:

108
:

109
:

110
:

111
:

112
:

113
:

114
:

115
:

116
:

117
:

118
:

119
:

120
:

121
:

122
:

123
:

124
:

125
:

126
:

127
:

128
:

129
:

130
:

131
:

132
:

133
:

134
:

135
:

136
:

137
:

138
:

139
:

140
:

141
:

142
:

143
:

144
:

145
:

146
:

147
:

148
:

149
:

:

:

1.
: Dismisses the appeal;

:

2.
: Orders the Commission of the European Communities to pay the costs.

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1 –
: Language of the case: English.