# Official Journal C 241/2013

| | ISSN 1977-091X
  doi:10.3000/1977091X.C_2013.241.eng |
| --- | --- |
| Official Journal
  of the European Union | C 241 |
| | |
| English edition | Information and Notices | Volume 5622 August 2013 |

ISSN 1977-091X

doi:10.3000/1977091X.C_2013.241.eng

Official Journal

of the European Union

C 241

English edition

Information and Notices

Volume 5622 August 2013

---

| Notice No | Contents | page |
| --- | --- | --- |
| | I   Resolutions, recommendations and opinions |
| | OPINIONS |
| | European Commission |
| 2013/C 241/01 | Commission Opinion of 20 August 2013 on the application, with regard to intermodal containers, of the prohibition of the import and export of equipment containing or relying on substances controlled by Regulation (EC) No 1005/2009 of the European Parliament and of the Council on substances depleting the ozone layer (
  1
  ) | 1 |

Notice No

Contents

page

I   Resolutions, recommendations and opinions

OPINIONS

European Commission

2013/C 241/01

Commission Opinion of 20 August 2013 on the application, with regard to intermodal containers, of the prohibition of the import and export of equipment containing or relying on substances controlled by Regulation (EC) No 1005/2009 of the European Parliament and of the Council on substances depleting the ozone layer (
  1
  )

1

1

| | II   Information |
| --- | --- |
| | INFORMATION FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES |
| | European Commission |
| 2013/C 241/02 | Non-opposition to a notified concentration (Case COMP/M.6988 — CKH/CKI/PAH/AVR) (
  1
  ) | 3 |

II   Information

INFORMATION FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES

European Commission

2013/C 241/02

Non-opposition to a notified concentration (Case COMP/M.6988 — CKH/CKI/PAH/AVR) (
  1
  )

1

3

| | IV   Notices |
| --- | --- |
| | NOTICES FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES |
| | European Commission |
| 2013/C 241/03 | Euro exchange rates | 4 |
| 2013/C 241/04 | Opinion of the Advisory Committee on mergers at its meeting of 9 November 2011 concerning a draft decision relating to Case COMP/M.6203 — Western Digital Ireland/Viviti Technologies — Rapporteur: Italy | 5 |
| 2013/C 241/05 | Final Report of the Hearing Officer — COMP/M.6203 — Western Digital Ireland/Viviti Technologies | 7 |
| 2013/C 241/06 | Summary of Commission Decision of 23 November 2011 declaring a concentration compatible with the internal market and the functioning of the EEA Agreement (Case COMP/M.6203 — Western Digital Ireland/Viviti Technologies) (notified under document C(2011) 8664)
   (
  1
  ) | 11 |
| | NOTICES CONCERNING THE EUROPEAN ECONOMIC AREA |
| | EFTA Surveillance Authority |
| 2013/C 241/07 | View of the representatives of the EFTA States and the EFTA Surveillance Authority on the Advisory Committee on mergers at its meeting of 9 November 2011 concerning a draft decision relating to Case COMP/M.6203 — Western Digital Ireland/Vivital Technologies — Rapporteur: Italy | 19 |
| | EFTA Secretariat |
| 2013/C 241/08 | Publication of the Norwegian Ministry of Transport and Communications' notification of directly awarding a public service contract in accordance with Article 7(3) of Regulation (EC) No 1370/2007 of the European Parliament and of the Council on public passenger transport services by rail and by road and repealing Council Regulations (EEC) Nos 1191/69 and 1107/70 | 22 |
| 2013/C 241/09 | Publication of the Norwegian Ministry of Transport and Communications' notification of directly awarding a public service contract in accordance with Article 7(3) of Regulation (EC) No 1370/2007 of the European Parliament and of the Council on public passenger transport services by rail and by road and repealing Council Regulations (EEC) Nos 1191/69 and 1107/70 | 23 |

IV   Notices

NOTICES FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES

European Commission

2013/C 241/03

Euro exchange rates

4

2013/C 241/04

Opinion of the Advisory Committee on mergers at its meeting of 9 November 2011 concerning a draft decision relating to Case COMP/M.6203 — Western Digital Ireland/Viviti Technologies — Rapporteur: Italy

5

2013/C 241/05

Final Report of the Hearing Officer — COMP/M.6203 — Western Digital Ireland/Viviti Technologies

7

2013/C 241/06

Summary of Commission Decision of 23 November 2011 declaring a concentration compatible with the internal market and the functioning of the EEA Agreement (Case COMP/M.6203 — Western Digital Ireland/Viviti Technologies) (notified under document C(2011) 8664)
   (
  1
  )

(notified under document C(2011) 8664)

1

11

NOTICES CONCERNING THE EUROPEAN ECONOMIC AREA

EFTA Surveillance Authority

2013/C 241/07

View of the representatives of the EFTA States and the EFTA Surveillance Authority on the Advisory Committee on mergers at its meeting of 9 November 2011 concerning a draft decision relating to Case COMP/M.6203 — Western Digital Ireland/Vivital Technologies — Rapporteur: Italy

19

EFTA Secretariat

2013/C 241/08

Publication of the Norwegian Ministry of Transport and Communications' notification of directly awarding a public service contract in accordance with Article 7(3) of Regulation (EC) No 1370/2007 of the European Parliament and of the Council on public passenger transport services by rail and by road and repealing Council Regulations (EEC) Nos 1191/69 and 1107/70

22

2013/C 241/09

Publication of the Norwegian Ministry of Transport and Communications' notification of directly awarding a public service contract in accordance with Article 7(3) of Regulation (EC) No 1370/2007 of the European Parliament and of the Council on public passenger transport services by rail and by road and repealing Council Regulations (EEC) Nos 1191/69 and 1107/70

23

| | V   Announcements |
| --- | --- |
| | PROCEDURES RELATING TO THE IMPLEMENTATION OF COMPETITION POLICY |
| | European Commission |
| 2013/C 241/10 | Prior notification of a concentration (Case COMP/M.6950 — UPC/GPT/JV) — Candidate case for simplified procedure (
  1
  ) | 24 |
| 2013/C 241/11 | Prior notification of a concentration (Case COMP/M.6990 — Vodafone/Kabel Deutschland) (
  1
  ) | 26 |

V   Announcements

PROCEDURES RELATING TO THE IMPLEMENTATION OF COMPETITION POLICY

European Commission

2013/C 241/10

Prior notification of a concentration (Case COMP/M.6950 — UPC/GPT/JV) — Candidate case for simplified procedure (
  1
  )

1

24

2013/C 241/11

Prior notification of a concentration (Case COMP/M.6990 — Vodafone/Kabel Deutschland) (
  1
  )

1

26

| | |
| --- | --- |
| | (1)   Text with EEA relevance |

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(1)   Text with EEA relevance

1

| EN | |
| --- | --- |

EN

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I Resolutions, recommendations and opinions

OPINIONS

European Commission

| 22.8.2013 | EN | Official Journal of the European Union | C 241/1 |
| --- | --- | --- | --- |

22.8.2013

EN

Official Journal of the European Union

C 241/1

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COMMISSION OPINION

of 20 August 2013

on the application, with regard to intermodal containers, of the prohibition of the import and export of equipment containing or relying on substances controlled by Regulation (EC) No 1005/2009 of the European Parliament and of the Council on substances depleting the ozone layer

(Text with EEA relevance)

2013/C 241/01

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union, and in particular Article 288 thereof,

Whereas:

| (1) | Regulation (EC) No 1005/2009 of the European Parliament and of the Council of 16 September 2009 on substances that deplete the ozone layer (1), in particular its Articles 15 and 17, lays down rules restricting the import and export of substances depleting the ozone layer listed in Annex I to the Regulation and referred to as ‘controlled substances’, as well as of products and equipment containing or relying on controlled substances. |
| --- | --- |

(1)

Regulation (EC) No 1005/2009 of the European Parliament and of the Council of 16 September 2009 on substances that deplete the ozone layer (1), in particular its Articles 15 and 17, lays down rules restricting the import and export of substances depleting the ozone layer listed in Annex I to the Regulation and referred to as ‘controlled substances’, as well as of products and equipment containing or relying on controlled substances.

| (2) | Article 28 of Regulation (EC) No 1005/2009 requires Member States to conduct inspections on the compliance of undertakings with that Regulation. |
| --- | --- |

(2)

Article 28 of Regulation (EC) No 1005/2009 requires Member States to conduct inspections on the compliance of undertakings with that Regulation.

| (3) | In accordance with the Montreal Protocol on Substances that Deplete the Ozone Layer (2), the continued use of hydrochlorofluorocarbons is still permitted, including in the production of intermodal containers. |
| --- | --- |

(3)

In accordance with the Montreal Protocol on Substances that Deplete the Ozone Layer (2), the continued use of hydrochlorofluorocarbons is still permitted, including in the production of intermodal containers.

| (4) | The import and placing on the market of intermodal containers containing or relying on hydrochlorofluorocarbons is prohibited in the European Union since 2004 but decommissioning of such containers is not required. |
| --- | --- |

(4)

The import and placing on the market of intermodal containers containing or relying on hydrochlorofluorocarbons is prohibited in the European Union since 2004 but decommissioning of such containers is not required.

| (5) | Therefore, intermodal containers used in international trade still commonly contain ozone-depleting substances in insulation foam or in attached or integrated refrigeration equipment using controlled substances as refrigerant. |
| --- | --- |

(5)

Therefore, intermodal containers used in international trade still commonly contain ozone-depleting substances in insulation foam or in attached or integrated refrigeration equipment using controlled substances as refrigerant.

| (6) | Regulation (EC) No 1005/2009 is stricter than the Montreal Protocol and prohibits the placing on the market of intermodal containers containing or relying on controlled substances. |
| --- | --- |

(6)

Regulation (EC) No 1005/2009 is stricter than the Montreal Protocol and prohibits the placing on the market of intermodal containers containing or relying on controlled substances.

| (7) | Under international conventions such as the Convention relating to Temporary Admission (3), or the Convention on Customs Treatment of Pool Containers used in International Transport (4), the free movement of intermodal containers should not be restricted. |
| --- | --- |

(7)

Under international conventions such as the Convention relating to Temporary Admission (3), or the Convention on Customs Treatment of Pool Containers used in International Transport (4), the free movement of intermodal containers should not be restricted.

| (8) | Pursuant to the Convention relating to Temporary Admission which was ratified by the Community and all the Member States, certain goods imported in connection with a commercial operation, including containers, are to be granted temporary admission. Articles 553, 554, 555 and 557 of Commission Regulation (EEC) No 2454/93 laying down provisions for the implementation of the Customs Code (5) provide inter alia that containers benefit from total relief from import duties under certain conditions. In particular, the customs authorities shall ensure that, unless specific exemptions are granted, the total period for which the containers remain under the arrangements for the same purpose and under the responsibility of the same holder does not exceed 24 months. |
| --- | --- |

(8)

Pursuant to the Convention relating to Temporary Admission which was ratified by the Community and all the Member States, certain goods imported in connection with a commercial operation, including containers, are to be granted temporary admission. Articles 553, 554, 555 and 557 of Commission Regulation (EEC) No 2454/93 laying down provisions for the implementation of the Customs Code (5) provide inter alia that containers benefit from total relief from import duties under certain conditions. In particular, the customs authorities shall ensure that, unless specific exemptions are granted, the total period for which the containers remain under the arrangements for the same purpose and under the responsibility of the same holder does not exceed 24 months.

| (9) | Pursuant to the constant case-law of the Court of Justice, legal acts of the institutions must be interpreted consistently with international agreements to which the Union is a Party, |
| --- | --- |

(9)

Pursuant to the constant case-law of the Court of Justice, legal acts of the institutions must be interpreted consistently with international agreements to which the Union is a Party,

IS OF THE OPINION:

| 1. | That in applying Regulation (EC) No 1005/2009, Member States should not consider the entry into, or exit from, the customs territory of the Union of an intermodal container as an import or an export for the purposes of Articles 15 and 17 of that Regulation if intermodal containers are under temporary admission. |
| --- | --- |

1.

That in applying Regulation (EC) No 1005/2009, Member States should not consider the entry into, or exit from, the customs territory of the Union of an intermodal container as an import or an export for the purposes of Articles 15 and 17 of that Regulation if intermodal containers are under temporary admission.

| 2. | That when inspecting intermodal containers containing or relying on controlled substances in accordance with Article 28 of Regulation (EC) No 1005/2009, Member States should verify that intermodal containers entering into the customs territory of the Union under temporary admission comply with Articles 553, 554, 555 and 557 of Regulation (EEC) No 2454/93 and that those containers are not placed on the market in the Union. |
| --- | --- |

2.

That when inspecting intermodal containers containing or relying on controlled substances in accordance with Article 28 of Regulation (EC) No 1005/2009, Member States should verify that intermodal containers entering into the customs territory of the Union under temporary admission comply with Articles 553, 554, 555 and 557 of Regulation (EEC) No 2454/93 and that those containers are not placed on the market in the Union.

| 3. | This Opinion is addressed to the Member States. |
| --- | --- |

3.

This Opinion is addressed to the Member States.

Done at Brussels, 20 August 2013.

For the Commission

Connie HEDEGAARD

Member of the Commission

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(1)  OJ L 286, 30.10.2009, p. 1.

1

(2)  OJ L 297, 31.10.1988, p. 8.

2

(3)  OJ L 130, 27.5.1993, p. 4.

3

(4)  OJ L 91, 22.4.1995, p. 46.

4

(5)  OJ L 253, 11.10.1993, p. 1.

5

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II Information

INFORMATION FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES

European Commission

| 22.8.2013 | EN | Official Journal of the European Union | C 241/3 |
| --- | --- | --- | --- |

22.8.2013

EN

Official Journal of the European Union

C 241/3

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Non-opposition to a notified concentration

(Case COMP/M.6988 — CKH/CKI/PAH/AVR)

(Text with EEA relevance)

2013/C 241/02

On 16 August 2013, the Commission decided not to oppose the above notified concentration and to declare it compatible with the common market. This decision is based on Article 6(1)(b) of Council Regulation (EC) No 139/2004. The full text of the decision is available only in English and will be made public after it is cleared of any business secrets it may contain. It will be available:

| — | 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, |
| --- | --- |

—

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,

| — | in electronic form on the EUR-Lex website (http://eur-lex.europa.eu/en/index.htm) under document number 32013M6988. EUR-Lex is the on-line access to the European law. |
| --- | --- |

—

in electronic form on the EUR-Lex website (http://eur-lex.europa.eu/en/index.htm) under document number 32013M6988. EUR-Lex is the on-line access to the European law.

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IV Notices

NOTICES FROM EUROPEAN UNION INSTITUTIONS, BODIES, OFFICES AND AGENCIES

European Commission

| 22.8.2013 | EN | Official Journal of the European Union | C 241/4 |
| --- | --- | --- | --- |

22.8.2013

EN

Official Journal of the European Union

C 241/4

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Euro exchange rates (1)

21 August 2013

2013/C 241/03

1 euro =

| | Currency | Exchange rate |
| --- | --- | --- |
| USD | US dollar | 1,3384 |
| JPY | Japanese yen | 130,52 |
| DKK | Danish krone | 7,4585 |
| GBP | Pound sterling | 0,85295 |
| SEK | Swedish krona | 8,7277 |
| CHF | Swiss franc | 1,2310 |
| ISK | Iceland króna | |
| NOK | Norwegian krone | 8,0535 |
| BGN | Bulgarian lev | 1,9558 |
| CZK | Czech koruna | 25,775 |
| HUF | Hungarian forint | 299,67 |
| LTL | Lithuanian litas | 3,4528 |
| LVL | Latvian lats | 0,7028 |
| PLN | Polish zloty | 4,2403 |
| RON | Romanian leu | 4,4420 |
| TRY | Turkish lira | 2,6185 |
| AUD | Australian dollar | 1,4811 |
| CAD | Canadian dollar | 1,3966 |
| HKD | Hong Kong dollar | 10,3789 |
| NZD | New Zealand dollar | 1,6913 |
| SGD | Singapore dollar | 1,7087 |
| KRW | South Korean won | 1 494,91 |
| ZAR | South African rand | 13,6506 |
| CNY | Chinese yuan renminbi | 8,1956 |
| HRK | Croatian kuna | 7,5430 |
| IDR | Indonesian rupiah | 14 504,51 |
| MYR | Malaysian ringgit | 4,4080 |
| PHP | Philippine peso | 58,808 |
| RUB | Russian rouble | 44,2007 |
| THB | Thai baht | 42,601 |
| BRL | Brazilian real | 3,2155 |
| MXN | Mexican peso | 17,4634 |
| INR | Indian rupee | 86,2700 |

Currency

Exchange rate

USD

US dollar

1,3384

JPY

Japanese yen

130,52

DKK

Danish krone

7,4585

GBP

Pound sterling

0,85295

SEK

Swedish krona

8,7277

CHF

Swiss franc

1,2310

ISK

Iceland króna

NOK

Norwegian krone

8,0535

BGN

Bulgarian lev

1,9558

CZK

Czech koruna

25,775

HUF

Hungarian forint

299,67

LTL

Lithuanian litas

3,4528

LVL

Latvian lats

0,7028

PLN

Polish zloty

4,2403

RON

Romanian leu

4,4420

TRY

Turkish lira

2,6185

AUD

Australian dollar

1,4811

CAD

Canadian dollar

1,3966

HKD

Hong Kong dollar

10,3789

NZD

New Zealand dollar

1,6913

SGD

Singapore dollar

1,7087

KRW

South Korean won

1 494,91

ZAR

South African rand

13,6506

CNY

Chinese yuan renminbi

8,1956

HRK

Croatian kuna

7,5430

IDR

Indonesian rupiah

14 504,51

MYR

Malaysian ringgit

4,4080

PHP

Philippine peso

58,808

RUB

Russian rouble

44,2007

THB

Thai baht

42,601

BRL

Brazilian real

3,2155

MXN

Mexican peso

17,4634

INR

Indian rupee

86,2700

---

(1)  Source: reference exchange rate published by the ECB.

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| 22.8.2013 | EN | Official Journal of the European Union | C 241/5 |
| --- | --- | --- | --- |

22.8.2013

EN

Official Journal of the European Union

C 241/5

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Opinion of the Advisory Committee on mergers at its meeting of 9 November 2011 concerning a draft decision relating to Case COMP/M.6203 — Western Digital Ireland/Viviti Technologies

Rapporteur: Italy

2013/C 241/04

Concentration

| 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. |
| --- | --- |

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 transaction has an EU dimension pursuant to Article 1(2) of the Merger Regulation. |
| --- | --- |

2.

The Advisory Committee agrees with the Commission that the notified transaction has an EU dimension pursuant to Article 1(2) of the Merger Regulation.

Market definition

| 3. | The Advisory Committee agrees with the Commission’s definitions of the relevant product markets in the draft decision.
  In particular, concerning the product market definition, the Advisory Committee agrees that the impact of the proposed transaction must be assessed on the following markets:






  (a) | the market for mission critical enterprise HDDs; |
| --- | --- | --- |

3.

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

In particular, concerning the product market definition, the Advisory Committee agrees that the impact of the proposed transaction must be assessed on the following markets:

(a)

the market for mission critical enterprise HDDs;

| (b) | the market for 3,5′′ business critical HDDs; |
| --- | --- |

(b)

the market for 3,5′′ business critical HDDs;

| (c) | the market for 3,5′′ desktop HDDs; |
| --- | --- |

(c)

the market for 3,5′′ desktop HDDs;

| (d) | the market for 3,5′′ CE HDDs; |
| --- | --- |

(d)

the market for 3,5′′ CE HDDs;

| (e) | the market for 2,5′′ mobile HDDs; |
| --- | --- |

(e)

the market for 2,5′′ mobile HDDs;

| (f) | the market for 2,5′′ CE HDDs; and |
| --- | --- |

(f)

the market for 2,5′′ CE HDDs; and

| (g) | the XHDD market. |
| --- | --- |

(g)

the XHDD market.

| 4. | The Advisory Committee agrees with the geographic market definition for:






  (a) | HDDs; and |
| --- | --- | --- |

4.

The Advisory Committee agrees with the geographic market definition for:

(a)

HDDs; and

| (b) | XHDDs. |
| --- | --- |

(b)

XHDDs.

Counterfactual

| 5. | The Advisory Committee agrees with the Commission that, for the purpose of the competitive assessment of the proposed transaction, the most appropriate approach is to adopt the priority principle (‘first come, first served’) based on the date of notification and that the proposed transaction must be assessed taking into account the Seagate/Samsung transaction which has been approved by the Commission Decision of 19 October 2011 (Case COMP/M.6214 — Seagate/HDD Business of Samsung). One Member State disagrees. |
| --- | --- |

5.

The Advisory Committee agrees with the Commission that, for the purpose of the competitive assessment of the proposed transaction, the most appropriate approach is to adopt the priority principle (‘first come, first served’) based on the date of notification and that the proposed transaction must be assessed taking into account the Seagate/Samsung transaction which has been approved by the Commission Decision of 19 October 2011 (Case COMP/M.6214 — Seagate/HDD Business of Samsung). One Member State disagrees.

Competitive assessment

Non-coordinated effects

| 6. | The Advisory Committee agrees with the Commission's conclusion that the proposed transaction is not likely to give rise to non-coordinated effects that would significantly impede effective competition on the worldwide markets for mission critical HDDs, 2,5′′ mobile HDDs and 2,5′′ CE HDDs. |
| --- | --- |

6.

The Advisory Committee agrees with the Commission's conclusion that the proposed transaction is not likely to give rise to non-coordinated effects that would significantly impede effective competition on the worldwide markets for mission critical HDDs, 2,5′′ mobile HDDs and 2,5′′ CE HDDs.

| 7. | The Advisory Committee agrees with the Commission's assessment that the proposed transaction as notified is likely to give rise to a significant impediment to effective competition as a result of non-coordinated effects in the worldwide markets for 3,5′′ desktop HDDs, 3,5′′ CE HDDs and 3,5′′ business critical HDDs. |
| --- | --- |

7.

The Advisory Committee agrees with the Commission's assessment that the proposed transaction as notified is likely to give rise to a significant impediment to effective competition as a result of non-coordinated effects in the worldwide markets for 3,5′′ desktop HDDs, 3,5′′ CE HDDs and 3,5′′ business critical HDDs.

| 8. | The Advisory Committee agrees with the Commission's assessment that although there are indications that the proposed transaction as notified may give rise to a significant impediment to effective competition as a result of non-coordinated effects in the EEA-wide XHDD market, in light of the remedies removing the significant impediment to effective competition in the upstream worldwide markets for 3,5′′ desktop HDDs, 3,5′′ CE HDDs and 3,5′′ business critical HDDs, the proposed transaction is in any event not likely to give rise to a significant impediment to effective competition in the downstream EEA-wide XHDD market. |
| --- | --- |

8.

The Advisory Committee agrees with the Commission's assessment that although there are indications that the proposed transaction as notified may give rise to a significant impediment to effective competition as a result of non-coordinated effects in the EEA-wide XHDD market, in light of the remedies removing the significant impediment to effective competition in the upstream worldwide markets for 3,5′′ desktop HDDs, 3,5′′ CE HDDs and 3,5′′ business critical HDDs, the proposed transaction is in any event not likely to give rise to a significant impediment to effective competition in the downstream EEA-wide XHDD market.

Coordinated effects

| 9. | The Advisory Committee agrees with the Commission’s assessment that the proposed transaction is not likely to give rise to coordinated effects that would significantly impede effective competition on the worldwide HDD markets and on the EEA-wide XHDD market. |
| --- | --- |

9.

The Advisory Committee agrees with the Commission’s assessment that the proposed transaction is not likely to give rise to coordinated effects that would significantly impede effective competition on the worldwide HDD markets and on the EEA-wide XHDD market.

Vertical effects

| 10. | The Advisory Committee shares the Commission's conclusion that the proposed transaction is not likely to significantly impede effective competition as a result of the foreclosure of manufacturers of components (heads and media) from a sufficient customer base which in turn would undermine Toshiba's ability to compete in the HDD markets. |
| --- | --- |

10.

The Advisory Committee shares the Commission's conclusion that the proposed transaction is not likely to significantly impede effective competition as a result of the foreclosure of manufacturers of components (heads and media) from a sufficient customer base which in turn would undermine Toshiba's ability to compete in the HDD markets.

Efficiencies

| 11. | The Advisory Committee agrees with the Commission's view that the alleged efficiencies brought about by the proposed transaction do not allow the Commission to declare the proposed transaction, as notified, compatible with the internal market with respect to the worldwide markets for 3,5′′ desktop, 3,5′′ CE and 3,5′′ business critical HDDs and the EEA-wide market for XHDDs. |
| --- | --- |

11.

The Advisory Committee agrees with the Commission's view that the alleged efficiencies brought about by the proposed transaction do not allow the Commission to declare the proposed transaction, as notified, compatible with the internal market with respect to the worldwide markets for 3,5′′ desktop, 3,5′′ CE and 3,5′′ business critical HDDs and the EEA-wide market for XHDDs.

Remedies

| 12. | The Advisory Committee agrees with the Commission's view that the remedy package submitted by the parties fully addresses the competition concerns identified by the Commission on the worldwide market for 3,5′′ business critical HDDs, worldwide market for 3,5′′ desktop HDDs, the worldwide market for 3,5′′ CE HDDs and the EEA-wide market for XHDDs. |
| --- | --- |

12.

The Advisory Committee agrees with the Commission's view that the remedy package submitted by the parties fully addresses the competition concerns identified by the Commission on the worldwide market for 3,5′′ business critical HDDs, worldwide market for 3,5′′ desktop HDDs, the worldwide market for 3,5′′ CE HDDs and the EEA-wide market for XHDDs.

Conclusion

| 13. | The Advisory Committee agrees with the Commission's conclusion that, subject to the full compliance with the commitments offered by the parties, the proposed transaction is not likely to significantly impede effective competition in the internal market or in a substantial part of it. |
| --- | --- |

13.

The Advisory Committee agrees with the Commission's conclusion that, subject to the full compliance with the commitments offered by the parties, the proposed transaction is not likely to significantly impede effective competition in the internal market or in a substantial part of it.

| 14. | The Advisory Committee agrees with the Commission's conclusion that the notified concentration must be declared compatible with the internal market and the functioning of the EEA Agreement in accordance with Articles 2(2) and 8(2) of the Merger Regulation and Article 57 of the EEA Agreement. |
| --- | --- |

14.

The Advisory Committee agrees with the Commission's conclusion that the notified concentration must be declared compatible with the internal market and the functioning of the EEA Agreement in accordance with Articles 2(2) and 8(2) of the Merger Regulation and Article 57 of the EEA Agreement.

| 15. | The Advisory Committee recommends the publication of its opinion in the Official Journal of the European Union. |
| --- | --- |

15.

The Advisory Committee recommends the publication of its opinion in the Official Journal of the European Union.

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| 22.8.2013 | EN | Official Journal of the European Union | C 241/7 |
| --- | --- | --- | --- |

22.8.2013

EN

Official Journal of the European Union

C 241/7

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Final Report of the Hearing Officer (1)

COMP/M.6203 — Western Digital Ireland/Viviti Technologies

2013/C 241/05

I.   Overview

| (1) | On 20 April 2011, the Commission received a notification of a proposed concentration pursuant to Article 4 of the Merger Regulation (2) by which Western Digital Corporation (‘WD’, the ‘Notifying Party’) intends to acquire, by way of purchase of shares, sole control within the meaning of Article 3(1)(b) of the Merger Regulation of Viviti Technologies Ltd, formerly known as Hitachi Global Storage Technologies Holdings Ltd (HGST) (3). On 30 May 2011, the Commission initiated proceedings pursuant to Article 6(1)(c) of the Merger Regulation. |
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(1)

On 20 April 2011, the Commission received a notification of a proposed concentration pursuant to Article 4 of the Merger Regulation (2) by which Western Digital Corporation (‘WD’, the ‘Notifying Party’) intends to acquire, by way of purchase of shares, sole control within the meaning of Article 3(1)(b) of the Merger Regulation of Viviti Technologies Ltd, formerly known as Hitachi Global Storage Technologies Holdings Ltd (HGST) (3). On 30 May 2011, the Commission initiated proceedings pursuant to Article 6(1)(c) of the Merger Regulation.

| (2) | On 18 August 2011, the Commission issued a Statement of Objections (SO) pursuant to Article 18 of the Merger Regulation, in which the Commission provisionally concluded that the proposed transaction would create a significant impediment to effective competition on a number of hard disk drive (HDD) markets. |
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(2)

On 18 August 2011, the Commission issued a Statement of Objections (SO) pursuant to Article 18 of the Merger Regulation, in which the Commission provisionally concluded that the proposed transaction would create a significant impediment to effective competition on a number of hard disk drive (HDD) markets.

| (3) | After having been granted access to the file on 19 August 2011 (4), the Notifying Party submitted its written comments on the SO on 1 September 2011. In its comments, the Notifying Party did not request to develop its arguments at a formal oral hearing pursuant to Article 14(1) of Regulation (EC) No 802/2004 (5). Instead, it developed orally its arguments at a State of Play meeting with the Directorate-General for Competition on 6 September 2011. |
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(3)

After having been granted access to the file on 19 August 2011 (4), the Notifying Party submitted its written comments on the SO on 1 September 2011. In its comments, the Notifying Party did not request to develop its arguments at a formal oral hearing pursuant to Article 14(1) of Regulation (EC) No 802/2004 (5). Instead, it developed orally its arguments at a State of Play meeting with the Directorate-General for Competition on 6 September 2011.

| (4) | In light of certain arguments raised by the Notifying Party in its comments on the SO and at the State of Play meeting of 6 September, the Commission carried out a further market investigation. At a State of Play meeting on 20 September 2011, the Commission shared with the Notifying Party the results of this further market investigation, and presented its views on certain of the arguments raised by the Notifying Party. The latter requested the opportunity to submit, by 26 September, supplementary comments to respond to the Commission's findings. The Commission agreed to such request. On 22 September, the Notifying Party was given access to non-confidential versions of the documents received by the Commission in the context of the further market investigation. Further information was also provided to the parties on 23, 24 and 26 September. The supplementary comments were submitted by the Notifying Party on 23 September and 26 September. |
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(4)

In light of certain arguments raised by the Notifying Party in its comments on the SO and at the State of Play meeting of 6 September, the Commission carried out a further market investigation. At a State of Play meeting on 20 September 2011, the Commission shared with the Notifying Party the results of this further market investigation, and presented its views on certain of the arguments raised by the Notifying Party. The latter requested the opportunity to submit, by 26 September, supplementary comments to respond to the Commission's findings. The Commission agreed to such request. On 22 September, the Notifying Party was given access to non-confidential versions of the documents received by the Commission in the context of the further market investigation. Further information was also provided to the parties on 23, 24 and 26 September. The supplementary comments were submitted by the Notifying Party on 23 September and 26 September.

| (5) | On 3 October 2011, the Notifying Party submitted a first commitments proposal. The Commission indicated that the commitments offered were not adequate to solve the competition concerns. On 10 October 2011, the Notifying Party put forward a revised set of commitments, which the Commission submitted to a market test on the same date. A further revised remedies package was presented to the Commission on 24 October 2011, and subsequently amended pursuant to further discussions with the Commission. The Notifying Party offered a final set of commitments on 27 October 2011, which the Commission concluded addressed all of the remaining concerns regarding the compatibility of the proposed transaction with the internal market. |
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(5)

On 3 October 2011, the Notifying Party submitted a first commitments proposal. The Commission indicated that the commitments offered were not adequate to solve the competition concerns. On 10 October 2011, the Notifying Party put forward a revised set of commitments, which the Commission submitted to a market test on the same date. A further revised remedies package was presented to the Commission on 24 October 2011, and subsequently amended pursuant to further discussions with the Commission. The Notifying Party offered a final set of commitments on 27 October 2011, which the Commission concluded addressed all of the remaining concerns regarding the compatibility of the proposed transaction with the internal market.

II.   Requests to the Hearing Officer

| (6) | During the procedure, the Notifying Party submitted three requests to me concerning access to the file. |
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(6)

During the procedure, the Notifying Party submitted three requests to me concerning access to the file.

First request

| (7) | On 26 August 2011, the Notifying Party asked me to review a decision of the Directorate-General for Competition refusing access to documents contained in the file of other proceedings under the Merger Regulation, namely Case COMP/M.6214 — Seagate Technology PLC/The HDD Business of Samsung Electronics Co Ltd (Case M.6214). The parties in these proceedings, which are competitors of WD and HGST on certain HDD markets, notified their proposed concentration to the Commission one day before the proposed concentration between WD and HGST was notified. I responded to the Notifying Party's request on 30 August along the following lines. |
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(7)

On 26 August 2011, the Notifying Party asked me to review a decision of the Directorate-General for Competition refusing access to documents contained in the file of other proceedings under the Merger Regulation, namely Case COMP/M.6214 — Seagate Technology PLC/The HDD Business of Samsung Electronics Co Ltd (Case M.6214). The parties in these proceedings, which are competitors of WD and HGST on certain HDD markets, notified their proposed concentration to the Commission one day before the proposed concentration between WD and HGST was notified. I responded to the Notifying Party's request on 30 August along the following lines.

| (8) | First, the Notifying Party requested to be given access to the file in Case M.6214 on the basis that it had ‘sufficient interest’ because it was an important competitor of the parties involved in that case. I rejected this request since pursuant to Article 17 of Regulation EC No 802/2004 (6), the Commission should provide access to the file to the parties to whom it has addressed a statement of objections and, upon request, to the other involved parties (as defined under Article 11(b) of that regulation). Since WD did not fall in either category in Case M.6214, it had no right of access to the file in that case. |
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(8)

First, the Notifying Party requested to be given access to the file in Case M.6214 on the basis that it had ‘sufficient interest’ because it was an important competitor of the parties involved in that case. I rejected this request since pursuant to Article 17 of Regulation EC No 802/2004 (6), the Commission should provide access to the file to the parties to whom it has addressed a statement of objections and, upon request, to the other involved parties (as defined under Article 11(b) of that regulation). Since WD did not fall in either category in Case M.6214, it had no right of access to the file in that case.

| (9) | Second, the Notifying Party claimed that, in Case M.6203, the Commission had relied extensively in the SO upon documentation and information from the file of Case M.6214 that had not been made available to it. I carefully reviewed the SO and found that it relied only on a few documents which had originally been submitted in Case M.6214 and later resubmitted in Case M.6203 upon request from the Directorate-General for Competition. Non-confidential versions of these documents were accessible to the Notifying Party in the file of Case M.6203. The claim that the Commission had relied, in the SO, on documents not accessible from Case M.6214 to the Notifying Party was therefore unfounded. |
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(9)

Second, the Notifying Party claimed that, in Case M.6203, the Commission had relied extensively in the SO upon documentation and information from the file of Case M.6214 that had not been made available to it. I carefully reviewed the SO and found that it relied only on a few documents which had originally been submitted in Case M.6214 and later resubmitted in Case M.6203 upon request from the Directorate-General for Competition. Non-confidential versions of these documents were accessible to the Notifying Party in the file of Case M.6203. The claim that the Commission had relied, in the SO, on documents not accessible from Case M.6214 to the Notifying Party was therefore unfounded.

| (10) | Third, in its request, the Notifying Party seemed to suggest that the Directorate-General for Competition had gone through the file in Case M.6214 generally and picked documents for its analysis in Case M.6203. Therefore, in application of the principle of equality of arms, the Notifying Party considered that it should similarly be able to review documents from Case M.6214 to search for exculpatory information. I investigated the matter with the Directorate-General for Competition and found no evidence that the Directorate-General for Competition had carried out a general review of the case file in Case M.6214 for the purpose of finding specific adverse evidence to be used in its assessment in Case M.6203. The only documents which had been resubmitted in Case M.6203 appeared to be broad recent strategic documents of the parties in Case M.6214 and market studies of independent consultants, both of the kind which the Commission normally requests from competitors in a merger investigation. In addition, such documents did not appear to be, by their nature, inherently more adverse or more favourable to the Notifying Party. In light of the above, I saw no reason to accept the Notifying Party's request to be given the opportunity to review documents in the file of Case M.6214, and accordingly rejected such request. |
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(10)

Third, in its request, the Notifying Party seemed to suggest that the Directorate-General for Competition had gone through the file in Case M.6214 generally and picked documents for its analysis in Case M.6203. Therefore, in application of the principle of equality of arms, the Notifying Party considered that it should similarly be able to review documents from Case M.6214 to search for exculpatory information. I investigated the matter with the Directorate-General for Competition and found no evidence that the Directorate-General for Competition had carried out a general review of the case file in Case M.6214 for the purpose of finding specific adverse evidence to be used in its assessment in Case M.6203. The only documents which had been resubmitted in Case M.6203 appeared to be broad recent strategic documents of the parties in Case M.6214 and market studies of independent consultants, both of the kind which the Commission normally requests from competitors in a merger investigation. In addition, such documents did not appear to be, by their nature, inherently more adverse or more favourable to the Notifying Party. In light of the above, I saw no reason to accept the Notifying Party's request to be given the opportunity to review documents in the file of Case M.6214, and accordingly rejected such request.

Second request

| (11) | On 31 August, the Notifying Party requested me to review a decision by the Directorate-General for Competition to redact the result of the bidding data analysis contained in the report prepared by the Notifying Party's economic advisers in the context of the data room (7). Since the request was not sufficiently reasoned, I informed the Notifying Party on 31 August that I was not able to address the request until sufficient clarification was provided. |
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(11)

On 31 August, the Notifying Party requested me to review a decision by the Directorate-General for Competition to redact the result of the bidding data analysis contained in the report prepared by the Notifying Party's economic advisers in the context of the data room (7). Since the request was not sufficiently reasoned, I informed the Notifying Party on 31 August that I was not able to address the request until sufficient clarification was provided.

| (12) | In the mean time, I investigated the matter with the Directorate-General for Competition, which subsequently decided to disclose further information from the economic advisers' report to the Notifying Party. |
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(12)

In the mean time, I investigated the matter with the Directorate-General for Competition, which subsequently decided to disclose further information from the economic advisers' report to the Notifying Party.

| (13) | The Notifying Party did not provide me with any clarification on their initial request, nor made any follow-up request. |
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(13)

The Notifying Party did not provide me with any clarification on their initial request, nor made any follow-up request.

Third request

| (14) | On 27 September 2011, the Notifying Party sent me a request to review a decision of the Directorate-General for Competition, following the State of Play meeting of 20 September 2011, refusing full or more granular access to certain redacted data and information gathered by the Commission in the course of its market investigation. The Notifying Party had received access to non-confidential versions of these data and information on 22, 23, 24 and 26 September (8). I responded to the request on 3 October 2011, as set out below. |
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(14)

On 27 September 2011, the Notifying Party sent me a request to review a decision of the Directorate-General for Competition, following the State of Play meeting of 20 September 2011, refusing full or more granular access to certain redacted data and information gathered by the Commission in the course of its market investigation. The Notifying Party had received access to non-confidential versions of these data and information on 22, 23, 24 and 26 September (8). I responded to the request on 3 October 2011, as set out below.

| (15) | First, the Notifying Party requested access to confidential information submitted by a competitor in response to questions on entry into the 3,5′′ Desktop market in order to verify the Commission's findings in this respect. In parallel to my review of this issue, the Directorate-General for Competition organised a data room procedure granting the Notifying Party's external advisers, under strict confidentiality rules, access to further parts of the information submitted by the competitor (9). the Directorate- General for Competition also provided the Notifying Party with further information, in the form of ranges, on the data originally redacted. In my response to the Notifying Party's request, I also provided general descriptions of the nature and content of the remaining confidential information that was not disclosed in the data room. I concluded that the information that had been provided was sufficient for the Notifying Party effectively to express its views on the conclusions reached by the Commission on the point in issue and presented to the Notifying Party at the 20 September State of Play meeting. |
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(15)

First, the Notifying Party requested access to confidential information submitted by a competitor in response to questions on entry into the 3,5′′ Desktop market in order to verify the Commission's findings in this respect. In parallel to my review of this issue, the Directorate-General for Competition organised a data room procedure granting the Notifying Party's external advisers, under strict confidentiality rules, access to further parts of the information submitted by the competitor (9). the Directorate- General for Competition also provided the Notifying Party with further information, in the form of ranges, on the data originally redacted. In my response to the Notifying Party's request, I also provided general descriptions of the nature and content of the remaining confidential information that was not disclosed in the data room. I concluded that the information that had been provided was sufficient for the Notifying Party effectively to express its views on the conclusions reached by the Commission on the point in issue and presented to the Notifying Party at the 20 September State of Play meeting.

| (16) | On the same issue, the Notifying Party had also requested that the Commission obtain data (i.e. data that was not on file) underlying certain costs calculations submitted by the competitor referred to in the previous paragraph. The Commission indeed requested, and obtained, further information from the competitor. Parts of such information were made accessible in the above-referred data room. I considered therefore that the request of the Notifying Party relating to this first issue had been addressed. |
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(16)

On the same issue, the Notifying Party had also requested that the Commission obtain data (i.e. data that was not on file) underlying certain costs calculations submitted by the competitor referred to in the previous paragraph. The Commission indeed requested, and obtained, further information from the competitor. Parts of such information were made accessible in the above-referred data room. I considered therefore that the request of the Notifying Party relating to this first issue had been addressed.

| (17) | Second, the Notifying Party complained to me that it had only received partial access to information submitted to the Commission by a certain group of customers in response to a question on their purchases of HDD. the Directorate- General for Competition had given the Notifying Party access to ‘anonymised’ versions of parts of the customers' responses, as well as aggregated information showing the distribution of purchases per product group. The Notifying Party claimed that, absent access to individual customer purchase volumes, it was unable to assess the relative importance of each customer's response and therefore its ability to defend itself was significantly impaired. |
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(17)

Second, the Notifying Party complained to me that it had only received partial access to information submitted to the Commission by a certain group of customers in response to a question on their purchases of HDD. the Directorate- General for Competition had given the Notifying Party access to ‘anonymised’ versions of parts of the customers' responses, as well as aggregated information showing the distribution of purchases per product group. The Notifying Party claimed that, absent access to individual customer purchase volumes, it was unable to assess the relative importance of each customer's response and therefore its ability to defend itself was significantly impaired.

| (18) | In my response, I considered that disclosing the individual purchase volumes, as requested, would potentially allow the identification of customers who responded to the questionnaires and had requested their responses to remain anonymous (which had been accepted (10)). In addition, I found that the information requested by the Notifying Party fell within the category of business secrets and other confidential information. Furthermore, the Notifying Party had not provided any reason why it would be necessary for it to assess the relative importance of each customer's response. Finally, after review of the information that the Directorate-General for Competition had provided to the Notifying Party on 23, 24 and 26 September 2011, I concluded that such information allowed the Notifying Party to usefully comment on the Commission's findings presented to it at the 20 September State of Play meeting. I nevertheless provided some additional information to reassure the Notifying Party of the representativeness of the customers' responses gathered by the Commission. |
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(18)

In my response, I considered that disclosing the individual purchase volumes, as requested, would potentially allow the identification of customers who responded to the questionnaires and had requested their responses to remain anonymous (which had been accepted (10)). In addition, I found that the information requested by the Notifying Party fell within the category of business secrets and other confidential information. Furthermore, the Notifying Party had not provided any reason why it would be necessary for it to assess the relative importance of each customer's response. Finally, after review of the information that the Directorate-General for Competition had provided to the Notifying Party on 23, 24 and 26 September 2011, I concluded that such information allowed the Notifying Party to usefully comment on the Commission's findings presented to it at the 20 September State of Play meeting. I nevertheless provided some additional information to reassure the Notifying Party of the representativeness of the customers' responses gathered by the Commission.

| (19) | Third, the Notifying Party requested access to another set of data provided by customers in response to a Commission's questionnaire, on which, according to the Notifying Party, the Commission seemed to ‘essentially’ rely to support some of its findings. First, I clarified to the Notifying Party that, contrary to its claim, the information contained in the customers' responses, was not crucial for the Commission's findings, but served only to confirm the results of a previous market investigation, which had been made accessible to the Notifying Party during the access to file of 19 August 2011. Second, after investigating the matter with the Directorate-General for Competition, I asked the latter to grant the Notifying Party access to information requested in the form of tables including the relevant parts of the customers' replies in a way that would secure the anonymity of the customers. Access was granted partly by the Directorate-General for Competition on 28 September 2011 and partly by me on 3 October 2011. In view of this additional access, I considered that the Notifying Party's request had been satisfied. |
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(19)

Third, the Notifying Party requested access to another set of data provided by customers in response to a Commission's questionnaire, on which, according to the Notifying Party, the Commission seemed to ‘essentially’ rely to support some of its findings. First, I clarified to the Notifying Party that, contrary to its claim, the information contained in the customers' responses, was not crucial for the Commission's findings, but served only to confirm the results of a previous market investigation, which had been made accessible to the Notifying Party during the access to file of 19 August 2011. Second, after investigating the matter with the Directorate-General for Competition, I asked the latter to grant the Notifying Party access to information requested in the form of tables including the relevant parts of the customers' replies in a way that would secure the anonymity of the customers. Access was granted partly by the Directorate-General for Competition on 28 September 2011 and partly by me on 3 October 2011. In view of this additional access, I considered that the Notifying Party's request had been satisfied.

| (20) | The Notifying Party did not submit any follow-up comment or new request after my response of 3 October. |
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(20)

The Notifying Party did not submit any follow-up comment or new request after my response of 3 October.

III.   The decision

| (21) | The decision concludes that the proposed transaction is compatible with the internal market and the EEA Agreement, subject to the condition that the Notifying Party complies with the commitments entered into vis-à-vis the Commission. In particular, these include an ‘upfront buyer’ clause, pursuant to which the Notifying Party will not be able to close the proposed transaction before it has entered into a binding sale and purchase agreement for the sale of the divestment business with a suitable purchaser, which is approved by the Commission. The decision does not contain any objections on which the parties have not had the opportunity to make known their views. |
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(21)

The decision concludes that the proposed transaction is compatible with the internal market and the EEA Agreement, subject to the condition that the Notifying Party complies with the commitments entered into vis-à-vis the Commission. In particular, these include an ‘upfront buyer’ clause, pursuant to which the Notifying Party will not be able to close the proposed transaction before it has entered into a binding sale and purchase agreement for the sale of the divestment business with a suitable purchaser, which is approved by the Commission. The decision does not contain any objections on which the parties have not had the opportunity to make known their views.

IV.   Conclusion

| (22) | Other than the three requests on access to file mentioned in Section II above, I did not receive any request or complaint from any party to the proceedings. In view thereof, and in light of the conclusion in Section III that the decision does not contain any objections on which the Notifying Party has not been heard, I consider that the effective exercise of the procedural rights of all participants in this case has been respected. |
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(22)

Other than the three requests on access to file mentioned in Section II above, I did not receive any request or complaint from any party to the proceedings. In view thereof, and in light of the conclusion in Section III that the decision does not contain any objections on which the Notifying Party has not been heard, I consider that the effective exercise of the procedural rights of all participants in this case has been respected.

Brussels, 21 November 2011.

Wouter WILS

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(1)  Pursuant to Articles 16 and 17 of Decision 2011/695/EU of the President of the European Commission of 13 October 2011 on the function and terms of reference of the hearing officer in certain competition proceedings (OJ L 275, 20.10.2011, p. 29).

1

(2)  Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (OJ L 24, 29.1.2004, p. 1 (the Merger Regulation)).

2

(3)  The proceedings are referred to below as Case M.6203.

3

(4)  A data room was also organised on 22-26 August 2011 so that the Notifying Party's economic advisers were able to access confidential quantitative information.

4

(5)  Commission Regulation (EC) No 802/2004 implementing Council Regulation (EC) No 139/2004 on the control of concentrations between undertakings (OJ L 133, 30.4.2004, p. 1).

5

(6)  See footnote 5.

6

(7)  See footnote 4 above.

7

(8)  See paragraph 4 above.

8

(9)  The data room was organised on 30 September 2011.

9

(10)  I saw no reason in this case to refuse the request for anonymity of the customers.

10

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| 22.8.2013 | EN | Official Journal of the European Union | C 241/11 |
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22.8.2013

EN

Official Journal of the European Union

C 241/11

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Summary of Commission Decision

of 23 November 2011

declaring a concentration compatible with the internal market and the functioning of the EEA Agreement

(Case COMP/M.6203 — Western Digital Ireland/Viviti Technologies)

(notified under document C(2011) 8664)

(Only the English version is authentic)

(Text with EEA relevance)

2013/C 241/06

On 23 November 2011, the Commission adopted a decision in a merger case under Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings
   (1), and in particular Article 8(2) of that Regulation. A non-confidential version of the full Decision can be found in the authentic language of the case and in the working languages of the Commission on the website of the Directorate-General for Competition, at the following address:

http://ec.europa.eu/comm/competition/index_en.html

I.   THE PARTIES

| (1) | Western Digital Corporation (‘WD’ or ‘Notifying Party’, United States) designs, develops, manufactures and sells hard disk drives (HDDs), solid state drives (SSDs), external hard disk drives (XHDDs) and media players. Its operations are vertically integrated upstream in the manufacturing of key components, such as read/write heads and media. |
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(1)

Western Digital Corporation (‘WD’ or ‘Notifying Party’, United States) designs, develops, manufactures and sells hard disk drives (HDDs), solid state drives (SSDs), external hard disk drives (XHDDs) and media players. Its operations are vertically integrated upstream in the manufacturing of key components, such as read/write heads and media.

| (2) | Hitachi Global Storage Technologies (HGST, Singapore), recently renamed Viviti Technologies, is a wholly-owned subsidiary of Hitachi, Ltd. It develops and manufactures digital storage devices, such as HDDs and SSDs, together with some branded XHDDs. It is also vertically integrated upstream. |
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(2)

Hitachi Global Storage Technologies (HGST, Singapore), recently renamed Viviti Technologies, is a wholly-owned subsidiary of Hitachi, Ltd. It develops and manufactures digital storage devices, such as HDDs and SSDs, together with some branded XHDDs. It is also vertically integrated upstream.

| (3) | WD and HGST are hereafter referred to as ‘the Parties’; the entity resulting from the proposed concentration is hereafter referred to as ‘the Merged Entity’. |
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(3)

WD and HGST are hereafter referred to as ‘the Parties’; the entity resulting from the proposed concentration is hereafter referred to as ‘the Merged Entity’.

II.   THE OPERATION

| (4) | On 20 April 2011, the Commission received a notification of a proposed concentration pursuant to Article 4 of the Merger Regulation by which WD acquires, by means of the purchase of shares, control within the meaning of Article 3(1)(b) of the Merger Regulation of the whole of HGST (hereafter referred to as ‘the proposed transaction’). |
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(4)

On 20 April 2011, the Commission received a notification of a proposed concentration pursuant to Article 4 of the Merger Regulation by which WD acquires, by means of the purchase of shares, control within the meaning of Article 3(1)(b) of the Merger Regulation of the whole of HGST (hereafter referred to as ‘the proposed transaction’).

| (5) | As a result of the proposed transaction, HGST will be solely controlled by WD. The operation therefore constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation. |
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(5)

As a result of the proposed transaction, HGST will be solely controlled by WD. The operation therefore constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

| (6) | The transaction has an EU dimension pursuant to Article 1(2) of the Merger Regulation. |
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(6)

The transaction has an EU dimension pursuant to Article 1(2) of the Merger Regulation.

III.   SUMMARY

A.   Analytical framework

| (7) | Another concentration affecting the same markets, namely the acquisition by Seagate (Seagate) of sole control over the HDD Business of Samsung Electronics Co., Ltd (Samsung HDD, South Korea) (2), was notified to the Commission on 19 April 2011, one day before the present transaction. |
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(7)

Another concentration affecting the same markets, namely the acquisition by Seagate (Seagate) of sole control over the HDD Business of Samsung Electronics Co., Ltd (Samsung HDD, South Korea) (2), was notified to the Commission on 19 April 2011, one day before the present transaction.

| (8) | Consistent with its recent practice, the Commission has decided to assess these parallel transactions affecting the same markets according to a priority rule (first come, first served) based on the date of notification. |
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(8)

Consistent with its recent practice, the Commission has decided to assess these parallel transactions affecting the same markets according to a priority rule (first come, first served) based on the date of notification.

| (9) | The Commission takes the view that it is inherent in the general system of the Merger Regulation that a party that is the first to notify a concentration which, assessed on its own merits, would not significantly impede effective competition in the internal market or in a substantial part thereof, is entitled to have its operation declared compatible with the internal market within the applicable time limits. It is neither necessary nor appropriate to take into account future changes to the market conditions resulting from concentrations subsequently notified. |
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(9)

The Commission takes the view that it is inherent in the general system of the Merger Regulation that a party that is the first to notify a concentration which, assessed on its own merits, would not significantly impede effective competition in the internal market or in a substantial part thereof, is entitled to have its operation declared compatible with the internal market within the applicable time limits. It is neither necessary nor appropriate to take into account future changes to the market conditions resulting from concentrations subsequently notified.

| (10) | The ‘first come, first served’ approach is the only one that ensures sufficient legal certainty and objectivity. The Commission recalls that ensuring legal certainty is one of the primary aims of the Merger Regulation. |
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(10)

The ‘first come, first served’ approach is the only one that ensures sufficient legal certainty and objectivity. The Commission recalls that ensuring legal certainty is one of the primary aims of the Merger Regulation.

| (11) | Furthermore, under the scheme of the Merger Regulation, the date of notification is the most appropriate basis for applying the priority rule. It is a clear and objective criterion, determined in all cases in accordance with the rules of Article 5 of Regulation (EC) No 802/2004, which fits into a notification-based system of merger control. Other criteria, such as the date that a binding agreement is signed or the moment that a proposed concentration is made public, are more difficult to apply and may lead to uncertainty. |
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(11)

Furthermore, under the scheme of the Merger Regulation, the date of notification is the most appropriate basis for applying the priority rule. It is a clear and objective criterion, determined in all cases in accordance with the rules of Article 5 of Regulation (EC) No 802/2004, which fits into a notification-based system of merger control. Other criteria, such as the date that a binding agreement is signed or the moment that a proposed concentration is made public, are more difficult to apply and may lead to uncertainty.

| (12) | Therefore, in view of the dates of notification, the proposed transaction is assessed taking into account the Seagate/Samsung transaction which was notified one day earlier and approved by the Commission on 19 October 2011. The starting point of the Commission's assessment is a market structure with the following HDD suppliers: HGST, the merged entity Seagate/Samsung, Toshiba and WD. |
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(12)

Therefore, in view of the dates of notification, the proposed transaction is assessed taking into account the Seagate/Samsung transaction which was notified one day earlier and approved by the Commission on 19 October 2011. The starting point of the Commission's assessment is a market structure with the following HDD suppliers: HGST, the merged entity Seagate/Samsung, Toshiba and WD.

B.   The relevant markets

1.   Introduction

| (13) | HDDs are devices that use one or more rotating disks with magnetic surfaces (media) to store and allow access to data. HDDs provide non-volatile data storage, which means that the data remains present when power is no longer applied to the device. |
| --- | --- |

(13)

HDDs are devices that use one or more rotating disks with magnetic surfaces (media) to store and allow access to data. HDDs provide non-volatile data storage, which means that the data remains present when power is no longer applied to the device.

| (14) | The main components of a hard drive are the Head-Disk-Assembly (HDA) and the Printed Circuit Board Assembly (PCBA). Toshiba and Samsung HDD purchase major components such as heads and media from third party manufacturers, such as TDK for heads and Showa Denko for media. Other suppliers, namely Seagate, WD and HGST, self-supply the large majority of these key components. |
| --- | --- |

(14)

The main components of a hard drive are the Head-Disk-Assembly (HDA) and the Printed Circuit Board Assembly (PCBA). Toshiba and Samsung HDD purchase major components such as heads and media from third party manufacturers, such as TDK for heads and Showa Denko for media. Other suppliers, namely Seagate, WD and HGST, self-supply the large majority of these key components.

| (15) | Differentiation of HDDs is possible according to their technical characteristics, such as size (3,5′′, 2,5′′, 1,8′′ form factors), rotational speed (seek time), storage capacity and the type of interface. |
| --- | --- |

(15)

Differentiation of HDDs is possible according to their technical characteristics, such as size (3,5′′, 2,5′′, 1,8′′ form factors), rotational speed (seek time), storage capacity and the type of interface.

| (16) | Further, HDDs are customarily categorised by reference to their end use, in particular the following. |
| --- | --- |

(16)

Further, HDDs are customarily categorised by reference to their end use, in particular the following.

(a)   Enterprise HDDs

| (17) | Enterprise HDDs are used mainly in servers and enterprise storage systems. Enterprise HDDs can be further segmented in: (i) Mission Critical HDDs (employed in high performance servers or storage arrays which require 99,999 % reliability); and (ii) Business Critical HHDs (used in the large storage facilities or server farms of internet companies which run 24/7). |
| --- | --- |

(17)

Enterprise HDDs are used mainly in servers and enterprise storage systems. Enterprise HDDs can be further segmented in: (i) Mission Critical HDDs (employed in high performance servers or storage arrays which require 99,999 % reliability); and (ii) Business Critical HHDs (used in the large storage facilities or server farms of internet companies which run 24/7).

(b)   Desktop HDDs

| (18) | Desktop HDDs are incorporated in personal computers intended for regular use at a single location (homes, businesses and multi-user networks). Nearly all HDDs for Desktop applications are based on the 3,5′′ form factor, which offers the highest storage capacity with the lowest price per GB. |
| --- | --- |

(18)

Desktop HDDs are incorporated in personal computers intended for regular use at a single location (homes, businesses and multi-user networks). Nearly all HDDs for Desktop applications are based on the 3,5′′ form factor, which offers the highest storage capacity with the lowest price per GB.

(c)   Mobile HDDs

| (19) | Mobile HDDs are incorporated primarily in notebook computers and other mobile devices. Individuals use mobile computers both in and away from homes and businesses. Most Mobile HDDs are based on the 2,5′′ form factor. They are generally more expensive and have less capacity than 3,5′′ Desktop HDDs. |
| --- | --- |

(19)

Mobile HDDs are incorporated primarily in notebook computers and other mobile devices. Individuals use mobile computers both in and away from homes and businesses. Most Mobile HDDs are based on the 2,5′′ form factor. They are generally more expensive and have less capacity than 3,5′′ Desktop HDDs.

(d)   Consumer Electronics (CE) HDDs

| (20) | CE HDDs are used in: (i) digital video recorders (DVRs) and satellite and cable set-top boxes (STBs); and (ii) game consoles. HDDs supplied for CE applications include both 3,5′′ and 2,5′′ form factor drives as well as a small volume of 1,8′′ drives (3). As opposed to HDDs used in PC applications (whether Desktop or Mobile), 2,5′′ and 3,5′′ HDDs used in CE products are provided with specific firmware codes customized according to the specific application purpose. |
| --- | --- |

(20)

CE HDDs are used in: (i) digital video recorders (DVRs) and satellite and cable set-top boxes (STBs); and (ii) game consoles. HDDs supplied for CE applications include both 3,5′′ and 2,5′′ form factor drives as well as a small volume of 1,8′′ drives (3). As opposed to HDDs used in PC applications (whether Desktop or Mobile), 2,5′′ and 3,5′′ HDDs used in CE products are provided with specific firmware codes customized according to the specific application purpose.

2.   Different HDDs markets according to form factor and end-use

| (21) | The Commission's investigation revealed that there is no demand-side substitutability across all HDDs since the various end-use applications where HDDs are incorporated largely determine the technical requirements of HDDs (capacity, interface, rpm and form factor). In addition, within the same end-use application HDDs with different form factors (namely 3,5′′ and 2,5′′) are not substitutable from a customer standpoint. |
| --- | --- |

(21)

The Commission's investigation revealed that there is no demand-side substitutability across all HDDs since the various end-use applications where HDDs are incorporated largely determine the technical requirements of HDDs (capacity, interface, rpm and form factor). In addition, within the same end-use application HDDs with different form factors (namely 3,5′′ and 2,5′′) are not substitutable from a customer standpoint.

| (22) | HDDs employed in different end-use applications are also subject to different industry dynamics and different supply chain models. The Commission's investigation also indicated that there is no sufficient supply-side substitutability across all types of HDDs in terms of effectiveness and immediacy. In the absence of such supply-side substitution, the market cannot be defined in a broader manner. |
| --- | --- |

(22)

HDDs employed in different end-use applications are also subject to different industry dynamics and different supply chain models. The Commission's investigation also indicated that there is no sufficient supply-side substitutability across all types of HDDs in terms of effectiveness and immediacy. In the absence of such supply-side substitution, the market cannot be defined in a broader manner.

| (23) | The Commission defined the following relevant product markets: (i) Enterprise Mission Critical HDDs (4); (ii) 3,5′′ Enterprise Business Critical HDDs; (iii) 3,5′′ Desktop HDDs; (iv) 3,5′′ CE HDDs; (v) 2,5′′ Mobile HDDs; and (vi) 2,5′′ CE HDDs. |
| --- | --- |

(23)

The Commission defined the following relevant product markets: (i) Enterprise Mission Critical HDDs (4); (ii) 3,5′′ Enterprise Business Critical HDDs; (iii) 3,5′′ Desktop HDDs; (iv) 3,5′′ CE HDDs; (v) 2,5′′ Mobile HDDs; and (vi) 2,5′′ CE HDDs.

| (24) | The Commission's investigation and previous decisions indicated that all the HDD markets are worldwide in scope. |
| --- | --- |

(24)

The Commission's investigation and previous decisions indicated that all the HDD markets are worldwide in scope.

3.   XHDDs

| (25) | External hard disk drives (XHDDs) allow PC users to supplement the storage space of their PC systems, their home and small office networks, or their CE devices. They provide stand-alone storage solutions. XHDDs use HDDs as inputs. Unlike internal HDDs, XHDDs are sold as finished products on the merchant market and substantially target different customers, mainly end users of PC and CE devices as opposed to original equipment manufacturers (OEMs). XHDDs are predominantly a branded business. |
| --- | --- |

(25)

External hard disk drives (XHDDs) allow PC users to supplement the storage space of their PC systems, their home and small office networks, or their CE devices. They provide stand-alone storage solutions. XHDDs use HDDs as inputs. Unlike internal HDDs, XHDDs are sold as finished products on the merchant market and substantially target different customers, mainly end users of PC and CE devices as opposed to original equipment manufacturers (OEMs). XHDDs are predominantly a branded business.

| (26) | The Commission considers that XHDDs constitute a separate product market that is downstream of HDDs. The Commission further considers that the XHDD market is currently regional and therefore must be assessed at the EEA-wide level as the customers as well as the customer mix differs significantly between the different regions in the world. Also the identity and number of XHDD suppliers vary across the different regions in the world. |
| --- | --- |

(26)

The Commission considers that XHDDs constitute a separate product market that is downstream of HDDs. The Commission further considers that the XHDD market is currently regional and therefore must be assessed at the EEA-wide level as the customers as well as the customer mix differs significantly between the different regions in the world. Also the identity and number of XHDD suppliers vary across the different regions in the world.

C.   Competitive assessment

Non-coordinated effects

| (27) | WD is currently the largest HDD supplier in terms of volume, and a close second to Seagate in terms of revenues. It is the largest supplier on the significant markets for 3,5′′ Desktop HDDs ([40-50]* % market share in revenues) and 2,5′′ Mobile HDDs ([30-40]* % market share in revenues), it is the largest supplier on the market for 3,5′′ CE HDDs ([40-50]* % market share in revenues), and the second largest on the market for 3,5′′ Business Critical HDDs ([30-40]* % market share in revenues). |
| --- | --- |

(27)

WD is currently the largest HDD supplier in terms of volume, and a close second to Seagate in terms of revenues. It is the largest supplier on the significant markets for 3,5′′ Desktop HDDs ([40-50]* % market share in revenues) and 2,5′′ Mobile HDDs ([30-40]* % market share in revenues), it is the largest supplier on the market for 3,5′′ CE HDDs ([40-50]* % market share in revenues), and the second largest on the market for 3,5′′ Business Critical HDDs ([30-40]* % market share in revenues).

| (28) | With the proposed transaction, WD would reinforce its leading position to become by far the largest HDD supplier on all HDD markets except on the market for Mission Critical Enterprise HDDs where WD only recently entered. The activities of WD and HGST overlap in all the HDD markets, and the proposed transaction would generally result in significant increments to WD's current market shares. |
| --- | --- |

(28)

With the proposed transaction, WD would reinforce its leading position to become by far the largest HDD supplier on all HDD markets except on the market for Mission Critical Enterprise HDDs where WD only recently entered. The activities of WD and HGST overlap in all the HDD markets, and the proposed transaction would generally result in significant increments to WD's current market shares.

| (29) | The Commission assessed the competitive effects of the proposed transaction on each of the relevant markets. |
| --- | --- |

(29)

The Commission assessed the competitive effects of the proposed transaction on each of the relevant markets.

| (30) | In line with the priority rule mentioned above, the relevant counterfactual is that pre-merger, Seagate/Samsung, WD, HGST and Toshiba remain as HDD competitors on the various 2,5′′ markets and the 3,5′′ Business Critical market, and WD, Seagate/Samsung and HGST remain as competitors on the 3,5′′ Desktop and 3,5′′ CE markets. |
| --- | --- |

(30)

In line with the priority rule mentioned above, the relevant counterfactual is that pre-merger, Seagate/Samsung, WD, HGST and Toshiba remain as HDD competitors on the various 2,5′′ markets and the 3,5′′ Business Critical market, and WD, Seagate/Samsung and HGST remain as competitors on the 3,5′′ Desktop and 3,5′′ CE markets.

| (31) | Market structure and competitive dynamics vary for each of the relevant HDDs markets. A number of common factors are nonetheless relevant for the Commission's competitive assessment for each of these markets, as explained below. |
| --- | --- |

(31)

Market structure and competitive dynamics vary for each of the relevant HDDs markets. A number of common factors are nonetheless relevant for the Commission's competitive assessment for each of these markets, as explained below.

| (32) | The Commission finds that products on the HDD markets have features of differentiated products rather than pure commodity products. The Commission's investigation indeed confirmed that technology and innovation are important, and that factors such as performance (rotation, seek speed), product quality and reliability, noise and energy consumption of HDDs are important factors in the purchasing decisions of OEM customers. Key factors driving competition between HDD suppliers are also the ability of HDD suppliers to execute their product roadmaps well and to bring high quality products to the market in a timely and cost-effective manner. |
| --- | --- |

(32)

The Commission finds that products on the HDD markets have features of differentiated products rather than pure commodity products. The Commission's investigation indeed confirmed that technology and innovation are important, and that factors such as performance (rotation, seek speed), product quality and reliability, noise and energy consumption of HDDs are important factors in the purchasing decisions of OEM customers. Key factors driving competition between HDD suppliers are also the ability of HDD suppliers to execute their product roadmaps well and to bring high quality products to the market in a timely and cost-effective manner.

| (33) | The Commission's investigation indicated that multi-sourcing is very important for HDD customers for reasons of security of supply as well as to receive competitively priced supply. The Commission's investigation further revealed that at least three qualified and reliable suppliers are required for an effective multi-sourcing policy. It follows that the ability of HDD customers to switch suppliers and reallocate purchase shares would be significantly limited in a two-supplier scenario. |
| --- | --- |

(33)

The Commission's investigation indicated that multi-sourcing is very important for HDD customers for reasons of security of supply as well as to receive competitively priced supply. The Commission's investigation further revealed that at least three qualified and reliable suppliers are required for an effective multi-sourcing policy. It follows that the ability of HDD customers to switch suppliers and reallocate purchase shares would be significantly limited in a two-supplier scenario.

| (34) | The competitors have different strengths and strategies. For the purpose of analysing the closeness of competition between WD and HGST, and the competitive force of HGST, the Commission assessed the competitive strengths of each of the HDD competitors on the basis of the various benchmarks identified by the Notifying Party's key executives, as well as HDD customers, namely, product breadth, product availability and execution of product roadmaps, product quality, technology and cost effectiveness/price. |
| --- | --- |

(34)

The competitors have different strengths and strategies. For the purpose of analysing the closeness of competition between WD and HGST, and the competitive force of HGST, the Commission assessed the competitive strengths of each of the HDD competitors on the basis of the various benchmarks identified by the Notifying Party's key executives, as well as HDD customers, namely, product breadth, product availability and execution of product roadmaps, product quality, technology and cost effectiveness/price.

| (35) | The Commission's investigation indicated that there are significant barriers to entry and that there is no likely, timely and sufficient entry in any of the relevant HDD markets, either by a new entrant in the HDD industry or by an HDD supplier that is not present in a specific HDD market (such as a possible entry by Toshiba in the 3,5′′ Desktop or 3,5′′ CE markets as further explained below). |
| --- | --- |

(35)

The Commission's investigation indicated that there are significant barriers to entry and that there is no likely, timely and sufficient entry in any of the relevant HDD markets, either by a new entrant in the HDD industry or by an HDD supplier that is not present in a specific HDD market (such as a possible entry by Toshiba in the 3,5′′ Desktop or 3,5′′ CE markets as further explained below).

1.   The worldwide market for 3,5′′ Desktop HDD

| (36) | WD is already one of the leading suppliers on the 3,5′′ Desktop market, with a [40-50]* % market share. HGST's market share is [10-20]* % and therefore significant. The proposed transaction would reduce the number of HHD competitors on the 3,5′′ Desktop market from three to two. Post-merger, the Merged Entity would have the highest market share in value ([50-60]* %). The other half of the market would be controlled by Seagate/Samsung, with a [40-50]* % market share. Since Toshiba is not present on this market, there would be not alternative supplier for customers other than the Merged Entity and Seagate/Samsung. |
| --- | --- |

(36)

WD is already one of the leading suppliers on the 3,5′′ Desktop market, with a [40-50]* % market share. HGST's market share is [10-20]* % and therefore significant. The proposed transaction would reduce the number of HHD competitors on the 3,5′′ Desktop market from three to two. Post-merger, the Merged Entity would have the highest market share in value ([50-60]* %). The other half of the market would be controlled by Seagate/Samsung, with a [40-50]* % market share. Since Toshiba is not present on this market, there would be not alternative supplier for customers other than the Merged Entity and Seagate/Samsung.

| (37) | Although the Notifying Party asserts that OEMs would re-allocate purchase shares between HDD suppliers once the proposed transaction is implemented, the Commission found that the proposed transaction differs from the previous concentrations in the HDD industry. In those previous cases, the Commission accepted that the ‘Conner effect’ could mitigate the effects of concentrations between two HDD competitors, since customers were able to shift purchase shares and ultimately keep their total number of HDD suppliers constant (5). |
| --- | --- |

(37)

Although the Notifying Party asserts that OEMs would re-allocate purchase shares between HDD suppliers once the proposed transaction is implemented, the Commission found that the proposed transaction differs from the previous concentrations in the HDD industry. In those previous cases, the Commission accepted that the ‘Conner effect’ could mitigate the effects of concentrations between two HDD competitors, since customers were able to shift purchase shares and ultimately keep their total number of HDD suppliers constant (5).

| (38) | Various sources of evidence confirm that multi-sourcing of HDD supplies is prevalent on the 3,5′′ Desktop market. Contrary to the Notifying Party's claim, even in a two-supplier scenario, most OEMs confirm that they would be unwilling to allocate very high purchase shares to a single HDD supplier. This means that in a two-supplier scenario, by construction, the share allocated to the most competitive bidder cannot be dramatically larger than the share allocated to the least competitive bidder. |
| --- | --- |

(38)

Various sources of evidence confirm that multi-sourcing of HDD supplies is prevalent on the 3,5′′ Desktop market. Contrary to the Notifying Party's claim, even in a two-supplier scenario, most OEMs confirm that they would be unwilling to allocate very high purchase shares to a single HDD supplier. This means that in a two-supplier scenario, by construction, the share allocated to the most competitive bidder cannot be dramatically larger than the share allocated to the least competitive bidder.

| (39) | Despite the Notifying Party's claim that WD/HGST and Seagate would continue to compete intensively for the highest purchase share of any HDD customer despite the impact of the removal of HGST the Commission's investigation showed that the proposed transaction might have given rise to an adverse price effect. The Commission considers that evidence on the ‘best responses’ of HDD suppliers when faced between the choice of competing aggressively for the higher purchase share or less intensely for the lower share, do not provide any indications on the effect that the removal of the third competitor has on competition between the remaining two competitors. The same applies to the argument that post-merger, WD/HGST and Seagate/Samsung would always have the incentive to decrease prices and increase output. |
| --- | --- |

(39)

Despite the Notifying Party's claim that WD/HGST and Seagate would continue to compete intensively for the highest purchase share of any HDD customer despite the impact of the removal of HGST the Commission's investigation showed that the proposed transaction might have given rise to an adverse price effect. The Commission considers that evidence on the ‘best responses’ of HDD suppliers when faced between the choice of competing aggressively for the higher purchase share or less intensely for the lower share, do not provide any indications on the effect that the removal of the third competitor has on competition between the remaining two competitors. The same applies to the argument that post-merger, WD/HGST and Seagate/Samsung would always have the incentive to decrease prices and increase output.

| (40) | On a 3,5′′ Desktop HDD market with only two suppliers, because customers need to multi-source, the runner-up bidder would not get zero demand, but on the contrary, a very significant one. In this perspective, the presence of the third competitor is likely to pose a significant competitive constraint on WD. This finding is all the more valid given that HGST has been an important competitive constraint on the 3,5′′ Desktop HDD market as evidenced by: (i) the bidding data; (ii) HGST's presence at large OEMs; and (iii) internal documents and public statements of WD, HGST and Seagate. The views that customers on the 3,5′′ Desktop market expressed during the course of the Commission's investigation confirm that the proposed transaction is likely to remove an important competitive constraint from the 3,5′′ Desktop market and to have an adverse price effect. |
| --- | --- |

(40)

On a 3,5′′ Desktop HDD market with only two suppliers, because customers need to multi-source, the runner-up bidder would not get zero demand, but on the contrary, a very significant one. In this perspective, the presence of the third competitor is likely to pose a significant competitive constraint on WD. This finding is all the more valid given that HGST has been an important competitive constraint on the 3,5′′ Desktop HDD market as evidenced by: (i) the bidding data; (ii) HGST's presence at large OEMs; and (iii) internal documents and public statements of WD, HGST and Seagate. The views that customers on the 3,5′′ Desktop market expressed during the course of the Commission's investigation confirm that the proposed transaction is likely to remove an important competitive constraint from the 3,5′′ Desktop market and to have an adverse price effect.

| (41) | It is not likely that Seagate would have the ability and incentive to increase its supplies so as to countervail any price increase by the Merged Entity. |
| --- | --- |

(41)

It is not likely that Seagate would have the ability and incentive to increase its supplies so as to countervail any price increase by the Merged Entity.

| (42) | The Commission finds that the proposed transaction would seriously increase the constraints that large OEMs face in switching their HDD suppliers. Thus, the bargaining strength of OEMs will be negatively impacted by the proposed transaction and customers would not possess sufficient countervailing power to counter the increase in market power brought about by the proposed transaction. The evidence from the Parties confirms that the significant impediment to effective competition that is likely in relation to large OEMs, applies with equal or even more force to distributors and smaller OEMs, which largely buy HDDs from the distribution channel, as well as XHDD suppliers which source their HDD input from the 3,5" Desktop market. |
| --- | --- |

(42)

The Commission finds that the proposed transaction would seriously increase the constraints that large OEMs face in switching their HDD suppliers. Thus, the bargaining strength of OEMs will be negatively impacted by the proposed transaction and customers would not possess sufficient countervailing power to counter the increase in market power brought about by the proposed transaction. The evidence from the Parties confirms that the significant impediment to effective competition that is likely in relation to large OEMs, applies with equal or even more force to distributors and smaller OEMs, which largely buy HDDs from the distribution channel, as well as XHDD suppliers which source their HDD input from the 3,5" Desktop market.

| (43) | The Commission cannot conclude that entry by Toshiba on the 3,5′′ Desktop market would be likely and sufficient. Furthermore, the Commission concludes that while entry by Toshiba might occur within the 2 years normally contemplated by the Horizontal Merger Guidelines, it is uncertain whether such entry would be timely given the short product life cycles in the 3,5′′ Desktop market. The Commission concludes that there is no likely, timely and sufficient entry by a new HDD competitor to defeat the likely anticompetitive effects of the proposed transaction. |
| --- | --- |

(43)

The Commission cannot conclude that entry by Toshiba on the 3,5′′ Desktop market would be likely and sufficient. Furthermore, the Commission concludes that while entry by Toshiba might occur within the 2 years normally contemplated by the Horizontal Merger Guidelines, it is uncertain whether such entry would be timely given the short product life cycles in the 3,5′′ Desktop market. The Commission concludes that there is no likely, timely and sufficient entry by a new HDD competitor to defeat the likely anticompetitive effects of the proposed transaction.

| (44) | In light of the above, the Commission concludes that the proposed transaction is likely to result in a significant impediment to effective competition in the worldwide market for 3,5′′ Desktop HDDs. |
| --- | --- |

(44)

In light of the above, the Commission concludes that the proposed transaction is likely to result in a significant impediment to effective competition in the worldwide market for 3,5′′ Desktop HDDs.

2.   The worldwide market for 3,5′′ CE HDDs

| (45) | WD is currently the second largest market player with a [40-50]* % market share. The combined WD/HGST entity would be the market leader holding a market share of [50-60]* %. The market share increment brought about by the proposed transaction would be [10-20]* % and hence significant. Post-merger, the Merged Entity will only face one remaining competitor, Seagate/Samsung, with a similar market share ([40-50]* %). |
| --- | --- |

(45)

WD is currently the second largest market player with a [40-50]* % market share. The combined WD/HGST entity would be the market leader holding a market share of [50-60]* %. The market share increment brought about by the proposed transaction would be [10-20]* % and hence significant. Post-merger, the Merged Entity will only face one remaining competitor, Seagate/Samsung, with a similar market share ([40-50]* %).

| (46) | The fact that some 3,5′′ CE customers solicit bids from two sources of supply only for certain HDD products does not undermine the great importance associated with the number of available suppliers on the market for negotiations purposes as this can impact OEMs' ability to secure sufficient volumes of supply at competitive prices. Virtually all CE OEMs confirm that they use the market presence of alternative supply sources to obtain better prices from those HDD suppliers that were invited to bid. |
| --- | --- |

(46)

The fact that some 3,5′′ CE customers solicit bids from two sources of supply only for certain HDD products does not undermine the great importance associated with the number of available suppliers on the market for negotiations purposes as this can impact OEMs' ability to secure sufficient volumes of supply at competitive prices. Virtually all CE OEMs confirm that they use the market presence of alternative supply sources to obtain better prices from those HDD suppliers that were invited to bid.

| (47) | WD and HGST belong to the same tier 1 group of HDD suppliers, and HGST is therefore a close competitor to WD and generally an important competitive force on the 3,5′′ CE market. |
| --- | --- |

(47)

WD and HGST belong to the same tier 1 group of HDD suppliers, and HGST is therefore a close competitor to WD and generally an important competitive force on the 3,5′′ CE market.

| (48) | There would be no sufficient post-merger countervailing buyer power since customers are not in a position to counteract the likely anticompetitive effects of the proposed transaction. |
| --- | --- |

(48)

There would be no sufficient post-merger countervailing buyer power since customers are not in a position to counteract the likely anticompetitive effects of the proposed transaction.

| (49) | The Commission cannot conclude that entry by Toshiba on the 3,5′′ CE HDDs market would be likely and sufficient. |
| --- | --- |

(49)

The Commission cannot conclude that entry by Toshiba on the 3,5′′ CE HDDs market would be likely and sufficient.

| (50) | In light of the above, the Commission concludes that the proposed transaction is likely to result in a significant impediment to effective competition in the worldwide market for 3,5′′ CE HDDs. |
| --- | --- |

(50)

In light of the above, the Commission concludes that the proposed transaction is likely to result in a significant impediment to effective competition in the worldwide market for 3,5′′ CE HDDs.

3.   The worldwide market for 3,5′′ Business Critical Enterprise HDDs

| (51) | There are currently four suppliers on the market for 3,5′′ Business Critical Enterprise HDDs: Seagate/Samsung, WD, HGST and Toshiba. WD is currently the second largest market player with a [30-40]* % market share. HGST is the third largest market player. The combined WD/HGST entity would be the market leader holding a market share in excess of [50-60]* % with a significant increment of [20-30]* %. |
| --- | --- |

(51)

There are currently four suppliers on the market for 3,5′′ Business Critical Enterprise HDDs: Seagate/Samsung, WD, HGST and Toshiba. WD is currently the second largest market player with a [30-40]* % market share. HGST is the third largest market player. The combined WD/HGST entity would be the market leader holding a market share in excess of [50-60]* % with a significant increment of [20-30]* %.

| (52) | The competitive strengths of WD and HGST overlap on a number of important parameters of competition, such as product portfolio and supply flexibility. |
| --- | --- |

(52)

The competitive strengths of WD and HGST overlap on a number of important parameters of competition, such as product portfolio and supply flexibility.

| (53) | The Commission's investigation indicated that the removal of HGST as an important supply source on the 3,5′′ Business Critical market is likely to have a detrimental effect on the ability of customers on that market to secure competitive prices when multi-sourcing their supplies. Contrary to the Notifying Party's view, the mere fact that some customers use only two sources of supply for certain products does not undermine the great importance associated to the number of available suppliers on the market for negotiations purposes as this can impact OEMs' ability to secure sufficient volumes of supply at competitive prices. |
| --- | --- |

(53)

The Commission's investigation indicated that the removal of HGST as an important supply source on the 3,5′′ Business Critical market is likely to have a detrimental effect on the ability of customers on that market to secure competitive prices when multi-sourcing their supplies. Contrary to the Notifying Party's view, the mere fact that some customers use only two sources of supply for certain products does not undermine the great importance associated to the number of available suppliers on the market for negotiations purposes as this can impact OEMs' ability to secure sufficient volumes of supply at competitive prices.

| (54) | The Commission's investigation showed that the proposed transaction removes the competitive constraint currently exercised by HGST as the third strongest player on the market and an important player in terms of quality and innovation. |
| --- | --- |

(54)

The Commission's investigation showed that the proposed transaction removes the competitive constraint currently exercised by HGST as the third strongest player on the market and an important player in terms of quality and innovation.

| (55) | The Commission's investigation indicated that Toshiba does not currently exercise a sufficiently constraining influence in the 3,5′′ Business Critical market to deter or defeat the increased market power of the Merged Entity post transaction. Furthermore, there is no clear indication that Toshiba is likely to develop into a sufficient competitive constraint in a sufficiently swift and sustained manner. |
| --- | --- |

(55)

The Commission's investigation indicated that Toshiba does not currently exercise a sufficiently constraining influence in the 3,5′′ Business Critical market to deter or defeat the increased market power of the Merged Entity post transaction. Furthermore, there is no clear indication that Toshiba is likely to develop into a sufficient competitive constraint in a sufficiently swift and sustained manner.

| (56) | In light of the above, the Commission concludes that the proposed transaction is likely to result in a significant impediment to effective competition in the worldwide market for 3,5′′ Business Critical Enterprise HDDs. |
| --- | --- |

(56)

In light of the above, the Commission concludes that the proposed transaction is likely to result in a significant impediment to effective competition in the worldwide market for 3,5′′ Business Critical Enterprise HDDs.

4.   The worldwide market for 2,5′′ Mobile HDDs

| (57) | The proposed transaction would reduce the number of suppliers of 2,5′′ Mobile HDDs from four to three. Post-merger, WD/HGST would hold a [40-50]* % market share (WD [30-40]* %; HGST [10-20]* %) and it would face a close runner-up Seagate/Samsung ([30-40]* %), as well as one other competitor Toshiba ([10-20]* %). |
| --- | --- |

(57)

The proposed transaction would reduce the number of suppliers of 2,5′′ Mobile HDDs from four to three. Post-merger, WD/HGST would hold a [40-50]* % market share (WD [30-40]* %; HGST [10-20]* %) and it would face a close runner-up Seagate/Samsung ([30-40]* %), as well as one other competitor Toshiba ([10-20]* %).

| (58) | The proposed transaction will not impact customers' ability to multi-source and switch suppliers in the 2,5′′ Mobile market where not only customers will also be able to source HDDs from Seagate/Samsung but also from Toshiba. It can be expected that Toshiba will gain shares in 2,5′′ Mobile HDD market as a majority of OEMs sourcing 2,5′′ Mobile HDDs stated that they will ‘re-allocate’ HDD purchase shares post-transaction. |
| --- | --- |

(58)

The proposed transaction will not impact customers' ability to multi-source and switch suppliers in the 2,5′′ Mobile market where not only customers will also be able to source HDDs from Seagate/Samsung but also from Toshiba. It can be expected that Toshiba will gain shares in 2,5′′ Mobile HDD market as a majority of OEMs sourcing 2,5′′ Mobile HDDs stated that they will ‘re-allocate’ HDD purchase shares post-transaction.

| (59) | In light of the above, the Commission concludes that the proposed transaction is not likely to result in a significant impediment to effective competition in the worldwide market for 2,5′′ Mobile HDDs. |
| --- | --- |

(59)

In light of the above, the Commission concludes that the proposed transaction is not likely to result in a significant impediment to effective competition in the worldwide market for 2,5′′ Mobile HDDs.

5.   The worldwide market for 2,5′′ CE HDDs

| (60) | The proposed transaction would reduce the number of suppliers of 2,5′′ CE HDDs from four to three. Currently HGST is the number 2 supplier, behind Toshiba, in the 2,5′′ CE market with a [30-40]* % market share in value. The proposed transaction will only result in a small increment of [0-5]* % in market share, given WD's limited market presence. Moreover, post-merger, the Merged Entity will continue to face competition from Toshiba and Seagate/Samsung, two strong suppliers which will hold market shares of [40-50]* % and [10-20]* % respectively. |
| --- | --- |

(60)

The proposed transaction would reduce the number of suppliers of 2,5′′ CE HDDs from four to three. Currently HGST is the number 2 supplier, behind Toshiba, in the 2,5′′ CE market with a [30-40]* % market share in value. The proposed transaction will only result in a small increment of [0-5]* % in market share, given WD's limited market presence. Moreover, post-merger, the Merged Entity will continue to face competition from Toshiba and Seagate/Samsung, two strong suppliers which will hold market shares of [40-50]* % and [10-20]* % respectively.

| (61) | The proposed transaction will not impact customers' ability to multi-source and switch suppliers in the 2,5′′ CE market where customers will also be able to source HDDs from Toshiba and Seagate/Samsung. |
| --- | --- |

(61)

The proposed transaction will not impact customers' ability to multi-source and switch suppliers in the 2,5′′ CE market where customers will also be able to source HDDs from Toshiba and Seagate/Samsung.

| (62) | In light of the above, the Commission concludes that the proposed transaction is not likely to result in a significant impediment to effective competition in the worldwide market for 2,5′′ CE HDDs. |
| --- | --- |

(62)

In light of the above, the Commission concludes that the proposed transaction is not likely to result in a significant impediment to effective competition in the worldwide market for 2,5′′ CE HDDs.

6.   The worldwide market for Mission Critical Enterprise HDDs

| (63) | The proposed transaction will only result in a negligible increment ([0-5]* %) to the market share of the current second player on the market, HGST ([20-30]* %). WD and HGST are not close competitors since the latter is the second well-established player after Seagate/Samsung ([60-70]* %) whilst WD is a small player which entered this market a few years ago but has struggled to gain a meaningful market share. Therefore, the proposed transaction will not have any material impact on the competitive structure of the worldwide market for Mission Critical Enterprise HDDs. |
| --- | --- |

(63)

The proposed transaction will only result in a negligible increment ([0-5]* %) to the market share of the current second player on the market, HGST ([20-30]* %). WD and HGST are not close competitors since the latter is the second well-established player after Seagate/Samsung ([60-70]* %) whilst WD is a small player which entered this market a few years ago but has struggled to gain a meaningful market share. Therefore, the proposed transaction will not have any material impact on the competitive structure of the worldwide market for Mission Critical Enterprise HDDs.

| (64) | In light of the above, the Commission concludes that the proposed transaction is not likely to result in a significant impediment to effective competition in the worldwide market for Mission Critical Enterprise HDDs. |
| --- | --- |

(64)

In light of the above, the Commission concludes that the proposed transaction is not likely to result in a significant impediment to effective competition in the worldwide market for Mission Critical Enterprise HDDs.

7.   The EEA-wide market for XHDDs

| (65) | The XHDD market is growing faster than the markets for internal HDDs. On the supply side, the XHDD market seems to be less concentrated than the HDDs markets. In addition to the HDD producers, there are alternative XHDD suppliers which are not vertically integrated upstream in the manufacturing of HDDs. |
| --- | --- |

(65)

The XHDD market is growing faster than the markets for internal HDDs. On the supply side, the XHDD market seems to be less concentrated than the HDDs markets. In addition to the HDD producers, there are alternative XHDD suppliers which are not vertically integrated upstream in the manufacturing of HDDs.

| (66) | The Commission's investigation indicated that WD is the largest player in the market ([30-40]* %) and after the acquisition of HGST ([0-5]* %), the only other integrated XHDD competitors would be Seagate/Samsung ([10-20]* %) and Toshiba (only about [0-5]* %). The non-integrated competitors are Iomega ([10-20]* %), LaCie ([5-10]* %), Verbatim/Freecom ([5-10]* %), Trekstor ([5-10]* %) and Buffalo ([0-5]* %). |
| --- | --- |

(66)

The Commission's investigation indicated that WD is the largest player in the market ([30-40]* %) and after the acquisition of HGST ([0-5]* %), the only other integrated XHDD competitors would be Seagate/Samsung ([10-20]* %) and Toshiba (only about [0-5]* %). The non-integrated competitors are Iomega ([10-20]* %), LaCie ([5-10]* %), Verbatim/Freecom ([5-10]* %), Trekstor ([5-10]* %) and Buffalo ([0-5]* %).

| (67) | The Commission's investigation revealed that, firstly, WD is already the leading XHDD player in the EEA XHDD market and the acquisition of HGST would further consolidate its current leading position. Secondly, the market shares and increment may underestimate the market power of the Merged Entity and the competitive constraint exerted by HGST on WD. The XHDD market has to be assessed in a dynamic perspective as the entry of HDD manufacturers in the XHDD market is currently rapidly changing the competitive landscape, mirroring in a closer fashion the upstream HDD markets. Thirdly, HGST is a close competitor to WD. Fourth, the Commission's investigation also indicated that the proposed transaction may increase the ability and incentive of WD to raise the costs of its non-integrated rivals in the downstream EEA XHDD market. Finally, there are no countervailing factors like low barriers to entry or buyer power which would sufficiently mitigate the significant competitive constraint removed by the proposed transaction. |
| --- | --- |

(67)

The Commission's investigation revealed that, firstly, WD is already the leading XHDD player in the EEA XHDD market and the acquisition of HGST would further consolidate its current leading position. Secondly, the market shares and increment may underestimate the market power of the Merged Entity and the competitive constraint exerted by HGST on WD. The XHDD market has to be assessed in a dynamic perspective as the entry of HDD manufacturers in the XHDD market is currently rapidly changing the competitive landscape, mirroring in a closer fashion the upstream HDD markets. Thirdly, HGST is a close competitor to WD. Fourth, the Commission's investigation also indicated that the proposed transaction may increase the ability and incentive of WD to raise the costs of its non-integrated rivals in the downstream EEA XHDD market. Finally, there are no countervailing factors like low barriers to entry or buyer power which would sufficiently mitigate the significant competitive constraint removed by the proposed transaction.

8.   Conclusion

| (68) | The Commission notes that the commitments that the Notifying Party has offered to remove the unilateral concerns in the upstream 3,5′′ HDD markets would preclude a significant impediment to effective competition from arising on the downstream EEA XHDD market. In particular, these commitments would allow for the emergence of a new, viable and effective competitor on those upstream 3,5′′ HDD markets. |
| --- | --- |

(68)

The Commission notes that the commitments that the Notifying Party has offered to remove the unilateral concerns in the upstream 3,5′′ HDD markets would preclude a significant impediment to effective competition from arising on the downstream EEA XHDD market. In particular, these commitments would allow for the emergence of a new, viable and effective competitor on those upstream 3,5′′ HDD markets.

| (69) | In light of the above, the Commission concludes that the proposed transaction, as amended by the commitments offered by the Notifying Party, is unlikely to give rise to a significant impediment to effective competition stemming from non-coordinated effects on the EEA-wide market for XHDDs. |
| --- | --- |

(69)

In light of the above, the Commission concludes that the proposed transaction, as amended by the commitments offered by the Notifying Party, is unlikely to give rise to a significant impediment to effective competition stemming from non-coordinated effects on the EEA-wide market for XHDDs.

| (70) | In light of the above assessment, the Commission concludes that the proposed transaction is likely to result in a significant impediment to effective competition in the following markets: (i) the worldwide 3,5′′ Desktop HDD market; (ii) the worldwide 3,5′′ CE HDD market; (iii) the worldwide 3,5′′ Business Critical Enterprise HDD market; and (iv) the EEA-wide XHDD market. |
| --- | --- |

(70)

In light of the above assessment, the Commission concludes that the proposed transaction is likely to result in a significant impediment to effective competition in the following markets: (i) the worldwide 3,5′′ Desktop HDD market; (ii) the worldwide 3,5′′ CE HDD market; (iii) the worldwide 3,5′′ Business Critical Enterprise HDD market; and (iv) the EEA-wide XHDD market.

Coordinated effects

| (71) | In the worldwide markets for 3,5′′ Desktop HDDs and 3,5′′ CE HDDs, only two competitors would remain post transaction. Given Toshiba's recent entry, there is a potential third competitor in the 3,5′′ Business Critical Enterprise although it has yet to gain market share. Firms may find it easier to reach a common understanding on the terms of coordination if they are relatively symmetric, including in terms of market shares. However, a number of elements appear to complicate agreeing on the terms of coordination in a sustainable way in these markets. As far as tacit collusion on price is concerned, the Commission's investigation indicated that the market is characterised by non-transparent bidding contests. |
| --- | --- |

(71)

In the worldwide markets for 3,5′′ Desktop HDDs and 3,5′′ CE HDDs, only two competitors would remain post transaction. Given Toshiba's recent entry, there is a potential third competitor in the 3,5′′ Business Critical Enterprise although it has yet to gain market share. Firms may find it easier to reach a common understanding on the terms of coordination if they are relatively symmetric, including in terms of market shares. However, a number of elements appear to complicate agreeing on the terms of coordination in a sustainable way in these markets. As far as tacit collusion on price is concerned, the Commission's investigation indicated that the market is characterised by non-transparent bidding contests.

| (72) | With regard to potential tacit collusion on output (e.g. on each HDD supplier's share of quarterly Total Available Market (TAM)), it appears that coordination at the aggregate level (such as at the level of each product market), could potentially be destabilised because of product mix effects. Each company would wish to achieve their share with high margin products within the allocated share of TAM. Effective and sustainable coordination would therefore require collusion at product level and at least on a quarterly basis (given that price negotiations with customers generally take place on at least a quarterly basis). The multitude of products within a given market as well as the frequency of price negotiations with customers would therefore make it more unlikely to put in place a process of tacitly reaching the terms of coordination. |
| --- | --- |

(72)

With regard to potential tacit collusion on output (e.g. on each HDD supplier's share of quarterly Total Available Market (TAM)), it appears that coordination at the aggregate level (such as at the level of each product market), could potentially be destabilised because of product mix effects. Each company would wish to achieve their share with high margin products within the allocated share of TAM. Effective and sustainable coordination would therefore require collusion at product level and at least on a quarterly basis (given that price negotiations with customers generally take place on at least a quarterly basis). The multitude of products within a given market as well as the frequency of price negotiations with customers would therefore make it more unlikely to put in place a process of tacitly reaching the terms of coordination.

| (73) | In any case, following the remedies offered by the Notifying Party, the future purchaser would enter all markets in which only two HDD suppliers would be left. It is likely that the purchaser — with comparatively low market shares in these markets — would have strong incentives not to participate in any coordination that seeks to preserve the status quo, or to deviate from the terms of coordination. |
| --- | --- |

(73)

In any case, following the remedies offered by the Notifying Party, the future purchaser would enter all markets in which only two HDD suppliers would be left. It is likely that the purchaser — with comparatively low market shares in these markets — would have strong incentives not to participate in any coordination that seeks to preserve the status quo, or to deviate from the terms of coordination.

| (74) | The Commission concludes that the proposed transaction is unlikely to result in a significant impediment to effective competition stemming from coordinated effects in the relevant markets. |
| --- | --- |

(74)

The Commission concludes that the proposed transaction is unlikely to result in a significant impediment to effective competition stemming from coordinated effects in the relevant markets.

Vertical relationships

| (75) | The proposed transaction brings together two companies which are already vertically integrated upstream in the production of heads and media used in the manufacture of HDDs. Both Parties also source a portion of their head and media requirements externally, from independent head and media manufacturers present on the merchant market. The extent of this external sourcing of heads and media differs for WD and HGST. |
| --- | --- |

(75)

The proposed transaction brings together two companies which are already vertically integrated upstream in the production of heads and media used in the manufacture of HDDs. Both Parties also source a portion of their head and media requirements externally, from independent head and media manufacturers present on the merchant market. The extent of this external sourcing of heads and media differs for WD and HGST.

| (76) | The Commission assessed whether the proposed transaction would lead to a risk of customer foreclosure to the detriment of head and media suppliers and the resulting possible impact on Toshiba's ability to source competitive components and ultimately its ability to compete on the HDD markets. |
| --- | --- |

(76)

The Commission assessed whether the proposed transaction would lead to a risk of customer foreclosure to the detriment of head and media suppliers and the resulting possible impact on Toshiba's ability to source competitive components and ultimately its ability to compete on the HDD markets.

| (77) | The data provided by the parties in combination with the results of the Commission's investigation showed that while the Merged Entity may have a certain ability to foreclose independent components suppliers it will not have the incentive to do so and in any case, any attempt of foreclosure would have no effect on independent component suppliers and by consequence on the downstream HDD markets. |
| --- | --- |

(77)

The data provided by the parties in combination with the results of the Commission's investigation showed that while the Merged Entity may have a certain ability to foreclose independent components suppliers it will not have the incentive to do so and in any case, any attempt of foreclosure would have no effect on independent component suppliers and by consequence on the downstream HDD markets.

| (78) | In light of the above, the Commission concludes that the proposed transaction is not likely to result in a significant impediment to effective competition stemming from customer foreclosure. |
| --- | --- |

(78)

In light of the above, the Commission concludes that the proposed transaction is not likely to result in a significant impediment to effective competition stemming from customer foreclosure.

Efficiencies

| (79) | On the basis of the evidence submitted by the Notifying Party, the Commission is not in the position to conclude that the efficiencies generated by the proposed transaction are likely to enhance the ability and incentive of the Merged Entity to act pro-competitively for the benefit of consumers, thereby counteracting the adverse effects on competition that the proposed transaction is likely to have. Accordingly, the Commission is not in the position to conclude that the proposed transaction is compatible with the internal market as a result of the efficiencies that it would bring about. |
| --- | --- |

(79)

On the basis of the evidence submitted by the Notifying Party, the Commission is not in the position to conclude that the efficiencies generated by the proposed transaction are likely to enhance the ability and incentive of the Merged Entity to act pro-competitively for the benefit of consumers, thereby counteracting the adverse effects on competition that the proposed transaction is likely to have. Accordingly, the Commission is not in the position to conclude that the proposed transaction is compatible with the internal market as a result of the efficiencies that it would bring about.

D.   Remedies

| (80) | The Notifying Party offered commitments on 3 October 2011. The proposed remedies consisted essentially in a ‘carve-out’ of production lines used by HGST to produce some 3,5′′ Desktop, CE and Business Critical products, along with some personnel and a license to IP rights. The Notifying Party submitted revised commitments on 10 October 2011. |
| --- | --- |

(80)

The Notifying Party offered commitments on 3 October 2011. The proposed remedies consisted essentially in a ‘carve-out’ of production lines used by HGST to produce some 3,5′′ Desktop, CE and Business Critical products, along with some personnel and a license to IP rights. The Notifying Party submitted revised commitments on 10 October 2011.

| (81) | The commitments offered by the Notifying Party on 10 October 2011 consisted in the divestment of an HDD business of HGST, including the following main tangible and intangible assets:






  (i) | a plant of HGST in [...]* which includes [20-30]* fully configured production lines capable of manufacturing 3,5′′ Desktop, CE and Business Critical HDDs, including XHDDs; |
| --- | --- | --- |

(81)

The commitments offered by the Notifying Party on 10 October 2011 consisted in the divestment of an HDD business of HGST, including the following main tangible and intangible assets:

(i)

a plant of HGST in [...]* which includes [20-30]* fully configured production lines capable of manufacturing 3,5′′ Desktop, CE and Business Critical HDDs, including XHDDs;

| (ii) | product designs for 3,5′′ HDDs in production and pipeline products in development by HGST; |
| --- | --- |

(ii)

product designs for 3,5′′ HDDs in production and pipeline products in development by HGST;

| (iii) | distribution offices in America, Asia and Europe; |
| --- | --- |

(iii)

distribution offices in America, Asia and Europe;

| (iv) | transfer of the IP rights used by the Divestment Business solely in the manufacture of 3,5′′ HDDs; |
| --- | --- |

(iv)

transfer of the IP rights used by the Divestment Business solely in the manufacture of 3,5′′ HDDs;

| (v) | a non-exclusive, perpetual, royalty-free, fully paid-up license for the IP rights used by the Divestment Business for the manufacture of 3,5′′ HDDs and by HGST for the manufacture of HDDs; |
| --- | --- |

(v)

a non-exclusive, perpetual, royalty-free, fully paid-up license for the IP rights used by the Divestment Business for the manufacture of 3,5′′ HDDs and by HGST for the manufacture of HDDs;

| (vi) | transfer of personnel of the plant, as well as some other R&D and marketing personnel; |
| --- | --- |

(vi)

transfer of personnel of the plant, as well as some other R&D and marketing personnel;

| (vii) | one or more supply agreements, under which the Merged Entity would supply HDD components (heads and aluminium media components) to the Divestment Business at then prevailing market prices for a period up to 3 years. |
| --- | --- |

(vii)

one or more supply agreements, under which the Merged Entity would supply HDD components (heads and aluminium media components) to the Divestment Business at then prevailing market prices for a period up to 3 years.

| (82) | The market test of the remedies carried out by the Commission indicated that a number of improvements to the remedies were needed and, most importantly, that an upfront buyer clause and more stringent suitable purchaser criteria were necessary in order to ensure the effectiveness of the proposed divestiture remedy. |
| --- | --- |

(82)

The market test of the remedies carried out by the Commission indicated that a number of improvements to the remedies were needed and, most importantly, that an upfront buyer clause and more stringent suitable purchaser criteria were necessary in order to ensure the effectiveness of the proposed divestiture remedy.

| (83) | Following the market test, on 24 and 27 October, the Notifying Party submitted improved commitments addressing all the aspects of the commitments that had been identified as requiring improvements, in particular: (i) the inclusion of an upfront buyer clause and stricter purchaser criteria; (ii) the inclusion of additional assets related to 4- and 5-platter HDDs in the scope of the Divestment Business; (iii) the transfer of patents to the Purchaser and generally stronger IP rights to be at the disposal of the Divestment Business; and (iv) the provision for specific contractual terms related to the supply of components and the setting up of firewalls within WD in order to avoid that it gains access to competitively sensitive information of the Divestment Business. |
| --- | --- |

(83)

Following the market test, on 24 and 27 October, the Notifying Party submitted improved commitments addressing all the aspects of the commitments that had been identified as requiring improvements, in particular: (i) the inclusion of an upfront buyer clause and stricter purchaser criteria; (ii) the inclusion of additional assets related to 4- and 5-platter HDDs in the scope of the Divestment Business; (iii) the transfer of patents to the Purchaser and generally stronger IP rights to be at the disposal of the Divestment Business; and (iv) the provision for specific contractual terms related to the supply of components and the setting up of firewalls within WD in order to avoid that it gains access to competitively sensitive information of the Divestment Business.

| (84) | Under the upfront buyer clause, the Notifying Party commits that it will not close the proposed acquisition of HGST before it has concluded a binding agreement for the sale of the Divestment Business to a suitable Purchaser that is approved by the Commission. Moreover, the Notifying Party has included stricter purchaser criteria according to which the purchaser will need to: (i) be committed to maintain the competitiveness of the Divestment Business including the development of 3,5′′ HDD technology in each of the markets of concern; and (ii) have proven expertise and an ongoing track record as an R&D innovator within the HDD industry, and preferably proven expertise in a market neighbouring a market of concern. This provision together with the improvements to the assets transferred and the stronger commitment regarding the supply of components ensure the long term viability and competitiveness of Divestment Business. |
| --- | --- |

(84)

Under the upfront buyer clause, the Notifying Party commits that it will not close the proposed acquisition of HGST before it has concluded a binding agreement for the sale of the Divestment Business to a suitable Purchaser that is approved by the Commission. Moreover, the Notifying Party has included stricter purchaser criteria according to which the purchaser will need to: (i) be committed to maintain the competitiveness of the Divestment Business including the development of 3,5′′ HDD technology in each of the markets of concern; and (ii) have proven expertise and an ongoing track record as an R&D innovator within the HDD industry, and preferably proven expertise in a market neighbouring a market of concern. This provision together with the improvements to the assets transferred and the stronger commitment regarding the supply of components ensure the long term viability and competitiveness of Divestment Business.

| (85) | The final commitments also provide for a reinforced role for the Monitoring Trustee for the monitoring of the implementation of the commitments. |
| --- | --- |

(85)

The final commitments also provide for a reinforced role for the Monitoring Trustee for the monitoring of the implementation of the commitments.

| (86) | The commitments will allow for the maintenance of a third competitive and viable alternative supplier on the worldwide markets for 3,5′′ Desktop HDDs, 3,5′′ CE HDDs and 3,5′′ Business Critical HDDs, provided the Divestment Business is purchased by a suitable purchaser. Post transaction the Merged Entity will continue to face competition from Seagate/Samsung and the Divestment Business (the successor to HGST in the markets of concern). Customers on these markets, including non-integrated XHDD suppliers, will continue to face a sufficient number of alternative suppliers. |
| --- | --- |

(86)

The commitments will allow for the maintenance of a third competitive and viable alternative supplier on the worldwide markets for 3,5′′ Desktop HDDs, 3,5′′ CE HDDs and 3,5′′ Business Critical HDDs, provided the Divestment Business is purchased by a suitable purchaser. Post transaction the Merged Entity will continue to face competition from Seagate/Samsung and the Divestment Business (the successor to HGST in the markets of concern). Customers on these markets, including non-integrated XHDD suppliers, will continue to face a sufficient number of alternative suppliers.

| (87) | The Commission concludes that the final commitments submitted by the Notifying Party are sufficient to eliminate its concerns as to the compatibility of the proposed transaction with the internal market. |
| --- | --- |

(87)

The Commission concludes that the final commitments submitted by the Notifying Party are sufficient to eliminate its concerns as to the compatibility of the proposed transaction with the internal market.

IV.   CONCLUSION

| (88) | For the reasons mentioned above, the decision concludes that the proposed concentration will not significantly impede effective competition in the internal market or in a substantial part of it. |
| --- | --- |

(88)

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

| (89) | Consequently the concentration should be declared compatible with the internal market and the functioning of the EEA Agreement, in accordance with Article 2(2) and Article 8(2) of the Merger Regulation and Article 57 of the EEA Agreement. |
| --- | --- |

(89)

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

---

(1)  OJ L 24, 29.1.2004, p. 1 (hereinafter referred to as the ‘Merger Regulation’).

(2)  Case COMP/M.6214 — Seagate/HDD Business of Samsung.

(3)  The 1,8′′ drive will not be discussed as neither WD nor HGST manufacture this type of HDDs.

(4)  For the purpose of the decision, there is no need to differentiate Enterprise Mission Critical HDDs according to form factor as no competition concerns arise in this market under any alternative product market definition.

(5)  See, for example, Case COMP/M.5483 — Toshiba/Fujitsu HDD business.

---

NOTICES CONCERNING THE EUROPEAN ECONOMIC AREA

EFTA Surveillance Authority

| 22.8.2013 | EN | Official Journal of the European Union | C 241/19 |
| --- | --- | --- | --- |

22.8.2013

EN

Official Journal of the European Union

C 241/19

---

View of the representatives of the EFTA States and the EFTA Surveillance Authority on the Advisory Committee on mergers at its meeting of 9 November 2011 concerning a draft decision relating to Case COMP/M.6203 — Western Digital Ireland/Vivital Technologies

Rapporteur: Italy

2013/C 241/07

Concentration

| 1. | The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission that the notified operation constitutes a concentration within the meaning of Article 3(1)(b) of the Merger Regulation. |
| --- | --- |

1.

The representative of the EFTA States and the EFTA Surveillance Authority 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 representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission that the notified transaction has an EU dimension pursuant to Article 1(2) of the Merger Regulation. |
| --- | --- |

2.

The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission that the notified transaction has an EU dimension pursuant to Article 1(2) of the Merger Regulation.

Market definition

| 3. | The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission’s definitions of the relevant product markets in the draft decision.
  In particular, concerning the product market definition, the representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission that the impact of the proposed transaction must be assessed on the following markets:






  (a) | the market for mission critical enterprise HDDs; |
| --- | --- | --- |

3.

The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission’s definitions of the relevant product markets in the draft decision.

In particular, concerning the product market definition, the representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission that the impact of the proposed transaction must be assessed on the following markets:

(a)

the market for mission critical enterprise HDDs;

| (b) | the market for 3,5′′ business critical HDDs; |
| --- | --- |

(b)

the market for 3,5′′ business critical HDDs;

| (c) | the market for 3,5′′ desktop HDDs; |
| --- | --- |

(c)

the market for 3,5′′ desktop HDDs;

| (d) | the market for 3,5′′ CE HDDs; |
| --- | --- |

(d)

the market for 3,5′′ CE HDDs;

| (e) | the market for 2,5′′ mobile HDDs; |
| --- | --- |

(e)

the market for 2,5′′ mobile HDDs;

| (f) | the market for 2,5′′ CE HDDs; and |
| --- | --- |

(f)

the market for 2,5′′ CE HDDs; and

| (g) | the XHDD market. |
| --- | --- |

(g)

the XHDD market.

| 4. | The representative of the EFTA States and the EFTA Surveillance Authority agrees with the geographic market definition for:






  (a) | HDDs; and |
| --- | --- | --- |

4.

The representative of the EFTA States and the EFTA Surveillance Authority agrees with the geographic market definition for:

(a)

HDDs; and

| (b) | XHDDs. |
| --- | --- |

(b)

XHDDs.

Counterfactual

| 5. | The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission that, for the purpose of the competitive assessment of the proposed transaction, the most appropriate approach is to adopt the priority principle (‘first come, first served’) based on the date of notification and that the proposed transaction must be assessed taking into account the Seagate/Samsung transaction which has been approved by the Commission Decision of 19 October 2011 (Case COMP/M.6214 — Seagate/HDD Business of Samsung). |
| --- | --- |

5.

The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission that, for the purpose of the competitive assessment of the proposed transaction, the most appropriate approach is to adopt the priority principle (‘first come, first served’) based on the date of notification and that the proposed transaction must be assessed taking into account the Seagate/Samsung transaction which has been approved by the Commission Decision of 19 October 2011 (Case COMP/M.6214 — Seagate/HDD Business of Samsung).

Competitive assessment

Non-coordinated effects

| 6. | The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission's conclusion that the proposed transaction is not likely to give rise to non-coordinated effects that would significantly impede effective competition on the worldwide markets for mission critical HDDs, 2,5′′ mobile HDDs and 2,5′′ CE HDDs. |
| --- | --- |

6.

The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission's conclusion that the proposed transaction is not likely to give rise to non-coordinated effects that would significantly impede effective competition on the worldwide markets for mission critical HDDs, 2,5′′ mobile HDDs and 2,5′′ CE HDDs.

| 7. | The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission's assessment that the proposed transaction as notified is likely to give rise to a significant impediment to effective competition as a result of non-coordinated effects in the worldwide markets for 3,5′′ desktop HDDs, 3,5′′ CE HDDs and 3,5′′ business critical HDDs. |
| --- | --- |

7.

The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission's assessment that the proposed transaction as notified is likely to give rise to a significant impediment to effective competition as a result of non-coordinated effects in the worldwide markets for 3,5′′ desktop HDDs, 3,5′′ CE HDDs and 3,5′′ business critical HDDs.

| 8. | The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission's assessment that although there are indications that the proposed transaction as notified may give rise to a significant impediment to effective competition as a result of non-coordinated effects in the EEA-wide XHDD market, in light of the remedies removing the significant impediment to effective competition in the upstream worldwide markets for 3,5′′ desktop HDDs, 3,5′′ CE HDDs and 3,5′′ business critical HDDs, the proposed transaction is in any event not likely to give rise to a significant impediment to effective competition in the downstream EEA-wide XHDD market. |
| --- | --- |

8.

The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission's assessment that although there are indications that the proposed transaction as notified may give rise to a significant impediment to effective competition as a result of non-coordinated effects in the EEA-wide XHDD market, in light of the remedies removing the significant impediment to effective competition in the upstream worldwide markets for 3,5′′ desktop HDDs, 3,5′′ CE HDDs and 3,5′′ business critical HDDs, the proposed transaction is in any event not likely to give rise to a significant impediment to effective competition in the downstream EEA-wide XHDD market.

Coordinated effects

| 9. | The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission’s assessment that the proposed transaction is not likely to give rise to coordinated effects that would significantly impede effective competition on the worldwide HDD markets and on the EEA-wide XHDD market. |
| --- | --- |

9.

The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission’s assessment that the proposed transaction is not likely to give rise to coordinated effects that would significantly impede effective competition on the worldwide HDD markets and on the EEA-wide XHDD market.

Vertical effects

| 10. | The representative of the EFTA States and the EFTA Surveillance Authority shares the Commission's conclusion that the proposed transaction is not likely to significantly impede effective competition as a result of the foreclosure of manufacturers of components (heads and media) from a sufficient customer base which in turn would undermine Toshiba's ability to compete in the HDD markets. |
| --- | --- |

10.

The representative of the EFTA States and the EFTA Surveillance Authority shares the Commission's conclusion that the proposed transaction is not likely to significantly impede effective competition as a result of the foreclosure of manufacturers of components (heads and media) from a sufficient customer base which in turn would undermine Toshiba's ability to compete in the HDD markets.

Efficiencies

| 11. | The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission's view that the alleged efficiencies brought about by the proposed transaction do not allow the Commission to declare the proposed transaction, as notified, compatible with the internal market with respect to the worldwide markets for 3,5′′ desktop, 3,5′′ CE and 3,5′′ business critical HDDs and the EEA-wide market for XHDDs. |
| --- | --- |

11.

The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission's view that the alleged efficiencies brought about by the proposed transaction do not allow the Commission to declare the proposed transaction, as notified, compatible with the internal market with respect to the worldwide markets for 3,5′′ desktop, 3,5′′ CE and 3,5′′ business critical HDDs and the EEA-wide market for XHDDs.

Remedies

| 12. | The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission's view that the remedy package submitted by the parties fully addresses the competition concerns identified by the Commission on the worldwide market for 3,5′′ business critical HDDs, worldwide market for 3,5′′ desktop HDDs, the worldwide market for 3,5′′ CE HDDs and the EEA-wide market for XHDDs. |
| --- | --- |

12.

The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission's view that the remedy package submitted by the parties fully addresses the competition concerns identified by the Commission on the worldwide market for 3,5′′ business critical HDDs, worldwide market for 3,5′′ desktop HDDs, the worldwide market for 3,5′′ CE HDDs and the EEA-wide market for XHDDs.

Conclusion

| 13. | The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission's conclusion that, subject to the full compliance with the commitments offered by the parties, the proposed transaction is not likely to significantly impede effective competition in the internal market or in a substantial part of it. |
| --- | --- |

13.

The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission's conclusion that, subject to the full compliance with the commitments offered by the parties, the proposed transaction is not likely to significantly impede effective competition in the internal market or in a substantial part of it.

| 14. | The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission's conclusion that the notified concentration must be declared compatible with the internal market and the functioning of the EEA Agreement in accordance with Articles 2(2) and 8(2) of the Merger Regulation and Article 57 of the EEA Agreement. |
| --- | --- |

14.

The representative of the EFTA States and the EFTA Surveillance Authority agrees with the Commission's conclusion that the notified concentration must be declared compatible with the internal market and the functioning of the EEA Agreement in accordance with Articles 2(2) and 8(2) of the Merger Regulation and Article 57 of the EEA Agreement.

EFTA Surveillance Authority

Silje THORSTENSEN

---

EFTA Secretariat

| 22.8.2013 | EN | Official Journal of the European Union | C 241/22 |
| --- | --- | --- | --- |

22.8.2013

EN

Official Journal of the European Union

C 241/22

---

Publication of the Norwegian Ministry of Transport and Communications' notification of directly awarding a public service contract in accordance with Article 7(3) of Regulation (EC) No 1370/2007 of the European Parliament and of the Council on public passenger transport services by rail and by road and repealing Council Regulations (EEC) Nos 1191/69 and 1107/70

2013/C 241/08

1.   Name and address of the contracting entity:

| The Norwegian Ministry of Transport and Communications |
| --- |
| Department of Public and Rail Transport |
| PO Box 8010 Dep |
| 0030 Oslo |
| NORWAY |

The Norwegian Ministry of Transport and Communications

Department of Public and Rail Transport

PO Box 8010 Dep

0030 Oslo

NORWAY

| Hedmark fylkeskommune |
| --- |
| PO Box 4404 |
| 2325 Hamar |
| NORWAY |

Hedmark fylkeskommune

PO Box 4404

2325 Hamar

NORWAY

2.   Duration of the public service contract:

The agreement covers a six — 6 — year period starting T13 up to and including T18. Each party has an option to cancel the agreement with the purpose to start renegotiations; this process has to start at the latest eighteen — 18 — months before T16, i.e. in June 2014.

3.   Description of the passenger transport services to be performed:

International passenger service by rail Kongsvinger–Charlottenberg with three daily round trips divided evenly on morning, noon and evening.

4.   Description of the parameters of the financial compensation:

The Norwegian Ministry of Transport and Communications and Hedmark fylkeskommune are co-financing the agreement with SEK 1 747 000 exclusive of VAT for the first three-year period (T13-T15). The Norwegian Ministry of Transport and Communications is set to pay SEK 407 000 and Hedmark fylkeskommmune SEK 1 340 000.

5.   Quality targets, such as punctuality and reliability, and rewards and penalties applicable:

The report must as a minimum include the following parameters: train-km Kongsvinger–Charlottenberg, seat-km Kongsvinger–Charlottenberg, revenue passenger-km Kongsvinger–Charlottenberg, number of travellers Kongsvinger–Charlottenberg, agreed train-km, and actual km covered.

6.   Conditions relating to essential assets:

VTAB is responsible for ensuring that the rail service has appropriate material and sufficient capacity, with Regina train set of two or three rail wagons.

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| 22.8.2013 | EN | Official Journal of the European Union | C 241/23 |
| --- | --- | --- | --- |

22.8.2013

EN

Official Journal of the European Union

C 241/23

---

Publication of the Norwegian Ministry of Transport and Communications' notification of directly awarding a public service contract in accordance with Article 7(3) of Regulation (EC) No 1370/2007 of the European Parliament and of the Council on public passenger transport services by rail and by road and repealing Council Regulations (EEC) Nos 1191/69 and 1107/70

2013/C 241/09

1.   Name and address of the contracting entity:

| The Norwegian Ministry of Transport and Communications |
| --- |
| Department of Public and Rail Transport |
| PO Box 8010 Dep |
| 0030 Oslo |
| NORWAY |

The Norwegian Ministry of Transport and Communications

Department of Public and Rail Transport

PO Box 8010 Dep

0030 Oslo

NORWAY

2.   Duration of the public service contract:

From December 2012 to December 2017. The Norwegian Ministry of Transport and Communications has an option to extend the contract for a period of 3 + 2 years.

3.   Description of the passenger transport services to be performed:

International passenger service by rail Oslo–Karlstad–(Stockholm) with two daily round trips. This equals an approximate production of 355 000 train-kilometres per year (Karlstad–Oslo).

4.   Description of the parameters of the financial compensation:

The Norwegian Ministry of Transport and Communications is to pay the contractor a set sum per year, exclusive of VAT. For 2013 this is SEK 4,5 million and for each year 2014-2017 — SEK 4 million.

5.   Quality targets, such as punctuality and reliability, and rewards and penalties applicable:

The contractor’s own rules and regulations pertaining to transportation and the sale of tickets shall apply. Standard of punctuality shall be 90 % + 15 minutes. Standard of regularity shall as a minimum be 98 %. In other areas that are not separately regulated by the agreement, the contractor is to set the same general quality requirements as it sets for its own similar transportation services.

6.   Conditions relating to essential assets:

None.

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V Announcements

PROCEDURES RELATING TO THE IMPLEMENTATION OF COMPETITION POLICY

European Commission

| 22.8.2013 | EN | Official Journal of the European Union | C 241/24 |
| --- | --- | --- | --- |

22.8.2013

EN

Official Journal of the European Union

C 241/24

---

Prior notification of a concentration

(Case COMP/M.6950 — UPC/GPT/JV)

Candidate case for simplified procedure

(Text with EEA relevance)

2013/C 241/10

| 1. | On 14 August 2013, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 (1) by which the undertakings Joint Stock Company United Petrochemical Company (‘UPC’, Russia) and Grupo Petrotemex SA de CV (‘GPT’, Mexico) acquire within the meaning of Article 3(1)(b) of the Merger Regulation joint control of a newly created joint venture (the ‘JV’, Netherlands), by way of purchase of shares. |
| --- | --- |

1.

On 14 August 2013, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 (1) by which the undertakings Joint Stock Company United Petrochemical Company (‘UPC’, Russia) and Grupo Petrotemex SA de CV (‘GPT’, Mexico) acquire within the meaning of Article 3(1)(b) of the Merger Regulation joint control of a newly created joint venture (the ‘JV’, Netherlands), by way of purchase of shares.

| 2. | The business activities of the undertakings concerned are:






  — | for UPC: petrochemical and gas processing activities via the companies it holds in Russia, as well as research and analysis for investment opportunities in petrochemical business, |
| --- | --- | --- |

2.

The business activities of the undertakings concerned are:

—

for UPC: petrochemical and gas processing activities via the companies it holds in Russia, as well as research and analysis for investment opportunities in petrochemical business,

| — | for GPT: manufacturing and sale of polyester chains mainly in the Americas (in particular terephtalic acid, polyethylene telephtalate resin, polyester staple fibre) for use among others in food / personal care packaging and textile, as the holding company of petrochemical manufacturing companies, |
| --- | --- |

—

for GPT: manufacturing and sale of polyester chains mainly in the Americas (in particular terephtalic acid, polyethylene telephtalate resin, polyester staple fibre) for use among others in food / personal care packaging and textile, as the holding company of petrochemical manufacturing companies,

| — | for the JV: manufacturing and sale of polyester chains (in particular polyethylene telephtalate resin) in the CIS, the EEA and other neighbouring countries. |
| --- | --- |

—

for the JV: manufacturing and sale of polyester chains (in particular polyethylene telephtalate resin) in the CIS, the EEA and other neighbouring countries.

| 3. | On preliminary examination, the Commission finds that the notified transaction could fall within the scope of the EC Merger Regulation. However, the final decision on this point is reserved. Pursuant to the Commission Notice on a simplified procedure for treatment of certain concentrations under the EC Merger Regulation (2) it should be noted that this case is a candidate for treatment under the procedure set out in the Notice. |
| --- | --- |

3.

On preliminary examination, the Commission finds that the notified transaction could fall within the scope of the EC Merger Regulation. However, the final decision on this point is reserved. Pursuant to the Commission Notice on a simplified procedure for treatment of certain concentrations under the EC Merger Regulation (2) it should be noted that this case is a candidate for treatment under the procedure set out in the Notice.

| 4. | The Commission invites interested third parties to submit their possible observations on the proposed operation to the Commission.
  Observations must reach the Commission not later than 10 days following the date of this publication. Observations can be sent to the Commission by fax (+32 22964301), by email to COMP-MERGER-REGISTRY@ec.europa.eu or by post, under reference number COMP/M.6950 — UPC/GPT/JV, to the following address:





  European Commission |
| --- | --- |
| Directorate-General for Competition |
| Merger Registry |
| 1049 Bruxelles/Brussel |
| BELGIQUE/BELGIË |

4.

The Commission invites interested third parties to submit their possible observations on the proposed operation to the Commission.

Observations must reach the Commission not later than 10 days following the date of this publication. Observations can be sent to the Commission by fax (+32 22964301), by email to COMP-MERGER-REGISTRY@ec.europa.eu or by post, under reference number COMP/M.6950 — UPC/GPT/JV, to the following address:

European Commission

Directorate-General for Competition

Merger Registry

1049 Bruxelles/Brussel

BELGIQUE/BELGIË

---

(1)  OJ L 24, 29.1.2004, p. 1 (the ‘EC Merger Regulation’).

(2)  OJ C 56, 5.3.2005, p. 32 (‘Notice on a simplified procedure’).

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| 22.8.2013 | EN | Official Journal of the European Union | C 241/26 |
| --- | --- | --- | --- |

22.8.2013

EN

Official Journal of the European Union

C 241/26

---

Prior notification of a concentration

(Case COMP/M.6990 — Vodafone/Kabel Deutschland)

(Text with EEA relevance)

2013/C 241/11

| 1. | On 16 August 2013, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 (1) by which the undertaking Vodafone Group Plc. (‘Vodafone’, United Kingdom) acquires within the meaning of Article 3(1)(b) of the Merger Regulation control of the whole of the undertaking Kabel Deutschland Holding AG (‘KDG’, Germany) by way of purchase of shares. |
| --- | --- |

1.

On 16 August 2013, the Commission received a notification of a proposed concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 (1) by which the undertaking Vodafone Group Plc. (‘Vodafone’, United Kingdom) acquires within the meaning of Article 3(1)(b) of the Merger Regulation control of the whole of the undertaking Kabel Deutschland Holding AG (‘KDG’, Germany) by way of purchase of shares.

| 2. | The business activities of the undertakings concerned are:






  — | for Vodafone: operation of mobile telecommunications networks; provision of related telecommunications services, including voice telephony and internet services, |
| --- | --- | --- |

2.

The business activities of the undertakings concerned are:

—

for Vodafone: operation of mobile telecommunications networks; provision of related telecommunications services, including voice telephony and internet services,

| — | for KDG: provision of TV and telecommunication services, including voice telephony and internet services. |
| --- | --- |

—

for KDG: provision of TV and telecommunication services, including voice telephony and internet services.

| 3. | On preliminary examination, the Commission finds that the notified transaction could fall within the scope the EC Merger Regulation. However, the final decision on this point is reserved. |
| --- | --- |

3.

On preliminary examination, the Commission finds that the notified transaction could fall within the scope the EC Merger Regulation. However, the final decision on this point is reserved.

| 4. | The Commission invites interested third parties to submit their possible observations on the proposed operation to the Commission.
  Observations must reach the Commission not later than 10 days following the date of this publication. Observations can be sent to the Commission by fax (+32 22964301), by e-mail to COMP-MERGER-REGISTRY@ec.europa.eu or by post, under reference number COMP/M.6990 — Vodafone/Kabel Deutschland, to the following address:





  European Commission |
| --- | --- |
| Directorate-General for Competition |
| Merger Registry |
| 1049 Bruxelles/Brussel |
| BELGIQUE/BELGIË |

4.

The Commission invites interested third parties to submit their possible observations on the proposed operation to the Commission.

Observations must reach the Commission not later than 10 days following the date of this publication. Observations can be sent to the Commission by fax (+32 22964301), by e-mail to COMP-MERGER-REGISTRY@ec.europa.eu or by post, under reference number COMP/M.6990 — Vodafone/Kabel Deutschland, to the following address:

European Commission

Directorate-General for Competition

Merger Registry

1049 Bruxelles/Brussel

BELGIQUE/BELGIË

---

(1)  OJ L 24, 29.1.2004, p. 1 (the ‘EC Merger Regulation’).

---