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C\_2020024EN.01001201.xml


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| 24.1.2020 | EN | Official Journal of the European Union | C 24/12 |

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SUMMARY OF COMMISSION DECISION

of 8 April 2019

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

(Case M.8436 – General Electric Company/LM Wind Power Holding (Article 14(1))

(notified under document C(2019)2569)

(Only the English version is authentic)

(Text with EEA relevance)

(2020/C 24/06)

On 8 April 2019 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)](#ntr1-C_2020024EN.01001201-E0001)
, and in particular Article 14(1) of that Regulation. A non-confidential version of the full Decision can be found in the authentic language of the case on the website of the Directorate-General for Competition, at the following address: http://ec.europa.eu/competition/elojade/isef/index.cfm?clear=1&policy\_area\_id=2

I.   THE PARTIES

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| | (1) | General Electric Company (‘GE’, USA) is a global diversified company comprising a number of business units, each with its own divisions. GE Renewable Energy is the business unit that produces and supplies wind turbines on a global basis. GE Offshore Wind is the business unit within GE Renewable Energy that is responsible for manufacturing and supplying offshore wind turbines. |

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| | (2) | LM Wind Power Holding (‘LM Wind’, Denmark) is active in the design, testing, manufacturing and supply of wind turbine blades, both in the European Economic Area (‘EEA’) and worldwide. |

II.   THE PROCEDURE

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| | (3) | On 11 January 2017, GE formally notified to the Commission its proposed acquisition of LM Wind. In the notification, GE stated that it ‘does not currently have any higher power output offshore wind turbine platforms in development’. Post-notification, the Commission found out, based on information provided by a third party, that GE was already actively marketing and offering to its customers a new higher output offshore wind turbine that it was developing. |

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| | (4) | On 9 March 2017, by means of a letter, the services of the Commission informed GE of the on-going investigation into the possible provision of incorrect or misleading information. On 6 July 2017, the Commission addressed a Statement of Objections (‘SO’) to GE communicating its preliminary view on the procedural infringement. |

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| | (5) | The possibility of a cooperation procedure was discussed with GE. After the Commission communicated the range of fines and the reduction offered to GE in case of cooperation, GE declined the cooperation procedure and then replied to the SO on 6 April 2018. |

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| | (6) | On that basis, and having given GE’s arguments due consideration, the decision imposes a fine pursuant to Article 14(1) of the Merger Regulation for the submission of incorrect information in the notification of the case M.8283 –General Electric Company/LM Wind Power Holding (the ‘Decision’). |

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| | (7) | The Decision was consulted with the Member States during the Advisory Committees on Concentrations on 20 February 2019 and 29 March 2019, which provided a favourable opinion. The Hearing Officer provided its favourable opinion on the proceedings in his report which was submitted on 1 April 2019. |

III.   SUMMARY

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| | (8) | The Commission has the power to impose fines for various negligent or intentional breaches of the procedural obligations under Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (the ‘Merger Regulation’). |

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| | (9) | In particular, Article 14(1) of the Merger Regulation provides that the Commission may by decision impose on undertakings fines not exceeding 1 % of the aggregate turnover of the undertakings concerned ‘where, intentionally or negligently: (a) they supply incorrect or misleading information in a submission, [...] notification [...] pursuant to Article 4’. |

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| | (10) | The Decision declares that GE infringed Article 14(1) of the Merger Regulation and Article 4(1) of the Implementing Regulation by negligently submitting incorrect information in the notification of the acquisition of LM Wind on 11 January 2017. As a result, the Decision imposes a fine on GE pursuant to Article 14(1) of the Merger Regulation. |

IV.   EXPLANATORY MEMORANDUM

A.   The infringement

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| | (11) | The Transaction consisted of the vertical integration of GE – a manufacturer of, inter alia, wind turbines – and the Danish wind turbine blade manufacturer LM Wind. By way of context, the Commission was conducting another investigation on the market for wind turbines at the same time, for the acquisition of Gamesa by Siemens (case M.8134 – SIEMENS/GAMESA). The two investigations ran largely in parallel. The infringement however only concerns GE’s submissions in the investigation of its acquisition of LM Wind. |

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| | (12) | In the notification of the Transaction, GE stated that it ‘does not currently have any higher power output offshore wind turbine platforms in development’. Post-notification, the Commission found, based on information provided spontaneously by a third party, that GE was already offering to customers a new higher output offshore wind turbine that was in development. |

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| | (13) | In addition to the notification, both before and after notification in both cases, the Commission submitted questions to GE in relation to the development of a higher output offshore turbine. GE made several submissions in the pre-notification phase, repeatedly and consistently downplaying the status of its development plans. |

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| | (14) | During the investigation, a customer revealed spontaneously to the Commission that GE’s product development was significantly more advanced than previously stated by GE. This submission contradicted GE’s statement that it was not developing a higher output offshore wind turbine. |

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| | (15) | Based on this third party intervention, the Commission – again – asked for detailed information and internal documents with regard to GE’s development projects. Only at this point did GE submit correct information on its R & D projects. It appeared that GE was actively marketing a higher output offshore wind turbine that was in development, in contrast with its statements in the notification. |

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| | (16) | On 1 February 2017, representatives of GE met with the Commission and were informed that its services considered the notification to be, at the very least, incomplete. The following day, GE formally withdrew the notification. |

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| | (17) | GE then re-notified the concentration on 13 February 2017. The revised notification contained material information with respect to GE’s offshore turbine product development activities that was absent from the original notification. A significant part of this information dated from prior to the submission of the original notification of the GE/LM Wind Transaction. |

B.   Negligence of GE

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| | (18) | The Commission considers that GE negligently provided incorrect information in the notification of the Transaction. In that regard, the Commission notes that R & D questions are standard sections contained in the template of the Form CO and are self-explanatory. Moreover, GE is a sophisticated company, it has extensive experience in filing notifications with the Commission and is familiar with the Form CO. This is confirmed by the fact that GE did provide extensive information with regard to its competitors’ pipeline projects in those sections. |

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| | (19) | In addition, GE was repeatedly asked the same questions with regard to its R & D projects, it had several occasions to submit the correct information. GE should have also been aware of the importance of the information requested, not only because it was an active player on the market and therefore knew the role of pipeline products to be competitive, but also because it was explicitly pointed out by the Commission. |

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| | (20) | Finally, GE had been explicitly informed about the importance of supplying information correct and not misleading, and warned about the possibility of fines. By signing the Form CO, GE declared that the information contained therein was correct and that it was aware of the possibility of fines. |

C.   The gravity

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| | (21) | The infringement committed by GE is serious in nature. The Form CO is an essential source of information for the Commission to shape the market investigation. In addition, the information incorrectly submitted in this case concerned the core product of one of the two markets under investigation, namely offshore wind turbine pipeline products, in the market of offshore wind turbines. |

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| | (22) | Moreover, pipeline products play a vital role in determining the competitiveness of suppliers of offshore wind turbines. Given the long lead times of offshore wind projects, suppliers often bid offering pipeline turbines that will be fully developed by the time they need to be installed. The Commission was thus prevented from correctly assessing the competitiveness of GE by lacking that information. The Commission needed to carry out a foreclosure analysis to assess whether GE would have had any incentive to foreclose rivals by discontinuing sales of LM Wind’s blades to its competitors downstream. That assessment largely depended on GE’s competitive position on the downstream market of offshore wind turbines, which in turn depended on GE’s pipeline products given the long lead times characteristics of the market. |

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| | (23) | While the outcome of the investigation would have remained unchanged in that the acquisition of LM Wind by GE would not have given rise to competition concerns, as shown in the final unconditional clearance decision, the Commission considers that the assessment would have been inaccurate without the correct information. |

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| | (24) | Finally, the Commission considers that GE negligently, as opposed to intentionally, provided incorrect information in the notification of the Transaction. |

V.   FINES

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| | (25) | Pursuant to Article 14(1)(a) of the Merger Regulation, a fine not exceeding 1 % of the aggregate turnover of the undertaking concerned in the year preceding the infringement decision can be imposed for submitting incorrect information in a notification pursuant to Article 4. The infringement decision is adopted in 2019. The turnover that is taken into account for the calculation of the fines is therefore GE’s aggregate turnover in 2018, which amounted to USD [...] billion (EUR [...] billion). |

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| | (26) | When imposing penalties under Article 14 of the Merger Regulation, the Commission takes into account the need to ensure that fines have a sufficiently punishing and deterring effect. |

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| | (27) | When calculating the fine in the present case, the Commission has taken into consideration the serious nature of the infringement committed by GE. In terms of gravity, the Commission considers that the infringement is the result of negligence on the part of GE. It also takes into account that GE is a sophisticated undertaking with experience in merger proceedings and was aware of its obligations under the Merger Regulation and the consequences attached to an infringement of Article 14(1). Moreover, the Commission considers that the competitive assessment in case M.8283 – General Electric Company/LM Wind Power Holding would have been inaccurate if the incorrect information would not have been discovered. |

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| | (28) | Concerning duration, an infringement of Article 14(1) of the Merger Regulation is an instantaneous infringement, committed on the date of implementation (11 January 2017). |

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| | (29) | Finally, when setting the amount of the fine the Commission took into consideration with regard to proportionality the value of the transaction (EUR [...] billion) as well as the turnover of the relevant business, notably the fact that GE Renewable Energy achieved in 2018 a turnover of USD [...] billion (EUR [...] billion), in relation to the aggregate turnover of GE. |

VI.   CONCLUSION

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| | (30) | For the reasons mentioned above, the Decision concludes that a fine should be imposed on GE for the infringement of Article 14(1) of the Merger Regulation and 4(1) of the Implementing Regulation. |

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[(1)](#ntc1-C_2020024EN.01001201-E0001)  [OJ L 24, 29.1.2004, p. 1](http://publications.europa.eu/resource/oj/JOL_2004_024_R_TOC).

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