# C_2004258EN.01000701.xml

| 20.10.2004 | EN | Official Journal of the European Union | C 258/7 |
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20.10.2004

EN

Official Journal of the European Union

C 258/7

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Notice pursuant to Article 27(4) of Council Regulation (EC) No 1/2003 (1) concerning Case COMP/B-1/38348 — Repsol CPP SA

1

(2004/C 258/03)

1.   Introduction

| 1. | On 20 December 2001, the Commission was notified under Articles 2 and 4 of Council Regulation No 17 by Repsol Comercial de Productos Petrolíferos SA (hereinafter called Repsol CPP) of agreements and/or model contracts laying down the conditions under which that undertaking carries on or will carry on the business of distributing fuel for motor vehicles through service stations in Spain. |
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1.

On 20 December 2001, the Commission was notified under Articles 2 and 4 of Council Regulation No 17 by Repsol Comercial de Productos Petrolíferos SA (hereinafter called Repsol CPP) of agreements and/or model contracts laying down the conditions under which that undertaking carries on or will carry on the business of distributing fuel for motor vehicles through service stations in Spain.

| 2. | On 19 March 2002, the Commission published in the Official Journal a notice inviting interested third parties to submit their comments on the notification (2). In response to the invitation, 69 comments were received from interested third parties, some on behalf of several service stations. |
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2.

On 19 March 2002, the Commission published in the Official Journal a notice inviting interested third parties to submit their comments on the notification (2). In response to the invitation, 69 comments were received from interested third parties, some on behalf of several service stations.

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2.   Parties

| 3. | Repsol CPP is a company belonging to the Repsol-YPF oil group. In Europe, this group is active mainly in Spain and in Portugal. It possesses, among other things, substantial refining capacity in Spain. Repsol CPP is active mainly in the distribution of fuel, lubricants and other similar products for motor vehicles in Spain. |
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3.

Repsol CPP is a company belonging to the Repsol-YPF oil group. In Europe, this group is active mainly in Spain and in Portugal. It possesses, among other things, substantial refining capacity in Spain. Repsol CPP is active mainly in the distribution of fuel, lubricants and other similar products for motor vehicles in Spain.

| 4. | The contractual partners of Repsol CPP in the context of the notified agreements are operators of Spanish service stations. These operators are mostly family businesses which seldom operate more than one service station. |
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4.

The contractual partners of Repsol CPP in the context of the notified agreements are operators of Spanish service stations. These operators are mostly family businesses which seldom operate more than one service station.

3.   The fuel market

| 5. | Fuel sold in Spain comes, as a rule, from Spanish refineries. The balance is imported by tanker. Spain is a net importer of diesel and a net exporter of petrol. Diesel outsells petrol, accounting for approximately two thirds of total consumption of the relevant products. Diesel sales are on the increase whereas petrol sales are declining. |
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5.

Fuel sold in Spain comes, as a rule, from Spanish refineries. The balance is imported by tanker. Spain is a net importer of diesel and a net exporter of petrol. Diesel outsells petrol, accounting for approximately two thirds of total consumption of the relevant products. Diesel sales are on the increase whereas petrol sales are declining.

| 6. | Domestically produced products are generally shipped using bulk transport facilities (pipelines, trains or ships) to local depots (primary logistics), whence they are transported by lorry to their final destination (secondary logistics). Imported products are either unloaded in depots at ports, which may or may not be connected to bulk transport facilities, or unloaded in the refinery and then transported in the same way as domestically produced products. |
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6.

Domestically produced products are generally shipped using bulk transport facilities (pipelines, trains or ships) to local depots (primary logistics), whence they are transported by lorry to their final destination (secondary logistics). Imported products are either unloaded in depots at ports, which may or may not be connected to bulk transport facilities, or unloaded in the refinery and then transported in the same way as domestically produced products.

| 7. | Fuel, whether produced by a refinery or imported, is either fed into the retail sales network of the producer or importer (composed of company-owned or affiliated service stations) or sold wholesale (off-network) to: (i) independent retailers who are not integrated upstream (unbranded service stations or supermarkets); (ii) traders (including large oil companies not vertically integrated in Spain); or (iii) large final customers (industrial and commercial users such as hospitals, car-hire companies, transport undertakings, factories, etc.). Products may, moreover, be exchanged between refiners or operators at all levels of the chain. |
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7.

Fuel, whether produced by a refinery or imported, is either fed into the retail sales network of the producer or importer (composed of company-owned or affiliated service stations) or sold wholesale (off-network) to: (i) independent retailers who are not integrated upstream (unbranded service stations or supermarkets); (ii) traders (including large oil companies not vertically integrated in Spain); or (iii) large final customers (industrial and commercial users such as hospitals, car-hire companies, transport undertakings, factories, etc.). Products may, moreover, be exchanged between refiners or operators at all levels of the chain.

| 8. | Retail sales involve sales to motorists through service stations (whether branded or not). There are broadly three categories of service station: (i) service stations owned or supplied by traditional, vertically integrated oil companies; (ii) independent service stations; and (iii) supermarkets. The types of fuel sold in Spanish service stations are: 98 octane unleaded petrol; 95 octane unleaded petrol; 97 octane lead replacement petrol, ‘A’ diesel (motor cars) and ‘B’ diesel (agricultural vehicles). |
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8.

Retail sales involve sales to motorists through service stations (whether branded or not). There are broadly three categories of service station: (i) service stations owned or supplied by traditional, vertically integrated oil companies; (ii) independent service stations; and (iii) supermarkets. The types of fuel sold in Spanish service stations are: 98 octane unleaded petrol; 95 octane unleaded petrol; 97 octane lead replacement petrol, ‘A’ diesel (motor cars) and ‘B’ diesel (agricultural vehicles).

| 9. | Petrol is sold primarily to final consumers on a retail basis, while a substantial proportion of diesel, and in particular ‘B’ diesel, sales are made off-network (3). |
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9.

Petrol is sold primarily to final consumers on a retail basis, while a substantial proportion of diesel, and in particular ‘B’ diesel, sales are made off-network (3).

3

| 10. | In earlier decisions (4), the Commission considered that the off-network (or wholesale) selling of fuel and the retail selling of fuel through service stations could constitute different product markets. In the case of off-network selling, it considered that there was a separate product market for each type of fuel. |
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10.

In earlier decisions (4), the Commission considered that the off-network (or wholesale) selling of fuel and the retail selling of fuel through service stations could constitute different product markets. In the case of off-network selling, it considered that there was a separate product market for each type of fuel.

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4.   The position of Repsol CPP

| 11. | The relevant market here is that for the sale of fuel off-network in Spain. Repsol CCP's market share is approximately ... [35 to 50 %] for petrol, approximately ... [35 to 50 %] for ‘A’ diesel and approximately ... [30 to 45 %] for ‘B’ diesel. |
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11.

The relevant market here is that for the sale of fuel off-network in Spain. Repsol CCP's market share is approximately ... [35 to 50 %] for petrol, approximately ... [35 to 50 %] for ‘A’ diesel and approximately ... [30 to 45 %] for ‘B’ diesel.

| 12. | In cases where the contract goods are final products, the Commission considers as a rule that an analysis limited to the market between supplier and buyer is insufficient since vertical restraints may have negative effects of reduced inter-brand competition on the resale market, that is, on the market downstream of the buyer. These effects are greater where the vertical restraints consist in non-compete obligations agreed between a supplier and a retailer. The concerned market here is that for the retailing of fuel in Spain, in which Repsol CPP holds a market share which also exceeds 30 % (approximately ... [35 to 50 %] for all products). |
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12.

In cases where the contract goods are final products, the Commission considers as a rule that an analysis limited to the market between supplier and buyer is insufficient since vertical restraints may have negative effects of reduced inter-brand competition on the resale market, that is, on the market downstream of the buyer. These effects are greater where the vertical restraints consist in non-compete obligations agreed between a supplier and a retailer. The concerned market here is that for the retailing of fuel in Spain, in which Repsol CPP holds a market share which also exceeds 30 % (approximately ... [35 to 50 %] for all products).

5.   The notified agreements

| 13. | The notified agreements are agreements for the exclusive purchase of fuel by service station operators in Spain. There are eight different types of agreement depending, on the one hand, on the type of tenure of the service station and, on the other, on the nature of the commercial relationship between Repsol CPP and the service station operator.






  (a) | The ‘CODO-agent’ agreement. Agreement for the distribution of fuel through service stations owned by Repsol CPP, the operator of which is a tenant. The operator has the status of agent. |
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13.

The notified agreements are agreements for the exclusive purchase of fuel by service station operators in Spain. There are eight different types of agreement depending, on the one hand, on the type of tenure of the service station and, on the other, on the nature of the commercial relationship between Repsol CPP and the service station operator.

(a)

The ‘CODO-agent’ agreement. Agreement for the distribution of fuel through service stations owned by Repsol CPP, the operator of which is a tenant. The operator has the status of agent.

| (b) | The ‘CODO-retailer’ agreement. Agreement for the distribution of fuel through service stations owned by Repsol CPP, the operator of which is a tenant. The operator has the status of retailer. |
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(b)

The ‘CODO-retailer’ agreement. Agreement for the distribution of fuel through service stations owned by Repsol CPP, the operator of which is a tenant. The operator has the status of retailer.

| (c) | The ‘DODO-agent’ agreement. Agreement for the distribution of fuel through service stations owned by their operators. The operator has the status of agent. |
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(c)

The ‘DODO-agent’ agreement. Agreement for the distribution of fuel through service stations owned by their operators. The operator has the status of agent.

| (d) | The ‘DODO-retailer’ agreement. Agreement for the distribution of fuel through service stations owned by their operators. The operator has the status of retailer. |
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(d)

The ‘DODO-retailer’ agreement. Agreement for the distribution of fuel through service stations owned by their operators. The operator has the status of retailer.

| (e) | The ‘Usufruct-agent’ agreement. Agreement between Repsol CPP and the owner of a service station by which the owner grants Repsol CPP a right in rem to the usufruct. As usufructuary, Repsol CPP simultaneously leases the service station to the bare owner or to a third party linked to the bare owner for the purposes of its operation. Upon expiry of the agreement, the bare owner automatically recovers full ownership of the service station. The transfer is accompanied by a fuel distribution agreement. The operator has the status of agent. |
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(e)

The ‘Usufruct-agent’ agreement. Agreement between Repsol CPP and the owner of a service station by which the owner grants Repsol CPP a right in rem to the usufruct. As usufructuary, Repsol CPP simultaneously leases the service station to the bare owner or to a third party linked to the bare owner for the purposes of its operation. Upon expiry of the agreement, the bare owner automatically recovers full ownership of the service station. The transfer is accompanied by a fuel distribution agreement. The operator has the status of agent.

| (f) | The ‘Usufruct-retailer’ agreement. Agreement between Repsol CPP and the owner of a service station by which the owner grants Repsol CPP a right in rem to the usufruct. As usufructuary, Repsol CPP simultaneously leases the service station to the bare owner or to a third party linked to the bare owner for the purposes of its operation. Upon expiry of the agreement, the bare owner automatically recovers full ownership of the service station. The transfer is accompanied by a fuel distribution agreement. The operator has the status of retailer. |
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(f)

The ‘Usufruct-retailer’ agreement. Agreement between Repsol CPP and the owner of a service station by which the owner grants Repsol CPP a right in rem to the usufruct. As usufructuary, Repsol CPP simultaneously leases the service station to the bare owner or to a third party linked to the bare owner for the purposes of its operation. Upon expiry of the agreement, the bare owner automatically recovers full ownership of the service station. The transfer is accompanied by a fuel distribution agreement. The operator has the status of retailer.

| (g) | The ‘Tenancy-agent’ agreement. Agreement between Repsol CPP and the owner of a plot of land by which the owner grants a tenancy right to Repsol CPP, which becomes owner of any existing or future buildings while its contractual partner retains ownership of the land. As owner of the buildings, Repsol CPP simultaneously leases the service station to the owner of the land or to a third party linked to the owner of the land for the purposes of its operation. Upon expiry of the agreement, the owner of the land automatically takes over ownership of the buildings. The transfer is accompanied by a fuel distribution agreement. The operator has the status of agent. |
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(g)

The ‘Tenancy-agent’ agreement. Agreement between Repsol CPP and the owner of a plot of land by which the owner grants a tenancy right to Repsol CPP, which becomes owner of any existing or future buildings while its contractual partner retains ownership of the land. As owner of the buildings, Repsol CPP simultaneously leases the service station to the owner of the land or to a third party linked to the owner of the land for the purposes of its operation. Upon expiry of the agreement, the owner of the land automatically takes over ownership of the buildings. The transfer is accompanied by a fuel distribution agreement. The operator has the status of agent.

| (h) | The ‘Tenancy-retailer’ agreement. Agreement between Repsol CPP and the owner of a plot of land by which the owner grants a tenancy right to Repsol CPP, which becomes owner of any existing or future buildings while its contractual partner retains ownership of the land. As owner of the buildings, Repsol CPP simultaneously leases the service station to the owner of the land or to a third party linked to the owner of the land for the purposes of its operation. Upon expiry of the agreement, the owner of the land automatically takes over ownership of the buildings. The transfer is accompanied by a fuel distribution agreement. The operator has the status of retailer. |
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(h)

The ‘Tenancy-retailer’ agreement. Agreement between Repsol CPP and the owner of a plot of land by which the owner grants a tenancy right to Repsol CPP, which becomes owner of any existing or future buildings while its contractual partner retains ownership of the land. As owner of the buildings, Repsol CPP simultaneously leases the service station to the owner of the land or to a third party linked to the owner of the land for the purposes of its operation. Upon expiry of the agreement, the owner of the land automatically takes over ownership of the buildings. The transfer is accompanied by a fuel distribution agreement. The operator has the status of retailer.

| 14. | In many cases, involving especially agreements of the types referred to at (e), (f), (g) and (h), Repsol CPP assumes all or part of the cost of building or renovating the service stations. |
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14.

In many cases, involving especially agreements of the types referred to at (e), (f), (g) and (h), Repsol CPP assumes all or part of the cost of building or renovating the service stations.

6.   Preliminary assessment

| 15. | On 18 June 2004, the Commission informed Repsol CPP of its preliminary assessment of this case as regards: 1. the distinction between agent and retailer within the meaning of Community competition law; 2. clauses relating to the setting of a maximum fuel retail price; and 3. non-compete clauses for fuel which might give rise to foreclosure of the market. |
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15.

On 18 June 2004, the Commission informed Repsol CPP of its preliminary assessment of this case as regards: 1. the distinction between agent and retailer within the meaning of Community competition law; 2. clauses relating to the setting of a maximum fuel retail price; and 3. non-compete clauses for fuel which might give rise to foreclosure of the market.

6.1.   The agency issue

| 16. | The Commission considers that, in the case of genuine agency agreements, the obligations imposed on the agent as to the contracts he negotiates and/or concludes on behalf of the principal in principle do not give rise to a competition problem. However, an agreement, though described as an agency agreement by the parties, may have features which justify a different assessment.
  The determining factor in this respect is the commercial or financial risk borne by the agent in relation to the activities for which he has been appointed as an agent by the principal. |
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16.

The Commission considers that, in the case of genuine agency agreements, the obligations imposed on the agent as to the contracts he negotiates and/or concludes on behalf of the principal in principle do not give rise to a competition problem. However, an agreement, though described as an agency agreement by the parties, may have features which justify a different assessment.

The determining factor in this respect is the commercial or financial risk borne by the agent in relation to the activities for which he has been appointed as an agent by the principal.

| 17. | However, whatever the agent's situation in the light of these criteria, the non-compete clauses (see paragraph 22) agreed with him may be problematic owing to their effects on inter-brand competition. This is the case if such clauses lead to foreclosure on the relevant market where the contract goods or services are sold or purchased.
  The Commission accordingly considers that the question whether or not the operators of Repsol CPP's service stations are genuine agents is irrelevant as far as the non-compete clauses are concerned. As regards maximum prices, it would appear in any case at this stage that the clauses concerned are acceptable, even if all the distributors linked to Repsol were to be considered, in law, to be retailers (see below). |
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17.

However, whatever the agent's situation in the light of these criteria, the non-compete clauses (see paragraph 22) agreed with him may be problematic owing to their effects on inter-brand competition. This is the case if such clauses lead to foreclosure on the relevant market where the contract goods or services are sold or purchased.

The Commission accordingly considers that the question whether or not the operators of Repsol CPP's service stations are genuine agents is irrelevant as far as the non-compete clauses are concerned. As regards maximum prices, it would appear in any case at this stage that the clauses concerned are acceptable, even if all the distributors linked to Repsol were to be considered, in law, to be retailers (see below).

6.2.   The maximum price clauses

| 18. | Most of the notified agreements prohibit service station operators from selling fuel at a price higher than the maximum set by Repsol CPP, but operators, including those described as agents in the agreements, are free to grant discounts. In a few of the notified agreements, Repsol CPP simply recommends a retail price, leaving it to operators to set the actual price either above or below the recommended price. |
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18.

Most of the notified agreements prohibit service station operators from selling fuel at a price higher than the maximum set by Repsol CPP, but operators, including those described as agents in the agreements, are free to grant discounts. In a few of the notified agreements, Repsol CPP simply recommends a retail price, leaving it to operators to set the actual price either above or below the recommended price.

| 19. | The Commission considers at this stage that these arrangements do not have an appreciable effect on competition within the meaning of Article 81(1) of the Treaty. They leave intact distributors' freedom to reduce prices below the maximum indicated by Repsol CPP. Operators described in the agreements as agents are entitled to reduce the prices actually paid by the customer, with the help of their commission, without reducing Repsol CPP's revenue. |
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19.

The Commission considers at this stage that these arrangements do not have an appreciable effect on competition within the meaning of Article 81(1) of the Treaty. They leave intact distributors' freedom to reduce prices below the maximum indicated by Repsol CPP. Operators described in the agreements as agents are entitled to reduce the prices actually paid by the customer, with the help of their commission, without reducing Repsol CPP's revenue.

| 20. | The Commission's investigation has not revealed the existence of any factors indicating that the setting of maximum prices might create significant alignment effects. In particular, there is nothing to suggest at this stage that intra-brand competition might be affected. |
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20.

The Commission's investigation has not revealed the existence of any factors indicating that the setting of maximum prices might create significant alignment effects. In particular, there is nothing to suggest at this stage that intra-brand competition might be affected.

6.3.   The non-compete clauses

| 21. | The distribution agreements between Repsol CPP and service station operators contain on-compete clauses which cover fuel intended for sale through service stations. The clauses do not cover any other products sold through service stations. They are to be found in 1 430 agreements of the CODO type, 770 of the DODO type and 460 of the usufruct or tenancy type. The duration of the clauses varies. In agreements of the CODO or DODO type, it is currently, as a rule, five years. In agreements of the usufruct or tenancy type, it ranges from 25 to 40 years depending on the type of agreement. |
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21.

The distribution agreements between Repsol CPP and service station operators contain on-compete clauses which cover fuel intended for sale through service stations. The clauses do not cover any other products sold through service stations. They are to be found in 1 430 agreements of the CODO type, 770 of the DODO type and 460 of the usufruct or tenancy type. The duration of the clauses varies. In agreements of the CODO or DODO type, it is currently, as a rule, five years. In agreements of the usufruct or tenancy type, it ranges from 25 to 40 years depending on the type of agreement.

| 22. | Such agreements may, depending on the circumstances, give rise to a competition problem, notably where, by virtue of such clauses, other suppliers in the market cannot sell to the buyers concerned, which may foreclose the market (exclusion of other suppliers by raising barriers to entry) and weaken inter-brand competition. As indicated above (see paragraph 17), whether service station operators are described in the agreements as agents or retailers is immaterial in this respect. |
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22.

Such agreements may, depending on the circumstances, give rise to a competition problem, notably where, by virtue of such clauses, other suppliers in the market cannot sell to the buyers concerned, which may foreclose the market (exclusion of other suppliers by raising barriers to entry) and weaken inter-brand competition. As indicated above (see paragraph 17), whether service station operators are described in the agreements as agents or retailers is immaterial in this respect.

| 23. | In its preliminary assessment, the Commission considered that the non-compete clauses in the agreements notified by Repsol CPP, and in particular in the agreements of the DODO, tenancy and usufruct type, might help significantly to create a foreclosure effect on the fuel retail market in Spain. Having regard to the economic and legal context of the notified agreements, the market is accessible only with difficulty by competitors wishing to enter it or increase their market share there. This is due notably to the significant vertical integration of operators, the cumulative effect of the parallel networks of vertical restraints, difficulties in setting up an alternative network and other competitive conditions (principally the saturation of the market and the nature of the product). |
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23.

In its preliminary assessment, the Commission considered that the non-compete clauses in the agreements notified by Repsol CPP, and in particular in the agreements of the DODO, tenancy and usufruct type, might help significantly to create a foreclosure effect on the fuel retail market in Spain. Having regard to the economic and legal context of the notified agreements, the market is accessible only with difficulty by competitors wishing to enter it or increase their market share there. This is due notably to the significant vertical integration of operators, the cumulative effect of the parallel networks of vertical restraints, difficulties in setting up an alternative network and other competitive conditions (principally the saturation of the market and the nature of the product).

| 24. | The notified agreements might contribute significantly to the foreclosure effect produced by all such agreements in their economic and legal context. This is a result of the following factors: the extent of the non-compete obligations imposed by Repsol CPP (the tied market share of Repsol CPP's sales is considerable, at around ... [25 to 35 %]); the non-compete commitments entered into are of substantial duration, especially in the case of agreements of the usufruct or tenancy type, which are long-term agreements (between 25 and 40 years); and service station operators and final customers are in a weak, fragmented position compared with suppliers, in particular Repsol CPP, which has a substantial market share. |
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24.

The notified agreements might contribute significantly to the foreclosure effect produced by all such agreements in their economic and legal context. This is a result of the following factors: the extent of the non-compete obligations imposed by Repsol CPP (the tied market share of Repsol CPP's sales is considerable, at around ... [25 to 35 %]); the non-compete commitments entered into are of substantial duration, especially in the case of agreements of the usufruct or tenancy type, which are long-term agreements (between 25 and 40 years); and service station operators and final customers are in a weak, fragmented position compared with suppliers, in particular Repsol CPP, which has a substantial market share.

| 25. | As regards the non-compete clauses in CODO-type agreements, the Commission considers at this stage that the duration of these clauses does not contribute, as such, to the foreclosure effect. At the end of the contractual relationship, it is invariably the supplier in his capacity as owner of the service station, and not the tenant-operator, who decides what products will be sold through the sales outlet concerned. |
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25.

As regards the non-compete clauses in CODO-type agreements, the Commission considers at this stage that the duration of these clauses does not contribute, as such, to the foreclosure effect. At the end of the contractual relationship, it is invariably the supplier in his capacity as owner of the service station, and not the tenant-operator, who decides what products will be sold through the sales outlet concerned.

7.   The commitments

7.1.   The commitments offered

| 26. | In response to this preliminary assessment, Repsol CPP has proposed to the Commission the following commitments designed to meet the Commission's concerns:






  — | Repsol CPP undertakes to offer to those service station operators who have granted it a temporary right in rem (in the form of a usufruct or tenancy) in the service station and have at the same time become temporary lessees (via an exchange of contracts) the possibility of ‘buying back’ the right in rem before the scheduled expiry of the agreement. This option may be exercised at any time from 1 January 2005 onwards provided the agreement has no more than 12 years left to run (exceptionally, in 2004, the option will be offered only in respect of agreements which have no more than 10 years left to run). The exercise of the option will involve paying Repsol CPP compensation equal to the market value of the right in rem in question. The market value will be calculated on the basis of Repsol CPP's annual cash flow and the contract period still to run. The market value does not correspond to the residual value of the investment. In the event of disagreement about the market value, the valuation criteria laid down in the Spanish law on expropriation will apply. |
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26.

In response to this preliminary assessment, Repsol CPP has proposed to the Commission the following commitments designed to meet the Commission's concerns:

—

Repsol CPP undertakes to offer to those service station operators who have granted it a temporary right in rem (in the form of a usufruct or tenancy) in the service station and have at the same time become temporary lessees (via an exchange of contracts) the possibility of ‘buying back’ the right in rem before the scheduled expiry of the agreement. This option may be exercised at any time from 1 January 2005 onwards provided the agreement has no more than 12 years left to run (exceptionally, in 2004, the option will be offered only in respect of agreements which have no more than 10 years left to run). The exercise of the option will involve paying Repsol CPP compensation equal to the market value of the right in rem in question. The market value will be calculated on the basis of Repsol CPP's annual cash flow and the contract period still to run. The market value does not correspond to the residual value of the investment. In the event of disagreement about the market value, the valuation criteria laid down in the Spanish law on expropriation will apply.

| — | Repsol CPP undertakes to observe a five-year maximum duration for new fuel distribution agreements with the operators of service stations of which Repsol CPP is not the owner. |
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—

Repsol CPP undertakes to observe a five-year maximum duration for new fuel distribution agreements with the operators of service stations of which Repsol CPP is not the owner.

| — | During a period ending on 31 December 2006, Repsol CPP undertakes not to buy outright from their operators existing service stations (DODO-type stations) which are not supplied exclusively by Repsol CPP, that is, which are not tied to its network. |
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—

During a period ending on 31 December 2006, Repsol CPP undertakes not to buy outright from their operators existing service stations (DODO-type stations) which are not supplied exclusively by Repsol CPP, that is, which are not tied to its network.

| — | Repsol CPP undertakes to advertise in advance the expiry of fuel distribution agreements with service stations and the option to terminate in advance agreements involving rights in rem. This advertising will take the form of a communication to the Ministry for Economic Affairs which will be made public via the Ministry's website. It will be effected during the first month of each quarter for the following quarter. |
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—

Repsol CPP undertakes to advertise in advance the expiry of fuel distribution agreements with service stations and the option to terminate in advance agreements involving rights in rem. This advertising will take the form of a communication to the Ministry for Economic Affairs which will be made public via the Ministry's website. It will be effected during the first month of each quarter for the following quarter.

| — | A third party (independent auditor) will verify compliance by Repsol CPP with the commitments entered into. He will draw up annual reports to the Commission. |
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—

A third party (independent auditor) will verify compliance by Repsol CPP with the commitments entered into. He will draw up annual reports to the Commission.

| 27. | The commitments entered into will remain valid until 31 May 2010. |
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27.

The commitments entered into will remain valid until 31 May 2010.

7.2.   Assessment of the commitments

| 28. | Repsol CPP's proposed commitments provide a practical response to the Commission's concerns about the foreclosure effect on the Spanish market. |
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28.

Repsol CPP's proposed commitments provide a practical response to the Commission's concerns about the foreclosure effect on the Spanish market.

| 29. | First of all, the offer makes it possible to increase considerably the number of service stations currently supplied by Repsol CPP which would be in a position to change supplier. The average number of service stations supplied by Repsol CPP in a position to change supplier would exceed 400 a year in the years ahead. At present, only between 140 and 160 service stations supplied by Repsol CPP are in a position to change supplier each year. Lastly, the offer of commitments makes it possible to shorten considerably the duration of agreements which, in the first few years of a liberalised oil market in Spain, have shielded for the long term a large number of sales outlets against competition. |
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29.

First of all, the offer makes it possible to increase considerably the number of service stations currently supplied by Repsol CPP which would be in a position to change supplier. The average number of service stations supplied by Repsol CPP in a position to change supplier would exceed 400 a year in the years ahead. At present, only between 140 and 160 service stations supplied by Repsol CPP are in a position to change supplier each year. Lastly, the offer of commitments makes it possible to shorten considerably the duration of agreements which, in the first few years of a liberalised oil market in Spain, have shielded for the long term a large number of sales outlets against competition.

| 30. | Secondly, the commitments contain a temporary restraint on the vertical integration of Repsol CPP, thereby ensuring that the number of sales outlets currently capable of being supplied by other operators stays the same. |
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30.

Secondly, the commitments contain a temporary restraint on the vertical integration of Repsol CPP, thereby ensuring that the number of sales outlets currently capable of being supplied by other operators stays the same.

| 31. | Thirdly, the commitments concerning advertising should make it easier for service station operators to enter into negotiations with alternative suppliers before their agreements with Repsol CPP come to an end. |
| --- | --- |

31.

Thirdly, the commitments concerning advertising should make it easier for service station operators to enter into negotiations with alternative suppliers before their agreements with Repsol CPP come to an end.

| 32. | These commitments have the effect of increasing the opportunities for potential competitors of Repsol CPP to establish themselves in the fuel retail market or for existing competitors to increase their market share. Moreover, competitors have alternative means of entering or expanding in the market: for instance, they can purchase existing distribution networks belonging to other suppliers or open new sales outlets. Together, these opportunities should enable a new competitor to attain, within a reasonable period, the minimum number of outlets necessary for the economic operation of a distribution system in this sector, or in other words to make an effective entry into the relevant market. |
| --- | --- |

32.

These commitments have the effect of increasing the opportunities for potential competitors of Repsol CPP to establish themselves in the fuel retail market or for existing competitors to increase their market share. Moreover, competitors have alternative means of entering or expanding in the market: for instance, they can purchase existing distribution networks belonging to other suppliers or open new sales outlets. Together, these opportunities should enable a new competitor to attain, within a reasonable period, the minimum number of outlets necessary for the economic operation of a distribution system in this sector, or in other words to make an effective entry into the relevant market.

8.   The Commission's intention at this stage

| 33. | On the basis of the above, the Commission intends to adopt a decision of the type provided for in Article 9 of Regulation No 1/2003. Before doing so, however, it invites interested third parties to submit any comments they might have within one month of publication of this notice. |
| --- | --- |

33.

On the basis of the above, the Commission intends to adopt a decision of the type provided for in Article 9 of Regulation No 1/2003. Before doing so, however, it invites interested third parties to submit any comments they might have within one month of publication of this notice.

| 34. | In doing so, interested third parties are also requested to provide the Commission with a non-confidential version of their submission, in which business secrets and confidential passages are deleted and replaced by a non-confidential summary, where possible, or marked ‘business secrets’ or ‘confidential’ as the case may be. They must state the reasons for their confidentiality claims. |
| --- | --- |

34.

In doing so, interested third parties are also requested to provide the Commission with a non-confidential version of their submission, in which business secrets and confidential passages are deleted and replaced by a non-confidential summary, where possible, or marked ‘business secrets’ or ‘confidential’ as the case may be. They must state the reasons for their confidentiality claims.

| 35. | Within the same period, interested third parties may request from the Commission, at the address given in the following paragraph, a copy of the commitments proposed by Repsol CPP with all confidential information removed. |
| --- | --- |

35.

Within the same period, interested third parties may request from the Commission, at the address given in the following paragraph, a copy of the commitments proposed by Repsol CPP with all confidential information removed.

| 36. | Interested third parties should send their comments, quoting the reference ‘COMP/B-1/38348 — Repsol CPP’, to the following address:





  Commission of the European Communities |
| --- | --- |
| Directorate-General for Competition |
| Antitrust Registry |
| B-1049 Brussels |
| Fax (32-2) 295 01 28. |

36.

Interested third parties should send their comments, quoting the reference ‘COMP/B-1/38348 — Repsol CPP’, to the following address:

Commission of the European Communities

Directorate-General for Competition

Antitrust Registry

B-1049 Brussels

Fax (32-2) 295 01 28.

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(1)  OJ L 1, 4.1.2003, p. 1.

1

(2)  OJ C 70, 19.3.2002, p. 29.

2

(3)  See, generally, the reports of the Comisión Nacional de la Energía: ‘Información básica de los sectores de la energía’, accessible at www.cne.es.

3

(4)  Commission Decision of 29 September 1999 declaring a concentration to be compatible with the common market (Case COMP/M.1383 — Exxon/Mobil), paragraphs 428 to 439, and Commission Decision of 9 February 2000 declaring a concentration to be compatible with the common market (Case COMP/M.1628 TotalFina/Elf), paragraphs 22 to 29.

4

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