Judgment — ECLI:EU:T:1999:85
Date: 1999-04-28
Language of the case: English
Court formation: Fourth Chamber, Extended Composition
Based on: Treaty establishing the European Economic Community (1957)
Subject matter: Competition;Agreements, decisions and concerted practices
Concepts: Commission discretion;Assessment criteria;Proceedings;Division of powers between the Commission and the national authorities
Procedure: Action for annulment - unfounded
Origin: Netherlands

summary list of all279 documents which made up the file. That list, produced in Annex 16 to theapplication, contained information of two kinds. First, it gave a breakdown of thedocuments by type. For that purpose, a classification under 13 headings wasnotified to the companies concerned (annual reports, internal notes, requests forinformation and so forth). The list contained, for each document or group ofdocuments, an indication of the key figure or, as the case may be, figurescorresponding to the heading under which the document or group of documentsfell. Secondly, the list indicated, for each document or group of documents,whether it was accessible to the companies concerned, partially accessible to them,confidential or not relevant. 75. It is apparent that the parties were refused access to five categories of documents,namely: (i) documents for purely internal Commission purposes; (ii) certaincorrespondence with the Member States; (iii) certain replies to requests forinformation made under Article 11 of Regulation No 4064/89; (iv) certaincorrespondence with third parties; and (v) one or more studies. 76. The applicant has no real grounds for complaining that the Commission refused itaccess to purely internal documents, which, as the Court has previously held, didnot have to be disclosed (see paragraph 66 above). An identical answer must be given in respect of the correspondence with the Member States and certain thirdparties, to which the Commission was entitled to refuse access on the basis of itsconfidential nature. So far as concerns the replies to requests for informationaddressed by the Commission to third parties, the Court has already held that, inthe present case, the Commission did not infringe the rights of the defence byproviding only non-confidential summaries of some of those replies (seeparagraphs 69 to 72 above). 77. As regards the study or studies which were mentioned in the summary list referredto by the applicant in its reply and were not provided to the applicant, theCommission mentions only two studies in the contested decision and the statementof objections sent pursuant to Article 18 of Regulation No 4064/89. Those studieswere, respectively, an econometric study for the purposes of the investigation,prepared by KPMG Management Consulting, and a study entitled Media inEurope, Europe Media Cost Comparison 1993, prepared by Young & Rubicam. A copy of the first study was sent to the parties and a copy of the second wasincluded in the file to which the parties had access on 26 July 1995. TheCommission does not refer to any other study in the contested decision or in thestatement of objections and the applicant has provided no concrete information tothe effect that those documents could have been based on information gatheredfrom such a study. 78. It follows that the way in which the Commission presented the table of the filecontents in this case does not infringe the rights of the defence. The replies of IDTV and Sleeswijk-D & D 79. The applicant does not dispute the Commission's assertion that the applicant hadaccess to the non-confidential summaries of the replies of IDTV and Sleeswijk-D & D. This ground of challenge must therefore be rejected. Documents alleged to have been acquired after the applicant inspected the file 80. The Court considers that the applicant has not substantiated its claim that theCommission acquired new documents concerning the Netherlands televisionproduction market after the applicant had obtained access to the file and that itfailed to disclose them to the applicant. In its application, the applicant hadreferred, in particular, to the first three sentences of paragraph 89 of the contesteddecision, which state: 'The in-house production of the public broadcasters is essentially used for theirown purposes. Although these productions are sometimes offered on theinternational market, they are normally not offered to other broadcasters in the Dutch TV market. There is, therefore, no direct competition between in-houseproduction and programmes produced by independent producers which are offeredon the market. 81. However, the Commission demonstrated at the hearing that the first two sentencesare taken from the statement of objections and the parties' reply theretorespectively. The statement of objections is dated 18 July 1995 and thus precedesthe parties' inspection of the file on 26 July 1995. The third sentence merely drawsthe logical conclusion from the first two sentences and does not contain any newinformation. 82. As regards the letter of 25 August 1995 from the Nederlandse Vereniging vanErkende Reclame Adviesbureaus (Netherlands Association of AdvertisingAgencies) to the Commission, since the applicant has withdrawn the argument asto the Commission's analysis of the position of HMG in the television advertisingmarket (see paragraph 32 above), it is unnecessary to examine the questionwhether the Commission's treatment of that letter infringed the rights of thedefence. Gathering of information by telephone 83. It is not in dispute that the Commission sent a letter pursuant to Article 11 ofRegulation No 4064/89, with a questionnaire annexed, to all the independentproducers listed in the Handbook and that it then contacted by telephone thosewho had failed to reply in order to ascertain the number of hours of televisionprogrammes produced by them in 1994 and the value in guilders of theprogrammes. It needed those figures in order to estimate the size of theindependent television production market and the proportion of that market heldby the applicant. 84. Article 11 of Regulation No 4064/89 is intended to enable the Commission togather all the information needed in order for it to carry out the tasks assigned toit by that regulation. When the Commission sends a request for information to aperson, it is required to state the legal basis and the purpose of the request as wellas the penalties laid down for supplying incorrect information. However, Article 11does not require the undertakings contacted to reply in writing. In the presentcase, most of the major undertakings did in fact provide written replies. Havingregard to the need for speed, which characterises the general scheme of RegulationNo 4064/89 (Kaysersberg, cited above, paragraph 113), the Commission chose toobtain by telephone the replies of the undertakings which had been sent a letterunder Article 11 but had not yet replied. Since the majority of the undertakingscontacted in that way also provided the replies needed for the Commission'sanalysis, thus meeting their obligations under Article 11, it would have beenexcessive to use the formal procedure referred to in Article 11(5). 85. It follows that the Commission did not infringe Article 11 of Regulation No 4064/89when, in order to complete its investigations, it contacted by telephone theundertakings to which it had already sent a letter under that provision and whichhad not replied. 86. While Regulation No 4064/89 was not infringed, it is still necessary, inasmuch as itis common ground that the information gathered by telephone was not submittedas such to the applicant, to establish whether the Commission thereby infringed therights of the defence within the meaning of the case-law referred to above(paragraph 65). 87. Under that case-law, in order to hold that the rights of the defence have beeninfringed, it is sufficient for it to be established that the non-disclosure of thedocuments in question might have influenced the course of the procedure and thecontent of the decision to the applicant's detriment (ICI v Commission, cited above,paragraph 78). 88. An infringement of the rights of the defence must be examined in relation to thespecific circumstances of each particular case (ICI v Commission, paragraph 70). 89. The Court thus notes, first, that the information gathered by telephone was usedby the Commission in order to calculate the applicant's share of the market forindependent Dutch-language television production, which it estimated at 'clearlymore than 50%. That global figure was notified to the applicant at the hearingon 8 August 1995. The Commission also calculated from that information themarket share of the 10 other largest producers in the market. The Commissionhad already indicated to the applicant, in the statement sent to it pursuant toArticle 18 of Regulation No 4064/89 on 18 July 1995 and at the time of the parties'inspection of the file on 26 July 1995, that, in its view, the applicant had a marketshare of around 60%. At the same time it had also provided an initial estimate ofthe market shares of the five other largest producers. The applicant had thus hadthe opportunity to comment on those estimates in writing in the parties' statementof defence, lodged on 4 August 1995, and to discuss the Commission's revisedfigures at the hearing itself. 90. Secondly, it is not in dispute that the information in question, as supplied by theindividual undertakings, concerned solely the number of hours of televisionprogrammes produced by them as independent producers in 1994 and the value ofthose programmes. Only those undertakings could provide that informationaccurately. It follows that even if the Commission had disclosed the information,which was, moreover, of a confidential nature, the applicant would not have beenable to challenge it. 91. Accordingly, the Commission did not infringe the applicant's rights of defence byfailing to disclose that information in the form in which it was provided byindividual producers. 3. The third plea, alleging infringement of essential procedural requirements Arguments of the parties 92. The applicant maintains that many new and important matters of fact and of lawemerged at the hearing of 8 August 1995. As a result, the advisory committee andthe college of Commissioners could not have had full knowledge of the materialfacts in the case, because they were not provided with a report containing theminutes of the hearing. The fact that the hearing was recorded on audio cassettesdoes not remedy that breach of an essential procedural requirement, with the resultthat the contested decision must be annulled. 93. The Commission replies in effect that it is not required to draw up official minutesof hearings in cases falling under Regulation No 4064/89, nor could the failure tosupply such minutes to the advisory committee or to the Commissioners haveinfluenced the outcome of the proceedings in this case. Findings of the Court 94. It is clear from the wording of Article 15(5) of Regulation No 3384/94 that theCommission is required merely to record the statements made by each personheard at a formal hearing. It is not however required to draw up minutes of sucha hearing, unlike the procedure under Article 9(4) of Regulation No 99/63, whichprovides that the essential content of the statements made by each person heard'shall be recorded in minutes which shall be read and approved by him. 95. It follows also that the applicant cannot contend that such minutes should havebeen sent to the Commissioners or to the members of the advisory committeebefore the contested decision was adopted. 96. This plea must therefore be rejected as unfounded. 4. The fourth plea, alleging infringement of Articles 2 and 3(1) and (3) of RegulationNo 4064/89 97. In its fourth plea, the applicant disputes the validity of the conclusion reached bythe Commission that its stake in HMG strengthened its dominant position in themarket for independent Dutch-language television production in the Netherlands. It puts forward two main grounds of challenge. First, it did not hold a dominant position in the relevant market. Secondly, its participation in the concentration didnot strengthen its position in that market. The applicant's dominant position 98. The applicant submits, on the one hand, that the Commission incorrectly definedthe relevant market as the market for independent Dutch-language televisionproduction and, on the other, that even if the Commission's narrow definition ofthe relevant market could be accepted, the applicant could not be considered tohold a dominant position in that market. Incorrect definition of the relevant market  Arguments of the parties 99. The applicant contends that the Commission wrongly defined the relevant marketin that it considered that the market for independent production of Dutch-languagetelevision programmes was separate from the market for in-house productions ofthe public broadcasters. The three grounds put forward by the Commission tojustify that conclusion are misconceived, namely that the public broadcastersproduce different types of programmes from the applicant, that the production ofthe public broadcasters is primarily for their own use, and that the publicbroadcasters are not in a position to decide freely whether to produce aprogramme themselves or to commission it from an independent producer. 100. First, the Commission was wrong in considering that the public broadcastersproduce different programmes from the applicant's. They produce entertainmentprogrammes which are comparable to its own, and it produces low-budget gameshows, talk shows and 'infotainment. In 1994 the big entertainment showsrepresented only 35% of its production in terms of value and 16.7% in terms ofhours produced. 101. Second, the production of the public broadcasters is not primarily intended for theirown use. The applicant points out that the public broadcasters have offered 345programmes on the international market through the sales agency NederlandseOmroepprogramma Stichting (NOS, an umbrella organisation which providesadministrative services to the public broadcasting bodies), whereas its internationalcatalogue is limited to 80 programmes. 102. Third, it is incorrect that a public broadcaster cannot choose freely whether toproduce a programme itself or to commission it from an independent producer. Some broadcasters have very substantial in-house production departments, whileothers appear to have much more limited resources. The Commission's argument that, because of their considerable investment, the public broadcasters have nochoice but to produce in-house, is therefore not in line with the Commission'sfactual description of the market. Furthermore, if a broadcaster has sufficient staffand facilities for a significant number of productions, that makes it easier for it tochoose between in-house and external production. 103. The Commission maintains, first, that the public channels have a marked tendencyto purchase high value entertainment programmes from outside while producingin-house those programmes which are inherent in their role as public broadcastersand low-value filler programmes. The applicant is much stronger in the field of bigentertainment programmes. While it produces only 13.3% in terms of the totalduration of programmes broadcast in the Netherlands, it accounts for 17.8% ofproduction by value. Its production therefore costs 42% more per hour thanproduction in the rest of the market, a fact which clearly shows that its productionmix is very different. 104. Secondly, the Commission observes that in-house productions are not sold on, atleast not in the Netherlands. Even though NOS offers 345 programmes producedby the public broadcasters on the international market, those international saleshave no effect on the Netherlands market. 105. Third, the Commission contends that the option of a 'make or buy decision islargely illusory. Where a public broadcaster has invested substantially in in-houseproduction facilities, those facilities will represent a significant cost, much of whichwill be sunk costs. There is therefore no short-term choice but to use thosefacilities to the greatest extent possible. Since broadcasters without in-houseproduction facilities are not faced with such a decision, they can hardly beconsidered to exercise influence over the independent production market.  Findings of the Court 106. Before considering the Commission's definition of the relevant market, it should beobserved that the basic provisions of Regulation No 4064/89, in particular Article 2thereof, confer a discretion on the Commission, especially with respect toassessments of an economic nature. Consequently, review by the Communityjudicature of the exercise of that discretion, which is essential for defining the ruleson concentrations, must take account of the discretionary margin implicit in theprovisions of an economic nature which form part of the rules on concentrations(Joined Cases C-68/94 and C-30/95 France and Others v Commission [1998]ECR I-1375, paragraphs 223 and 224). 107. In the present case, the Commission defined the market correctly, in that itconcluded that the independent production of Dutch-language televisionprogrammes was a separate market from the market for in-house productions ofthe public broadcasters. 108. First, programmes produced by independent producers can be substituted only inpart for programmes produced by the public broadcasters. The public broadcastersproduce themselves, for the most part, the programmes essential to their role aspublic broadcasters and the low-value filler programmes. By contrast, it is notdisputed that the applicant, which is by far the most important independentproducer in the Netherlands, is much stronger in the field of big entertainmentprogrammes, which account for 35% of its production. According to the figuresprovided by the Commission, which the applicant has not contested, its hourlyproduction costs are 42% higher than those in the rest of the market, a fact whichclearly shows that its programmes have a different profile. 109. Second, although certain programmes produced by the public broadcasters are soldon the international market, those sales have no effect on the Netherlands market. The applicant concedes that, so far as concerns the Netherlands market, the in-house production of the public broadcasters is essentially intended for their ownuse. There is thus no direct competition between the in-house production of thepublic broadcasters, whose programmes are not, as a rule, offered to otherbroadcasters in the Netherlands market, and the programmes produced by theindependent producers which are offered on that market. 110. Third, the Commission could reasonably conclude that a public broadcaster wasgenerally not in a position to choose whether to produce a programme itself or tocommission it from an independent producer. 111. On the one hand, the applicant has not refuted the Commission's argument thatpublic broadcasters with significant in-house production activities have madesubstantial investment for that purpose, having, in particular, taken on thenecessary production staff, a major element in the cost of producing a programme. In those circumstances, it was reasonable for the Commission to conclude that ifpublic broadcasters were to increase significantly the number of commissions placedwith independent producers, to the detriment of their in-house production, theywould nevertheless have to bear the cost of their in-house production capacitywithout obtaining a return on the investment made in terms of programmesproduced. Such a policy would not be commercially feasible, at least not in thelong run. 112. On the other hand, the Commission's argument that, because of their substantialinvestment, the public broadcasters have no choice but to produce theirprogrammes themselves is not invalidated by the fact that certain broadcasters haveonly very modest production departments, because it is clear that suchbroadcasters, lacking means of production themselves, must therefore commissionprogrammes from independent producers. No dominant position of the applicant in the relevant market  Arguments of the parties 113. The applicant maintains that, even on the Commission's narrow definition of themarket, it cannot be regarded as holding a dominant position. There are 97producers in the Netherlands market. Only 29 producers replied in writing to theCommission's questionnaires and the information provided by the others over thetelephone is not reliable. The Commission therefore calculated the applicant'smarket share on the basis of incomplete evidence. 114. The Commission infers from the fact that the applicant was unaware of theproducers not included in the Handbook, which cited the names of 85 producersincluding the applicant itself, that they were so small as to be completelyinsignificant for the purposes of its analysis of the market. 115. It points out that very high market shares are considered to be extremely importantwhen determining whether an undertaking holds a dominant position. Anundertaking which holds a large and firm market share for a long period is likelyto become an unavoidable trading partner, so that a dominant position could insuch circumstances be inferred from the market share alone. In the present case,the applicant held a market share of more than 50% and was by far the largestoperator on the market. 116. The applicant also submits that the other factors relied on by the Commission inconcluding that the applicant held a dominant position in the relevant market aremisconceived. 117. First, it is incorrect that it has preferential access to foreign formats which are thenadapted to the Dutch audience. It had produced only 38 programmes based onforeign formats in the previous three years and not in excess of 60 as theCommission claimed. It appears that the Commission relied on certain subjectivereplies from its competitors which are wholly unreliable because those competitorsdid not know precisely which formats were owned by it. 118. Besides, 45 of the 143 programmes which it produced in 1994 were not based ona format. Also, several of the popular formats which it uses are owned bybroadcasters. It is incorrect that the applicant owned the most popular Dutchformats. 119. The Commission considers that it demonstrated satisfactorily that the applicantowned a large number of the most popular Dutch formats and had preferentialaccess to foreign formats. In stating that the applicant had preferential access tothose formats, it was only recording the view of many of the applicant's competitorsthat it was in a strong position, in particular because it had the capital base topurchase programmes by entering into 'output deals (contracts with broadcastersfor a specified volume of programmes). In 1993/94 the applicant produced half ofthe most popular non-sports entertainment programmes. 120. Second, the applicant states that it is not correct that it has a large number of themost popular Dutch television personalities under contract. 121. Nor is its presence in the theatrical field a matter of importance for televisionpersonalities, because hardly any of them make use of that opportunity. It is alsoirrelevant that it has its own agency for stars. It merely has an agency which dealswith scheduling for events, and it has no power to enter into contracts ofengagement on behalf of its stars. 122. The Commission states in reply that it concluded, in the light of the concernsexpressed by other operators on the production market, that the applicant hadmany of the most popular Dutch television personalities under contract, often onan exclusive basis. The fact that they make little use of the opportunities forappearing other than on television is hardly important: the existence of thoseopportunities may lead them to choose to work with the applicant rather than withanother company, thereby strengthening its position. In any event, it neverconsidered that this was a particularly important factor in establishing theapplicant's dominant position. 123. Third, the applicant states that the Commission wrongly assumed that profits madein other countries were liable to strengthen its position in the Netherlands. Thoseresources are used in the first place to develop the subsidiaries in the variouscountries concerned. 124. The Commission maintains that the applicant's large-scale activities outside theNetherlands strengthen its dominant position in the Netherlands market. Itssubsidiaries give it preferential access to the international market and increase theresources of the whole group when financing major productions or determiningwhich further investment might be most profitable. That can be seen particularlyfrom the fact that it is the largest supplier to RTL Germany, which is itself theleading German commercial television station. 125. Fourth, the applicant submits that a number of facts put forward by it butneglected by the Commission prove that it does not hold a dominant position. Firstof all, it is not able to exclude existing competition or prevent the entry ofnewcomers, several companies having entered the Netherlands production marketin recent years. Nor are its customers dependent on it, as is shown by the fact thatpublic broadcasters boycotted it following the creation of HMG and gave up threevery popular programmes. Furthermore, the Commission failed to take sufficientaccount of the future growth of the television production market and of the factthat that growth would not benefit it. Thus, the new private channel, SBS, did notsign a production agreement with it, Kindernet, a second new channel, was tocompete directly with RTL 4, and a third channel, Euro 7, did not intend tocommission productions from it in 1995. 126. The Commission states that the undertakings which have succeeded in establishingthemselves in the Netherlands market in recent years needed an established partnerin that market. D & D joined with Sleeswijk, which was already a major Dutchproducer. Grundy entered the Netherlands market through a joint venture with theapplicant. It is therefore clear that even large international groups cannot enterthe Netherlands market without the support of existing market players. 127. It adds that, while developments in the Netherlands television market would resultin increased demand from all channels, the largest increase in demand by valuewould certainly be for additional programming for Veronica. Since the applicantwas the main supplier to Veronica and would thenceforth have the benefit of aproduction agreement and a structural link by virtue of its joint control with RTLover HMG, it was very difficult to believe that most of Veronica's additionalprogramming would not be supplied by it. Furthermore, since Veronica wasfinancially the strongest broadcaster, its requirements were likely to include moreof the expensive dramas and entertainment programmes in which the applicant wasparticularly strong. On the other hand, the three other new private channels wouldhave lower budgets and their production requirements would be relativelyinsignificant. 128. It states, finally, that it has shown that the revenue of the public broadcasters woulddecline in the future, which made an increase in the purchase of high-valueprogrammes unlikely. It is incorrect that the in-house production capacity of thepublic broadcasters could have any significant competitive impact on theindependent production market.  Findings of the Court 129. It is appropriate to consider at the outset the method used by the Commission forcalculating the applicant's share of the market for independent Dutch-languagetelevision production in the Netherlands. 130. First, the Commission was right to calculate the market shares of the variousproducers by reference to the value of programmes and not the number of hoursproduced. The applicant has not disproved the results of the Commission'sinvestigation, which showed that the hourly value of television productions rangedfrom NLG 30 000 to NLG 300 000. In those circumstances, market share can bevalidly calculated only on the basis of value and not volume. 131. Second, the Commission's calculation of the applicant's market share is reasonable. It is clear from the written replies given by the Commission to the Court that theCommission had sent questionnaires to 84 independent producers, not only 75 asstated in the pleadings. Those 84 producers were all the producers referred to inthe Handbook other than the applicant itself. According to notes made during theinvestigation of the case, the Commission received written information from 29 producers, which related, inter alia, to the number of hours of televisionprogrammes produced in 1994 and to the value in guilders of those programmes. It also obtained information by telephone from 37 other producers on those twomatters. It thus received replies from 78% of the 84 producers. It then estimatedthe value of the hours produced by the 18 producers for which it had noinformation, on the basis of the information supplied by other producers with asimilar number of employees. Finally, it took into account the data provided by theapplicant itself in order to calculate the size of the total market and the marketshare held by the applicant. 132. The Commission thus did not err by stating in the contested decision that theapplicant's market share was 'clearly more than 50%. 133. Furthermore, the Commission has demonstrated in its reply to one of the Court'swritten questions that, even though it had to include an estimate of the value of theprogrammes produced by a producer which was among the 29 which had repliedin writing but which had failed to supply the necessary figure, that would not havealtered its estimate of the applicant's market share, which would still have beenclearly more than 50%. 134. It is necessary to examine next whether the Commission was right to conclude that,in this case, the applicant held a dominant position in the relevant market. According to settled case-law, a particularly high market share may in itself beevidence of the existence of a dominant position, in particular where, as here, theother operators on the market hold only much smaller shares (Case 85/76Hoffmann-La Roche v Commission [1979] ECR 461, paragraph 41, Case C-62/86Akzo v Commission [1991] ECR I-3359, paragraph 60, and Case T-30/89 Hilti vCommission [1991] ECR II-1439, paragraphs 91 and 92). 135. The Commission found, on the basis of its investigations, that the second mostimportant producer held a market share of between 5% and 10%, four otherproducers each held market shares of between 2% and 5%, and the five otherlargest producers each held market shares of between 1% and 2%, while all theother producers held a market share of less than 1% each. In those circumstances,the Commission did not manifestly err in its assessment when it concluded that theapplicant held a dominant position in the relevant market. 136. The Commission also referred to the applicant's further strengths which gave it aposition far superior to that of its competitors. The Court will consider those otherfactors in turn. 137. First, so far as concerns the applicant's preferential access to foreign formats, theapplicant has not refuted the Commission's argument that it was in a strongposition because of it its capital base, which enabled it to purchase programmes byentering into 'output deals. As the Commission explained at the hearing, it is easier for a producer to obtain the necessary formats when it has already signeda contract with a broadcaster for a specified volume of programmes. Contrary tothe applicant's submission, that explanation is not invalidated by the fact that thecontract generally does not specify the content of the programmes. Thefundamental point is that the producer already has a contract with a broadcasterguaranteeing that it will be able to produce a certain number of hours ofprogrammes. 138. As regards formats in general, the applicant has not disputed that in 1993/94 itproduced half of the most popular non-sports entertainment programmes and that24 of those 28 programmes were based on a format. In those circumstances, theCommission's conclusions are not affected either by the fact that a third of theprogrammes produced by the applicant in 1994 were not based on a format or bythe fact that, according to the applicant, broadcasters, and not itself, owned otherpopular formats. 139. The Commission was also correct in its assertion that the applicant had producedmore than 60 programmes based on foreign formats in the three years precedingthe concentration, as was demonstrated by the list which the applicant had itselfsubmitted to the Commission as an annex to its reply of 14 July 1995 to theCommission's request for information of 7 June 1995, and is included in Annex 11to the application. It is clear from that list that the figure of 38 programmesmentioned by the applicant in fact refers to the number of foreign formats usedduring that period and not to the number of programmes produced on the basisof those formats. 140. Nor could the Commission ignore the opinion of other producers, of broadcastersand of other private channels, which had considered that the applicant owned alarge number of the most popular Dutch formats and enjoyed preferential accessto foreign formats. 141. Second, the applicant's statement that a large number of television personalities are either linked to broadcasters or freely available to anyone is not sufficient to refutethe Commission's assessment that it had a high number of the most popular Dutchtelevision personalities under contract. So far as concerns the opportunities forthose personalities to appear elsewhere than on television and the fact that theapplicant has its own agency for stars, even if, as the Commission acknowledges,those are not important factors in establishing the applicant's dominant position,it cannot be ruled out that they may strengthen its position in the market to someextent. 142. Third, as regards activities outside the Netherlands, the applicant has not refutedthe Commission's argument that the applicant's large-scale activities outside theNetherlands may strengthen its position in the Netherlands market, given that itssubsidiaries give it preferential access to the international market and increase theresources of the group as a whole. 143. Fourth, the other facts put forward by the applicant do not substantiate itsargument. While it is true that other companies entered the Netherlandsproduction market during the years preceding the concentration, the applicant hasnot disproved that those new entrants needed an established partner in thatmarket, at least initially. As regards the alleged boycott of the applicant by certainpublic broadcasters following the announcement of HMG's creation, it is to beobserved that, as the applicant itself states, the applicant supplied 88.2% of itsproduction in 1994 to the channels Veronica, RTL 4 and RTL 5, and it wastherefore not unreasonable for the Commission to conclude that such a boycottwould have only minor significance. 144. Nor has the applicant shown in what way the Commission was wrong in consideringthat Kindernet and Euro 7 would be very low budget channels, inasmuch asKindernet planned to concentrate mainly on children's daytime programmes andEuro 7 was in essence to be a news and documentary channel, and that theirproduction requirements would therefore be relatively insignificant in value. Furthermore, the programmes produced by the applicant are of no interest toEuro 7. Nor has the applicant disputed that Veronica's programme budget wasalmost three times the budget of SBS. 145. Moreover, the applicant has not proved that the Commission was wrong inconsidering that most of the additional demand for Dutch-language productionswould come from Veronica, which would need programmes for four and a half daysof extra broadcasting  while the public broadcasters would have to fill only twoand a half days  following Veronica's departure as a public broadcaster. Since theapplicant was already Veronica's main supplier, it was also reasonable for theCommission to conclude that most of Veronica's additional programming would besupplied by it. 146. In view of all of the foregoing, the Commission correctly defined the relevantmarket and the applicant's share of it, and was right in concluding that theapplicant held a dominant position in that market. 147. This argument must accordingly be rejected as unfounded. Strengthening of the applicant's dominant position 148. The applicant submits that the Commission wrongly concluded, first, that VMG,together with RTL, exercised joint control over HMG and, secondly, that theapplicant's participation in the concentration strengthened its position in the marketfor independent Dutch-language television production in the Netherlands. HMG not jointly controlled by VMG and RTL  Arguments of the parties 149. The applicant states that HMG was composed of four bodies, namely the generalmeeting of shareholders, the shareholders' committee, the managing board and theprogramme directors. The managing board had to obtain the prior agreement ofthe general meeting of shareholders for the majority of important businessdecisions, including decisions concerning the strategy of HMG, the three-yearbusiness plan and annual budget, important capital investments and bonds or loans. The 'overall programming concept was also part of that list, as were theappointment and dismissal of the programme directors and of theDirector/Secretary-General. 150. VMG and RTL had an equal number of representatives in the general meeting ofshareholders. However, the applicant, joining forces with Veronica in VMG, hada minority interest, because VMG held only 49% of the capital of HMG and underLuxembourg law, to which HMG was subject, VMG and RTL voted not accordingto the number of representatives but according to their respective holdings. 151. Under clause 3.4 of the merger agreement, the general meeting was to attempt toresolve problems by consent. If no consensus was reached, the question was to beput on the agenda of the next general meeting where 'the relevant proposal shallbe capable of adoption by simple majority of the votes cast at such meeting. Inpractice, that means that RTL, with 51% of the voting rights, had a majority at thatsecond meeting. 152. The applicant refers to the judgment in Case T-2/93 Air France v Commission[1994] ECR II-323, where the fact that major decisions of the board had to betaken by at least one representative of TAT SA and one of British Airwayssupported the conclusion that there was indeed joint control, and considers thatRTL had exclusive control because it was impossible for shareholders other thanRTL to block major decisions. 153. The shareholders' committee of HMG, which also had an identical number ofrepresentatives of RTL and of VMG, took decisions unanimously but hadcompetence only in respect of the issues listed in clause 3.3 of the mergeragreement, that is to say rights relating to the normal protection of minorityshareholders, which had nothing to do with the programming of HMG. 154. The applicant concludes therefrom that the Commission has not submitted anyconvincing argument or evidence to support its conclusion that the applicant,through its structural link to HMG, was in a position to influence the generalstrategy of HMG in programming and programme purchasing so as to strengthenits position in the market for independent production (paragraph 100 of thecontested decision). 155. It adds that, as it had only a minority holding in HMG, it did not satisfy theconditions, laid down by the Court of Justice in Joined Cases 142/84 and 156/84BAT and Reynolds v Commission [1987] ECR 4487 (hereinafter 'the Philip Morrisjudgment), under which a shareholding of one competitor in another may becaught by the prohibition in Article 85 of the Treaty. The concentration did nottherefore pose any competition problems. 156. The Commission points out that it concluded that HMG was jointly controlled byRTL and VMG because the most important strategic decisions taken by themanaging board had to have the prior approval of the general meeting ofshareholders. Although RTL could in theory impose its will eventually, it was notconceivable that it would do so having regard to the period of time which was laiddown in the procedure set out in clause 3.4 of the merger agreement and to thefact that HMG and RTL had to maintain good relations with the applicant, sinceit was HMG's principal programme supplier under the production agreement. Itfollows that VMG exercised a decisive influence over HMG owing to the fact that,in practice, major decisions concerning it had to be taken jointly by RTL andVMG. It submits in that regard that the applicant misconstrues Air France vCommission, cited above. 157. It adds that the shareholders' committee existed in order to resolve issues requiringthe consent of all the shareholders. A decision to make substantial changes in theprofile, positioning or programming format of any of the three channels had to betaken unanimously. A similar procedure was necessary in order to change thegeneral terms of the contracts of the staff of the channels. The requirement thatsuch changes could only be authorised unanimously goes beyond what is necessaryto protect the interests of a minority shareholder and thus supports theCommission's view that HMG was jointly controlled. 158. The Commission considers, furthermore, that the Philip Morris judgment is notrelevant to this case.  Findings of the Court 159. Under Article 3(3) of Regulation No 4064/89, control is constituted by rights,contracts or any other means which, either separately or in combination and havingregard to the considerations of fact or law involved, confer the possibility ofexercising decisive influence on an undertaking. 160. In the light of the considerations of fact and law in this case, the Commission wascorrect in concluding that VMG (Veronica and the applicant) and RTL exercisedjoint control over HMG. 161. Under the merger agreement, the most important strategic decisions had to beapproved by the general meeting of shareholders before being put before themanaging board. Those decisions covered, in particular, the strategy of HMG, thethree-year business plan and annual budget, important investments, the 'overallprogramming concept and the appointment and dismissal of the programmedirectors and of the Director/Secretary-General. 162. In accordance with clause 3.4 of the merger agreement, issues submitted to thegeneral meeting had to be decided by consensus. The agreement of RTL andVMG had therefore to be sought for all those decisions and, if a consensus couldnot be obtained, a period of 15 days was laid down during which therepresentatives of RTL and VMG had to use all endeavours to reach such aconsensus. Only after those two stages could a final decision be adopted by simplemajority vote, when RTL, with 51% of the voting rights, had a majority. 163. Furthermore, the shareholders' committee, which took decisions by unanimous vote,had to give its prior approval to certain decisions of the managing board whichwent beyond what is necessary to protect the interests of a minority shareholder. Thus, a decision changing substantially the profile, positioning or programmingformat of any of the three channels could only be taken unanimously. The samewas true of a decision creating a new channel which would compete directly withone of the three existing channels. Accordingly, those aspects of HMG's strategyand of its 'overall programming concept were necessarily subject to unanimousagreement between RTL and VMG. 164. It follows that the Commission could reasonably conclude that RTL and VMG hadjoint control over HMG, having regard to the provisions of the merger agreement. It is therefore unnecessary to consider the applicant's arguments concerning RTL'salleged exclusive control and the Philip Morris judgment. No strengthening of the applicant's position in the relevant market  Arguments of the parties 165. The applicant submits that its stake in HMG did not enable it to exercise anyinfluence on either HMG's general programming or its purchase of programmes. Its alleged ability to prevent access of other producers to HMG is based on thealleged joint control when, so far as concerns RTL 4, RTL 5 and Veronica, it hadalready been the main supplier of RTL and Veronica for five years and their imagehad therefore already been determined to a large extent by its programmes overthat period. Thus, its position was not strengthened, nor was competition impeded,by the creation of HMG. 166. The Commission considers that the parent companies could not manage HMGproperly unless they were in agreement on the most important strategic decisions. It is inconceivable that the applicant's acquisition of a stake was solely a financialinvestment which did not procure for it the benefit of decisive influence over HMG. The Commission's essential concern was therefore to prevent the structural linksbetween the applicant and HMG from closing the market in question to otherproducers and strengthening its position in that market.  Findings of the Court 167. The Commission did not err in its assessment by concluding that, because of thestructural link created between the parties to the concentration and the jointcontrol which the applicant was therefore to exercise with RTL over HMG, inagreement with Veronica, the applicant had henceforth ensured a vast market forits production. Without that structural link it would have been realistic to envisagethe possibility of other producers providing a much larger proportion of HMG'sadditional programme requirements. It was not possible for any other producer inthe Netherlands to benefit from a guaranteed outlet for its productions nor toinfluence a broadcaster's programme acquisition policy. That conclusion could onlybe reinforced by the terms of the production agreement (see paragraph 18 above). 168. Furthermore, the parties themselves had stated that the supply relationship linkingthe applicant to RTL and Veronica was a major factor in determining the imageof RTL 4, RTL 5 and Veronica and that it would be equally important for thesuccess of HMG. They had also acknowledged that the purpose of theconcentration was partly to enable the applicant to reduce the risk to which it wasexposed in producing new programme formats, in that the concentration wouldensure that the applicant's income from the new formats was maximised. It wastherefore reasonable for the Commission to conclude that the applicant wouldprovide its most promising programmes or those of proven appeal to HMG, to thedetriment of other broadcasters. 169. In those circumstances, the Court finds that the applicant has not proved that theCommission exceeded the limits of its discretion or that it manifestly erred whenit concluded that the effect of the concentration would be to strengthen theapplicant's dominant position in the market for independent Dutch-languagetelevision production in the Netherlands and that effective competition in themarket would thus be significantly hindered. 170. It follows that this argument must be rejected and, therefore, that the applicationmust be dismissed in its entirety. Costs 171. Under Article 87(2) of the Rules of Procedure, the unsuccessful party is to beordered to pay the costs if they have been applied for in the successful party'spleadings. Since the applicant has been unsuccessful it must, having regard to thedefendant's pleadings and to the order of the President of the Fourth Chamber,Extended Composition, of 7 October 1996, be ordered to bear, in addition to itsown costs, one fifth of those incurred by the defendant before the withdrawal ofVeronica, RTL, CLT and VNU together with all of those incurred by the defendantafter their withdrawal. On those grounds, THE COURT OF FIRST INSTANCE (Fourth Chamber, ExtendedComposition), hereby: 1. Dismisses the application; 2. Orders the applicant to bear, in addition to its own costs, one fifth of thecosts incurred by the defendant until the withdrawal of the parties on7 October 1996 together with all of those incurred subsequently. Lindh García-Valdecasas Lenaerts Cooke Jaeger Delivered in open court in Luxembourg on 28 April 1999. H. Jung P. Lindh Registrar President 1: Language of the case: English.