Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE  
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel,   BELGIË  
 
Tel: +32 229 -91111. Fax: +32 229 -64301. E -mail: COMP -MERG ER-REGISTRY@ec.europa.eu . 
 EUROPEAN COMMISSION  
 
 
 
 
 
Brussels,  22.10.2018  
C(2018 ) 7042 final  
  
 
 
 
 
 
 To the notifying party:  
 
Subject : Case M. 9060 – HP / Apogee  
Commission decision pursuant to Article 6(1)(b) of Council 
Regulation No  139/20041 and Article 57 of the Agreement on the 
European Economic Area2 
Dear Sir or Madam,  
(1) On 17 September 2018 , the European Commission received notification of a 
proposed concentration pursuant to Article 4 of the Merger Regulation by which 
HP Inc. ( "HP", United States) acquires within the meaning of Article 3(1)(b) of 
the Merger Regulation sole control of the wh ole of Apogee Group Limited 
("Apogee ", United Kingdom) .3 HP is designated hereinafter  as the "Notifying 
Party " and HP and Apogee are collectively referred to as "Parties ". 
1. THE PARTIES  
(2) HP is a US -based multinational technology company that manufactures and sells 
electronic devices, including personal computers and printers. HP markets inkjet 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation '). With effect from 1 December 2009,  the Treaty on 
the Functioning of the European Union ( 'TFEU ') has introduced certain changes, such as the 
replacement of  'Community ' by 'Union ' and 'common market ' by 'internal market '. The terminology of 
the TFEU will be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement').  
3  Publication in the Official Journal of the European Union No C 340 , 24.09.2018 , p. 13.  In the published version of this decision, some 
information has been omitted pursuant to Article 
17(2) of Council Regulation (EC) No 139/2004  
concerning non -disclosure of business secrets and 
other confidential information. The omissions are 
shown thus […]. Where possible the information 
omitted has been replaced by ranges of figures or a 
general description.  PUBLIC VERSION  
2 and laser printers geared towards a range of needs to consumers and businesses. 
HP's offerings include personal computing and other access devices; and imaging 
and print ing-related products and services.  
(3) Apogee is a provider of managed print services ( "MPS ") to business users 
primarily in the United Kingdom. Its MPS offering comprises a flexible 
combination of hardware, consumables, software, maintenance, workflow 
managem ent, consulting, training and other related services.  
2. THE OPERATION  
(4) Pursuant to a sale and purchase agreement entered into on 1 August 2018 ( "the 
SPA"), HP will acquire control of Apogee through the acquisition of an ultimate 
indirect shareholding of at least 90% of the share capital of Manzana Holdings 
Limited (the holding co mpany through which the Sellers4 hold their interest in 
Apogee) ( "the Proposed Transaction "). Following completion of the Proposed 
Transaction, 100% of the shares in the capital of M anzana Holdings Limited 
which bear a right to vote will be held by Perigee Midco UK Limited, a wholly 
owned subsidiary of HP.   
(5) The Proposed Transaction will result in Albacore Holdings Jersey Ltd (a private 
limited company established by HP and incorporat ed in Jersey) ( "Jersey TopCo "), 
indirectly holding (through Perigee Midco UK Limited) 100% of the shares of 
Manzana Holdings Limited. [Details relating to the structure of the proposed 
acquisition] . 
(6) A shareholders’ agreement will be entered into in relatio n to the Proposed 
Transaction upon completion ( "the Shareholders’ Agreement "), under which [a 
direct subsidiary of HP]  will have exclusive voting rights. […]. 
(7) Under the Shareholders’ Agreement, there is no limit on the number of directors 
on Jersey TopCo’s  Board (and therefore the number of directors that HP can 
appoint). However, the current intention is that at completion there will be […] 
directors: HP will appoint […] directors while the two current joint -CEOs of 
Apogee (Robin Stanton -Gleaves and Jason Collins) will be entitled to remain as 
joint-CEOs and be appointed as directors of Jersey TopCo. This right is personal 
to […]. Strategic decisions will be taken at board level and voting at board 
meetings will be made on a simple majority basis, meaning t hat HP appointed 
directors will have control of the Board and there are no reserved matters relating 
to strategic day to day commercial decisions which require greater than simple 
majority votes to pass. HP is also responsible for [….] . 
(8) The Proposed Transa ction therefore constitutes a concentration pursuant to 
Article 3(1)(b) of the Merger Regulation.  
                                                 
4  The Sellers are Euroblue Investments Limited, certain funds ( "the Equistone Funds ") managed by 
Equistone Partners Europe Limited ( "Equistone ") and various other management and employee 
sellers ( "the Sellers "). The Equistone Funds are: Equistone Partners  Europe Fund V "A" L.P., 
Equistone Partners Europe Fund V "B" LP, Equistone Partners Europe Fund V "C" L.P., Equistone 
Partners Europe Fund V "D" L.P., Equistone Partners Europe Fund V "E" L.P., Equistone Partners 
Europe Fund V "F" L.P., Equistone Partners  Europe Fund V "G" L.P., Equistone V Excess L.P., and 
Europe Equity V.  
3 3. EU DIMENSION  
(9) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 5 000 million5 (HP: EUR 46 868.09 million; Apogee: EUR […] 
million). Each of them has an EU -wide turnover in excess of EUR 250 million 
(HP: EUR […] million; Apogee: EUR […] million), but they do not achieve more 
than two -thirds of their aggregate EU -wide turnover within one and the same 
Member State.  
(10) The Prop osed Transaction  therefore has an EU dimension  pursuant to  Article 1(2) 
of the Merger Regulation . 
4. RELEVANT MARKETS  
4.1. Structure of supply of printers and MPS  
(11) Apogee is active in the provision of MPS direct to its customers, while HP’s 
focus is on the sale of printers (usually via distributors and resellers). Only a 
small portion of HP’s business involves direct sales of branded printers to 
customers and/or the provision of MPS (which is generally limited to large global 
enterprise customers). As a result, HP i s primarily active “upstream” of Apogee, 
and sells to Apogee the printer hardware that forms part of Apogee’s supply of 
MPS.   
(12) A simplified overview of the structure of supply in the markets in which HP and 
Apogee operate is set out as Figure 1 below:  
Figu re 1: Structure of supply of printers and MPS  
 
 
Source: Form CO  
                                                 
5  Turnover calculated in accordance with Article 5 of the Merger Regulation .  

4 4.2. Printers  
(13) In previous decisions6, the Commission distinguished the regular format printers 
which use A3 and A4 papers from the large format printers which function on A2 
or larger papers and other supports.7 The Notifying Party does not disagree with 
this finding.   
(14) Respondents to t he market investigation confirmed that this is still a valid 
distinction  due to different applications and sales channels of regular and lar ge 
format printers .8   
(15) In line with its previous decisional practice, for the purpose of this decision, the 
Commission considers that the supply of large format printers should be 
distinguished from the supply of regular format printers.  The following sect ions 
discuss any possible further sub -segmentation of the market for regular format 
printers and large format printers.  
4.2.1.  Supply of regular format printers  
4.2.1.1.  Product market definition  
(16) In previous decisions, the Commission considered distinctions between single -
function and multi -function printers, but ultimately left the product market 
definition open in this regard.9 The Commission considered that the supply of 
mono (black and white) and of colour regular format printers belong to the same 
relevant produ ct market.10 As to a further segmentation based on printer speed 
ranges measured by the output of pages per minute (ppm), the Commission left 
the exact product market definition open.11 The Commission also looked into the 
possible segmentation of printers by  page format (that is to say, A3 printers and 
A4 printers) ultimately leaving the exact product market definition open.12  
(17) The Notifying Party submits that printers with different speed, colour, 
functionalities, etc. belong to the same market for regular fo rmat printers as the 
boundaries between the different segments of the regular format printer market 
are becoming increasingly blurred due to technological developments. In any 
                                                 
6  Commission decision of 22 December 2009 in Case M.5672 Canon/Océ , paragraphs 13 and 14; 
Commission deci sion of 4 April 2017 in Case M.8254 HP/Printer Business of Samsung Electronics , 
paragraph 16.  
7  In HP/Samsung , the Commission considered that the supply of branded office automation 
equipment belongs to a separate relevant market than that of the supply o f unbranded office 
automation equipment. As Apogee is neither a manufacturer nor a buyer of unbranded printers, this 
market will not be considered further in this decision . 
8  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 September  2018, question 4.  
9  Commission decision of 4 April 2017 in Case M.8254 HP/Printer Business of Samsung Electronics , 
paragraph 28. The Commission also considered that a distinction could be made between single 
function office equipment (SFPs) and multifunc tional peripherals (MFPs) , in Commission decision 
of 22 December 2009 in Case M.5672 Canon/Océ , paragraphs 16 to 19  and Commission decision of 
19 January 2010 in Case COMP/M.5666 Xerox/ Affiliated computer services , paragraphs 20 -29. 
With regard to the dis tinction between single function devices, the Commission considered that 
photocopiers, printers and fax machines may constitu te three distinct product markets  in Case 
M.4434 Ricoh/Danka  of 8 December 2006.  
10  HP/Samsung, paragraph 36.  
11  HP/Samsung, paragraph 44.  
12  HP/Samsung, paragraph 51.  
5 case, the Notifying Party submits that the exact market definition can be left o pen 
as it does not affect the outcome of the assessment of the Proposed Transaction.  
(18) The market investigation test ed whether any segmentations of regular format 
printers (e.g. based on single function vs. multifunctional equipment, mono vs. 
colour format p rinters, speed ranges, A3/A4 format) would be appropriate. A 
majority of printer suppliers stated that a further segmentation was not 
appropriate  due to similarities in customer applications.13  
(19) However, for the purpose of the present decision, the question  whether the 
product market consists of all regular format printers or whether separate markets 
exist for  any segmentations of regular format printers can be left open as the 
Proposed Transaction does not raise serious doubts  as to its compatibility with t he 
internal market  under any plausible market definition , including the narrowest 
possible markets for (i) single function or multifunctional equipment, (ii) mono 
(black&white) and color regular format printers; (iii) segments based on speed 
measured by th e output of pages per minute (ppm) namely personal devices 
(speed up to 10 or 20 ppm for mono and up to 20 ppm for colour), office devices 
(speed between 11 -20 and 90 ppm for mono and 20 – 50 ppm for colour) and 
commercial/production devices (speed over 90  ppm for mono and a bove 50 for 
colour); (iv) A3 and A4 regular format printers . 
4.2.1.2.  Geographic market definition  
(20) In HP/Samsung , the Commission considered that there were clear indications that 
the relevant markets are wider than national or even EEA wide, ulti mately leaving 
the question open.14  
(21) The Notifying Party submits that the relevant geographic market should be 
defined as EEA -wide, given that: (i) OEMs have manufacturing facilities in Asia 
and other global regions from where they ship their products aroun d the world; 
(ii) transportation costs are relatively low for worldwide shipping of printers; (iii) 
there are no import or export quota restraints or other material trade barriers; (iv) 
major distributors in the EEA resell printers in multiple countries, w hile some of 
them also cover the distribution logistics for several countries with one 
warehouse; (v) OEMs generally price on an EEA or even wider basis following 
standard price lists; and, (vi) product characteristics of printers do not vary 
significantly  in the EEA or throughout the world.  
(22) The market investigation indicated that the geographic scope of the market may 
be wider than national , as a majority of p rinter suppliers are able to supply to 
other countries in the EEA15 and a majority of customers would consider sourcing 
printers from a supplier that is active in another country in the EEA.16  
(23) In conclusion, in spite of the fact that current sourcing patterns  for regular format 
printers  are usually at national level, there are clear indications that the relevant 
markets are wider than national or even EEA wide.  However, for the purpose of 
                                                 
13  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 September 2018, question 5.  
14  HP/Samsung , paragraph 59.  
15  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 Septembe r 2018, question 8.  
16  Replies to questionnaire Q3 – Questionnaire to enterprise customers of 19 September 2018, 
question 5.  
6 the present decision the question whether the relevant geographic  market 
definition is national or EEA -wide can be left open as the Proposed Transaction 
does not rai se serious doubts  as to its compatibility with the internal market  under 
any plausible market definition , including the narrowest possible national market . 
4.2.2.  Supply of large format printers  
4.2.2.1.  Product market definition  
(24) Large format printers can be used by custo mers: (i) to print signage and display 
items (posters, banners, rigid signs, vehicle and building wraps and packaging); 
(ii) to print large format photos and posters; (iii) for print proofing; and (iv) for 
computer aided design (CAD)17. In addition, large f ormat printers will vary 
depending on the printing technology used, the type and size of media they can 
print on, and their printing capacity.  
(25) In Canon/Océ ,18 the Commission analysed the transaction by distinguishing 
between graphic arts (GA)19 and CAD appli cations but did not reach any 
conclusions as to the exact boundaries of the product market.  
(26) The Notifying Party submits that there is no need to reach a conclusion as to 
whether GA and CAD printers are part of separate markets, as the Proposed 
Transaction will not raise any concerns on any plausible market definition.  
(27) During the market investigation a majority of printer suppliers indicated that  a 
segmentation between large format printers for GA and CAD applications is still 
relevant due to different appli cations of each segment.20  
(28) However, for the purpose of the present decision, the question whether the 
product market consists of all large format printers or whether separate markets 
exist for  any segmentations of large format printers (e.g. for GA and CAD  
applications ) can be left open as the Proposed Transaction does not raise serious 
doubts  as to its compatibility with the internal market  under any plausible market 
definition , including the narrowest possible markets for GA printers and CAD 
printers . 
4.2.2.2.  Geographic market definition  
(29) In Canon/Océ21, the Commission noted that in spite of the fact that sourcing 
patterns are usually at national level, there are clear indications that the market for 
office equipment is wider than national if not EEA -wide. Ultimatel y, the 
Commission left the precise geographic market definition open.  
(30) The Notifying Party submits that the relevant geographic market should be 
defined as EEA -wide.  
                                                 
17  Typical CAD applications are technical line drawings, maps, (architectural) renderings and 
illustration, supporting photographs (to a limited extent) as well as (mainly indoor) posters . 
18  Commission decision of 22 December 2009 in Case M. 5672, Canon/Océ, para 39.  
19      Typical applications include display materials, advertising material and signage  
20  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 September 2018, question 6.  
21  Canon/Océ , paragraph 47.  
7 (31) The market investigation indicated that the geographic scope of the market may 
be wider tha n national , as a majority of printer suppliers are able to supply to 
other countries in the EEA22 and a majority of customers would consider sourcing 
printers from a supplier that is active in another country in the EEA.23  
(32) In conclusion, in spite of the fac t that current sourcing patterns  for large format 
printers  are usually at national level, there are clear indications that the relevant 
markets are wider than national or even EEA wide . However, for the purpose of 
the present decision  the question whether the relevant geographic market 
definition is national or EEA -wide can be left open as the Transaction does not 
raise serious doubts  as to its compatibility with the internal market  under any 
plausible market definition , including the narrowest possible national market.  
4.2.3.  Managed Print Services  
4.2.3.1.  Product market definition  
(33) MPS offerings cover a broad spectrum of solutions, comprising a flexible 
combination of hardware, consumables, software, maintenance, workflow 
management, consulting, training and other rela ted services. These related 
services may include remote monitoring and management services, audit and 
advice on fleet management, software supply, outsourced provision of document 
production, mailroom services, cloud services, etc. Generally MPS providers will 
enter into multi -year and bespoke agreements with customers to provide some or 
all of these services depending on customer need and preference, and MPS 
providers are broadly able to customise the service offering according to the 
customer’s requiremen ts. At the very least, MPS providers will therefore provide 
the customer with access to hardware (i.e. the printer and consumables) and then 
a range of related added -value features, to provide an overall MPS arrangement.  
(34) The Notifying Party submits that – even though IDC appears to distinguish 
between  "basic " and a "sophisticated / managed " MPS offering s – it is not 
appropriate (or indeed possible) to segment MPS by different types of value 
added services that a customer may choose to contract for. Accordin g to the 
Notifying Party, from a demand side perspective, customers regularly assess their 
MPS needs and are able to shift between different types of MPS (and vice -versa) 
depending on their on -going requirements. From a supply side perspective, all 
MPS sup pliers are able to offer a range of services depending on specific 
customer needs. There is a wide variety of MPS suppliers, and each MPS supplier 
offers several solution packages depending on customer requirements. For the 
more sophisticated services, an MPS provider will often partner with specialised 
companies, like software vendors, which enable them to expand their range of 
service offerings at little or no incremental cost and time. In each case, the key 
value that the MPS supplier adds is not so much  the individual underlying 
printers, consumables, and software and systems, but assembling these into a 
package that acts as a finished ‘solution’ for a client’s printing and document 
needs, and ensuring that this ‘solution’ remains functional.  
                                                 
22  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 September 2018, question 8.  
23  Replies to questionnaire Q3 – Questionnaire to enterprise customers of 19 September 2018, 
question 5.  
8 (35) During the market investigation a majority of printer suppliers , MPS providers 
and enterprise customers  stated  that MPS are different based on the size of the 
business .24 Several respondents stated that large enterprise clients need more 
sophisticated services, such a s extensive printer fleet management services.25  
(36) However, the majority of printer suppliers  and MPS providers  is able to provide 
both basic and more sophisticated types  of MPS depending on the customer's on -
going requirements 26 and a majority of customers is able to shift between these 
different types of MPS depending on their needs.27 For this reason , for the 
purpose of the present decision , the Commission will assses the Transaction in a 
market encompassing all MPS.  
4.2.3.2.  Geographic market definition  
(37) The Notifying Party submits that the relevant market is that for MPS on an EEA 
basis as demand for MPS is driven primarily by the range of services required by 
the customer and the size of a customer’s business. For example, HP and other 
OEMs enter into MPS agreements that are EEA -wide, if not global, in scope with 
very large enterprise customers (such as major banks and multinational 
corporations). According to the Notifying Party, local or mid -sized national 
businesses are more likely to  make purchasing decisions at a regional level, and 
be concerned about consistency across a regional business (and regional 
customisation): they are more likely to procure MPS from resellers, such as 
Apogee, that operate at a national level as well as from  certain OEMs, such as 
Xerox, that have expanded into servicing these types of business either through 
acquisition or an expansion of their MPS network. Smaller regional MPS 
providers would be competitively constrained by the national providers, but, in 
each case, there is competition ‘upwards’ and ‘downwards’ from the different 
sized suppliers in the market.  
(38) The market investigation provided mixed results as to the geographic market for 
MPS. Different MPS suppliers supply at different geographic levels, i.e. either 
worldwide, in the EEA or at the national level28 and only MPS suppliers already 
active internationally could start supplying in other countries.29 A majority of 
printer suppliers who replied during the market investigation supply MPS on 
EEA -wide ba sis.30, and a  majority of these printer suppliers also stated that they  
                                                 
24  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 September 2018, question 11; 
Replies to questionnaire Q2 – Questionnaire to providers of managed print services of 19 September  
2018, question 4; Replies to questionnaire Q3 – Questionnaire to enterprise customers of 19 
September 2018, question 8.  
25  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 September 2018, question 
11.1; See also Replies to questionna ire Q3 – Questionnaire to enterprise customers of 19 September 
2018, question 8.1.  
26  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 September 2018, question 12; 
Replies to questionnaire Q2 – Questionnaire to providers of managed pr int services of 19 September 
2018, question 5.  
27  Replies to questionnaire Q3 – Questionnaire to enterprise customers of 19 September 2018, 
question 9.  
28  Replies to questionnaire Q2 – Questionnaire to providers of managed print services of 19 September 
2018, question 6.  
29  Replies to questionnaire Q2 – Questionnaire to providers of managed print services of 19 September 
2018, question 7.  
30  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 September 2018, question 9.  
9 could not start supplying MPS to end -customers outside the EEA .31 A majority of 
enterprise customers purchase MPS from suppliers located in the same EEA 
Member State where they are located32 but would consider purchasing from a 
MPS supplier active in another country in the EEA.33  
(39) For the purpose of the present decision , the question whether the geographic 
market for MPS is national or wider can be left open as the Transaction does not  
raise serious doubts  as to its compatibility with the internal market , under any 
plausible geographic market definition , including the narrowest possible national 
market . 
5. COMPETITIVE ASSESSMEN T 
5.1. Horizontally affected markets34 
5.1.1.  Regular format printers  
(40) The Proposed Transaction gives only rise to a horizontally affected market in the 
supply of regular format printers.35 The Parties’ combined market share of regular 
format printers (on the basis of direct sales to end -users) does not exceed [0-5]% 
on the ma rket for the supply of regular format printers across the EEA and would 
not exceed [10-20]% for sales in the UK alone. Considering narrower product 
categories (split by function, speed, colour; and split by A3/A4 and inkjet/laser) 
no affected markets arise in the EEA or in the UK, except for one sub -segment 
(SFP, colour, > 45ppm) in the UK, in which however the increment to Apogee’s 
[30-40]% share is less than [0-5]%: this reflects the fact that HP sold only […] 
printers directly to end -users in 2017.  
(41) The Notifying Party submits that the Proposed Transaction does not raise 
horizontal concerns in  the supply of regular format printers at an EEA and UK 
level since sufficient competition will remain to prevent any harm to competition 
occurring as a result of the Proposed Transaction. According to the Notifying 
Party, HP’s closest competitors for the supply of regular format printers are the 
                                                 
31  Replies to qu estionnaire Q1 – Questionnaire to printer suppliers of 19 September 2018, question 10.  
32  Replies to questionnaire Q3 – Questionnaire to enterprise customers of 19 September 2018, 
question 6.  
33  Replies to questionnaire Q3 – Questionnaire to enterprise cus tomers of 19 September 2018, 
question 7.  
34  The market shares in this section are based on the Parties' direct sales to end -consumers.  
35  The Proposed Transaction does not give rise to a horizontally affected market in the supply of large 
format printers. The Parties’ combined share printers (on the basis of direct sales to end -users) does 
not exceed [5-10]% on the market for the supply of large format printers across the EEA or the UK. 
For printers for CAD applications, the Parties’ combined share does not  exceed [5-10]% across the 
EEA and would not exceed [5-10]% in the UK. For printers for GA applications, the Parties’ 
combined share is below [0-5]% across the EEA or the UK.  In addition, in both the EEA and the 
UK, the share of Apogee is below [0-5]% (re flecting the fact that it sold a total of […] large format 
printers over the three year period 2015 -2017). The horizontal overlap in the supply of large format 
printers will therefore no longer be discussed in this Section.  Similarly, the Proposed Transact ion 
does not give rise to a horizontally affected market in the supply of MPS. The Parties’ combined 
share on this market (on the basis of direct sales to end -users) does not exceed [5-10]% on the 
market for the supply of MPS across the EEA (HP: [0-5]%; Ap ogee: [0-5]%) and would be below 
[10-20]% for sales in the UK alone (HP: [0-5]%; Apogee: [10-20]%). The horizontal overlap in the 
supply of MPS will also not be discussed further in this Section.  
10 other OEMs, which are large multinational competitors with established business 
connections throughout the EEA, including Ricoh, Canon, Konica Minolta, 
Kyocera, Xerox, Epson and Brother, all of which have shares of  over 5% 
throughout the EEA and exert significant competitive pressure on HP throughout 
the EEA. The Notifying Party submits that Apogee has a minimal market share in 
the supply of regular format printers and only sold […] large format printers in 
the EEA in 2017.  
(42) The Commission considers that the Proopsed Transaction does not raise serious 
doubts  as to its compatibility with the internal market  in the supply of r egular 
format printers, for the following reasons.  
(43) First, as described above (see recital (40)), irrespective of the precise product and 
geographic ma rket definition, the combined market shares of HP and Apogee lead 
to an affected market only  in a one sub -segment (SFP, colour, > 45ppm) in the 
UK. The increment to Apogee’s [30-40]% share is less than [0-5]%. Therefore, 
the competitive conditions that would result from the merger are not materially 
different from those that would have prevailed absent the merger. This follows 
from the fact that HP only sells a very limited amount of printers directly to end -
users.  
(44) Second, the market investigation confirmed that post-Transaction there will be a 
sufficient number of suppliers of regular format prin ters to ensure the same level 
of competition in the market as today and ensure choice for customers , as is 
confirmed by a majority of competitors and customers .36 A majority of 
competitors37 and customers38 consider that the likely impact of the Proposed 
Transaction on the intensity of competition in the market for the supply of regular 
format printers, will either remain the same or will increase.   
5.2. Vertically affected markets39 
(45) The Proposed  Transaction would give rise to s everal vertical r elationships. In 
particular, HP is primarily active upstream of Apogee and sells to Apogee the 
printer hardware that forms part of Apogee's supply of MPS.  
(46) According to the Non -Horizontal Merger Guidelines, foreclosure occurs when 
actual or  potential rivals’ access to supplies or markets is hampered, thereby 
                                                 
36  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 September 2018, question 1 7 
and 18 ; Replies to questionnaire Q2 – Questionnaire to providers of managed print services of 19 
September 2018, question 5.  
37  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 September 201 8, questions 14 
and 15.  
38  Replies to questionnaire Q3 – Questionnaire to enterprise customers of 19 September 2018, 
questions 11 and 12  
39  The market shares in this section are based on the HP's total sales of regular and large format 
printers in the EEA and the UK through all routes to market ( i.e. its "upstream" sales or 
direct/indirect sales to end -users). This includes sales of HP printers made through resellers, such as 
Apogee.  
11 reducing those companies’ ability and/or incentive to compete. Such foreclosure 
may discourage entry or expansion of rivals or encourage their exit.40 
(47) The Non -Horizontal Merger Guidelines  distinguish between two forms of 
foreclosure: input foreclosure occurs where the merger is likely to raise the costs 
of downstream rivals by restricting their access to an important input and 
customer foreclosure occurs where the merger is likely to forec lose upstream 
rivals by restricting their access to a sufficient customer base.41 
(48) In order for foreclosure to be a concern, three conditions need to be met post - 
merger: (i) the merged entity needs to have the ability to foreclose its rivals42 ; (ii) 
the mer ged entity needs to have the in centive to foreclose its rivals43; and (iii) the 
foreclosure strategy needs to have a significant detrimental effect on the 
parameters of competition on the downstream market (input foreclosure)44 or on 
consumers (customer fore closure). In practice, these factors are often examined 
together since they are closely intertwined.45 
(49) The Commission examined whether the Proposed Transaction could give rise to a 
possible risk of input foreclosure for the supply of large and/or regular fo rmat HP 
printers exclusively to Apogee to the detriment of other downstream providers of 
MPS. In addition, the Commission assessed the risk of a possible customer 
foreclosure for HP's competitors  provided that the merged entity would  stop 
acquiring large a nd/or regular format printers from other printer suppliers and 
exclusively rely on the printers provided by HP.  
5.2.1.  Regular format printers  
(50) On the potential market for the supply of all regular format printers to MPS 
providers that rely on purchasing regular f ormat printers from the OEMs, no 
vertically affected market arises (neither in the EEA nor the UK) on the basis of 
value shares  (i.e. market shares based on sales value). HP's share is moderate in 
the EEA and in the UK (at [20-30]% and [20-30]%, respectively). In HP/Samsung  
the Commission used shares by value as the appropriate metric by which to assess 
market power in these markets.  
(51) However, vertically affected markets arise for the supply of all regular format 
printers if market power were to  be assessed on the basis of volume shares  as 
HP’s share would be [40-50]% (EEA) and [40-50]% (UK).  
(52) In addition, in a number of sub -segments for the supply of regular format printers 
segmented by function, speed and colour, HP has market shares above 30%. 
Vertically affected markets arise in most of these sub -segments as shown Table 1 
below. Although HP’s market share is [60-70]% in the EEA and [60-70]% in the 
                                                 
40  Guidelines on the assessment of non -horizontal mergers under the Council Regulation on the 
control of concentration between undertakings (the Non -Horizontal Merger Guidelines) OJ C 265/6, 
18.10.2008, paragraphs 29 -30. 
41  See Non-Horizontal Merg er Guidelines, paragraph 30.  
42  See Non-Horizontal Merger Guidelines, paragra phs 33 to 39 and 60 to 67 . 
43  See Non -Horizontal Merger Guidelines, paragraphs 40 to 46 and 68 to 71.  
44  See Non -Horizontal Merger Guidelines, paragraphs 47 to 57.  
45  See Non -Horizontal Merger Guidelines, paragraphs 72 to 77.  


14 would exclusively supplylarge and/or regular  format HP printers, regardless of 
any further segmentation , to Apogee to the detriment of other downstream 
providers of MPS .  
(62) First, with regard to the ability  to engage in input foreclosure, the merged entity 
does not appear to have a significant degree of market power in the ups tream 
market for the supply of regular format printers . Based on the Notifying Party’s 
submission, o ther suppliers of branded regular format printers in the EEA, i.e. 
Ricoh, Canon and Konica Minolta all have shares above 10% in the EEA and the 
UK, and other significant OEMs have shares between 5% and 10 %. The market is 
fragmented with no player having a share of over 25%.  HP’s competitors can all 
manufacture or acquire unbranded  printers, and their distribution systems will 
enable them to supply printers throughout the EEA. With the established reliance 
on unbranded printers and good supply -side substitutability, price increases by 
OEMs can easily be met by increased supply from competitors .  
(63) Second, with regard to large format printers, based on the Notifying Party’s 
submission, there are other competito rs such as Canon (with a [20-30]% share at 
an EEA level and [10-20]% share at a UK level), Epson, and the wide format 
specialist OEMs, Mimaki, Roland and EFI, with shares of greater than [0-5]% at 
both the EEA and UK level.  
(64) Third , as discussed above, there appear to be a number of competitors to HP's 
printer business which could provide alternatives to the merged entity , nota bly 
Canon which suppies regular format and large format printers . A majority of MPS 
providers indicated tha t they already source regular format and large format 
printers from other manufacturers (such as Konica Minolta, Canon, Ricoh, 
Kyocera and others) .47  
(65) Fourth , with regard to the incentive  to engage in any input foreclosure,  the 
Commssion considers that, bas ed on the Notifying Party’s submission, t he 
combined entity’s share in the MPS market would only be moderate and therefore 
HP would not be incentivised to implement an input foreclosure strategy that 
would prevent  other resellers from selling HP printers t o the market. Furthermore, 
in accordance with the Notifying Party’s submission, despite HP having a higher 
share than some of its OEM rivals large format printers, Apogee’s sale of large 
format printers related to its MPS offering is de minimis (having sol d only […] 
printers in the EEA during 2017) ruling out any potential benefit for HP of by 
implementing an input foreclosure strateg y. 
(66) Fifth, during the market investigation, a majority of MPS providers responding to 
the market investigation consider that t he merged entity could or would not 
engage in input foreclosure.48 For instance, a  competitor indicated that "HP 
products will be available to a multitude of resellers and dealers" . Another 
competitor indicated that “whilst Apogee is a large reseller, I do not consider it to 
                                                 
47  Replies to questionnaire Q2 – Questionnaire to providers of managed print services of 19 September 
2018, question 2.  
48  Replies to questionnaire Q2 – Questionnaire to providers of managed print services of 19 September 
2018, question 11.  
15 be large enough to fulfill the requirements of HP, and therefore HP will need to 
also supply other resellers ”.49 
(67) Based on the above, the Commission concludes that the Proposed Transaction 
does not give rise to serious doubts as to its compatibility with the internal market 
in relation to input foreclosure in light of the vertical link between the u pstream 
market for regular and large format printers  and the downstream market for MPS.   
5.2.4.  Custo mer foreclosure  
5.2.4.1.  Notifying Party's views  
(68) The Notifying Party submits that the Parties lack the ability and incentive to 
foreclose printer suppliers from access to key customers.  
(69) First, a ccording to the Notifying Party, the combined entity’s MPS business wil l 
not be an important customer on the downstream market for printers, given its 
low market shares on the downstream market for MPS both a worldwide, EEA 
and UK level. Moreover, large competitors will continue to place competitive 
pressure on the combined e ntity in the EEA and the UK. As […] of Apogee’s 
printers are sourced from OEMs other than HP/Samsung, if the combined entity 
purchased 100% of its printers post -Transaction from HP, the impact on the sales 
of other OEMs would be a reduction of less than [0-5]% of non -HP suppliers’ 
sales globally, or less than [0-5]% in the UK. Moreover, vertical integration 
protects competing printer suppliers from any attempted customer foreclosure 
strategy.  
(70) Second, t he Notifying Party submits that the merged entity would  lack the 
incentive to cease procuring products from upstream OEM rivals, as it could not 
capitalise on the increased profits that the combined entity could derive either at 
the upstream level (i.e. by increasing sales in the MPS market) or at the 
downstre am level (due to lessened competition as a result of the foreclosure 
strategy) for the following reasons:  (i) the combined entity’s share at the 
downstream level is low and foreclosure is unlikely to lead to higher profits at the 
upstream level based on a hypothetical increase in sales downstream; and; (ii) the 
downstream business relies on being able to offer customers a comprehensive 
‘print solutions’ offering, which includes access to a broad range of printers, 
services and value added products that are packaged together to fit a customer ’s 
bespoke MPS requirements.   
5.2.4.2.   Commission's assessment  
(71) The Commission considers that for the reasons set out below, the Proposed 
Transaction does not raise serious doubts as to its compatibility with the internal 
market with respect to potential customer foreclosure by which  the merged entity 
would stop acquiring large and/or regular format printers from other printer 
suppliers and exclusively rely on the printers provided by HP  for the provision of  
MPS .  
(72) First, with regard to the ability  to engage in a ny potential  customer foreclosure 
strategy, the m erged entity does not appear to have a significant degree of market 
                                                 
49  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 September 2018, question 20.  
16 power in the downstream market for the provision of MPS, irrespective of the 
precise geogra phic market definition.  
(73) Second, t here are other MPS competitors which will continue to exert competitive 
constraint on the merged entity post -Transaction. The market investigation results 
confirmed that MPS customers consider that Apogee’s market share is  low and 
that "less choice in the market will inevitably lead to increased competition” 
amongst the remaining players on the market .50 
(74) Third, based on the Notifying Party's submission, even if the merged entity  would 
source printers exclusively from HP, the  impact on the sales of other OEM 
providers would not  be significant .  
(75) Fourth, during the market in vestigation a competitor expressed the view that "HP 
cannot only resell through Apogee as their sales and market coverage through 
resellers is much bigger" .51 Another competitor  responding to the market 
investigation  indicated that that there is limited incentive for the merged entity to 
employ a possible foreclosure strategy as it would restrict the market on which it 
would operate and ther eby reduce sales.52 A majority of competitors responding 
to the market investigation consider that the merged entity would not have the 
ability and incentive to degrade the terms and conditions of the supply of regular 
format and/or large format printers.53  
(76) Fifth, with  regard to the incentive  to engage in any potential customer  foreclosure, 
the Commission considers that the combined MPS offerings of the merged entity 
would be impeded if they attempt a foreclosure strategy, while MPS competitors 
would remain free to offe r customers HP printers and services as well as a range 
of other branded printers from HP’s OEM competitors and an assortment of 
bundled services (some proprietary and some contracted from other providers 
such as document software providers).  
(77) A majority of  MPS providers responding to the market investigation consider that 
the merged entity will not have an incentive to engage in a customer foreclosure 
strategy because the one supplier approach would limit their market 
opportunities .54 For instance, one compe titor expressed the view that "the 
company Apogee is a service provider and the success of the company is among 
others the great manufacturer portfolio, The customers who need an appropriate 
solution will certainly also get the right products offered in th e future for their 
requirements. Therefore, [we] think that in the future Apogee will focus more on 
HP products but will also continue to market the other manufacturers with 
appropriate solutions" .55 
(78) Based on the above, the Commission concludes that the Pro posed Transaction 
does not give rise to serious doubts as to its compatibility with the internal market 
                                                 
50  Replies to questionnaire Q2 – Questionnaire to providers of managed print services of 19 September 
2018, question 10.  
51  Replies to questionnaire Q1 – Questionnaire  to printer suppliers of 19 September 2018, question 20.  
52  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 September 2018, question 20.  
53  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 September 2018, question 21.  
54  Replies to questionnaire Q2 – Questionnaire to providers of managed print services of 19 September 
2018, question 11.  
55  Replies to questionnaire Q1 – Questionnaire to printer suppliers of 19 Sept ember 2018, question 22.  
17 in relation to customer foreclosure in light of the vertical link between the 
upstream market for regular and large format printers  and the downstream m arket 
for MPS.   
6. CONCLUSION  
(79) For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal  market and with 
the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of 
the Merger Regulation and Article 57 of the EEA Agreement . 
For the Commission  
(Signed)  
Margrethe VESTAGER  
Member of the Commission