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, 24.02.2022  
C(2022 ) 1255 final  
PUBLIC VERSION  
 
State Street Corporation  
1 Lincoln Street, Floor 8  
Boston, MA 02111 -2901  
United States  of America  
Subject : Case M. 10499  – STATE STREET / BBH (INVESTOR SERVICES 
BUSINESS)  
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 24 January 2022 , the European Commission received notificat ion of a proposed 
concentration pursuant to Article 4 of the Merger Regulation by which State Street 
Corporation  (“State Street ”, US) intends to acquire  within the meaning of Article 
3(1)(b) of the Merger Regulation sole control of Brown Brothers Harriman & Co. ’s 
(“BBH ”, US) investor services  business (the “ Target ”) (the “ Transaction ”) by way 
                                                 
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’).  
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information omitted has been replaced by 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.  
 
2 of purchase of shares and assets .3 State Street  is referred to as the “ Notifying Party ” 
and, together with the Target , the “ Parties ”. 
1. THE  PARTIE S  
(2) State Street is based in Boston and is active in the field of financial services and, 
more specifically, in the provision of domestic and global securities services to 
support institutional investors in developing and executing their global investment 
strategies. As a securities services provider, State Street provides an array of 
customised investment solutions to asset managers, pension funds, hedge funds, 
insurance companies, collective funds, mutual funds and non -profit organisations. 
These primarily comprise global  and local custody, fund administration, securities 
lending, investment manager operations outsourcing, recordkeeping, performance 
measurement and analytics and transfer agency services. State Street has more than 
39,000 employees and operates in more than  100 geographic markets worldwide, 
including in the United States, Canada, Europe, the Middle East and Asia.  
(3) BBH operates three primary lines of business: Investor Services (equivalent to State 
Street’s custody business), Private Banking and Investment Ma nagement. The 
investor Services  division i.e. the Target,  operates via its 17 offices across the US, 
Europe and Asia  and provides investment servicing, custody and safekeeping, 
agency , securities lending and borrowing, investment operations and technology 
solutions to its clients, which are primarily financial institutions and asset managers.   
As of June 30, 2021,  the Target serviced  total consolidated assets of approximately 
USD […], total assets under custody of USD 5.34 trillion and total assets under 
administration of USD […]. The Target is headquartered in New York and has 
approximately 4,700 employees, primarily operating from its offices in Boston, 
Jersey City, Kraków, Luxembourg, Dublin, Tokyo, Hong Kong and London (with 
smaller locations in Zurich, Beijing and Grand Cayman).  
2. THE  CONCE NTRATION  
(4) On 6 September  2021, State Street and BBH  entered into an agreement pursuant to 
which State Street  agreed to acquire from BBH  a combination of shares in, or assets 
from, certain of its European and Asian subsidiaries, together comprising  Target. 
Following completion of the Transaction, State Street  will thus acquire sole control 
of the Target. The Transaction is therefore a concentration within the meaning of 
Article 3(1)(b) of the EU Merger Regulation.  
3. UNION DIME NSION  
(5) The undertakings concerned have a combined aggregate worldwide turnover of more 
than EUR 5 000 million4 (State Street : EUR 8 533 million; Target : EUR […]). Each 
of them has a  Union -wide turnover in excess of EUR 250 million  (State Street : EUR  
[…]; Target : EUR […]), but they do not achieve more than two -thirds of their 
aggregate Union-wide turnover within one and the same Member State. The notified 
                                                 
3  Publication in the Official Journal of the European Union No C 54, 1.1.2022, p. 6.  
4  Turnover calculated in accordance with Article 5 of the Merger Regulation.  
 
3 operation therefore has a U nion dimension pursuant to Article 1(2) of the Merger 
Regulation . 
4. RE LEVANT MARKE TS  
(6) The Parties are both active in the supply of securities services (also sometimes 
referred to as investment servicing) to asset managers and institutional investors and, 
in the case of Target, high net  worth individual clients. Institutional cl ients include 
mutual funds, pension funds, alternative investors such as hedge funds and insurance 
companies.  
(7) The Commission has previously analysed securities services in a number of cases, 
distinguishing between: global custody, i.e. the service by whic h a custodian holds a 
range of assets/securities on behalf of a client; and fund administration, i.e. a range 
of outsourced investor services, different configurations of which are provided to 
sophisticated financial institutions and asset managers.  
4.1. Global  custody  
4.1.1.  Product market definition  
4.1.1.1.  Previous Commission decision s 
(8) In previous Commission decisions , global custody services have been held to include 
safekeeping of assets, presentation of securities for and reception of securities from 
clearing and settlem ent platforms, income and dividend processing, arranging of 
withholding tax relief and tax reclaim, other corporate actions such as notification 
and dealing with bonus issues, rights issues and takeovers, proxy voting services, 
sweeping of uninvested cash and transaction and portfolio reporting services.5 
Global custodians may also provide to their clients foreign exchange trading, 
securities lending, performance measurement and risk analysis, and management of 
cash accounts and cash funds linked to securit ies held in custody.   
(9) The Commission considered that these services all form part of a single product 
market but left open whether global custody should be systematically distinguished 
from local custody (sub -custody).6 Local custody (or sub -custody) refer s to the 
provision of custody services within a specific jurisdiction  (see section 4.2). 
(10) The Commission previously considered  whether a common product market for 
global custody and fund administration services exists , but left open the question .7 
4.1.1.2.  The Notifying Party’s  view  
(11) The Notifying Party  submit s that all services  mentioned in paragraph (8) form part 
of a single product market, which should not be further divided into segments. 
                                                 
5  M.5797 State Street / Intesa Sanpaolo, paragraph 11; M.3781 Crédit Agricole / Caisse D’Epargne, 
paragraphs 11 -14; M. 3027 State Street / Deutsche Bank, paragraphs 8 -10. 
6  M.5797  State Street / Intesa Sanpaolo , paragraph 12; M.3781 Crédit Agricole / Caisse D’Epargne, 
paragraphs 11 -14; M. 3027 State Street / Deutsche Bank, paragraph 10.  
7  M.5797 State Street / Intesa Sanpaolo, paragraphs 8 -9; M.3781 Crédit Agricole / Caisse D’Epa rgne  ; M. 
3027 State Street / Deutsche Bank.  
 
4 Notably, the Notifying Party  argue s that segmentations by customer type, fund type 
or asset type or volume of assets under management (“ AUM”) would not be 
appropriate. The Notifying Party submits that:  
(a) The services provided under global custody do not materially vary for any of 
these possible segments8;  
(b) All service providers can offer the services for each possible segment .9  
(c) Likewise, the ser vices are not materially different  depending on the segment . 
The specific mix of services rather depends on the individual needs of every 
client .10  
(12) The Notifying Party  regard s a combined market for global custody and fund 
administration as a plausible  product market definition as well,  as the two services 
are commonly provided together.11  
4.1.1.3.  The Commission’s assessment  
(13) Global custody comprises a broad set of services that can be different from client to 
client. Some of these services, such as safekeeping of assets, p resentation of 
securities for and reception of securities from, clearing and settlement platforms  and 
income and dividend processing  are considered as core global custody services by 
virtually all respondents  to the Commission’s market investigati on. Other services, 
such as proxy voting services and sweeping of uninvested cash are considered by a 
majority of respondents  as ancillary global custody services.12 However, the 
Commission did not get any indications that any of these services are sufficiently 
distinct so that they should be considered as separate product markets. As such, for 
the purposes of this Decision the Commission considers global custody to c omprise 
all the services mentioned in paragraph (8). 
(14) The majority of customers  that responded to the Commission’s market investigation 
do not choose different global custody service providers for different asset classes. 
However, some customers indicated that more niche asset classes may benefit from 
specific support and services from the global custodian.13 Similarly, the majority of 
competitors  that responded to the C ommission’s market investigation  either 
indicated that global custody services are broadly the same across asset types, or that 
there are slight differences, but that all major suppliers are able to serve all types of 
assets.14 As such, for the purposes of this Decision the Commission considers that a 
segmentation by asset class is not appropriate.  
(15) Concerning different customer types ( e.g. asset  managers vs. pension funds) , the 
majority of competitors  consider that global custody services are the same, 
                                                 
8  Form CO, paragraphs 96, 111.  
9  Form CO, paragraphs  108, 110.    
10  Form CO, paragraphs 96, 107, 112.  
11  Form CO, paragraph 102.  
12  Responses to questionnaire Q1 to customers, question 4  and questionnaire Q 2 to competitors, question 4 . 
13  Responses to questionnaire Q1 to customers, question 7. 
14  Responses to questionnaire Q2 to competitors, question 8 . 
 
5 regar dless of customer type.15 As such, for the purposes of this Decision the 
Commission considers that a segmentation by customer type is not appropriate.  
(16) To conclude , the Commission considers that global custody can be considered as a 
single heterogeneous mark et, with a set of services that may differ  slightly  
depending on client needs or asset type . 
(17) As concerns a combined market for global custody services and fund administration, 
the Commission’s market investigation confirmed that the majority of customers  
source global custody and fund administration together, as this is generally more 
efficient. However, not all customers source the two services together, for example 
in order to select a best in class service provider for each service , which may not be 
the same provider .16 Furthermore, there are slight differences in the competitive 
landscape for each service. For example, there are some non -bank fund 
administrators , who  cannot provide global custody as the latter requires a banking 
license.  
(18) In this case, it can be left open whether the appropriate product market definition is 
limited to global custody, or comprises a combined market for global custody and 
fund administration, as the Parties’ market positions are very similar on both 
markets. The Commission will perform its competitive assessment on the narrowest 
basis, i.e. a separate market for each of global custody and fund administration. 
However, considering that the Parties’ position on a combined market is very 
similar, the competitive assessment is valid for a combined market as well.  
4.1.2.  Geographic market definition  
4.1.2.1.  Previous Commission decision s 
(19) The Commission has p reviously considered whether  global custody market s are  
global, EEA wide or national in scope considering aspects such as: the  global nature 
of the service, the regulatory framework, whether clients hold a large number of 
domestic assets, and whether clients prefer a global custodian with its own local 
presence in this jurisdiction.17 Notably, in case M.3781 Crédit Agricole / Cais se 
D’Epargne  in 2005 , the C ommission, without concluding on the matter, examined 
the existence of a national (French) market on the basis that a large number of clients 
held significant parts of their investments in French instruments and could prefer a 
provider having its local custody service.  
4.1.2.2.  The Notifying Party’s  view  
(20) The Notifying Party  submit s that the market for global custody  services is global in 
scope. F irst, while acknowledging that both the AIFMD and UCITS regimes18 
                                                 
15  Responses to questionnaire Q2 to competitors, question 10 . 
16  Responses to questionnaire Q1 to customer s, question 6. 
17  M.3781 Crédit Agricole / Caisse D’Epargne, paragraphs  15 – 19; M.5797 State Street / Intesa Sanpaolo , 
paragraph  17. 
18  All collective investment undertakings which: (i) raise capital from a number of investors, with a view to 
investing it  in accordance with a defined investment policy for the benefit of those investors; and (ii) are 
domiciled or distributed in the EU, are subject to either the UCITS framework or the AIFMD framework. 
UCITS and their management companies and managers or AIFs  (AIFMs) are governed by the Member 
State laws implementing the relevant Directives (Undertakings for Collective Investment Transferable 
 
 
6 require that a global custod ian providing a depositary function for EU domiciled 
funds must be domiciled in the Member State where the fund is domiciled, the 
Notifying Party  argue s that the Parties’ clients manage funds that hold assets in 
multiple jurisdictions in and outside of the  EU. Thus, the clients source global 
custody services globally.19 Second, the major global custodians, including the 
Parties, operate globally.20 Third, global custodian s could easily obtain the 
regulatory approval to establish a local presence in the potent ially affected national 
markets, Ireland and Luxembourg.21 Fourth , global custody services are often 
delegated withi n the custodians group and, hence , car ried out in different locations 
from an operational perspective.22   
(21) Moreover, the Notifying Party is  of the view that the considerations in case M.3781 
are irrelevant for the present case as, promoted by the introduction of a European 
passport for UCITS and AIF under the respective regulatory frameworks, clients 
hold assets in various jurisdictions. Moreove r, different from the French market in 
M.3781, Ireland and Luxembourg are generally regarded as cross -border 
jurisdictions that are used by investment institutions to access the broader EEA 
market.23 
4.1.2.3.  The Commission’s assessment  
(22) A slight majority of customer s responding to the Commission’s market investigation 
indicated that they source global custody services by comparing offers worldwide, 
and that the major players are active globally.24 However, the vast majority of 
customers  that responded to the Commissio n’s market investigation indicated that 
they demand that their global custodian is present in the country in which their fund 
is domiciled due to regulatory requirements.25 Indeed, the European UCITS and 
AIFMD regimes do not contain a passporting provision for global custodian 
services, meaning that global custodians need to be present in the country of 
domiciliation of their client funds.  
(23) Furthermore, some customers indicated that there are global custodians that are only 
active regionall y. 
(24) These facts woul d indicate that global custody services in the EEA might be national 
in scope.  
(25) Ultimately, in this case the appropriate geographic market definition for global 
custody services can be left open, as the Transaction does not give rise to 
competitive concerns  under any plausible geographic market definition. The 
Transaction does not give rise to an affected market for global custody on a global or 
                                                                                                                                                      
Securities Directive 2009/65/EC (“UCITS IV”), Directive 2014/91/EU (“UCITS V”) and Alternative 
Investment Fund Managers  Directive 2011/61/EU (the “AIFMD”)).  
19  Form CO, paragraph 114, 121.  
20  Form CO, paragraph 121.  
21  Form CO, paragraph 120.  
22  Form CO, paragraph 121.  
23  Form CO, paragraphs 123 – 125. 
24  Responses to questionnaire Q1 to customers, question 9.  
25  Response s to questionnaire Q1 to customers, question 10.  
 
7 EEA-wide level. At national level, the Transaction gives rise to affected global 
custody markets in Ireland and Luxembourg . 
4.2. Local custody  
4.2.1.  Product market definition  
4.2.1.1.  Previous Commission decisions  
(26) Local custody (or sub -custody) refers to the provision of custody services within a 
specific jurisdiction. The Commission has previously noted that a local custodian (or 
sub-custodian) is one method by which a global custodian can carry out custody 
services in countries other than the one in which it is domiciled and still adhere to 
the specific requirements of national law.26 In the same case, the Commission also 
considered glob al custody and local custody as separate standalone markets on the 
basis that they perform different functions. Global custody is intended for the end 
customer (i.e., institutional investors in this case) and implies a direct link between 
the global custod ian and the end customer. In contrast, local custody refers to a 
service intended for global custodians, who can therefore be considered as 
employing a sub -contractor with no direct link to the end customer. The Commission 
ultimately left the exact product  market definition open.  
4.2.1.2.  The Notifying Party’s view  
(27) The Notifying Party submits that, while there is likely a local custody market that the 
Commission could plausibly analyse, the question can be left open.27  
4.2.1.3.  The Commission’s assessment  
(28) The market investigation has not provided any indication that the Commission 
should depart from precedents or the Notifying Party’s view with regard to the 
market definition for local custody.  As such, for the purposes of this Decision, the 
Commission has considered a plausible market for local custody services, but does 
not conclude on whether local custody clearly constitutes a separate product market, 
given that no competition concerns arise regardless of the precise definition.  
4.2.2.  Geographic market definition  
4.2.2.1.  Previou s Commission decisions  
(29) The Commission noted in Crédit Agricole/Caisse D'Epargne/JV  that it may be 
defensible to analyse a national -level market (in that case, France) on the basis that a 
large number of clients with a significant part of their investment domiciled in one 
country may favour a sub -custodian in the same country. However, t he Commission 
ultimately left the exact approach to geographic market definition open.  
                                                 
26  M.3781 Crédit Agricole/Caisse D’Epargne/JV , decision of 14 June 2005, paragraphs 11 -12. 
27  Response to RFI 7, paragraph 2.2  
 
8 4.2.2.2.  The Notifying Party’s view  
(30) The Notifying Party submits that the Commission should not depart from its 
previous decisional practice.  
4.2.2.3.  The Commission’s assessment  
(31) The mark et investigation has not provided any indication that the Commission 
should depart from precedents or the Notifying Party’s view with regard to the 
market definition for local custody.  As such, for the purposes of this Decision, the 
Commission has consider ed the market to be national in scope.  
4.3. Fund administration  
4.3.1.  Product market definition  
4.3.1.1.  Previous Commission decision s 
(32) The Commission considered that fund administration includes a range of services 
that form a single product market.28 These services typically include: acting as 
trustee, depositary or depot bank of mutual funds; accounting services and net asset 
valuations; share registration and taxation services; transfer agency; trustee and 
record keeping services; ancillary legal and secretarial services and  transaction and 
portfolio reporting services. Additional value -added services may be offered, such as 
providing middle and back office services for fund managers; benefit payment 
services; performance measurement and risk analysis; and consolidated 
record keeping .29 
(33) While ultimately leaving the question open, in M.5797 State Street / Intesa 
Sanpaolo , the Commission examined whether fund administration services for 
individual managed accounts (IMAs) constitute a separate market.  
4.3.1.2.  The Notifying Party’s  view  
(34) The Notifying Party  submit s that fund administration constitutes a single product 
market comprising of the services mentioned in paragraph (32) without further 
segmenta tion. Notably, a segmentation by fund type would not be appropriate as the 
services provided to different fund types do not substantially differ and the 
regulatory background is very similar.30 According to the Parties, this also applies to 
IMAs, as the ser vices are very similar, because the only difference is that NAV 
calculations do not have to be divided in units.31  
(35) Moreover, the Notifying Party  states that transfer agency should not be considered 
separately from fund administration. Transfer agency is, i n most cases, provided 
together with fund administration and clients do not select a service provider based 
                                                 
28  M.3781 Crédit Agricole / Caisse D’Epargne, paras. 21; M.5797 State Street / Intesa Sanpaolo , paragraph 
14. 
29  M. 3027 State Street / Deutsche Bank, paragraph 11.  
30  Form CO, paragraph 139.  
31  Form CO, paragraph 140.  
 
9 on their transfer agency capabilities but look at the more general service package of 
fund administration.32  
4.3.1.3.  The Commission’s assessment  
(36) Fund admini stration  can cover various services and the precise definition appears to 
vary more among market participants than that of global custody. Respondents to the 
market investigation agree that accounting (e.g. Net Asset Value calculation) is a 
core fund administration service, while they are divided on whether remaining 
services such as transfer agency, securities lending, back -office activities, collateral 
management, depobank, correspondent bank, performance and analytics, tax -
transparent asset poo ling, transition management, foreign exchange services and 
client and regulatory reporting should be classified as core or ancillary fund 
administration services .33 However, no market participants suggested  that any of 
these services are sufficiently distin ct so that they should be considered as separate 
product markets.  
(37) Further, with respect to transfer agency, the Notifying Party’s view was confirmed; 
the majority of customers responding  to the market investigation stated that they 
source transfer agency together with fund administration, and the majority of 
competitors  responding to the market investigation indicated that they usually 
provide transfer agency together with fund administration (and/or global custody, to 
the extent that global custody and fu nd administration are themselves provided 
together).34 As such, for the purposes of this Decision the Commission considers 
fund administration  to comprise all the services mentioned in paragraph  (32). 
(38) As is the case for global custody service providers, the majority of customers  that 
responded to the Commission’s market investigation do not choose different fund 
administration  service providers for different asset clas ses.35 Similarly, the majority 
of competitors that responded to the Commission’s market investigation either 
indicated that fund administration  services are broadly the same across asset types, 
or that there are slight differences, but that all major suppli ers are able to serve all 
types of assets.36 As such, for the purposes of this Decision the Commission 
considers that a segmentation by asset class is not appropriate.  
(39) Concerning different customer types ( e.g. asset managers vs. pension funds), the 
large ma jority of competitors consider that either fund administration  services are the 
same, regardless of customer type , or that they differ per customer but all major 
suppliers are able to serve all types of customers .37 As such, for the purposes of this 
Decisio n the Commission considers that a segmentation by customer type is not 
appropriate.  
(40) To conclude, the Commission considers that fund administration  can be considered 
as a single heterogeneous market, with a set of services that may differ slightly 
depending  on client needs or asset type.  As per paragraph s (17)-(18), the question of 
                                                 
32  Form CO, paragraphs 144 – 146.  
33  Responses to questionnaire Q1 to customers, question 5 and questionnaire Q2 to competitors, question 5.  
34  Responses to questionnaire Q1 to customers, question 5 and questionnai re Q2 to competitors, question 7 . 
35  Responses to questionn aire Q1 to customers, question 8 . 
36  Responses to questionnaire Q2 to competitors, question 9.  
37  Responses to questionnaire Q2 to competitors, question 11.  
 
10 whether fund administration and global custody services are a combined market or 
two separate markets can be left open.  
4.3.2.  Geographic market definition  
4.3.2.1.  Previous Commission decision s 
(41) The Commission considered a possible national definition of the relevant market in 
M.3027, but noted in case M.3781, without concluding on the matter, that the 
arguments of the Parties in that case that the market may be wider than national had 
been in part confirmed by the market investigation.38 The reasons for considering a 
national market were that some of the activities included in the fund administration 
services have specific national regulations or require a national presence following 
the UCIT S Directive .39 However, the market investigation in case M.3781 suggested 
that this had partially changed.40 
4.3.2.2.  The Notifying Party’s  view  
(42) The Notifying Party  submit s that the fund administration market is at least EEA -
wide in scope for four reasons. First , fund administrators are usually active in 
various jurisdictions, including a range of countries across the EEA and tend to offer 
standardised services irrespective of the location.41 Second, an increasing number of 
clients sources fund administration serv ices from a single provider on a pan -
European or at least multi -jurisdictional basis.42 Third, market dynamics are 
substantially similar across the EU.43 Finally, European regulatory regimes, namely 
AIFMD and UCITS Directives, continue harmonisation of the s ervices environment 
within the EEA.44 Considering these dynamics, the Notifying Party  further argue s 
that the assessment in M.3027 would not be appropriate anymore.  
4.3.2.3.  The Commission’s assessment  
(43) A majority of customers responding to  the Commission’s market i nvestigation 
indicated that they source fund administration services by comparing offers 
worldwide, and that the major players are active globally.45 Unlike global custody 
services, f or fund administration services there does not appear to be a regulatory 
requirement for national presence. Nevertheless, customers do indicate that they 
sometimes look for local knowledge and expertise related to the scope of 
investment.46  
(44) Ultimately, in this case the appropriate geographic market definition for fund 
administration  services can be left open, as the Transaction does not give rise to 
competitive concerns under any plausible geographic market definition. The 
                                                 
38  M.3781 Crédit Agricole / Caisse D’Epargne, paragraph  22. 
39  M.3027 State Street / Deutsche Bank, paragraph 12.  
40  M.3781 Crédit Agricole / Caisse D’Epargne, paragraph 22.  
41  Form CO, paragraph  161. 
42  Form CO, paragraph 162.  
43  Form CO, paragraph 163.  
44  Form CO, paragraph 165.  
45  Responses to questionn aire Q1 to customers, question 11 . 
46  Responses to questionn aire Q1 to customers, question 11 . 
 
11 Transaction does not give rise to an affected market for fund administration  on a n 
EEA-wide level. At national level, the Transaction gives rise to affected fund 
administration  markets in Ireland and Luxembourg . At the global level, the 
Transaction also gives rise to an affected fund admin istration market.  
4.4. Asset management  
4.4.1.  Product market definition  
4.4.1.1.  Previous Commission decision s 
(45) The Commission has previously described asset management as “the provision of 
investment advice and often also the implementation of this advice”.47 Asset 
management includes, “the creation, establishment and marketing of funds mainly to 
retail clients on an ‘off -the-shelf’ basis and the provision of portfolio management 
services for institutional investors.”48 The Commission has previously considered a 
market for overa ll asset management, but also further segmentation by client type 
(i.e., asset management for retail clients and asset management for institutional 
clients) as well as a separate market for mutual funds. Within asset management for 
institutional clients, t he Commission has also considered further sub -segmentation 
by active management (asset manager aims at outperforming a benchmark such as an 
index) and passive management (asset manager aims at replicating the performance 
of an index). Similarly, within ass et management for retail clients, the Commission 
has considered further sub -segmentation by open retail funds (no restriction on the 
number of investors) and closed retail funds (tailored for a small group of investors). 
Ultimately, however, the Commission  has left open the question of whether asset 
management should be treated as a single market or segmented more narrowly 
according to these various distinctions.49  
4.4.1.2.  The Notifying Party’s  view  
(46) The Notifying Party submits that the relevant market is likely to  be asset 
management without further segmentation, but notes that the exact product market 
definition can be left open.50 The Notifying Party adds that most asset management 
providers tend to provide the full range of asset management products/services and 
certain types of funds (e.g., UCITS) can be addressed to both institutional and retail 
clients.  
                                                 
47  M.6812  SFPI/DEXIA , decision of 21 February 2013, paragraph 30; M.4844 Fortis/ABN AMRO Assets , 
decision of 3 October 2007, paragraph 67; M.8257 NN Group/Delta Lloyd , decision of 7 April 2017, 
paragraph 108. 
48  M.8359 Amundi/Credit Agricole/Pioneer Investments , decision of 2 4 March 2017, paragraph 16; M.9796 
UNIQA/AXA (Insurance, Asset Management and Pensions – Czechia, Poland and Slovakia) , decision of 
29 July 2020, paragraph 35.  
49  M.3894 Unicredito/HVB , decision of 18 October 2005, paragraphs 35 -36; M.4844 Fortis/ABN AMRO  
Assets , decision of 3 October 2007, paragraphs 67 -70; M.5728 Crédit Agricole/Société Générale Asset 
Management , decision of 22 December 2009, paragraphs 35 - 39; M.8359 Amundi/Credit Agricole/Pioneer 
Investments , decision of 24 March 2017, paragraphs 18 an d 20. 
50  Response to RFI 7, paragraph 1.3.  
 
12 4.4.1.3.  The Commission’s assessment  
(47) The market investigation has not provided any indication that the Commission 
should depart from precedents or the Notifying Party’s view with regard to the 
market definition for asset management.  As such, for the purposes of this Decision  
the Commission considers a market for asset management, leaving open the question 
of further segmentation.  
4.4.2.  Geographic market definition  
4.4.2.1.  Previous Comm ission decision s 
(48) In previous cases, the Commission has considered the market as global, EEA -wide 
or national in scope, but ultimately left this question open.51 
4.4.2.2.  The Notifying Party’s  view  
(49) The Notifying Party submits that the geographic market is at least E EA-wide, if not 
global, in scope, but note that the exact approach to product market definition can be 
left open.52 The Notifying Party adds that, as noted in previous Commission 
decisions, a wider than national market is particularly plausible for large 
multinational corporate customers with cross -border activities, where there may also 
be a need to pool risks on an international basis. The Notifying Party argues that this 
is supported by the fact that the asset management sector has been harmonised 
through out the EU by virtue of the UCITS Directive and AIFD.  
4.4.2.3.  The Commission’s assessment  
(50) The market investigation has not provided any indication that the Commission 
should depart from precedents or the Notifying Party’s view with regard to the 
market definition for asset management.  As such, for the purposes of this Decision, 
the Commission has considered the market as global, EEA -wide or national in scope.  
5. COMPE TITIVE ASSE SSME N T 
(51) The Transaction gives rise to horizontal overlaps in global custody and in fund 
administration, as well as to vertical links between local custody and global  custody,  
global custody and asset management, and fund administration and asset 
management.  
5.1. Horizo ntally affected markets  
5.1.1.  Legal framework  
(52) The Commission Guidelines on the assessment of horizontal mergers under the 
Merger Regulation (the “Horizontal Merger Guidelines”) distinguish between two 
main ways in which mergers between actual or potential compe titors on the same 
                                                 
51  M.8359 Amundi/Credit Agricole/Pioneer Investments , decision of 24 March 2017, paragraphs 28 -29 and 
M.5728 Crédit Agricole/Société Générale Asset Management , decision of 22 December 2009, paragraph 
41. 
52  Response to RFI 7, paragraph 1.5.  


 
15 stop them from switching. This is evidenced by fees being at the same levels 
in Ireland and Luxembourg, despite different concentration levels.56 
(c) All of the Parties' major competitors are already present in both Ireland an d 
Luxembourg, and there are no barriers to expansion or any differentiation 
that makes them distant competitors to the Parties. Therefore, t he Parties face 
strong competitive constraints irrespective of geographic scope .57 
5.1.2.3.  The Commission’s assessment  
(60) First,  the Commission notes that post -Transaction, the merged entity will have a high 
market share in Ireland ( [40-50]%) and a more modest – yet still market leading – 
market share in Luxembourg ( [20-30]%). However, the Luxembourgish  global 
custody market is far  more fragmented than the market in Ireland.  
(61) In addition, data submitted by the Notifying Party confirms its argument that the 
strong position in Ireland is primarily driven by a high degree of customer 
concentration. State Street’s top three clients in Ir eland account for [a significant 
percentage] % of its assets under custody (“AUC”), and the Target’s top three clients 
account for [a significant percentage] % of its Ireland AUC.58 As such, the loss of 
one or few clients could significantly shift the market shares and potentially remove 
State Street’s leading position.  
(62) Second, the market investigation confirmed that a number of strong competitors 
remain in each of the markets post -Transaction. Despite the strong market position 
of State Street in Ireland, customers that responded to the Commission’s market 
investigation rated several other providers of global custody services similarly or 
more suitable for their needs in Ireland, including BNY M ellon, BNP Paribas, Citi, 
JP Morgan and Northern Trust.59 One customer explained, “ All the above listed 
Custodians are recognized in the market. There are additional players that are not 
shown in the list .”60 Another confirmed, “ State Street, Northern Trust,  BNY Mellon 
& JP Morgan are the largest custodians in Ireland and have significant experience 
and expertise… ”61 One customer summarized, “ The Irish market is substantial and 
well served with custodians .” 62 
(63) Moreover, c ustomers that responded to the Commissio n’s market investigation did 
not consider State Street and the Target as particularly close competitors. Customers 
typically considered the other large global custodians, such as BNY Mellon, 
Northern Trust and JP Morgan, as the closest competitors to State  Street  in both 
Ireland and Luxembourg . The Target is considered a smaller competitor. One 
customer summarizes, “ BBH is more competing against the second level of 
custodians by asset under custody .” Some customers explained that while State 
                                                 
56  Form CO, paragraphs 203 -205. 
57  Form CO, paragraphs 206 -212. 
58  Form CO, paragraphs 191 -194, 252 -255. 
59  Responses to questionnaire Q1 to customers, question 1 2. 
60  Response  to questionnaire Q1 to customers, question 1 2. 
61  Response to questionnaire Q1 to customers, question 1 2. 
62  Response to questionnaire Q1 to customers, question 1 2. 
 
16 Street is chara cterised by efficient process due to its scale, the Target is characterised 
by more tailored, high-touch service.63 
(64) Third,  contrary to the Notifying Party’s arguments, customers consider that 
switching suppliers is either difficult or very difficult, and costs a significant amount 
of money and time.64 Despite the se difficulties , there is evidence that  significant 
client switches do occur. For example, in December 2021, BlackRock (State Street’s 
largest customer in Ireland) announced that it will move its iSha res ETF  portfolio to 
a multi -custodian model and away from State Street as the sole supplier.65 The Irish 
part of this portfolio accounts for approximately […]% of State Street’s AUC in 
Ireland. Other examples are provided by customers responding to the mar ket 
investigation; “ We moved the majority of our Luxembourg Funds from [one 
provider] to [another provider] in 2021. After lengthy DD process we concluded 
that they could provide the required service but at a cheaper price which the 
investors would benefit  from .”66 Another explains, “ We added [one provider] in 
Luxembourg as we were unhappy with the service levels provided our existing 
provider. ” Another customer “ transitioned 2 funds from [one provider] to [another 
provider in] Ireland. The services in scope  included depositary/global custody and 
fund administration. It was a strategic decision to move these funds based on the 
wider relationship [with the provider] and operational efficiency that could be 
gained from consolidating providers .” Additionally, when launching a new fund, 
asset managers do have flexibility to choose a (new) global custodian.  
(65) Moreover , several customers indicated that they would be willing to switch if 
necessary, and  that they  could employ negotiation strategies such as internal 
benchmarking and benchmarking with the help of external consultants.67 One 
customer explains, “ [the customer] is rather reluctant to switch and would 
thoroughly assess and weigh the transition costs against the potential benefits in 
terms of service and price.  However, switching is not excluded, because, if it would 
be in the best interest of the investors. [the customer] protects the interest of the 
investor and ensures that services and prices are adequate. ”68 Indeed, most 
customers already work with multiple global custodians in a single jurisdiction, 
because, among others, this “ enables direct comparison of services and 
benchmarking ”.69 One customer summarizes, “ in a recurring period of 3 years, [the 
customer] challenges its suppliers either in bilateral negot iations or with formal 
requests for proposals (“RFP”) in order to benchmark and evaluate the service 
offerings. ”70 Furthermore, several  responding customers indicated that they have 
stopped working with a global custodian in the past 3 years, while around a  third 
indicated that they have added a new global custodian in the past 3 years.  
                                                 
63  Responses to questi onnaire Q1 to customers, question 1 6. 
64  Responses to questionnaire Q1 to customers, question 26. 
65  https://www.wsj.com/articles/blackrock -to-pull-2-trillion -in-assets -from-state -street -
11638918001#:~:text=Citigroup%20will%20wind%20up%20custodian,expected%20to%20take%2018%
20months.&text=The%20bank%20also%20provides%20custody,the%20manager's%20private%2Dm arke
ts%20business ., Accessed on 17 February 2022.  
66  Responses to questionnaire Q1 to customers, question 25.  
67  Responses to questionnaire Q1 to customers, question 23. 
68  Minutes of call with customer held on 4 January 2022.  
69  Responses to questionnaire  Q1 to customers, question 20. 
70  Minutes of call with customer held on 6 January 2022.  
 
17 (66) Fourth and last, t he large majority of customers and competitors that responded to 
the Commission’s market investigation did not expect a negative impact on the 
global custod y markets in either Ireland or Luxembourg, instead indicating that they 
expect the Transaction to have a neutral or positive effect.71 One customer explains, 
“Even though two important market players are merging, it is possible that the 
merger will result i n higher pressure on prices and will create trends to innovate ” 
and others confirm , “Innovation power increases and scale benefits are expected to 
be passed on to clients ” and “ The technology coupled with the scale (State Street) 
may accelerate investment in innovative products. ” Yet another customer explains, 
“The transaction involves parties with complementary attributes in terms of 
coverage and expertise. The combined organisation will have increased scale across 
markets where custody services are delive red, providing opportunities to reduce 
prices, and additional client servicing capabilities, providing opportunities for 
enhanced service delivery .”  
(67)  Furthermore, the vast majority of customers that responded to the Commission’s 
market investigation indic ated that sufficient suitable suppliers will be available 
post-Transaction.72 One customer summarizes, “[the customer] has no competition 
concerns regarding the Transaction as there would remain sufficient competitors on 
the market globally as well as in Lu xembourg and Ireland ” and another confirms, 
“There are sufficient providers of global custody and fund administration globally 
and in Ireland .”73 Regarding Ireland specifically, customers confirmed, “ We 
consider that there will be sufficient suppliers to pr ovide coverage for the Irish 
market ” and “ There are many other firms based in Ireland that can supply the 
services. ”74 
(68) Based on the above, the Transaction does not give rise to serious doubts as to its 
compatibility with the internal market or a substantial  part thereof in relation to  
horizontal non -coordinated effects for the provision of global custody services in 
Ireland and Luxembourg.  
5.1.3.  Fund administration  
5.1.3.1.  Market structure  
(69) Both Parties are active globally in fund administration. The Transaction does not 
give rise to an affected market under an EEA -wide geographic scope, as the Parties’ 
combined market share remains under 20% ( [10-20]% in 2020). The Transaction 
does give rise to an affected market for fund administration at global level, and at 
national lev el in Ireland and Luxembourg.  
                                                 
71  Responses to questionnaire Q1 to customers, question s 30.2, 30.3, 30.4 and questionnaire Q 2 to 
competitors , question s 28.2, 28.3, 28.4 . 
72  Responses to questionnaire  Q1 to customers, question 32. 
73  Responses to questionnaire Q1 to customers, question 31. 
74  Responses to questionnaire Q1 to customers, question 32. 


 
20 (72) The Luxembourgish fund administration  market i s more fragmented, and State 
Street’s market share is lower ( [10-20]% in 2020). The pre -Transaction HHI is 
below 1,000 and the Transaction brings a modest delta HHI of [100-200], with the 
final HHI remaining under 1,000 . 
(73) The global fund administration mark et is relatively more concentrated. State Street’s 
market share is [10-20]% in 2020 , but t he pre -Transaction HHI is approximately  
[1000 -3000] . The Transaction, however, brings a negligible delta of [0-100]. 
5.1.3.2.  The Notifying Party’s view  
(74) The Notifying Party a rgues that no competition concerns arise in fund 
administration, regardless of the geographic market definition, because there are a 
number of well -resourced competitors,75 customers can and do switch,76 and the 
market shares are not reflective of market pow er77 but rather of high customer 
concentration.78 Additionally, the Notifying Party argues that low regulatory barriers 
to entry (e.g., no banking licence requirement), coupled with the growth of 
alternative asset classes which do not require a custodian, ha ve created an 
opportunity for independent non -bank fund administrators to enter the fund 
administration space.79 According to the Notifying Party, in Europe these companies 
compete directly with banks such as the Parties.  
5.1.3.3.  The Commission’s assessment  
(75) The Com mission finds that the Transaction does not raise serious doubts as to its 
compatibility with the internal market or the functioning of the EEA Agreement in 
relation to fund administration, and its further plausible segmentations, at a global 
level or nati onal level in Ireland or Luxembourg, for the following reasons.  
(76) First, the Commission notes that post -Transaction, the merged entity will have a high 
market share in Ireland ( [40-50]%) and a more modest – yet still market leading – 
market share in Luxembou rg ( [20-30]%). However, the Luxembourgish global 
custody market is more fragmented than the market in Ireland.  At the global level, 
the merged entity will have a low market share only slightly above 20% (at [20-
30]%) and will remain number two; moreover, t he increment at global level is very 
low, at [0-5] percentage point . 
(77) Furthermore, data submitted by the Notifying Party confirms its argument that the 
strong position in Ireland is primarily driven by a high degree of customer 
concentration. State Street’s top three clients in Ireland account for [a significant 
percentage] % of its AUC, and the Target’s top three clients account for [a significant 
percentage] % of its Ireland AUC.80 As such, the loss of one or few clients could 
significantly shift the market shares and potentially remove State Street’s leading 
position.  
                                                 
75  Form CO, paragraph 263.  
76  Form CO, paragraphs 266 - 269.  
77  Form CO, paragraphs 251 et seq.  
78  Form CO, paragraph 255.  
79  Form CO, paragraphs 276 – 279. 
80  Form CO, paragraphs 252 -255. 
 
21 (78) Second,  the market investigation confirmed that a number of strong competitors 
remain in each of the markets post -Transaction. Customers ranked Bank of New 
York Mellon as the top provider in Ireland, followed by BBH, State Street, Northern 
Trust and JP Morgan. Cu stomers indicated that all 5 providers, and at least 3 others, 
would be suitable or very suitable to meet their needs in fund administration in 
Ireland.81 One customer summarized, “ All the above listed suppliers are recognized 
in the market. There are addit ional players that are not shown in the list ,” while 
another confirmed, “ All service providers listed in this questionnaire are well 
established and reputable market players .”82  
(79) Similarly, customers ranked Bank of New York Mellon as the top provider in 
Luxembourg, followed by BBH, State Street, BNP Paribas and JP Morgan. 
Customers indicated that all 5 providers and at least 1 other would be suitable or 
very suitable to meet their needs in fund administration in Luxembourg.83 One 
customer summarized, “ The Lux embourg market is also well established and served 
by a variety of providers .”84 Competitors confirmed customers’ view concerning 
fund administration in both Ireland and Luxembourg.85  
(80) Moreover, the Parties are not considered to be close competitors of each other . 
Customers typically considered the other large global custodians, such as BNY 
Mellon, Northern Trust and JP Morgan, as the closest competitors to State Street  and 
to BBH in Ireland. In Luxembourg, customers considered BNY Mellon and JP 
Morgan to be the closest competitors to both State Street and BBH .86  
(81) Overall, t he Target is considered a smaller competitor. Some customers explained 
that while State Street is characterised by efficient process due to its scale, the Target 
is characterised by more tai lored, high -touch service.87 One customer summarized, 
“State Street's closest competitors are the larger organisations providing fund 
administration services. BBH's closest competitors are smaller and can provide a 
more bespoke service .”88 Another specified,  “BBH is more competing against the 
second level of administrators by asset under administration. ”89 
(82) Third,  contrary to the Notifying Party’s arguments, customers consider that 
switching suppliers is either difficult or very difficult, and costs a significa nt amount 
of money and time.90 Therefore, although it is relatively rare for an existing fund to 
switc h administrator s, there is evidence that  switching does occur  for various 
reasons . For example, a fund may switch  in case of unsatisfactory performance of 
the incumbent  provider . One customer states, “ We moved the majority of our 
Luxembourg Funds from [one provider] to [another provider] in 2021. After lengthy 
DD process we concluded that they could provide the requi red service but at a 
                                                 
81  Responses to questionnaire Q1 to customers, question 13.  
82  Response to questionnaire Q1 to customers, question 13.  
83  Responses to questionnaire Q1 to customers, question 14.  
84  Response  to questionnaire Q1 to customers, question 14.  
85  Responses to questionnaire Q2 to competitors, questions 16, 18.  
86  Responses to questionnaire Q1 to customers, questions 17, 19.  
87  Responses to questionnaire Q1 to customers, quest ion 17.  
88  Response to questionnaire Q1 to customers, question 17.  
89  Response to questionnaire Q1 to customers, question 17.  
90  Responses to questionnaire Q1 to customers, question 26.  
 
22 cheaper price which the investors would benefit from .”91 Another explains, “ We 
added [one provider] in Luxembourg as we were unhappy with the service levels 
provided our existing provider. ” Another customer “ transitioned 2 funds from [o ne 
provider] to [another provider in] Ireland. The services in scope included 
depositary/global custody and fund administration. It was a strategic decision to 
move these funds based on the wider relationship [with the provider] and 
operational efficiency that could be gained from consolidating providers .” Yet 
another customer describes the process and rationale, “ We changed custody and fund 
administrators in [ year] from [a provider] and [a provider] to [selected 
provider]…we decided to undertake a review o f both service providers and 
undertook an RFP process. The aim was to benchmark the incumbents to other 
providers in the market and during the RFP it was clear benefits of consolidating  
both fund structures into one …[an incumbent provider  was] eliminated f rom the 
process at the first stage as the services offered were significantly inferior. [ One 
provider] and [another provider] were the finalist and references were taken from 
existing clients. Both service providers offered a superior service compared with  the 
incumbents however [the customer] decided to partner with [selected provider] due 
to similarities in the culture and ethos ”  Moreover, w hen launching a new fund, asset 
managers do have flexibility to choose a (new) fund administrator .   
(83) In addition , several customers indicated that they would be willing to switch if 
necessary, and could employ negotiation strategies such as internal benchmarking 
and benchmarking with the help of external consultants.92 One customer explains, 
“[the customer] is rather reluctant to switch and would thoroughly assess and weigh 
the transition costs against the potential benefits in terms of service and price. 
However, switching is not excluded, because, if it would be in the best interest of the 
investors. [the customer] p rotects the interest of the investor and ensures that 
services and prices are adequate. ”93 Indeed, the majority of customers already work 
with multiple fund administrators in a single jurisdiction.94 One customer explains, 
“We are better able to negotiate se rvices when we have a comparative provider .”95 
Another customer summarizes, “ in a recurring period of 3 years, [the customer] 
challenges its suppliers either in bilateral negotiations or with formal requests for 
proposals (“RFP”) in order to benchmark and e valuate the service offerings. ”96 
Furthermore, several  responding customers indicated that they have stopped working 
with a fund administrator in the past 3 years, while a sizeable number  indicated that 
they have added a new fund administrator in the past 3  years.  
(84) Fourth and last, t he large majority of customers and competitors that responded to 
the Commission’s market investigation expected a positive or neutral  impact on the 
overall fund administration  market , as well as the fund administration market s in 
Ireland and in Luxembourg.97 One customer explains, “ We consider that the impact 
will be neutral or marginally positive for the market. There are some complimentary 
[sic] aspects between State Street and BBH in terms of market coverage that should 
                                                 
91  Responses to questionnaire Q1 to customers, question 25.  
92  Respons es to questionnaire Q1 to customers, question 23.  
93  Minutes of call with customer held on 4 January 2022.  
94  Responses to questionnaire Q1 to customers, question 21.  
95  Response  to questionnaire Q1 to customers, question 21.  
96  Minutes of call with custom er held on 6 January 2022.  
97  Responses to questionnaire Q1 to customers, question s 30.5, 30.6, 30.7 and questionnaire Q 2 to 
competitors , question s 28.2, 28.3, 28.4 . 
 
23 provide g reater options and benefit for clients of both firms. The increased scale and 
coverage should also allow for further price compression in the market .” Another 
confirms, “ Perceiving the capabilities and strengths of BBH and State Street as 
complimentary  [sic]  regards fund administration and transfer agency we would not 
expect any major change on price charged to the market but improvements on 
quality and innovation as a consequence of combining BBH's expertise and agility 
with State Street's scale and capab ility to fund innovation and bringing it to market 
to the extent the post -merger integration is successful .”  
(85) Furthermore, the vast majority of customers that responded to the Commission’s 
market investigation indicated that sufficient suitable suppliers w ill be available 
post-Transaction.98 Customers explained, “ the market remains competitive with 
other service providers ” and “ There are many other firms that can supply the 
services. ”99 Regarding Ireland specifically, customers confirmed, “ We consider that 
there will be sufficient suppliers to provide coverage for the Irish market ” and 
“There are many other firms based in Ireland that can supply the services .”100 
(86) Based on the above, the Transaction does not give rise to serious doubts as to its 
compatibility w ith the internal market or a substantial part thereof in relation to  
horizontal non -coordinated effects for the provision of fund administration services 
in Ireland, in Luxembourg and at the global level.  
5.2. Vertically affected markets  
5.2.1.  Legal framework  
(87) Accord ing to the Commission’s Guidelines on the assessment of non -horizontal 
mergers under the Council Regulation on the control of concentrations between 
undertakings (“Non -horizontal Merger Guidelines”), foreclosure effects may occur 
where actual or potential rivals' access to supplies or markets is hampered or 
eliminated as a result of the merger, thereby reducing these companies' ability and/or 
incentive to compete.101 
(88) In assessing the likelihood of an anticompetitive input  foreclosure scenario, the 
Commission examines, first, whether the merged entity would have, post -merger, the 
ability to substantially foreclose access to inputs, second, whether it would have the 
incentive to do so, and third, whether a foreclosure strategy would have a significant 
detrimenta l effect on competition downstream.102 These three conditions are 
cumulative so that the absence of any of them is sufficient to rule out the likelihood 
of anti -competitive input foreclosure.103 
(89) In assessing the likelihood of an anticompetitive customer  foreclosure scenario, the 
Commission examines, first, whether the merged entity would have the ability to 
foreclose access to downstream markets by reducing its purchases from its upstream 
rivals, second, whether it would have the incentive to reduce its purchases upstream, 
                                                 
98  Responses to questionnaire Q1 to customers, question 32. 
99  Responses to questionnaire Q1 to customers, question 31. 
100  Responses to questionnaire Q1 to customers, question 32.  
101  Non-horizontal Merger Guidelines, paragraph 18.  
102  Non-horizontal Merger Guidelines, paragraph 32.  
103  Case T – 370/17 KPN v Commission, EU:T:2019:354, para 119.  
 
24 and third, whether a foreclosure strategy would have a significant detrimental effect 
on consumers in the downstream market.104 
5.2.2.  Local  custody  (upstream)  – Global  custody  (downstream)  
(90) With regard to the upstream markets, the Parties act as  a local custodian in: (i) the 
US, Canada, Germany and the UK for State Street; and (ii) the US for BBH.105 In the 
US, the Parties expect that their combined  share falls below 30%. In Canada, 
Germany and the UK, State Street estimates its share to be [20-30]%, [10-20]% and 
[10-20]% in each country respectively, while BBH is not active at all.  
(91) The Parties’ combined market shares in global custody (downstream) have been 
presented above in Tables 1 and 2. They are [40-50]%, [20-30]%, [10-20]% and [10-
20]% respectively in Ireland, Luxembourg, in the EEA and at the global level.  
(92) Given these market shares, only the vertical link between global custody in Ireland 
downstream and local custody upstream is affected.106 
5.2.2.1.  Customer foreclosure  
(A) The Notifying Party’s view  
(93) The Parties submit that the supply of local custody services (upstream) to global 
custody providers (downstream) does not constitute a vertically affected market. 
First, the Notifying Party argues that the appropriate geographic market for the 
provision o f global custody (downstream) is global, in which case the Parties’ 
combined market share would be significantly below 30%. The Notifying Party 
therefore argues that there is  no scope for either input or customer foreclosure 
concerns to arise in relation t o the provision of local custody services in these 
jurisdictions.  
(94) With respect to customer  foreclosure, t he Notifying Party adds that  the Parties will 
not have sufficient market power downstream . The Notifying Party argues that as a 
result of customer con centration, competition is fierce and market positions are not 
entrenched in Ireland. In fact, fees as a proportion of AUA are similar across both 
the Republic of Ireland and Luxembourg, despite the higher concentration in the 
former. The Notifying Party a rgues that the relatively more concentrated market 
shares in the Republic of Ireland are therefore not reflective of market power.107  
(95) The Notifying Party further argues that the combined entity would lack incentive to 
pursue a customer foreclosure strategy;  in the US, neither State Street nor BBH 
currently use third -party local custody suppliers. Therefore, the Parties would not 
have the ability, nor the incentive, to pursue customer foreclosure in relation to local 
custody services in the US. The Parties do  use third -party local custodians in 
Canada, Germany and the UK. However, the Notifying Party states that there would 
                                                 
104  Non-horizontal Merger Guidelines, paragraph 59.  
105  Form CO, paragraph 339 ff. 
106  Input  foreclosure for this vertical link is not assessed further in this decision as it can be excluded a prior i 
due to the low combined market shares (< 30% in all cases ) in the upstream  market. The rest of this section 
therefore focuses on customer  foreclosure.  
107  Form CO, paragraph 351.  
 
25 be no incentive for the Parties to pursue customer foreclosure in these countries as 
funds domiciled in the Republic of Ireland do not rep resent a significant portion of 
the global custody market (less than 4.3%). Therefore, even if assets under all funds 
in the Republic of Ireland were subject to local custody services in Canada, Germany 
and the UK, the Parties would have no incentive to pu rsue customer foreclosure.  
(B) The Commission’s assessment  
(96) The Commission finds that the Transaction does not raise serious doubts as to its 
compatibility with the internal market or the functioning of the EEA Agreement in 
relation to the vertical relationshi p between local custody  upstream and global 
custody  downstream, regardless of the precise market definition, for the following 
reasons.  
(97) First, the vertical link is largely pre -existing, since State Street is already active both 
upstream and downstream. The  increment from the Target upstream is [5-10]%,108 
which does not represent a significant change in the incentive  to foreclose. 
Downstream, the increment is [5-10]%, which represent s only  a moderate change in 
the ability  to foreclose. Indeed, as argued by th e Notifying Party and as confirmed by 
the Commission in section  5.1.2.3 , sufficient customers , i.e. global custodians,  will 
remain downstream . The vast majority of customers that responded to the 
Commission’s market investigation indicated that sufficient suitable  global 
custodians will be available post -Transaction.109 This is also valid for global 
custodians as customers of local custody providers.   
(98) Moreover, there is customer concentration in Ireland, with State Street’s top three 
clients in Ireland account for [a significant percentage] % of its AUC, and the 
Target’s top three clients account for [a significant percentage] % of its Ireland 
AUC.110 As such, the loss of one or few clients could significantly shift the market 
shares and potentially remove the merged ent ity’s leading position  in global custody . 
This would indicate that the merged entity would lack the market power downstream  
implied by its market shares , and thus the ability  or incentive  to successfully 
implement customer  foreclosure , given that the loss of a few clients could threaten 
the success of the foreclosure strategy .  
(99) Second, funds domiciled in the Republic of Ireland only represent less than 4.3% of 
the total addressable market of global custody downstream. Of these, only a certain 
percentage req uire local custody services in the countries where the Parties are 
present, namely US, Canada, Germany and the UK ; the Parties estimate those shares 
to be 50 -55%, <1%, <2% and <7% respectively for those jurisdictions .111 However, 
even if all assets under all  funds in the Republic of Ireland were subject to local 
custody services in US, Canada, Germany and the UK, local custody competitors 
upstream would have sufficient remaining demand (i.e. 95.7%) for their services.  
(100)  Only one competitor indicated a potentia l concern in relation to this vertical link ; 
this competitor currently receives local custody services from the Target and 
suggested that the quality of service post -Transaction is unknown as it depends on 
                                                 
108  Response to RFI 7, paragraph 4.1.  
109  Responses to questionnaire Q1 to customers, question 32. 
110  Form CO, paragraphs 191 -194.  
111  Response to RFI 7, paragraph 3.2.  
 
26 whether State Street continues the same quality of  service. In other words, the 
concern was related to a preference for BBH as a provider, rather than the risk of an 
intentional degradation of service to itself post -Transaction as a downstream 
competitor .  
5.2.3.  Global custody  (upstream)  – Asset management  (downstream)  
(101)  The Parties’ combined market shares in global custody have been presented above in 
Table s 1-2. They are [40-50]%, [20-30]%, [10-20]% and [10-20]% respectively in 
Ireland, Luxembourg , in the EEA  and at the global level.  
(102)  The Parties' combined s hare in asset management is  low, at [0-5]%, [0-5]%, [0-5]% 
and [0-5]% respectively in Ireland, Luxembourg, globally and in the EEA . 
(103)  Given these market shares, only the vertical link between global custody in Ireland 
upstream and asset management downstream  is affected.112 
5.2.3.1.  Input foreclosure  
(A) The Notifying Party’s view  
(104)  First, the Notifying Party argues that the combined entity would lack significant 
market power and therefore ability to pursue an input foreclosure strategy. The 
Notifying Party argues that as a result of customer concentration, competition is 
fierce and market positions are not entrenched in Ireland. In fact, fees as a proportion 
of AUA are similar across both the Republic of Ireland and Luxembourg, despite the 
higher concentration in the former.  The relatively more concentrated market shares 
in the Republic of Ireland are therefore not reflective of market power.113  
(105)  Second, the Notifying Party argues that the combined entity would lack incentive to 
pursue an input foreclosure strategy; the Parties ’ major competitors are already 
present in the Republic of Ireland, including BNY Mellon ( [10-20]%), JP Morgan 
([10-20]%), BNP Paribas ( [0-5]%), Northern Trust ( [10-20]%) and Citi ( [0-5]%). 
Thus, downstream customers will continue to have a choice of globa l custody  
suppliers post Transaction. The Notifying Party adds that threats of switching that 
the Parties face reinforces this conclusion.114 The Notifying Party concludes that any 
downstream gains would accrue to rivals rather than to the Parties given thei r very 
small shares (and minimal increment) in asset management.   
(B) The Commission’s assessment  
(106)  The Commission finds that the Transaction does not raise serious doubts as to its 
compatibility with the internal market or the functioning of the EEA Agreement i n 
relation to the vertical relationship between global custody  upstream and asset 
management downstream , regardless of the precise market definition , for the 
following reasons.  
                                                 
112  Customer foreclosure for this vertical link is not assessed further in this decision as it can be excluded a 
priori  due to the  low combined market shares (<4% under any market definition) in the downstream 
market. The rest of this section therefore focuses on input foreclosure.  
113  Form CO, paragraph 351.  
114  Form CO, paragraph 352.  
 
27 (107)  First, the vertical link is largely pre -existing, since State Street is already active both 
upstream and downstream. The increment from the Target upstream is [5-10]%, 
which represent s only  a moderate  change in market power and thus ability to 
foreclose. Downstre am, the increment is negligible, indicating a lack of change in 
the incentive to foreclose. Indeed the low combined market share downstream would 
point to low potential gains in the case of foreclosure.  
(108)  Second, as argued by the Notifying Party and as conf irmed by the Commission in 
section 5.1.2.3 , sufficient competitors will remain upstream. Moreover, there is 
customer concentration in Ireland, with S tate Street’s top three clients in Ireland 
account for [a significant percentage] % of its AUC, and the Target’s top three clients 
account for [a significant percentage] % of its Ireland AUC.115 As such, the loss of 
one or few clients could significantly shift  the market shares and potentially remove 
the merged entity’s leading position in global custody.  This would indicate that the 
merged entity would lack the market power upstream implied by its market shares, 
and thus the ability  or incentive  to successfull y implement input foreclosure , given 
that the loss of a few clients could threaten the success of the foreclosure strategy .  
(109)  Third  and last , while the majority of responding competitors indicated that they 
currently use services from the Parties, a large m ajority of responding competitors 
stated that they are not concerned that the Parties would stop providing the service 
post-Transaction.116 The only competitor who indicated a potential concern did so in 
relation to a different vertical link, namely local cu stody upstream and global 
custody downstream, dealt with in the previous section.  
5.2.4.  Fund administration (upstream) – Asset management  (downstream)  
(110)  The Parties’ combined market shares upstream in fund administration have been 
presented above in Table s 3-5. They are [40-50]%, [20-30]% and [20-30]% 
respectively in Ireland, Luxembourg and at the global level.  
(111)  The Parties' combined share downstream in asset management is low, at [0-5]%, [0-
5]%, [0-5]% and [0-5]% respectively in Ireland, Luxembourg, globally an d in the 
EEA.  
(112)  Given these market shares, only the vertical link between fund administration in 
Ireland upstream and asset management downstream is affected.117 
5.2.4.1.   Input foreclosure  
(A) The Notifying Party’s view  
(113)  First, the Notifying Party argues that the combined  entity would lack significant 
market power and therefore ability to pursue an input foreclosure strategy. The 
Notifying Party argues that as a result of customer concentration, competition is 
fierce and market positions are not entrenched in Ireland. In f act, fees as a proportion 
                                                 
115  Form CO, paragraphs 191 -194.  
116  Responses t o questionnaire Q2 to competitors, question 27.  
117  Customer foreclosure for this vertical link  is not assessed further in this decision as it can be excluded a 
priori  due to the low combined market shares (<4% under any market definition) in the downstream  
market. The rest of this section therefore focuses on input foreclosure.  
 
28 of AUA are similar across both the Republic of Ireland and Luxembourg, despite the 
higher concentration in the former. The relatively more concentrated market shares 
in the Republic of Ireland are therefore not reflective of marke t power.118  
(114)  Second, the Notifying Party argues that the combined entity would lack incentive to 
pursue an input foreclosure strategy; the Parties’ major competitors are already 
present in the Republic of Ireland, including BNY Mellon ( [10-20]%), JP Morgan 
([10-20]%), BNP Paribas ( [0-5]%), Northern Trust ( [10-20]%) and Citi ( [0-5]%). 
Thus, downstream customers will continue to have a choice of fund administration 
suppliers post Transaction. The Notifying Party adds that threats of switching that 
the Parties f ace reinforces this conclusion. The Notifying Party concludes that any 
downstream gains would accrue to rivals rather than to the Parties given their very 
small shares (and minimal increment) in asset management.119 
(B) The Commission’s assessment  
(115)  The Commission  finds that the Transaction does not raise serious doubts as to its 
compatibility with the internal market or the functioning of the EEA Agreement in 
relation to the vertical relationship between fund administration upstream and asset 
management downstream , regardless of the precise market definition, for the 
following reasons.  
(116)  First, the vertical link is largely pre -existing, since State Street is already active both 
upstream and downstream. The increment from the Target upstream is [5-10]%, 
which only represent s a moderate  change in market power and thus ability to 
foreclose. Downstream, the increment is negligible, indicating a lack of change in 
the incentive to foreclose. Indeed the low combined market share downstream would 
point to low potential gains in the case of foreclosure.  
(117)  Second, as argued by the Notifying Party and as confirmed by the Commission in 
section  5.1.3.3 , sufficient competitors will remain upstream. Moreover, there is 
customer concentration in Ireland, with State Street’s top three clients in Ireland 
account for [a significant percentage] % of its AUC, and the Target’s top three clients 
account for [a sign ificant percentage] % of its Ireland AUC.120 As such, the loss of 
one or few clients could significantly shift the market shares and potentially remove 
the merged entity’s leading position in fund administration.  This would indicate that 
the merged entity wou ld lack the market power upstream implied by its market 
shares, and thus the ability  or incentive  to successfully implement input foreclosure , 
given that the loss of a few clients could threaten the success of the foreclosure 
strategy .   
(118)  Third  and last , wh ile the majority of responding competitors indicated that they 
currently use services from the Parties, a large majority of responding competitors 
stated that they are not concerned that the Parties would stop providing the service 
post-Transaction.121 The o nly competitor who indicated a potential concern did so in 
relation to a different vertical link, namely local custody upstream and global 
custody downstream, dealt with in section  5.2.2 .  
                                                 
118  Form CO, paragraph 356.  
119  Form CO, paragraph 357.  
120  Form CO, paragraphs 191 -194, 252 -255. 
121  Responses to questionnaire Q 2 to competitors , question 27. 
 
29 6.  CONCLUSION  
(119)  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  
Executive Vice-President