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 -MERGER -REGISTRY@ec.europa.eu . 
 EUROPEAN COMMISSION  
 
Brussels, 4.5.2018  
C(2018 ) 2879 final  
PUBLIC VERSION  
 
To the notifying party  
Subject : Case M. 8658 — UTC/Rockwell Collins  
Commission decision pursuant to Article 6(1)(b) in conjunction with 
Article 6(2) o f Council Regulation No  139/20041 and Article 57 of the 
Agreement on the European Economic Area2 
                                                 
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 replaceme nt 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possible the information omitted has been 
replaced by ranges of figures or a general 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 1. THE PARTIES  ................................ ................................ ................................ ............  5 
2. THE CONCENTRATION  ................................ ................................ ..........................  5 
3. EU DIMENSION  ................................ ................................ ................................ ........  5 
4. PROCEDURE  ................................ ................................ ................................ .............  5 
5. OVERVIEW OF THE AIRC RAFT MANUFACTURING I NDUSTRY  ...................  6 
5.1. Types of aircraft  ................................ ................................ ................................  6 
5.2. Supply chain  ................................ ................................ ................................ ...... 7 
5.3. Procurement  process  ................................ ................................ ..........................  7 
5.3.1.  Large commercial aircraft  ................................ ................................ ... 8 
5.3.2.  Regional aircraft/corporate jets  ................................ ...........................  8 
5.3.3.  Military aircraft ................................ ................................ ....................  8 
5.3.4.  Helicopters  ................................ ................................ ...........................  8 
6. PRODUCT MARKET DEFIN ITION  ................................ ................................ .........  9 
6.1. Trimmable horizontal stabiliser actuator ("THSA")  ................................ ....... 10 
6.1.1.  Introduction  ................................ ................................ .......................  10 
6.1.2.  Relevant product market  ................................ ................................ .... 10 
6.1.3.  Mechanical sub -assemblies for the THSA system: the ball 
screw  ................................ ................................ ................................ .. 13 
6.2. Pilot Controls  ................................ ................................ ................................ ... 14 
6.2.1.  Introdu ction  ................................ ................................ .......................  14 
6.2.2.  Relevant product markets  ................................ ................................ .. 15 
6.3. Ice Protection  ................................ ................................ ................................ ... 19 
6.3.1.  Introduction  ................................ ................................ .......................  19 
6.3.2.  Relevant product markets  ................................ ................................ .. 19 
6.4. Oxygen systems  ................................ ................................ ...............................  22 
6.4.1.  Introduction  ................................ ................................ .......................  22 
6.4.2.  Relevan t product market  ................................ ................................ .... 23 
6.5. Aircraft seating  ................................ ................................ ................................  24 
6.5.1.  Introduction  ................................ ................................ .......................  24 
6.5.2.  Business jets seating  ................................ ................................ ..........  24 
6.5.3. Cabin attendant seating  ................................ ................................ ...... 25 
6.6. Interior lighting  ................................ ................................ ................................  26 
6.6.1.  Introduction  ................................ ................................ .......................  26 
6.6.2.  Relevant product market  ................................ ................................ .... 26 
6.7. Passenger Service Units  ................................ ................................ ..................  27 
6.7.1.  Introduction  ................................ ................................ .......................  27 
 
 
3 6.7.2.  Relevant product markets  ................................ ................................ .. 27 
6.8. Potable water systems  ................................ ................................ ......................  27 
6.8.1.  Relevant product market: potable water systems  ..............................  28 
6.8.2.  Components for potable water systems  ................................ .............  28 
6.9. Maintenance Repair and Overhaul ('MRO') operations and spare parts  .........  29 
6.10.  ARINC  31 
6.10.1.  Introduction  ................................ ................................ .......................  31 
6.10.2.  Relevant product market  ................................ ................................ .... 34 
6.11.  Inertial Measurement Units  ................................ ................................ .............  36 
6.11.1.  Introduction  ................................ ................................ .......................  36 
6.11.2.  Relevant product market  ................................ ................................ .... 36 
6.12.  Military GPS receivers  ................................ ................................ ....................  36 
6.12.1.  Introduction  ................................ ................................ .......................  36 
6.12.2.  Relevant product market  ................................ ................................ .... 37 
6.13. Air data systems  ................................ ................................ ..............................  37 
6.13.1.  Introduction  ................................ ................................ .......................  37 
6.13.2.  Relevant product market  ................................ ................................ .... 38 
6.14.  Aircraft Engines  ................................ ................................ ...............................  39 
6.14.1.  Introduction  ................................ ................................ .......................  39 
6.14.2.  Relevant product markets  ................................ ................................ .. 39 
6.15.  Avionics  ................................ ................................ ................................ ...........  40 
6.15.1.  Introduction  ................................ ................................ .......................  40 
6.15.2.  Relevant product markets  ................................ ................................ .. 40 
6.16.  Environmental control systems  ................................ ................................ ....... 42 
6.16.1.  Introduction  ................................ ................................ .......................  42 
6.16.2.  Relevant product market  ................................ ................................ .... 42 
6.17. Food and beverage preparation and storage equipment  ................................ .. 42 
7. GEOGRAPHIC MARKET DE FINITION  ................................ ................................  43 
7.1. Original aircraft equipment  ................................ ................................ .............  43 
7.2. MRO and spare parts  ................................ ................................ .......................  44 
8. COMPETITIVE ASSESSME NT ................................ ................................ ..............  44 
8.1. Horizontal relationships  ................................ ................................ ...................  44 
8.1.1. Analytical framework  ................................ ................................ ........  44 
8.1.2.  THSA  ................................ ................................ ................................ . 45 
8.1.3.  Pilot Controls  ................................ ................................ .....................  48 
8.1.4.  Ice Protection  ................................ ................................ .....................  51 
 
 
4 8.1.5.  Aircraft seating  ................................ ................................ ..................  54 
8.1.6.  Oxygen Systems  ................................ ................................ ................  55 
8.1.7.  Inter ior lighting  ................................ ................................ ..................  57 
8.1.8.  PSUs  ................................ ................................ ................................ .. 58 
8.1.9.  Potable water systems  ................................ ................................ ........  59 
8.1.10.  MRO and spare parts  ................................ ................................ .........  60 
8.2. Vertical links  ................................ ................................ ................................ ... 65 
8.2.1.  Analytical framework  ................................ ................................ ........  65 
8.2.2.  Mechanical sub -assemblies for the THSA system: the ball 
screw  ................................ ................................ ................................ .. 67 
8.2.3.  Components for potable water systems  ................................ .............  67 
8.2.4.  ARINC  ................................ ................................ ...............................  68 
8.2.5.  IMUs and GPS  ................................ ................................ ...................  79 
8.2.6.  Air data probes and Air data computers  ................................ ............  83 
8.3. Conglomerate links  ................................ ................................ ..........................  85 
8.3.1.  Introduction  ................................ ................................ .......................  85 
8.3.2.  Analytical framework  ................................ ................................ ........  86 
8.3.3.  General considerations on conglomerate effects of the 
Transaction  ................................ ................................ ........................  86 
8.3.4.  Aircraft engines and avionics  ................................ ............................  91 
8.3.5.  Environmental control systems and galley cooling  ...........................  99 
8.3.6.  Pilot controls, flight controls and actuation  ................................ ..... 100 
9. PROPOSED REMEDIES  ................................ ................................ ........................  102 
9.1. Analytical Framework  ................................ ................................ ...................  102 
9.2. Description of the proposed remedies  ................................ ...........................  103 
9.2.1.  THSA and pilot controls  ................................ ................................ .. 104 
9.2.2.  Ice protection systems  ................................ ................................ ..... 104 
9.2.3.  Oxygen Systems  ................................ ................................ ..............  105 
9.3. Assessment of the proposed remedies of 12 April 2018  ...............................  105 
9.3.1.  THSA and pilot controls  ................................ ................................ .. 105 
9.3.2. Ice protection systems  ................................ ................................ ..... 108 
9.3.3.  Oxygen Systems  ................................ ................................ ..............  110 
9.3.4.  Conclusion on the assessment of the proposed remedies  ................  111 
10. CONCLUSION  ................................ ................................ ................................ ....... 112 
 
 
 
5 Dear Sir or Madam,  
(1) On 12 March 2018 , the European Commission received notification of a 
proposed concentration pursuant to Article 4 of the Merger Regulation by which 
United Technologies Corporation (UTC) wi ll acquire within  the meaning of 
Article 3( 1)(b) of the Merger Regulation control of the whole of Rockwell 
Collins Incorporated (Rockwell Collins)  (the Transaction) . UTC is designated 
hereinafter as ‘the Notifying Party’3. UTC and Rockwell Collins are designated 
hereinafter as ‘the Parties ’. 
1. THE PARTIES  
(2) UTC provides high -technology products and services for the building systems 
and aerospace industries worldwide. The UTC group comprises the following 
business units: (i) Otis Elevator Company, (ii) U TC Climate, Controls & 
Security, (iii) Pratt & Whitney, and (iv) UTC Aerospace Systems.  
(3) Rockwell Collins is a manufacturer and supplier of aviation and integrated 
solutions for both commercial and government applications. It also 
manufactures and supplies a variety of aircraft cabin interior products.  
2. THE CONCENTRATION  
(4) Pursuant to an Agreement and Plan of Merger signed on 4 September 2017, 
UTC intends to purchase all shares in Rockwell Collins and thus acquire sole 
control over Rockwell Collins. The Transac tion therefore constitutes a 
concentration pursuant to Article 3(1)(b) of the Merger Regulation.  
3. EU DIMENSION  
(5) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 5 000 million ( UTC EUR 51 ,696 million, Rockwell Collins  
EUR  7,372 million ). Each of them has a Union -wide turnover in excess of 
EUR  250 million ( UTC EUR […] million, Rockwell Collins EUR  […] million ), 
but they do not achieve more than two -thirds of their aggregate Union -wide 
turnover within one and the same Me mber State. The notified operation 
therefore has an EU dimension pursuant to Article 1(2) of the Merger 
Regulatio n.  
4. PROCEDURE  
(6) For its assessment of the Transaction, the Commission has made use of the 
available means of investigation pursuant to Arti cle 11  of the Merger 
Regulation. In particular, the Commission sent e xtensive questionnaires to 
competitors (mainly aircraft component suppliers) and customers (airframers4 
                                                 
3  Publication in the Official Journal of the European Union No C 105, 20.3.2018 , p. 8. 
4  The company engage in the design and manufacture of the aircraft.  
 
 
6 and airlines). The Commission also conducted numerous phone interviews with 
competitors a nd customers . In reaction to  complaints received  from some  
market participants who highlight ed potential adverse effects of the Transaction 
on competition in different markets , the Commission conducted additional  
phone calls and addressed  written requests for information  to various market 
participants . The Commission also analysed internal documents originating from 
UTC and Rockwell Collins, including supply contracts with customers in certain 
select ed products  and including  internal strategy document s for integration plans 
after the Transaction. The Commission also collected and assessed bidding data 
from the Parties and their main customers  to assess competitive dynamics in the 
tender processes in different product markets .  
5. OVERVIEW OF THE AIRCR AFT MANUFA CTURING INDUSTRY  
(7) As a matter of general introduction, this section summarises the Commission's 
understanding of the basic features of the aircraft manufacturing industry, as 
explained mainly by the Notifying Party in the Form CO  and as previously 
summarize d by the Commission in prior decisions , and introduces terms and 
concepts used in the remainder of the decision.5  
5.1. Types of aircraft  
(8) For the purpose of the merger control assessment of the Transaction , four types 
of aircraft are relevant: (i) commercial aircraft, (ii) military aircraft, 
(iii) helicopters  and (iv) general aviation .  
(9) The commercial aircraft category includes large commercial aircraft, regional 
aircraft and business/corporate jets.  
(a) Large commercial aircraft are generally equipped with over 100 seats, 
can cover a range of more than 2,000 naut ical miles and cost over 
USD  35 million. A distinction can be drawn between (i) wide -body 
aircraft equipped with 200 -850 seats and carrying passengers over more 
than 4,000 nautical miles distances, and (ii) narrow -body aircraft 
equipped with 100 -200 seats and carrying passengers over 2,000 -4,000 
nautical miles distances.  
(b) Regional aircraft are generally equipped with 30 to 90 seats and can 
cover a range of less than 2,000 nautical miles. Regional aircraft are 
comprised of (i)  large regional aircraft which can tran sport 70 -90 
passengers and (ii)  small regional aircraft which can transport 30 -50 
passengers.  
(c) Business/corporate aircraft/jets are aircraft des igned for corporate 
activities and typically cost between USD 3 million and more than 
USD  50 million.  
                                                 
5  A very similar introduction was already included in case M.8425 – Safran/Zodiac Aerospace , 
paras. 9ff. 
 
 
7 (10) The military aircraft category comprises aircraft designed for military activities, 
be it combat aircraft or non -combat aircraft – i.e. designed for sear ch and rescue, 
reconnaissance, transport, observation and training.  
(11) Helicopters  include normal and transport rotorcrafts propelled by turbine 
engines used for civil or military applications6.  
(12) As a fourth category, the industry generally defines aircraft used for flight 
activities not involving commercial air transportation or aerial work as "general 
aviation aircraft". General aviation aircraft typically seat 1 -6 passengers and are 
generally equipped with piston -powered engines; they are used inter alia f or 
personal/private travel, air tourism, recreational flying, and air sports.  
5.2. Supply chain  
(13) The supply chain in the aerospace industry mainly comprises two types of 
suppliers: Tier -1 and Tier -2 (and Tier -3 as the case may be). Tier -1 suppliers 
generally ha ve integration capabilities and provide whole systems and 
equipment. Tier-2 suppliers tend to be active at an upstream stage, supplying 
components and sub -components which are later integrated into the 
systems/equipment by either the aircraft manufacturer or the Tier -1 supplier (or 
third -parties system integrators) . 
(14) On the demand side, different types of customers purchase systems and 
equipment depending on the type of aircraft considered.  
(a) Large commercial aircraft: depending on the system/equipment 
conside red, purchasers are either (i) aircraft manufacturers (also known 
as "airframers") with significant integration capabilities or (ii) end -
users – inter alia airlines, lessors and national governments – who 
sometimes directly purchase certain equipment and s ystems from the 
Tier-1 supplier.  
(b) Regional aircraft/corporate jets: systems and equipment are usually 
purchased by aircraft manufacturers who then resell the whole aircraft 
to end -users.  
(c) Military aircraft and helicopters: systems and equipment are usually 
purchased by aircraft and helicopter manufacturers, in some cases also 
the Ministry of Defence depending on the equipment or system 
considered. Helicopter/military aircraft manufacturers will in any case 
provide the integration of main systems and equipment . 
5.3. Procurement process  
(15) In most cases, customers in the aircraft manufacturing industry source systems 
and equipment by means of competitive tender offers, often for the duration of 
the aircraft programme in question. The structure of the tender process can vary 
according to the aircraft type, customer involved or platform in question.  
                                                 
6  Very small light helicopters are also equipped with piston -driven engines.  
 
 
8 5.3.1.  Large commercial aircraft  
(16) Aircraft manufacturers of large commercial aircraft can either source products 
through build -to-print or build -to-specification ("build -to-spec") proc esses. The 
build -to-print process requires the supplier to manufacture equipment, systems 
and components to the exact specifications provided by the customer. The build -
to-specification process, on the other hand, allows the supplier to use its own 
design and manufacturing skills.  
(17) Additionally, a distinction needs to be drawn between buyer -furnished 
equipment ("BFE") and supplier -furnished -equipment ("SFE"). BFE are 
purchased by end -users (e.g. airlines), whereas SFE are purchased by the aircraft 
manufactur er before the sale of the aircraft to the end -user.  
(18) With respect to SFE, suppliers for the different systems and equipment of an 
aircraft platform are selected through a competitive tender process. When 
launching a new aircraft platform, the aircraft manuf acturers first issue Requests 
for Information ("RFI") to several prospective bidders in order to identify a 
preliminary list of potential suppliers for the systems/equipment/part that it will 
not manufacture in -house. The aircraft manufacturers then typica lly issue 
Requests for Proposals ("RFP") in order to "down -select" a limited number of 
final candidates who will submit "Best and Final Offers" on the basis of which 
final negotiations and selection will be conducted.  
(19) Tenders for BFE products typically occ ur at a later stage of the procurement 
process, around two years before the delivery of the aircraft.  
5.3.2.  Regional aircraft/corporate jets  
(20) Contrary to the procurement process for large commercial aircraft (which can be 
based either SFE or BFE), most equipment and systems for regional 
aircraft/business jets are sold on an SFE basis. The purchasers are therefore in 
most cases the aircraft manufacturers and not end -customers.  
5.3.3.  Military aircraft  
(21) The procurement process for equipment and systems for military aircraft  follows 
a specific pattern. Due to the low volume of aircraft and to the complexity of the 
integrated systems, the procurement process requires close cooperation between 
the airframer, the system supplier and the National Procurement Authority 
acting on b ehalf of the end -users.  
5.3.4.  Helicopters  
(22) The procurement of systems and equipment for helicopters is usually organized 
by the helicopter manufacturer, though certain parts can also be sourced directly 
by Ministries of Defence for military helicopters (e.g. engi nes). For helicopters, 
purchases take place by means of a tender process or through a negotiated 
procedure.  
 
 
9 6. PRODUCT MARKET DEFINITION  
(23) UTC and Rockwell Collins are important worldwide suppliers of aircraft 
equipment  and the Transaction is one of the largest in the aerospace industry to 
date. UTC and Rockwell Collins have broad but generally complementary 
product portfolios  as illustrated by Figure 1. More than [90-100]% of Rockwell 
Collins’ commercial business does not lead to any horizontal overlaps with 
UTC’s activities . 
Figure 1 - Complementarity of the portfolios, UTC internal document7 
 
 
(24) This decision analyses the limited number of horizontal8 and vertical relations 
created by the transaction , including the Parties' activities on the aftermarket  in 
terms of maintenance , overhaul and repair ('MRO') operations and the sale of 
spare parts . Given that a number of the Parties’ products are  complementary , the 
assess ment  also extends to the analysis of conglomerate effects.  
                                                 
7  Internal document […]. 
8 In addition to the horizontal overlaps analysed in the following section , the Parties' activities also 
overlap in the supply of aircraft interface devices ("AID") and air data computers. The combined 
marke t shares in those products are below 20% so that no horizontally affected markets arise. It is 
relevant, however, to assess the vertical and conglomerate links of these activities with other activities 
of the Parties. For this reason, those horizontal over laps are assessed in the datalink network services 
section (section 8.2.4 ) and in the air data system section (section 8.2.6 ), respectively.  
 A further potential horizontal overlap between the Parties' activities concerns electronic engine 
controls, which are the interface between the throttle and the fuel system of an airc raft. In 2016, 
Rockwell Collins achieved USD […] turnover supplying electronic engine controls for small piston 
engines. UTC supplied electronic engine controls for gas turbine engines. Due to Rockwell Collins' 
limited activities and the Parties' focus on different engines, this horizontal overlap does not lead to 
serious doubts as to its compatibility with the internal market and is therefore not discussed further in 
this decision.  

 
 
10 6.1. Trimmable horizontal stabiliser actuator ("THSA ") 
6.1.1.  Introduction  
(25) THSA systems are a subset of aerospace flight control actuation s ystems. 
Actuation systems are hydraulically, mechanically or electronically driven 
components that are controlled from the cockpit. They physically move flight 
control surfaces of a plane (such as rudders, ailerons, elevators, slats or flaps) or 
angle the rotors on a helicopter to steer the aircraft in flight or assist in take -off 
and landing. The THSA’s function is to move the horizontal stabiliser that 
controls the pitch of the aircraft.9  
Figure 2 - THSA  
  
Source: Form CO . 
6.1.2.  Relevant product market  
(26) The Commission has not specifically assessed THSA s so far. In a previous case, 
the Commission considered a segmentation  of actuation systems into primary 
flight control actuators (“PFCA”), secondary flight control actuators (“SFCA”)  
and THSA. The question whether the THSA constituted a separate market or 
was part of the PFCA or SFCA markets was ultimately left open.  
(27) In a previous case, the Commission  found  that the markets for actuations 
systems should not be further segmented accor ding to the size of the aircraft.10 
(28) As regards a differentiation between civil and military applications , in previous 
decisions,11 the Commission has left open whether actuation systems for 
commercial/civil and military aircraft constitute separate product m arkets.  
(29) The Notifying Party  agree s12 that THSAs should indeed be considered a product 
market separate from other actuation products, due to the absence of demand 
side substitutability and limited supply side substitutability: not all THSA 
suppliers are able to manufacture the PFCA and SFCA  and vice versa . For 
example, whereas UTC manufactures the full range of actuators, Rockwell 
Collins is only active in the manufacture of the THSA. The Parties explain that 
                                                 
9  Form CO, THSA, paras 6.9 -6.10.  
10  Case COMP/M.6410 – UTC/Goodrich , paras. 94 and 98 .  
11  Case IV/M.1493 – United Technologies/Sundstrand , p. 19; Case COMP/M.2183 – Smiths 
Industries/TI Group , para. 8; case COMP/M.2892 – Goodrich/TRW Aeronautical Systems Group , 
para 10; case COMP/M.6410 – UTC/Goodrich , para. 96.  
12  Form CO, THSA, paras 6.31 -6.34.  

 
 
11 THSAs are sometimes tendered together with eit her the PFCA  or the SFCA . 
They reckon however that in most cases, they are sourced standalone.13 
(30) In the Notifying Party's ' view, in line with the Commission precedent, the size of 
the aircraft does not further segment the market for THSAs . UTC sees  the 
technology  as largely scalable and believes  that all THSA producers are capable 
of supplying any size of aircraft14. Furthermore, UTC  submit s that no dividing 
line between small and large aircraft is possible to be drawn in this respect.  
(31) The Notifying Party considers15 there is no important distinction between civil 
and military applications for THSA systems. In the vast majority of cases, 
THSA products on civil and military applications are similar. The Notifying 
Party explains that this is because THSA syste ms are only used on military 
transport aircraft, rather than specialized military combat aircraft ( e.g., fighter 
jets), which are similar to the commercial application. Moreover, the same 
suppliers are generally active in both civil and military applicatio ns and there 
will therefore be a similar number of alternative suppliers under either market 
definition post -Transaction.  
(32) The Notifying Party  however  argue s16 that THSAs can be differentiated 
according to the technology they use  into hydraulic and electric  THSAs. UTC 
submit s that in general, large commercial aircraft utilise mechanically controlled 
hydraulic motors, where the motor provides additional speed, force and 
reliability needed to move the heavier control surfaces used by the large aircraft. 
Most r egional and business jets on the other hand utilize electric THSAs as less 
power is required and electric THSA s are lighter in weight and more efficiently 
operated. The Parties however acknowledge that there have been some 
exceptions, such as the B787 and A350, large commercial aircraft that use 
electrical THSAs , and regional and business jets that use hydraulic THSAs, such 
as the Gulfstream  G550 .  
(33) As concerns the pricing of THSAs , the Notifying Party  submit s that hydraulic 
THSAs are significantly more expensive than electric ones, hydraulic ranging 
from USD  […] to USD […] while  Rockwell Collins' electric THSAs cost in 
general USD […]. The […]'s electric THSA fell into the  price range of the 
hydraulic, however , at USD […].17  
(34) According to the Notifying party, n ot all suppliers are capable of manufacturing 
both types: Although UTC has electro -mech anical design capability, it only 
manufactures hydraulic THSAs18 whereas Rockwell Collins produces only 
electro -mechani cal ones and claims not being able to manufacture the hydraulic 
variant . The Notifying Party  submit s that the hydraulic system alone constitutes 
half of the price of a hydraulic THSA, limiting supply side substitutability . 
                                                 
13  E.g. for the […], the THSA was tendered as part of the PFC A, whereas […] has tendered all THSAs 
separately for all platform in the past 10 years.   
14  The Parties also note that THSAs are only present on the more sophisti cated aircraft, most business 
jets and smaller aircraft do not have THSA systems.   
15  Form CO, THSA , para 6.31.  
16  Form CO, THSA , para 6.37.  
17  Form CO, THSA, para 6.15.  
18  The […] supply an electric THSA system . 
 
 
12 (35) The results of the Commission's  market investigation confirmed  the Parties' 
argument that THSA s were  indeed a separate market  from the rest of the 
actuators due to the absence of  demand side substitutability and  the limited 
supply side substitutability.19 
(36) Market participants  also confirm ed that size of the aircraft did not matter, as  
scaling up was not an issue for suppliers from a  technology standpoint: 
specification and characteristics of THSAs are  always  unique and associated to 
the aircraft type, size and load which they are designed  for.20  
(37) As regards military THSA, respondents mostly thought that in principle they are 
to be  different iated  from civil applications , as the structure of the aircraft that 
the THSA is mounted on  is differed and prices for military THSA s are 
significantly hi gher, as platform size did not allow allocating  the fixed 
development costs across  a large number of products.  It was noted, however, 
that in general, as also true for the military application, the THSA is custom 
made for the platform and in this respect commercial and military THSA s were 
similar.21  
(38) As regards a sub -segmentation into hydraulic and electro -mechanical THSA, 
from a technological perspective hydraulic and electric THSAs are different, 
prices are usually different and the market investigation confirmed that the 
aircraft OEM will set the aircraft design requirements and specify if they are 
seeking hydraulic or electrical actuation in most cases.22  
(39) However, some respondents have also submitted that airframers may ask for 
studies for both solution s (electric or hydraulic) in some early requests for 
information.  They also explained that electro -mechanical THSAs are gradually 
replacing hydraulic ones, independent ly of the size of the aircraft. Hydraulic 
THSAs and electro -mechanical THSAs have  therefo re gradually enter ed more 
and more in competition wi th each other.23 
(40) Even if , in general, it appears that larger aircraft are more likely to use a 
hydraulic THSA, evidence shows  that Rockwell Collins is already present on 
the […] and Moog on the […] with el ectro -mechanical THSA. Furthermore, 
some p latforms  have hybrid system s with both, hydraulic and electric THSA.  
(41) The responding competitors pointed to some supply side substitution, too, 
stating that manufacturers with electro -mechanical capability could technically 
also start manufacturing hydraulic  THSAs, as these are technologically 
simpler .24 
                                                 
19  See minutes of calls with THSA competi tors on 30 November 2017 , 10 January 2018 and 
16 January  2018, s ee also replies to question 31 of Questionnaire 1 - Competitors . 
20  See replies to question 31.3 to Questionnaire  2 - Airframers.  
21  See replies to question s 8 and  31 of Questionnaire 1 - Competitors and question 3 0 of Questionnaire 2 
- Airframers.  
22  See replies to question 31 of Questionnaire 1 - Competitors and question 31 of Questionnaire 2 - 
Airframers.  
23  See replies to question 3 2 of Questionnaire 1 - competitors . 
24  See minutes of calls with THSA competitors on 20 February 2018, see replies to question 31 of 
Questionnaire 1 - Competitors and replies to question 31 of Questionnaire 2 – Airfamers.  
 
 
13 (42) In summary , the market investigation did not confirm the justification for further 
segmenting THSAs into electric and hydraulic  THSAs . Therefore, for the 
purposes of the present decision the Commission  consider s that the market for 
THSAs will encompass both electric and hydraulic THSAs for any type of 
aircraft. Whether the relevant product market for THSAs is to be sub -segmented 
into civil and milit ary application, will be left open.  
6.1.3.  Mechanical sub -assemblies for the THSA system: the ball screw  
(43) The mechanical ball screw assembly is the main mechanical component of the 
THSA. Mechanical sub -assemblies include ball screws (a screw and nut 
assembly that  has a rolling ball interface between the screw and nut to give 
efficient operation), as well as a trunnion assembly, a no -back, and all secondary 
load path devices. For the purposes of operating the THSA, the screw is rotated 
and the nut (which is prevent ed from rotating) translates rotational motion to 
linear motion.25 
Figure 3 - Ball screw  for the THSA  
 
Source: Form CO . 
(44) The ball screw constitutes a major proportion of the value of the THSA system, 
[…] as reported by the Parties.26 
(45) Only UTC is active in the manufacture of ball screws, Rockwell Collins is not.  
(46) Other suppliers of THSA systems, e.g., Liebherr, Moog or  Parker, do not have 
in-house design and production capabilities for ball screws either and will 
procure the ball screw  assembly to specification.27 Also Boeing has been 
sourcing components and integrated the THSA system internally.  
(47) In a previous decision, the Commission discussed the market for ball screws for 
THSA and found that these sub -assemblies were specific to the THSA and could 
                                                 
25  Form CO, para 6.39.  
26  See reply to question 60 of the Commission's RFI# 1 on 21 Decem ber, 2017.  
27  Form CO, para 6.40, confirmed by the market investigation, s ee replies to question 34 of 
Questionnaire 1 - Competitors.  

 
 
14 not be used for other actuators.28 The ultimate market definition was left open 
however.   
(48) For the purposes of the assessment of this case, the Commission will consider  
the relevant product market for ball screw s for THSAs . Even under this 
narrowest plausible market definition, no serious doubts arise as to the 
compatibility of the Transaction with the internal market.  
6.2. Pilot Controls  
6.2.1.  Introduction  
(49) Pilot controls are equipment directly accessible to the pilot in the cockpit 
providing the man -machine interface for piloting functions (speed up, brake, 
land, etc.). Pilot controls typically include throttle quadrants, joysticks and 
yokes, rudder pedals, flight deck control suites, active side stick units, thrust 
control assemblies, different kinds of  levers (flap slat lever, landing gear control 
lever, braking control lever, speedbrake lever) and nose wheel steering 
handles29. Pilot controls are based on three main technologies: (i) mechanical or 
manual, (ii)  hydro -mechanical / hydraulic, and (iii) fly-by-wire30. 
(50) The Parties' activities only overlap with regard to three types of pilot controls:  
(a) Pilot control sticks  (hereinafter also referred to as 'sticks') , that is center 
yokes and sidesticks,  whereas Rockwell Collins  manufactures and sells 
center yokes  (but no sidesticks) , and UTC  manufactures and sells 
sidest icks (but no center yokes) . Pilot control sticks  are used primarily to 
control an aircraft’s elevators and ailerons. The elevators are part of the 
tail, at the rear of an aircraft, and they ad just an aircraft’s pitch. This 
allows the pilot to change the angle of attack, increasing or decreasing the 
altitude. The ailerons form part of the trailing edge of the wings, and they 
help to control the aircraft in roll31.  
 Center yokes  consist of a grip positioned on a central column front 
and center for both the pilot and co -pilot. Rotating the control 
wheel moves the ailerons and rolls the axis. Fore and aft 
movem ents of the control column move the elevator and change  
the pitch of the axis32. 
 A sidestick  is located on the side console of the pilot. Sidesticks 
convert the pilot’s hand movements into electrical signals, which 
are then processed by the aircraft’s computers to determine how to 
move the control surfaces to best achieve what the pilot wants. 
This replaces mechanical linkages and means that pilot inputs do 
not directly move the control surfaces33. Most sidesticks today are 
'passive' sidesticks meaning that there is no tactile feedback from 
                                                 
28  Case COMP/M.6410 – UTC/Goodrich , paras 102ff.  
29  Case M.8425 – Safran/Zodiac Aerospace , para. 183.  
30  Form CO, Pilot Controls, para. 6.2.  
31  Form CO, Pilot Controls, para. 6.5. 
32  Form CO , Pilot Controls , para. 6.6. 
33  Form CO , Pilot Controls , para. 6.11.  
 
 
15 the aircraft or the other pilot. 'Active' sidesticks, introduced only 
recently, provide tactile and visual feedback in response to pilot 
and autopilot commands but have not yet been widely adopted in 
the commercial aircraft space34. 
(b) Rudder brake pedal systems ('RBPS')  are located on the floor in front of 
the p ilot. They control the rudder, as well as the brakes on the wheels 
while the aircraft is touching the ground. The rudder is a vertical flight 
surface typically attached to the fin (or vertical stabilizer). It allows the 
pilot to control the yaw of the vert ical axis to change the horizontal 
direction in which the nose is pointing35. 
(c) The throttle quadrant assembly  ('TQA ') is normally located on the 
centre console, between the pilot and first officer. It allows the pilot to 
control the fuel flow in an aircraft,  which determines the engines’ 
thrust36.  
Figure 4 - Pilot controls in a cockpit  
 
Source: Form CO . 
6.2.2.  Relevant product market s 
(51) Pilot controls have been subject of Commission precedents  only to a limited 
extent. The Commission previously  noted that, according to its market 
investigation, the pilot controls have very different functions, technologies, 
requirements, procurement and suppliers  and therefore the claim that no 
distinction should be made between different pilot control s for the purpose of a 
market definition was not confirmed. However, ultimately, the exact product 
market definition was left open37. 
                                                 
34  Form CO , Pilot Controls , paras. 6.14, 6.15.  
35  Form CO , Pilot Controls , para. 6.16.  
36  Form CO , Pilot Controls , para. 6.18.  
37  Case M.8425 – Safran/Zodiac Aerospace , paras. 188 -191. 

 
 
16 6.2.2.1.  The Notifying Party's submission  
(52) In line with this precedent, t he Notifying Party submit s that center yokes, 
sidesticks , RB PS and TQA should all be considered separate products market 
due to the lack of demand side substitutability and only limited supply side 
substitutability between the different types of pilot controls38.  
(53) This segmentation should apply both for civil as well as for military 
applications39. Furthermore, no segmentation should be made according to 
different type of technology40. Ultimately , the Notifying Party claim s the market 
should not be further segmented by the type of aircraft (large commercial, 
regiona l or business jet)41, refer ring by analogy to the decision in  
UTC/Goodrich42, where the Commission concluded that markets for actuations 
systems should not be further segmented according to the size of the aircraft43.  
(54) In particular as regards the distinction  between the pilot control sticks 'center 
yokes' and 'side sticks', the Notifying Party  maintain s that these pilot controls 
belong to separate markets, which are not affected markets for the purpose of 
this Transaction. Whereas from a demand -side perspecti ve, yokes and sidesticks 
perform the same function, both pilot controls are strongly differentiated and 
subject to airframers' particular preferences (historical design, engineering 
philosophy). The Notifying Party  finally  argues  from a supply -side perspec tive 
that it would be difficult for a supplier of sidesticks to manufacture center yokes 
and vice versa44.  
6.2.2.2.  The Commission's assessment  
(55) The results of the Commission's  market investigation confirmed the Notifying 
Party's  approach to assume separate product markets for pilot control sticks, the 
RBPS and TQA.  
(56) A regards demand side considerations, t he vast maj ority o f respondents 
confirmed that sticks, RBPS and TQA are not substitutable with one another and 
that they do not  have similar prices. Some respondents put forward that the pilot 
controls have similar technical characteristic , but this was not the majority45. 
One customer responded that " [d]espite the fact that they are all part of cockpit 
control, sticks, RBPS and TQ A do not have the same function and are not used 
in the same way (RBPS is used with the feet when the others with the hand). In 
this context, it is not the same loads that can apply the pilots (i.e. Pilot is able to 
develop much higher loads with the legs than with the hand). ", whereas another 
                                                 
38  Form CO , Pilot Controls , paras. 6.30 – 6.32.  
39  Form CO , Pilot Controls , para. 6.34.  
40  Form CO , Pilot Controls , para. 6.33.  
41  Form CO , Pilot Controls , para. 6.35.  
42  Form CO, Pilot Controls , para. 6.35.  
43  Case COMP/M.6410 – UTC/Goodrich , para. 98.  
44  Form CO, Pilot Controls, paras. 6.37 – 6.40.  
45  See replies to question 48  of Questionnaire 1 – Competitors ; Replies to question 50 of 
Questionnaire  2 –Airframers.  
 
 
17 stated that " [s]ticks, RBPS, and TQA are technically different. These products 
perform different functions "46. 
(57) The results of the market investigation showed further  that there are  are no clear 
indications of sufficien t supply side substitutability to include the products in the 
same relevant market.  Even if there are opinions that a supplier of one kind of 
pilot controls (sticks, RBPS, TQA) may easily start producing another kind of 
pilot controls, this has been challe nged by roughly the same number  of 
respondents  in the Commission's investigation47.  
(58) Furthermore, t here is no differentiation required as regards the type of the 
aircraft. Market participants widely  agreed that it wou ld not make a difference if 
the pilot controls are used on a large commercial aircraft, regional aircraft or 
business jet4849. 
(59) In relation to sidesticks and center yokes, t he majority of responses to the 
market investigation concurred that sidesticks and center yokes are not fully 
substitutable with one another and that they lack similar technical  
characteristics. There are differences in prices, even though there is a wide 
understanding that the purpose of sidesticks and center yokes is the same50. As 
regards the supply -side substitutability, the  investigation produced a mixed 
picture. Some respondents believe that a sidestick manufacturer can easily start 
producing center yokes and vice versa51. Other s disagree  however . One 
respondent mentioned that : "Sidesticks and centre yokes may have similar 
technical characteristics; but sidestick controls 2 axes and centre yoke controls 
1 axis "; and another submitted that  "Suppliers of side sticks can NOT easily start 
producing centre yokes because the technology of the 2 products is different "52.  
(60) However, it  should be noted that a majority of market participants takes the 
view that sidesticks and center yokes do compete53. This is explained by the fact 
that " [s]ide sticks supplier may influence aircraft manufacturers to move from 
center yokes (older technology ) to side stick (newer technology (…)) "54 
                                                 
46  See a reply to que stion 50  of Questionnaire 2 –Airframers.  
47  See replies to question 48  of Questionnaire 1 – Competitors ; replies to question 50  of Questionnaire 2 
– Airframers.  
48  See replies to question 48.2  of Questionnaire 1 – Competitors . Replies to question 50.2  of 
Questionnaire 2 – Airframers.  
49 As regards a potential segmentation according to either civil or military use of an aircraft, the 
Commission's market investigation did not provide sufficient evidence that such segmentation should 
be made for the purpose of the product market definition - Replies to question 30  of Questionnaire 2 –
Airframers.  
50  See replies to question 51  of Questionnaire 1 – Competitors ; Replies to ques tion 51 of 
Questionnaire  2 – Airframers.  
51  See replies to question 51  of Questionnaire 1 – Competitors ; Replies to question 51 of 
Questionnaire  2 – Airframers.  
52  See replies to question 51.1  of Questionnaire 2 – Airframers.  
53  See replies to question 52  of Questionnaire 1 – Competitors . 
54  See a reply to question 52.1  of Questionnaire 1 – Competitors . 

 
 
19 6.3. Ice Protection  
6.3.1.  Introduction  
(65) Ice protection systems are used to prevent the accretion of ice on aircraft 
surfaces or remove accreted ice, in particular, on propellers and the leading 
edges of aircraft wings. The systems  operate either by preventing the initial 
accretion of ice or by periodically removing any ice which has formed58. 
(66) There are several applications for ice protection on an aircraft, such as on wing s, 
on the vertical and horizontal stabilizers, on windshields, sensors, etc .59.  
(67) Furthermore, ice protection products for the same application on aircraft may 
utilize different kinds of technologies, such as pneumatic ice protection, 
thermal -pneumatic ice protection, chemical ice protection, electro -therma l ice 
protection  and electro -mechanical expulsion ice protection60. 
(68) The Parties are both active  in ice protection systems for wing s and propeller 
heaters  with the overlap concerning mainly general aviation aircraft . UTC 
manufactures wing ice protection prod ucts based on the pneumatic ice 
protection technology and to a certain extent electro -thermal technology , and 
propeller ice protection products based on electro -thermal technology  as well as 
chemical technology . Rockwell Collins produces wing ice protectio n products 
based on pneumatic ice protection technology  and propeller ice protection 
products based on electro -thermal technology  as well as chemical 
technology61,62. 
6.3.2.  Relevant product market s 
(69) There are no Commission precedents as regards ice protection products on 
aircraft.  
6.3.2.1.  The Notifying Party's submission  
(70) The Notifying Party  propose s to define different ice protection markets based on 
the application on the aircraft. It argue s that there is n o demand substitution 
between ice protection product s designed for different applications , that 
                                                 
58  Form CO, Ice Protection, para. 6.1. For the purpose of this decision, the term 'ice protection' or 'ice 
protection systems', respectively, is used both for syste ms that prevent the accretion of ice and for 
systems that remove already accreted ice.  
59  Form CO, Ice Protection, para. 6.39.  
60  Form CO, Ice Protection, para. 6.7-6.28. 
61  Parties' reply to question 35 of RFI 3  pre-notification  of 7 February 2018, as re gards the production of 
ice protection products for propellers based on chemical technology.  
62  The Parties overlap in a third product: engine inlet de -icers. These can be either pneumatic or 
elastromeric and are designed to protect the inlets placed on t he wings. According to the Notifying 
Party, the combined turnover does not exceed EUR […] and the Parties' combined market share is 
[0-5]% (Form CO, Ice Protection, paras. 6.55 and 6.56). Considering the very limited size of this 
activity and hence a very limited potential impact on competition as well as the lack of complaints in 
the market investigation, this product will not be discussed further in the decision.   
 
 
20 procurement for each application is carried out separate ly, and  that the supply -
side substitution is limited63. 
(71) Hence, the Notifying Party  submits  that there are  two relevant product markets:  
(a) for wing ice protection products ; and  
(b) for propeller ice protection products (that are sometimes  also referred 
to as 'propeller heaters ').  
(72) In the Notifying Party's  view, the relevant product market for wing ice 
protection also includes ice protection products for vertical and horizontal 
stabilizers, as there is, as opposed to other applications on aircraft, a high degree 
of supply -side substitutability since  most of  wing ice protection supplier s also 
offer ice protection products for vertical and horizontal stabilizers64.  
(73) The Notifying Party  also claim s that further segmentation s by aircraft type are 
not warranted65.  
(74) Furthermore, according to the Notifying Party , no distinction sh ould be made 
between sale of ice protection products on the original equipment market and on 
the aftermarket66. 
(75) Finally , for wing ice protection products  in particular , the Notifying Party  bring s 
forward that the relevant product market shall comprise all ice protection 
technologies that could be used on aircraft that mig ht use pneumatic ice 
protection. In the Notifying Party 's view this excludes thermal -pneumatic ice 
protection systems (also referred to as 'bleed air systems') as these are used 
primarily on large commercial aircraft, regional jets and large business jets, 
which are types of aircraft that do not use pneumatic ic e protection67.  
(76) Since virtually all propeller ice protection products utilize the same technology 
(electro -thermal), no distinction should be made in consideration of the 
technology  in the opinion of the Notifying Party68. 
6.3.2.2.  The Commission's assessment  
(77) The results of the Commission's  market investigation did not indicate anything 
to the contrary  that each ice protection application on the aircraft constitute s a 
separate product market . More specifically, the market investigation confirmed, 
in line with the Notifying Party's ' view, that ice protection on wings and (vertical 
and horizontal) stabilizers belong to one product market .69 One respondent 
                                                 
63  Form CO, Ice Protection, para. 6.40.  
64  Form CO, Ice Protection, para. 6.41.  
65  Form CO, Ice Protection, para. 6.43.  
66  Parties' reply to question 101 of RFI 1  pre-notification  of 14 November 2017; Form CO, Ice 
Protection, footnote 77.  
67  Form CO, Ice Protection, para. 6.45.  
68  Form CO, Ice Protection, para. 6.46.  
69  See replies to question 120 of Questionnaire 1 – Competitors ; Replies to question 118  of 
Questionnaire  2 –Airframers.  
 
 
21 pointed out that as regards ice protection for wing s and stabilizers " same 
physics, same thermodynamics " apply70. 
(78) Howe ver, respondents  to the market investigation indicated a further relevant 
segmentation of the product market by technology  for wing ice protection and 
horizontal and vertical stabilisers . Whereas pneumatic, thermal pneumatic, 
thermal electric, ch emical and  electro -mechanical (' EMEDS ') ice protection 
technologies exist for wing ice protection and vert ical and horizontal stabilizers, 
only thermal electric and chemical are the technical options for propeller 
heaters71.  
(79) For wing ice protection, a ccording to the  market participants , the technologies 
are not substitutable with each other. Whereas the intended use is identical, the 
majority of respondents held that ice protection systems of these kinds differ in 
product characteristics and price  and are not substit utable with one another in 
general. Respondents to the market investigation explained that " [t]he different 
methods are technically different and thus not substitutable with one another " 
and supported the opinion that " these technologies are not generally 
interchangeable ". Additionally, suppliers using certain technologies cannot 
easily start producing wing ice protection using other technologies72. Relating to 
supply side substitution , it was stated that " [i]t is a significant investment for a 
supplier to a dd the capability of another technology (eg it is a significant 
undertaking for an electro -thermal supplier to add chemical technology, it is a 
significant investment for a pneumatic supplier to add electro -mechanical 
technology, etc) "73. 
(80) This result is sup ported by further replies received during the market 
investigation dem onstrating  that different technologies for wing ice protection 
cannot be used on all type s of aircraft. Market participants stated, among others, 
that " [p]neumatic de -icing could certainly hardly be implemented on certain 
commercial aircraft (…) " and that " [d]e-icing [technologies are] generally used 
on smaller, slower aircraft [whereas] [a]nti -icing (higher performance) [are] 
generally used on larger faster (jet category) transpor ts"74 
(81) The Commission notes that replies from the market investigation do not 
distinguish between different ice protection products solely in view of the type 
or size of the aircraft but rather point out that the suitability of an ice protection 
technology depends on several technical criteria such as the aircraft speed or the 
wing material . Certain technical criteria may be more common for c ertain types  
of aircraft but a type or size of an aircraft , respectively,  does not necessarily 
determine specific tech nical criteria75. 
                                                 
70  See a r eply to question 120  of Questionnaire 1 – Competitors . 
71  Form CO, Ice Protection, para. 6.39 including Table 3.  
72  See replies to question 119  of Ques tionnaire 1 – Competitors ; Replies to question 117  of 
Questionnaire  2 – Airframers.  
73  For all  quotes in this paragraph: See replies to question 119.1  of Questionnaire 1 – Competitors . 
74  For all  quotes in this paragraph: See replies to question 119.1 of Q uestionnaire 2  – Airframers . 
75 As regards a potential segmentation according to either civil or military use of an aircraft (this applies 
both for wing and stabilizer ice protection as well as for propeller ice protection), the Commission's 
market investigation die not provide sufficient evidence that such segmentation should be made for 
 
 
 
22 (82) For propeller ice protection products, the market investigation indicated that 
propeller ice protection products are in general substitutable in terms of prices 
(the prices are different in absolute terms but similar in proportion to the s ize of 
the propeller) and th e intended use, but may, however, differ in terms of certain 
technical criteria76. 
(83) Furthermore, a ccording to the majority of the market respondents, the original 
equipment sales market and the aftersales market sh ould not be considered as 
separate markets in ice protection products77. One respondent explained that 
"[t]he aftermarket is not necessarily independent from the OE market due to the 
fact that suppliers normally protect their right to distribute the product, un less 
you are licensed by the OE to do so. "78 
(84) The Commission concludes that for the purpose of defining the relevant product 
markets for ice protection products on aircraft, different technologies (such as 
pneumatic, thermal -pneumatic, electro -thermal, chemi cal, electro -mechanical 
expulsion), each form a separate product market.  
(85) The Commission further concludes that as regards the specific ice protection 
applications on wings and stabilizers, these belong to the same product market.  
(86) There are strong  indicat ions for separate markets of  the applications of ice 
protection products on aircraft (wings, propellers, etc.). Therefore, the 
Commission concludes that , except for the specific constellation of wings and 
stabilizers, the relevant product market is to be s egmented according to different 
applications for ice protection products.   
(87) In conclusion , the Commission takes the view that no further segmentation of 
the relevant product markets should be made according to the type or size of an 
aircraft and between ori ginal equipment sales market and the aftermarket.  
6.4. Oxygen systems  
6.4.1.  Introduction  
(88) Oxygen systems provide supplemental oxygen to passengers and crew members 
for specific situations or for the provision of emergency oxygen in the event of 
smoke, fire, fumes, or  loss of cabin pressure. They are present throughout the 
aircraft, and are a regulatory requirement for aircraft which fly above a certain 
altitude . 
(89) Oxygen systems consist of a number of individual yellow oxygen masks stored 
in the compartments near passenger seats (as presented in Figure 5) and near 
areas like la vatories and galleys, and an oxygen source, such as a centralized 
gaseous cylinder or decentralized chemical oxygen generator. A chemical 
                                                                                                                                                 
the purpose of the product market definition – See replies to question 30  of Questionnaire 2 –
Airframers.  
76  See replies to question 121 and 121.1  of Questionnaire 1 – Competitors ; replies to question 120 
and 120.1  of Questionnaire 2 – Airframers.  
77  See replies to question 122  of Questionnaire 1 – Competitors ; replies to question 121  of 
Questionnaire  2 – Airframers.  
78  See a reply to question 121  of Questionnaire 2 – Airframers . 
 
 
23 oxygen generator system connects to a limited number of masks in a certain 
compartment ( e.g., above a passenger seatin g row). Pulling a mask will trigger 
the supply of oxygen which will last for at least 15 minutes. The entire system 
can usually be reset in the cockpit or in some other location in the aircraft.79 
Figure 5 - Oxygen systems  
 
Source : Form CO . 
(90) Aircraft also typically have portable oxygen systems on board for the crew. 
Portable systems exist in different forms: masks connected to portable devices, 
or even hoods.  
6.4.2.  Relevant product market  
(91) The Notifying Party considers that oxygen systems form part of a single relevant 
product market  for civil applications .80 According to the Notifying Party, a ll 
oxygen systems, across all aircraft types, both portable and non -portable, have 
similar underlying technology and a similar production process. Fur ther, oxygen 
systems generally perform the same function, and are held to the same 
regulatory requirements, regardless of aircraft type. Moreover, all main market 
players offer a full range of oxygen systems.81 
(92) The Commission has not previously considered t he market for aircraft oxygen 
systems . 
(93) The market investigation has not brought any evidence that would go against the 
Notifying Party's proposed market definition. Further, any potential 
segmentation of the oxygen market (by aircraft type or between porta ble and 
non-portable oxygen systems) would have no impact on the competitive 
assessment. The precise market definition for oxygen systems can therefore be 
left open . 
                                                 
79  Form CO, other products, paragraphs 6.3 to 6.6.  
80  Military applications are different from a technological perspective. If military applications are 
include in the oxygen market, the market share of Rockwell Collins would be lower accordi ng to the 
Notifying Party ( [30-40]%). This share is however likely to be underestimated as it is unclear whether 
all companies identified by the Notifying Party are indeed active in the oxygen sector.  
81  Form CO, Other products, paragraphs 6. 11. 

 
 
24 (94) Furthermore, t he Notifying Party suggests that while they may often be 
incorporated into them, oxygen systems are a separate product from passenger 
service units ( PSUs ; for a further discussion of PSUs, see section 6.7).  
(95) The results of the Commission's market investigation broadly confirm ed that 
there is no strong preference in the market for PSUs and oxygen bundles . 
Furthermore, market bids for PSUs and oxygen systems have been seen both 
separately (for instance the latest Boeing 777X tender) and together.  
(96) On this basis, the Commission maintains that oxygen systems may be 
considered a separate product market  from PSUs . 
6.5. Aircraft seating  
6.5.1.  Introduction  
(97) There  are two basic types of aircraft seating:  
(a) Passenger seating and crew seating. Passenger seating is located in the 
aircraft cabin and is used by passengers. It is found on large 
commercial aircraft, regional jets, and business jets. Passenger seating, 
except for  business jet passenger seating , can also be divided by class 
(e.g., economy  class , business  class , and first  class , each with varying 
degrees of luxury).  
(b) Crew seating is non-passenger seating used by the flight crew. It is 
divided into two types: p ilot seating  and cabin attendant seating 
(“CAS ”). Pilot seating is located in the aircraft cockpit, and is used by 
the pilot and co -pilot. CAS  is located throughout the aircraft, is used by 
flight attendants , and is also referred to as “flight attendant se ating”.82 
(98) There is no overlap between the Parties in commercial aircraft passenger 
seating, which represents more than 90% of the overall aircraft seating business. 
Rockwell Collins produces commercial passenger seats, but UTC does not. The 
activities of the Parties overlap  in business jets seating and CAS leading to 
affected markets in both areas. They also overlap in pilot seating without leading 
to affected markets.83 
6.5.2.  Business jets seating  
(99) The Notifying Party argues that business jet passenger seating is found on 
business jets as well as on commercial airframes converted for private or 
business use. It differs from passenger seating  found on l arge commercial 
aircraft and regional jets (although there is according to the Notifying party a  
                                                 
82  Form CO , Aircraft seating, paragraphs 6.6 to 6.8.  
83  The Parties consider there are several differences between pilot seating and other forms of aircraft 
seating which warrant their being treated separately. Pilot seats must be able to move and be adjusted 
horizo ntally and vertically to a greater degree than passenger seats and must conform to more 
stringent crashworthiness standards. For these reasons, the Parties consider that pilot seating 
constitute a distinct market which has been overall confirmed by respond ents to the market 
investigation. The Parties achieve a combined market share of [10-20]% in pilot seating. Therefore 
pilot seating will not be assessed further in this decision.  
 
 
25 degree of functional overlap with co mmercial first -class seating). First, business 
jet passenger seating typically is highly adjustable; it can often be made to lie 
completely flat, and more advanced models have a wide range of motion along 
running tracks. Second, business jet passenger seat ing can take several forms in 
addition to upright seats, such as corner units, divans, and even pull -out bed 
divans. Third, business jet passenger seating is mostly bespoke and is usually 
manufactured to a higher standard for passenger comfort (premium lea ther, 
integrated heating and internet connectivity).84 
(100)  In a previous case, the Commission considered a segmentation between 
commercial and business jet seats and a further segmentation of commercial 
seats into first, business and economy class, but left the  ultimate market 
definition open.85 
(101)  A majority of respondents to the market investigation have confirmed that in 
general business jet seats are materially different from and therefore not 
interchangeable with passenger commercial aircraft seating (LCA or re gional 
jets).86 Respondents have in particular submitted that passenger seating for 
business jets are specific in the functions and in the variety of configurations 
sought, notably in relation to size, customization, material, complexity, 
functionality and testing requirements.  
(102)  However, the question  whether business jets seats belong to a separate market or 
to the overall market for passenger seats (where there is no overlap between the 
Parties 'activities ) can be left open as the transaction does not raise serious 
doubts regarding  its compatibility with the internal market  even on a narrow 
market for business jets seats .  
6.5.3.  Cabin attendant seating  
(103)  As with pilot seating, the Notifying party submits that ther e are differences 
between CAS and other forms of aircraft seating. CAS has a different form from 
other seating, as it is often stowable and wall mounted . Additionally, CAS must 
undergo more stringent crashworthiness testing than passenger seating, as it 
must be certified to a 16G standard while the industry standard for passenger 
seating is currently 9G and 12G.87 
(104)  The Commission has not previously considered the market for CAS . 
(105)  Respondents to the market investigation have in general confirmed that cabin 
attendant seating  are materially different from and therefore not interchangeable 
with pilot seating88, notably because pilot seating has many more control and 
requirements and certification paths than an attendant seat.  
                                                 
84  Form CO , Aircraft seating, paragraph 6. 11. 
85  Case M.8305 – Rockwell Collins/B E Aerospace , para. 14. 
86  See replies to questio n 70 of Questionnaire Q2 - Airframers and replies to question 72 of 
Questionnaire 2 - Competitors.   
87  Form CO, Aircraft seating, paragraph 6.25.  
88  See replies to question 72  of Questionnaire 2 - Airframers and replies to question 75  of 
Questionnaire  2 - Competitors . 
 
 
26 (106)  However, the question whether cabin attendant  seats belong to a separate market 
or to  a broader market encompassing pilot seats (where the combined market 
share is around [10-20]%) can be left open as the transaction does not raise 
serious doubts even on a narrow market for cabin attendant seat ing. 
6.6. Interior lighting  
6.6.1.  Introduction  
(107)  Interior lights illuminate the inside of the aircraft, back -light passenger signs, 
and cockpit displays and controls. Interior lighting includes main cabin lights 
(wash lights), reading lights, egress lights, and batteri es (which show the way 
out of the aircraft in the event of an emergency), signage ( such as  information 
signs and exit signs), cockpit lights, and cargo lights.   
6.6.2.  Relevant product market  
(108)  The Notifying Party argues that all the above mentioned products listed in 
paragraph (107)  belong to the same relevant product market  given the degree of 
supply - side substitutability . The Notifying Party also claims there is no  reason 
to further segment this market by type of aircraft, or to differentiate between 
original equipment sales and after -market/ retrofit sales.  
(109)  Moreover, the Notifying Party argues that integrated interior lighting solutions  
(where the airframer contra cts with cabin integrators either for a complete 
lighting system or for a floor -to-floor interior solution)  should not be considered 
a separate market.  
(110)  In previous decisions, the Commission distinguished  exterior l ighting from 
interior lighting. The Commi ssion also considered a segmentation of the 
different types of interior lighting products but ultimately left the exact market 
definition open89. 
(111)  Respondents to the market investigation agree in general that interior lighting 
products have similar character istics and they all agree that LED is the main 
technology used in the industry90. Not all of them share the view that a supplier 
of a certain type of product can easily switch production to another type of 
product91. The majority of respondents do not see si gnificant differences in 
lighting products per type of aircraft but some respondents have  singled out that 
lighting for business jets had different aesthetical requirements and a different 
economy of scale92. The majority of OEM respondents considered the 
aftermarket to be independent from the original sales market93. 
                                                 
89  Case M.8305 – Rockwell Collins/BE Aerospace , paras. 26; case COMP/M.6410 – UTC/Goodrich , 
paras. 134, 138.  
90  See r eplies to questions 94, 96 and 97 of Questionnaire 1 - Competitors and repl ies to questions 91, 
95 and 96 of the Questionnaire 2 – Airframers.  
91  See replies to question 94 of Questionnaire 1 - Competitors and repl ies to questio n 91 of 
Questionnaire 2 – Airframers . 
92  See replies to questions 94.3 and 94.4 of  Questionnaire 1 - Competitor s and repl ies to questio n 91.2 of 
Questionnaire 2 – Airframers . 
93  See replies to question 105 of Questionnaire 1 - Competitors . 
 
 
27 (112)  However, the question whether a further segmentation of the interior lighting 
market is warranted can be left open as the transaction does not raise serious 
doubts even on  narrow er market s for interior lighting .  
6.7. Passenger Service Units  
6.7.1.  Introduction  
(113)  Passenger Service Units ("PSUs")  are panels built into the aircraft cabin ceiling , 
above passenger seats , that contain a combination of components:  typically a 
reading light, attendant call interface, air vent, seat -belt and no -smoking signs, 
and other passen ger-related equipment .  
6.7.2.  Relevant product markets  
(114)  In the UTC/Goodrich , when assessing the market shares in the interior lighting 
market and in pa rticular in the cabin signage category the Commission took into 
account  PSU signage94. Against this background, t he Notifying Party submits 
that a distinction should be made between PSUs  and interior lighting, since 
PSUs  combine lights and other components.  The Notifying Party  also argues 
there is no reason to further segment the market by type of aircraft as PSUs are  
generally  only present on large and regional commercial aircraft95. According to 
the Notifying Party there is also no reason to distinguish bet ween PSUs supplied 
directly to aircraft OEMs and PSUs integrated in floor -to-floor offerings.  
(115)  The airframers that responded  to the market investigation found in general that 
PSUs and lighting do not have similar technical characteristics nor use similar 
technologies.  The OEM replies were however more dispersed although the 
majority agree that switch ing production between the two products is not easy96. 
As explained above in section 6.4, some systems OEM considered that the PSU 
market should also include the oxygen system  although views were split on this 
issue97. 
(116)  Given that the transaction does not raise serious doubts regardin g its 
compatibility with the internal marke t under any plausible segmentation , the 
exact product market definition of the PSUs market may be left open.  
6.8. Potable water systems  
(117)  Potable  water systems supply water on aircraft for use in sinks and food and 
beverage preparation, such as tea and coffee boilers. On smaller business jet 
aircraft, they are also used for immediate water consumption by passengers.  The 
                                                 
94  Case COMP/M.6410 – UTC/Goodrich , paras. 727 and 728. Notwithstanding On a subsequent 
decision, when defining and assessing the interior lighting market, the Commission did not 
considered in any way PSUs – see case M.8305 – Rockwell Collins/BE Aerospace .  
95  According to the Notifying Party, business jets may use a form of PSU, which are large, custo m-made 
pieces. […] – see Form CO, section PSUs, para.  7.23.  
96  See replies to question 109 of Questionnaire 1 - Competitors ; and replies to question 106 of 
Questionnaire 2 – Airframers . 
97 See replies to questions 110 and 110.1 of Questionnaire 1 - Competi tors. 
 
 
28 Notifying Party submits that  wastewater  systems are physically separate from 
potable water systems, and do not make use of the same equipment.98 
6.8.1.  Relevant product market : potable water systems  
(118)  The Commission has not yet examined potable water systems in its decisional 
practice.  
(119)  The No tifying Party submits that potable water systems should not be further 
subdivided according to the type of aircraft. According to the Notifying Party, 
potable water systems for all sizes of aircraft generally consist of the same 
essential components: water  storage tanks, piping ( i.e., metal or plastic lines and 
tubes), water heaters, filtration or  purification units, and a control and 
monitoring system. The Notifying Party submits that a  competitor active in the 
supply of potable water systems to smaller ai rcraft can easily execute projects  
for larger ones.99 
(120)  Market participants confirmed that waste water systems and potable water 
systems were indeed two distinct systems.  Sometimes, they report, airframers 
tender them separately  and manufacturers tend to be different.100 
(121)  The market definition for potable water systems  can be left open as the 
transaction does not raise serious doubt with its compatibility with the internal 
market under any alternative plausible market definition.  
6.8.2.  Components for potable water sy stems  
(122)  The Notifying Party submits101 that potable water systems consist of several 
basic plumbing systems, including the storage tank, hose and valves, drain lines 
and masts, and faucets which hold and route water around the aircraft; filtration 
/ purificati on systems, which keep the water safe to drink; and heating and 
control units, which monitor and keep the water liquid and prepare it to a desired 
temperature.   
(123)  UTC submits102 that it […] manufactures  […] of the components that are 
required to complete a pot able water system and purchases the rest from 
competitors such as […].  
(124)  UTC is also active in the sale of components required to assemble and integrate 
potable water systems.  
(125)  The Notifying Party explains103 that components are produced or procured and 
integ rated by all competitors in the market.  
                                                 
98  Form CO, Potable Water Systems, para 6.1.  
99  Form CO, Potable Water Systems, para s 6.11 and 6.12.  
100  See e.g. minutes of a call with a competitor on 21 December 2017, replies to question 132 of 
Questionnaire 1 - Competitors.  
101  Form CO, Potable Water Systems, para 6. 4. 
102 Form CO, Potable Water Systems, para 6. 7. 
103  Form CO, Potable Water Systems, para 6. 25. 
 
 
29 (126)  In addition, airframers are also customers for components who design and 
integrate the potable water systems themselves and in the Notifying Party's 
assessment this is very widespread.104  
(127)  The Notifying Party there fore argues105 that components and the complete 
potable water systems should form part of the same relevant product market.  
(128)  The Commission considers that it can be left open whether components for 
potable water systems are part of the market for complete potab le water systems  
or whether they constitute separate input markets since no serious doubts arise 
as the compatibility of the Transaction with the internal market in this respect 
under the alternative plausible market definitions .  
6.9. Maintenance Repair and Overhaul (' MRO ') operations  and spare parts  
(129)  In its previous decisional practice the Commission has differentiated four 
different types of MRO operations (i) line maintenance, (ii) heavy maintenance, 
(iii) engine maintenance and (iv) component maintenance.106 The Commission 
concluded that a further differentiation could be made according  to the aircraft 
type that is serviced .107  
(130)  The Parties are both active in component maintenance for all types of aircraft  
[…]. UTC is also active in engine maintenance, but Rock well Collins is not  
[description of the Parties' MRO activities] .  
(131)  Component maintenance comprises inspection, test and alteration of specific 
equipment and components installed on an aircraft, which can be repaired and 
are of a significant value.108 The inv estigation in this case has not resulted in 
evidence to deviate from the Commission's previous practice of defining a 
separate product market for component maintena nce.  
(132)  As part of their component maintenance, t he Parties provide MRO services 
related mainly to their own components  and provide spare parts.  In this respect, 
a Commission precedent considered a relevant product market for spare parts 
that was separate from the provision of MRO services.109 Nevertheless, the 
                                                 
104  The Parties are aware of self -sourcing and design of by  each of [description of the Parties' market 
intelligence regarding airframer self -sourcing].  
105  Form CO, Potable Water Systems, para 6. 3. 
106  See for example case COMP/M.6410 – UTC/Goodrich , para. 174; case COMP/M.3280 – Air 
France/KLM , para. 39; case COMP/JV.19 – KLM /Alitalia , paras. 56 -57.  
107  Case COMP/JV.19  – KLM/Alitalia , paras  56-57. 
108  See c ase M.8425 – Safran/Zodiac Aerospace , para 275.  
109  See case COMP/M.6410 – UTC/Goodrich , paras. 182 -191. In another precedent, the Commission 
also considered that the distribution of aerospace spare parts could be divided into different sub-
segments, such as, on one hand, the distribution of large aerospace parts by airframe and component 
manufacturers, and, on the other hand, the distribution of small spare parts, requiring regular and 
quick replacement, by independent distributors. The Commission considered another possibility of 
separate segments for spare parts dedicated for large commercial aircraft and for general 
aviation/regional aircraft. The Commission also identified a possible distinction between spare parts 
dedicated for comme rcial aircraft and those for military aircraft. The Commission ultimately left open 
the precise scope of the relevant product market.  See case COMP/M.4241 – Boeing/Aviall , 
paragraph  10. 
 
 
30 provision of MRO services may also  include the provision of spare parts, 
blurring the lines between those two types of activities.  
(133)  MRO services , including component  maintenance , are provided either by:  
(a) The original system, equipment or component manufacturers ( ‘OEM’, 
such as the Parties) providing MRO services with regard to their own 
system, equipment or component;  
(b) The airlines and airline -owned MRO service providers (such as 
Lufthansa Technik or Air France Industries , BA Iberia or Air Canada ) 
servicing both their ow n fleet and that of third parties;  
(c) Independent MRO service providers (such as ADAT , Haeco  or AJ 
Walter) and  
(d) Airframers (such as Airbus  and Boeing).  
(134)  Airlines and airline -owned MRO service providers, independent MRO service 
providers and airframers usuall y offer MRO services for a broader portfolio of 
products or nose -to-tail ("NTT") MRO services. Once they have won the 
contract with an airline, they can either undertake the MRO services themselves 
or sub -contract it to the respective original system, equi pment or component 
manufacturers.110 
(135)  In order for an MRO service provider to perform maintenance on  any OEM's 
equipment, it requires  the spare parts, licenses , specific tools  and testing 
equipment,  and the technical documentation and manuals how to service the 
equipment , most of which is obtained from the OEM of the component  in 
question.  
(136)  The replies received to the Commission’s market investigation  in this case  
confirmed that all MRO service providers compet ed against each  other in 
servicing the Parties' e quipment.111  
(137)  Spare parts  are sold by OEMs  either as stand -alone products or as part of an 
MRO service. Spare parts can not only be supplied by the manufacturer of the 
original equipment but also by alternative third party spare part suppliers . For 
obtaining  spare parts that are not OEM, different  options exist112. 
(138)  It is not necessary to conclude whether spare parts form part  of the relevant 
product market  for component maintenance (thus encompassing MRO services  
and spare parts) or whether separate markets for  component MRO and 
component spare parts should be defined , since the Proposed Transaction does 
                                                 
110  See case M.8425 – Safran/Zodiac Aerospace , paras. 278 -279.  
111  See replies to questions 140 and 141 of Questionnaire 2 - Airframers, question 146 of Questionnaire  1 
- Competitors and replies to question 44 of Questionnaire 3 – Airlines.  
112  Including the PMA ( "Parts Manufacturer Approval" ), third party replacement parts t ested and 
approved by the  US Federal Aviation Authority , the Owner Operator Produced Parts  ("OOPP"), spare 
parts by the MRO operator or airline, second hand spare parts, or new components supplied by any 
alternative manufacturer holding a Supplemental or Supplementary Type Certificate ("STC"), for 
further details see  case M.8425 – Safran/Zodiac Aerospace , paras . 281-284.  
 
 
31 not give rise to serious doubts  regarding its compatibility with the internal 
market under each of the alternative  plausible market definition s. 
6.10. ARINC  
6.10.1.  Introduction  
(139)  Rockwell Collins offers datalink network services and information technology 
solutions that enable air -to-ground and ground -to-ground secure 
communications113. Air -to ground services include both voice and data 
capabilities. These services are t ypically purchased by airlines and function as a 
virtual "pipe" through which data is transmitted from the aircraft to the parties 
on the ground, including an airline's operation centre, air traffic control, border 
control and airline partners ( including component manufacturers that receive 
data to monitor  components’  performance).  
(140)  Rockwell Collins' datalink services are generally referred to as ARINC, the 
acronym of Aeronautical Radio Incorporated, a company which Rockwell 
Collins acquired in December 2013 . At the time, ARINC also included a 
standard setting organisation which was not acquired by Rockwell Collins. 
ARINC's standard setting organisation was transferred to SAE International114 
instead. Since December 2013, the network and the standard setting or ganisation 
have operated as independent entities. Moreover, ARINC standards are 
developed and adopted by the Airlines Electronic Engineering Committee 
(AEEC)115, which is part of SAE International .  
(141)  Rockwell Collins datalink networks consist of Very High Fre quency (VHF)  and 
High Frequency (HF)  radio signals that are sent by a global network of land 
based radio stations and satellite s. Satellite communications  are purchase d from 
satellite providers to supplement the (in -house) VHF and HF networks of 
datalink p roviders116. On the ground, Rockwell Collins uses a networ k of coper 
and fibre lines contracted from commercial  telecommunication 
suppliers117.These networks support air -to-ground and ground -to-ground 
communications , respectively . The primary functions of Rock well Collins’ 
datalink network services are set out in Figure 6. 
                                                 
113  "Air-to-ground" refers to the network services that connect the aircraft in the air with a variety of 
ground locations, such as: air traffic controls and airline operational controls. "Ground -to ground" 
refers to the network services that connect the airlines with a variety of third parties on the ground 
such as airports, governments/immigration authorities, ground handlers, other airli nes and travel 
agents.  
114  SAE international is a professional association and standards developing organization for engineering 
professionals in various industries - see https://www.sae.org/about/ . 
115  See: AEEC is  a standard -setting committee whose members are airframers, OEMs component 
manufacturers, airlines and other aerospace players - see: https://www.aviation -ia.com/activities/aeec . 
116  Inmarsat and I ridium sell satellite connectivity to datalink providers.  
117  See Reply to RFI no 22.  
 
 
32 Figure 6 - Primary functions of datalink network services  
 
Source: Form CO . 
(142)  Data transmitted over the ARINC network uses the ACARS protocol118. The 
ACARS protocol is also administered by the AEEC. All datalink providers 
adhere to the open ACARS industry standards and all actual or potential users 
(network providers, avionics equipment manufacturers or airlines) have free 
access to this standard.  When there is need to t ransmit an ACARS message on 
the ground -to-ground network, the message is formatted into a n IATA Type B 
message119. 
(143)  The datalink network services generally interface with an aircraft's radio system 
and its communications data management unit (CMU)120. Radios an d CMUs are 
provided by avionics suppliers. Any equipment intended for use with ARINC, or 
other VHF/satellite network , must be tested to ensure that it will not cause 
disruption to the network and that it adheres to the requisite public 
specifications. ARIN C and its primary competitor SITA  - which operates a n air-
to-ground and ground -to-ground  network  with a similar geographical coverage - 
provide such qualification testing for aircraft radios and CMUs.  
(144)  ARINC does not test other systems or components that interface with the CMU 
on board of the aircraft, such as aircraft interface devices, fl ight management 
systems , aircraft condition monitoring systems or other aircraft health 
                                                 
118  ACARS stands for Aircraft Communications Addressing and Reporting System.  
119  Ground to Ground messages are categorised as either IATA Type A or Type B. Type A messaging  is 
a two -way (i.e. query and response) message traffic. Type B messaging, which accounts for 
approximately 80 -901% of all traffic, is used for one -way message traffic that does not require a 
response. To uplink and downlink messages onto and from air -to-ground network a Message 
Processor formats the message to unsure it complies with the ACARS protocol or the Type -B format 
– See reply to question 5 of RFI no. 22.  
120  Cockpit/ communication data management unit is a pilot interface device through which the pilot 
receives and replies to messages from air traffic control and airline operational controls.  

 
 
33 management type of units. AR INC has a non -discrimination and confidentiality 
policy with regards to the testing of components for use in its network121. 
(145)  Rockwell Collins' datalink network services are interoperable with avionics 
from other (non -Rockwell Collins) suppliers and Rockwell Collins' avionics can 
work with other competitors' datalink network services122. Furthermore, ARINC 
and SITA datalink networks function under open access standards.  ARINC and 
its primary competitor SITA have reciprocal agreements to deliver each other's 
traffic at no cost in instances where, for example, an airline needs to send traffic 
to a ground control station operation on the other provider's network .  
(146)  The ARINC  network functions as a utility for the transfer of data at the 
discretion of airlines. The airlines are the primary customers of datalink network 
services providers. The airlines own the data that is transmitted via the network 
and decide who has access to the data123. Rockwell Collins does not receive air -
to-ground data from ARINC, nor does it have  a connection to the ground -to-
ground network. Rockwell Collins does not monitor data pertaining to its own 
components via ARINC124.  
(147)  Third parties, such as component manufacturers and health management 
providers125, may receive data from the aircraft directly from the data link 
network where two conditions are met: (i) they have a contract with datalink 
providers to establish the data usage rates; and (ii) the airline requests for traffic 
related to its fleet to be delivered to the third party. When th e two requirements 
are in place, the airline and the third party receive the same data flow, at the 
same speed, pursuant to the Service Level Agreement executed between ARINC 
and the airline. Under the Service Level Agreement , Rockwell Collins is 
required to provide airlines on a regular basis with performance reports, which 
identify the actual performance statistics compared to the overall services goals 
listed in the Service Level Agreement (examples of service goals: above  
[90-100]% availability rate of datalink network services; above [90-100]% 
success delivery rate of uplink messages). The performance reports cover a 
number of metrics broken down by aircraft, geographic area, time periods, 
avionics systems and communication technologies126.  
(148)  Alternatively, the airline can choose to receive the ACARS message from the 
data link network to its local ACARS terminal and subsequently route the 
ACARS message to the third party127.  
                                                 
121 Rockwell Collins' qualification policy available online: https://www.rockwellcollins.com/ -
/media/Files/Unsecure/Services -And-Support/Information -Management/ARINC -
Aviation/ARINC GLOBALink Avionics Qualification Policy.ashx . 
122  See F orm CO, Section datalink services, para 6.19.  
123  Market participants have confirmed that airlines own the data and that OEMs need the airlines 
authorisation to access the data – responses to Follow -up questions of 6 and 9 April 2018.  
124  See Form CO, Sectio n datalink services, para 6.23.  
125  In addition to the component or system manufacturer, airframers, airlines can also provide health 
management services, which consist of diagnostics of aircraft systems, maintenance requirement 
prognostics and component de sign improvements.  
126  See Parties' response to pre -notification RFI no 2.  
127  Airframer reply of 11 April to EC questions of 9 April.  
 
 
34 (149)  Three types of data are transmitted air -to-ground over the ARINC networ k: 
(i) air traffic control, (ii) airline operational control and (iii) performance data 
(that is to say  engine and other components monitoring data). The Parties 
estimate that […] of the data transmitted pertains to traffic control, […] to 
airline operatio nal control and […] to performance data.  
(150)  The performance data that is currently transmitted through ACARS messages on 
the ARINC or SITA  networks pertains to the so -called "first generation 
performance data ". The ACARS protocol sets a limit on the size of each 
individual message , making it possible  to transmit  only short low volume 
messages.  
(151)  Large sets  of performance  data used in advanced monitoring of the aircraft 
systems, so -called aircraft health management  services128, are  currently 
offloaded when the air craft is on the ground through commercial cellular and 
Wi-Fi networks, or manually ( through the use of USB sticks  or PCMCIA cards).  
(152)  Figure 7 is a diagram of the diffe rent data flows within the aircraft, from air -to 
ground and from ground -to-ground.  
Figure 7 - Diagram of the different data flows  
[…] 
Source: Annex 4 Annex 4c -12 to Form CO , slide 38 . 
6.10.2.  Relevant product  market  
6.10.2.1.  The Notifying Party’s views  
(153)  The Notifying Party  submit s that there is a high degree of substitutability among 
datalink network services that rely on different types of connectivity, including 
VHF  and SATCOM  as provided by ARINC and  SITA . The Notifying Party  
explain s that f or sa fety and efficiency reasons, airlines generally have access to 
both ARINC  and SITA networks. According to the Parties ’ estimates, […] of 
the airlines dual -source129, having one network as the primary and the other as 
the secondary provider130. Despite some dif ferences in the network coverage (as 
the two networks are not identical) the Parties submit that SITA supplies the 
same utility function as ARINC and is a direct substitute with respect to air -to-
ground and ground -to-ground communication.  
(154)  The Notifying Par ty further submits that i n addition to the ARINC and SITA 
networks, there are broadband satellite service providers making inroads into 
offering  datalink services. Most of these providers started by offering passenger 
                                                 
128  Aircraft health management services provide diagnostics of aircraft systems, maintenance 
requirement prognostics and com ponent design improvements. These services rely on performance 
data generated by various sensors installed on aircraft systems. Such sensors generate large volumes 
of high -frequency data, such as vibration levels, speed, temperature, pressure, etc – see Pa rties' reply 
to questions 1 and 2 RFI no 7.  
129  Even when an airline does not have a contract with the datalink provider, it can still access the 
network of that provider on an ad hoc basis, but the unit price for data usage will be higher.  
130  The majority of airlines that responded to the Questionnaire confirmed that they dual source – See 
Replies to Question 17 of Questionnaire to Customers - Airlines.  
 
 
35 inflight connectivity and today some also offer datalink services for the airlines 
operational use, such as real -time weather monitoring. This has resulted in the 
migration of same data traffic of ARINC and SITA's networks onto to these 
alternative networks  according to the Notifying Party . 
(155)  Notwithstanding, the Notifying Party  submit s that the VHF/Satellite  datalink 
networks do not have the bandwidth or the configuration to transmit large sets of 
data as the second generation network services which rely on broadband satellite 
solutions  or othe r means of data transmission . According to the Notifying Party , 
in light of differing technology, suppliers and performance levels , first 
generation network services are wholly distinct from second generation network 
services.   
(156)  The Notifying Party further submits that a sub -segmentation of the datalink 
network services base d on type of aircraft is not warranted. With the exception 
of helicopters which do not use these services, all other aircraft are offered and 
use these services in a similar manner.  
6.10.2.2.  The Commission’s assessment  
(157)  The results of the Commission's market investigation ha ve shown that the 
majority of airlines consider the datalink services offered by ARINC and SITA 
to be interchangeable. The geographic coverage difference has nonetheless been 
singled out131. In fact, while Rockwell Collins is the exclusive supplier of VHF 
in […], SITA is the exclusive supplier of VHF in […]. Nonetheless both airlines 
can provide coverage using other connectivity means132. The majority of OEMs 
therefore  considered tha t ARINC and SITA compete133. 
(158)  Market participants have also corroborated that large sets of data used in 
advanced health management services are offloaded when the plane is on the 
ground through  cellular  or Wi-Fi networks or  manually134 and that broadband 
connectivity providers which are already offering services related to passenger 
inflight connectivity and some cabin operational data could also in the near 
future transmit performance data135. 
(159)  However, the question whether first generati on and second generation datalink 
services constitute separate markets or belong to a single product market can be 
left open as the transaction does not raise serious doubts regarding its 
compatibility with the internal market under any  of those  segmentati ons.  
                                                 
131  See replies to question 18 of Questionnaire 3 - Airlines.  
132  SITA has mentioned that it has satellite c overage in China – See SITA's reply to EC questions of 
6 April 2018.  The Parties submitted they also provide services in […] using HF or satellite instead of 
VHF – See Form CO.  
133  See replies to question 156 of Questionnaire 1 – Competitors.  
134  On this matter the Commission sent specific questions to two airlines, two airframers, two engine 
OEMs and a few datalink network providers. They all agree that the large sets of data required for 
health management is offloaded pre or post flight when the aircraft  is on the ground using cellular or 
Wi-Fi connectivity or manually – Replies to 6 and 9 April EC questions.  
135  Broadband provider's reply of 14 April 18 to the EC questions of 9 of April.  
 
 
36 6.11. Inertial Measurement Units  
6.11.1.  Introduction  
(160)  Inertial Measurement Units (IMUs) are devices that sense rotation, acceleration, 
and occasionally the surrounding field (through gyroscopes, accelerometers and 
magnetic sensors). IMUs are often incorporated int o Inertial Navigation 
System  (INS).  
(161)  IMUs are often used in conjunction with positional tracking systems, such as 
Global Positioning Systems (GPS) receivers. Using IMUs on their own can lead 
to measurement errors that arise from continually integrating acc eleration with 
respect to time to calculate velocity and position. Navigation systems often 
include GPS and IMUs  to increase precision . 
(162)  IMUs can be categorised by performance, by their ability to work in different 
environment (space, air, land and maritime) and technology type (automotive 
and electronics).  
6.11.2.  Relevant product market  
(163)  UTC proposes to segment the market according to performance: high -grade 
IMUs for use in aircraft navigation systems; (ii) low -grade military IMUs for 
use in drones, missile s and land vehicles; and (iii) IMUs for use in consumer 
electronics, such as smartphones.  
(164)  While generally acknowledging the differences in performa nce levels, n ot all 
respondents to the market investigation agree with th e specific  segmentation  
suggested by  UTC . One competitor adds another category for an ultra -high 
grade; while another considers five categories: strategic, navigation, tactical, 
industrial and consumer136. 
(165)  As the transaction does not raise serious doubts regarding its compatibility with 
the in ternal market  under the alternative plausible market definitions, the exact 
market definition for the IMUs market may be left open.  
6.12. Military GPS receivers  
6.12.1.  Introduction  
(166)  The GPS is a radio -navigation system that provides geolocation data to users via 
satellite triangulation. Although the term has become synonymous with global 
positioning systems generally, it refers to the system operated by the United 
States. Other countries have developed their own radio -navigation systems, 
e.g. European Union's Gali leo, Russia's GLONASS  or China's BeiDou.  
(167)  GPS satellites broadcast two types of codes: (i) the unencrypted 
coarse/acquisition (C/A) code, which is made freely available to the public; and 
(ii) the restricted precision P(Y) code, which incorporates system  to prevent 
potential interference with its signals through spoofing  or jamming.  In 1998, the 
                                                 
136 See replies to question 6 of the Questionnaire_IMU_Competitors.  
 
 
37 United States Joint Chiefs of Staff selected a Selective Availability Anti -
Spoofing Module (S AASM) as the United States' preferred GPS security 
architecture. SAASM G PS systems are exclusively used in military applications 
under the control of the United States Department of Defence137. 
6.12.2.  Relevant product market  
(168)  The Notifying Party  consider s that C/A code and SAASM  GPS receivers 
constitute two separate markets. According t o the Notifying Party, C/A code 
GPS receivers are manufactured by many suppliers for applications available to 
the public. By contrast, SAASM  GPS receivers require authorisation from the 
United States  Department of Defence both to manufacture and to purcha se. 
They are used exclusively for military applications.  
(169)  Based on their use, t he Notifying Party  further segment s the SAASM  GPS 
receivers for aircraft applications and for non - aircraft applications.  
(170)  In a previous decision the Commission has considered the  segmentation of the 
GPS receivers between commercial, military, and institutional but ultimately left 
the market open138. 
(171)  Given that the transaction does not raise serious doubts regarding its 
compatibility with the internal market under the plausible  alternative market 
definitions, the exact product market definition of the GPS receivers  market may 
be left open.  
6.13. Air data systems  
6.13.1.  Introduction  
(172)  Air data systems provide a range of flight parameters such as pressure, air speed, 
altitude, angle of attack an d sideslip. Traditional, non -integrated air data systems 
rely on a combination of external probes (sensors), pressure transducers or air 
data computers. The more recent integrated air data systems rely on air data 
computers integrated in the sensors themse lves (“smart probes”) without 
pressure transducers or separate air data computers.  
6.13.1.1.  Air data sensors  
(173)  Air data sensors are exterior devices used to measure the aircraft air stream 
environment in terms of pitot (impact)  and static (ambient)  pressure139, 
tempera ture, and angle of attack. They include air data probes, angle of attack 
sensors and temperature sensors. Air data sensors either use pressure transducers 
or air data computers (ADC)  to convert external pressure information into an 
electronic signal. The p ressure from air data probes can travel through 
pneumatic tubing into pressure transducers, which in turn provide electronic 
pressure signals directly to the aircraft avionics. Alternatively, an ADC can be 
                                                 
137  See Parties' re sponse  to EC Questions on Vertical Issues, of 31 January 2018.  
138  Case  COMP/ M.3680  – Alcatel/Finmeccanica/ Alcatel Alenia Space & Telespazio . 
139  Pitot pressure is the pressure that is measured by a Pitot tube, an open -ended tube connected t o a 
pressure -measuring device  
 
 
38 used to convert the outside pressure into signals,  perform corrections and 
transmit the information to the avionics system140. 
(174)  Air sensors are engineered to comply with system level requirements that are 
unique to each aircraft in terms of size, weight, power, and other key 
performance criteria.  
6.13.1.2.  Air data co mputer  
(175)  ADCs collect information from aircraft sensors and translate it into flight 
readings, including in particular altitude, airspeed, angle of attack, and 
temperature. ADCs require specific aircraft architecture, which allows for 
pneumatic tubing and wi ring to connect the aircraft’s probes to the ADC.  
6.13.1.3.  Smart probe  
(176)  Integrated air data systems combine the functionality of the sensing probes with 
an integrated air data computer into a single component that provides all critical 
air data parameters. This is a  different technology from traditional air data 
systems and it has implications in the aircraft design, namely it can lead to 
a 50% weight saving when compared to the traditional air data systems because 
there is no need for pneumatic tubing, and there wil l be less electrical wiring.  
6.13.2.  Relevant p roduct market  
(177)  In line with the Commission's precedent in UTC/Goodrich141, the Notifying 
Party  argue s that air data probes form part of a single separate product market. 
According to the Notifying Party, d espite the fact that air data sensors are 
engineered to comply with specifications unique to each aircraft, all major 
suppliers are able to manufacture air data probes for a range of different aircraft 
types and therefore a segmentation of this market per type of aircraft is not 
warranted.  
(178)  The Notifying Party is  also of the opinion that air data computers are not 
interchangeable with pressure transducers, but depending on the design of the 
system, an air data system can use either pressure transducers or ADCs to 
convert external pressure information into an elect ronic signal.  
(179)  The Notifying Party  further submit s that integrated air data systems (smart 
probe) are not substitutable with traditional data systems. From a demand 
perspective, although for a new platform airframers may consider both systems 
in their trade  studies, they make a choice early on in the process which results in 
very different air data system architecture. From a supply side perspective given 
the significant differences in technology, suppliers of traditional air data systems 
are not necessarily  able to supply integrated air data systems.  
(180)  Based on the information collected from the Parties and third parties during the 
market investigation, the Commission considers that ADCs  and air probes 
belong to separate markets  due to their different charact eristics and 
                                                 
140  Form CO, Air Data Sensors section, para. 6.6.  
141  Case COMP/M.6410 – UTC/Goodrich , para 169.  
 
 
39 functionalities . Regarding  the question whether the smartprobe constitutes a 
separate market from the other air probes, indeed most of the market participants 
responding to the Commission’s investigation  recognised the particular features 
of this product, namely its capability to substitute a complete (traditional) air 
data system composed of probes, pneumatic tubing, air transducers and/or air 
computers142.  
(181)  As the transaction will not raise serious doubts regarding its compatibility with 
the in ternal market  under the alternative plausible market definitions , the exact 
market definition of each one of them may be left open.  
6.14. Aircraft Engines  
6.14.1.  Introduction  
(182)  Aircraft engines power and propel the aircraft. UTC is active in the market for 
aircraft engin es, operating through Pratt & Whitney, a subsidiary firm, as well as 
two joint ventures, International Aero Engines and Engine Alliance.143 Rockwell 
Collins does not engage in this market.  
6.14.2.  Relevant product markets  
(183)  The Notifying Party submits that the definition for the aircraft engine market 
may be left open on the basis that i n the absence of any overlaps, the 
Transaction should not give rise to competition concerns under any plausible 
definition of the market.  
(184)  The Notifying party puts forward  three p rincipal engine types, set out as 
follows:144 
(a) Turbofan engines, where a fan driven by a turbine provides extra air to 
the burner and gives extra thrust.  These are typically installed in large 
commercial aircraft (both wide -bodied and narrow -bodied aircraft),  
regional jets or corporate jets.  
(b) Turboprop engines, where thrust is provided by an external propeller 
rather than an internal fan. These offer the combination of high thrust 
and low fuel consumption ideal for short -haul aircraft.  
(c) Turboshaft engines, whic h produce shaft power, rather than jet thrust. 
These are similar to their turboprop counterparts but are procured 
almost exclusively for helicopters.  
                                                 
142  See replies to question 142 of Questionnaire 1 - Competitors and replies to question 22 of 
Questionnaire 2 - Airframers.  
143  IAE AG is a joint venture between P&W, Japanese Aero Engine Corporation (“JAEC”), and MTU 
Aero Engines, solely controlled by UTC (Case COMP/M.6446 – Pratt&Whitney/International Aero 
Engines ). It manages the engineering, sales, production, customer support, and aftermarket services 
for the V2500 engine. IAG LLC is a joint venture between the same entities that is responsible for the 
production of parts for combustor components and assembly of t he combustor modules for the 
PurePower PW110 0G-JM aero engine. Together IAR AG and IAG LLC constitute IAE. Engine 
Alliance  is a 50/50 joint venture between P&W and GE Aviation  
144  Form CO, Aircraft engines, paragraphs 6.2 to 6.5.  
 
 
40 (185)  The Notifying Party also puts forward that  further segmentation of turbofan 
engines has historically also been considered by the Commission on the basis of 
the 'mission profile' of the aircraft, i.e. the purpose for which the engine is 
procured . This refers  to the aircraft's seating capacity, flying range, price and 
operational cost among other things.145 
(186)  On the  basis of this approach, the Commission considers that aircraft engines 
can be distinguished between146:  
(a) engines for Large Commercial Aircraft or LCA . These can be 
potentially sub -segmented into engines for narrow -body/single -aisle 
aircraft  and engines for wide -body/double -aisle aircraft due to the ir 
different mission profile . 
(b) engines for regio nal aircraft. The Commission has considered splitting 
this category further into a distinction between engines for small 
regional jets, designed for the transportation  of 30 to 50 passengers, and 
engines for  large regional jets, designed for the transportation of 70 to 
90 passengers.  
(c) jet engines for Corporate Aircraft . This category may be further 
segmented into the market for heavy, medium and light corporate 
aircraft . 
(187)  As no other major element to distinguish the market has been identified, the 
Commission will retain the product market definition based on engine type 
segmentation in this case. This segmentation has been deemed appropriate in 
earlier decisions147 and remains broadly so according to the current market 
investigation, based on the fact that customers do not regard these engine types 
as substitutable  and that the suppliers and their respective strengths differ  
between engine types . 
6.15. Avionics  
6.15.1.  Introducti on 
(188)  Avionics refers to a series of equipment that is used for navigation, 
communications and the evaluation of flight conditions. Collectively this 
equipment forms the 'avionics suite', and the majority of this equipment is 
located in the cockpit.  Rockwell Collins currently manufactures and supplies 
standardized cockpit  avionics equipment, such as communications systems, 
navigation, and display and flight control systems  for both commercial and 
military customers.  UTC does not sell avionics . 
6.15.2.  Relevant product  market s 
(189)  The Notifying Party submits that the definition for the avionics market may be 
left open on the basis that in the absence of any overlaps, the Transaction should 
                                                 
145  Form CO, Aircraft  engine s, paragraphs 6.11 and 6.12.  
146  Case M.8242 – Rolls -Royce/ITP ; Case COMP/M.2220 – General Electric/Honeywell . 
147  Case M.8425 – Safran/Zodiac Aerospace . 
 
 
41 not give rise to competition concerns under any plausible definition of the 
market.  
(190)  In a previous case the Commission has considered each individual avionics 
product (aircraft flight -control systems, monitoring systems, communications 
systems, navigation systems, weather systems and anti -collision systems) to be 
separate product markets.148 
(191)  More consistently however, p revious  practice by the Commission has drawn a 
distinction between the avionics systems required for (i) large commercial 
aircraft (typically powered by turbofan jet engines ), (ii) regional/business jets 
and (iii) military airc raft.149  
(a) It has been noted that there is no clear segmentation between the 
regional t ransport and the business aviation segment with regard to the 
avionics products/  (sub-)systems that are offered, since the latter are the 
same in terms of price, size , capabilities  and technical 
interdependency150. 
(b) The structure of supply and demand and nature of customers differs 
between large commercial aircraft on the one hand and 
regional/business jets on the other hand , with airframers seeking a more 
integrated style  of avionics in the cockpit for regional and business 
aircraft, and a more federated style of avionics for large commercial 
aircraft (where some products may be chosen or changed by 
airlines) .151 This is because in the regional and business space, avionics 
suppliers are selected by the airframer in an SFE model, while in large 
commercial aircraft they may be offered under an SFE or a BFE 
procurement model.152 
(192)  These differences in turn will correspond to material, functional and software 
differences in the avion ics systems of an aircraft.  
(193)  This forms the justification for a distinction in the  avionics market consistent 
with what the Commission has done previously, distinguishing between avionics 
for large commercial aircraft on the one hand and avionics for regio nal 
jets/corporate jets  on the other hand . The market investigation in this case has 
not provided evidence to deviate from this distinction153. 
                                                 
148  Case COMP/M.2220 – General Electric /Honeywell . 
149  A further distinction  may be drawn for the avionics  systems required for helicopters, but as the Parties 
are not active in avionics for helicopters , avionics for helicopters will not be discussed further in this 
decision and the relevant product market definition  may be left open  in this respect.  
150  Case C OMP/ M.1601 – Allied Signal/Honeywell ; COMP/ M.2220 – General Electric /Honeywell . 
151  Case COMP/ M.2220 – General Electric /Honeywell . 
152 Reply of the Parties t o the Commission's RFI#2 dated January 23, 2018.  
153  See non -confidential minutes of a call with an engine competitor dated 18 April, 2018 that confirmed 
that avionics systems do not necessarily differ between aircraft with different engines.  
 
 
42 6.16. Environmental c ontrol systems  
6.16.1.  Introduction  
(194)  Environmental control systems (“ECS”) manage the flow of air within the  
aircraft, which helps to regulate cabin temperature and cabin pressure, as well as 
to prevent ice from forming on flight surfaces and components.  
(195)  ECS include many types of products which perform different functions in the 
aircraft, namely (i) bleed air sy stems (control the distribution of the air taken 
from the engine and provide it to the air conditioning, anti -ice and engine 
starting systems); (ii) air conditioning systems (provide passengers with 
heated/cooled conditioned air); (iii) ventilation systems  (circulate air around the 
aircraft); (iv) cabin pressure control systems (maintain comfortable pressure in 
the cabin as the aircraft changes altitude) and (v) anti -ice systems (use hot air 
taken from the engine and deliver it to the wings and engine inlet  surfaces to 
prevent ice from forming).  
6.16.2.  Relevant product market  
(196)  The Notifying Part y agree s with the Commissions' approach in the 
GE/Honeywell  case, where the Commission reviewed the parties ’ market shares 
on the basis of an overall market  for EC S.  
(197)  In Unite d Technologies/ Sundstrand , the Commission noted that ECS includes 
systems which perform different functions in the aircraft, namely bleed air 
systems, anti -ice systems, air conditioning and cabin pressure control systems, 
and that a distinction can b e drawn between air cycling cooling technology and 
vapour cycle cooling, but it ultimately left the market definition open154. 
In GE/Honeywell  the Commission indeed  considered the parties ' market share 
for an overall market155. In its latest decision, Safran/Z odiac , the Commission 
also considered a distinction according to systems function and according to 
technology used but ultimately left the market definition open156. 
(198)  In the present case there is no indication t hat would lead to deviate from the 
Commission pr ecedent s. In any case , as the proposed transaction does not raise 
serious doubts regarding its compatibility with the internal market  in any 
plausible segmentation of this market , the exact market definition can be left 
open.  
6.17. Food and beverage preparation and storage equipment  
(199)  Food and beverage preparation and storage equipment (“FBPSE”) refers to 
galley inserts adapted for the use of preparing and storing food and beverages. 
FBPSE includes products such as ovens, refrigerators and coffee machines for 
installation in aircraft galleys. They are sold as galley inserts to be integrated in 
the overarching galley structure.  
                                                 
154  See case COMP/M.1493 – United Technologies/Sundstrand , paras. 18 -19. 
155  See case COMP/M.2220 – General Electri c/Honeywell , para.270.  
156  See case M.8425 – Safran/Zodiac  Aerospace , paras 174 - 177. 
 
 
43 (200)  The Notifying Party considers that all FBPSE products form part of a single 
relevant product market. According to the Notifying Party, FBPSE  are 
somewhat different from other galley inserts with respect to technologies used. 
Furthermore, the majority, if not all, of Rockwell Collins' competitors  in this 
space can, and do, offer a full portfolio of FBPSE. Moreover, FBPSE is 
generally purchased as a package  according to the Notifying Party .  
(201)  One of the main competitors has corroborated the Notifying Party 's position  in 
the Commission's market investigation . It has distinguished galleys for storage 
from inserts which refer to domestic electrical a ppliances such as oven s, 
refrigerator, and coffee machine . Within inserts, it considered that no distinction 
is warranted since "for “visual commonality” reason, Airlines often select a 
complete set of inserts (depending on their needs) which enables them to have 
electrical appliances with a similar exterior design "157. 
(202)  As the proposed transaction does not raise serious doubts  regarding its 
compatibility with the internal marke t in any plausible market definition, the 
exact definition of the FBPS E market may be left open.  
7. GEOGRAPHIC MARKET DEF INITION  
7.1. Original aircraft equipment  
(203)  As is the case for the other markets for civil aerospace applications and in line 
with Commission's precedents  in this sector, the Notifying Party submits that the 
geographic market definition for all products markets discussed in Sections 6.1 
to 6.17 is worldwide.  
(204)  The market investigation confirmed that most of the aerospace equipment 
suppliers serve their customers regardless  of their location and customers choos e 
their supplier s worldwide .  
(205)  Competing original  equipment manufacturers  responding to the market 
investigation agreed that procurement of aircraft equipment and their 
manufacturing was taking place on a worldwide scale, suppliers were active 
across countries and international trade flows were significa nt. Some  
respondents remarked that there were some caveats:  some countries imposed 
trade barriers and transport costs were not to  be completely disregarded . 
Furthermore,  market respondents noticed  some variation in prices , albeit not 
between the same compo nents sold to different customers across the world but 
between components manufactured in different regions due to differences in 
labour costs . All taken into account, the  prevailing view of the respondents 
confirmed the precedents and a worldwide market f or different types of 
aerospace equipment .158  
(206)  Regarding military applications, respondents confirm that restrictions  on trade , 
such as governmental export controls  on such components geographically limit 
                                                 
157  See minutes of a call held with the competitor on 4 January 2018.  
158  See replies to question 28 of Questionnaire 2 - Airframers and replies to question 6 of Questionnaire 1 
- Competitors . 
 
 
44 the range of  suppliers available to customers159. In any event, such measures 
affecting the Parties' products are not susceptible to influence  the competitive 
assessment in the EEA.  
(207)  The Commission therefore consider s that the geographic market for all 
aerospace  equipment  discussed in Section s 6.1 to 6.17 is worldwide  in scope  
(for MRO and spare parts, see below) . 
7.2. MRO and s pare parts  
(208)  In a precedent case, the  Commission found  that, for component MRO services, 
the location of the facility is of secondary importance and that such services do 
not need to be performed at airports. The Commission found that m ost 
component MRO service providers are active globally and both the service 
providers and customers considered that the markets for component MRO 
services were worldwide in scope, regardless of the type of aircraft o r 
component . The precedent found some i ndication that wheels and brake MRO 
services  may be an exception to this and could be local in scope , and concluded 
that for the purposes of that decision it was not necessary to define the precise 
geographical  scope of component maintenance.160  
(209)  As regards spare parts, a precedent161 found  that the distribution of aerospace 
spare parts takes place at the worldwide level or at least EEA -wide level. In a 
more recent case, the Commission recognised that it is a worldwide market as 
spare parts are sold to customer s worldwide irrespective of the suppliers’ 
location and the price does not vary substantially depending on whether they are 
sold in the  EEA region or worldwide.162 
(210)  Respondents to the Commission's market investigation considered that 
component MRO and also sp are parts, similar to the original equipment, were 
part of a worldwide geographic market.163 
(211)  The Commission therefore concludes that for the purposes of this decision t he 
relevant geographic markets for component MRO services and spare part s will 
be considered  worldwide in scope.  
8. COMPETITIVE  ASSESSMENT  
8.1. Horizontal relationship s  
8.1.1.  Analytical framework  
(212)  The Commission Guidelines on the assessment of horizontal mergers under the 
Council Regulation on the control of concentrations between undertakings (the 
                                                 
159 See replies to question 7 of Questionnaire 1 – Competitors and replies to question 29 of 
Questionnaire  2 – Airfamers.  
160  Case COMP/M.6410 – UTC /Goodrich , 26 July 2012, paragraph 198.  
161  Case COMP/M.4241 – Boeing /Aviall , 18 August 2006, paragraph 11.  
162  Case COMP/M.6410  – UTC /Goodrich , 26 July 2012, paragraph 19 9. 
163 See replie s to question 6.3 of Questionnaire 1 - Competitors and replies to question 28.3 of 
Questionnaire 2 – Airfamers and replies to question 10.3 to Questionn aire 3 - Airlines.  
 
 
45 "Horizontal Merger Guidelines")164 distinguish  between two main ways in 
which mergers between actual or potential competitors on the same relevant 
market may significantly impede effective competition, namely non -coordinated 
and coordinated effects.   
(213)  Non-coordinated effects may significantly impede effective competition by 
eliminating important competitive constraints on one or more firms, which 
consequently would have increased market power, without resorting to 
coordinated behaviour. In that regard, the Hor izontal Merger Guidelines 
consider not only the direct loss of competition between the merging firms, but 
also the reduction in competitive pressure on non -merging firms in the same 
market that could be brought about by the merger165. 
(214)  The Horizontal Merger G uidelines list a number of factors which may influence 
whether or not significant non -coordinated effects are likely to result from a 
merger, such as the large market shares of the merging firms, the fact that the 
merging firms are close competitors, the l imited possibilities for customers to 
switch suppliers, or the fact that the merger would eliminate an important 
competitive force. That list of factors applies equally if a merger would create or 
strengthen a dominant position, or would otherwise signific antly impede 
effective competition due to non -coordinated effects. Furthermore, not all of 
those factors need to be present to make significant non -coordinated effects 
likely and this is not an exhaustive list166. 
(215)  Furthermore, in accordance with the Horizont al Merger Guidelines,  a merger 
with a potential  competitor can have horizontal anti -competitive effects in two 
situations: (i) where the potential competitor constrains the behaviour of firms 
active in the market , notably when the potential competitor poss esses assets that 
could easily be used to enter the market without incurring significant sunk costs 
or (ii) where the merging partner is very likely to incur the necessary sunk costs 
to enter the market in a relatively short period of time after which it w ould 
constrain the behaviour of firms currently active in the market.167  
(216)  For the merger to have significant anti -competitive effects, two basic conditions 
must be fulfilled. First, the potential competitor must already exert a significant 
constraining influ ence or there must be a significant likelihood that it would 
grow to become an effective competitive force. Evidence that a potential 
competitor has plans to enter a market in a significant w ay could help the 
Commission reach such a conclusion. Second, there must not be a sufficient 
number of other potential competitors, which could maintain sufficient 
competitive pressure after the merger.168 
8.1.2.  THSA  
(217)  Affected markets arise due to the horizontal overlap of the Parties' activities in 
the manufacture and sale o f THSAs.  
                                                 
164 OJ C 31, 5.2.2004, p. 5.  
165 Horizontal Merger Guidelines, paragraph 24.  
166 Horizontal Merger Guidelines, paragraph 2 6. 
167 Horizontal Merger Guidelines, paragraph 59.  
168 Horizontal Merger Guidelines, paragraph 60.  
 
 
46 (218)  The Parties' combined market share amount ed to [50-60]% (increment of 
[5-10]% by Rockwell Collins ) in 2016  and has been relatively stable over the 
past three years169. If airframers’ in -house production is excluded  and only the 
merchant market is considered , the combined market share of the Parties rises 
to [70-80]% (increment of [10-20]% by Rockwell Collins ).170 
(219)  Shall a military segment for THSA be considered, the Parties' combined market 
shares have been varying between [60-70]% and [80-90]% between  2014 
and 2016.171  
(220)  The Notifying Party claim s172, however, that irrespective of the market 
definition, the concentration does not negatively affect competition in THSAs 
for the following reasons:  
(a) UTC  submit s that historical market shares are not informative in 
bidding markets Historical  market shares therefore reflect the success  
of the aircraft platform more than the competitive strength of the THSA 
supplier.  
(b) UTC  also submit s that UTC and Rockwell Collins  do not consider each 
other as competitors : UTC and Rockwell Collins design and 
manufacture different types of THSA systems for largely different 
types of aircraft. UTC supplies primarily hydraulic THSA systems, 
which airframers typically require for large com mercial aircraft. 
Rockwell Collins supplies only electric THSA systems, which 
airframers usually utilize for regional and business jets.  
(c) UTC  does not expect this situation to change […] and electric THSA 
systems to replace hydraulic THSA systems , arguing  that both 
technologies will continue to co -exist in parallel, albeit for largely 
different applications.  
(d) UTC  also claim s that Rockwell Collins is not a major THSA supplier 
and at least another eight competitors are active in THSAs, namely 
Parker Hannifin,  Moog, Safran, Liebherr, Thales, Shimadzu, 
Electromech and Beaver Aerospace , many of these strong and well 
established in THSA.   
(e) In addition  to these , UTC  argue s, airframers represent an additional 
competitive constraint due to their capability to manufact ure the THSA 
in-house.  
(221)  The Commission's  investigation could not confirm the Notifying Party 's 
assessment .  
                                                 
169  [50-60]% in 2015 and [40-50]% in 2014.  
170  According to the Parties, Boeing a nd Dassault self -supply the THSA for a number of their platforms.  
171  Form CO, THSA, para 7.1 7. 
172  Form CO, THSA, para 7.1.  
 
 
47 (222)  Recent bidding activity indicates that UTC and Rockwell Collins have indeed 
been competing for the same projects: […].173 Most notably, both have 
comp eted against each  other for the large platforms of […] but also for the […]. 
(223)  The market investigation revealed that UTC and Rockwell are the two main 
suppliers for THSAs and two of the three independent suppliers for large 
commercial aircraft (with Moog). Although Rockwell traditionally supplies 
THSAs rather for regional and business jet platforms and UTC for large 
commercial aircraft, the trend towards electric THSAs has enabled Rockwell 
Collins to bid and win contracts against UTC for large platforms  […].174  
(224)  While UTC is mainly active in hydraulic THSA, it has capacity to manufacture 
electric THSAs : As also indicated by the Parties, UTC […]. Market participants 
indicated that , although the substitution is not immediate, the evolution is clearly 
towards the more electric solutions  and these are becoming more and more 
standard, even for large aircraft .175 […].  
(225)  As regards airframers' in -house capacity, Boeing is indeed capable of 
manufacturing THSAs in house  and does so for multiple platforms . For Boeing, 
all fu ture platforms or derivatives would be evaluated for a make or buy 
decision. Other airframer s indicated that they could possibly insource the 
manufacture of THSAs , however this is a long-term strategic decision that is not 
taken on an ad -hoc basis as it requires considerable investment into production 
capacities .176  
(226)  A number of customers and competitors have expressed concerns regarding the 
increase of Parties' bargaining power for THSAs and the  reduction of choice 
post- merger.177 
(227)  Some market participants  also pointed out that one cannot completely disregard 
current market shares, as they also reflect the cash generating potential of a 
competitor' s THSA business, which is vital in maintaining and further 
developing the business, which requires funds.178 
(228)  Some respondents to the investigation have also raised concerns as regards the 
possibility for the merged entity to bundle actuators such as THSAs and flight 
control systems  (pilot controls and electr onic flight controls) . According to those 
respondents, s ome airframers may seek to source such bundles which could 
potentially have a negative  effect on single product suppliers.179 These concerns 
will be assessed in section 8.3.6 . 
                                                 
173  Reply of the Parties t o the Commission's RFI#1 and RFI#3 on bidding data  on 25 January 2018 and 
26 February, 2018 respectively.  
174  See replies to questions 35 and 38 of Q uestionnaire 1 - Competitors . 
175  See replies to question s 31 and 32  of Questionnaire 1 - Competitors and question 32 of 
Questionnaire  2 - Airframers.  
176  See replies to question 41 of Questionnaire 2 - Airframers.  
177  See replies to question 45 of Questionnaire 1 -Competitors , See replies to question 4 6 of 
Questionnaire 2 - Airframers.  
178  See minutes of ca lls with competitors on 10 January, 2018 and 20 Februar y, 2018.  
179  See replies to question s 43 and 44 of Questionnaire 1 - Competitors.   
 
 
48 (229)  The Commission  therefore conclude s that the Transaction raises serious doubts 
with regard to the Parties' activities in the manufacture of THSAs.  
8.1.3.  Pilot Controls  
(230)  As mentioned in section 6.2, the Parties are present in the following relevant 
markets: Sticks, RBPS and TQA.  
8.1.3.1.  Sticks (center yokes and sidesticks)  
(231)  In sidesticks, UTC has a market share of [40-50]% on the merchant market, 
whereas Rockwell Collins has 0%. On the merchant market of center yokes, 
Rockwell Collins has a market share of [40-50]% whereas UTC has a market 
share of 0%180.  
(232)  Therefore, the Transaction would  not raise serious doubts as to its  compatibility 
with the internal  market for a separate product market of center yokes or for a 
separate product market of sidesticks.  
(233)  If an overall  product markets for sticks is defined (including both center yo kes 
and sidesticks) , the Parties would have a combined market share of [40-50]% on 
the overall merchant market for pilot control sticks181.  
(234)  The Commission notes that in th at case, however, the Parties could not be 
considered as close competitors in pilot control sticks. For e ach of types of 
sticks they would face partially the same competitors as Esterline Corporation, 
Safran and Woodward produce both types of sticks . In past tenders for pilot 
control sticks, the Parties competed only in […] tenders out of […] against each 
other. Whereas in the market investigation the majority of competitors took the 
view that in general the Parties are close competitors in pilot controls (thus 
relating also to RBPS and TQA)182, one customer respondent stated – relating 
overall to pilot controls  - that it does " not recognize UTC and Rockwell Collins 
competing in the market ."183 and another added that it " considers UTC and 
Rockwell Collins as being "close competitors " only for RBPS ."184 
(235)  Furthermore, the investigation revealed that the market participants do not 
expect significant impact in the market of sticks. Whilst t he respondents were 
indifferent about the impact on prices, quality and innovation , some stated that 
competition may rath er increase185. 
(236)  In view of the above considerations, the Commission considers that also in the 
event of a product market comprising center yokes and sidesticks the 
Transaction does not raise serious doubts as to its compatibility with the internal  
market wit h respect to  pilot control sticks. In any event, however, the 
                                                 
180  Form CO, Pilot Controls, para s. 7.12 and 7.13.  
181  Calculated on the basis of the sales volumes for 2016 indicated by the Notifying Party in Form CO, 
Pilot Controls, paras. 7.12 and 7.13.  
182  See replies to question 60  of Questionnaire 1 – Competitors . 
183 See a reply to question 58.1  of Questionnaire 2 – Customers -Airframers . 
184  See a reply to question 58.1  of Questionnaire 2 – Customers -Airframers . 
185  See replies to question 66  of Questionnaire 1 – Competitors; Replies to question 65.1  of 
Questionnaire 2 –Airframers . 
 
 
49 commitments include the divestment of Rockwell Collins' entire activities in 
pilot controls, thus also its activities in sticks, as discussed in section 9. 
8.1.3.2.  Rudder Brake Pedal System  
(237)  The Notifying Party submit s that their combined position in RBPS does not lead 
to affected markets  as the Parties' combined market  shares on the merchant 
market for RBPS is rather moderate with [10-20]% based on sales in 2016186.  
(238)  However, the analysis of the bidding data  draws a different picture of the 
Parties' current market position. In RBPS, either UTC or Rockwell Collins  
won […] out of the […]most recent bids for large commercial aircraft,  […] out 
of […]for regional aircraft and […] out of […]for business jets187. Considering 
for instance the most recent bids in large commercial aircraft, all […] have been 
won either by UTC or Rockwell Collins188.  
(239)  The market investigation further revealed that the majority of the respondents 
does not contemplate to sponsor a market entry of a new supplier for pilot 
controls189 and there were no recent market entries in pilot controls in general, 
which one respondent commented as follows: " All players have been in this 
market for decades. The barriers to entry seem quite high "190. 
(240)  The results of the market investigation also show that many of the responding 
competitors and some of the airframers saw the Parties as the mo st important 
competitors in pilot controls  (both in TQA and RBPS ) some ranking the Parties 
as number one and two globally191.  
(241)  Ultimately, as regards the impact of the Transaction on the market for RBPS, the 
answers of the market respondents are not homogenous relating to  prices, 
quality and innovation , but some airframers  assume that the market power of the 
Parties will increase, whilst competitors'  market power will decrease192.  
(242)  The Commission notes that although the market shares for RBPS are modera te, 
the bidding data and the market investigation points to the Parties being close 
competitors and particularly strong in recent tenders193. Furthermore, the Parties' 
strong market position resulting from the most recent successes of the Parties in 
bids was  largely confirmed by market participants and there are high barriers to 
enter the market for potential new suppliers. Finally , the purportedly largest 
competitor mentioned by the Notifying Party in RBPS is apparently active 
mainly in the armaments industr y and has not been mentioned by any 
respondent in the market investigation. The Commission concludes, therefore , 
                                                 
186  Form CO, Pilot Controls, para s. 7.15.  
187  None of the Parties bid for military aircraft.  
188  […]. 
189  See replies to question 60  of Questionnaire 2 – Airframers . 
190  See a reply to question 61.1  of Questionnaire 2 – Airframers . 
191  See replies to question 56  of Questionnaire 1 – Competitors, replies to question 56  of Questionnaire 2 
– Airframers.  
192 See replies to question 67  of Questionnaire 1 – Competit ors, replies to question 65.2 of 
Questionnaire  2 – Airframers.  
193  In particular, UTC won the tender for the […] with revenues expected from […].  
 
 
50 that the Transaction raise s serious doubts as regards its impact on competition 
for RBPS on aircraft .  
8.1.3.3.  Pilot Controls – Throttle Quadrant Assem bly  
(243)  The Parties' combined market share is  [50-60]% in TQA on the merchant 
markets according to the Notifying Party's submission194.  
(244)  This high market share  was also confirmed through the analysis of the bidding 
data195. In TQA, the Parties won […] out of the […] most recent bids for large 
commercial aircraft, […] out of […] for regional aircraft, […] out of […] for 
business jets  and […] out of […] in military aircraft, thus demonstrating a strong 
position on the market for TQA.  
(245)  The Commission notes that the t wo strongest competitors post -merger would 
have each a market share of [10-20]%.  
(246)  The general results of the market investigation relating to pilot controls as 
reflected in Section 8.1.3.2  of this decision also apply to TQA : 
(a) As indicated by the bidding data, the Parties are close competitors. This 
has been confirmed by a number of market participants during the 
Commission's market investigation196. 
(b) Many of the responding competitors and some of the airframers saw the 
Parties as the most important competitors in pilot controls (both in 
TQA and RBPS) some ranking the Parties as number one and two 
globally197.  
(c) The majority of the respondents does not contemp late to sponsor a 
market entry of a new supplier for pilot control198 and there were no 
recent market entries in pilot controls in general while barriers to entry 
are high199. 
(d) Some airframers assume that the market power of the Parties will 
increase, whilst competitors' market power will decrease200. 
(247)  On the basis of the above, the Commission concludes that  the Transaction raises 
serious doubts as regards its impact on competition for TQA on aircrafts.  
                                                 
194  Form CO, Pilot Controls, para . 7.18.  
195  Reply of the Parties to the Commission's RFI#1 and RFI#3 on bidding  data on 25 January, 2018 and 
on 25 February respectively.  
196  See replies to question 60  of Questionnaire 1 – Competitors, replies to question 58  of Questionnaire 2 
– Airframers.  
197  See replies to question 56  of Questionnaire 1 – Competitors, replies to question 55  of Questionnaire 2 
– Airframers.  
198  See replies to question 60  of Questionnaire 2 – Airframers.  
199  See replies to question 61  of Questionnaire 2 – Airframers.  
200  See replies to question 65.3  of Questionnaire 2 – Airframers.  
 
 
51 8.1.4.  Ice Protection  
(248)  In view of the product market definition, the  Transaction gives rise to 
horizontally affected markets regarding pneumatic ice protection  products  for 
wings and stabilizers and for electro -thermal ( including chemical ) ice protection 
products for propellers.  
(249)  The Notifying Party  argue s that the Transac tion will not significantly impede 
competition because there are strong alternative suppliers, in particular in case 
of wing ice protection a number of more advanced wing ice protection 
technologies and in the aftermarket competition not only from original  
equipment suppliers but also from those who seek supplemental type certificates 
('STC'), allowing them to replace other producers’ ice protection products201. 
Furthermore, the Notifying Party  claim s that customers source through bidding 
processes , which ren ders historic market shares less relevant202.  
(250)  According to the estim ate of the Notifying Party, 70% -80% of the overall sales 
in wing ice protection and 50% -60% of the overall sales in propeller ice 
protection market are accounted for by the aftermarket, the  rest by the OE 
market. The Commission notes that whereas UTC is covering both the OE 
market as well as the aftermarket, Rockwell Collins is active primarily on the 
aftermarket . 
8.1.4.1.  Pneumatic ice protection for wings and stabilizers  
(251)  Other than the Parties the  only other competitor offering pneumatic wing ice 
protection products is Zodiac  Aerospace . Based on this,  the Commission notes 
that post -merger the number of competitors on the pneumatic ice protection 
market for aircraft wings and stabilizers would decre ase from three to two.  
(252)  The Parties' combined market share in pneumatic wing ice protection is 
[50-60]% according to the Notifying Party ’s estimates  for the year 2016 . The 
market share remains rather stable considering previous  years (2014: [50-60]%; 
2015:  [50-60]%)203.  
(253)  In view of the overall sales value of wing ice protection products including other 
technologies such as EMEDS or electro -thermal, the pneumatic wing ice 
protection products accounted for [70-80]% of the sales value in 2016. In 
assessing the i mportance of pneumatic ice protection in the future, the 
Commission notes that a lso this share remained rather stable through the past 
years (2014: [80-90]%, 2015:  [80-90]%)204, even though the market 
investigation revealed that there is a general  trend towards electro -thermal ice 
protection solutions205. 
                                                 
201  Form CO, Ice Prot ection, para s. 7.1., 7.4 – 7.9. 
202  Form CO, Ice Protection, para s. 7.2 and 7.3.  
203  Form CO, Ice Protection, para s. 7.13.  
204  Form CO, Ice Protection, para s. 7.11.  
205  See replies to question 130  of Questionnaire 2 – Airframers . 
 
 
52 (254)  The market investigation further  showed that the Parties are  seen as close 
competitors  by their rivals206. The Commission received statements such as: 
"Both [Rockwell Collins] and UTC make similar pne umatic boots and propeller 
heaters. They compete directly in the aftermarket with equivalent offerings ."207 
Another respondent noticed that " UTC and Rockwell Collins are the two biggest 
suppliers for Wing Ice Protection (pneumatic ice wing ice protection and  
propeller heaters). "208. Furthermore, the Parties are named frequently amongst 
the strongest competitors by competing ice protection manufacturers209. 
Customers consider UTC to remain strong also in future210. The closeness of 
competition is further demonstrate d by the fact that Rockwell Collins is active 
primarily on the aftermarket ([…]211), where it seeks to supply its ice protection 
products to customers who originally purchased aircraft with ice protection 
products from UTC212.  
(255)  For the impact of the Transaction, t he majority of respondents expect 
competition to decrease213 and some expect prices to increase214. 
(256)  The Commission notes that, regarding the aftermarket, UTC offers certified ice-
protection products on […] types of aircraft215. On […] out of these,  there is no 
competitor with a certified de -icing product. Post -merger, however, this number 
would increase to […] out of […], where the merged entity would not have any 
competitor with a certified ice protection product216.  
(257)  On the basis of the above, the T ransaction raises serious doubts as regards its 
impact on competition for pneumatic ice protection products on aircraft wings 
and stabilizers , first and foremost based on the post -merger duopoly comprising 
the merger entity and Zodiac, as well as the curre nt strong combined position of 
the Parties in view of the market shares and the merger entity's forecasted strong 
market position in the future .  
8.1.4.2.  Electro -thermal ice protection for propellers  
(258)  The Parties' combined market share in propeller ice protection i s [30-40]% 
according to the Notifying Party’s estimates for the year 2016. The market share 
remains rather stable considering previous  years (2014:  [40-50]%; 
2015:  [40-50]%)217.  
                                                 
206  Airframers do not consider the Parties as 'close competitors' – see replies to question 128 of 
Questionnaire 2  – Customers. This is in line with […]. 
207  See replies to question 126.1  of Questionnaire 1 – Competitors . 
208  See replies to question 126.1  of Questionnaire 1 – Competitors . 
209  See replies to question 124  of Questionnaire 1 – Competitors . 
210  See replies to question 125  of Questionnaire 2 – Airframers . 
211  Form CO, Ice Protection, para s. 6.11 and 6.36.  
212  See min utes of a call with a component OEM, on 23 March, 2018.  
213  See replies to question 128 of Questionnaire 1 – Competitors.  
214  See replies to question 124 of Questionnaire 1 – Competitors.  
215  Document 'Supplemental_Response_to_Q1(b)', submitted to the Competition Bureau Canada as 
response by the Notifying Party to March 16 RFI of the Competition Bureau Canada.  
216 Analysis by the Commission of the Document 'Supplemental_Response_to_Q1(b)', submitted to the 
Competition Bureau Canada as response by the Notifying Party to March 16 RFI of the Competition 
Bureau Canada.  
217  Form CO, Ice Protection, para. 7.13.  

 
 
54 on the merged entity post-merger as well as the lack of concerns resulting from 
the market investigation. It can, however, remain open whether there are serious 
doubts as to the Transaction 's compatibility  with the internal market  in view  of 
propeller ice protection as the  propeller ice protection business of Rockwell 
Collins is part of the commitment entered into by Rockwell Collings relating to  
its entire ice protection business as set out in section 9. 
8.1.5.  Aircraft seating  
8.1.5.1.  Business jets seats  
(263)  UTC is a Tier 1 supplier for business jet passenger seating. UTC’s sales are to 
airframers or to those firms contracted by the aircraft owner to perform interior 
completion. UTC’s largest customers for business jet passenger seating are […]. 
(264)  Rockwell Colli ns sells most of its business jet passenger seating products as a 
Tier 1 supplier to aircraft OEMs, which include […]. 
(265)  The Parties achieve a moderate combined market share of [20-30]% in business 
jets seats (UTC: [5-10]%, Rockwell Collins: [10-20]%) and fa ce competition 
from Ipeco  ([20-30]%), RCO Engineering ( [10-20]%) and PAC ( [5-10]%). 
(266)  The consolidated bidding data shows that UTC and Rockwe ll Collins are not 
the closest competitors in business jet passenger seating, and that UTC is a 
relatively minor  ([…]) competitor in this business. According to 
the consolidated bidding data, UTC bid on […] out of […] opportunities 
([…]%) but  only was selected for […] opportunities ( […]%) while Rockwell 
Collins bid on  […] out of 25 opportunities ( […]%) and was selecte d for 
[…] opportunities  ([…]%). Rockwell Collins has met […] in a larger number of 
bids ( […] out of […]) than UTC ( […] out of […]). 
(267)  No concerns have been expressed during the market investigation as regards the 
impact of  the Transaction on competition for business jets seats.223 
(268)  On the basis of the above, the Transaction does not raise serious doubts as 
regards its compatibility with the internal market  for business jets seats.  
8.1.5.2.  Cabin attendant seating  
(269)  UTC is a Tier 1 supplier for CAS. UTC’s largest CAS custom ers are […], with 
total sales of EUR […]. 
(270)  Rockwell Collins has […]. 
(271)  The Parties achieve a combined market share of [70-80]% in CAS but the 
increment is particularly small (UTC: [70-80]%, Rockwell Collins: [0-5]%), 
reflecting Rockwell Collins ' […] relevance in this market. The parties face 
competition from Zodiac ( […]%) and other suppliers like Meggitt and Heico.  
                                                 
223  See replies to question 90 -1 of Questionnaire 2 – Airframers.  
 
 
55 (272)  No concerns have been expressed during the market investigation as regards the 
impact of the Transaction on competition for CAS.224 
(273)  On the basis of the above, and notably the very small increment arising from the 
Transaction, the Transaction does not raise serious doubts as regards its impact 
on competition for CAS.  
8.1.6.  Oxygen Systems  
(274)  Rockwell Collins provides oxygen systems for all types of airc raft. Oxygen 
systems are sold either directly to aircraft OEMs (Airbus, Boeing, Textron) or to 
interior integrators. In either case, it is the aircraft OEM who chooses the 
oxygen supplier and decides whether it will integrate itself or will delegate the 
integration to a Tier -1 supplier (such as an interior integrator or a PSU supplier) 
prior to its delivery to the OEM.  
(275)  In 2016, Rockwell Collins had sales of EUR  […] in oxygen systems , 
corresponding to a market share of [50-60]%. 
(276)  UTC does not manufacture oxy gen systems. UTC is however working on an 
[…]e development program for an oxygen system  that [description of UTC's 
Oxygen Program] . Specifically, UTC is working […] to research and develop a  
[description of UTC's Oxygen Programme 1]  oxygen […] (Programme 1 ) and to  
develop […] oxygen [description of UTC's Oxygen Programme 2] 
(Programme  2). 
(277)  UTC is therefore a potential competitor of Rockwell Collins in the oxygen 
systems market. Pursuant to the Horizontal Merger Guidelines, for a merger 
with a potential compe titor to have significant anti -competitive effects, two 
basic conditions must be fulfilled. First, the potential competitor must already 
exert a significant constraining influence or there must be a significant 
likelihood that it would grow into an effecti ve competitive force. Evidence that a 
potential competitor has plans to enter a market in a significant way could help 
the Commission to reach such a conclusion. Second, there must not be a 
sufficient number of other potential competitors, which could main tain 
sufficient competitive pressure after the merger .225 
(278)  At this stage of the proceedings, the Commission takes the view the merger of 
Rockwell Collins, which is active in the oxygen systems market with UTC as a 
potential competitor in this market is likely  to have anti -competitive effects  and 
therefore raises serious doubts as to i ts compatibility with the internal market in 
this respect . 
(279)  As regards the likelihood that UTC will grow into an effective or competitive 
force in the oxygen market, UTC has explained that both programs are 
[descrip tion of UTC's Oxygen Programs ]. With respect to Programme  2, 
[descrip tion of UTC's Oxygen Programs ].226 
                                                 
224  See replies to question 90 -2 of Questionnaire 2 – Airframers.  
225  HMG, paragraph 60.  
226  See response to RFI 5, dated 27 March 2018, paragraphs 9.1 to 9.8.  
 
 
56 (280)  However, the Commission considers that […], there is a significant likelihood 
that UTC will grow into an effective competitive force in oxygen systems.  
(281)  The most recent internal document of UTC as regards oxygen systems (dated 8 
March 2018)227 indicates tha t entry into service […].228 Another internal 
document states that [quote from UTC's internal document] .229 
(282)  The likelihood of success for these programmes is further enhanced by the […]. 
In an internal document dated February 2017, UTC mentions that [quote fro m 
UTC's internal document]230. In another internal document, the interest of […] is 
described as follows [quote from UTC's internal document] .231 
(283)  The table in Figure 8 shows the market share objectives of UTC as regards 
oxygen systems by platforms types for the major customers.232 [Details of 
UTC's R&D programs] . 
Figure 8 - Market share objectives of UTC in oxygen systems  
[…] 
(284)  On the basis of the above, the Commission considers that there is a significant 
likelihood that UTC post -entry would grow into an effective competitive force 
in the oxygen market.  
(285)  As regards the existence of co mpetitors which could maintain sufficient 
competitive pressure after the merger, the current market for oxygen systems is 
particularly concentrated, with only two main suppliers. Rockwell Collins holds 
a market share of [50-60]%, and its only other active competitor, Safran/Zodiac, 
has a [30-40]% market share233. A narrower segmentation by aircraft type or 
portable and non -portable oxygen systems would not change the picture of a 
duopoly market in oxygen systems.  
(286)  Further, the market investigation has shown t hat Safran/Zodiac ( [30-40]% 
market share), engages mainly in legacy business  and has not won any new 
platforms in  the last decade . In an internal document of Rockwell  Collins related 
to oxygen systems, Zodiac is described as a company that [quote from Rock well 
Collins' internal document]  and [quote from Rockwell Collins' internal 
document]234. In another internal document, Rockwell Collins describes Zodiac 
as follows  [quote from Rockwell Collins' internal document] .235 
                                                 
227  See […]. 
228  See […], slide 8.  
229  See […], slide 12.  
230  Ibidem, slide 19.  
231  […]. 
232  See […], slide 9.  
233  The Notifying Party has explained that "other suppliers" account for the remaining [0-5]% of the 
market but they have not been identified in the form CO and the Parties' internal documents only 
discuss Zodiac as an alternative supplier in oxygen systems.  
234  See B/E Aerospace (subsequently ac quired by Rockwell Collins) […] slide 10.  
235  See B/E Aerospace (subsequently acquired by Rockwell Collins ) […], slide 17.  
 
 
57 (287)  This non-competitive market situation is confirmed by UTC i n one of its 
internal documents where they  explain that [quote from UTC's internal 
document]236. Another company active in a neighbouring area in the aerospace 
sector explained that there is " a place in the global commercial passenger plane  
market for an additional new oxygen technology provider as there is currently 
no competition ".237 
(288)  Furthermore, barriers to entry in the oxygen market are high, consisting of 
intellectual property, engineering, regulatory agency compliance, certification 
and overall programme schedule . They are further increased by the presence of a 
dominant supplier like Rockwell Collins in the market which states as an 
objective in one of its internal document s [quote from Rockwell Collins' internal 
document]238  
(289)  The existenc e of barriers to entry was confirmed by a market player which 
indicates that  "large players in the military aerospace oxygen area could decide 
to enter the civilian market. The technologies used are different between the 
civilian and military markets but t he fact that it is airworthy oxygen in both case 
could be used to develop a dedicated product offering(…) it is not a swift entry 
and expansion"239. No player active in the oxygen military market has indicated 
to the Commission that it wishes to enter the oxygen civil aircraft market .  
(290)  Against that background, the likely entry of UTC  in oxygen systems could have 
beneficial  effects on competition  in a concentrated market where barriers to 
expansion and entry are significant. The Commission therefore consider s that 
the Transaction  raises serious doubts as regards its impact on competition to its 
compati bility with the internal market  as regards  oxygen systems . 
8.1.7.  Interior lighting  
(291)  UTC is present in lighting with a full range of products but does not have "floor -
to-floor" interior capabilities. UTC sells both to airframers and Tier 1 suppliers. 
UTC's aftermarket sales represent  circa [50-60]% of its lighting business . Most 
of these sales are spare parts sales; only […] comes from retrofit sales.  
(292)  Rockwell Collins is  mainly present in cabin lighting and cabin signage. 
However, Rockwell Colli ns has "floor -to-floor" capabilities. Rockwell Collins 
also sells to airframers and Tier 1 suppliers. [70-80]% of Rockwell Collins' 
revenues in lighting come  from sales to airframers, [10-20]% to integrators and 
the remaining  [10-20]% are aftermarket sales.  
(293)  Both UTC's and Rockwell Collins' OE sales are SFE.  In the interior lighting 
market , the Parties have a combined market share of [20-30]% (UTC [10-20]% 
and Rockwell Collins  [10-20]%). In the OE market , the Parties have a combined 
market share of [30-40]% (UTC [10-20]% and Rockwell Collins [20-30]%) and 
in the aftermarket , [10-20]% (UTC [10-20]% and Rockwell Collins [5-10]%). In 
case the interior lighting mark et were segmented by aircraft type, the Parties 
                                                 
236  See […], slide 16.  
237  See reply to a RFI dated 6 April 2018 . 
238  See […], slide  24. 
239  See reply to a RFI dated 9 April 2018.  
 
 
58 would have a combined market share of [30-40]% (UTC [20-30]% and 
Rockwell [10-20]%) in LCA; [30-40]% (UTC [10-20]% and 
Rockwell  [10-20]%) in regional aircraft; [20-30]% in business jets (UTC [0-5]% 
and Rockwe ll [10-20]%); [5-10]% in military aircraft (UTC [5-10]% and 
Rockwell [0-5]%); and  [0-5]% in helicopters (UTC [0-5]% and 
Rockwell  [0-5]%).  
(294)  The P arties ' main competitor is Diehl and there are several other smaller players 
present i n most segments of the lighting market: Koito, Honeywell, Leonardo, 
Asronics, Bruce Aerospace.  
(295)  The majority of airframers do not consider the parties to be close competitors240, 
which is reflected in the bidding data. The Parties do not seem to meet often  (in 
[…]% of the tenders  for LCA, […]% for regional aircraft  and […]% for 
business jets). The percentage  of tenders in which one of the Parties won is 
relatively high:  […]% for LCA ( […]); […]% for Regional ( […]); […]% for 
business jets ( […]). However, in most cases that one of the Parties won a tender 
[…]241. The bidding data also shows that frequently airframers sp lit the tender 
and multisource from different suppliers . 
(296)  Although some airframers that participated in the market investigation 
considered that the Transaction would increase the Parties' market power , none 
has expressed a ny concern regarding an increase in prices or a decrease in 
quality or innovation in the PSU market242. 
(297)  On the basis of the above, the Transaction does not raise serious doubts as to its 
compatibility with the internal market as regards its impact on competition for 
interior lighting products.  
8.1.8.  PSUs  
(298)  UTC is a Tier 1 and a Tier 2 supplier of PSUs . [Description of UTC's sales 
strategy] . UTC sells standardised PSUs to […] but […] the cus tomised PSUs it 
sells to other customers, […]. UTC's aftermarket sales represent circa [20-30]% 
of its PSUs business. […]. UTC's biggest customer in the aftermarket is […]. 
(299)  Rockwell Collins  is a Tier 1 and Tier 2 supplier of PSUs . Rockwell Collins sells 
PSUs as a stand -alone product  (to […]) but also with oxygen system (to […]) 
and as part of a floor -floor offer (to […]). Most of Rockwell Collins' revenues 
come from […] PSUs. Rockwell Collin's aftermarket sales represent circa 
[5-10]% of  its PSU business. […]. 
(300)  UTC's and Rockwell Collins' OE sales are all SFE.  The Parties estimate that 
their combined market share in an overall PSU market is [40-50]% 
(UTC  [20-30]% and Rockwell Collins [10-20]%). In case the market is 
segmented  per aircraft type, the Parties combined market share raises to 
[40-50]% in the LCA (although Rockwell Collins market share remain at 
[10-20]%), and to [40-50]% in the regional aircraft (UTC  [20-30]% and 
                                                 
240  See replies to question 100 of Questionnaire 2 – Airframers.  
241  [Details of Parties' bids] . 
242  See replies to question 104 of Questionnaire 2 - Airframers.  
 
 
59 Rockwell Collins [20-30]%). In case the relevant mar ket would comprehend 
both PSU and interior lighting, the Parties combined market share is [20-30]%. 
In case the relevant market would include PSUs and oxygen systems , the parties 
combined market share would be [50-60]% (UTC [5-10]% and Rockwell 
Collins [40-50]%). In a  market comprising PSUs, lighting and oxygen systems, 
the Parties combined market share would be [30-40]% (UTC [10-20]% and 
Rockwell Collins  [20-30]%). 
(301)  The Parties ' main competitors are  Safran and Astronics . Both of them are 
present in interior  lighting, oxygen systems  (except for Astronics)  and both of 
them have also integration capabilities.  
(302)  UTC and RC were not perceived as close competitors by the majority of 
customers243 which is reflected in the bidding data. The Parties do not seem to 
meet o ften ([…]% of the times for LCA, […]% for regional  aircraft  and […] in 
business jets). The percentage of tenders in which one of the Parties won is 
relatively low  at […]% for LCA ( […]); […]% for regional aircraft  ([…]). 
(303)  Although some airframers that participated in the market investigation 
considered that the Transaction would increase the Parties' market power , none 
has expressed a concern regarding an increase in prices or a decrease in quality 
or innovation in the PSU m arket244. 
(304)  On the basis of the above, the Transaction does not raise serious doubts as 
regards its impact on competition for PSUs . 
8.1.9.  Potable water systems  
(305)  UTC is active in potable water systems where its focus is […]. It has no 
presence in […] potable water systems, and has no current plans to expand into 
this area. UTC provides potable water systems for the […], among others. UTC 
is […].245  
(306)  The Parties submit that Rockwell Collins which is active in wastewater systems, 
[…]: it has carried out […] so far, with […] and […].246 
(307)  The Parties' activities therefore overlap only marginally in the sale of potable 
water systems. While UTC estimates its market share at [30-40]% for 2016 , 
Rockwell Collins considers its market share , with its one project carried out so 
far, to be below  [0-5]%. If a sub -segmentation per aircraft type is considered, 
UTC's share in the business jet segment rises to [80-90]% in 2016 , with an 
increment of [0-5]% by Rockwell Collins .247  
(308)  However, the Notifying Party argues248 that these estimated market shares 
largely overestimate UTC's actual presence in potable water systems, as they do 
                                                 
243  See replies to question 110 of Questionnaire 2 – Airframers.  
244  See replies to question 115 of Questionnaire 2 – Airframers.  
245  Form CO, Potable W ater Systems, para 6. 8. 
246  Form CO, Potable Water Systems, para 6. 9.  
247  Form CO, Potable Water Systems, Table 2 and Table RFI2.1.  
248  Form CO, Potable Water Systems, para 7.4.  
 
 
60 not include the sale of components by other OEMs to airframers who have 
historically been and many are still integrating purchased components to 
assemble  the potable water system themselves and not purchasing the entire 
system.249 The UTC sales figures, on the other hand do include UTC's 
component sales.  
(309)  In the Notifying Party's estimat e, the overall market size could be larger than 
double for the mar ket encompassing all aircraft types and possibly […]% larger 
for the business segment.  
(310)  In any event, the Notifying Party submits250, Rockwell Collins is […] on this 
market and  Rockwell Collins supplies the […] potable water system […], who is 
a Rockwell Collins waste system customer. Rockwell Collins has […]. 
(311)  The Notifying Party points to the presence of a number  of strong competitors 
including Zodiac, the market leader, Diehl, Transdigm, JAMCO, as well as a 
number of other component s uppliers, including Cox & Co, International Water - 
Guard, Yokohama, and DYNAMO Aviation along with many other smaller 
companies.  
(312)  UTC expects251 […] and […] to significantly increase market share in the near 
future, having recently won tenders for aircraft t hat are currently ramping up 
production, such as the […] tender won by […], increasing from […] planes 
produced in 2016 to […] in 2018.  
(313)  During the investigation , Zodia c, Diehl  and Transdigm  confirmed being  present 
as competitors on a large number of platf orms252. They saw Rockwell Collins 
present on the market, but held that it was not closely competi ng with UTC.253  
(314)  Bidding data submitted by the Parties254 reflect s the same picture : since the 
year 2000, Rockwell has been […] for potable water systems.  
(315)  On the basis of the above, the Transaction does not raise serious doubts as to its 
compatibility with the internal market as regards its impact on competition for 
potable water systems.  
8.1.10.  MRO and spare parts  
(316)  The Parties' activities overlap with regard to the  provision of component 
maintenance in terms of providing MRO services and selling spare parts. Both 
UTC and Rockwell Collins are active in servicing their own components and 
                                                 
249  Such as for instance including, […]. See the Notifying Party's reply to question 12 of the 
Commission's RFI#1 on19 December, 2017 and see also UTC's letter to the US Department of Justice 
on potable water systems on 6 October, 2017).  
250  Form CO, Potable Water Systems, para 7.7. 
251  Form CO,  Potable Water Systems, para 7. 8. 
252  See replies to question 130 of Q1 - Questionnaire to competitors.  
253  See replies to question 134 of Q1 - Questionnaire to competitors , see also minutes of calls with 
competitors on 21 December 2017 and 4 January, 2018.   
254  Reply of the Parties to the Commission's RFI#1 and RFI#3 on bidding data on 25 January, 2018 and 
on 25 February respectively.  
 
 
61 achieve significant turnover on the aftermarket: [30-40]%255 of UTC's 
and [20-30]% of Rockwell Collins' turnover stems from their activities on the 
aftermarket;  revenues from maintenance activities and sale of spare parts.  
(317)  The Parties  do not provide maintenance services on each other 's equipment and 
the Parties  […] provide maintenance services on any third party OEM 
equipment256, each focussing instead on providing maintenance services on its 
own equipment .  
(318)  Some of the Parties' competitors for MRO services  voiced  concerns about 
ongoing foreclosure practices by OEMs, including UTC and Roc kwell Collins, 
when competing for carrying out maintenance on their equipment: they claim 
that OEMs try to limit their access to the technical documentation, spare parts  
and tools and that OEMs set excessive license fees for third party operators . 
They arg ue that s pare parts, manuals, tools and testing equipment are  all 
essential inputs without which an independent MRO cannot carry out 
maintenance on the equipment. The complainants are concerned that the 
Transaction will increase UTC's incentives to foreclose access to spare parts and 
manuals257 and that its  increased market power will translate into capturing more 
MRO revenues from independent MRO service providers.  
(319)  The Parties ' competitors held in this respect that OEM's offering bundles of 
equipment  with associated support services (maintenance and spare parts) was 
common practice, enabling them to offer  customers discounts and competitive 
prices.258 
8.1.10.1.  The Parties' arguments  
(320)  The Parties submit that they are not competing against each other in the field o f 
MRO services and spare parts : They  do not service each  others' equipment […]. 
Their MRO activities are essentially limited to servicing  their own equipment  
only.259 Therefore, there is no competitive overlap between their aftermarket 
activities.  
(321)  Although their overall market share for component maintenance is estimated 
at [20-30]% and [5-10]% for UTC and Rockwell Collins respectively,260 the 
Parties  also argue that they do not enjoy exclusivity on the maintenance of their 
own equipment: UTC estimates that on average [50-60]% of its equipment has 
been service d by third party providers  in 2016 and 2017 . For  Rockwell Collins  
the estimates differ across product groups, in interior systems it  is as high 
                                                 
255  Excluding engine sales and maintenance.  
256 UTC has some repair work on one of its repair sites for third party equipment [description of UTC's 
repair activities ]. Rockwell Collins gives a similar estimate ( […]) for the proportion of third party 
equipment serviced out of all equipment serviced by Rockwell Collins.  
257  See minutes of a call with an MRO competitor on 27 March  2018. See also replies to question 44 of  
Q3 – Questionnaire to customers - airlines.  
258  See replies to question 12 of Questionnaire 1 - Competitors.  
259  See point 11.1 of UTC's reply to the Commission's RFI#6 on 3 April, 2018.  
260  See reply to question 12 of RFI#8 on 10 April, 2018. Figure encompassing MRO services including 
spare parts.  
 
 
62 as […]% whereas in lighting and commercial system products the ratio is lower, 
[10-20]% and [30-40]% respectively.261 
(322)  UTC explains that complex parts in which t he OEM holds relevant IP rights  are 
typically supplied by the OEM and that UTC does have components and spares 
that can exclusively be replaced by UTC262. UTC also explains that often from a 
business perspective, [details of UTC's contracts with customers] .263  
(323)  UTC  adds however, that [details of the Parties' repair activities] .  
(324)  UTC also  argues that many supply contracts  [details  of UTC's supply contracts ], 
limiting its ability to foreclose MRO competitors.   
(325)  The Notifying Party adds that reputational issues discipline its behaviour on the 
aftermarket  also limiting its incentives to foreclose its MRO competitors, who 
are also it s customers at the same time.  
8.1.10.2.  The Commission's assessment  
(A) Horizontal overlap in MRO  
(326)  As regards the horizontal overlap  between the Parties' activities in component 
MRO services, the Commission concludes that no serious doubts arise since:  
(a) The Parties' combined market share would reach [30-40]% which as 
such is not indicative of strong market power. More importantly, 
however, the Parties do not service each other's components. T herefore 
irrespective of their combined  market shares, they are not currently 
competing with each other. As exp lained, UTC and Rockwell Collins 
focus on servicing their own components and  […].  
(b) Furthermore, although some respondents indicated in the market 
investigation that the larger product portfolio could potentially increase 
the market power of the merged enti ty vis -à-vis customers, the 
Commission considers that the Transaction will not fundamentally 
change the competitive landscape . That is  because the set of products 
on which the merged entity will carry out MRO services does not reach 
the full scope of nose -to-tail MRO service providers to be able to fully 
compete with them  after the Transaction . UTC will have on average 
a [20-30]% presence with its equipment on existing platforms 
(expre ssed as  the cost of all components supplied by the merged entity 
as a proportion of the total procurement cost of an aircraft, as set out in 
paragraph (432)). It wi ll however not be able to substitute the potential  
need of an airline for a nose -to-tail MRO service provider. Therefore, 
the Transaction does not lead to significant change s in the competitive 
dynamics of the existing situation.   
                                                 
261  Replies to question 10 of RFI#8 on10 April, 2018.  
262  See UTC's reply to question 102 of RFI 1 as 21 December, 2017.  
263  See UTC's reply to que stion 5 of RFI 12 on 16 April, 2018.  
 
 
63 (c) Alternative  component  MRO  service providers will remain available 
after the Transaction . This is confirmed by the Parties' OEM 
competitors replying to the market investigation.264 Furthermore, al l but 
one airframer responding to the market investigation confirmed having 
its own MRO operations,265 as did a number of airlines,266 and the 
market investigation confirmed that for the servicing of an OEM's 
equipment, the airlines' MRO providers, airframers and other 
independent MRO operators are all in competition with each other .267 
The level of competition in providing component MRO services is also 
reflected by the […] ratio of the Parties ' components not serviced by 
the Parties themselves  ([50-60]% for UTC; […]268 for Rockwell 
Collins, as concerns overlap products, see paragraph (321) ). As one 
large OEM put it : "As concerns MRO, the largest role is played by the 
airframers, then the airlines and the role of the equipment 
manufacturers is less,  more of a supportive role".269 
(B) Horizontal overlap in s pare parts  
(327)  Similarly, a s regards the horizontal overlap  between the Parties' activities in 
supplying spare parts, the Commission concludes that no serious doubts arise 
since:  
(a) The Parties' combined market share in component MRO  including 
spare  parts would reach [30-40]% which as such is not  indicative of 
strong market power. More importantly, however, the Transaction will 
not change the competitive landscape in the supply of spare part s since 
the Par ties do not manufacture each other's components for the 
aftermarket . Therefore irrespective of their achieved market shares, 
they are not currently competing with each other.  UTC  [description of 
UTC's spare parts sales ]. The Commission notes that a  subsidi ary of 
Rockwell Collins (Intertrade Ltd) [description of Rockwell Collins ' 
spare parts sales ]270. 
(b) The merged entity will continue to face competition from alternative 
spare parts that can be used instead of their original products, 
developed and manufactured  by third party spare parts suppliers. UTC 
submits that on average [20-30]% of the spare parts required to service 
UTC equipment is manufactured by alternative third parties. In case of 
Rockwell Collins, the third party penetration of spare parts is […], up 
to [10-20]%. In this regard, the Commission takes note of the concerns 
raised in the market investigation indicating the customers' dependency 
on the OEM spare part manufacturers and the merged entity's alleged 
ability to use its leverage to increase pri ces. However, the Commission 
                                                 
264  See replies to question 146 of Questionnaire 1 –Competitors . 
265  See replies to question 138 of Questionnaire 2 – Airframers.  
266  See replies to question 26 of Questionnaire 3 - Airlines.  
267  See replies to question 141  of Questionnaire 2 – Airframers.  
268  Except for interior lighting, where the third party maintenance for Rockwell Collins products is 
[0-5]%. 
269  See minutes of a call with a competitor  on 19 December, 2017.  
270  In 2017, […], see the Notifying Party's reply  to the Commisison's RFI#12 of April 16, 2018.  
 
 
64 considers that these concerns have been present before the Transaction 
and relate to practices by OEMs that may be aimed at limit ing 
competition from third party  spare part  manufacturers (e.g., PMA)  and 
are inherent to a possible single -sourcing strategy chosen by the 
airframer  or the airline . In the Commission's view the concern is not 
exacerbated by the Transaction, as is does not affect competition 
between the OEM and third party spare part manufacturers on the 
aftermarket for spare parts, given that  the Parties are not competing  
against each  other on that market271. Therefore the Transaction will not 
increase concentration levels on the market for spare parts:  For any of 
the Parties ’ equipment, either of the Parties an d an unchanged number 
of third party spare part manufacturers will compete.  
(C) Access to spare parts and other inputs (upstream) for the provision 
of MRO services (downstream)  
(328)  As regards input foreclosure concerns  expressed by certain market participants 
during the Commission's market investigation that the OEMs restrict access to 
spare parts272 and other inputs  (such as to documentation, IP rights, tooling, 
testing equipment and maintenance data ), the Commission notes that similar 
concerns were voiced during t he investigations of the UTC /Goodrich and 
Safran /Zodiac transactions by competing  MRO service providers . Nevertheless, 
and for similar reasons as set out in those two previous decisions, the 
Commission concludes that no serious doubts arise due to foreclos ure concerns 
in this Transaction since:   
(a) In UTC/Goodrich the Commission found that such foreclosure 
practices reported by the independent MRO service providers indeed 
existed, but that they were unrelated to the concentration.  In particular, 
no link was found between the number of equipment on a given aircraft 
by any supplier and the  existence of or attempts at foreclo sure practices  
by that supplier .273 The same conclusions hold true in this case.  The 
foreclosure concerns expressed relate to the individu al equipment , 
regardless of how many other types of equipment the same supplier has 
installed on the same aircraft.  The potential incentive s to try to 
foreclose competitors from access to necessary inputs follow from a 
potential position of market power du e to the fact that the individual 
equipment of one supplier has been chosen for a certain platform (with 
generally  limited possibilities for the airframer to replace the equipment 
during the lifetime of the platform). Those incentives would therefore 
not b e influenced by the same OEM having more equipment installed 
on the same platform or with the same customer.   
                                                 
271 […]. 
272  For instance, the market participants refer to the possibility that the merger entity would limit the use 
of PMAs (Parts Manufacturer Approval). Those are spare parts not manufactured by the OEM but  by 
a third party and certified by the Federal Aviation Agency to meet airworthiness standards. 
Furthermore, market participants report of practices by which OEMs reject warranty if parts are not 
replaced by the OEMs own manufactured spares but alternative  suppliers were used . 
273  See case COMP/M.6410 – UTC/Goodrich , paras 735 – 754 and case M.8425 – Safran/Zodiac 
Aerospace , paras  48 -356.  
 
 
65 (b) As set out in the Safran/Zodiac decision274, any potential ability of the 
merged entity to engage in input foreclosure would not be related to the 
Transaction but would come from the chosen single source strategy and 
the limited substitutability of original spare parts. The same holds true 
in this case.  As such, the Transaction is unlikely to impact the ability of 
the Parties to restrict or frustrate access to spare  parts or other 
necessary input.  The market investigation in  case Safran/Zodiac 
precedent also found275 that the possibilities for input foreclosure also 
also limited by the OEMs' contractual obligation vis -à-vis the airframers 
to provide prod uct support, including spare parts and technical 
documentation to airlines and all MRO service providers chosen by the 
airline, usually until five aircraft from the platform are still in operation.  
(c) The addition of Rockwell Collins' share to UTC's existing  share of 
supply of spare parts or other inputs will not materially alter the 
competitive dynamics on the aftermarket on any given or future 
platform , as the Transaction will not lead to an increase in 
concentration on the market for spare parts for any of  the Parties' 
equipment . Even if some incentive to foreclosure were to exist, the 
Transaction is unlikely to change that incentive, even for future 
platforms . Furthermore, f or existing platforms the merged entity would 
be bound by its existing contractual obligations.  As a consequence, the  
competition that the merged entity has been facing on the market for 
spare parts, including from alternative third party spare part 
manufacturers , before the Transaction is unlikely to  be altered as a 
result of the Transa ction.   
(d) The Commission has not found indications during its market 
investigation in this case that the previous concentration UTC/Goodrich 
of 2012 has had adverse effects on t he MRO and spare parts markets.  
8.1.10.3.  Conclusion on MRO services and spare parts  
(329)  On th e basis of the above, the Transaction does not raise serious doubts 
regarding its compatibility with the internal market  for MRO services and spare 
parts.  The Commission takes notes of the concerns raised in the market 
investigation, considers however that  the concerns are unrelated to the 
Transaction , as already similarly found and explained in its UTC/Goodrich and 
Safran/Zodiac decisions . 
8.2. Vertical links  
8.2.1.  Analytical framework  
(330)  Vertical mergers involve companies operating at different levels of the same 
suppl y chain. For instance, a vertical merger occurs when a manufacturer of a 
certain product merges with one of its distributors.  
                                                 
274 See case M.8425 – Safran/Zodiac Aerospace , paras  48 -356. 
275 Ibindem, para 645.  
 
 
66 (331)  Pursuant to the Commission Guidelines on the assessment of non -horizontal 
mergers under the Council Regulation on the control of c oncentrations between 
undertakings (the “Non -Horizontal Merger Guidelines”)276, vertical mergers do 
not entail the loss of direct competition between merging firms in the same 
relevant market and provide scope for efficiencies.  
(332)  However, there are circumstances in which vertical mergers may significantly 
impede effective competition. This is in particular the case if they give rise to 
foreclosure277. 
(333)  The Non -Horizontal Merger Guidelines distinguish between two forms of 
foreclosure: input foreclosure, where the merger is likely to raise costs of 
downstream rivals by restricting their access to an important input, and customer 
foreclosure, where the merger is likely to foreclose upstream rivals by restricting 
their access to a sufficient customer base278.  
(334)  Pursuant to the Non -Horizontal Merger Guidelines, i nput foreclosure arises 
where, post -merger, the new entity would be likely to restrict access to the 
products or services that it would have otherwise supplied absent the merger, 
thereby raising its downs tream rivals' costs by making it harder for them to 
obtain supplies of the input under similar prices and conditions as absent the 
merger279. 
(335)  For input foreclosure to be a concern, the Merged Entity should have a 
significant degree of market power in the upstream market. Only when the 
Merged Entity has such a significant degree of market power, can it be expected 
that it will significantly influ ence the conditions of competition in the upstream 
market and thus, possibly, the prices and supply conditions in the downstream 
market280. 
(336)  Pursuant to  the Non -Horizontal Merger Guidelines, customer foreclosure may 
occur when a supplier integrates with an im portant customer in the downstream 
market and because of this downstream presence, the Merged Entity  may 
foreclose access to a sufficient customer base to its actual or potential rivals in 
the upstream market (the input market) and reduce their ability or incentive to 
compete which in turn, may raise downstream rivals' costs by making it harder 
for them to obtain supplies of the input under similar prices and conditions as 
absent the merger. This may allow the Merged Entity  profitably to establish 
higher pr ices on the downstream market281. 
(337)  For customer foreclosure to be a concern, a vertical merger must involve a 
company which is an important customer with a significant degree of market 
power in the downstream market. If, on the contrary, there is a sufficient ly large 
customer base, at present or in the future, that is likely to turn to independent 
                                                 
276 OJ C 265, 18.10.2008, p. 6.  
277 Non-Horizontal Merger Guidelines, para 18.  
278 Non-Horizontal Merger Guidelines, para 30.  
279 Non-Horizontal Merger Guidelines, para 31.  
280 Non-Horizontal Merger Guidelines, para 35.  
281 Non-Horizontal Merger Guidelines, para 58.  
 
 
67 suppliers, the Commission is unlikely to raise competition concerns on that 
ground282. 
8.2.2.  Mechanical sub -assemblies for the THSA system: the ball screw  
(338)  A THSA competitor  suggested that UTC could have an increased incentive for 
input foreclosure of ball screws to competing THSA suppliers following the 
Transaction.  
(339)  UTC  submits that its production of the ball screw is mainly for  captive purposes  
and that it has […]. UTC  estimates  that its market share for t he ball screw is 
[0-5]%. It argues that its activity on the merchant market for the sale of  the ball 
screw is related to […] and is therefore limited to […]. UTC further argues that 
alternative suppliers exist for the ball  screw , namely  Umbra, Beaver, Thomson 
Saginaw, Steinmayer and Sumimoto. UTC estimates that Thomson and Umbra 
in particular are the leading suppliers of ball screws with market shares of 
[20-30]% and  [30-40]% respectively.  
(340)  The Commission has analysed UTC ’s contract with […]283 which is […] with 
[description of UTC’s supply contract] . 
(341)  The responses to the market investigation confirmed the presence of alternative 
suppliers, in particular Umbra, which was reported to be an important and 
growing284 ball screw supplier. U mbra is not vertically integrated into the 
manufacture of THSA s, therefore all its ball screw production is sold on the 
merchant market. Marke t participants also mentioned Beaver, Steinmayer and 
Thomson as alternative manufacturers o f the ball screw.285  
(342)  The Commission further notes that UTC was not implementing a foreclosure 
strategy […] before the Transaction despite being already the leading supplier in 
THSAs. That indicates that UTC had limited ability or incentives to engage in 
input foreclosure due to its downstream activities in THSAs.  
(343)  In any event, the commitments  whereby Rockwell Collins ’ entire THSA 
business is divested  (see Section 9), removes the entire overlap between the 
Parties ’ activities in THSA . Therefore , after impleme ntation of the 
commitments, the Transaction would not  bring about any change in the market 
with relation to the pre-existing vertical link between UTC's activities in the 
manufacture of ball screw s and UTC's activities in the manufacture of THSA s.  
8.2.3.  Compone nts for potable water systems  
(344)  The Notifying Party argues that components and the complete potable water 
systems should form part of the same relevant product market and therefore no 
vertical link arises.  
                                                 
282 Non-Horizontal Merger Guidelines, para 61.  
283  Annex to the Commission's RFI #4 on ball screw and THSA on 1 March 2018.  
284  At the time of the decision, Umbra was about to take over also Meggit 's ball screw operations.  
285  See repl ies to question 34.1 of Questionnaire 1 - Competitors.  
 
 
68 (345)  If components for potable water systems are considered a relevant market on 
their own, a vertical link is created between UTC's component sales and the 
Parties ’ activit ies in the sales of complete potable water systems.  
(346)  The Commission considers however that this vertical link does not lead to any 
input or customer foreclosure concerns:  
(347)  Only a minor part of UTC's turnover , less th an USD […], is achieved through 
sales of components  to UTC's competitors for potab le water systems. This 
translates into a negligible market share of UTC on the component market. The 
majority of sales are achieved with airframes. Th e supply relationship s with 
competitors  in potable water systems, notably with large competitors such as 
[…] have  existed before the Transaction  and there are no indications that UTC , 
with a [30-40]% market share pre -Transaction  in potable water systems  has 
engaged or tried to engage in input or customer foreclosure strategies.  
(348)  It is unlikely that the marginal addition of Rockwell Collins' potable water 
business  downstream where Rockwell Collins achieves a market share of 
[0-5]% market share via […] valued at USD […], could change UTC's 
incentives to continue  supplying competitors.  
(349)  In any event, many of UTC's comp etitors in complete potable water systems, 
such as Zodiac or Diehl, Jamco, Cox&Co and International Waterguard 
Industries are all also all active in the manufacture and sale of components.  
(350)  Customer foreclosure is equally highly unlikely as Rockwell Collins ' purchase  
share on the procurement market for such components is immaterial , in line with 
its marginal activities in potable water systems . Conversely , UTC will not be in 
the position to purchase components from Rockwell Collins  to a sufficient 
extent and accordingly will have to continue purchasing these on the merchant 
market .  
(351)  Ther efore, the Commission considers that the  Transaction does not raise serious 
doubts regarding its compatibility with the internal market  as regards the vertical 
link that is created between UTC's component business and Rockwell Collins' 
and UTC's potable wa ter systems . 
8.2.4.  ARINC  
(352)  Rockwell Collins provides datalink network services and estimates that it has a 
market share of [40-50]% in the first generation datalink services.  If this market 
were to be  segment ed by aircraft size, Rockwell Collins market share would be 
[30-40]% in the large and regional commercial aircraft and of [50-60]% in the 
business jets and government aircraft286. In second generation datalink services, 
Rockwell Collins' market share is below [5-10]%. 
(353)  UTC is not present in this market. UTC supplies two types of components, the 
aircraft interface device (AID) and Pratt & Whitney's eFast unit that transmit 
data over several communication networks: WI -FI, satellite communication, 
cellular, and VFH/satellite  networks. Neither of these components 
                                                 
286  See Form CO, Section Datalink Network Services, paras. 6.33 and 6.37.  
 
 
69 communicate s directly with the VHF/Satellite networks and therefore is subject 
to testing by ARINC or SITA . 
(a) The AID is a small box that collects, stores and transmits data within 
the aircraft and off the aircraft287. AIDs are generally designed to 
ARINC industry standard specifications for data transmission. UTC 
offers its AID to airlines as a retrofit solution.  
(b) Pratt &  Whitney's eFast is an on -board, near real time data acquisition 
and transmission unit tha t automatically downloads,  processes and 
stores data and then uploads it to a customer portal.  Although eFAST 
performs the function of a health monitoring data concentrator and to 
this extent could be considered as belonging to the same relevant 
market as an AID, UTC primarily markets eFAST as an engine health 
management product.  UTC  supplies eF AST  as a standard equipment on 
the Bombardier Series.  
(354)  To date, Rockwell Collins has sold fewer than […] units (for a total of 
approximately USD […]) of its single AI D product. All these sales were made 
to […], which offered it to airlines as an optional add -on to the avionics package 
available direct ly from the production line (i.e. a line fit option). Today […] 
does not market this product anymore288. However, Rockwell Collins will 
supply a modified version of its AID to […] for its flight operations and 
maintenance exchanger ( […]) for the […] and […] families. […] will be 
installing […] on all new […] and […] aircraft […]. The Parties' combined 
marke t share in 2016 was [10-20]% (UTC [10-20]%, Rockwell Collins  [0-5]%). 
The Parties also estimate that in the ne xt 5 years Rockwell Collins' mar ket share 
will not exceed [0-5]% (including sales of its new AID to the […] program)289. 
8.2.4.1.  Complaints raised  during th e market investigation  
(355)  Some market participants  raised concerns during the Commission’s market 
investigation  that the merged entity would discriminate against its competitors 
in the supply of aircraft components and in the supply of component MRO290 
service s by: (i) hampering the approval of components to be admitted to the 
ARINC network; (ii) hampering access to the  ARINC standards; (iii) using  
sensitive information; (iv) degrading the ARINC service level; (v) pricing data 
transmission that pertain s to the monitoring of competito rs' components higher 
than data transmission  pertaining to the merged entity's components  and/or 
including such preferential data transmission prices in a bundle with the sale of 
data collection and storage equipment291. They s ubmit that such practices would 
                                                 
287  An AID  acquires data from various aircraft systems including the  flight management computer, air  
data inertial reference uni t, flight data recorder, digital aircraft condition monitoring systems recorder, 
and multimode receiver. AI Ds provide two way transmission  with the ability to send data to the 
cockpit and back to the avionics system and to the ground operations.  
288  Rockwel l Collins […]. 
289  Reply to RFI no.16, on 23 April 2018.  
290  High -volume, advance aircraft data is not used for most MRO ser vices that are offered today but my 
become the basis for advanced MRO services in the future – see Reply to RFI no 7.  
291  See r eplies t o question 155.1  of the Questionnaire 1 - Competitors, replies to question 27.1 of 
Questionnaire 3 - Airlines, replies to question 149.1 of the Questionnaire 2 - Airframers.  
 
 
70 have the effect of making it harder for alternative component and  MRO and 
health management providers to offer their services.  
8.2.4.2.  Discriminatory conduct regarding the testing of components  
(356)  One complainant submitted that the mer ged entity would have the increased 
ability and incentive to discri minate against competitors’ products' access to 
ARINC, given  it would have a bigger portfolio of products that rely on access to 
ARINC and compete directly with the complainant. According t o the 
complainant, t he merged entity could increase prices, establish unfair or 
discriminatory terms and cause delays in the approval process of components to 
be admitted to the ARINC network292. 
(357)  The Commission considers that the se concerns are not merger -specific and are 
therefore unfounded  for the purposes of this merger control procedure . None of 
UTC ’s components needs to be tested by ARINC or SITA  since none of UTC’s 
components is  subject to testing by ARINC . The ability or incentive of 
Rockwell Collins to adopt discriminatory  conduct with respect to ARINC 
approvals does not change with the Transaction . The Transaction  therefore does 
not bring anything new to the qualification process to be admitted to these 
networks. As mentioned in p aragraph (353)  the components supplied by UTC, 
which use ARINC or SITA networks, are not tested because they do not 
communicate directly with those networks.  
(358)  In any event, a s mentioned in paragraph (144)  Rockwell Collins has a non -
discriminat ion and confidentiality policies293. Testing i s conduct ed in ARINC 
laboratories on an arm's length basis within Rockwell Collins294. Each 
component supplier has access to the tests results and independently tests its 
equipm ent for public certification purposes  in-house, so any discrepancies 
between ARINC results and the supplier's own result can be easily detected . 
Rockwell Collins ARINC adopts testing procedures published by the relevant 
standard -setting bodies and provides these to the component suppliers, wh o may 
attend testing295. Furthermore, e xcept for the complainant, no other OEM 
competitor has argued having  experienced attempts by Rockwell Collins to 
foreclose its access to ARINC296. 
                                                 
292  Complainant' submission of 27 February 2018.  In this submission the complainan t argues: " The main 
interaction between  [the complainant]  and ARINC continues to relate to: (i) being approved to be 
admitted to the ARINC network, and (ii) sending and receiving data over the network using a licence  
(…). On the approving side,  [the complainant’s] experience has been that the process for new 
products to be admitted to the ARINC network has become more difficult and the complainant  
believes that it has been treated unfavourably on at least two occasions ". This is reiterated by th e 
complainant in its reply to question 154.1 of of the Questionnaire to Competitors of Aircraft Systems.   
293  Changing these policies would endanger the commercial success of ARINC, as ARINC works as an 
open -standard secured network.  
294  Form CO, Section Da talink Network Services, para 6.46.  
295  Also to ensure transparency and impartiality, Rockwell Collins also publishes a test results index and 
a qualification annual report  - Form CO, Datalink Network Services section, paragraph 6.46. It would 
be at least s uspicious that the results of testing were always, or most of the times negative when 
components belonged to a competitor - Form CO, Datalink Network Services section, paragraph 6.46.  
296  See replies to question 153 of the Questionnaire 1 - Competitors.  
 
 
71 8.2.4.3.  Discriminatory conduct regarding access to standards  
(359)  The same  complainant submitted that Rockwell Collins' ARINC controls 
ARINC interface standards and that the merged entity would have an increased 
ability and incentive to withhold or diminish access to the ARINC standards297. 
(360)  The Commission considers that the merged entity  would  not have the ability or 
incentive to engage in such practic es.  
(361)  As mentioned in paragraph (140) , the AEEC is responsible for the ARINC 
standards an d also administers the ACARS protocol. Rockwell Collins has no 
control over either. Any proposed modifications to the ACARS standards (i.e.  
ARINC 618 and 620),  as to any other ARINC standards, can be publicly 
submitted by all participants in the AEEC for review by the AEEC. T he merged 
entity would not have the ability to withhold or diminish access to ARINC 
standards or modify the ACARS s tandards  to its benefit or in detriment of its 
competitors.  
(362)  In addition, the merged entity would not have the incentive to do so . Airlines 
require that the ARINC network , as well as any components with which it 
interacts , adhere to stringent open access standards to ensure complete 
interoperability on all aircraft, which ensures safe and efficient operation.  The 
commercial success of  the ARINC  network depends on the ability to integrate 
with all available aircraft systems298. As another OEM competitor of the merged 
entity explained: "(…) it is unlikely that UTC/Rockwell Collins would attempt to 
move ARINC from an industry cons ortium approach to an approach that 
exclusively benefits UTC/Rockwell products or technology because the 
remaining industry  participants would create an alternate system comparable to 
the current ARINC organizations "299. 
8.2.4.4.  Access to competitively sensitive inf ormation  
(363)  The complainant also competes with Rockwell Collins in selling ARINC airtime 
and value -added services to airlines in the business aviation segment. ARINC 
provides airtime packages to the complainant, which the complainant resells to 
airlines toget her with flight support services , such as weather information or 
aircraft maintenance information.  
(364)  Through the operation of the ARINC network, Rockwell Collins knows who the 
complainant's customers for the provision of airtime and flight support services 
are. According to the complainant, Rockwell Collins could use this information 
to approach those customers and sell their own Rockwell Collins services to 
them. The complainant claims it has seen this behaviour by Rockwell Collins in 
the past300. 
                                                 
297  Complainant's responses of 3 April 2018 to EC follow -up question of 28 March 2018.  
298  Form CO, S ection Datalink Network Services,  para. 6.19  
299  OEM competitor's reply to EC questions sent on 6 April 2018.  
300  Complainant's reply to the Commission's questi ons of 26 March 2018 second version sent on 
4 April  2018 and reiterated in the call of 4 April 2018.  
 
 
72 (365)  The Commissi on considers that th is concern is not merger specific  and therefore 
unfounded for the purposes of this merger control procedure . UTC does not 
provide datalink networks services  and does not  provide flight support services 
or resell air time in competition with the complainant . The ability or incentive of 
Rockwell Collins to adopt such conduct does not change with the Transaction .  
8.2.4.5.  Restrict access to ARINC  network 301 by degrading service level to competitors  
(366)  The complainant also expressed the concern that the  merged entity would 
prioritise the data streams pertaining to their products (more favourable 
transmission speed) in detriment of its competitors. According to the 
complainant, t he incentive to do so increases as the merged entity has more 
products that c ommunicate via the data link network , for instance for health 
management purposes302. The complainant also mentioned the possibility that 
the merged entity's data traffic could crowd out other messages from 
competitors303. In addition , the complainant also argued that Rockwell Collins 
could access the complainant's components data that is transmitted on ARINC  
network for Rockwell Collins' commercial use304. 
(367)  The Commission considers that the merged entity would not have the ability or 
the incentive to adopt suc h conducts.  
(368)  With regards to ability, although not technically impossible , it would be time  
consuming  and costly t o intercept the messages and to change the architecture of 
the network in order to  detect and delay the transmission of some data:  
(a) Each ACARS message has a header or "identifier" based on which the 
data is routed305. These "identifiers" are part of the ACARS standard306. 
However, the data that flows from components (such as, the engine or 
the APU) is encoded307. According to the Notifying Party, "significant 
resources would need to be expended to access, intercept and interpret 
this data. This would require proprietary tools and software from the 
competing component manufacturer, which are not publicly 
available308.  
                                                 
301  ARINC network includes the air -to-ground network and also the ground –to- ground network when it 
is necessary to use that network to transmit ACARS messages.  
302  Complainant's reply of 3 of April 2018 to the Commission's questions of 26 March 2018.  
303  Minutes of the 4 April 2018 call with the complainant.  
304  The complainant refers to both air -to-ground and to ground -to-ground transmissions. It argues t hat 
encryption is not a fail -safe protection and that despite contractual protections, it would be difficult to 
prove any breach. – see Complainant's reply of 3 of April 2018 to the Commission's questions of 
26 March 2018.  
305  This header identifies the com ponent from which the data flows, the type of data (traffic control, 
operational, or performance data) and the location to where it needs to be transmitted. -call with the 
Parties on 18 April.  
306 Datalink Network provider reply to EC questions of 6 April 201 8. 
307  User -defined messages allow the airline to encode or decode messages, and this information is only 
privy to the component provider by permission of the airli ne. ARINC does not require the airline to 
disclose this information. The airline may decide to disclose this information in order for ARI NC to 
help solve network issues – see minutes of 18 April call with the parties. Encryption increases 
confidentiality treatment and reduces the size of the message and consequently its cost in terms of 
data usag e - Form CO, para. 6.64 of the Datalink Network Services section.  
308  Form CO, Section Datalink Network Services para, 6.64.  
 
 
73 (b) Any attempt at altering the content o f the data would require resources 
to decipher the code and to make changes to the code. Any changes to 
the code would render the message unreadable which would be 
immediately noticed by airlines309.  
(c) To delay the transmission of messages, either message pri ority 
indicators would need to be altered (which would have little effect in 
terms of timing - difference of milliseconds), or a new algorithm would 
need to be designed, which is also costly.  
(369)  In addition, such conducts would imply a breach of contract not only with the 
component  OEM s but also with the airlines:  
(a) Rockwell Collins operates the ARINC  network separately from its 
other businesses.  [Description of Rockwell Collins’ use of ARINC and 
its contractual obligations] . 
(b) Rockwell Collins  is contractually obliged to provide […]310. 
(c) Rockwell Collins is required to provide airlines on a regular basis with 
performance reports, which identify the actual performance statistics 
compared to the overall services goals listed in the Service Level 
Agreements.  
(370)  Moreover , Rockwell Collins is not the only provider of air-to-ground  datalink  
services. SITA is a str ong competitor in this business. Although the complainant 
argued that SITA is not substitutable with ARINC given the differences in 
geographic coverage and that it is costly to switch from one to another, the 
market investigation does not support th ese claims:  
(a) A clear  majority of airlines and component OEMs considered that 
ARINC and SITA compete with one another311. 
(b) Although the  VHF /Satellite  network is not identical and each company 
has "gaps" in a given region or country, both use satellite connectivity 
in those areas  to bridge those gaps . 
As to the easiness of switching f rorm one provider to the other, the results 
of the market investigation were less conclusive. About half  of the airlines 
consider that switching is not easy, because it require s changes in the 
software. One airline pointed out that reprograming old CMUs  (ACARS 
MU systems) could b e costly , while others consider that such switching is 
easy312. However,  most of these airlines  that responded to the market 
investigation , including those that claimed that switching was not easy, 
already dual source today313 and one  large airline  has recently  changed all 
                                                 
309  Form CO, Section Datalink Network Services , para. 6.52.  
310  Form  CO, Section Datalink Network Services , para. 6.55.  
311  See replies  to questions 18 and 18.1 of Questionnaire 3 - Airlines, replies to question 156 of 
Questionnaire 1 - Competitors.  
312  See replies  to question 19 and 19.1 of Questionnaire 3 – Airlines.  
313  See replies to question 17 of Questionnaire 3 - Airlines.  
 
 
74 its global fleet from SITA to ARINC  […]314. As for the old er ACARS MU 
systems, switching may imply removing the system off the aircraft and 
updat ing it in a shop, or replac ing it. However, the Parties estimate that the 
number of aircraft that operate this type of system represent  [0-5]-[5-10]% 
of the total active  fleet.  Moreover, as these MU systems are not 
compatible with new standards for ATC communications in the EU and 
USA, they shall all be replaced […]315. 
(371)  With regards to incentives, such conduct would most likely harm ARINC's 
reputation as an open datalink network provider and it could only be beneficial 
for the merged entity if it could convince airlines to buy its products to avoid 
delays or data tempering, which would not be likely  given the lack of legitimate 
reasons for the discrepancies. Faced with such behaviour airlines would most 
likely switch to SITA .  
(372)  In fact, the complain ant itself acknowledges that since the acquisition of the 
ARINC network by Rockwell Collins it never had  a problem with its license to 
send and receive messages through ARINC, or with the actual sending and 
receiving of messages through ARINC  (despite already competing with 
Rockwell Collins in the provision of certain aircraft components)316.  
(373)  Similarly, the m erged entity would have n either  the ability nor the incentive to 
crowd out  competitors  by increasing the number of messages sent over the 
ARINC network from its own components and leaving less bandwidth for 
message s originating from competitors’ components :  
(a) The airframers decide which components generate data and how the 
data is transmitted within the aircraft and off the aircraft, not the 
datalink operator . 
(b) The airlines also decide on how they want to collect and receive the 
data from the aircraft and who  has access to that data.  It is not the 
datalink network provider who decides how much data and what type 
of data is transmitted through its network.  
(c) Airlines would be aware of any difficulty encountered by components 
OEM s, who need the airlines ' authoris ation to access the data, and there 
is a strong likelihood that they would switch to SITA . Given that the 
vast majority of ARINC customers are airlines, not components 
OEM317 the merged entity would hardly have any incentive to adopt 
such conduct.  
                                                 
314  See Form CO, Datalink Network Services section, para. 6.27.  
315  Parties reply to question of 2.4 of RFI no. 8.  
316  The complainant's submission of 27 February 2018 reads "The main interaction between [the 
complainant] and ARINC continues to relate to: (i) being approved to be admitted to the ARINC 
network, and (ii) sending and receiving data over the network using a licence.[§] On the licensing 
side, [the complainant] and ARINC continue to have a good working relationship since ARINC was 
acquired by RC.  
317    Parties reply t o question of 3 of RFI no. 8.  
 
 
75 (d) ARINC 's ne twork  is not suitable for second generation performance  
data, as illustrated by the fact that a lready today the vast majority of 
performance data  used by UTC ’s and other competitors’  health 
management services is offloaded when th e aircraft is on the ground via 
cellular and Wi -Fi networks.   
(374)  For similar reasons the merged entity would not have the ability or incentive to 
access the complainant's data flows or any of its competitors ' data flows  
transmitted through ARINC network  and use the information to  gain 
competitive advantage .  
(375)  The mere fact that data is routed through AR INC network  would not give the 
merged entity immediate access to competitively sensitive  information about the 
competitors' components or systems. To have access to such data flows, the 
merged entity would have to intercept the data which is costly and contrary to 
the contracts with airlines and third parties.  
(a) As mentioned above, significant resources would need to be expended 
to access, intercept and interpret the data. This would require 
proprietary tools and software which are not available . Even  in case the  
intercepting and decoding of the message was successful, the 
unauthorized reader would need to know the baseline specifications of 
the component to which the data pertains to interpret the data in a 
meaningful way . 
(b) ARINC is contractually required to […]318. In addition third parties can 
request additional confidentiality provisions. For example, in an 
agreement with a competitor it is est ablished that […]319. 
(376)  With regards to incent ives, again such conduct would most likely harm 
ARINC's reputation as an open datalink network provider . Moreover, t he 
majority of data routed through ARINC is operational in nature and has limited 
competitive sensitivity , therefore its value is unlikely to compensate the 
investment in time and in money to be able (if at all) to intercept and interpret 
the data . 
8.2.4.6.  Price discrimination (including bundles) regarding access to the ARINC  
Network  
(377)  The complainant submit s that t he merged entity may  price discrimina te in 
ARINC's network  services, (i) by charging competitors higher prices, (ii) by 
offering discounts  to the transmission of data pertaining to its own components, 
and/or (iii)  by bundling data transmission services with any data system or 
component that g enerates data required for the provision of health management 
services or MRO services.   
(378)  The Commission considers that t he merged entity would not have the ability to 
leverage its  position in the ARINC network business to improve its position  in 
the aircra ft health management services market  or in the MRO services . There 
                                                 
318  See Form CO, Datalink Network Services section, para 6.67.  
319  See Form CO, Datalink Network Services section, para 6.67.  
 
 
76 are three main reasons – which will be expanded upon below - for the merged 
entity 's lack of ability: (i) ARINC's VHF/satellite network is not an important 
input for the transmission of per formance data; (ii)  airframers determine the 
hardware and software that gathers and transmits data within the aircraft and off 
the aircraft ; (iii) airlines choose the transmission data provider and authorise the 
transmission of data to third parties.  
(A) ARINC 's VHF/satellite network is not an important input for the 
transmission of performance data  
(379)  First, ARINC faces competition from SITA in the transmission of real time first 
generation performance data320. Therefore, any attempt to delay data streams, 
temper with the data or charge higher prices would lead to customer s switching 
to SITA321. 
(380)  Second, as confirmed by the market investigation VHF/Satellite networks are 
not a relevant mean s to transmit  second -generation performance data322. On the 
contrary, the VHF/sat ellite networks do not have the bandwidth or the 
configuration to transmit the large sets of data required:  
(a) As explained  in paragraph (150) , the ACARS protocol is only suitable 
for sending short messages. The performance data transmitted in real 
time through ACARS pertains to short condition status reports (the so -
called first generation performance data).  
(b) The large volume, high frequency performanc e data used in predictive 
health management services (the so -called second generation data) is 
transferred when the aircraft is on the ground through cellular, Wi -Fi 
networks, or manually.  
(381)  Third, already today  there are many alternatives to offload second generation 
data using cellular and Wi -Fi networks, including the Parties' solutions:  
(a) Companies such as Teledyne, Avionica, Sagem, and Astronics, have 
developed AIDs and other solutions to transfer data when the aircraft is 
on the ground through these netwo rks.  
(b) Also Rockwell Collins' AID product for […] program323, Rockwell 
Collins' AIMCS324 and UTC's eFAST product325 make use of cellular 
                                                 
320  See paragraph (370)  above.  
321  See paragraph (370)  above.  
322  The complainant itself acknowledges that ARINC does not have the capacity to transm it large sets of 
data: " Currently only key messages and alerts as chosen by the customer are transmitted through 
ARINC in “real time”. The current ACARS/VHF networks are not fast enough to handle larger 
amounts of data and can be likened in performance to internet modems from the 1980s ." – see 
minutes of the call of 4 of April 2018.  
323  Rockwell Collins will provide dual cellular connections for […] and […] aircraft starting in 2018. 
One channel is reserved for […] data transfers to support its […] Airplane Health Mana gement . The 
second channel will be for the airline's own use for its operational and maintenance programs, or to 
use ACARS over IP , instead of a first generation datalink network.  More importantly, Rockwell 
Collins will not have access  to the data that is captured and transmitted. It will be limited to providing 
the hardware component (AID) and managing the data transmission from […] to the […] servers.  
 
 
77 connectivity to transmit performance data on the ground.  The 
cellular/Wi -Fi connectivity for these applications is provided by  
telecommunication networks  and not by ARINC (or SITA) . 
(382)  Fourth , given the costs and the limited capacity of VHF/Satellite networks, 
ACARS over IP is currently being developed to allow the transmission of 
ACARS messages via cellular, Wi -Fi networks on the g round and through 
second generation satellite networks in -flight326. Hence, this can be expected to 
further reduc e the relevance of ARINC and SITA networks for the transmission 
of aircraft performance data.  
(383)  Fifth, t he Parties327 and other market participants328 expect that real -time 
performance data will, in the future, be transmitted through high bandwidth 
satellite connectivity. Second generation air -to-ground links using medium -band 
and broadband satellite have been developed mainly to enable passenger intern et 
connectivity. Today there are several providers of these services, such as 
Panasonic, GoGo a nd Global Eagle Entertainment. Thales, SITA and Rockwell 
Collins operate as value -added resellers of both of Inmarsat and Iridium's 
service329. In the future, thes e broadband connectivity services could be used to 
also transmit in -flight other aircraft data, including performance.  Rockwell 
Collins has around [0-5]% market share as a reseller of satellite broadband 
connectivity and estimates that  its market share wil l not exceed [5-10]% […]330. 
(B) Airframers , not the Parties,  determine the hardware and software 
that gathers and transmits data within the aircraft and off the 
aircraft  
(384)  As to the role of the airframers, they determine  which components of the aircraft 
will gene rate performance data, and what types of data they will generate  and 
how the data is transmitted . As specified by the airframer, these components 
will "publish" data into the aircraft internal network using ARINC standards, 
and the Aircraft Condition Monit ory System331 will "listen" to and record the 
                                                                                                                                                 
324 […] by Rockwell Collins for the […] platform. It allows the transmission of […]. While the ACARS 
over IP standard is being developed, […] are transmitted through cellular or WiFi on the ground and, 
in the future, may also be transmitted in -flight through second -generation satellite services . 
325  UTC's solution (eFAST) is installed on […] aircraft and makes use of cellular connection to 
download large amounts of data to a customer portal.  
326  ACARS over IP refers to an industry standard that is being developed by the standard setting body 
SAE International.  The Parties estimate the standar d may take […] to become ratified . Rockwell 
Collins' AID for the […] program and […] are intended to support ACARS over IP when the standard 
is complete (likely with new software).  
327  Parties' submission of 10 April 2018 and the Par ties' reply to RFI no. 8. An airframer corroborated 
that ACARS -over-IP for real time, air -to-ground communications will be certified soon – see 
airframer reply of 11 of April to EC questions of 9 of April.  
328  Replies to Commission flow -up questions of 9 and 12 of April.  
329  The v alue-added consists in managing the relationship with the customer, providing the on -board 
system to connect passengers to the internet and the ground infrastructure to connect the passenger to 
the commercial internet once the signal reaches the ground thr ough broadband satellite  – see Minutes.  
330  See Parties' reply to question 2 of RFI no. 21.  
331  Aircraft condition and monitory system (ACMS) is a software that collects and stores performance 
data generated by aircraft components. ACMS is typically hosted i n the aircraft's data management 
hardware, such as an AID.  
 
 
78 specific data streams, as defined by the airframer or the aircraft operator332. The 
merged entity has therefore no control on how much performance data is 
generated and on how that data is transmitted within the ai rcraft and off the 
aircraft.  
(385)  Furthermore, Airframers are trying to enhance their position in health 
management333 and MRO services by taking control of the data generated by 
aircraft systems in order to create unique datasets, not available to component 
supp liers. In their most recent platforms, Airbus and Boeing design the data 
flow in such way that the data will go through the airframers' servers before 
getting to the component manufacturer or the airline. For example, Airbus has 
taken the position that dat a generated by the engine's FADEC should not be 
available to the engine supplier (in th is case Pratt & Whitney) or to the airline 
directly. Instead the data will be aggregated by Airbus' aircraft data management 
system (FOMAX) and transferred to Airbus' da ta centre for processing.  
Accordingly, t he merged entity will face strong competition on health 
management services, including from Airbus and Boeing, and the control of the 
ARINC network will not give it a particular advantage.  
(C) Airlines choose the transmi ssion data provider and authorise the 
transmission of data to third parties  
(386)  As to the role of airlines,  the airlines choose the data network provider and 
authorise third parties' access to the data generated by their fleet. The airline 
may choose to route their aircraft management data to a health management 
provider or to develop their own IT infrastructure with analytical capabilities (as 
FedEX did).   
(387)  With regards to incentive s, as mentioned before any discrimination in the 
provision of VHF/Satellite serv ices would jeopardise A RINC 's reputation as an 
open network and lead to customers switching to other alternatives.  
(388)  Similarly, the merged entity would not have the ability or incentive to bundle  
aircraft components (that generate performance data) or systems (that support 
the aggregation or transfer of data) with cheaper or fre e of charge ARINC 
transmissions .  
(389)  In addition to all the reasons explained above, the opportunity to offer such kind 
of bundle is limited to bundling ARINC access either with Buyer Furnished 
                                                 
332  In addition to ACMS, another software used to transmit data to the ground is the quick access 
recorder (QAR). These systems are present on most large commercial and regional aircraft, and must 
be tested, validated and certified by the airframer before they are put on the aircraft.  
333  Today, Boeing offers its health management services to […] airline operators; Airbus services 
[…] airline operators, Lufthansa Technik services […] and Honeywell se rvices […] airline operators. 
UTC is has […], in addition to its helicopter health management product and the health management 
services for Pratt & Whitney's engines. UTC currently offers […] a legacy -component which will be 
decommissioned in […]. Rockwel l Collins provides no health management services – Parties reply to 
question 1 of RFI no. 7 Parties reply to question 1 of RFI no. 8; Parties reply to question 15 of 
RFI no. 16.  
 
 
79 Equipment or with retrofit components, where the merged entity would 
encounter one and the same customer, the airlines334: 
(a) Within UTC ’s portfolio, the only BFE product  where UTC has a 
mark et share above [30-40]% that can generate performance data is 
wheels and brakes for LCA . Already today, without Rockwell Collins 
capabilities UTC offers health management services for  its brakes . 
Taking into consideration the positioning of LCA airframe rs in the 
provision of health management services, it is very unlikely that such a 
bundle would be successful.  
(b) As for the retrofit componen ts, in particular UTC's AID (as suggested 
by a market participant ), such bundle would not be very likely. F irst, 
not often the airline would be in a position to change the component 
provider  in retrofit solutions and if it did there are other alternatives to 
UTC's AIDs  (UTC has [10-20]% market share) . Second, retrofit 
solution s do not cover necessar ily the entire fl eet of the airline,  while 
ARINC  services are subscription -based service contracts for the  entire 
fleet.  
(390)  For all the above reasons, it is unlikely that the merged entity would leverage its 
position in the provision of network services to harm competition in  the 
provision of health management services.  
8.2.5.  IMU s and GPS  
(391)  The Part ies' activities in IMUs  and GPS  receivers  lead to both vertical and 
conglomerate links  with UTC being active in the supply of IMUs and Rockwell 
Collins being act ive in the supply of GPS rec eivers . 
(392)  As regards IMUs:  
(a) UTC only supplies tactical IMUs and […]. UTC estimates that in 2016 
the IMU market was worth EUR  […] and that it had a [30-40]% market 
share. UTC estimates that Honeywell had also a [30-40]% share of this 
market, while the remainin g third is divided among: Safran ( [10-20]%), 
Systron Donner ( [10-20]%), Litton ( [10-20]%), and 
Sensanor  ([0-5]%)335. UTC expects its and its competitors ' market 
shares to be similar in 2017336. 
(b) Rockwell Collins does not manufacture IMUs. However, Rockwell 
Collins sources tactical IMUs from […] for its integrated offer of IMUs 
and C/A code GPS receivers337 and for a Common Range Integrated 
                                                 
334  AID's, ACMS are sold to the airframers as SFE, for example Rockwell Collins ' new AID for the […] 
program, UTC's eFAST product. The complainant mentioned the possibility of the merged entity 
offering preferential pricing or free transmissions of data pertaining to the merged entity's Auxiliary 
Power Units but this system is sold a s SFE (and thus not to the same customer base as the ARINC 
data link network services which are sold to airlines).  
335  See reply to question 6 of RFI no. 6 and to question 5.1 of RFI no. 21.  
336  See reply to question 5.1 of RFI no. 21.  
337  Rockwell Collins' Athena 511 product. It sold […]. 
 
 
80 Instrumentation System ("CRIIS")338. Rockwell Collins also pur chases 
tactical IMUs from […]. These tactical  IMUs are not incorporated into 
any Rockwell Collins product , but are used for experimental purposes. 
Overall, Roc kwell Collins has purchased EUR  […] of IMUs in 2016 
(EUR […] from […] and EUR […] from […]). 
(393)  As regards GPS receivers:  
(a) Rockwell Collins manufactures and supplies both C/A code and 
SAASM code GPS receivers. As the complaint that was put forward in 
the market investigation pertains to SAASM  code GPS receivers, the 
Commission's analysis will be focussed  on this market and its possible 
segmentations. According to Rockwell Collins, in 2017 the market size 
of SAASM GPS receivers for aircraft applications amounted to 
EUR  […] and its market share was approximately [10-20]%. Rockwell 
Collins estimates that in 2017, the market size of SAASM GPS 
receivers for non -aircraft applications amounted to approximately 
EUR  […] and its market share was [70-80]%. There are […] other 
companies authorised by the US Department of Defence to 
manufacture and supply SAASM GPS rec eivers: […] and […].  
(b) UTC is not present in any of the GPS receivers markets and its tactical 
grade IMUs can only be integrated with SAASM GPS receivers for 
non-aircraft applications.  
8.2.5.1.  Complaint raised during the market test investigation  
(394)  A competitor of UTC in tactical IMUs, that supplies tactical (low -grade) IMUs 
to Rockwell Collins, complained that post -Transaction Rockwell Collins would 
internalise its demand for IMUs and stop purchasing them from the 
complainant, giving preference to UTC.  
(395)  In addition , the same complainant, who also sources SAASM GPS receivers 
from Rockwell Collins, claimed that post -Transaction Rockwell Collins would 
supply SAAM GPS receivers only o n less favourable terms or would stop 
supplying them. The complainant claims that the m erged entity could displace 
the complaints' integrated offers first in the non -aircraft space and later in the 
aircraft space339.  
(A) Customer foreclosure concern  
(396)  Rockwell Collins is not an important customer or channel to sell tactical IMUs. 
As mentioned above , the tactical IMUs market was worth EUR […] in 2016 and 
Rockwell Collins total purchase of this product was less than [0-5]%. In 
addition, Rockwell Collins is also not an important tactical IMU customer of the 
                                                 
338  CRIIS is an integrated system delivered to […] for the operational testing and training of weapon 
systems. Rockwell Collins sold […] units in the past two years.  
339  See complainant's responses of 3 Apri l 2018 to EC follow -up question of 26 March 2018.  
 
 
81 complainant since its purchases correspond to  far less than [5-10]% of the 
complainant total sales of tactical IMUs340.  
(397)  Even if post -Transaction, Rockwell Collins would stop sourcing IMUs from the 
complainant, that would not have a significant impact neither in the tactical 
IMUs market, nor in the complainant's tactical IMUs business.  
(B) Input foreclosure concern: SAASM GPS for aircraft applications  
(398)  The merged entity neither has the ability nor the incentive to stop supplying 
SAASM GPS receivers for aircraft applications.  
(399)  With regards to ability, Rock well Collins' market share is around [10-20]% and 
there are four other alternative suppliers. The complainant already certified a 
competitor of Rockwell Collins to be its supplier of SAASM GPS receivers for 
aircraft applications for one of its integrated o ffers, substituting Rockwell 
Collins in new platforms341.  
(400)  With regards to incentives, the merged entity would be unlikely to forego a 
revenue stream (sales of SAASM GPS receivers for aircraft applications) when 
it does not have the capability to supply an i ntegrated offer similar to the 
complainant, and consequently recoup the lost revenue through the sale of a 
competing integrated offer:  
(a) On the one hand, the complainant is the most important customer of 
Rockwell Collins for SAASM GPS receivers for aircraft applications.  
(b) On the other hand, and more importantly, UTC does not manufacture 
high-grade IMUs, which are the suitable IMUs to be integrated with 
SAASM GPS receivers for aircraft applications.  
(401)  In fact, to the extent that UTC is not active, nor has plans t o enter the high -grade 
IMUs market, the proposed Transaction changes nothing to what Rockwell 
Collins could have done on a unilateral basis before the Transaction.  
(C) Input foreclosure concern: SAASM GPS for non -aircraft 
applications  
(402)  Similarly, the merged ent ity does not have the ability or the incentive to stop 
supplying SAASM GPS receivers for non -aircraft applications.  
(403)  With regards to ability, given procurement characteristics in the industry, the 
merged entity would not be able to tie or commercially bund le Rockwell 
                                                 
340  This calculation is made based on the value of Rockwell Collins purchases and the complaint's market 
share in IMUs estimated by the Parties.  
341  Around 2010 the complainant implemented a dual source strat egy for the SAASM receivers and 
qualified […] receivers for use in new platforms. In 2013, Rockwell Collins issued a last time buy 
notice of its GEMV and GEM VI (SAASM) GPS receivers. The complainant chose not to continue 
purchasing Rockwell Collins' updat ed GEM GPS receiver (GEM VII) and opted to do a last buy of 
the legacy technology. Rockwell Collins expects that these deliveries will be completed […] – see 
Parties reply to RFI no. 11, on 11 April 2018.  
 
 
82 Collins' SAAMS GPS receivers with UTC's tactical grade IMUs, displacing the 
complainant.  
(a) First, the integration of SAASM GPS for non -aircraft applications with 
tactical IMU is generally made for precision weapons. With one 
exception, all weapo ns manufacturers procure these two products 
separately and integrate them in -house. The integration requires 
proprietary knowledge about the interface, performance parameters and 
design of the weapon, which is not typically available either to SAASM 
GPS or  to tactical IMUs suppliers. In the exceptional case where the 
weapon OEM subcontracted the integration of the navigation system, to 
the Parties' understanding this integration is also done based on the 
weapon OEM's proprietary knowledge. Therefore, even i n this case, the 
subcontractor cannot integrate independently from the weapon OEM. 
In fact, the complainant's integrated offer is made for the manufacture 
of weapons and the complaint also supplies tactical IMUs on a stand -
alone basis to other weapons OEMs . 
(b) Second, although Rockwell Collins has a strong position in this 
segment ( [70-80]% market share), it does not have a "must -have" 
product. Currently, […] supply weapons OEMs and […] have been 
certified by the US Department of Defense  and have the capabilit y to 
do so.  
(404)  With regards to incentive, since  Rockwell Collins and UTC sell respectively and 
on a stand -alone basis SAASM GPS receivers and tactical grade IMUs to 
weapons OEM, it is very unlikely that post -Transaction the merged entity would 
forgo a certain  revenue stream ( […]) to push for a new bundle offer when the 
majority of their potential customers is not open to such integrated offer:  
(a) On one hand, […]342. 
(b) On the other hand, […]343. 
(405)  In terms of effects, SAASM GPS receivers are not an (important) input for the 
manufacture and supply of tactical grade IMUs, so there would be little (if any) 
impact on the IMUs market. Moreover, in the unlikely scenario where the 
merged entity would bring to the market a new integrated solution accepted by 
the weapon OEMs this is not necessarily a negative outcome. It would mean a 
new product on the market, and, possibly, competition for the complainant, in 
case already today the complainant can offer integrated solutions independent 
from the weapons OEM s. 
                                                 
342  See Parties' reply to question 4 of RFI no.11.  
343  See Parties' submission of 11 April 2018.  
 
 
83 8.2.6.  Air data probes and Ai r data computers  
(406)  UTC supplies air sensors and smart probes. UTC has a leading position in both 
of these markets, in particular with regards to the smart probe which is a 
relatively recent product first developed by UTC:  
(a) In the overall market for air data p robes, UTC has a market share 
of [60-70]%, followed by Thales ( [10-20]%) and Heico ( [10-20]%). In 
large commercial aircraft, UTC has a larger market share ( [70-80]%) 
and its main competitors are Thales  ([5-10]%) and Heico ( [5-10]%). In 
business jets, UTC h as a market share of  [70-80]%, followed by  
Safeflight ( [20-30]%) and Esterline  ([0-5]%). In military aircraft, UTC 
has a market share of [70-80]% and its main competitors are  Safeflight 
([10-20]%) and Transdigm  ([5-10]%). In regional jets, UTC has a 
lower market share ( [50-60]%) and Heico ( [20-30]%) and 
Thales  ([10-20]%) are its main competitors. Finally, in helicopters, 
UTC has a market share of [30-40]% and its main competitors are 
Thales ( [30-40]%) and Safeflight ( [10-20]%).  
(b) In the overall market for (new) integrated air data systems (smart 
probe), UTC has market share of [90-100]% followed by 
Transdigm  ([5-10]%) and Meggi t ([0-5]%). In LCA and Regional Jets, 
UTC has [90-100]%. In Business Jets, UTC has [90-100]% and 
TransDigm has [5-10]%. In Military aircraft, UTC has [60-70]%, 
Meggit has [20-30]% and Transdigm has [10-20]%.  
(c) In case the air data probes market would also include smartprobes, 
UTC's market share would be [70-80]%, fo llowed by Thales and Heico 
with [5-10]% each.  
(407)  Rockwell C ollins is not a supplier of either air sensors or smart probes. 
Rockwell Collins supplies air data computers on a stand -alone basis, but […]. 
UTC sells air data computers to a […] platforms. The Parties estimate that their 
combined market share is  [10-20]% (Rockwell Collins [10-20]% and 
UTC  [0-5]%). The Parties main competitors in air data computers  market are 
Thales ( [30-40]%), Honeywell ( [20-30]%) and Curtis -Wright ( [10-20]%)344. 
8.2.6.1.  Complaint raised during the market investigation  
(408)  A component OEM who supplies air data computers and recently entered the air 
data probes market (no turnover yet)  argued that Rockwell Collins would be a 
significant sales channel for its air data probe business but post -merger 
Rockwell Collins would prefe rential ly select UTC air data probes to the 
exclusion of other competitors345. 
(409)  The complainant further argued that post -merger UTC would no longer have the 
incentive to supply its competitors with its probes.  
                                                 
344  Parties' reply to  question 8 of  RFI no . 5.  
345  Complainant's reply to question 141.1 of Questionnaire to Competitors of Aircraft Systems; and 
Complainant's responses of 3 April 2018 to EC follow -up question of  26 March 2018.  
 
 
84 (410)  Another component OEM who is present in the avion ics market mentioned that 
the merged entity could bundle its smart probe with avionics making it more 
difficult to compete in the avionics market.  
(A) Customer foreclosure concern  
(411)  The merged entity has no ability to engage in customer foreclose in the air 
probes market. First, air data computer manufacturers are not the only customers 
or the primary customers for air data probes, but airframers are346.  
(412)  Second, Rockwell Collins does not appear to have a sufficiently strong position 
in ADC to justify t he customer foreclosure concern raised by the complainant. 
As mentioned, there are two other competitors (including the complaint) with a 
higher market share than Rockwell Collins and there are several other 
suppliers347. Third, as the complainant itself ack nowledged two other OEMs, 
Transdigm/Aerosonic and Aeroprobe have entered the ADC market recently348.  
(413)  The merged entity would also not have the incentive to engage in customer 
foreclose on the air probes market. First, Rockwell Collins […], but it sells its 
ADC predominantly on a stand -alone basis […]349. Second, the Parties 
submitted that ADC is […] for Rockwell Collins ( […]). Third, already today 
UTC […]. Going forward the merged entity is interested in […]. 
(414)  In terms of effects, without using Rockwell Collins  as a channel for its air probe 
market, the complainant made an entry in this market securing two platforms. 
Even in case the merged entity will not procure air probes from the complaint it 
is difficult to envisage how this could negatively affect the comp lainant's 
business to any significant extent and consequently the overall air probe market.  
(B) Input foreclosure concern  
(415)  The merged entity will not have the ability or incentive to carry out an input 
foreclosure strategy.  
(416)  First, air probes are not a necessar y input for air data computers. As mentioned 
above air probes are usually selected by the airframers and not by the air 
computer manufacturers. Second, although UTC is the market leader of air 
probes, there are alternative suppliers. Third, the complainant  itself has recently 
entered the market.  
(417)  The merged entity will also have no incentive to engage in input foreclose of air 
data computer manufacturers. First, UTC 's […] supply agreement where it was 
selected by a customer other than an airframer is the con tract with the 
complainant. UTC has submitted that […]. Second, already today UTC supplies 
air sensors and some ADCs and it has never leverage d its position in air probes 
                                                 
346  The vast majority of airframers confirm that they choose the air probe supplier – see r eplies to 
question  133 to the Questionnaire to Customers - Airframers . 
347  Respondents to the question 140 of the Questionnaire to Competitor of Aircraf t Systems considered 
that although Rockwell Collins has an important position in the air data computer market there are 
many alternative suppliers of ADC.  
348  Complainant's reply to questions 140 and 141 of Questionnaire to Competitors of Aircraft Systems.   
349  […]. 
 
 
85 to gain a better position in the ADC market , indicating limited incentives to do 
so after the Transaction .  
(418)  In terms of effects, the supply agreement between the complainant and UTC is 
[0-5]% of UTC business and therefore a n […] of the air data probes market.  
(419)  Finally, already today UTC supplies air data probes and air data computers 
together for two platforms. These offers represent [0-5]% of UTC business in air 
probes. There are other components OEMs that have the capability to supply 
both air probes and air c omputers (e.g. Thales, Transdigm) and some are present 
with both products in the same platform.  
(420)  These integrated offers have not had the effect of foreclosing, or raising entry 
barriers in either the air probe market (where the complainant has just entere d) 
or the air data computers market (where the complainant acknowledges two new 
entries)350. 
(C) Smart probe and avionics  
(421)  An OEM competitor explicitly referred to the possibility of the merged entity to 
bundle its smart probe with avionics to the detriment of th e avionics 
competitors351. 
(422)  It is unlikely that the merged entity would have the ability or the incentive to 
significantly harm competition in the avionics market by offering such 
commercial bundle.  
(423)  First, UTC is the market leader in smart probes with high market shares . 
However there are no indications that UTC has attempted or been successful in 
leveraging its position in smart probes to increase its position in any other 
aircraft component, let alone that such strategies have resulted in foreclosure 
effects . Furthermore, airframers will usually procure air systems and avionics 
separately. Second, the value of SmartProbes is minimal compared to the value 
of avionics system, so a discount on SmartProbes would not be important 
enough to influence the selection of the avionics system. Third, already today 
there are avionics companies who have the capability to offer traditional air data 
systems and avionics (e.g. Thales and Honeywell) and this has not impede d 
other avionics companies without such capabilities fro m competing.  
8.3. Conglomerate links  
8.3.1.  Introduction  
(424)  The Commission has applied its analytical framework (described in 
section  8.3.2 ) to analyse certain general conglomer ate considerations of this 
Transaction (section 8.3.3 ) before analys ing the specific conglomerate links 
between the Parties’ activities in aircraft engines and avionics (section 8.3.4 ), 
                                                 
350  According the Merger Non -Horizontal guidelines bundling or tying may have anti -competitive effects 
when it leads to the reduction of rival's ability or incentive to compete and/ or deters entry – See 
paragraphs 111 and 112.  
351  Complainant's re ply to the Commission's questions of 26 March, 2018.  
 
 
86 environmental control systems and galley cooling (section 8.3.5 ) and pilot 
controls, flight controls and actuation (section 8.3.6 ). 
8.3.2.  Analytical framework  
(425)  Pursuant to the Non -Horizontal Merger Guidelines,352 in most circumstances, 
conglomerate mergers do not lead to any competition problems. However, 
foreclosure effects may arise in conglomerate mergers when the combination of 
products in related markets may confer on the Merged Entity the ability and 
incenti ve to leverage a strong market position from one market to another 
closely related market by means of tying or bundling or other exclusionary 
practices.  
(426)  The Non -Horizontal Merger Guidelines distinguish between bundling, which 
usually refers to the way pro ducts are offered and priced by the Merged Entity 
and tying, usually referring to situations where customers that purchase one 
good (the tying good) are required to also purchase another good from the 
producer (the tied good).  
(427)  Within bundling practices, a  distinction is also made between pure bundling and 
mixed bundling. In the case of pure bundling the products are only sold jointly 
in fixed proportions. With mixed bundling the products are also available 
separately, but the sum of the stand -alone prices is higher than the bundled 
price. Tying can take place on a technical or contractual basis. For instance, 
technical tying occurs when the tying product is designed in such a way that it 
only works with the tied product (and not with the alternatives offere d by 
competitors).  
(428)  While tying and bundling have often no anticompetitive consequences, in 
certain circumstances such practices may lead to a reduction in actual or 
potential competitors' ability or incentive to compete. This may reduce the 
competitive pr essure on the Merged Entity allowing it to increase prices or 
deteriorate supply conditions in other ways. In this particular case regarding the 
combination of engines and avionics, the complainant has raised concerns of 
mixed bundling and technical tying . 
(429)  In assessing the likelihood of such a scenario of conglomerate effects, the 
Commission examines, first, whether the merged firm would have the ability to 
foreclose its rivals, second, whether it would have the economic incentive to do 
so and, third, wheth er a foreclosure strategy would have a significant 
detrimental effect on competition, thus causing harm to consumers. In practice, 
these factors are often examined together as they are closely intertwined . 
8.3.3.  General consideration s on conglomerate effects of the Transaction  
(430)  UTC and Rockwell Collins manufacture and market a broad range of systems 
and equipment for the aerospace industry. However, there are a number of 
factors that make foreclosure due to conglomerate effects of th e Transaction 
                                                 
352  Guidelines on the assessment of non -horizontal mergers under the Council Regulation on the control 
of concentrations between undertakings, Official Journal C 265 of 18/10/2008  ("Non -Horizontal 
Guidel ines").  
 
 
87 highly unlikely. A full overview of the market shares of the aircraft equipment 
and components where the Parties’ activities do not overlap but where their 
market shares exceed 30% are set out in Annex 1 .  
(431)  During the market investigation, market participants acknowledged the 
complementarity between the Parties’ portfolios and the limited degree of 
competition between them  in general . Nevertheless, some market participants 
expressed the concern  that the merge d entity  could have increased ability and 
incentive to tie or bundl e aircraft components and systems, negatively affecting 
the ability of competitors with a smaller portfolio to compete, which could 
ultimately lead to a potential limitation of choice for customers . However, mo st 
of the  voiced concerns were unspecific , without a concrete concept of how tying 
or bundling could materialize and how this could lead to harm ing competition. 
In addition, most market  participants noted, equally on a general note, that the 
merged entity's ability to bundle or tie would ultimately  depend on the 
airframers ’ willingness to accept such bundled or tied offers.353 
(432)  Taking a broader perspective on the importance of the merged entity as a 
supplier of aircraft components, and following on some market participants' 
feedback  that UTC's market p ower could significantly increase after the merger 
through the sheer number of components they  have installed on an aircraft,354 
the Commission notes  that a bottom up calculation of the share of components 
provided by the parties on existing platforms355 amoun ts currently  to an average 
of [20-30]% (with an average increment compared to the pre -merger situation of 
[5-10]% brought by Rockwell Collins) . Although there is some variation  
between platforms and for a number of  platforms the Parties' share of 
components as of the total can be high er, even the highest procurement share is 
below [50-60]%356. This indicates that, generally speaking, there are alternatives 
available that have been chosen by airframers for many different components on 
the aircraft.  
(433)  The Notifying Party adds357 that o UTC and Rockwell Collins focus on different 
types, namely on SFE and BFE equipment respectively , as regards their non -
overlap products . This in their view limits the bundling opportunities 
significantly for two main  reasons: First, SFE and BFE products are sold to 
different customers (airfamers and airlines respectively), therefore, there is no 
scope for bundling. Second, the Transaction does not result in any significant 
increment to an existing  portfolio of BFE products.  
                                                 
353  See replies to questions 12, 19, 22, 23, 24, 26 and 161 of Questionnaire 1 -Competitors.  
354  Some indicated UTC could have a share of over [50-60]% of the total procurement cost of an aircraft, 
e.g. see replies to question 9 of Q3 - Questionnaire to customers –airframers, see also minutes of a 
call with a competitor on 16 January, 2018.  
355  See the Parties' replies to questions 26 and 27 of the Commission's RFI#1: Proportion of procurement 
cost of all equipment installed by the merged entity  as a proportion of the total procurement cost of a 
platform. The calculation was  carried out for the major 30 platforms w here both Parties are present.  
356  Ibid. The highest shares can be noted for […], the merged entity's share is [40-50]% with an [5-10]% 
increment by Rockwell Collins, the following highest is reported to be on the […] 
([30-40]%+[5 -10]%) and on the […] ([20-30]% + [0-5]%).  
357  See the Notifying Party's reply to the question 2 3 'Conglomerate' o f the Commission RFI#1 as of 
11 January, 2018.  
 
 
88 (434)  UTC 's only BFE products are: wheels & brakes and some comfort enhanced 
Cabin Attendant Seating. The Notifying Party sees bundling in general to occur 
between systems that fit or work together closely. And n one of th ese products , 
in their view , is a good candi date to be bundled  with Rockwell Collins' BFE 
products; avionics, commercial passenger seating, datalink network services and  
food & beverage  systems.  Therefore,  any conglomerate theory should focus on 
SFE products.  
(435)  The Notifying Party acknowledges358 that there is certain room for commercial 
bundling and quotes for instance a supply agreement with a regional jet 
manufacturer in 2012 where UTC [details of UTC's supply agreement and 
bidding strategy] .  
(436)  In this respect , the Notifying Party explains that smaller airfamers of regional 
and business jets more often seek to procure packages as they value the OEMs 
integ ration capacity, whereas large airframers, having more extensive  own 
integration capacity , rather opt for individual packages.  
(437)  To underline thi s, the Notifying Party notes that large airf ramers  have the 
tendency  of breaking up product packages , which  they had tendered together 
previously. Rockwell Collins mentions a situation where , having bid on an RFI 
in 2013 for a large commercial airframer en compassing all pilot controls, where 
the package, after receipt for the offers, was divided into separate RFIs again for 
each pilot control.  
(438)  In any case, the Notifying Party holds359 that there is no evidence  that had UTC 
entered any  commercial bundling pra ctices , based on its already broad  product 
portfolio pre -Transaction , they ever had  any anti -competitive effect. The 
Notifying Party believes that airframers possess both the power and the 
incentive to reject any attempt at anti -competitive bundling or tyi ng by suppliers 
because they would be  directly harmed by any resulting reduction in 
competition.  
(439)  Respondents to the market investigation in general confirmed that commercial 
bundling of different components is relatively rare in the industry , and that 
tenders are usually organised for each component separately, although replies 
were split and indicated that the presence of bundling was dependent on a 
variety of different factors: Market participants mentioned  for instance that there 
could be a differ ence in the procurement strategies  between the manufacturers of 
large commercial aircraft and of  the regional and business jet segment, as the 
latter may not have the same level of integration capacity and are more inclined 
to tender or accept pack aged solutions. They also added that it is difficult to 
generalise and bundling depends also on the functional or technical closeness of 
the products involved, e.g., an engine is more likely to be bundled with a 
                                                 
358 See the Notifying Party's reply to the question 25 'Conglomerate' of the Commission RFI#1 as of 
11 January, 2018.  
359  Form CO, General Section, para 7.8.  
 
 
89 nacelle360 than with a landing gear361, thereby largely confirming the Notifying 
Party's general arguments.  
(440)  Airframers' practice of braking up previously tendered packages, as reported by 
the Parties, has been confirmed by over half of the responding airfamers ,362 and 
this was also reflected in some of t he bidding data analysed by the Commission, 
as described for instance in paragraph (295) . 
(441)  Respondents to the Commission's market investigation generally could  not 
recall  specific examples of the Parties' commercial bundling or tying in the past 
although each of the Parties , and in particular UTC, already supplied a range of 
aircraft components to the same customer base before the Transaction. In 
particular , the respo ndents did not report any instance s where actual foreclosure 
effects occurred by reducing  actual or potential competitors' ability and 
incentives to compete , including by making it harder for specific market entrants  
to win business , thus causing harm to competition.363  
(442)  Rather , the responses reflect that as a general  rule, the airframers, some of which 
may hold significant buyer power due to the concentrated structure of the 
market , are in the driving seat to formulate  the scope of the tender s:364 "This 
pract ice is sometimes encountered, and is typically a strategic sourcing choice 
of each customer. It seems to be more common where a customer has a strategic 
preference for a small number of suppliers on a given program or for a given 
commodity. Such sourcing s trategies vary from customer to customer and 
program to program. "365 and: "This happens frequently (787, A350) where it 
benefits the customer, although aircraft manufacturers (primes) seem to be 
moving away from this"366. 
(443)  The airframers' control over this process is further highlighted  through the 
replies of competing equipment manufacturers , who  confirmed having 
concluded  all their supply contracts in the past 10 years as a result of a 
competitive selection process.367 
(444)  Airfram ers in their replies seemed to be rather agnostic towards commercial 
bundling and maintained that there was generally no particular  strategy with 
respect to  commercial bundles , even if this was to  reduce the purchase price of 
the equipment : According to th ese replies, t he selection of any product 
depended on a number of several additional  criteria built into the procurement 
process , not necessarily less important  than price , such as the technical 
compliance, support arrangements  or company experience .368 As a  large 
airframer puts it: "[Airf ramer's]  priority is to run a fair and equal tender 
                                                 
360  Nacelles are aerodynamic structures that surround jet engines, anchoring them to the airfram e, and 
provide thrust for the flight.  
361  See replies t o questions 12 and 13 of Questionnaire 1 - Competitors; overall one third of competitors 
reported having ever made bundled offers.  
362 See replies to question 21 of Questionnaire 2 – Ariframers.  
363  See replies t o question 14 of Questionnaire 1 - Competitors.  
364  See replies t o question 2 4 of Questionnaire 1 - Competitors.  
365  A competitor's reply to question 12 of Questionnaire 1 - Competitors . 
366  A competitor's reply to question 12 of Q1 - Questionnaire to Competitors.  
367  See replies to question 6 of Questionnaire 1 - Competitors . 
368  See replies to questions 15 , 16 and 26 of Questionnaire 2 – Airframers.  
 
 
90 process. Such strategies will only be successful where all bidders have an equal 
chance to offer  such multi -products packages ."369  
(445)  Many responding  airframers therefore prefer to tender individual equipment but 
reportedly remain  open to commercial bundles to be evaluated on a case -by-case 
basis. Even with a broader portfolio and an increase d ability of UTC to offer 
bundled packages, airframers held t hat this alone was not sufficient to enable 
UTC to sell those packages to the airframers.370 
(446)  Regarding technical tying , the Notifying Party submits371 that the aerospace 
industry uses standard communications protocols that allow the various aircraft 
systems to  interoperate, and independent third parties establish these protocols. 
Components are connected via gateways using industry -standard 
communications protocols specified by the airframer. Any systems that used 
different (proprietary) communications protocol s and thus would not 
interoperate with other suppliers’ systems would not meet airframer 
specifications and would be rejected by  the airframers,  
(447)  This was largely confirmed by the parties' competitors that held that  airframers  
are conscious of the effect that accepting tied offers could have on the number 
of competitors they will be able to cons ider in current and future bids.372 Market 
participants  also explained373 that airframers use very standard interfaces 
precisely in order to  avoid the technical tying of systems.  Technical tying 
increases their dependence on the supplier , decrease s transparency  and can 
significantly inflate the cost of maintenance as  any replacement  requirement will 
affect the entire system instead of  a modula r approach .374 As one competitor 
puts it with respect to tying for buyer furnished equipment; " a threat for their 
supply chain ".  
(448)  Some respondents were of the view that technical tying exists , in particular in 
case of regional or business jets ; however, almost all added the caveat  of the 
countervailing buyer power  "as long as it is accepted by the aircraft 
manufacturer "375.  
(449)  Furthermore, only a fraction of respondents to the Commission's market 
investigation identified products of the merged entity , which they considered  to 
be unique , a 'must -have'  or impossible  to source  from alternative suppliers376, 
which  could help render ing a tying or commercial bundling scenario sufficiently 
successful.  
                                                 
369 See a large airframer's reply to question 19  of Questionnaire 2 – Airframers.  
370 See a large airfmae r's reply to question 23 of Questionnaire 2 – Airframers.  
371 Form CO, General Section, para 7.89 ff.  
372  See replies to question 14 of Questionnaire 1 - Competitors.  
373  See replies to question 1 5 of Questionnaire 1 - Competitors .  
374  See replies to question  15 of Questionnaire 1 – Competitors  and also minutes of a call with 
competitors on 11 April, 2018.  
375  See a competitor's reply to question 15 of Questionnaire 1 - Competitors .  
376  See replies to question 18 of Questionnaire 1 – Competitors, replies to qu estion 2 2 of Q 2 - 
Questionnaire 2 – Airframers.  
 
 
91 (450)  Finally , competitors largely agreed that UTC will become by far the largest 
competitor but companies of large  size and similar  portfolio, namely Safran 
Group, GE and Honeywell would compete on par with the merge d entity.377  
8.3.4.  Aircraft engines and avionics  
8.3.4.1.  Complaint s from market participants  
(451)  A marke t player active in the avionics market expressed the concern that the 
combination of UTC's strength in engines and Rockwell  Collins strong position 
in avionics would create an industry giant with an almost nose -to-tail offering 
across avionics and mechanic al systems. The combined entity would gain an 
unrivalled ability to negotiate aggressively with airframers given its size, 
economic strength and strong portfolio, making it an almost unavoidable trading 
partner.378  
(452)  According to this complainant, t he combine d UTC/R ockwell  Collins  will have 
significantly enhanced scale, bringing together UTC and RC's generally 
complementary portfolios. In particular, UTC would be able to combine its 
strength in propulsion (in relation to which it supplies engines for the range  of 
thrust classes, including air transport at the highest end) and other areas, 
together with RC's strong suite of avionics products.379 
(453)  From an economic perspective, the combined entity will have an increased 
incentive to seek to leverage its air transport  propulsion offering in particular to 
bundle together  engines with APUs, avionics safety systems, cockpit systems, 
and potentially other components  at a discounted price . Offering engines and 
avionics products commercial bundles together with a  limited discount on the 
engine (by far the largest cost item on the plane) would incentivize the 
customers to choose the merged entity's bundle with avionics.  It would also be 
economically viable to do so, given that loss of margin  on avionics products 
provided at low price or at cost can be recouped by securing sale of its 
propulsion products (being the vast majority of the value of the aircraft).  Other 
avionics players have expressed the concerns regarding risks of commercial 
bundling of engines and avio nics and how such a practice  would impact their 
activities as a pure avionics supplier.380 
                                                 
377  See replies to question 160 of Questionnaire 1 - Competitors.  
378  Responses to the European Commission’s follow -up questions dated 26 March 2018 . 
379  The complainant also argues that their concerns are heightened given that UTC and Rockwell Collins 
reached on 16 March 2018a commercial agreement, with Boeing which according to public sources, 
are " win win agreements win -win agreements with each of them that bring value to our customers and 
support our com panies’ competitiveness  "The complainant believes that this agreement could 
negatively affect its ability (as well as other suppliers’ ability) to compete for Boeing’s business and 
is indicative of the combined entity’s market power which allows it to lock -in key customers to the 
exclusion of key competitors. More specifically, the complainant argues that the deal with Boeing is 
cross products and allegedly helps Boeing with its cost cutting objectives. The Commission has 
analysed these agreements and has n ot found any evidence that these agreements enable UTC and 
Rockwell Collins to bundle or tie products of their portfolio to foreclose rivals with a narrower 
portfolio.  
380  See replies to questions 19 and 161 of Questionnaire 1 - Competitors.  
 
 
92 (454)  Another potential anticompetitive effect of the merger would be technical tying 
between engines and avionics. This complainant has explained that there is a 
possibilit y that the merged UTC/Rockwell Collins would develop an integrated 
solution of engines and avionics, based on data excha nge between the two 
components  that would improve the performance of the engine. The more data 
that can be shared between systems will i mprove the fuel efficiency, operating 
cost and maintenance requirement of the engine. For instance, the avionics 
products collect information about the weather, the flight path and the weight of 
the plane that could be used to optimize the performance of t he engine. Data -
sharing and a deeper understanding of how the two sub -systems work could 
significantly improve engine performance.  
(455)  In particular, the complainant  has expressed a specific concern with respect to 
the degradation of compatibility between UTC engines with competitors’ 
avionics products. The improved integrated offer of engines and avionics could 
be designed in such a way that the engine of UTC would not work at all or 
would work less well when combined with a competitor’s avionics products. 
This could lead to foreclosure of avionics competitors.  
(456)  The engine and the avionics interact already today. However, that interaction is 
limited to command/control and not much information is actually shared 
between the components . Increased information shari ng through proprietary 
interconnectivity standards could favour avionics system that interact more in 
depth with UTC engines and lock out other avionics suppliers.381 
(457)  Finally, the complainant has explained that the Transaction and the combination 
of engines and avionics would provide the merged entity with a timing  
advantage. In general, the airframer will set the schedule for tenders of 
components. The engine is usually chosen first and m any parts of an aircraft will 
fundamentally be connected to this engine  once it is chosen. Therefore the 
engine defines much of the architecture of an aircraft from the very first day. 
The risk would be that  this early procurement of UTC engines would either 
(i) allow the merged entity to understand the requirements/architect ure required 
by the airframer for its other components earlier than other firms, and therefore 
be able to use this insight to develop better offerings for the customer before 
other competitors, or (ii) enable the customer to default towards an 
engine/avion ics bundle without going to tender at all to save time in the 
procurement process .382 
(458)  In terms  of effects on competition  in avionics, assuming the complainant is 
locked out from winning business in avionics because of these practices, it will 
be difficult for the complainant to stay in the market. Since bids for new 
platforms are rare, the complainant would not have to lose  out on many bids to 
feel an effect. The long -term nature of the industry requires that investment in 
research and development take s place far ahead of aircraft programmes, and 
there is a certa in level of foresight required.  
                                                 
381  Non confidential minutes of a call with the complainant on 4 April 2018.  
382  Non confidential minutes of a call with the complainant on 4 April 2018.  

 
 
94 models, the Boeing 787 Dreamliner, the Boeing 747 -8, and the Airbus A380. 
CFMI sells the CFM56 engine that powers th e Airbus A340, Airbus A320 
(classic) family  as an option  and the Boeing 737 (classic) , as well as the LEAP -
engine that powers the Airbus A320neo as an option, the Boeing 737 MAX on 
an exclusive basis, and the COMAC C919 on an exclusive basis.  
(462)  Rolls - Royce is also active in this market for large commercial aircraft, with a 
portfolio covering the Airbus A330neo,  the Airbus A350, the Boeing 787 
Dreamliner family  (as an option) , and the Airbus A380  (as an option).  
(463)  For large commercial aircraft, Rockwell Collins  holds  a market share of 
[30-40]% in avionics , on par with Honeywell ( [30-40]%) and ahead of Thalès 
([10-20]%). Other suppliers (GE  avionics, L3, Teledyne) have shares  [0-5]%. A 
segmentation by avionics component would not dramatically change the picture, 
with Rockwell Collins being […] in satellite communications, communications, 
navigation, multi -mode receiver GPS and weather systems, and Honeywell […] 
in collusion avoidance, flight management systems and flight control electronics 
(where Rockwell Collins  […]), information management and communications 
management units  
(A.ii) Regional and business jets  
(464)  In engines for regional and business jets, UTC has a stronger position in engines 
with a combined share of [20-30]% in value and [50-60]% in volumes for both 
engin es in service and backlog orders. UTC supplies several types of engines for 
regional aircraft and business jets which are available on various platforms of 
Bombardier, Gulfstream, Embraer, Cessna and Mitsubishi. This share also 
reflects the fact that UTC [information on UTC's participation in recent tenders ]. 
For these three platforms, the avionics supplier has already been selected  
(Honeywell for the Embraer platform, Rockwell Collins for the Mitsubishi and 
Bombardier platforms) . 
(465)  For regional and business jets, Rockwell Collins holds a market share of 
[40-50]% in avionics, ahead of Honeywell ( [30-40]%), Thalès ( [10-20]%) and 
Garmin ( [5-10]%). A  segmentation by avionics component would not lead to 
significantly differences in market  shares . 
(466)  One area of regional/business jets where UTC is particularly strong is turboprop 
engines where they would hold a share of [70-80]% for regional turboprop and 
more than [90-100]% for business turboprop. These shares are high because 
UTC has won com petitions for old platforms (ATR 42, ATR 72 and Bombardier 
400) years ago.  There are therefore not necessarily indicative of UTC's capacity  
to win any new business for a new turboprop platform, should an airframer 
decide to committing to launch one (which is not the case for the moment). In 
the event that a new platform is launched, it is likely that new suppliers would 
emerge as engines manufacturers such as GE which has announced working on 
a new generation turboprop engine .384 
                                                 
384  See for  example Flight Global 27 December 2017 GE completes first ground test of Advanced 
Turboprop engine available at https://www flightglobal.com/news/articles/ge -completes -first-ground -
test-of-advanced -turboprop -444489/ . 
 
 
95 (467)  In any case, the Commission h as not defined in the  past avionics market in 
relation to the types of engines that power the aircraft (turboprop or turbofan) 
but rather pursuant to the mission profile of the aircraft. Moreover, the 
Commission has not found that avionics for aircraft pow ered by turboprop 
engines would be significantly different from avionics for aircraft powered by 
turbofan engines, assuming that the mission profile is the same. There is thus no 
market for avionics used in aircraft powered by turboprop engines, in which t he 
merged entity could try to leverage potential market power in turboprop engines. 
Rather, any effect of potential foreclosure practices needs to be assessed on the 
relevant market s for avionics in business/regional aircraft where the merged 
entity's mark et power is insufficient for such strategies to succeed and result in 
foreclosure of competitors.  Furthermore, making it more difficult for 
competitors to sell avionics products on regional or business aircraft powered by 
turboprop engines is unlikely to l ead to any foreclosure effects on the markets 
for avionics for regional and business aircraft as a whole  (taking also into 
account that research and development efforts are not tailored or focused 
specifically on avionics sold on aircraft powered by turbop rop engines).   
(468)  The Notifying party has explained that  all the regional jet procurements for 
aircraft systems have already taken place , notably those won by UTC such as 
the Embraer E2 family, the Bombardier C Series, the Mitsubishi MRJ, and the 
Irkut MC -21. There are no plans by any airframer to build a new regional jet in 
the foreseeable future. All the platforms identified paragraph (464)  are still 
forthcoming or very recently introduced. Successful airframe programs have a 
useful production life -span of 15 -20 or more years. No airframer will introduce 
a new jet into this extremely crowded market for at least that much time . As a 
result, even if UTC had market powe r in regional jet engines, it would have no 
opportunity to leverage this position to sell other products for many years .385 
(469)  There are other players active in this market for engines for regional and 
business jets, such as GE (active in regional and business jets), Honeywell 
(active in regional and business jets), Rolls -Royce (active in regional and 
business jets with a strong presence in large business jets) and Williams  
International (active mainly  in small business jets) . Two of these players are 
already ac tive in engines and avionics and could provide alternatives to the 
combination of the merged entity.  
(470)  Moreover, the avionics market for regional and business jets, on which UTC 
enjoys a market share of [50-60]% represents ¼ of the overall avionics market 
([…] out of […] overall), avionics for LCAs accounting for the remainder. 
Avionics for regional jets , in which UTC has recently won bids for engines, 
account for less than one third of the overall regional/business jets avionics 
market ([…]). Therefore the i ncentives of UTC to engage into foreclosure 
practices are restricted by the fact that its market power, if any, is limited to a 
minor part of the overall avionics market.  
                                                 
385  See "Respon se to EC state of play m eeting - Potential concern engines /avionics"  April 10, 2018 . 
 
 
96 (B) Commercial bundling is not a regular feature of the industry  and 
timing of the procur ement process is in the hands of the airframer  
(471)  The Notifying Party has explained that a irframers control every aspect of the 
systems procurement process, often driven by the cadence of engineering 
decisions inherent in aircraft design: they establish the s pecifications of each 
component and system being procured, set the bidding timing and process, and 
invite the suppliers who can participate in any procurem ent opportunity. 
Airframers are  sophisticated purchasers who have every incentive to maintain a 
compe titive supplier base and the means to ensure this. These realities prevent 
any effort by aerospace system suppliers to engage in  anticompetitive 
bundling/foreclosure strategies.  
(472)  This control of airframers  has been confirmed by respondents to the market 
investigation , as explained in section 8.3.3 . In general, airframers  are reluctant 
to source bundled offers and prefer to select different suppliers to ensure a hig h 
level of competition. Bundled offer are sometimes proposed but they are in 
general unsolicited and the airframer would consider if only it matches its 
objectives in terms of cost efficiency and system integration. Airframers also 
control the timing of th e procurement process in full and are unlikely to be 
influenced by the capacity of a supplier to propose engines and avionics at the 
same time.  
(473)  Even when airframers request offers for bundles of related systems (as described 
in more detail below  for the Em braer example ), they remain free to and 
routinely do break up such packages . The current trend is toward airframers 
procuring more systems individually from more diffe rent suppliers, not the 
opposite. Bundled offers also often require the supplier to also be the systems 
integrator, responsible for all testing and simulation of aircraft performance .386 
(474)  The Commission 's investigation  has not brought up evidence on  relevant  
examples of commercial bundling of engines and other products in the last 
years, neither from the Parties nor from other suppliers active in engines and 
avionics such as Honeywell  and to a lesser extent GE  (and accordingly has not 
brought up evidence of any actual foreclosure effects) . An example which was 
mentioned by the complainant was the procurement decision of Embraer for its 
E-Jet series.  According to the complainant, UTC was selected to provide a 
bundle comprising Pratt & Whitney engines and APU, primary and secondary 
electrical distribution systems, emergency electrical generation syst ems, 
batteries and converters and wheels and carbon brakes . However, UTC has 
explained that [details of UTC 's supply agreement ].387 
(475)  The fact that bundling is an uncommon feature of the aerospace industry is 
further confirmed by the situation of Honeywell in business jets. Honeywell is 
one of the suppliers  of business jets engines and also competes with Rockwell 
Collins in avionics. Sho uld customers require and obtain bundled discounted 
offers combining engines and avionics, one would expect Honeywell to be 
present in the same platforms for engines and avionics. The reality is that, as 
                                                 
386  See replies to question 17 of Questionnaire 2 - Airframers.  
387  Fom CO, General section, para 7.57.  
 
 
97 shown in the table below Honeywell supplies engines and avionics systems for 
several corporate jet platforms, but it almost never supplies both products for the 
same platform . 
Table 3 - Engines and avionic supplier by business jets platform  
 
(476)  In terms of future plans, [reference to th e Parties'  internal document s].  
(C) As regards technical tying, i t is h ighly speculative that industry will 
move towards technical integration of engines/avionics  
(477)  The Commission 's investigation  has not brought up specific evidence that the 
aerospace industry is moving towards tighter integration between engines and 
avionics.  
(478)  An engine supplier has put forward that the engines and avionics systems are 
currently rather isolated from each other. In particular certification for each of 
these systems takes place se parately. This is the case for strict safety reasons. 
The engine must be able to control itself in normal operation in all modes of 
failure, and must work independently to run or shut itself down safely.  
(479)  The engine has its own 'computer', known as the FADEC. Only the FADEC is in 
complete control of the engine. The data that this outputs includes for instance 
temperature and RPM, but not linked to any avionics.  
(480)  The potential advantage of linking the engine s and avionics systems is that the 
FADEC footprint would be substantially reduced. The FADEC is currently quite 
a large box whose weight and size must be accounted for, materially affecting 
the operation of the aircraft.  
(481)  In order to link more closely the e ngine with the avionics, however, the 
certification process would need to change, and the company proposing this 
would need to work with regulators to rewrite the regulation behind this. The 
substantial amount of investment that would be required and the a bove 
mentioned technical barriers to certification represent significant obstacles to 
achieve this closer integration.388 
(482)  There  is an ever -increasing breadth of frequency and number of sensors  on the 
engine , and hence the amount of data being transmitted is also increasing . Over 
time, the process has evolved from capturing a few data points to more 
automated, rule -based capture of a much larger data set . This does not mean, 
however, that avionics are more deeply integrated with engines as there might  
be interference s with safety -critical functions of the engine.389 
(483)  The Parties [details of the Parties’ current and future R&D programs] .390 
                                                 
388  See minutes of a call with an engine manufacturer on 20 April 2018.  
389  See m inutes of a c all with an engine manufacturer on 20 April 2018 . 
390  See reply to RFI 18 submitted on 23 April 2018.  
 
 
98 (484)  In terms of future plans, [reference to the Parties’ internal documents] .  
(D) Customers are likely to oppose any proprietary commun ication 
systems that would more closely connect engines  and avionics  
(485)  Currently, the ARINC 429  communication  protocol applies to bidirectional 
communications between the FADEC  (on the engine)  and the avionics Data 
Management Cabinet ("DMC")  for the followin g functions: (i) autoflight; 
(ii) autothrottle; and (iii)  thrust management / flight management, to support 
coordinated flight manoeuvres . The FADEC communicates with the avionics 
displays for display indications such as turbine speed . ARINC 429 is the 
standard protocol for communication between engines and avionics.  
(486)  The Notifying Party has explained that t he engine interoperates with different 
parts of the avionics system through these industry -standard communication 
protocols that are specified by the airframer. This precludes according to the 
Notifying party  any possibility of technical tying – systems (including engines 
and avionics) that do not meet airframers’ specifications for the communications 
interface with the rest of the aircraft, and in part icular with major systems such 
as engines and avionics, would never be selected by an airframer. Airframers 
would not allow their freedom to select and change suppliers to be limited by 
suppliers’ using non -standard or proprietary communications protocols.391 
(487)  Other engines manufacturers have confirmed during the market investigation 
that airframers seek to maintain standard protocols between engines and 
avionics. One engine manufacturer has put forward that the ultimate arbiter of 
the relationship between the  engine a nd avionics will be the airframer, who will 
likely prefer more adapted communications systems over more closed systems. 
The airframer will have a strategy according to which they will place 
requirements on the compone nts manufacturer to comply wit h and t he merged 
entity is not in a position to influence this choice .392 
(488)  Another engine manufacturer has explained that a irframers exert a lot of control 
in this market and tend to prefer a greater range of options and more openness. 
This supplier  airframer s are the driving force behind openness in the market. 
They expect airframers to continue to play this role in the future, as if they do 
not they will be at a disadvantage, having to pay higher prices and potentially 
getting locked in to supply from a sing le provider . If costs increase  because of 
proprietary standards , airframers  will not be interested in engaging and will 
continue to prefer open standards for communication.393 
(E) Overall conclusion on conglomerate effects engines/avionics  
(489)  The Commission therefo re consider that the Transaction does not raise serious 
doubts as regards conglomerate effects resulting from the combination of UTC's 
engines  and Rockwell Collins 'avionics.  
                                                 
391  See reply to RFI 14.  
392  Non confidential minutes of a call with an engine manufacturer on 20 April 2018.  
393  Non confidential minutes of a call with an engine manufacturer on 20  April 2018 . 
 
 
99 8.3.5.  Environmental control systems and galley cooling   
(490)  UTC is active in environmental control systems (“ECS”), which manage the 
flow of air within the aircraft, which helps to regulate cabin temperature and 
cabin pressure, as well as to prevent ice from forming on flight surfaces and 
components.  
(491)  UTC has market share of circa [30-40]% in an overall market. If a segmentation 
by aircraft type  is retained , UTC's market share varies between [40-50]% in 
large and regional jets and [20-30]% in military aircraft. UTC's present in 
helicopters and in business jets is not significant with a mar ket share of [0-5]% 
and below [0-5]%, respectively. If a segmentation  by type of system function is 
retained, UTC's ma rket shares vary from almost [60-70]% in cabin pressure to 
[10-20]% in bleed air systems. UTC has a market share of circa [40-50]% in air 
conditioning and circa [30-40]% in ventilation systems.  
(492)  Rockwell Collins is active in food and beverage preparation and storage 
equipment (“FBPSE”)  with a [70-80]% market share . FBPSE includes products 
such as ovens, refrigerators, and coffee machines for  installation in aircraft 
galleys. One type of such inserts is aircraft galley air chillers.  
(493)  Although  ECS and cooling galley system are totally unrelated in terms of 
manufacturing process , the cooling of  food or beverages can be done by the 
ECS directly , via the ventilation system394 (in which case supplemental galley 
chillers are not required) . When the cooling of food or beverages is done by the 
cooling galleys the  interaction between the ECS and the supplemental cooling is 
limited to the ducting of the exh aust of the latter into the exhaust of the 
former395. 
(494)  An ECS competitor of UTC expressed the concerned  that the merged entity 
could harm its competitors in the ECS market by bundling these products.  
(495)  It is not likely that the merged entity will have the ability or incentive to 
significantly impede competition in the ECS market by offering commercial 
bundles of ECS and galley cooling for the following reasons.  
(a) First, UTC has a market share of around [30-40]% in  the ventilation 
system (and in the overall  ECS market ) and there are several other 
suppliers, one of them with market share around [20-30]% in the 
ventilation system (and two others with market shares of around 
[20-30]% in the overall ECS market).  
(b) Second, while ECS is a SFE , galley cooling is a BFE , so each product 
is sold to a different customer .  
(c) Third, already today UTC offers an ECS with a food and beverage 
trolley cooling function and can thus offer this functionality without 
Rockwell Collins’ aircraft galley air chillers . Zodiac  also supplies ECS 
                                                 
394  See Form CO, section ECS, para. 6.3.  
395  Parties reply to RFI no. 17.  
 
 
100 and FBPSE, including aircraft galley air chillers396. Liebherr offers an 
addition on -board cooling system for food storage or avionics thermal 
management in addition to its air conditioning system397. 
8.3.6.  Pilot contro ls, flight controls and actuation  
(496)  Some market participants saw UTC strong in actuation, especially in THSA s, 
and in pilot controls, while they saw Rockwell Collins strong  in flight control 
electronics, THSAs  and pilot controls . Therefore, some mark et participants 
argues, the merged entity could offer the entire flight control system to 
customers .398 According to some respondents to the Commission's market 
investigation, combining pilot controls, flight control electronics and actuation 
products would provide the merged entity with a competitive advantage399. To 
the extent that the OEM would be  willing to contract for an entire system 
solution, th at combination could  become a natural bundle  according to some  
market participant s.400  
(497)  Most of t he responses remained vague in terms of potential harmful effects on 
competition however, The Commission notes in pa rticular  that few competitors 
thought this bundled offer of UTC could harm competition, notably by 
rendering smaller competitors' single product offers less attractive thereby 
depriving them of the necessary cash flows for continued viability  and making it  
more difficult for them to compete .401 Most competitors mentioned rather  that 
the complementarity of its product offering would enable the merged entity to 
design a better product offering , with optimised and  more efficient  performance 
together with higher discounts , which would  translate into a competitive 
advantage.402 
(498)  Taking into account the divestments under the commitments discussed in 
section 9 according to which all of Rockwell Collins' activities in pilot controls 
and actuation (THSAs) will be divested, the Transaction would be limited to 
leading to a new combination of Rockwell C ollins' activities in flight control 
electronics on the one hand and UTC's activities in pilot controls and actuation, 
including THSAs, on the other hand.  
(499)  The Commission finds , however,  that the merged entity would have insufficient 
market power and theref ore no ability to foreclose competitors through the use 
of bundling or tying in pilot controls, actuation and flight control electronics. 
The commitments offered by UTC divesting the entire product overlap in 
THSAs and pilot controls would in any case prev ent the merged entity from 
                                                 
396  Parties reply to RFI no. 17.  
397  See Liebherr's site: https://www.liebherr.com/en/deu/products/aerospace -and-transportation -
systems/aerospace/products -and-solutions/air -management -systems/air -management -
systems.html#!/accordion -start-module=supp -cooling -acc-item-start-module . 
398  See replies to questions 19 and 40 of Q1 - Questionnaire to Competitors.  
399  See minutes of a call with a competitor on 19 December, 2017 . See minutes of a call with a 
competitor on 4 January,  2018.  
400  See reply of a competitor to question 39 of Questionnaire 1 – Competitors  and replies to question 63 
of Questionnaire 1 - Competito rs.  
401  See reply of a competitor to question 19 of Questionnaire 1 - Competitors .  
402  See replies to questions 40 and 41  of Questionnaire 1 - Competitors . 
 
 
101 developing significant market power in any of the pr oducts involved a potential 
bundle:  
(a) Rockwell Collins' market share  in flight control electronics wa s 
[50-60]% in regional and business aircraft while its market share was 
[0-5]% in large commercial aircraft  in 2016 . Rockwell Collins' strongest 
competitor in flight control electronics is Honeywell with a market share 
in flight control electronics of [30-40]% in large commercial aircraft and 
of [20-30]% in regional and business air craft in 2016 . Other competitors 
include Garmin, GE, Universal and Teledyne.403  
(b) Taking into account the divestment of Rockwell Collins' entire activit ies 
in pilot controls under the commitments (see section 9), the merged 
entity's market share was [20-30]% in all types of pilot controls in LCA 
and less than [5-10]% in each of regional , business and military aircraft 
in 2016 (including, among other s, a market share of [0-5]% in RBPS, 
[10-20]% in TQAs and [40-50]% in side sticks and [0-5]% centre yokes 
in 2016 as set  out in section 8.1.3 ). 
(c) Taking into account  the divestment of Rockwell Collins' entire activities 
in THSAs under the commitments (see section 9), the merged entity's 
market share  was [40-50]-[60-70]% in THSAs in 2016 . As regards other 
actuation products, the merged entity' market share was [20-30]% in 
primary flight control actuation (equal in size to co mpetitors Moog and 
Parker), and  [30-40]% in secondary flight control actuation i n 2016.404 
(500)  Those market s hares are not indicative of the significant degree of market power 
required to have the ability to foreclose competitors through bundling or tying 
strategies. (i) As regards large commercial aircraft, the situation would hardly 
change compared to the situa tion before the Transaction since no current 
Rockwell Collins business in flight control electronics would be added to UTC's 
activities in pilot controls and actuation. (ii) As regards regional, business and 
military aircraft, the merged entity's capabilit ies in pilot controls are […] limited 
at less than [5-10]% while it will continue to face at least one strong competitor, 
Honeywell, in the sale of flight control electronics  and a number of competitors, 
including the Divestment Business, in the sale of pi lot controls and THSA . 
Furthermore, those products from Rockwell Collins on the one hand (flight 
control electronics) and UTC on the other hand (pilot controls and actuation) 
were generally not singled out by market participants as unique products  or 
'must -have' products  or as products for which no alternatives could be found in 
the market (also taking into account the divestments under the commitments).405 
(501)  Furthermore, a s set out earlier  in sections 8.3.3  and 8.3.4 , airframers' control of 
the procurement process make successful foreclosure  strategies unlikely.  
(502)  Moreover , Rockwell Collins already had capabilities in flight control 
electronics, THSAs and pilot controls before the Transaction […]. Similarly, 
                                                 
403  Form CO, Annex RFI2 [Avion ics] – Q5. 
404  Form CO, Other Products, page 231.  
405  See replies to question 18 of Questionnaire 1 - Competitors. , replies to question 2 2 of Questionnaire 2 
– Airframers.  
 
 
102 none of Rockwell Collins' potential past strategies has resulted in foreclosure of 
competitors in either of flight cont rol electronics, THSAs or pilot controls. This 
indicates that the merged entity would not have incentives to engage in 
foreclosure  after the Transaction.  
(503)  As an answer to a potential commercial bundling strategy by the merged entity 
on the other hand, a num ber of competitors indicated that they would resort to 
finding partners for developing simi lar packages and engage in joint bidding.406  
9. PROPOSED REMEDIES  
9.1. Analytical Framework  
(504)  The following princi ples from the Remedies Notice407 apply where parties to a  
merger  choose to offer commitments in order to restore effective competition.  
(505)  Where a concentration raises competition concerns in that it could significantly  
impede effective competition, in particular as a result of the creation or 
strengthening  of a dominant position, the parties may seek to modify the 
concentration in order to  resolve the competition concerns and thereby ga in 
clearance of their merger408. 
(506)  The Commission only has power to accept commitments that are capable of  
rendering the concentration compati ble with the internal market in that they will  
prevent a significant impediment to effective competition in all relevant markets  
where competi tion concerns were identified409. To that end, the commitments 
have to  eliminate the competition concerns entirely410 and have to be 
comprehensive and  effec tive from all points of view411. 
(507)  In assessing whether proposed commitments are likely to eliminate its 
competition  concerns, the Commission considers all relevant factors including 
inter alia the type,  scale and scope of  the commitments, judged by reference to 
the structure and  particular characteristics of the market in which those concerns 
arise, including the  position of the parties and othe r participants on the 
market412. Moreover,  commitments must be capable of being i mplemented 
effectively within a short period  of time413. 
                                                 
406  See replies to questions 21, 23 and 44 of Questionnaire 1 - Competitors.  
407  Commission's Notice on Remedies acceptable under Council Re gulation (EC) No 139/2004 and under 
Commission Regulation (EC) No 802/2004 ("Remedies Notice"), OJ C 267, 22.10.2008, p. 1.  
408  Remedies Notice, paragraph 5.  
409  Remedies Notice, paragraph 9.  
410  Case C -202/06 P Cementbouw Handel & Industrie v Commission  [2007] ECR 2007 I -12129, 
paragraph 54: “ it is necessary, when reviewing the proportionality of conditions or obligations which  
the Commission may, by virtue of Article 8(2) of Regulation No 4064/89, impose on the parties to a  
concentration, not to determine wh ether the concentration still has a Community dimension after 
those  conditions or obligations have been complied with, but to be satisfied that those conditions and 
those  obligations are proportionate to and would entirely eliminate the competition problem that has 
been  identified ”. 
411  Remedies Notice, paragraph 9 and 61.  
412  Remedies Notice, paragraph 12.  
413 Remedies Notice, paragraph 9.  
 
 
103 (508)  Where a proposed concentration threatens to significantly impede effective  
competition the most effective way to maintain effective competition, apart from  
prohibition, is to create the conditions for the emergence of a new competitive 
entity  or for the strengthening of existing competitors via divestiture by the 
merging  parties414. 
(509)  The divested activities must consist of a viable business that, if operated by a 
suitable  purchaser  (hereinafter referred to as 'Purchaser') , can compete 
effectively with the merged entity on a lasting basis and that  is divested as a 
going concern. The business must include all the assets which  contribute to its 
current operation or which are necessary to ensure its viability a nd 
competitiveness and all personnel which are currently employed or which are  
necessary to ensure the business' v iability and competitiveness415. 
(510)  Personnel and assets which are currently shared between the business to be 
divested  and other businesses of the  parties, but which contribute to the 
operation of the  business or which are necessary to ensure its viability and 
competitiveness, must also  be included. Otherwise, the viability and 
competitiveness of the business to be  divested would be endangered. Ther efore, 
the divested business must contain the  personnel providing essential functions 
for the business such as, for instance, group  R&D and information technology 
staff even where such personnel are currently  employed by another business unit 
of the partie s —at least in a sufficient proportion  to meet the on -going ne eds of 
the divested business416. 
(511)  Normally, a viable business is a business that can operate on a stand -alone -basis,  
which means independently of the merging parties as regards the supply of input  
materials or other forms of cooperation other tha n during a transitory period417. 
(512)  The intended effect of the divestiture will only be achieved if and once the 
business  is transferred to a suitable Purchaser in whose hands it will become an 
active  competitive  force in the market. The potential of a business to attract a 
suitable  Purchaser is an important element already of the Commission's 
assessment of the  appropriateness of the proposed commitment. In order to 
ensure that the business is  divested to a suitab le Purchaser, the commitments 
must include criteria to define the  suitability of potential P urchasers. This will 
allow the Commission to conclude that  the divestiture of the business to such  a 
Purchaser will likely remove the competition  concerns identifie d418. 
9.2. Description of the proposed remedies  
(513)  In order to render the concentration compatible with the internal market, the 
undertakings concerned have modified the notified concentration by entering 
into the following three packages of commitments, which are annexed to this 
decision and form an integral part thereof.  
                                                 
414  Remedies Notice, paragraph 22.  
415  Remedies Notice , paragraph 23 -25. 
416  Remedies Notice, paragraph 26.  
417  Remedies Notice, paragraph 32.  
418  Remedies Notice, paragraph 47.  
 
 
104 (514)  The Notifying Party  submitted co mmitments pursuant to Article 8 (2) of the 
Merger Regulation on  12 April 2018  ('the Commitments of 12 April 2018 '). The 
Commission subjected these  commitments to a m arket test. The market test 
indicated that the Commitments of  12 April 2018  needed  to be completed  to 
entirely eliminate the concerns raised by the  Transaction.  
(515)  In order to address the issues raised in the market test, the Notifying Party 
submitted  a final  set of commitments on 26 (for oxygen) and 30 April  2018  (for 
THSA PC as well as IP, together with oxygen 'the Final Commitments '). 
9.2.1.  THSA and pilot controls   
(516)  The remedies  contain  the divestment of Rockwell Collins'  ('the THSA -PC 
Divestment Business '):419  
(a) Trimmable Horizontal Stabilizer Actuators business, which includes 
THSAs, legacy flap actuation, and nose wheel steering gear boxes;  
(b) Pilot control systems business, which includes center yokes, rudder 
brake pedal units, throttle quadrant assemblies, auto -throttles and 
control stand modules; and  
(c) 'Special  Products ' business , which includes inter alia fuel sticks, waste 
water drain valves, aircraft ground support couplings , and ground 
service couplings.  
(517)  Relating to these product businesses, the Commitments  further contain all 
tangible and intangible assets and personnel.  
(518)  The THSA -PC Divestment Business is currently spread over eight sites in the 
United States, Mexico, India and France420. For the purpose of the divestment, it 
will be concentrated on three sites (Irvine, Melbourne (both United States) and 
Mexicali (Mexi co)), whereas all other Rockwell Collins' activity relating to this 
business will be transferred to these three sites or replaced accordingly421. 
Conversely, the activities carried out on these sites and that are unrelated to the 
THSA PC Divestment Business will be extracted from these sites by way of a 
reverse carve -out. The exact implementation of the measures is partly at the 
discretion of the Purchaser.  
9.2.2.  Ice protection systems  
(519)  The remedies contain the divestment of Rockwell Collins' SMR Technologies 
business, ('the IP Divestment Business ') which manufactures Rockwell Collins' 
pneumatic ice protection systems and other ice protection products, along with 
inter alia fuelling systems and other industri al products, hovercraft skirts, 
composites and  commercial aviation products422. 
                                                 
419  Commitments  of 12 April 2018  – THSA/Pilot Controls/Special Products  – Schedule, para. 1.  
420  Form RM – THSA/Pilot Controls/Special Pr oducts - para. 27. 
421  Commitments  of 12 April 2018  – THSA/Pilot Controls/Special Products  – Schedule, para. 2.  
422  Commitments  of 12 April 2018  – Ice Protection  – Schedule, para. 1.  
 
 
105 (520)  Relating to these product businesses, the Commitments further contain all 
tangible and intangible assets and personnel.  
(521)  The only site of SMR Technologies is located in Fenwick (West Virginia, 
United States) that will be completely divested, except for the WEMAC product 
line (e.g., air gasper valves, interior signage components, etc.) and related 
equipment and machinery. The  WEMAC product line is not related to other 
activities  carried out  in Fenwick […]. It will be carved out and retained by 
Rockwell Collins423.  
9.2.3.  Oxygen  Systems  
(522)  The remedies contain the divestment of UTC's oxygen research ('the Oxygen 
Divestment Business ') and development programs, including all intangible 
assets, such as intellectual property rights; all research and development 
contracts of the research and development programs concerning the "[…] 
Oxygen Program " and the "[…] Oxygen Program " as well as the  personnel  
([…])424. 
(523)  Moreover, the Parties agreed not to close the Transaction before they have found 
a buyer for the oxygen programme (upfront buyer clause).  
9.3. Assessment of the proposed remedies  of 12 April 2018  
9.3.1.  THSA and pilot controls  
9.3.1.1.  The Notifying Party's  arguments  
(524)  In the Par ties' view, the Commitments of 12  April 2018  are sufficient to remove 
the competition concerns identified by the Commission .  
(525)  The Parties maintain that the THSA -PC Divestment Business creates the 
conditions for the emergence of a new  competitive entity, or the strengthening 
of an existing competitor, in the area of  THSA, pilot controls  and Special 
Products. In their view, t he aforementioned competitor will be capable,  at the 
minimum, of replicating the current competitive interaction ( to the extent  
applicable) between Rockwell Collins and UTC425, as the THSA -PC Divestment 
Business comprises the entire (global) business of Rockwell Collins relating to 
THSA, pilot controls and Special Products. The Parties consider that the 
Divestment Busin ess goes beyond the concerns identified by the Commission426. 
(526)  The Parties offer to enter into transitional agreements with the Purchaser where 
necessary to implement the transfer  of the Divestment Business assets a s quickly 
as possible427.  
                                                 
423  Commitments  of 12 April 2018  – Ice Protection  – Schedule, paras. 2 and 4.  
424  Commitments  of 12 April 2018  – Oxygen Systems  – Schedule, paras. 1 and 2.  
425  Form RM – THSA/Pilot Con trols/Special Products - para.14.  
426  Form RM – THSA/Pilot Con trols/Special Products – paras. 15 and 16.  
427  Form RM – THSA/Pilot Con trols/Special Products – para. 9.  
 
 
106 9.3.1.2.  The Commission's As sessment  
(527)  The Commission's assessment focused on (i) whether the Commitments of  
12 April 2018  were sufficient to remove the competition concerns caused by the  
Transaction in terms of horizontal overlaps; (ii) whether the Divestment 
Business of  12 April 2018  constituted a viable business able to compete 
effectively with the merged entity a lasting basis; (iii) whether there were 
specific conditions that a potential purchaser  should fulfil and (iv) whether the 
Divestment Business of 12 April 2018  was sufficiently attractive to find a 
suitable purchaser.  
(528)  On 17  April 2018 , the Commission launched a market test regarding the 
Commitments  of 12 April 2018  covering all of the questions outlined in 
paragraph  (527) . The results of  the market test showed that the Commitments of 
12 April 2018 were in principle  deemed a suitable solution to resolve the 
competition concerns identified by the  Commission. Remaining  issues were  
addressed by th e Notifying Party through improveme nts made to the 
Commitments of 12  April 2018 . 
(A) Removal of competition concerns  
(529)  The Parties propose to divest Rockwell Collins' entire global THSA and entire 
pilot controls business. Considering that the Com mission raised serious doubts 
for the overlap in THSA ( see section 8.1.2 ) and for the overlaps in certain pilot 
controls ( see sections 8.1.3.2  for RBPS and 8.1.3.3  for TQA) the scope of the 
Divestment Business is suitable to remove  competition concerns in principle.  
(530)  This is in line with the results of the market test, where the majority of 
respondents stated that they consider the Commitments of 12 April 2018 as 
suitable to effectively remove any competition concerns raised by the 
Transaction in THSA428 and in pilot controls429. 
(B) Viability and competitiveness of the Divestment Business according 
to Commitments of 12 April 2018 
(531)  The Commission considers that the THSA -PC Divestment Business includes all  
the essential  functions and personnel to be viable and competitive from the 
perspective of research  and development, production, marketing and sales, 
logistics  and relations with suppliers and customers . Notably the activities which 
will be extracted from […] are unrelated to the THSA PC Dives tment Business.  
(532)  From a financial perspective, although the THSA PC Divestment Business has 
[…] in the last two years (2016 and 2017), its financial performances are 
scheduled to improve […]. 
                                                 
428  See replies to question 3  of Questionnaire on Commitments . 
429  See replies  to question 4  of Questionnaire on Commitments . 
 
 
107 (533)  The market test resulted in the majority of respondents stating that the THSA PC 
Divestment Business would be viable and competitive both immediately as well 
as in the next five years430. No specific comments have been expressed 
regarding  the reverse carve -out planned by Rockwell Collins.  
(534)  Apart of the need to clarify certain aspects of the scope of the THSA PC 
Divestment Business proposed on 12 April 2018 – that clarification was 
subsequently provided by the Parties431 - the market test revealed that 
respondents stress the importance  of sufficient transitional support from 
Rockwell Coll ins for the potential Purchaser, namely as regards the IT structure, 
sales channels as well as aftermarket business432.  
(535)  The aspects raised by  the respondents were subsequently addressed by the 
Parties in the Final Commitments of 30 April  2018  according to which the 
Parties are prepared to enter into transitional agreements , notably as regards 
aftermarket and spare parts when needed, to ensure t he viability and 
competitiveness of the THSA PC  Divestment Business433.  
(C) Purchaser criteria  
(536)  Rockwell Collins is confident that there will be numerous candidate Purchasers  
interested in the Divestment Business. To date, Rockwell Collins has received  
expressio ns of interest from a number of potential purchasers, that all have 
expressed  interest in attending management presentations .434 These expressions 
of interest have been confirmed during the market test.435 
(537)  Market test respondents stressed that the more experience the potential 
Purchaser has in the aerospace industry, including established relationship s with 
established aircraft manufacturers, the more it would foster the viability and 
competitiveness of the Divestment Business436.  
(538)  The Parties took this in to account by adjust ing the Commitments of 
12 April  2018  as set ou t in paragraph (539)437. 
                                                 
430  See replies  to question 5 and 6 of Questionnaire on Commitments . 
431  These aspects related in particular t o certain tangible assets and activities that are to be transferred as 
part of the Divestment Business […]. 
432  See replies  to question 3 to 24 of Questionnaire on Commitments.  
433  Form RM – THSA/Pilot Con trols/Special Products - para.102; Commitments  of 30 April 2018  – Ice 
Protection  – Schedule, para. 5.  
434  Form RM – THSA/Pilot Controls/Special Products - para. 20. 
435  See replies to question 21 of Questionnaire on Commitments . 
436  See replies to questions 18 – 20 of Questionnaire on Commitments . 
437  Final Commitments  of 30 April 2018  – THSA/Pilot Controls/Special Products  – para. 16.  
 
 
108 9.3.1.3.  Description of the Final Commitments of 30 April  2018  
(539)  The Final Commitments  of 30 April  2018 address the comments stemming from 
the market test by inserting : 
(a) A further Purchaser criterion to ensure that the potential Purchaser has 
sufficient experience in the aerospace industry  as well as commercial 
relationships with major airfr amers ;  
(b) A clause clarifying that the scope of any transition agreements will cover 
all necessary aspects of the Divestment Business , notably in relation to 
aftermarket and spare parts . 
9.3.1.4.  Assessment of the Final Commitments of 30 April  2018  
(540)  The Commission con siders that the Final Commitments fully address comments 
with respect to the Commitments of 12 April 2018 . 
9.3.2.  Ice protection systems  
9.3.2.1.  The Notifying Party's arguments  
(541)  In the Par ties' view, the Commitments of 12  April 2018  are sufficient to remove 
the competition concerns identified by the Commission . 
(542)  The Parties bring forward that the IP Divestment Business encompasses the 
entirety of Rockwell Collins' global ice protection systems, and that the 
Commitments will, therefore, remove the overlap between t he Parties in this 
product area in its entirety438. 
(543)  In the Parties' opinion, t he acquisition of the IP Divestment Business, will 
provide the potential Purchaser with all tangible and intangible assets (including 
intellectual property rights), sales, sourcing  and supply arrangements and 
distributor lists and records, to enable the Purchaser to compete in the supply of 
ice protection systems  and other products manufactured by the Divestment 
Business .439  
9.3.2.2.  The Commission's Assessment  
(A) Removal of competition concerns  
(544)  The Parties propose to divest Rockwell Collins' entire global ice protection 
business. Considering that the Commission raised serious doubts for the overlap 
only in the pneumatic ice protection ( see section  8.1.4 ) the scope of the IP 
Divestment Business is suitable to remove competition concerns in principle.  
                                                 
438  Form RM – Ice Protection - para.16.  
439  Form RM – Ice Protection – paras. 18 and 19.  
 
 
109 (545)  This is in line with the results of the market test, where the majority of 
respondents stated  that they consider the Commitments of 12 April 2018 as 
suitable to effectively remove any competition concerns raised by the 
Transaction in pneumatic ice protection440. 
(B) Viability and competitiveness of the IP Divestment Business of 
12 April 2018  
(546)  The Commission considers that the IP Divestment Business is a stand -alone 
business including all the essential functions and personnel to be viable and 
competitive from the perspective of research and development, production, 
marketing and sales, logistics  and relations with suppliers and customers. SMR 
Technologies was a stand -alone business until its acquisition by B/E Aerospace 
in 1998 and it continued to operate as such within B/E Aerospace and now 
within Rockwell Collins since B/E Aerospace's acquisiti on by Rockwell Collins 
in 2017 . 
(547)  Notably the Commission considers that the carve -out of the WEMAC 
production line has no negative impact on the viability of the Divestment 
Business. As explained in paragraph (521) , the WEMAC product line is 
unrelated to ice protection systems.  
(548)  From a financial perspective, t he IP Divestment Business generated a turnover 
of […] in 2017 and achieved an EBITDA of USD […] in 2017. In 201 7, the 
EBITDA margin was […]%. In 2017, SMR Technologies with the inclusion of 
the WEMAC product line  generated a turnover of […] in 2017 and achieved an 
EBITDA of […], representing a margin of […]%. The exclusion of the 
WEMAC product line therefore has a […] impact  on the viability of the 
Divestment Business. […]. 
(549)  The market test resulted in the majority of respondents stating that the 
Divestment Business would be viable and competitive both immediately as well 
as in the next five years441. No specific comme nts have been expressed 
regarding the carve -out of the WEMAC product line  planned by Rockwell 
Collins  
(550)  Apart of the need to clarify certain aspects of the scope of the Divestment 
Business proposed on 12 April 2018 – that clarification was subsequently 
provi ded by the Parties442 - the market test revealed that respondents stress the 
importance of the distribution network for the Divestment Business' products443. 
(551)  The aspects raised by the respondents were subsequently addressed by the 
Parties in further submissions according to which all elements of the distribution 
network being owned by Rockwell Collins shall be sold to the potential 
Purchaser. The Parties furthe r explained that the distribution network is widely 
                                                 
440  See replies to question 25  of Questionnaire on Commitments . 
441  See replies to question  26 and 27 of Questionnaire on Commitments .  
442  These aspects related in to re-qualification and re -certification.  
443  See replies to question 26 and 27 of Questionnaire on Commitments . 
 
 
110 independent from Rockwell Collins and that also all related distribution 
agreements will be transferred to the potential Purchaser444.  
(C) Purchaser criteria  
(552)  Market test respondents stressed that the stronger the existing presence of the 
potential Purchaser is in the aerospace industry, the more it would foster the 
viability and competitiveness of the Divestment Business445. Several 
respondents already active in the aerospace industry have expressed interest in 
purchasing the IP Divestment Business.446 
(553)  The Parties took this into account by adjust ing the Commitments of 
12 April  2018  as described in paragraph (554)447. 
9.3.2.3.  Descripti on of the Final Commitments of 30 April  2018  
(554)  The Final Commitments of 30 April  2018 address the comments  stemming from 
the market test by inserting a further Purchaser criterion to ensure that the 
potential Purchaser has an existing presence in the aerospa ce industry.  
9.3.2.4.  Assessment of the Final Commitments of 30 April  2018  
(555)  The Commission considers that the Final Commitments fully address the 
comments  with respect to the Commitments of 12 April 2018 . 
9.3.3.  Oxygen Systems  
(556)  The Parties propose to divest UTC's  entire research programme in oxygen 
systems . Considering that the Commission raised serious doubts for  the removal 
of potential competition on Rockwell Collins 's oxygen systems  from UTC, the 
scope of the Divestment Business is suitable to remove competition conce rns in 
principle . 
(557)  This was confirmed in the market test where a majority of respondents  
mentioned  that a divestment of the oxygen programmes would enable a 
purchaser to take advantage of the proposed R&D projects to enter or expand its 
role in the market f or oxygen systems.  
(558)  The Commission considers that the Oxygen Divestment Business is likely to 
provide a suitable platform to run a viable oxygen business.  The Net Product 
Value (difference between the present value of cash inflows and the present 
value of c ash outflows over a period of time) until […] is […] at USD […] for 
both […] programmes.448 
(559)  In terms of viability, the majority of respondents considered the Divestment 
business  as viable to enable a suitable purchaser to enter or increase its market 
presence in oxygen systems, considering that it includes the IP necessary to pass 
                                                 
444  Form RM – Ice Protection – (new) para. 52.  
445  See replies to questio ns 40 and 40.1 of Questionnaire on Commitments . 
446  See replies to question 41 of Questionnaire on Commitments . 
447  Final Commitments  of 30 April 2018  – Ice Protection  – para. 16.  
448  See […], slide 20. 
 
 
111 the extensive qualification procedures in this area , as well as the […] having 
worked on the project.449 
(560)  Respondents to the market test have indicated a suitable purchaser should have  
customer credibility, financial and human capacity to de velop a research 
programme and industrial and engineering capabilities, in order to have proper 
incentives to bring the project forward in the same wa y as UTC. Some 
companies have expressed a prelimi nary interest in exploring acquisition of the 
Oxygen divestment business.450 
(561)  The inclusion of the upfront buyer clause in the remedies for oxygen systems 
enables  the Commission to conclude with a high degree of certainty that the 
divestment will be implemented and will remove any concern with regard to the 
identity of the potential purchaser and the effective disposal of the Oxygen 
Divestment Business.  
9.3.4.  Conclusion on the assessment of the proposed remedies  
(562)  For the reasons outlined above, the commitments entered into by the 
undertakings concerned are sufficient to eliminate the serious doubts as to the 
compatibility of the Transaction with the internal market.  
(563)  The co mmitments in sections B of the Annex es 2, 3 and 4 constitute conditions 
attached to this decision, as only through full compliance therewith can the 
structural changes in the relevant markets be achieved. The other commitments 
set out in the Annex es 2, 3 a nd 4  constitute obligations, as they concern the 
implementing steps which are necessary to achieve the modifications sought in a 
manner compatible with the internal market.  
(564)  In accordance with the distinction described in paragraph  (563)  as regards  
conditions and obligations, this Decision should be made conditional on the full 
compliance by the Parties with Section B of the THSA PC SP Final 
Commitments (including the Schedule of the THSA PC SP Final 
Commitments ), Section B of the IP Final Commitments (including the Schedule 
of the IP Final Commitments)  and Section B of the Oxygen Final Commitments 
(including the Schedule of the Oxygen  Final Commitments . All other sect ions of 
the THSA PC SP Final Commitments, the IP Final Commitments and the 
Oxygen Final Commitments should be obligations within the meaning of the 
merger Regulation. The full text of the Commitments is attached as an annex to 
this Decision and forms an in tegral par t thereof.  
                                                 
449  See replies to question 46 of Questionnaire on Commitments.  
450  See replies to question 56  of Questionnaire on Commitments . 
 
 
112 10. CONCLUSION  
(565)  For the above reasons, the Commission has decided not to oppose the notified 
operation as modified by the commitments and to declare it compatible with the 
internal market and with the functioning of the EEA Agreement, subject to full 
compliance with the conditions in section B of Annex 2  (including schedule), 
section B of Annex 3 (including Schedule) and Section B of Annex 4 (including 
schedule) and with the obligations contained in the other sections of the said 
annexe s. This decision is adopted in application of Article 6(1)(b) in conjunction 
with Article  6(2) of the Merger Regulation and Article 57 of the EEA 
Agreement.  
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Member of the Commission  
 
 
1 CASE M.8658 — UTC/RO CKWELL COLLINS  
ANNEX  1 
SHARES IN MARKETS AFFECTED DUE TO CONGLOMERATE LINKS  
 
 
Products where either of the parties has a market 
share above 30%  UTC  Rockwell 
Collins  BFE/
SFE 
SAASM GPS Receivers for Non -Aircraft Applications  
 [70-80]% SFE 
Cabin Management Systems  
 [40-50]% SFE 
Avionics (LCA)   [30-40]% SFE/
BFE 
Avionics (Business and regional jets)  
 [40-50]% SFE/
BFE 
Commercial Seats  
 [20-30]% BFE 
    First class seats  
 [80-90]% BFE 
Datalink (ARINC)  
 [40-50]% BFE 
Oxygen systems  
 [50-60]% SFE 
Food and Beverage  
 [70-80]% BFE /
SFE 
Tactical IMU  [30-40]% 
 SFE 
Electrical generation  [60-70]% 
 SFE 
      On large commercial aircraft  [80-90]% 
 SFE 
Evacuation systems  [30-40]% 
 SFE 
Ice detection  [80-90]% 
 SFE 
Air data probes  [60-70]% 
 SFE 
Air data Integrated System (Smartprobes)  [90-100]% 
 SFE 
Propeller systems  [50-60]% 
 SFE  
Helicopter engines  [40-50]% 
 SFE 
Regional/corporate jets engines  [50-60]%  SFE 
APU (overall)  [30-40]%  SFE 
APU (regional jet)  [60-70]% 
 SFE 
Nacelles  [40-50]% 
 SFE 
Helicopter actuation  [30-40]% 
 SFE 
Landing gears (only wheels and brakes)  [30-40]% 
 BFE /
SFE 
Cargo systems  [30-40]% 
 SFE 
 
  
  
  
 
 Annex 2  
April 30, 2018  
 
 
Case COMP/M.8658 – UTC / Rockwell Collins  
 
COMMITMENTS TO THE EUROPEAN COMMISSION  
 
 
Pursuant to Article 6(2) of Council Regulation (EC) No 139/2004 (the “ Merger  
Regulation ”), Rockwell Collins (including its Affiliated Undertakings, “ Rockwell 
Collins ”) and United Technologies Corporation ( including its Affiliated Undertakings, 
“UTC ”, and together with Rockwell Collins, the “ Parties ”) hereby enter into the 
following Commitments ( the “ Commitments ”) vis -à-vis the European Commission (the 
“Commission ”) with a view to rendering Rockwell Collins' acquisition by UTC (the 
“Transaction ”) compatible with the internal market and the functioning of the EEA 
Agreement.  
 
This text shall be interpreted in light of the Commission 's decision pursuant to 
Article  6(1)(b) of the Merger Regulation to declare the Transaction compatible with the 
internal market and the functioning of the EEA Agreement (the “ Decision ”), in the 
general framework of Eur opean Union law, in particular in light of the Merger 
Regulation, and by reference to the Commission Notice on remedies acceptable under 
Council Regulation (EC) No 139/2004 and unde r Commission Regulation (EC) 
No 802/2004 (the “ Remedies  Notice ”). 
 
The Sche dule and its Appendices form an integral part of the Commitments.  
 
Section A.  Definitions  
 
1. For the purposes of these Commitments, the following terms shall have the 
following meaning:  
 
 Affiliated Undertakings : undertakings controlled by the Parties, where by the 
notion of control shall be interpreted pursuant to Article 3 of the Merger 
Regulation and in light of the Commission Consolidated Jurisdictional Notice 
under Council Regulation (EC) No 139/2004 on the control of concentrations 
between undertakings ( the “ Consolidated Jurisdictional Notice ”). 
 
 Assets : the assets that are necessary to ensure the viability and 
competitiveness of the Divestment Business, and insofar as they are not 
specifically mentioned in the Schedule taking into account the identity and 
capabilities of the Purchaser, as indicated in Section B, paragraph 6 and as 
described in more detail in the Schedule.  
 
  
  
  
 
 
2  Closing : the transfer of the legal title to the Divestment Business to the 
Purchaser.  
 
 Closing Period : the later of the period of […] from the approval of the 
Purchaser and the terms of sale by the Commission or the obtaining of all 
required regulatory approvals prior to Closing.  
 
 Confidential Information : any business secrets, know -how, commercial 
information, or any other information o f a proprietary nature that is not in the 
public domain.  
 
 Conflict of Interest : any conflict of interest that impairs the Trustee's 
objectivity and independence in discharging its duties under the 
Commitments.  
 
 Divestment Business : the assets as defined in  Section B and in the Schedule 
which UTC and Rockwell Collins commit to divest.  
 
 Divestiture Trustee : one or more natural or legal person(s) who is / are 
approved by the Commission and appointed by Rockwell Collins and who has 
/ have received from Rockwell  Collins the exclusive Trustee Mandate to sell 
the Divestment Business to a Purchaser at no minimum price.  
 
 Effective Date : the date of adoption of the Decision.  
 
 First Divestiture Period : the period of […] from the Effective Date.  
 
 Hold Separate Manager : the person appointed by Rockwell Collins to 
manage the day -to-day operation of the Divestment Business under the 
supervision of the Monitoring Trustee.  
 
 Key Personnel: all personnel necessary to maintain the viability and 
competitiveness of the Divestment Business, as listed in the Schedule, 
including the Hold Separate Manager.  
 
 Monitoring Trustee : one or more natural or legal person(s) who is / are 
approved by the Commission and appointed by Rockwell Collins, and who 
has / have the duty to monitor Rockwell  Collins' compliance with the 
conditions and obligations attached to the Decision.  
 
 Parties : Rockwell Collins and UTC.  
 
  
  
  
 
 
3  Personnel : all staff currently employed by the Divestment Business, 
including staff seconded to the Divestment Business, shared personnel as well 
as the additional personnel listed in the Schedule.  
 
 Purchaser : the entity approved by the Commission as acquirer of the 
Divestment Business in accordance with the criteria set out in Section D.  
 
 Purchaser Criteria : the criteria laid down  in paragraph 16  of these 
Commitments that the Purchaser must fulfil in order to be approved by the 
Commission.  
 
 Rockwell Collins : Rockwell Collins, Inc., incorporated under the laws of the 
State of Delaware (U.S.), with its registered office at 400 Collin s Road N.E., 
Cedar Rapids, Iowa  52498, U.S., and its Affiliated Undertakings.  
 
 Schedule : the schedule to these Commitments describing more in detail the 
Divestment Business.  
 
 Trustee(s) : the Monitoring Trustee and / or the Divestiture Trustee as the case 
may be.  
 
 Trustee Divestiture Period : the period of […] from the end of the First 
Divestiture Period.  
 
 UTC : United Technologies Corporation, incorporated under the laws of the 
State of Delaware, United States, with its registered office at Corporation 
Trust Center, 1209 Orange Street, in the City of Wilmington, County of New 
Castle, Delaware, 19801, United States.  
  
  
  
 
 
4 Section B.  The commitment to divest and the Divestment Business  
 
 Commitment to divest  
 
2. In order to maintain effective competition, the Parties commit to divest, or 
procure the divestiture of, the Divestment Business by the end of the Trustee 
Divestiture Period to a Purchaser and on terms of sale approved by the 
Commission in accordance with the procedure described in paragraph 17  of these 
Commitm ents.  To carry out the divestiture, the Parties commit to find a 
Purchaser and to enter into a final binding sale and purchase agreement for the 
sale of the Divestment Business within the First Divestiture Period.  If the Parties 
have not entered into suc h an agreement at the end of the First Divestiture Period, 
the Parties shall grant the Divestiture Trustee an exclusive mandate to sell the 
Divestment Business in accordance with the procedure described in paragraph 29 
in the Trustee Divestiture Period.  
 
3. The Parties shall be deemed to have complied with this commitment if:  
 
(a) by the end of the Trustee Divestiture Period, Rockwell Collins or the 
Divestiture Trustee has entered into a final binding sale and purchase 
agreement and the Commission approves the pro posed purchaser and the 
terms of sale as being consistent with the Commitments in accordance with 
the procedure described in paragraph 16; and  
 
(b) the Closing of the sale of the Divestment Business to the Purchaser takes 
place within the Closing Period.  
 
4. In order to maintain the structural effect of the Commitments, the Parties shall, 
for a period of ten (10) years after Closing, not acquire, whether directly or 
indirectly, the possibility of exercising influence (as defined in paragraph 43 of 
the Remedies Not ice, footnote 3) over the whole or part of the Divestment 
Business, unless, following the submission of a reasoned request from the Parties 
showing good cause and accompanied by a report from the Monitoring Trustee 
(as provided in paragraph 43  of these Com mitments), the Commission finds that 
the structure of the market has changed to such an extent that the absence of 
influence over the Divestment Business is no longer necessary to render the 
Transaction compatible with the internal market.  
 
 Structure and definition of the Divestment Business  
 
5. The Divestment Business consists of the following Rockwell Collins' businesses:  
 
 The Trimmable Horizontal Stabilizer Actuators (" THSA ") business, 
which includes THSAs, legacy flap actuation, and nose wheel steering 
gear boxes;  
 
  
  
  
 
 
5  The P ilot Control Systems (" PCS") business, which includes center yokes, 
rudder brake pedal units, throttle quadrant assemblies, auto -throttles and 
control stand modules; and  
 
 The Special Products business , which includes inter alia fuel sticks, waste 
water drain valves, aircraft ground support couplings, and ground service 
couplings.  
 
6. The Divestment Business consists of Rockwell Collins' global THSA, PCS, and 
Special Products businesses.  The legal and functional structure of the Di vestment 
Business as operated to date is described in the Schedule.  The Divestment 
Business, described in more detail in the Schedule,  includes all assets and staff 
that contribute to the current operation or are necessary to ensure the viability and 
competitiveness of the Divestment Business,  in particular:  
 
(a) all tangible and intangible assets (including intellectual property rights);  
 
(b) all licenses, permits and authorizations issued by any governmental 
organisation for the benefit of the Divestment Business;  
 
(c) all contracts, leases, commitments and customer orders of the Divestment 
Business; all customer, credit and other records of the Divestment Business; 
and 
 
(d) the Personnel.  
 
7. For the avoidance of doubt, the Divestment Business will not include any 
tangible or intangible assets that are used either exclusively or predominantly for 
activities other than those related to, and that are not necessary for the viability 
and competitiveness of, Rockwell Collins' THSA, PCS, and Special Products 
businesses.  
 
Section C.  Related commitments  
 
 Preservation of viability, marketability and competitiveness  
 
8. From the Effective Date until Closing, Rockwell Collins shall preserve or procure 
the preservation of the economic viability, marketability and competitiveness of 
the Divestment Business, in accordance with good business practice, and shall 
minimise as far as possible any risk of loss of competitive potential o f the 
Divestment Business.  In particular Rockwell Collins undertakes:  
 
(a) not to carry out any action that might have a significant adverse impact on the 
value, management or competitiveness of the Divestment Business or that 
might alter the nature and scope  of activity, or the industrial or commercial 
strategy or the investment policy of the Divestment Business;  
  
  
  
  
 
 
6 (b) to make available, or procure to make available, sufficient resources for the 
development of the Divestment Business, on the basis and continuatio n of the 
existing business plans;  
 
(c) to take all reasonable steps, or procure that all reasonable steps are being 
taken, including appropriate incentive schemes (based on industry practice), 
to encourage all Key Personnel to remain with the Divestment Busine ss, and 
not to solicit or move any Key Personnel to Rockwell Collins' remaining 
businesses.  Where, nevertheless, individual members of the Key Personnel 
exceptionally leave the Divestment Business, Rockwell Collins shall provide 
a reasoned proposal to rep lace the person or persons concerned to the 
Commission and the Monitoring Trustee.  Rockwell Collins must be able to 
demonstrate to the Commission that the replacement is well suited to carry 
out the functions exercised by those individual members of the K ey 
Personnel.  The replacement shall take place under the supervision of the 
Monitoring Trustee, who shall report to the Commission.  
 
 Hold -separate obligations  
 
9. The Parties commit, from the Effective Date until Closing, to keep the 
Divestment Business sep arate from the business(es) they are retaining and to 
ensure that unless explicitly permitted under these Commitments: (i) management 
and staff of the business(es) retained by the Parties  have no involvement in the 
Divestment Business; (ii) the Key Personn el and Personnel of the Divestment 
Business have no involvement in any business retained by the Parties and do not 
report to any individual outside the Divestment Business.  
 
10. Until Closing, Rockwell Collins shall assist the Monitoring Trustee in ensuring 
that the Divestment Business is managed as a distinct and saleable entity separate 
from the businesses which Rockwell Collins is retaining.  Immediately after the 
adoption of the Decision, Rockwell Collins shall appoint a Hold Separate 
Manager.  The Hold Separate Manager, who shall be part of the Key Personnel, 
shall manage the Divestment Business independently and in the best interest of 
the business with a view to ensuring its continued economic viability, 
marketability and competitiveness and its independence from the businesses 
retained by Rockwell Collins.  The Hold Separate Manager shall closely 
cooperate with and report to the Monitoring Trustee and, if applicable, the 
Divestiture Trustee.  Any replaceme nt of the Hold Separate Manager shall be 
subject to the procedure laid down in paragraph 8(c) of these Commitments.  The 
Commission may, after having heard Rockwell Collins, require Rockwell Collins 
to replace the Hold Separate Manager.  
 
 Ring -fencing  
 
11. Rockwell Collins shall implement, or procure to implement, all necessary 
measures to ensure that it does not, after the Effective Date, obtain any 
  
  
  
 
 
7 Confidential Information relating to the Divestment Business.  Any such 
Confidential Information obtained by Roc kwell Collins before the Effective Date 
will be eliminated and not be used by Rockwell Collins.  This includes measures 
vis-à-vis Rockwell Collins' appointees on the supervisory board and/or board of 
directors of the Divestment Business.  In particular, th e participation of the 
Divestment Business in any central information technology network shall be 
severed to the extent possible, without compromising the viability of the 
Divestment Business.  Rockwell Collins may obtain or keep information relating 
to th e Divestment Business which is reasonably necessary for the divestiture of 
the Divestment Business or the disclosure of which to Rockwell Collins is 
required by law.  
 
 Non-solicitation clause  
 
12. The Parties undertake, subject to customary limitations, not to solicit, and to 
procure that Affiliated Undertakings do not solicit, the Key Personnel transferred 
with the Divestment Business for a period of […] after Closing.  
 
 Due diligence  
 
13. In order to enable potential purchasers to carry out a reasonable due diligence of 
the Divestment Business, Rockwell Collins shall, subject to customary 
confidentiality assurances and dependent on the stage of the divestiture process:  
 
(a) provide to potential  purchasers sufficient information as regards the 
Divestment Business; and  
 
(b) provide to potential purchasers sufficient information relating to the Personnel 
and allow them reasonable access to the Personnel.  
 
 Reporting  
 
14. Rockwell Collins shall submit written reports in English on potential purchasers 
of the Divestment Business and developments in the negotiations with such 
potential purchasers to the Commission and the Monitoring Trustee no later than 
ten (10) days after the end of every month followin g the Effective Date (or 
otherwise at the Commission's request).  Rockwell Collins shall submit a list of 
all potential purchasers having expressed interest in acquiring the Divestment 
Business to the Commission at each and every stage of the divestiture p rocess, as 
well as a copy of all the offers made by potential purchasers within five days of 
their receipt.  
 
15. Rockwell Collins shall inform the Commission and the Monitoring Trustee on the 
preparation of the data room documentation and the due diligence pro cedure and 
shall submit a copy of any information memorandum to the Commission and the 
Monitoring Trustee before sending the memorandum out to potential purchasers.  
 
  
  
  
 
 
8 Section D.  The Purchaser  
 
16. In order to be approved by the Commission, the Purchaser must fu lfil the 
following criteria:  
 
(a) The Purchaser shall be independent of and unconnected to the Parties and 
their Affiliated Undertakings (this being assessed having regard to the 
situation following the divestiture);  
 
(b) The Purchaser shall have the financial r esources, proven expertise and 
incentive to maintain and develop the Divestment Business as a viable and 
active competitive force in competition with the Parties and other 
competitors;  
 
(c) The Purchaser shall have an existing presence in the aerospace industr y, and 
shall have existing relationships with major aircraft manufacturers;  
 
(d) The acquisition of the Divestment Business by the Purchaser must neither be 
likely to create, in light of the information available to the Commission, prima 
facie  competition conc erns nor give rise to a risk that the implementation of 
the Commitments will be delayed.  In particular, the Purchaser must 
reasonably be expected to obtain all necessary approvals from the relevant 
regulatory authorities for the acquisition of the Divestm ent Business.  
 
17. The final binding sale and purchase agreement (as well as ancillary agreements) 
relating to the divestment of the Divestment Business shall be conditional on the 
Commission's approval.  When Rockwell Collins has reached an agreement with 
a purchaser, it shall submit a fully documented and reasoned proposal, including a 
copy of the final agreement(s), within one (1) week to the Commission and the 
Monitoring Trustee.  Rockwell Collins must be able to demonstrate to the 
Commission that the purch aser fulfils the Purchaser Criteria and that the 
Divestment Business is being sold in a manner consistent with the Commission's 
Decision and the Commitments.  For the approval, the Commission shall verify 
that the purchaser fulfils the Purchaser Criteria a nd that the Divestment Business 
is being sold in a manner consistent with the Commitments including their 
objective to bring about a lasting structural change in the market.  The 
Commission may approve the sale of the Divestment Business without one or 
more Assets or parts of the Personnel, or by substituting one or more Assets or 
parts of the Personnel with one or more different assets or different personnel, if 
this does not affect the viability and competitiveness of the Divestment Business 
after the sal e, taking account of the proposed purchaser.  
 
  
  
  
 
 
9 Section E.  Trustee  
 
I. Appointment procedure  
 
18. Rockwell Collins shall appoint a Monitoring Trustee to carry out the functions 
specified in these Commitments for a Monitoring Trustee.  Rockwell Collins 
commits not to close the Transaction before the appointment of a Monitoring 
Trustee.  
 
19. If Rockwell Collins has not entered into a binding sale and purchase agreement 
regarding the Divestment Business one (1) month before the end of the First 
Divestiture Period or i f the Commission has rejected a purchaser proposed by 
Rockwell Collins at that time or thereafter, Rockwell Collins shall appoint a 
Divestiture Trustee.  The appointment of the Divestiture Trustee shall take effect 
upon the commencement of the Trustee Divestiture Period.  
 
20. The Trustee shall:  
 
(i) at the time of appointment, be independent of the Parties;  
 
(ii) possess the necessary qualifications to carry out its mandate, for example 
have sufficient relevant experience as an investment banker or consultant or 
auditor; and  
 
(iii) neither have nor become exposed to a Conflict of Interest.  
 
21. The Trustee shall be remunerated by Rockw ell Collins in a way that does not 
impede the independent and effective fulfilment of its mandate.  In particular, 
where the remuneration package of a Divestiture Trustee includes a success 
premium linked to the final sale value of the Divestment Business,  such success 
premium may only be earned if the divestiture takes place within the Trustee 
Divestiture Period.  
 
  
  
  
 
 
10  Proposal by Rockwell Collins  
 
22. No later than two (2) weeks after the Effective Date, Rockwell Collins shall 
submit the name or names of one or more natural or legal persons whom 
Rockwell Collins proposes to appoint as the Monitoring Trustee to the 
Commission for approval.  No later than one (1) month before the end of the First 
Divestiture Period or on req uest by the Commission, Rockwell Collins shall 
submit a list of one (1) or more persons whom Rockwell Collins proposes to 
appoint as Divestiture Trustee to the Commission for approval.  The proposal 
shall contain sufficient information for the Commission t o verify that the person 
or persons proposed as Trustee fulfil the requirements set out in paragraph 20  and 
shall include:  
(a) the full terms of the proposed mandate, which shall include all provisions 
necessary to enable the Trustee to fulfil its duties unde r these Commitments;  
 
(b) the outline of a work plan which describes how the Trustee intends to carry 
out its assigned tasks; and  
 
(c) an indication whether the proposed Trustee is to act as both Monitoring 
Trustee and Divestiture Trustee or whether different tru stees are proposed for 
the two functions.  
 
 Approval or rejection by the Commission  
 
23. The Commission shall have the discretion to approve or reject the proposed 
Trustee(s)  and to approve the proposed mandate subject to any modifications it 
deems necessary f or the Trustee to fulfil its obligations.  If only one (1) name is 
approved, Rockwell Collins shall appoint or cause to be appointed the person or 
persons concerned as Trustee, in accordance with the mandate approved by the 
Commission.  If more than one (1 ) name is approved, Rockwell Collins shall be 
free to choose the Trustee to be appointed from among the names approved.  The 
Trustee shall be appointed within one (1) week of the Commission’s approval, in 
accordance with the mandate approved by the Commiss ion. 
 
 New proposal by Rockwell Collins  
 
24. If all the proposed Trustees are rejected, Rockwell Collins shall submit the names 
of at least two (2) more natural or legal persons within one (1) week of being 
informed of the rejection, in accordance with paragra phs 18  and 23  of these 
Commitments.  
 
 Trustee nominated by the Commission  
 
25. If all further proposed Trustees are rejected by the Commission, the Commission 
shall nominate a Trustee, whom Rockwell Collins shall appoint, or cause to be 
appointed, in accordance with a Trustee mandate approved by the Commission.  
  
  
  
 
 
11  
II. Functions of the Trustee  
 
26. The Trustee shall assume its specified duties and obligations in order to ensure 
compliance with the Commitments.  The Commission may, on its own initiative 
or at the request of the Trustee or Rockwell Collins , give any orders or 
instructions to the Truste e in order to ensure compliance with the conditions and 
obligations attached to the Decision.   
 
 Duties and obligations of the Monitoring Trustee  
 
27. The Monitoring Trustee shall:  
 
(i) propose in its first report to the Commission a detailed work plan describin g how 
it intends to monitor compliance with the obligations and conditions attached to 
the Decision.  
 
(ii) oversee, in close co -operation with the Hold Separate Manager, the on -going 
management of the Divestment Business with a view to ensuring its continued 
economic viability, marketability and competitiveness and monitor compliance by 
Rockwell Collins with the conditions and obligations attached to the Decision.  
To that end the Monitoring Trustee shall:  
 
(a) monitor the preservation of the economic viability, marketability and 
competitiveness of the Divestment Business, and the keeping separate of the 
Divestment Business from the businesses retained by Rockwell Collins , in 
accordance with paragraphs 8  and 9  of these Commitments;  
 
(b) supervise the management of the Divestment Business, in accordance with 
paragraph 10  of these Commitments;  
 
(c) with respect to Confidential Information:  
 
 determine all necessary measures to ensure that Rockwell Collins does 
not after the  Effective Date obtain any Confidential Information relating 
to the Divestment Business,  
 
 in particular strive for the severing of the Divestment Business' 
participation in a central information technology network to the extent 
possible, without compromis ing the viability of the Divestment 
Business,  
 
 make sure that any Confidential Information relating to the Divestment 
Business obtained by Rockwell Collins before the Effective Date is 
eliminated and will not be used by Rockwell Collins , and  
  
  
  
 
 
12  
 decide whet her such information may be disclosed to or kept by 
Rockwell Collins as the disclosure is reasonably necessary to allow 
Rockwell Collins to carry out the divestiture or as the disclosure is 
required by law;  
 
(d) monitor the splitting of assets and the allocation of Personnel between the 
Divestment Business and Rockwell Collins ;  
 
(iii)propose to Rockwell Collins such measures as the Monitoring Trustee considers 
necessary to ensure Rockwell Collins' compliance with the conditions and 
obligations attached to the Decision, in particular the maintenance of the full 
economic viability, marketability or competitiveness of the Divestment Business, 
the holding separate of the Divestment Business and the non -disclosure of 
compet itively sensitive information;  
 
(iv) review and assess potential purchasers as well as the progress of the divestiture 
process and verify that, dependent on the stage of the divestiture process:  
 
(a) potential purchasers receive sufficient and correct information r elating to the 
Divestment Business and the Personnel in particular by reviewing, if 
available, the data room documentation, the information memorandum and 
the due diligence process, and  
 
(b) potential purchasers are granted reasonable access to the Personnel;  
 
(v) act as a contact point for any requests by third parties, in particular potential 
purchasers, in relation to the Commitments;  
 
(vi) provide to the Commission, sending the Parties a non -confidential copy at the 
same time, a written report within fifteen (15) days after the end of every month 
that shall cover the operation and management of the Divestment Business as 
well as the splitting of assets and the allocation of Personnel so that the 
Commission can assess whether the Divestment Business is held in a manner 
consistent with the Commitments and the progress of the divestiture process as 
well as potential purchasers;  
 
(vii) promptly report in writing to the Commission, sending the Part ies a non -
confidential copy at the same time, if it concludes on reasonable grounds that 
Rockwell Collins is failing to comply with these Commitments;  
 
(viii) within one (1) week after receipt of the documented proposal referred to in 
paragraph  17 of these Commit ments, submit to the Commission, sending the 
Parties a non -confidential copy at the same time, a reasoned opinion as to the 
suitability and independence of the proposed purchaser and the viability of the 
  
  
  
 
 
13 Divestment Business after the sale and as to whether  the Divestment Business is 
sold in a manner consistent with the conditions and obligations attached to the 
Decision, in particular, if relevant, whether the sale of the Divestment Business 
without one or more Assets or one or more Key Personnel affects th e viability of 
the Divestment Business after the sale, taking account of the proposed purchaser;  
 
(ix) assume the other functions assigned to the Monitoring Trustee under the 
conditions and obligations attached to the Decision.  
 
28. If the Monitoring and Divestiture Trustee are not the same legal or natural 
persons, the Monitoring Trustee and the Divestiture Trustee shall cooperate 
closely with each other during and for the purpose of the preparation of the 
Trustee Divestiture Period in order to facilitate  each other's tasks.  
 
 Duties and obligations of the Divestiture Trustee  
 
29. Within the Trustee Divestiture Period, the Divestiture Trustee shall sell at no 
minimum price the Divestment Business to a purchaser, provided that the 
Commission has approved both t he purchaser and the final binding sale and 
purchase agreement (and ancillary agreements) as in line with the Commission's 
Decision and the Commitments in accordance with paragraphs 16 and 17 of these 
Commitments.  The Divestiture Trustee shall include in the sale and purchase 
agreement (as well as in any ancillary agreements) such terms and conditions as it 
considers appropriate for an expedient sale in the Trustee Divestiture Period.  In 
particular, the Divestiture Trustee may include in the sale and purc hase agreement 
such customary representations and warranties and indemnities as are reasonably 
required to affect the sale.  The Divestiture Trustee shall protect the legitimate 
financial interests of Rockwell Collins , subject to Rockwell Collins' uncondit ional 
obligation to divest at no minimum price in the Trustee Divestiture Period.  
 
30. In the Trustee Divestiture Period (or otherwise at the Commission's request), the 
Divestiture Trustee shall provide the Commission with a comprehensive monthly 
report writt en in English on the progress of the divestiture process.  Such reports 
shall be submitted within fifteen (15) days after the end of every month with a 
simultaneous copy to the Monitoring Trustee and a non -confidential  copy to the 
Parties . 
 
III. Duties and  obligations of Rockwell Collins  
 
31. Rockwell Collins shall provide and shall cause its advisors to provide the Trustee 
with all such co -operation, assistance and information as the Trustee may 
reasonably require to perform its tasks.  The Trustee shall have  full and complete 
access to any of Rockwell Collins' or the Divestment Business' books, records, 
documents, management or other personnel, facilities, sites and technical 
information necessary for fulfilling its duties under the Commitments and 
Rockwell Collins and the Divestment Business shall provide the Trustee upon 
request with copies of any document.  Rockwell Collins and the Divestment 
  
  
  
 
 
14 Business shall make available to the Trustee one or more offices on their premises 
and shall be available for meetings in order to provide the Trustee with all 
information necessary for the performance of its tasks.  
 
32. Rockwell Collins shall provide the Monitoring Trustee with all managerial and 
administrative support that it may reasonably request on behalf of the 
management of the Divestment Business.  This shall include all administrative 
support functions relating to the Divestment Business which are currently carried 
out at headquarters level.  Rockwell Collins shall provide and shall cause its 
advisors to p rovide the Monitoring Trustee, on request, with the information 
submitted to potential purchasers, in particular give the Monitoring Trustee access 
to the data room documentation and all other information granted to potential 
purchasers in the due diligenc e procedure.  Rockwell Collins shall inform the 
Monitoring Trustee on possible purchasers, submit lists of potential purchasers at 
each stage of the selection process, including the offers made by potential 
purchasers at those stages, and keep the Monitori ng Trustee informed of all 
developments in the divestiture process.  
 
33. Rockwell Collins shall grant or procure Affiliated Undertakings to grant 
comprehensive powers of attorney, duly executed, to the Divestiture Trustee to 
effect the sale (including ancillary agreements), the Closing and all actions and 
declarations which the Divestiture Trus tee considers necessary or appropriate to 
achieve the sale and the Closing, including the appointment of advisors to assist 
with the sale process.  Upon request of the Divestiture Trustee, Rockwell Collins 
shall cause the documents required for effecting t he sale and the Closing to be 
duly executed.  
 
34. Rockwell Collins shall indemnify the Trustee and its employees and agents (each 
an “Indemnified Party ”) and hold each Indemnified Party harmless against, and 
hereby agrees that an Indemnified Party shall have n o liability to Rockwell 
Collins for, any liabilities arising out of the performance of the Trustee’s duties 
under the Commitments, except to the extent that such liabilities result from the 
wilful default, recklessness, gross negligence or bad faith of the  Trustee, its 
employees, agents or advisors.  
 
35. At the expense of Rockwell Collins , the Trustee may appoint advisors (in 
particular for corporate finance or legal advice), subject to Rockwell Collins' 
approval (this approval not to be unreasonably withheld o r delayed) if the Trustee 
considers the appointment of such advisors necessary or appropriate for the 
performance of its duties and obligations under the Mandate, provided that any 
fees and other expenses incurred by the Trustee are reasonable.  Should Rockwell 
Collins refuse to approve the advisors proposed by the Trustee the Commission 
may approve the appointment of such advisors instead, after having heard 
Rockwell Collins .  Only the Trustee shall be entitled to issue instructions to the 
advisors. Paragr aph 34 of these Commitments shall apply mutatis mutandis .  In 
the Trustee Divestiture Period, the Divestiture Trustee may use advisors who 
served Rockwell Collins during the Divestiture Period if the Divestiture Trustee 
considers this in the best interest of an expedient sale.  
  
  
  
 
 
15  
36. Rockwell Collins agrees that the Commission may share Confidential 
Information proprietary to Rockwell Collins with the Trustee.  The Trustee shall 
not disclose such information and the principles contained in Article 17 (1) and 
(2) of the Merger Regulation apply mutatis mutandis .  
 
37. Rockwell Collins agrees that the contact details of the Monitoring Trustee are 
published on the website of the Commission's Directorate -General for 
Competition and they shall inform interested third partie s, in particular any 
potential purchasers, of the identity and the tasks of the Monitoring Trustee.  
 
38. For a period of ten (10) years from the Effective Date the Commission may 
request all information from the Parties that is reasonably necessary to monitor 
the effective implementation of these Commitments.  
 
IV. Replacement, discharge and reappointment of the Trustee  
 
39. If the Trustee ceases to perform its functions under the Commitments or for any 
other good cause, including the exposure of the Trustee to a Co nflict of Interest:  
 
(a) the Commission may, after hearing the Trustee and Rockwell Collins , require 
Rockwell Collins to replace the Trustee; or  
  
(b) Rockwell Collins may, with the prior approval of the Commission, replace the 
Trustee.  
 
40. If the Trustee is removed  according to paragraph 39 of these Commitments, the 
Trustee may be required to continue in its function until a new Trustee is in place 
to whom the Trustee has effected a full hand over of all relevant information. The 
new Trustee shall be appointed in ac cordance with the procedure referred to in 
paragraphs 18 -25 of these Commitments.  
 
41. Unless removed according to paragraph 39 of these Commitments, the Trustee 
shall cease to act as Trustee only after the Commission has discharged it from its 
duties after al l the Commitments with which the Trustee has been entrusted have 
been implemented.  However, the Commission may at any time require the 
reappointment of the Monitoring Trustee if it subsequently appears that the 
relevant remedies might not have been fully and properly implemented.  
 
 
Section F.  The review clause  
 
42. The Commission may extend the time periods foreseen in the Commitments in 
response to a request from the Parties or, in appropriate cases, on its own 
initiative.  Where the Parties request an extens ion of a time period, it shall submit 
a reasoned request to the Commission no later than one (1) month before the 
expiry of that period, showing good cause.   This request shall be accompanied by 
  
  
  
 
 
16 a report from the Monitoring Trustee, who shall, at the same time send a non -
confidential copy of the report to the Parties .  Only in exceptional circumstances 
shall the Parties be entitled to request an extension within the last month of any 
period.  
 
43. The Commission may further, in response to a reasoned request fro m the Parties 
showing good cause waive, modify or substitute, in exceptional circumstances, 
one or more of the undertakings in these Commitments.  This request shall be 
accompanied by a report from the Monitoring Trustee, who shall, at the same 
time send a  non-confidential copy of the report to the Parties .  The request shall 
not have the effect of suspending the application of the undertaking and, in 
particular, of suspending the expiry of any time period in which the undertaking 
has to be complied with.  
 
Section G.  Entry into force  
 
44. The Commitments shall take effect upon the date of adoption of the Decision.  
 
[Signed]  
  
  
  
 
 
17 SCHEDULE  
 
1. The proposed Commitments offered by Rockwell Collins consist of the 
divestiture to the Purchaser of Rockwell Collins' global: (i) Trimmable Horizontal 
Stabilizer Actuators (" THSA ") business, which includes THSAs, legacy flap 
actuation, and nose wheel steering gear boxes; (ii) Pilot Control Systems (" PCS ") 
business, which includes center yokes, rudder brake pedal units, throttle q uadrant 
assemblies, auto -throttles and control stand modules; and (iii) Special Products 
business, which includes inter alia  fuel sticks, waste water drain valves, aircraft 
ground support couplings, and ground service couplings.  These businesses, as 
defin ed in this Schedule, are hereinafter referred to as the " Divestment 
Business ".  If there is any asset or personnel which is not covered by this 
Schedule but which is both used (exclusively or not) in the Divestment Business 
and necessary for the continued viability and competitiveness of the Divestment 
Business, that asset or adequate substitute will be offered to potential purchasers.  
 
2. The Divestment Business is comprised of the following tangible assets:  
 
(a) Rockwell Collins' rights to use:  
 
i. Buildings […]  (United States);  
 
ii. Building […] (United States); and  
 
iii. Buildings […] (Mexico) . 
 
Should the Purchaser so choose, and at the Purchaser's sole discretion, 
Rockwell Collins will:  
 
iv. Retain  Building […], and transfer the requisite assets to Building 
[…]; 
 
v. Retain  Building […], and transfer the requisite assets to a location 
at the Purchaser's discretion; and  
 
vi. Retain Building […], and transfer the requisite assets to Building 
[…]. 
 
(b) The inventory of finished goods, components, sub -components, and raw 
materials to the extent related to Rockwell Collins' THSA, PCS, and 
Special Products businesses, and owned by Rockwell Collins as of the 
date of Closing, as well as all rights to market and sell such inventory (to 
the extent applicable);  
 
(c) The manufacturing, testing and  servicing equipment and machinery 
owned or licensed by Rockwell Collins and used in the manufacturing and 
  
  
  
 
 
18 testing of Rockwell Collins' THSA, PCS and Special Products.  A non -
exhaustive list is included at  Appendix 1  to the Commitments.  This 
includes all documentation (for example, machine records, design history 
files and technical files) related to this manufacturing, testing and 
servicing equipment and machinery ;  
 
(d) All business records, books of account, financial records, and tax records 
to the extent related to Rockwell Collins' THSA, PCS, and Special 
Products businesses;  all information, including customer and supplier 
lists and details, product and pricing information, account histories, 
research data and commercial data to the extent relating to Ro ckwell 
Collins' THSA, PCS, and Special Products.  
 
(e) To the extent applicable, all sales and promotional literature and other 
sales -related materials to the extent used or held for use for Rockwell 
Collins' THSA, PCS, and Special Products businesses.  
 
(f) For the  avoidance of doubt, the Divestment Business will not include any 
tangible assets that are used either exclusively or predominantly for 
activities other than those related to, and that are not necessary for the 
viability and competitiveness of, Rockwell Co llins' THSA, PCS, and 
Special Products businesses.  
 
3. The Divestment Business includes the following personnel:  
 
Subject to the applicable local employment legislation, Rockwell Collins commits 
to transfer to the Purchaser the following personnel:  
 
i. The Key  Personnel; and  
 
ii. The Personnel.  
 
An exhaustive list of the Key Personnel, and the Personnel is enclosed herewith at 
Appendix 2 . 
 
4. The Divestment Business is comprised of the following intangible assets:  
 
(a) Patents. Rockwell  Collins will transfer or license the patents and 
applications, including the rights thereto, owned by Rockwell Collins that 
are used by Rockwell Collins in the manufacturing, sale and servicing of 
its THSA, PCS, and Special Products businesses.  A non -exha ustive list of 
the patents and applications to be transferred is included at Appendix 3  to 
the Commitments.  
 
  
  
  
 
 
19 (b) Know -how. Rockwell Collins will transfer the trade secrets, confidential 
and/or proprietary know -how, confidential customer data, or other 
confiden tial information and other intellectual property owned by 
Rockwell Collins that are used by Rockwell Collins in Rockwell Collins' 
THSA, PCS, and Special Products businesses.  
 
(c) Trademarks. Rockwell Collins will transfer the trademarks owned by 
Rockwell Colli ns, that are used by Rockwell Collins in the manufacturing 
of its THSA, PCS, and Special Products businesses.  An exhaustive list is 
included at Appendix 3  to the Commitments.  
 
(d) Other intangible assets:   
 
The Divestment Business will also include:  
 
i. Any co ntracts related to Rockwell Collins' THSA, PCS, and/or 
Special Products businesses (or are otherwise necessary to operate 
the Divestment Business) entered into by Rockwell Collins prior 
to Closing.  
 
ii. In order to confer the benefit of such contracts to the Purchaser, 
Rockwell Collins will use its best efforts to transfer (in whole or in 
part) any sales, sourcing, and supply agreements to the extent they 
relate to the manufacture and/or commercialization  of Rockwell 
Collins THSA, PCS, and/or Special Products businesses.  An non -
exhaustive list of such customers and suppliers is included at 
Appendix 4  to the Commitments.  
 
iii. All licenses, permits and authorizations issued by any 
governmental organization to t he extent transferable under 
applicable legal requirements, and the Purchaser and its affiliates 
do not own substantially similar licenses, permits and 
authorizations.  
 
(e) For the avoidance of doubt, the Divestment Business will not include any 
intangible ass ets that are used exclusively or predominantly for activities 
other than those related to, and that are not necessary for the viability and 
competitiveness of, Rockwell Collins' THSA, PCS, and Special Products 
businesses.  
 
Transitional agreements  
 
5. The Part ies will enter into any necessary transitional agreements with the 
Purchaser (covering, depending on the Purchaser's profile and preferences, inter 
alia IT, HR, aftermarket and spare parts, purchasing, contract support, 
  
  
  
 
 
20 manufacturing assistance etc.) to ef fectuate the move of the assets described 
herein to the Purchaser as quickly as possible.  
 
* * *  
 
 
Appendices 1 -4 […]  
 
  
  
  
 
 Annex 3  
April 30, 2018  
 
 
Case COMP/M.8658 – UTC / Rockwell Collins  
 
COMMITMENTS TO THE EUROPEAN COMMISSION  
 
 
Pursuant to Article 6(2) of Council Regulation (EC) No 139/2004 (the “ Merger  
Regulation ”), Rockwell Collins (including its Affiliated Undertakings, “ Rockwell Collins ”) 
and United Technologies Corpo ration ( including its Affiliated Undertakings, “UTC ”, and 
together with Rockwell Collins, the “ Parties ”) hereby enter into the following Commitments 
(the “ Commitments ”) vis -à-vis the European Commission (the “ Commission ”) with a view 
to rendering Rockwell Collins' acquisition by UTC (the “ Transaction ”) compatible with the 
internal market and the functioning of the EEA Agreement.  
 
This text shall be interpreted in light of the Commission's decision pursuant to Article 6(1)(b) 
of the Merger Regulation to declare the Transaction compatible with the internal market and 
the functioning of the EEA Agreement (the “ Decision ”), in the general framework of 
European Union law, in particular in light of the Merger Regulation, and by reference to the 
Commission Notic e on remedies acceptable under Council Regulation (EC) No 139/2004 and 
under Commission Regulation (EC) No 802/2004 (the “ Remedies  Notice ”). 
 
The Schedule and its Appendices form an integral part of the Commitments.  
 
Section A.  Definitions  
 
1. For the purpos es of these Commitments, the following terms shall have the following 
meaning:  
 
 Affiliated Undertakings : undertakings controlled by the Parties, whereby the 
notion of control shall be interpreted pursuant to Article 3 of the Merger 
Regulation and in light of the Commission Consolidated Jurisdictional Notice 
under Council Regulation (EC) No 139/2004 on the control of concentrations 
between undertakings (the “ Consolidated Jurisdictional Notice ”). 
 
 Assets : the assets that are necessary to ensure the viability and competitiveness of 
the Divestment Business, and insofar as they are not specifically mentioned in the 
Schedule taking into account the identity and capabilities of the Purchaser, as 
indicated in Section B, paragraph 6 and as described in more detail in  the 
Schedule.  
 
 Closing : the transfer of the legal title to the Divestment Business to the Purchaser.  
 
  
  
  
 
2  Closing Period : the later of the period of […] from the approval of the Purchaser 
and the terms of sale by the Commission or the obtaining of all require d 
regulatory approvals prior to Closing.  
 
 Confidential Information : any business secrets, know -how, commercial 
information, or any other information of a proprietary nature that is not in the 
public domain.  
 
 Conflict of Interest : any conflict of interest t hat impairs the Trustee's objectivity 
and independence in discharging its duties under the Commitments.  
 
 Divestment Business : the assets as defined in Section B and in the Schedule 
which UTC and Rockwell Collins commit to divest.  
 
 Divestiture Trustee : one or more natural or legal person(s) who is / are approved 
by the Commission and appointed by Rockwell Collins and who has / have 
received from Rockwell Collins the exclusive Trustee Mandate to sell the 
Divestment Business to a Purchaser at no minimum price.  
 
 Effective Date : the date of adoption of the Decision.  
 
 First Divestiture Period : the period of […] from the Effective Date.  
 
 Hold Separate Manager : the person appointed by Rockwell Collins to manage 
the day -to-day operation of the Divestment Business und er the supervision of the 
Monitoring Trustee.  
 
 Key Personnel: all personnel necessary to maintain the viability and 
competitiveness of the Divestment Business, as listed in the Schedule, including 
the Hold Separate Manager.  
 
 Monitoring Trustee : one or more  natural or legal person(s) who is / are approved 
by the Commission and appointed by Rockwell Collins, and who has / have the 
duty to monitor Rockwell Collins' compliance with the conditions and obligations 
attached to the Decision.  
 
 Parties : Rockwell Coll ins and UTC.  
 
 Personnel : all staff currently employed by the Divestment Business, including 
staff seconded to the Divestment Business, shared personnel as well as the 
additional personnel listed in the Schedule.  
 
 Purchaser : the entity approved by the Commi ssion as acquirer of the Divestment 
Business in accordance with the criteria set out in Section D.  
  
  
  
 
3  
 Purchaser Criteria : the criteria laid down in paragraph 16 of these Commitments 
that the Purchaser must fulfil in order to be approved by the Commission.  
 
 Rockwell Collins : Rockwell Collins, Inc., incorporated under the laws of the 
State of Delaware (U.S.), with its registered office at 400 Collins Road N.E., 
Cedar Rapids, Iowa  52498, U.S., and its Affiliated Undertakings.  
 
 Schedule : the schedule to these Commitments describing more in detail the 
Divestment Business.  
 
 Trustee(s) : the Monitoring Trustee and / or the Divestiture Trustee as the case 
may be.  
 
 Trustee Divestiture Period : the period of […] from the end of the First 
Divestiture Period.  
 
 UTC : Unite d Technologies Corporation, incorporated under the laws of the State 
of Delaware, United States, with its registered office at Corporation Trust Center, 
1209 Orange Street, in the City of Wilmington, County of New Castle, Delaware, 
19801, United States.  
  
  
  
 
4 Section B.  The commitment to divest and the Divestment Business  
 
 Commitment to divest  
 
2. In order to maintain effective competition, the Parties commit to divest, or procure the 
divestiture of, the Divestment Business by the end of the Trustee Divestiture P eriod to 
a Purchaser and on terms of sale approved by the Commission in accordance with the 
procedure described in paragraph 17 of these Commitments.  To carry out the 
divestiture, the Parties commit to find a Purchaser and to enter into a final binding 
sale and purchase agreement for the sale of the Divestment Business within the First 
Divestiture Period.  If the Parties have not entered into such an agreement at the end 
of the First Divestiture Period, the Parties shall grant the Divestiture Trustee an 
exclusive mandate to sell the Divestment Business in accordance with the procedure 
described in paragraph 29 in the Trustee Divestiture Period.  
 
3. The Parties shall be deemed to have complied with this commitment if:  
 
(a) by the end of the Trustee Divestiture Peri od, Rockwell Collins or the Divestiture 
Trustee has entered into a final binding sale and purchase agreement and the 
Commission approves the proposed purchaser and the terms of sale as being 
consistent with the Commitments in accordance with the procedure described in 
paragraph 17; and  
 
(b) the Closing of the sale of the Divestment Business to the Purchaser takes place 
within the Closing Period.  
 
4. In order to maintain the structural effect of the Commitments, the Parties shall, for a 
period of ten (10) years aft er Closing, not acquire, whether directly or indirectly, the 
possibility of exercising influence (as defined in paragraph 43 of the Remedies 
Notice, footnote 3) over the whole or part of the Divestment Business, unless, 
following the submission of a reason ed request from the Parties showing good cause 
and accompanied by a report from the Monitoring Tr ustee (as provided in 
paragraph  43 of these Commitments), the Commission finds that the structure of the 
market has changed to such an extent that the absence of influence over the 
Divestment Business is no longer necessary to render the Transaction compatible with 
the internal market.  
 
 Structure and definition of the Divestment Business  
 
5. The Divestment Business consists of Rockwell Collins' SMR Technologies – which 
manufactures inter alia  Rockwell Collins' pneumatic ice protection systems and other 
ice protection products, along with fueling systems and other industrial products, 
hovercraft skirts, composites and commercial aviation products – as detailed in the 
Schedule.  The structure of the Divestment Business as operated to date is described 
in the Schedule.   
 
  
  
  
 
5 6. The Divestment Business, described in more detail in the Schedule, includes all assets 
and staff that contribute  to the current operation or are necessary  to ensure the viability and 
competitiveness of the Divestment Business,  in particular:  
 
(a) all tangible and intangible assets (including intellectual property rights);  
 
(b) all licenses, permits and authorizations issued  by any governmental organisation 
for the benefit of the Divestment Business;  
 
(c) all contracts, leases, commitments and customer orders of the Divestment 
Business; all customer, credit and other records of the Divestment Business; and  
 
(d) the Personnel.  
 
7. For the avoidance of doubt, the Divestment Business will not include:  
 
(a) the WEMAC product line (e.g., air gasper valves, interior signage components, 
etc.); 
 
(b) any manufacturing equipment related to the WEMAC product line; and  
 
(c) any tangible or intangible assets which are exclusively related to the WEMAC 
product line;  
 
(d) any tangible or intangible assets that are used either exclusively or predominantly 
for activities other than those related to, and that are not necessary for the viability 
and competitiveness of SM R Technologies' businesses.  
 
 
Section C.  Related commitments  
 
 Preservation of viability, marketability and competitiveness  
 
8. From the Effective Date until Closing, Rockwell Collins shall preserve or procure the 
preservation of the economic viability, marketability and competitiveness of the 
Divestment Business, in accordance with good business practice, and shall minimise 
as far as possible any risk of loss of competitive potential o f the Divestment Business.  
In particular Rockwell Collins undertakes:  
 
(a) not to carry out any action that might have a significant adverse impact on the 
value, management or competitiveness of the Divestment Business or that might 
alter the nature and scope  of activity, or the industrial or commercial strategy or 
the investment policy of the Divestment Business;  
 
(b) to make available, or procure to make available, sufficient resources for the 
development of the Divestment Business, on the basis and continuation  of the 
existing business plans;  
  
  
  
 
6  
(c) to take all reasonable steps, or procure that all reasonable steps are being taken, 
including appropriate incentive schemes (based on industry practice), to 
encourage all Key Personnel to remain with the Divestment Busines s, and not to 
solicit or move any Key Personnel to Rockwell Collins' remaining businesses.  
Where, nevertheless, individual members of the Key Personnel exceptionally 
leave the Divestment Business, Rockwell Collins shall provide a reasoned 
proposal to repl ace the person or persons concerned to the Commission and the 
Monitoring Trustee.  Rockwell Collins must be able to demonstrate to the 
Commission that the replacement is well suited to carry out the functions 
exercised by those individual members of the Ke y Personnel.  The replacement 
shall take place under the supervision of the Monitoring Trustee, who shall report 
to the Commission  
 
 Hold -separate obligations  
 
9. The Parties commit, from the Effective Date until Closing, to keep the Divestment 
Business separ ate from the business(es) they are retaining and to ensure that unless 
explicitly permitted under these Commitments: (i) management and staff of the 
business(es) retained by the Parties  have no involvement in the Divestment Business; 
(ii) the Key Personnel  and Personnel of the Divestment Business have no involvement 
in any business retained by the Parties and do not report to any individual outside the 
Divestment Business.   
 
10. Until Closing, Rockwell Collins shall assist the Monitoring Trustee in ensuring that 
the Divestment Business is managed as a distinct and saleable entity separate from the 
businesses which Rockwell Collins is retaining.  Immediately after the adoption of the 
Decision, Rockwell Collins shall appoint a Hold Separate Manager.  The Hold 
Separate Manager, who shall be part of the Key Personnel, shall manage the 
Divestment Business independently and in the best interest of the Divestment 
Business with a view to ensuring its continued economic v iability, marketability and 
competitiveness and its independence from the businesses retained by Rockwell 
Collins .  The Hold Separate Manager shall closely cooperate with and report to the 
Monitoring Trustee and, if applicable, the Divestiture Trustee.  An y replacement of 
the Hold Separate Manager shall be subject to the proc edure laid down in 
paragraph  9(c) of these Commitments.  The Commission may, after having heard 
Rockwell Collins , require Rockwell Collins to replace the Hold Separate Manager.  
 
 Ring -fencing  
 
11. The Parties  shall implement, or procure to implement, all necessary measures to 
ensure that it does not, after the Effective Date, obtain any Confidential Information 
relating to the Divestment Business. Any such Confidential Information obta ined by 
Rockwell Collins before the Effective Date will be eliminated and not be used by 
Rockwell Collins. This includes measures vis -à-vis Rockwell Collins' appointees on 
the supervisory board and/or board of directors of the Divestment Business.  In 
particular, the participation of the Divestment Business in any central information 
  
  
  
 
7 technology network shall be severed to the extent possible, without compromising the 
viability of the Divestment Business. Rockwell Collins may obtain or keep 
information relat ing to the Divestment Business which is reasonably necessary for the 
divestiture of the Divestment Business or the disclosure of which to Rockwell Collins 
is required by law.  
 
 Non-solicitation clause  
 
12. The Parties undertake, subject to customary limitation s, not to solicit, and to procure 
that Affiliated Undertakings do not solicit, the Key Personnel transferred with the 
Divestment Business for a period of […] after Closing.  
 
 Due diligence  
 
13. In order to enable potential purchasers to carry out a reasonable  due diligence of the 
Divestment Business, Rockwell Collins shall, subject to customary confidentiality 
assurances and dependent on the stage of the divestiture process:  
 
(a) provide to potential purchasers sufficient information as regards the Divestment 
Business; and  
 
(b) provide to potential purchasers sufficient information relating to the Personnel and 
allow them reasonable access to the Personnel.  
 
 Reporting  
 
14. Rockwell Collins shall submit written reports in English on potential purchasers of the 
Divestm ent Business and developments in the negotiations with such potential 
purchasers to the Commission and the Monitoring Trustee no later than ten (10) days 
after the end of every month following the Effective Date (or otherwise at the 
Commission's request).  Rockwell Collins shall submit a list of all potential 
purchasers having expressed interest in acquiring the Divestment Business to the 
Commission at each and every stage of the divestiture process, as well as a copy of all 
the offers made by potential pur chasers within five days of their receipt.  
 
15. Rockwell Collins shall inform the Commission and the Monitoring Trustee on the 
preparation of the data room documentation and the due diligence procedure and shall 
submit a copy of any information memorandum to t he Commission and the 
Monitoring Trustee before sending the memorandum out to potential purchasers.  
 
  
  
  
 
8 Section D.  The Purchaser  
 
16. In order to be approved by the Commission, the Purchaser must fulfil the following 
criteria:  
 
(a) The Purchaser shall be independent of and unconnected to the Parties and their 
Affiliated Undertakings (this being assessed having regard to the situation 
following the divestiture);  
 
(b) The Purchaser shall have the financial resources, proven expertise and incentive to 
maintain and develop the Divestment Business as a viable and active competitive 
force in competition with the Parties and other competitors;  
 
(c) The Purchaser shall have an existing presence in the aerospace industry;  
 
(d) The acquisition of the Divestment Business by the Purchaser must neither be 
likely to create, in light of the information available to the Commission, prima 
facie  competition concerns nor give rise to a risk that the implementation of the 
Commitments will be delayed.  In particular, the Purchaser must reasonably be 
expected to obtain all necessary approvals from the relevant regulatory authorities 
for the acquisition of the Divestment Business.  
 
17. The final binding sale and purchase agreement (as well as ancillary agreements) 
relating to the divestment of the Divestment Business shall be conditional on the 
Commission's approval.  When Rockwell Collins has reached an agreement with a 
purchaser, it sh all submit a fully documented and reasoned proposal, including a copy 
of the final agreement(s), within one (1) week to the Commission and the Monitoring 
Trustee.  Rockwell Collins must be able to demonstrate to the Commission that the 
purchaser fulfils th e Purchaser Criteria and that the Divestment Business is being sold 
in a manner consistent with the Commission's Decision and the Commitments.  For 
the approval, the Commission shall verify that the purchaser fulfils the Purchaser 
Criteria and that the Div estment Business is being sold in a manner consistent with 
the Commitments including their objective to bring about a lasting structural change 
in the market.  The Commission may approve the sale of the Divestment Business 
without one or more Assets or par ts of the Personnel, or by substituting one or more 
Assets or parts of the Personnel with one or more different assets or different 
personnel, if this does not affect the viability and competitiveness of the Divestment 
Business after the sale, taking accou nt of the proposed purchaser.  
 
Section E.  Trustee  
 
I. Appointment procedure  
 
18. Rockwell Collins shall appoint a Monitoring Trustee to carry out the functions 
specified in these Commitments for a Monitoring Trustee.  Rockwell Collins commits 
not to close the Transaction before the appointment of a Monitoring Trustee.  
 
  
  
  
 
9 19. If Rockwell Collins has not entered into a binding sale and purchase agreement 
regarding the Divestment Business one (1) month before the end of the First 
Divestiture Period or if the Commission has rejected a purchaser proposed by 
Rockwell Collins at that time or thereafter, Rockwell Collins shall appoint a 
Divestiture Trustee.  The appointment of the Divestiture Trustee shall take effect upon 
the commencement of the Trustee Divestiture Period.  
 
20. The Trustee shall:  
 
(i) at the time of appointment, be independent of the Parties;  
 
(ii) possess the necessary qualifications to carry out its mandate, for example have 
sufficient relevant experience as an investment banker or consultant or auditor; 
and 
 
(iii) neither have nor become exposed to a Conflict of Interest.  
 
21. The Trustee shall be remunerated by Rockwell Collins in a way that does not impede 
the independent and effective fulfilment of its mandate.  In particular, where the 
remuneration package of a Div estiture Trustee includes a success premium linked to 
the final sale value of the Divestment Business, such success premium may only be 
earned if the divestiture takes place within the Trustee Divestiture Period.  
 
 Proposal by Rockwell Collins  
 
22. No later than two (2) weeks after the Effective Date, Rockwell Collins shall submit 
the names of one (1) or more natural or legal persons whom Rockwell Collins 
proposes to appoint as the Monitoring Trustee to the Commission for approval.  No 
later than one (1) mont h before the end of the First Divestiture Period or on request by 
the Commission, Rockwell Collins shall submit a list of one (1) or more persons 
whom Rockwell Collins proposes to appoint as Divestiture Trustee to the 
Commission for approval.  The proposal  shall contain sufficient information for the 
Commission to verify that the person or persons proposed as Trustee fulfil the 
requirements set out in paragraph 20 and shall include:  
 
(a) the full terms of the proposed mandate, which shall include all provisions 
necessary to enable the Trustee to fulfil its duties under these Commitments;  
 
(b) the outline of a work plan which describes how the Trustee intends to carry out its 
assigned tasks; and 
 
(c) an indication whether the proposed Trustee is to act as both Monitoring Trustee 
and Divestiture Trustee or whether different trustees are proposed for the two 
functions.  
 
  
  
  
 
10  Approval or rejection by the Commission  
 
23. The Commission shall have the discreti on to approve or reject the proposed Trustee(s)  
and to approve the proposed mandate subject to any modifications it deems necessary 
for the Trustee to fulfil its obligations.  If only one (1) name is approved, Rockwell 
Collins shall appoint or cause to be appointed the person or persons concerned as 
Trustee, in accordance with the mandate approved by the Commission.  If more than 
one (1) name is approved, Rockwell Collins shall be free to choose the Trustee to be 
appointed from among the names approved.  Th e Trustee shall be appointed within 
one (1) week of the Commission’s approval, in accordance with the mandate 
approved by the Commission.  
 
 New proposal by Rockwell Collins  
 
24. If all the proposed Trustees are rejected, Rockwell Collins shall submit the names  of 
at least two (2) more natural or legal persons within one (1) week of being informed 
of the rejection, in accordance with paragraphs 18 and 23 of these Commitments.  
 
 Trustee nominated by the Commission  
 
25. If all further proposed Trustees are rejected by the Commission, the Commission shall 
nominate a Trustee, whom Rockwell Collins shall appoint, or cause to be appointed, 
in accordance with a Trustee mandate approved by the Commission.  
 
II. Functions of the Trustee  
 
26. The Trustee shall assume its specified duties and obligations in order to ensure 
compliance with the Commitments.  The Commission may, on its own initiative or at 
the request of the Trustee or Rockwell Collins , give any orders or instructions to t he 
Trustee in order to ensure compliance with the conditions and obligations attached to 
the Decision.   
 
 Duties and obligations of the Monitoring Trustee  
 
27. The Monitoring Trustee shall:  
 
(i) propose in its first report to the Commission a detailed work plan describing how it 
intends to monitor compliance with the obligations and conditions attached to the 
Decision.  
 
(ii) oversee, in close co -operation with the Hold Separate Manager, the on -going 
management of the Divestment Business with a view to ensuring its continued 
economic viability, marketability and competitiveness and monitor compliance by 
Rockwell Collins with th e conditions and obligations attached to the Decision.  To 
that end the Monitoring Trustee shall:  
 
  
  
  
 
11 (a) monitor the preservation of the economic viability, marketability and 
competitiveness of the Divestment Business, and the keeping separate of the 
Divestment  Business from the businesses retained by Rockwell Collins , in 
accordance with paragraphs 8 and 9 of these Commitments;  
 
(b) supervise the management of the Divestment Business, in accordance with 
paragraph 10 of these Commitments;  
 
(c) with respect to Confidential Information:  
 
 determine all necessary measures to ensure that Rockwell Collins does not 
after the Effective Date obtain any Confidential Information relating to the 
Divestment Business,  
 
 in particular strive for the severing of the Divestment Business' participation 
in a central information technology network to the extent possible, without 
compromising the viability of the Divestment Business,  
 
 make sure that any Confidential Information  relating to the Divestment 
Business obtained by Rockwell Collins before the Effective Date is 
eliminated and will not be used by Rockwell Collins , and  
 
 decide whether such information may be disclosed to or kept by Rockwell 
Collins as the disclosure is r easonably necessary to allow Rockwell Collins 
to carry out the divestiture or as the disclosure is required by law;  
 
(d) monitor the splitting of assets and the allocation of Personnel between the 
Divestment Business and Rockwell Collins ;  
 
(iii)propose to Rockwel l Collins such measures as the Monitoring Trustee considers 
necessary to ensure Rockwell Collins' compliance with the conditions and obligations 
attached to the Decision, in particular the maintenance of the full economic viability, 
marketability or compet itiveness of the Divestment Business, the holding separate of 
the Divestment Business and the non -disclosure of competitively sensitive 
information;  
 
(iv) review and assess potential purchasers as well as the progress of the divestiture 
process and verify that,  dependent on the stage of the divestiture process:  
 
(a) potential purchasers receive sufficient and correct information relating to the 
Divestment Business and the Personnel in particular by reviewing, if available, the 
data room documentation, the information memorandum and the due diligence 
process, and  
 
(b) potential purchasers are granted reasonable access to the Personnel;  
  
  
  
 
12  
(v) act as a contact point for any requests by third parties, in particular potential 
purchasers, in relation to the Commitments;  
 
(vi) provide to the Commission, sending the Parties a non -confident ial copy at the same 
time, a written report within fifteen (15) days after the end of every month that shall 
cover the operation and management of the Divestment Business as well as the 
splitting of assets and the allocation of Personnel so that the Commis sion can assess 
whether the Divestment Business is held in a manner consistent with the 
Commitments and the progress of the divestiture process as well as potential 
purchasers;  
 
(vii) promptly report in writing to the Commission, sending the Parties a non -confi dential 
copy at the same time, if it concludes on reasonable grounds that Rockwell Collins is 
failing to comply with these Commitments;  
 
(viii) within one (1) week after receipt of the documented proposal referred to in 
paragraph 17 of these Commitments, submit t o the Commission, sending the Parties a 
non-confidential copy at the same time, a reasoned opinion as to the suitability and 
independence of the proposed purchaser and the viability of the Divestment Business 
after the sale and as to whether the Divestment  Business is sold in a manner consistent 
with the conditions and obligations attached to the Decision, in particular, if relevant, 
whether the sale of the Divestment Business without one or more Assets or one or 
more Key Personnel affects the viability of the Divestment Business after the sale, 
taking account of the proposed purchaser;  
 
(ix) assume the other functions assigned to the Monitoring Trustee under the conditions 
and obligations attached to the Decision.  
 
28. If the Monitoring and Divestiture Trustee are not the same legal or natural persons, 
the Monitoring Trustee and the Divestiture Trustee shall cooperate closely with each 
other during and for the purpose of the preparation of the Trustee Divestiture Period 
in order to facilitate each other's tasks.  
 
 Duties and obligations of the Divestiture Trustee  
 
29. Within the Trustee Divestiture Period, the Divestiture Trustee shall sell at no 
minimum price the Divestment Business to a purchaser, provided that the 
Commission has approved both the purchaser and the fin al binding sale and purchase 
agreement (and ancillary agreements) as in line with the Commission's Decision and 
the Commitments in accordance with paragraphs 16 and 17 of these Commitments.  
The Divestiture Trustee shall include in the sale and purchase ag reement (as well as in 
any ancillary agreements) such terms and conditions as it considers appropriate for an 
expedient sale in the Trustee Divestiture Period.  In particular, the Divestiture Trustee 
may include in the sale and purchase agreement such cust omary representations and 
  
  
  
 
13 warranties and indemnities as are reasonably required to affect the sale.  The 
Divestiture Trustee shall protect the legitimate financial interests of Rockwell Collins , 
subject to Rockwell Collins' unconditional obligation to dive st at no minimum price 
in the Trustee Divestiture Period.  
 
30. In the Trustee Divestiture Period (or otherwise at the Commission's request), the 
Divestiture Trustee shall provide the Commission with a comprehensive monthly 
report written in English on the pro gress of the divestiture process.  Such reports shall 
be submitted within fifteen (15) days after the end of every month with a 
simultaneous copy to the Monitoring Trustee and a non -confidential  copy to the 
Parties . 
 
III. Duties and obligations of Rockwell Collins  
 
31. Rockwell Collins shall provide and shall cause its advisors to provide the Trustee with 
all such co -operation, assistance and information as the Trustee may reasonably 
require to perform its tasks.  The Trustee shall have full and complete access to any of 
Rockwell Collins' or the Divestment Business' books, records, documents, 
management or other personnel, facilities, sites and technical information necessary 
for fulfilling its duties under the Commitments and Rockwell Collins and the 
Divestment Business shall provide the Trustee upon request with copies of any 
document.  Rockwell Collins and the Divestment Business shall make available to the 
Trustee one or more offices on their premises and shall be available for meetings in 
order to provide the Trustee with all information necessary for the performance of its 
tasks.  
 
32. Rockwell Collins shall provide the Monitoring Trustee with all managerial and 
administrative support that it may reasonably request on behalf of the management of 
the Divestment Business.  This shall include all administrative support functions 
relating to the Divestment B usiness which are currently carried out at headquarters 
level.  Rockwell Collins shall provide and shall cause its advisors to provide the 
Monitoring Trustee, on request, with the information submitted to potential 
purchasers, in particular give the Monito ring Trustee access to the data room 
documentation and all other information granted to potential purchasers in the due 
diligence procedure.  Rockwell Collins shall inform the Monitoring Trustee on 
possible purchasers, submit lists of potential purchasers at each stage of the selection 
process, including the offers made by potential purchasers at those stages, and keep 
the Monitoring Trustee informed of all developments in the divestiture process.  
 
33. Rockwell Collins shall grant or procure Affiliated Underta kings to grant 
comprehensive powers of attorney, duly executed, to the Divestiture Trustee to effect 
the sale (including ancillary agreements), the Closing and all actions and declarations 
which the Divestiture Trustee considers necessary or appropriate to  achieve the sale 
and the Closing, including the appointment of advisors to assist with the sale process.  
Upon request of the Divestiture Trustee, Rockwell Collins shall cause the documents 
required for effecting the sale and the Closing to be duly execut ed. 
 
  
  
  
 
14 34. Rockwell Collins shall indemnify the Trustee and its employees and agents (each an 
“Indemnified Party ”) and hold each Indemnified Party harmless against, and hereby 
agrees that an Indemnified Party shall have no liability to Rockwell Collins for, any 
liabilities arising out of the performance of the Trustee’s duties under the 
Commitments, except to the extent that such liabilities result from the wilful default, 
recklessness, gross negligence or bad faith of the Trustee, its employees, agents or 
adviso rs. 
 
35. At the expense of Rockwell Collins , the Trustee may appoint advisors (in particular 
for corporate finance or legal advice), subject to Rockwell Collins' approval (this 
approval not to be unreasonably withheld or delayed) if the Trustee considers the 
appointment of such advisors necessary or appropriate for the performance of its 
duties and obligations under the Mandate, provided that any fees and other expenses 
incurred by the Trustee are reasonable.  Should Rockwell Collins refuse to approve 
the advis ors proposed by the Trustee the Commission may approve the appointment 
of such advisors instead, after having heard Rockwell Collins .  Only the Trustee shall 
be entitled to issue instructions to the advisors. Paragraph 34 of these Commitments 
shall apply mutatis mutandis .  In the Trustee Divestiture Period, the Divestiture 
Trustee may use advisors who served Rockwell Collins during the Divestiture Period 
if the Divestiture Trustee considers this in the best interest of an expedient sale.  
 
36. Rockwell Collins agrees that the Commission may share Confidential Information 
proprietary to Rockwell Collins with the Trustee.  The Trustee shall not disclose such 
information and the principles contained in Article 17 (1) and (2) of the Merger 
Regulation apply mutatis mu tandis .  
 
37. Rockwell Collins agrees that the contact details of the Monitoring Trustee are 
published on the website of the Commission's Directorate -General for Competition 
and they shall inform interested third parties, in particular any potential purchasers , of 
the identity and the tasks of the Monitoring Trustee.  
 
38. For a period of ten (10) years from the Effective Date the Commission may request all 
information from the Parties that is reasonably necessary to monitor the effective 
implementation of these Com mitments.  
 
IV. Replacement, discharge and reappointment of the Trustee  
 
39. If the Trustee ceases to perform its functions under the Commitments or for any other 
good cause, including the exposure of the Trustee to a Conflict of Interest:  
 
(a) the Commission may, after hearing the Trustee and Rockwell Collins , require 
Rockwell Collins to replace the Trustee; or  
 
(b) Rockwell Collins may, with the prior approval of the Commission, replace the 
Trustee.  
 
  
  
  
 
15 40. If the Trustee is removed according to paragraph 39 of these Commitments, the 
Trustee may be required to continue in its function until a new Trustee is in place to 
whom the Trustee has effected a full hand over of all relevant information. The new 
Trustee shall be appointed in accordance with the proc edure referred to in 
paragraphs  18-25 of these Commitments.  
 
41. Unless removed according to paragraph 39 of these Commitments, the Trustee shall 
cease to act as Trustee only after the Commission has discharged it from its duties 
after all the Commitments with w hich the Trustee has been entrusted have been 
implemented.  However, the Commission may at any time require the reappointment 
of the Monitoring Trustee if it subsequently appears that the relevant remedies might 
not have been fully and properly implemented . 
 
Section F.  The review clause  
 
42. The Commission may extend the time periods foreseen in the Commitments in 
response to a request from the Parties or, in appropriate cases, on its own initiative.  
Where the Parties request an extension of a time period, it shall submit a reasoned 
request to the Commission no later than one (1) month before the expiry of that 
period, showing good cause.   This request shall be accompanied by a report from the 
Monitoring Trustee, who shall, at the same time send a non -confident ial copy of the 
report to the Parties .  Only in exceptional circumstances shall the Parties be entitled to 
request an extension within the last month of any period.  
 
43. The Commission may further, in response to a reasoned request from the Parties 
showing goo d cause waive, modify or substitute, in exceptional circumstances, one or 
more of the undertakings in these Commitments.  This request shall be accompanied 
by a report from the Monitoring Trustee, who shall, at the same time send a non -
confidential copy of  the report to the Parties .  The request shall not have the effect of 
suspending the application of the undertaking and, in particular, of suspending the 
expiry of any time period in which the undertaking has to be complied with.  
 
Section G.  Entry into force  
 
44. The Commitments shall take effect upon the date of adoption of the Decision.  
 
[Signed]  
  
  
  
  
 
16 SCHEDULE  
 
 
1. The proposed Commitments offered by Rockwell Collins consist of the divestiture to 
the Purchaser of SMR Technologies – which manufactures inter alia  Rockwell 
Collins' pneumatic ice protection systems and other ice protection products, along 
with fueling systems and other industrial products, hovercraft skirts, composites and 
commercial aviation products  – as defined in th e Schedule, including the tangible and 
intangible assets listed below (hereinafter referred to as the " Divestment Business ").  
For the avoidance of doubt, the Divestment Business does not include the WEMAC 
product line ( e.g., air gasper valves, interior signage components, etc.) and related 
equipment and machinery, as specified below.1  If there is any asset or personnel 
which is not covered by this Schedule but which is both used (exclusively or not) in 
the Divestment Busin ess and necessary for the continued viability and 
competitiveness of the Divestment Business, that asset or adequate substitute will be 
offered to potential purchasers.  
 
2. The Divestment Business is comprised of the following tangible assets:  
 
(a) SMR Technologies' facility located in Fenwick (West Virginia, United 
States);  
 
(b) The inventory of finished goods to the extent related to the SMR 
Technologies business with the exclusion of those related to the WEMAC 
product line , and owned by SMR Technolog ies as of the date of Closing, as 
well as the right to market and sell such inventory;  
 
(c) The manufacturing and testing equipment and machinery owned by SMR 
Technologies and used in the manufacturing of ice protection systems, fueling 
systems and other indus trial products, hovercraft skirts, composites and 
commercial aviation products , with the exclusion of those used exclusively or 
predominantly in the WEMAC product line .2  This includes all 
documentation (for example, machine records, design history files a nd 
technical files) related to the manufacturing equipment and machinery. An 
exhaustive list of the equipment is included at Appendix 1  to the 
Commitments;  
 
(d) All business records, books of account, financial records, and tax records to 
the extent pertaining  to SMR Technologies, with the exclusion of those 
related to  the WEMAC product line;  
 
                                                 
1  As submitted in response to RFI 2 on March 22, 2018, the Parties intend to retain the WEMAC product 
line by way of a reverse carve -out.  […]. 
2  For completeness, one piece of equipment called […] manufactures both the ice protection systems and 
the WEMAC product line. This piece of equipment will be included in the Divestment Business.  Only 
machinery exclusively used for the WEMAC product line wi ll be excluded.  
  
  
  
 
17 (e) For the avoidance of doubt, the Divestment Business will not include any 
tangible assets that are used either exclusively or predominantly for activities 
other than those  related to, and that are not necessary for the viability and 
competitiveness of SMR Technologies' businesses, with the exclusion of the 
WEMAC product line.  
 
3. The Divestment Business is comprised of the following intangible assets:  
 
(a) Pipeline products.  All pipeline products and projects initiated before 
Closing, including […], by SMR Technologies and that are reflected in the 
books and records, with the exception of those exclusively related to the 
WEMAC product line.  
 
(b) Patents.  Rockwell Collins will tra nsfer the patents and applications, 
including the rights thereto, owned by Rockwell Collins that are used by 
SMR Technologies in its ice protection product line or in any of the other 
products manufactured in its Fenwick facility.  […].  A non -exhaustive l ist 
of the patents and applications to be transferred is included at Appendix 2  to 
the Commitments.  
 
(c) Know -how.  Rockwell Collins will transfer the trade secrets, confidential 
know -how, confidential customer data, or other confidential information and 
other intellectual property owned by Rockwell Collins that are used by SMR 
Technologies in Rockwell Collins' ice prot ection product lines, as well as in 
other products manufactured in its Fenwick facility, with the exception of 
the WEMAC product line .  A non -exhaustive list is included at Appendix 3  
to the Commitments .   
 
(d) Brands.  Rockwell Collins will transfer the ice p rotection brand names […].  
Rockwell Collins will also transfer the brand names associated with any of 
its other products manufactured SMR Technologies, with the exception of 
those related to the WEMAC product line .  A non -exhaustive list is included 
at Appendix 4  to the Commitments .   
 
(e) Other intangible assets.  
 
(i) Any contracts related to Rockwell Collins’ Divestment  Business 
product line or pipeline projects (or are otherwise necessary to 
operate the Divestment Business and to develop the pipeline 
projects)  entered into by Rockwell Collins  prior to Closing.  
 
(ii) In order to confer the benefit of such contracts to the Purchaser, 
Rockwell Collins will use its best efforts to transfer (in whole or in 
part) any sales, sourcing, supply and distribution agreements to the 
extent they relate to the manufacture and/or commercialization of the 
Divestment Business product lines or pipeline projects (or are 
otherwise necessa ry to operate the Divestment Business and to 
develop the pipeline projects).   
  
  
  
 
18  
(iii)All licenses, permits and authorizations issued by any governmental 
organization (including, where applicable, the CE mark) specifically 
identified by reference to a schedule, to the extent transferable under 
applicable legal requirements and Purchaser and its affiliates do not 
own substantially similar licenses, permits and authorizations.  A 
non-exhaustive list is included at Appendix 5  to the Commitments .  
 
(f) The Divestment Bus iness will not include any intangible assets that are used 
either exclusively or predominantly for activities other than those related to, 
and that are not necessary for the viability and competitiveness of SMR 
Technologies' businesses.  
 
4. For the avoidance of doubt, the Divestment Business concerns SMR Technologies, 
including its tangible and intangible assets with the exclusion of the WEMAC product 
line ( e.g., air gasper valves and related components as well as interior signage 
components).  The WEMAC produ ct line will be transferred to Rockwell Collins' 
facility […].  The WEMAC product line is unrelated to the manufacturing of ice 
protection systems.  
 
5. The Divestment Business includes all Personnel employed at SMR Technologies 
including Key Personnel set out below .  An exhaustive list of the Key Personnel, and 
the Personnel is enclosed  at Appendix 6  to the Commitments.  
 
 
 […]: Manufacturing Engineering Manager;  
 […]: Quality Manager;  
 […]: Program Manager;  
 […]: Marketing Specialist;  
 […]: Inside Sales Representative;  
 […]: Inside Sales Representative;  
 […]: Manufacturing Supervisor (De -ice product line);  
 […]: Materials Supervisor;  

  
  
  
 
19  […]: Accounting Manager; and  
 […]: Maintenance Supervisor.  
 
6. At the request of the Purchaser, customary transition services may be put in place 
notwithstanding the stand -alone business that constitutes SMR Technologies.  
 
 
* * *  
 
Appendices 1 -6 […]  
 
 
 Annex 4  
 
   April 26, 2018  
European Commission  
DG Competition  
Place Madou  
1210 BRUSSELS  
 
    
CASE COMP/M.8658 – UTC/ROCKWELL COLLINS  
 
COMMITMENTS TO THE EUROPEAN COMMISSION  
 
Pursuant to Article 6(2) of Council Regulation (EC) No 139/2004 (the “ Merger Regulation ”), United 
Technologies Corporation (“ UTC ”) hereby enters into the following Commitments (the 
“Commitments ”) vis -à-vis the European Commission (the “ Commission ”) with a view to rendering 
the acquisition of Rockwell Collins, Inc. (“ Rockwell Collins ”, together with UTC  the “ Parties ”) (the 
“Concentration ”) compatible with the internal market and the functioning of the EEA Agreement.   
 
This text shall be interpreted in light of the Commission’s decision pursuant to Article 6(1)(b) of the of 
the Merger Regulation to declar e the Concentration compatible with the internal market and the 
functioning of the EEA Agreement (the “ Decision ”), in the general framework of European Union 
law, in particular in light of the Merger Regulation, and by reference to  the Commission Notice on  
remedies acceptable under Council Regulation (EC) No 139/2004 and under Commission Regulation 
(EC) No 802/2004 (the “ Remedies Notice ”). 
 
Section A.  Definitions  
 
1. For the purpose of the Commitments, the following terms shall have the following meaning:  
 
Administrative Support : any administrative support provided by UTC to the Hold Separate 
Manager and the Divestment Programs, including at the Hold Separate Manager’s request, to 
assist with day -to-day management of the Divestment Programs, including but no t limited to legal 
advice and use of IT resources or administrative resources.   
 
Affiliated Undertakings : undertakings controlled by the Parties, whereby the notion of control 
shall be interpreted pursuant to Article 3 of the Merger Regulation and in ligh t of the Commission 
Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 on the control of 
concentrations between undertakings (the “ Consolidated Jurisdictional Notice ”).  
 
Assets: the assets that contribute to the current operation  or are necessary to ensure the viability 
and competitiveness of the Divestment Programs as indicated in Section B, paragraphs 6 (a), (b) 
and (c) and described more in detail in the Schedule.   
 
[Details of UTC’s R&D programs] Oxygen Program: [details of UT C’s R&D programs].  
 
 
2 Closing : the transfer of the Divestment Programs to the Purchaser.  
 
Closing Period : the period of […] from the approval of the Purchaser and the terms of sale by the 
Commission or the obtaining of all required regulatory approvals prior  to Closing, whichever 
occurs later.   
 
Confidential Information: any business secrets, know -how, commercial information, or any 
other information of a proprietary nature that is not in the public domain.  
 
Conflict of Interest : any conflict of interest that impairs the Trustee's objectivity and 
independence in discharging its duties under the Commitments.  
 
[Details of UTC’s R&D programs]  Oxygen Program : [details of UTC’s R&D programs] .   
 
Divestment Programs : the oxygen research and development programs that UTC commits to 
divest, as defined in Section B and in the Schedule.  
 
Divestiture Trustee : one or more natural or legal person(s) who is/are approved by the 
Commission and appointed by UTC and who has/have  received from UTC the exclusive Trustee 
Mandate to sell the Divestment Programs to a Purchaser at no minimum price.  
  
Effective Date : the date of adoption of the Decision.  
 
First Divestiture Period : the period of […] from the Effective Date.  
 
Hold Separ ate Manager : the person appointed by UTC for the Divestment Programs to manage 
the day -to-day business under the supervision of the Monitoring Trustee.   
 
Key Personnel : all personnel necessary to maintain the viability and competitiveness of the 
Divestmen t Programs, as listed in the Schedule.  
 
Monitoring Trustee : one or more natural or legal person(s) who is/are approved by the 
Commission and appointed by UTC, and who has/have the duty to monitor UTC’s compliance 
with the conditions and obligations attach ed to the Decision.  
 
Parties:  UTC and the undertaking that is the target of the concentration, Rockwell Collins.  
 
Personnel : all staff currently solely engaged in the Divestment Programs, as listed in the 
Schedule.  
 
Proposed Transaction : the acquisition o f Rockwell Collins by UTC.  
 
Purchaser : the entity approved by the Commission as acquirer of the Divestment Programs in 
accordance with the criteria set out in Section D.  Any singular reference to the Purchaser should 
be considered to refer to one or more Purchasers.  
 
Purchaser Criteria : the criteria laid down in paragraph 16 of these Commitments that the 
Purchaser must fulfil in order to be approved by the Commission.  
 
3  
Rockwell Collins:  Rockwell Collins, Inc., incorporated under the laws of the State of Delaware, 
United States, with its registered office at 400 Collins Road N .E., Cedar Rapids, Iowa 52498, 
United States.  
 
Schedule : the schedule to these Commitments describing more in detail the Divestment Programs.  
 
Trustee(s) : the Monitoring Trustee and/or the Divestiture Trustee as the case may be.   
 
Trustee Divestiture Peri od: the period of […] from the end of the First Divestiture Period, 
subject to any extensions granted in accordance with Section F (The Review Clause) of these 
Commitments.  
 
UTC : United Technologies Corporation, incorporated under the laws of the State of Delaware, 
United States, with its registered office at Corporation Trust Center, 1209 Orange Street, in the 
City of Wilmington, County of New Castle, Delaware, 19801, United States, and registered with 
the Delaware Division of Corporations under file numbe r 0334827.   
 
Section B.  The commitment to divest and the Divestment Programs   
 
 Commitment to divest  
 
2. In order to maintain effective competition, UTC commits to divest, or procure the divestiture of 
the Divestment Programs by the end of the Trustee Divestiture Period to a purchaser and on terms 
of sale approved by the Commission in accordance with the procedure described in paragraph 17 
of these Commitments. To carry out the divestiture, UTC commits to find a purchaser and to enter 
into a final binding sale and purchase agreement for the sale of the Divestment Programs within 
the First Divestiture Period. If UTC has not entered into such an agreement at the end of the First 
Divestiture Period, UTC shall grant the Divestiture Trustee an exclusive mandate to sell the 
Divestment Programs in accordance with the procedure described in paragraph 29 in the Trustee 
Divestiture Period.  
 
3. The Concentration shall not be implemented before UTC or the Divestiture Trustee has entered 
into a final binding sale and purchase agreement  for the sale of the Divestment Programs and the 
Commission has approved the purchaser and the terms of sale in accordance with paragraph 17.  
 
4. UTC shall be deemed to have complied with this commitment if:  
 
 (a) by the end of the Trustee Divestiture Period, UTC or the Divestiture Trustee has 
entered into a final binding sale and purchase agreement and the Commission 
approves the proposed purchaser and  the terms of sale as being consistent with the 
Commitments in accordance with the procedure described in paragraph 17; and  
 
 (b) the Closing of the sal e of the Divestment Programs to the Purchaser takes place within 
the Closing Period.  
 
 
4 5. In order to maintain the structural effect of the Commitments, UTC shall, for a period of […] after 
Closing, not acquire, whether directly or indirectly, the possibility  of exercising influence (as 
defined in paragraph 43 of the Remedies Notice, footnote 3) over the whole or part of the 
Divestment Programs, unless, following the submission of a reasoned request from UTC showing 
good cause and accompanied by a report from the Monitoring Trustee (as provided in paragraph 
43 of these Commitments), the Commission finds that the structure of the market has changed to 
such an  extent that the absence of influence over the Divestment Programs is no longer necessary 
to render the proposed concentration compatible with the internal market.  
 
 Structure and definition of the Divestment Programs   
 
6. The Divestment Programs consist of a ll of UTC’s activities in the development of aircraft oxygen 
generation systems, consisting of two R&D programs: the […] Oxygen Program and the […] 
Oxygen Program. The legal and functional structure of the Divestment Programs as operated to 
date is described in the Schedule. The Divestment Programs, described in more detail in the 
Schedule, include all assets and staff that contribute to the current operation or are necessary to 
ensure the viability and competitiveness of the D ivestment Programs, in particular:  
 
 (a) all intangible assets, including intellectual property rights;  
 
 (b) all research and development contracts of the Divestment Programs concerning the 
[…] Oxygen Program and the […] Oxygen Program;  
 
 (c) the Personnel.  
 
7. [Intentionally left blank ].  
 
 Section C.   Related commitments  
 
 Preservation of viability, marketability and competitiveness  
 
8. From the Effective Date until Closing, UTC shall preserve or procure the preservation of the 
economic viability, marketability and competitiveness of the Divestment Programs, in accordance 
with good business practice, and shall minimise as far as possible any risk of loss of competitive 
potential of the Divestment Programs. In particular UTC undertakes:  
(a) not to carry out any action that might have a significant adverse impact on the value, 
management or competitiveness of the Divestment Programs or that  might alter the 
nature and scope of activity, or the industrial or commercial strategy or the investment 
policy of the Divestment Programs;  
(b) to make available, or procure to make available, sufficient resources for the 
development of the Divestment Pr ograms, on the basis and continuation of the 
existing business plans;  
(c) to take all reasonable steps, or procure that all reasonable steps are being taken, 
including appropriate incentive schemes (based on industry practice), to encourage all 
Key Personn el to remain with the Divestment Programs, and not to solicit or move 
any Personnel to UTC’s remaining business. Where, nevertheless, individual members 
 
5 of the Key Personnel exceptionally leave the Divestment Programs, UTC shall 
provide a reasoned proposal  to replace the person or persons concerned to the 
Commission and the Monitoring Trustee. UTC must be able to demonstrate to the 
Commission that the replacement is well suited to carry out the functions exercised by 
those individual members of the Key Pers onnel. The replacement shall take place 
under the supervision of the Monitoring Trustee, who shall report to the Commission.  
 
 Hold -separate obligations  
 
9. UTC commits, from the Effective Date until Closing, to procure that the Divestment Programs are 
kept separate from the businesses that UTC will be retaining and, after closing of the notified 
transaction to keep the Divestment Programs separate from the bu siness that UTC is retaining and 
to ensure that unless explicitly permitted under these Commitments: (i) management and staff of 
the businesses retained by UTC have no involvement in the Divestment Programs, with the 
exception of providing Administrative S upport; (ii) the Key Personnel and Personnel of the 
Divestment Programs have no involvement in any business retained by UTC .  These provisions 
will not apply to any involvement necessary after the Effective Date by UTC personnel not 
engaged in the Divestm ent Programs, in the negotiation and signing of any agreements with […] 
for additional research in the best interests of the […] Oxygen Program. For the avoidance of 
doubt, any such agreements shall be considered a contract relating to the Divestment Progr ams as 
set out in paragraph 2 of the Schedule.  
 
10. Until Closing, UTC shall assist the Monitoring Trustee in ensuring that the Divestment Programs 
are managed as distinct and saleable research and development programs separate from the 
businesses which UTC is retaining. Immediately after the adoption of the Decision, UTC shall 
appoint a Hold Separate Manager. The Hold Separate Manager, who shall be part of the Key 
Personnel, shall manage the Divestment Programs independently and in the best interest of the 
Divestment Programs with a view to ensuring their continued economic viability, marketability 
and competitiveness and their independence from the busin esses retained by UTC, with UTC’s 
Administrative Support where needed . The Hold Separate Manager shall closely cooperate with 
and report to the Monitoring Trustee and, if applicable, the Divestiture Trustee. Any replacement 
of the Hold Separate Manager sha ll be subject to the procedure laid down in paragraph 8(c) of 
these Commitments. The Commission may, after having heard UTC, require UTC to replace  the 
Hold Separate Manager.  
 
11. [Intentionally left blank .] 
 
 Ring -fencing  
 
12. UTC shall implement, or procure to implement, all necessary measures to ensure that it does not, 
after the Effective Date, obtain any Confidential Information relating to the Divestm ent Programs 
except to the extent needed and only for the purposes of providing Administrative Support, and 
that any such Confidential Information obtained by UTC before the Effective Date will be 
eliminated and not be used by UTC. In particular, the parti cipation of the Divestment Programs in 
any central information technology network shall be severed to the extent possible, without 
compromising the viability of the Divestment Programs.  UTC may obtain or keep information 
relating to the Divestment Program s which is reasonably necessary for the divestiture of the 
Divestment Programs or the disclosure of which to UTC is required by law.  
 
 
6  Non-solicitation clause  
 
13. The Parties undertake, subject to customary limitations, not to solicit, and to procure that 
Affiliated Undertakings do not solicit, the Key Personnel transferred with the Divestment 
Programs for a period of […] after Closing.  
 
 Due diligence  
 
14. In order to enable potential purchasers to carry out a reasonable due diligence of the Divestment 
Programs, UTC shall, subject to customary confidentiality assurances and dependent on the stage 
of the divestiture process:   
(a) provide to potential purchas ers sufficient information as regards the Divestment 
Programs;  
(b)  provide to potential purchasers sufficient information relating to the Personnel and 
allow them reasonable access to the Personnel.  
 
 Reporting  
 
15. UTC shall submit written reports in Engli sh on potential purchasers of the Divestment Programs 
and developments in the negotiations with such potential purchasers to the Commission and the 
Monitoring Trustee no later than 10 days after the end of every month following the Effective 
Date (or other wise at the Commission’s request). UTC shall submit a list of all potential 
purchasers having expressed interest in acquiring the Divestment Programs to the Commission at 
each and every stage of the divestiture process, as well as a copy of all the offers made by 
potential purchasers within five days of their receipt.  
 
16. UTC shall inform the Commission and the Monitoring Trustee on the preparation of the data room 
documentation and the due diligence procedure and shall submit a copy of any information 
memoran dum to the Commission and the Monitoring Trustee before sending the memorandum out 
to potential purchasers.  
 
Section D.  The Purchaser  
 
17. In order to be approved by the Commission, the Purchaser must fulfil the following criteria:  
(a) The Purchaser shall be independent of and unconnected to the Parties and their Affiliated 
Undertakings (this being assessed having regard to the situation following the divestiture).  
(b) The Purchaser shall have the financial resources, proven experti se and incentive to maintain 
and develop the Divestment Programs as a viable and active competitive force in competition 
with the Parties and other competitors and, in particular, to continue to commit resources as 
UTC would otherwise have done to progress  the Development Programs;  
(c) The acquisition of the Divestment Programs by the Purchaser must neither be likely to 
create, in light of the information available to the Commission, prima facie  competition 
concerns nor give rise to a risk that the implemen tation of the Commitments will be delayed. In 
particular, the Purchaser must reasonably be expected to obtain all necessary approvals from the 
relevant regulatory authorities for the acquisition of the Divestment Programs.  
 
 
7 18. The final binding sale and purch ase agreement (as well as ancillary agreements) relating to the 
divestment of the Divestment Programs shall be conditional on the Commission’s approval. When 
UTC has reached an agreement with a purchaser, it shall submit a fully documented and reasoned 
proposal, including a copy of the final agreement(s), within one week to the Commission and the 
Monitoring Trustee. UTC must be able to demonstrate to the Commission that the purchaser fulfils 
the Purchaser Criteria and that the Divestment Programs are being sold in a manner consistent 
with the Commission's Decision and the Commitments. For the approval, the Commission shall 
verify that the purchaser fulfils the Purchaser Criteria and that the Divestment Programs are being 
sold in a manner consistent with the Commitments including their objective to bring about a 
lasting structural change in the market. The Commission may approve the sale of the Divestment 
Programs without one or more Assets or parts of the Personnel, or by substituting one or more 
Assets or pa rts of the Personnel with one or more different assets or different personnel, if this 
does not affect the viability and competitiveness of the Divestment Programs after the sale, taking 
account of the proposed purchaser.  
 
Section E.  Trustee  
 
 I. Appointment procedure  
 
19. UTC shall appoint a Monitoring Trustee to carry out the functions specified in these Commitments 
for a Monitoring Trustee. UTC commits not to close the Concentration before the appointment of 
a Monitoring Trustee.  
 
20. If UTC has not en tered into a binding sale and purchase agreement regarding the Divestment 
Programs one month before the end of the First Divestiture Period or if the Commission has 
rejected a purchaser proposed by UTC at that time or thereafter, UTC shall appoint a Divest iture 
Trustee. The appointment of the Divestiture Trustee shall take effect upon the commencement of 
the Trustee Divestiture Period.  
 
21. The Trustee shall:  
(i) at the time of appointment, be independent of the Parties and their Affiliated Undertakings;  
(ii) possess the necessary qualifications to carry out its mandate, for example have sufficient 
relevant experience as an investment banker or consultant or auditor; and  
(iii) neither have nor become exposed to a Conflict of Interest.  
 
22. The Trustee shall be remunerated by UTC in a way that does not impede the independent and 
effective fulfilment of its mandate. In particular, where the remuneration package of a Divestiture 
Trustee includes a success premium linked to the final sale value of the Divestment Pro grams, 
such success premium may only be earned if the divestiture takes place within the Trustee 
Divestiture Period.  
 
  Proposal by UTC  
 
23. No later than two weeks after the Effective Date, UTC shall submit the name or names of one or 
more natural or legal p ersons whom UTC proposes to appoint as the Monitoring Trustee to the 
Commission for approval. No later than one month before the end of the First Divestiture Period 
or on request by the Commission, UTC shall submit a list of one or more persons whom UTC 
 
8 proposes to appoint as Divestiture Trustee to the Commission for approval. The proposal shall 
contain sufficient information for the Commission to verify that the person or persons proposed as 
Trustee fulfil the requirements set out in paragraph 20 and shall include:  
 
(a) the full terms of the proposed mandate, which shall include all provisions necessary to 
enable the Trustee to fulfil its duties under these Commitments;  
 
(b) the outline of a work plan which describes how the Trustee intends to carry out its 
assigned tasks;  
 
(c)  an indication whether the proposed Trustee is to act as both Monitoring Trustee and 
Divestiture Trustee or whether different trustees are proposed fo r the two functions.  
 
  Approval or rejection by the Commission  
 
24. The Commission shall have the discretion to approve or reject the proposed Trustee(s)  and to 
approve the proposed mandate subject to any modifications it deems necessary for the Trustee to 
fulfil its obligations. If only one name is approved, UTC  shall appoint or cause to be appointed the 
person or persons concerned as Trustee, in accordance with the mandate approved by the 
Commission. If more than one name is approved, UTC  shall be free to ch oose the Trustee to be 
appointed from among the names approved. The Trustee shall be appointed within one week of the 
Commission’s approval, in accordance with the mandate approved by the Commission.  
 
  New proposal by the UTC  
 
25. If all the proposed Trustees are rejected, UTC  shall submit the names of at least two more natural 
or legal persons within one week of being informed of the rejection, in accordance with 
paragraphs 18 and 23 of these Commitments.  
 
  Trustee nominated by the Commission  
 
26. If all further proposed Trustees are rejected by the Commission, the Commission shall nominate a 
Trustee, whom UTC  shall appoint, or cause to be appointed, in accordance with a trustee mandate 
approved by the Commission.  
 
 
 II. Functions of the Trustee  
 
27. The Trustee shall assume its specified duties and obligations in order to ensure compliance with 
the Commitments. The Commission may, on its own initiative or at the request of the Trustee or 
UTC, give any orders or instructions to the Trustee in order to ensure compliance with the 
conditions and obligations attached to the Decision.   
 
 
9   Duties and obligations of the Monitoring Trustee  
 
28. The Monitoring Trustee shall:  
 
(i)        propose in its first report to the Commission a detailed work plan describing how it 
intends to monitor compliance with the obligations and conditions attached to the 
Decision.  
 
(ii) oversee, in close co -operation with the Hold Separate Manager, the on -going m anagement 
of the Divestment Programs with a view to ensuring their continued economic viability, 
marketability and competitiveness and monitor compliance by UTC with the conditions 
and obligations attached to the Decision. To that end the Monitoring Truste e shall:  
 
  (a) monitor the preservation of the economic viability, marketability and 
competitiveness of the Divestment Programs, and the keeping separate of the 
Divestment Programs from the business retained by the Parties, in accordance with 
paragraphs 8 and 9 of these Commitments;  
 
  (b) supervise the management of the Divestment Programs as a distinct and saleable 
research and development program, in accordance with paragraph 10 of these 
Commitments;  
 
  (c) with respect to Confidential Information:  
 
 determine all necessary measures to ensure that UTC does not after the 
Effective Date obtain any Confidential Information relating to the 
Divestment Programs,  
 in particular strive for the severing of the Divestment Programs’ participation 
in a central information technology network to the extent possible, without 
compromising the viability of the Divestment Progr ams,  
 make sure that any Confidential Information relating to the Divestment 
Programs obtained by UTC before the Effective Date is eliminated and will 
not be used by UTC and  
 decide whether such information may be disclosed to or kept by UTC as the 
disclosure is reasonably necessary to allow UTC to carry out the divestiture 
or as the disclosure is required by law;  
 
  (d) monitor the splitting of assets and the allocation of Pe rsonnel between the 
Divestment Programs and UTC or Affiliated Undertakings;   
 
(iii) propose to UTC such measures as the Monitoring Trustee considers necessary to ensure 
UTC’s compliance with the conditions and obligations attached to the Decision, in 
particular the maintenance of the full economic viability, marketability or competitiveness 
of the Divestment Programs, the holding separate of the Divestment Programs and the 
non-disclosure of competitively sensitive information;  
 
(iv) review and assess potential purchas ers as well as the progress of the divestiture process 
and verify that, dependent on the stage of the divestiture process:  
 
10  
  (a) potential purchasers receive sufficient and correct information relating to the 
Divestment Programs and the Personnel in parti cular by reviewing, if available, the 
data room documentation, the information memorandum and the due diligence 
process, and  
 
  (b) potential purchasers are granted reasonable access to the Personnel;  
 
(v) act as a contact point for any requests by third parties, in particular potential purchasers, in 
relation to the Commitments;  
 
(vi) provide to the Commission, sending UTC a non -confidential copy at the same time, a 
written report within 15 days after the end of every month that shall cover the operation 
and m anagement of the Divestment Programs as well as the splitting of assets and the 
allocation of Personnel so that the Commission can assess whether the Divestment 
Programs are held in a manner consistent with the Commitments and the progress of the 
divestitu re process as well as potential purchasers;  
 
(vii) promptly report in writing to the Commission, sending UTC a non -confidential copy at the 
same time, if it concludes on reasonable grounds that UTC is failing to comply with these 
Commitments;  
 
(viii) within one week a fter receipt of the documented proposal referred to in paragraph 17 of 
these Commitments, submit to the Commission, sending UTC a non -confidential copy at 
the same time, a reasoned opinion as to the suitability and independence of the proposed 
purchaser and the viability of the Divestment Programs after the Sale and as to  whether 
the Divestment Programs are sold in a manner consistent with the conditions and 
obligations attached to the Decision, in particular, if relevant, whether the Sale of the 
Divestment Programs without one or more Assets or not all of the Personnel af fects the 
viability of the Divestment Programs after the sale, taking account of the proposed 
purchaser;  
 
(ix) assume the other functions assigned to the Monitoring Trustee under the conditions and 
obligations attached to the Decision.  
 
29. If the Monitoring and Di vestiture Trustee are not the same legal or natural persons, the Monitoring 
Trustee and the Divestiture Trustee shall cooperate closely with each other during and for the 
purpose of the preparation of the Trustee Divestiture Period in order to facilitate e ach other's tasks.  
 
  Duties and obligations of the Divestiture Trustee  
 
30. Within the Trustee Divestiture Period, the Divestiture Trustee shall sell at no minimum price the 
Divestment Programs to a purchaser, provided that the Commission has approved both the 
purchaser and the final binding sale and purchase agreement (and ancillary agreements) as in line 
with the Commission's Decision and the Commitments in accordance with paragraphs 17 and 17 
of these Commitments. The Divestiture Trustee shall include in the sale and purchase agreement 
(as well as in any ancillary agreements) such terms and  conditions as it considers appropriate for 
an expedient sale in the Trustee Divestiture Period. In particular, the Divestiture Trustee may 
 
11 include in the sale and purchase agreement such customary representations and warranties and 
indemnities as are reas onably required to effect the sale. The Divestiture Trustee shall protect the 
legitimate financial interests of UTC, subject to UTC’s unconditional obligation to divest at no 
minimum price in the Trustee Divestiture Period.  
 
31. In the Trustee Divestiture Per iod (or otherwise at the Commission’s request), the Divestiture 
Trustee shall provide the Commission with a comprehensive monthly report written in English on 
the progress of the divestiture process. Such reports shall be submitted within 15 days after the  end 
of every month with a simultaneous copy to the Monitoring Trustee and a non -confidential  copy to 
UTC . 
 
 III. Duties and obligations of the Parties  
 
32.  UTC shall provide and shall cause its advisors to provide the Trustee with all such co -operation, 
assistance and information as the Trustee may reasonably require to perform its tasks. The Trustee 
shall have full and complete access to any of UTC’s or the  Divestment Programs’ books, records, 
documents, management or other personnel, facilities, sites and technical information necessary 
for fulfilling its duties under the Commitments and UTC and the Divestment Programs shall 
provide the Trustee upon request  with copies of any document. UTC and the Divestment Programs 
shall make available to the Trustee one or more offices on their premises and shall be available for 
meetings in order to provide the Trustee with all information necessary for the performance o f its 
tasks.  
 
33. UTC shall provide the Monitoring Trustee with all managerial and administrative support that it 
may reasonably request on behalf of the management of the Divestment Programs. This shall 
include all administrative support functions relating to  the Divestment Programs which are 
currently carried out at headquarters level. UTC shall provide and shall cause its advisors to 
provide the Monitoring Trustee, on request, with the information submitted to potential 
purchasers, in particular give the Mon itoring Trustee access to the data room documentation and 
all other information granted to potential purchasers in the due diligence procedure. UTC shall 
inform the Monitoring Trustee on possible purchasers, submit lists of potential purchasers at each 
stage of the selection process, including the offers made by potential purchasers at those stages, 
and keep the Monitoring Trustee informed of all developments in the divestiture process.  
 
34. UTC shall grant or procure Affiliated Undertakings to grant comprehensive powers of attorney, 
duly executed, to the Divestiture Trustee to effect the sale (including ancillary agreements), the 
Closing and all actions and declarations which the Divestiture Trustee considers necessary or 
appropriate to achieve the sa le and the Closing, including the appointment of advisors to assist 
with the sale process. Upon request of the Divestiture Trustee, UTC shall cause the documents 
required for effecting the sale and the Closing to be duly executed.  
 
35. UTC shall indemnify the Trustee and its employees and agents (each an “ Indemnified Party ”) and 
hold each Indemnified Party harmless against, and hereby agrees that an Indemnified Party shall 
have no liability to UTC for, any liabilities arising out of the performance of the Trust ee’s duties 
under the Commitments, except to the extent that such liabilities result from the wilful default, 
recklessness, gross negligence or bad faith of the Trustee, its employees, agents or advisors.  
 
 
12 36. At the expense of UTC, the Trustee may appoint adv isors (in particular for corporate finance or 
legal advice), subject to UTC’s approval (this approval not to be unreasonably withheld or 
delayed) if the Trustee considers the appointment of such advisors necessary or appropriate for the 
performance of its duties and obligations under the Mandate, provided that any fees and other 
expenses incurred by the Trustee are reasonable. Should UTC refuse to approve the advisors 
proposed by the Trustee the Commission may approve the appointment of such advisors instea d, 
after having heard UTC. Only the Trustee shall be entitled to issue instructions to the advisors. 
Paragraph 34 of these Commitments shall apply muta tis mutandis . In the Trustee Divestiture 
Period, the Divestiture Trustee may use advisors who served UTC during the Divestiture Period if 
the Divestiture Trustee considers this in the best interest of an expedient sale.  
 
37. UTC agrees that the Commission may share Confidential Information proprietary to UTC with the 
Trustee. The Trustee shall not disclose such information and the principles contained in Article 17 
(1) and (2) of the Merger Regulation apply mutatis mutandis .  
 
38. UTC agrees that the contact detail s of the Monitoring Trustee are published on the website of the 
Commission's Directorate -General for Competition and they shall inform interested third parties, 
in particular any potential purchasers, of the identity and the tasks of the Monitoring Trustee . 
 
39. For a period of 10 years from the Effective Date the Commission may request all information 
from the Parties that is reasonably necessary to monitor the effective implementation of these 
Commitments.  
 
 IV. Replacement, discharge and reappointment of the  Trustee  
 
40. If the Trustee ceases to perform its functions under the Commitments or for any other good cause, 
including the exposure of the Trustee to a Conflict of Interest:  
 
(a) the Commission may, after hearing the Trustee and UTC, require UTC to replace the Trustee; 
or  
(b) UTC may, with the prior approval of the Commission, replace the Trustee.  
41. If the Trustee is removed according to paragraph 39 of these Commitments, the Trustee may be 
required to continue in its function until a new Trustee is in place to whom the Trustee has 
effected a full hand over of all relevant inform ation. The new Trustee shall be appointed in 
accordance with the procedure referred to in paragraphs 18-25 of these Commitments.  
 
42. Unless removed according to paragraph 39 of these Commitments, the Trustee shall cease to act as 
Trustee only after the Commission has discharged it from its duties after all the Commitments 
with which the Trustee has been entrusted have been implemented. However, the Commission 
may at any time require the reappointment of the Monitoring Trustee if it subsequently appears 
that the relevant remedies might not have been fully and properly implemented.  
 
Section F.  The review clause  
 
43. The Commission may extend  the time periods foreseen in the Commitme nts in response to a 
request from UTC or, in appropriate cases, on its own initiative. Where UTC requests an extension 
of a time period, it shall submit a reasoned request to the Commission no later than one month 
 
13 before the expiry of that period, showing good cause . This request shall be accompanied by a 
report from the Monitoring Trustee, who shall, at the same time send a non -confidential copy of 
the report to UTC. Only in exceptional circumstances shall UTC be entitled to request an 
extension within the  last month of any period.  
 
44. The Commission may further, in response to a reasoned request from UTC showing good cause 
waive, modify or substitute, in exceptional circumstances, one or more of the undertakings in 
these Commitments. This request shall be accompanied by a report from th e Monitoring Trustee, 
who shall, at the same time send a non -confidential copy of the report to UTC. The request shall 
not have the effect of suspending the application of the undertaking and, in particular, of 
suspending the expiry of any time period in w hich the undertaking has to be complied with.  
 
Section G.  Entry into force  
 
45. The Commitments shall take effect upon the date of adoption of the Decision.  
 
[Signed]  
 
14 SCHEDULE  
 
1. The Divestment Programs consist of UTC’s activities in the development of aircraft 
passenger oxygen generation systems, consisting of two R&D programs, the […] 
Oxygen Program and the […] Oxygen Program.  They include all of UTC’s oxygen -
related assets necessary to continue developmental R&D efforts on the […] Oxygen 
Program and the […] Oxygen Program .   
 
2. In accordance with paragraph 5 of these Commitments, the Divestment Programs 
comprise:  
 
(a) All intangible assets owned by UTC or Affiliated Undertakings at the Effective Date, 
including all UTC’s rights in intellectual property, research data generated in the 
course of business, patents, invention disclosures, research results, a nd know -how, 
necessary to continue R&D efforts on the […] Oxygen Program and the […] Oxygen 
Program. In particular, UTC’s intangible assets to be transferred include all patents 
and patent applications listed in Confidential Annex  – Oxygen  – 4.  
(b) All research and development contracts relating to the Divestment Programs and 
necessary to continue R&D efforts on the […] Oxygen Program and the […] Oxygen 
Program, entered into by UTC prior to Closing. In particular, UTC will make best 
efforts to either  assign any existing contracts with the partner universities involved in 
the […] Oxygen Program (including the […] identified in Confidential Annex – 
Oxygen – 2), and the […] Oxygen Program (including the agreement with […] 
identified in Confidential Annex  – Oxygen – 3.3) to the Purchaser, as well as any 
future agreements with […] for additional oxygen -related research, or alternatively 
and at the Purchaser’s discretion, will make best efforts to terminate any existing 
contracts with the universities, as we ll as any new agreements with […], so as to 
provide the Purchaser with the ability to enter into new contracts with the partner 
universities or carry out the research concerning the […] Oxygen Program and […] 
Oxygen Program alone or with partners of its ow n choosing;  
 
(c) The following Personnel and Key Personnel: the Divestment Programs’ […]. 
 
3. The Divestment Programs shall not include:  
  
(a) Any intangible assets owned by UTC that are used either exclusively or predominantly 
for activities other than those related to, and that are not necessary for the viability and 
competitiveness of, the […] Oxygen Program or the […] Oxygen Program.   
 
(b) The employees who currently provide limited general engineering and project support 
to the Divestment Programs, or management oversight, and reflect the general non -
specialized expertise that any qualified aerospace Purchaser would have and will not 
be tran sferred.  
 
(c) Certain UTC employees assisting with the negotiation and signing of any agreements 
with […] for additional research in the […] Oxygen Program.  
 
 
15 (d) Certain commercially available engineering software owned or licensed by UTC and 
used to analyse data generated  by the Divestment Programs.  
 
4. If there is any asset or personnel which is not covered by paragraph 2 of this Schedule 
but which is both  used (exclusively or not) in the Divestment Programs and necessary 
for the continued viability and competitiveness of the Divestment Programs, that asset 
or adequate substitute will be offered to potential purchasers.  
 
* * *  
 
Annexes : [Details of UTC's R&D programs]