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, 23.10.2019  
C(2019 ) 7713 final  
PUBLIC VERSION  
 
To the notifying p arties 
Subject : Case M. 9387  – Allied Irish Banks/First Data Corporation/Semeral  
Commission decision pursuant to Article 6(1)(b) of Council Regulation 
No 139/20041 and Article 57 of the Agreement on the European Economic 
Area2 
Dear Sir or Madam,  
(1) On 18 September 2019 , the European Commission received notification of a 
proposed concentration pursuant to Article 4 of the Merger Regulation by which 
Allied Irish Banks plc (“ AIB”, Ireland) and First Data Corporation (“ FDC ”, USA) 
(together, the “Notifying Parties”) will acqu ire joint control over Semeral Limited 
(“Semeral”, Ireland) . Semeral is  the holding company of Payzone Ireland Limited 
(“Payzone”, Ireland).3 AIB, FDC , Semeral , and Payzone  are designated hereinafter 
as the “Parties ”. 
1. THE PARTIES  
(2) AIB is a financial services group operating predominantly in Ireland and providing a 
range of banking, financial and related services to retail, business, and corporate 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the “Merger Regulation ”). With effect from 1 December 2009,  the Treaty on the 
Functioning of the European Union ( “TFEU ”) has introduced certain changes, such as the replacement of  
“Community ” by “Union ” and “common market ” by “internal market ”. The terminology of the TFEU will 
be used throughout this decision.  
2  OJ L 1, 3.1.1994, p. 3 (the “ EEA Agreement ”). 
3  Publication in the Official Journal of the European Union No C 322, 26.9.2019 , p. 6. 
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information omitted has been replaced by 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 customers. FDC  is active in electronic commerce and payment services for 
businesses worldw ide.  In Ireland, AIB and FDC jointly control AIBMS, a JV active 
in merchant acquiring and payment card processing services.4  
(3) Semeral  is a holding company  controlled by The Carlyle Group  (USA) . Semeral  
controls Payzone , which operates a multi -channel cons umer payments acceptance 
network in Ireland, predominantly focused on services that facilitate the payment of 
utility bills, transport -related charges , and pre -paid mobile top -ups. 
2. THE CONCENTRATION  
(4) The Notifying Parties signed a Share Purchase Agreement o n 18 April 2019, by 
virtue of which the operation (“Transaction”) will be structured as follows. First, 
[DETAILS OF JV STRUCTURE] . Augmentum would then acquire directly 100%  
of the shares  of Semeral .  
(5) Although Semeral has no activities other than being the  holding company for 
Payzone, Payzone is a business with a market presence to which market turnover can 
be clearly attributed and hence, as clarified in paragraph 24 of the Consolidated 
Jurisdictional Notice (“CJN”),5 it constitutes an undertaking within t he meaning of 
the Merger Regulation.  
(6) Following completion of the Transaction, the Notifying Parties would acquire joint 
control of Augmentum, Semeral , and Payzone.  Post -Transaction , the Notifying 
Parties would jointly make decisions related to the strateg ic commercial conduct of 
each of Augmentum, Semeral, and Payzone . [DETAILS OF JV STRUCTURE] .6 
(7) As neither of the Notifying Parties exerted previously any form of control over 
Semeral (or Payzone), the transaction qualifies as an acquisition of control by  third 
parties pursuant to paragraph 91 of the CJN.  
(8) In light of the above, the transaction constitutes a concentration within the meaning 
of Article 3(1)(b) of the Merger Regulation.  
3. EU DIMENSION  
(9) The undertakings concerned have a combined aggregate world -wide turnover of 
more than EUR 5 000 million7 (AIB: EUR 2 874 million; FDC: EUR 7 349 million; 
Payzone: EUR […] million) . Two of them have an EU-wide turnover in excess of 
EUR 250 million  (AIB: EUR 2 874 million; FDC: EUR […] million). AIB and 
Payzon e achieve more than two thirds of their aggregate EU -wide turnover in 
Ireland, but FDC does not.  
(10) The notified operation therefore has an EU dimension pursuant to Article 1(2) of the 
Merger Regulation.  
                                                 
4  See Case M.4814 , AIB/FDC/JV .  
5  Commission Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 on the 
control of concentrations between undertakings (OJ C 95, 16.2.2008, p.9)  
6  Stakeholders Agreement (17 April 2019), clauses  2.8(a)(i) and 2.8(a)(ii), and Schedule 1.  
7  Turnover calculated in accordance with Article 5 of the Merger Regulation . 
 
 
3 4. RELEVANT MARKETS  
4.1. Supply of POS terminals to merchants  
4.1.1.  Product market definition  
(11) A POS terminal  (or “POS”)  is the electronic device used to process card payments at 
the merchant's location. It is a necessary element for physical card based 
transactions. POS terminals are either sold or leased to merchants. POS terminals are 
supplied either together with the merchant acquiring services or on a standalone 
basis.    
(12) There are different types of POS terminals: traditional POS terminals and mobile 
POS (or “mPOS”) card readers.  Traditional POS terminals connect to the  merchant 
acquirer’s system through the merchant’s fixed telephone line , through broadband 
(via fixed cable or WiFi) or through the mobile telephone network.   mPOS card 
readers connect to the merchant’s mobile device ( smartphone or tablet ) via Bluetooth 
and an app on that mobile device then connects to the merchant acquirer .8 POS 
terminals are used by merchants of different sizes .9   
(13) In FIS/Worldpay , the Commission considered a separate product market for the 
supply of POS terminals to merchants.10  The Commission left open the question 
whether a possible relevant market for the supply of POS terminals should be sub -
segmented by type of POS device or based on the size of the POS terminal 
customers.11 
(14) In this case, t he Notifying Parties submit that the m arket for supply of POS terminals 
should not be further sub -segmented, by device type or by merchant size.   
(15) For the purposes of the present decision, the  exact product market definition can be 
left open since  the Transaction does not give rise to serious doubts as to its 
compatibility with the internal market  under any plausible definition  (i.e., supply of 
POS to all merchants; supply of traditional POS to merchants; supply of POS to 
large merchants; supply of POS to medium -sized merchants; supply of POS to 
smaller merchants) .  
4.1.2.  Geographic market definition  
(16) In its decisional practice , the Commission considered that the market  for supply of 
POS to merchants  is likely national in scope but eventually left the question open.12  
(17) In this case, t he Notifyin g Parties submit that the market for POS terminals could be 
broader than national and cover a territory including Ireland and the UK,  because 
                                                 
8  Case M.9357, FIS/Worldpay , para . 28.  
9  See Case M.9357, FIS/Worldpay , para. 34, where, by reference to the UK, the Parties defined smaller 
merchants as all merchants with an annual total payments volume (“TPV”) below GBP 380 000; medium -
sized merchants as all merchants with an annual TPV between GBP 380 000 and GBP 1 million; and large 
merchants as all merchants with an annual  TPV exceeding GBP 1 million.   
10  Case M.9357, FIS/Worldpay , paras. 36 -38.  See also Case M.7873, Worldline/Equens/Paysquare , paras. 
62-69. 
11  Case M.9357, FIS/Worldpay , para. 38.  
12  Case M.9357, FIS/Worldpay , para. 41 and M.7873, Worldline/Equens/Paysqu are, paras. 128ff.  
 
 
4 sales /leases  are completed remotely and providers can offer support services in both 
countries in the same languag e.   
(18) For the purposes of the present decision, the exact geographic market definition for 
the s upply of POS to merchants can be left open , since the Transaction does not give 
rise to serious doubts as to its compatibility with the internal market even unde r the 
narrowest plausible geographic market definition , i.e. at national level  in Ireland .13  
4.2. Top-ups for pre -paid mobile telecommunication services  
4.2.1.  Product market definition  
(19) Retail mobile telecommunication services include the delivery of voice and data 
services to end customers via a mobile network.14 Mobile Network Operators 
(“MNOs”) and to Virtual Mobile Network Operators (“MVNOs”)  can offer such 
services either on a post -paid basis (where customers enter a long -term contract and 
receive a monthly bill)  or on a pre -paid basis (where customers advance purchase 
credit to use their mobile phone).  
(20) Customers of pre -paid mobile telecommunication services need to purchase credit 
(or “ top up” their phone) regularly. MNOs/MVNOs offer in -house top-up 
capabilities but they also rely on third party services which provide additional top-up 
options. MNOs/MVNOs remunerate the third parties to use their top-up services .   
(21) Customers who want to top up their mobile phones can do so through two channels: 
(i) the customer -present  channel and (ii) the customer -not-present  channel. In more 
detail:  
(a) Customer -present channel . This channel allows customers to top up their 
mobile phone by visiting a retail store of the MNO/MVNO or by purchasing 
vouchers in a retail outlet ; and  
(b) Customer -not-present channel . This channel allows customers to top up their 
mobile phone by calling or texting a dedicated number provided by the 
MNO/MVNO; by using the app or the website of the MNO/MVNO (using a 
payment card); or via their bank account using online banking or the bank 
app or at an ATM.   
(22) In past decisions , the Commission defined a market for retail mob ile 
telecommunication  services .15  The Commission has not assessed top -ups for pre -
paid mobile telecommunication services in its previous decisio nal practice.16   
                                                 
13  According to the Parties, the market for supply of POS terminals to merchants (under all possible sub -
segmentations) would not be affected by the Transaction under any plausible geographic market definition 
wider than Ireland.  See reply to RFI 6, 22 October 2019.  
14  Case M.6992 , Hutchinson 3G UK/Telefonica Ireland , para. 141, with references to previous decisions.  
15  Case M.6992 , Hutchinson 3G UK/Telefonica Ireland , para. 141, with references to previous decisions .  
The Commission a rgued that this market should not be further sub -divided into a post -paid and a pre -paid 
segment (see Case M.6992, Hutchinson 3G UK/Telefonica Ireland , paras.  142-143).  Top-ups are not 
required for post -paid mobile telecommunication services and as such, these services are not relevant for 
the assessment of the plausible product markets in this case.  
16  In Case ME/659/18 , Post Office Limited/Payzone Bill Payments Limited , the CMA c onsidered that mobile 
top-ups constitute a separate market which is different from other business payme nt systems but 
 
 
5 (23) In this case,  the Notifying Parties submit that there is a relevant market for top -ups 
for pre -paid mobile telecommunication services, which is separate from the market 
for retail mobile telecommunication services.  The Notifying Parties also stress  the 
differences bet ween top-ups through the customer -present  channel and through the 
customer -not-present channel.  In any event, the Notifying Parties  take the view that 
it can be left open whether the relevant market includes all top -up services for pre -
paid mobile telecom munication services or there are separate markets for customer -
present top -ups and customer -not-present top -ups.   
(24) The Commission’s market investigation suggests  that top-ups through the  customer -
present  and the customer -not-present  channels are not substi tutable for the following 
reasons:  
(a) The vast majority of MNOs/MVNOs need (and have ) access to both channels 
to distribute pre -paid mobile telecommunication  services to end customers  
and compete effectively.  As an MNO /MVNO  explained: “ ceasing to offer 
top-ups through any of the existing channels would be a risk for [the 
MNO /MVNO ] as it would trigger customer frustration/risk churn/NPS 
ramifications ”17.  
(b) According to most MNOs/MVNOs, customers are unlikely to switch between 
channels.  As one MNO /MVNO  put it, “customers who choose one method  
usually  stick with it ”.18  Another  MNO /MVNO  added: “... the majority of 
customers tend to use the same method for topping up as the method they 
began the usage journey with, to a large extent using the same retail outlet 
continuously for example ”.19  An internal document of AIB confirmed that 
“[…]”;20 and 
(c) There are important technical differences between the customer -present and 
the customer -not-present channels, which means that suppliers could not 
readily switch or expand fro m one to the other.  With the exception of the 
MNO/MVNOs’ own capabilities, there are no suppliers who are active in 
both channels in Ireland today.21  
(25) In any event, even if all top -up solutions for pre -paid mobile telecommunication 
services in Ireland were  considered to belong to one single market, this would be a 
highly differentiated  market , as it would include two distinct and very dissimilar 
channels, i.e., the customer -not-present and the customer -present channel, which do 
not compete closely.  
                                                                                                                                                      
eventually left the issue open (see paras.  49-52).  This market would correspond to customer -present top -
ups for pre -paid mobile telecommunication services.   
17  MNO /MVNO ’s email of 23 August 2019, in respo nse to questionnaire of 16 August 2019, Doc ID 65 
(“NPS” refers to the Net Promoter Score, a customer satisfaction index).  In the same vein, 
MNO /MVNO ’s email of 23 August 2019, in response to questionnaire of 16 August 2019, Doc ID 66 and 
MNO /MVNO ’s email  of 20 August 2019, in response to questionnaire of 16 August 2019, Doc ID 40.  
18  MNO /MVNO ’s email of 23 August 2019, in response to questionnaire of 16 August 2019, Doc ID 57 and 
in the same vein, MNO /MVNO ’s email of 23 August 2019, in response to questi onnaire of 16 August 
2019 , Doc ID 62.   
19  MNO /MVNO ’s email of 23 August 2019, in response to questionnaire of 16 August 2019, Doc ID 62.  
20  [INTERNAL DOCUMENT ], provided as Form CO, Attachment H -1.  
21  See Tables 2 and 3 below.  
 
 
6 (26) For the  purposes of this decision,  the exact product market definition can be left 
open since the Transaction does not give rise to serious doubts as to its compatibility 
with the internal market under any plausible definition (all top-ups for pre -paid 
mobile tel ecommunication services ; customer -present  top-ups for pre -paid mobile 
telecommunication services; customer -not-present  top-ups for pre -paid mobile 
telecommunication services).  
4.2.2.  Geographic market definition  
(27) In Hutchinson 3G UK/Telefonica Ireland , the Commis sion concluded that the 
relevant geographic market for retail mobile telecommunication services is national 
in scope because of the national licences required for MNOs to operate and grant 
access to their networks.22  
(28) Consistent with this precedent, the Notifying Parties submit  that the geographic 
scope of the market for top-ups for retail mobile telecommunication services is also 
national.   
(29) In this case, t he market investigation did not provide any indications that would 
require the Commission to depart from its precedents.  In any event, the exact 
geographic market definition for this market can be left open, since the Transaction 
does not give rise to serious doubts as to its compatibility with the internal market 
even under the narrowest plau sible geographic market definition, i.e. at national 
level in Ireland .23 
4.3. Merchant acquiring (downstream market)  
4.3.1.  Product market definition  
(30) Merchant acquirers offer services that enable merchants to accept card payment 
transactions by connecting them to a range of card schemes and by providing 
solutions to process card payment transactions.24   
(31) The Commission has previously defined  a relevant product  market for merchant 
acquiring  services.  The Commission has also considered separate plausible market s 
for me rchant acquiring services based on (i) the payment card scheme ( merchant 
acquiring for domestic  or international  card schemes ); (ii) the payment card brand 
(merchant acquiring for VISA or Mastercard card schemes ); (iii) the payment card 
type ( merchant acqu iring for credit or debit cards ); and (iv) the payment platform 
(merchant acquiring through physical POS terminals or online ).25 
(32) In this case, t he Notifying Parties submit that it is not ap propriate to define separate 
markets for merchant a cquiring services  based on the payment card brand; the 
payment card t ype; or the payment p latform.  The Notifying Parties add that there is 
no domestic payment scheme in Ireland and a market de lineation based on the 
payment card scheme would  not be appropriate in t his country . 
                                                 
22  Case M.6992 , Hutchinson  3G UK/Telefonica Ireland , para.  164.  
23  According to the Parties, a plausible market including all top -ups for pre -paid mobile telecommunication 
services would not be affected by the Transaction under any plausible geographic market definition wider 
than Ireland.  See reply to RFI 6, 22 October 2019.  
24  Case M.9357, FIS/Worldpay , para. 14.  
25  Case M.9357, FIS/Worldpay , paras. 16 -21 with references to earlier Commission decisions.  
 
 
7 (33) For the purposes of this decision, the exact product market definition for merchant 
acquiring can be left open since the Transaction does not give rise to serious doubts 
as to its compatibility with the internal market under any plausible definitio n (i.e. 
merchant acquiring; merchant acquiring for Visa card transactions; merchant 
acquiring for MasterCard transactions; merchant acquiring for credit card 
transactions; merchant acquiring for debit card transactions; merchant acquiring for 
payments made  through physical POS terminals;  and merchant acquiring for 
payments made through web -enabled interfaces ). 
4.3.2.  Geographic market definition  
(34) In past decisions, the Commission has considered the market for merchant acquiring 
to be likely national in scope, irres pective of the type of card, the card scheme  or the 
card brand that merchant acquiring services concern.26  The precise scope of the 
geographic market definition was ultimately left open.27 
(35) In this case, t he Notifying Parties did not depart from the Commissi on’s precedents 
as regards geographic market definition for merchant acquiring.  
(36) For the purposes of the present decision, the exact geographic scope of the market 
for merchant acquiring can be left open since the Transaction does not give rise to 
serious doubts as to its compatibility with the internal market even under the 
narrowest plausible geographic market definition, i.e. at national level in Ireland.28 
4.4. Provision of ISO services (upstream market)  
4.4.1.  Product market definition  
(37) Merchant acquirers often  use their in -house sales teams to  identify and sign up new 
customers (merchants).   Merchant acquirers can also  outsource new customer 
recruitme nt to third parties, namely, independent service organisations or ISOs .29 A 
merchant acquirer may use one or more  ISOs  concurrently . Sometimes, merchant 
acquirers may recruit merchants both directly and via  ISOs . Even when a merchant 
is recruited through the ISO, t he contractual relationship for the provision of 
merchant acquiring services remains between the merchan t and the merchant 
acquirer.  ISOs are focused solely on recruiting, onboarding and supporting new 
merchants.  
                                                 
26  See e.g., M.6956, Telefonica/Caixabank/Banco Santander, para. 49 and M.5241, American 
Express/Fortis/Alpha Card , para. 30 .  See also M.7241, Advent International/Bain Capital Investors/Nets 
Holding , para. 30, where the Commission considered that the market for merchant acquiring services for 
all plausible market segmentatio ns, except web -enabled transactions, is most likely national in scope, 
whereas the market for merchant acquiring services for payments made through web -enabled interfaces 
would be at least EEA -wide.  
27  Case s M.9357, FIS/Worldpay , paras. 25 -26, M.7950, EGB /GP, paras. 32 and 38, M.7873, 
Worldline/Equens/Paysquare , para. 108, and M.7241, Advent International/Bain Capital  Investors/Nets 
Holding , paras. 23ff.  
28  According to the Parties, the market for merchant acquiring services (under all possible sub-
segmentations) would not be affected by the Transaction under any plausible geographic market definition 
wider than Ireland.  See reply to RFI 6, 22 October 2019.  
29  Case M.9357, FIS/Worldpay , para. 42.  
 
 
8 (38) The Commission has previously considered a separate relevant product market for 
the provision of ISO services  in FIS/Worldpay .30  The Commission ev entually left 
open the question whether ISO services should be sub -segmented by type of 
associated merchant acquiring services.  
(39) The Notifying Parties consider  that ISO services and merchant acquiring services 
belong to the same relevant product market.  A ccording to the Notifying Parties, 
“ISOs and merchant acquirers offer the same fundamental service, i.e., the ability to 
accept card payments... [W]hile ISOs... effectively operate as a reseller of a 
merchant acquirer’s services, ISOs and merchant acquirer s do compete directly for 
merchants...” .31  Having said this, the Notifying Parties also consider a separate 
plausible relevant market including only the provision of ISO services (and 
excluding merchant acquiring services).32  In any event, the Notifying Parties submit 
that the precise product market definition can be left open, as the Transaction does 
not give rise to competition concerns under any plausible market delineation.   
(40) Consistent with its decision in FIS/Worldpay , the Commission considers that IS O 
services and merchant acquiring services do not belong to the same market.  This is 
in line with the Notifying Parties’ claim that  “the ISO acts as the representative of 
their merchant acquirer partner... regardless of whether the merchant is recruited 
directly by the merchant acquirer or indirectly on behalf of the merchant acquirer by 
an ISO, merchants enter into merchant acquiring contracts only with merchant 
acquirers.”33  This means th at merchant acquiring services (the basis of an ISO’s 
offering to merchants ) are controlled  by merchant acquire rs, not by ISOs themselves .  
What is more, ISOs have a contractual relationship with and are remunerated by the 
merchant acquirer – not the merchant directly.34   
(41) For the purposes of this decision, it can be left  open whether this separate market for 
ISO services should be sub -segmented further, since the Transaction does not give 
rise to serious doubts as to its compatibility with the internal market under any 
plausible definition (all ISO services; ISO services market split by type of associated 
merchant acquiring services).  
4.4.2.  Geographic market definition  
(42) In FIS/Worldpay , the Commission left the geographic market definition for ISO 
services open given that the transaction did not raise any issues even at the   
narrowest plausible geographic market definition  (i.e., at national  level ).35  
(43) The Notifying Parties submit that the geographic market scope for the provision of 
ISO services is national, but that given  that the transaction does not present any 
competition concerns, the exact definition can be left open.  
(44) For the purposes of the present decision, the exact geographic scope of the market 
for ISO services can be left open since the Transaction does not give rise to serious 
                                                 
30  Case M.9357, FIS/Worldpay , para. 46.  
31  Form CO, para. 6.139.  
32  The Notifying Parties take the view that a plausible market for the provision of ISO services should not be 
sub-segmented by type of associated merchant acquiring services.  
33  Form CO, para s. 6.24 and  6.139.   
34  Case M.9357, FIS/Worldpay , para.  42.  
35  Case M.9357, FIS/Worldpay , para.  49. 
 
 
9 doubts as to its compatibility with th e internal market even under the narrowest 
plausible geographic market definition, i.e. at national level in Ireland.36 
5. COMPETITIVE ASSESSMEN T 
5.1. Introduction  
(45) Article 2 of the Merger Regulation requires the Commission to examine whether 
notified concentrations  are compatible with the internal market, by assessing whether 
they would significantly impede effective  competition in the internal market or in a 
substantial part of it, in particular as a result of the creation or strengthening of a 
dominant position.  
(46) A merger giving rise to a significant impediment of effective competition may do so 
as a result of the creation or strengthening of a dominant position in the relevant 
market(s). Moreover, mergers in oligopolistic markets involving the elimination of 
impor tant constraints that the parties previously exerted on each other, together with 
a reduction of competitive pressure on the remaining competitors, may also result in 
a significant impediment to effective competition, even in the absence of 
dominance.37 
(47) The Commission Guidelines on the assessment of horizontal mergers under the 
Merger Regulation  (the “Horizontal Merger Guidelines”)38 describe horizontal non -
coordinated effects as follows: “ A merger may significantly impede effective 
competition in a market by  removing important competitive constraints on one or 
more sellers who consequently have increased market power. The most direct effect 
of the merger will be the loss of competition between the merging firms. For 
example, if prior to the merger one of the merging firms had raised its price, it 
would have lost some sales to the other merging firm. The merger removes this 
particular constraint. Non -merging firms in the same market can also benefit from 
the reduction of competitive pressure that results from t he merger, since the merging 
firms’ price increase may switch some demand to the rival firms, which, in turn, may 
find it profitable to increase their prices. The reduction in these competitive 
constraints could lead to significant price increases in the r elevant market. ”39 
(48) The Horizontal Merger Guidelines 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 m erging firms 
are close competitors, the limited possibilities for customers to switch suppliers, or 
the fact that the merger would eliminate an important competitive force.40 That list 
of factors applies equally regardless of whether  a merger would create o r strengthen 
a dominant position, or would otherwise significantly impede effective competition 
due to non -coordinated effects. Furthermore, not all of these factors need to be 
                                                 
36  According to the Parties, the market for ISO services (under all possible sub -segmentations) would not be 
affected by the Transaction under any plausible geographic market definition wider  than Ireland.  See 
reply to RFI 6, 22 October 2019.  
37  Horizontal Merger Guidelines, para.  25. 
38  OJ C 31, 5.2.2004, p. 5.  
39  Horizontal Merger Guidelines, para. 24. 
40  Horizontal Merger Guidelines, paras. 27 and following.  
 
 
10 present for significant non -coordinated effects to be likely. The list of facto rs, each 
of which is not necessarily decisive in its own right, is also not an exhaustive list.41  
(49) Finally, the Horizontal Merger Guidelines describe a number of factors, which could 
counteract the harmful effects of the merger on competition, including the  likelihood 
of buyer power, the entry of new competitors on the market, and efficiencies.  
(50) In addition, the Commission Guidelines on the assessment of non -horizontal mergers 
under the Merger Regulation (the "Non -horizontal Merger Guidelines") distinguish 
between  two main ways in which vertical mergers may significantly impede 
effective competition, namely input  foreclosure and customer foreclosure.42  
(51) For a transaction to raise input foreclosure competition concerns, the merged entity 
must have a significant degree of market power upstream.43 In assessing the 
likelihood of an anticompetitive  input foreclosure strategy, the Commission has to 
examine (i) whether the merged entity would have the ability to substantially 
foreclose access to inputs ; (ii) whether it would have the incentive to do so; and (iii) 
whether a foreclosure strategy would have a significant detrimental effect on 
competition downstream.44  
(52) For a transaction to raise customer foreclosure competition concerns, the merged 
entity must  be an importan t customer with a significant degree of market power in 
the downstream market.45 In assessing the likelihood of an anticompetitive customer 
foreclosure strategy, the Commission has to examine (i) whether  the merged entity 
would have the ability to foreclose access to downstream markets by reducing its 
purchases from upstream rivals; ( ii) whether it would have the incentive to do so; 
and (iii) whether a foreclosure strategy would have a significant detrime ntal effect 
on consumers in the downstream market.46 
5.2. Overview of Affected Markets  
(53) The Transaction gives rise to limited horizontal and vertical overlaps. The 
Transaction results in two horizontally affected markets, namely (i) the supply of 
POS terminals to  merchants, where  Payzone, FDC, and AIBMS  are active and (ii) 
top-ups for  pre-paid mobile telecommunication services that AIB and Payzone offer 
to MNOs/MVNOs . The Transaction also gives rise to a vertical link  which results in 
two affected markets: (i) ISO services provided by Payzone (upstream) and (ii) 
merchant acquiring services provided by AIBMS and FDC (downstream).47 
                                                 
41  Horizontal Merger Guidelines , paras. 24-38. 
42  OJ L 24, 29.1.2004, p. 1.  
43  Non-horizontal Merger Guidelines, para. 35. 
44  Non-horizontal Merger Guidelines, para. 32. 
45  Non-horizontal Merger Guidelines, para. 61.  
46  Non-horizontal Merger Guidelines, para. 59. 
47  The Transaction also gives rise to a vertical link between (i) manufacture of POS terminals and supply to 
intermediaries where FDC is active  (upstream ) and (ii) supply  of POS terminals to merchants where 
Payzone , AIBMS, and FDC  are active  (downstream ).  Both FDC’s share in the upstream market and the 
combined share of  Payzone , AIBMS, and FDC  in the downstream market are below 30%.  Thus, these 
markets are not vertically affected by the Transaction.  


 
 
13 would not  give rise to competition concerns in this market for the reasons discussed 
below.  
5.4.1.  The Parties are distant competitors  
(63) The Parties offer different top-up solutions that cater for the needs of different end 
customers. For instance, while any customer can purchase the top-up vouchers 
offered by Payzone, only customers with an AIB bank accou nt can use its top-up 
capabilities.  An internal document of AIB confirmed that “ […]”.53 An 
MNO/ MVNO explained: “ if a sim card was purchased in a retail environment [end-
customers]  are likely to top  up in a retail environment. Customers who purchased 
throug h a website would likely continue to do s o, and the bank account option...  
would refer to a younger demographic who are more inclined to use their apps to do 
general business ”.54  The market investigation also suggested that  customers of each 
segment rarely  switch between pre -paid distribution channels.55 Therefore, the 
solutions of AIB and Payzone do not compete closely for the same type of end -
customers.  
(64) During the market investigation, MNO /MVNO s confirmed that when negotiating 
with Payzone fees for top -up services, they do not use as benchmark the fees offered 
to AIB and other players in the customer -not-present channel. A reason for this is 
that Payzone ( like other customer -present  actors) follows  a different cost structure 
than customer -not-present  compe titors, because [DETAILS OF PAYZONE’S COST 
STRUCTURE] .56 MNO /MVNO s added that when negotiating with AIB the fee for 
top-up services, they also do not use as benchmark the fees offered to Payzone and 
other players in the customer -present  channel.57   
  
                                                 
53  [INTERNAL DOCUMENT] , provided as Form CO, Attachment H -1 (emphasis added) .  
54  MNO /MVNO ’s email of 23 August 2019, in response to questionnaire of 16 August 2019, Doc ID 62.  
55  MNO /MVNO ’s email of 23 August 2019, in response to questionnaire of 16 August 2019, Doc ID 57 and 
in the same vein, MNO /MVNO ’s email of 23 August 2019, in response to questionnaire of 16 August 
2019 , Doc ID 62.   
56  Minutes of call with MNO /MVNO , 12 September 2019, para.  7.b. 
57  Minutes of call with MNO /MVNO , 12 September 201 9, para.  7.a. 
 
 
14  
(65) Rathe r, each of AIB and Payzone compete more closely with other rivals than with 
each other:  
(a) Payzone’s top -up solution competes closely with the other services in the 
customer -present  channel.  Vodafone, Three, and eir (which together account 
for approximately 90% of all mobile telecommunication services in Ireland) 
use top -up vouchers not just from Payzone, but also from PostPoint and 
Euronet (epay).  Payzone also competes with the (customer -present  and 
customer -not-present ) top-up options that the MNOs/MVNOs themselves 
offer.58  As one MNO /MVNO  put it during the market investigation: “ the 
customers abandoning the voucher channel started using [the 
MNO /MVNO ’s] own top -up capabilities (online and in -store) ”.59   
(b) AIB’s top -up solutions compete closely with the  (customer -not-present ) top-
up options that the MNOs/MVNOs themselves offer.60  Both the banking  top-
ups and the MNO/MVNO own tools are predominantly online solutions, 
based on apps a nd websites. According to one MNO /MVNO , there is “more 
interchangeability between top -ups through digital channels offered by 
MNOs/MVNOs and banks (including websites and apps), and less 
interchangeability between voucher top -ups and top -ups through digita l 
channels ”61. 
(66) Finally, in the past 5 years, the percentage of  mobile subscribers in Ireland using pre -
paid services  has declined by 11%,62 while the percentage  of post -paid retail mobile 
subscribers in Ireland has increased.  The Notifying Parties recognize  that f or the 
[…].”63 The market investigation suggested that this is particularly true for 
customers using the voucher channel .64 […].65  This further confirms the lack of 
competitive closeness between the top -up solutions of AIB and Payzone.    
5.4.2.  Customers of pre -paid top-up solutions (MNOs /MVNOs) multi -home  and have 
countervailing buyer power  
(67) As shown in Table 3 below, most  MNOs /MVNOs active in Ireland use several 
solutions to offer top-ups for pre -paid mobile telecommunication services to their 
                                                 
58  Indeed, the MNOs/MVNOs have every incentive to encourage subscribers who switch away from 
Payzone’s solutions to use the MNO/MVNO top -up capabilities.  First , this would allow the 
MNOs/MVNOs to retain the commission that would otherwise ha ve to be paid to a third party.  Second , 
supplying customers directly may provide MNOs/MVNOs with additional insights into their customer 
base, including customer profiles and usage patterns.  Third , their own top -up methods provide 
MNOs/MVNOs with an addi tional opportunity to distribute promotional material and advertisements to 
their customers (see Reply of the Notifying Parties to RFI 5, 9 October 2019, para. 7.3).  
59  Minutes of call with MNO /MVNO , 12 September 2019, para. 5.  
60  Minutes of call with MNO /MVNO , 12 September 2019, para.  6.  See also fn. 58 above regarding the 
MNOs/MVNOs’ incentives.  
61  MNO /MVNO ’s email of 23 August 2019, in response to questionnaire  of 16 August 2019, Doc ID 65.  
62  See Form CO, fn. 80.  
63  [INTERNAL DOCUMENT] , provided as Form CO, Attachment I-2. 
64  Minutes of call with MNO /MVNO , 10 September 2019, 5.  
65  [INTERNAL DOCUMENT] , provided as Form CO, Attachment H -1, p. 114, which identifies as the main 
risk for Payzone the […].  

 
 
16 5.4.4.  Conclusion  
(71) In light of the above considerations , the Commission concludes that the Transaction 
does not give rise to serious doubts as to its compatibility with the internal market in 
the plausible market for top -ups for mobile telecommunication services in Ireland.  
5.5. ISO Services in Ireland (Upstream) – Merchant Acquiring Services in Ireland 
(Downstream)  
(72) AIBMS and FDC offer merchant acquiring services in Ireland , holding a combined 
share of [30-40]% (by value of transactions) and [30-40]% (by volume of 
transactions)  in 2018  in the relevant market for merc hant acquiring services .72  
Payzone offers ISO services only to AIBMS in Ireland , and it holds  a share of [30-
40]% (by value of transactions ) and [50-60]% (by volume of transactions)  in the 
market for ISO services in Ireland .73   
(73) The Transaction does not give rise to competition concerns regarding the vertical 
link between the upstream market for ISO services in Ireland and the downstream 
market for merchant acquiring services in Ireland for the reasons explained below.74   
5.5.1.  Input foreclosure  
(74) The Transaction  is unlikely to give rise to input foreclosure concerns .  The combined 
entity would not have the ability to foreclose its downstream  competitors in 
merchant acquiring in Ireland (under all plausible market delineations) by restricting 
access to ISO service s for the following reasons:  
(a) Input foreclosure may raise competition problems when it is essential for the 
downstream product, e.g., when that product could not be manufactured or 
effectively sold on the market without the input.75  ISO services do not see m 
to be an important input for merchant acquiring.  Merchant acquirers can and 
do provide on their own the services offered by ISOs (i.e. , signing up 
                                                 
72  The Notifying Parties confirm  that their market shares in merchant acquiring  would remain comparable 
under all plausible market delineations (i.e., if the merchant acquiring services were to be sub -segmented 
on the basis of the payment card brand, the payment card type , or the payment platform ).  The Notifying 
Parties added that a ll merchant acquirers are typically active in each of the plausible sub -segments in 
Ireland. For these reasons, the analysis and conclusion in this Section applies regardless of the precise 
relevant market delineation in merchant acquiring services.  
73  The Notifying Parties submit that ISOs in Ireland facilitate the acceptance of all types of cards, of all 
brands, for payments made through physical or web -enabled interfaces.  For these reasons, the analysis 
and conclusion in this Section applies regardless of a possible sub -segmentation in the market for ISO 
services.  
74  Even assuming that ISO services and m erchant acquiring services belong to the same market, as the 
Parties argued (see para. (39) above ), the horizontal  overlap between AIBMS’, FDC’s, and Payzone’s 
activities would not give rise to serious doubts as to  the compatibility of the Transaction with the internal 
market . The combined share of the Parties would be [30-40]% (in terms of value of transactions) and [30-
40]% (in terms of volume of transactions)  in a hypothetical market including both ISO services and 
merchant acquiring services in Ireland .  The increment cont ributed by Payzone would remain low ( [0-5]% 
in terms of value of transactions and [5-10]% in terms of volume of transactions).  Post -Transaction, the 
combined entity would continue facing competition by several strong rivals, including  Worldpay, Elavon, 
Barclays, BOIPA, Valitor, Paymentsense, Swedbank, JP Morgan Chase, and others, such as  Adyen and 
Stripe.  The Parties would not be close competitors as AIBMS and FDC are merchant acquirers while 
Payzone is an ISO, only reselling merchant acquiring services o f AIBMS.  
75  Non-horizontal Merger Guidelines, para. 34 
 
 
17 merchants and managing customer relationships).76 For example, in 2018, 
[70-80]% of the merchants that AIBMS  recruited were identified and signed 
up through AIBMS’s own sales team.  […].   
(b) The combined entity would not have the ability to foreclose downstream 
competitors, as it cannot negatively affect the overall availability of inputs for 
the downstream market .77 […].  Post-Transaction, the combined entity would 
not be able to foreclose any of its downstream rivals by restricting access to 
Payzone’s ISO services, because none of these rivals relies  on these services 
today to compete effectively.  In any event, a  number of ISO s will remain in 
the market post -Transaction  and will be able to satisfy merchant acquirer 
demand .  This includes BOIPA, Payment Plus, and eCOMM.  In the 
upstream market , there has also been new entry recently , e.g., by  
Paymentsense and RMS, which are headquartered in the UK, but started 
offering ISO services in Ireland in recent years.   
(75) As the Commission found that the combined entity would have no ability to 
foreclose merchant acquirers in Ireland , it is not necessary to assess in detail the 
incentives of the combined entity or the  overall impact of the Transaction on 
competition .  
5.5.2.  Customer foreclosure  
(76) The Transaction is unlikely to lead to customer foreclosure  concerns . The combined 
entity would not have the ability to  foreclose its upstream  competitors in ISO 
services  in Ireland (under all plausible market delineations) by restricting access to a 
significant customer base  for the following reasons:  
(a) When considering whether the merged entity has the ability to foreclose  
access to downstream markets, the Commission examines whether there are 
sufficient economic alternatives in the downstream markets for the upstream 
rivals to sell their output .78 In this case, p ost-Transaction, a significant 
customer base of merchant acqui rers will remain in Ireland for ISOs to sell 
their services to (representing approximately 63% of the market (in terms of 
volume of transactions) or 67% (in terms of value of transactions)).  Such 
potential customers include Worldpay, Elavon , Barclays, Val itor, Swedbank, 
JP Morgan Chase, Adyen, and Stripe.   
(b) The combined entity has the ability to engage in customer foreclosure, only 
when it involves a company which is an important customer in the 
downstream market.79  AIBMS and FDC are not significant custom ers for 
ISO services in Ireland today.  As explained above, AIBMS mainly recruits 
merchant customers directly (through its own sales team) while FDC does 
not use ISOs to recruit merchants in Ireland.  In any event , AIBMS already 
sources approximately […]% of its (limited) demand for ISO services  from 
Payzone.  The remaining AIBMS’ demand for ISO services from providers 
                                                 
76  Case M.9357, FIS/Worldpay , para. 80(a).  
77  Non-horizontal Merger Guidelines, para.  36.  
78  Non-horizontal Merger Guidelines, para.  61. 
79  Non-horizontal Merger Guidelines, para.  61. 
 
 
18 other than Payzone only represents […]% of the overall demand for ISO 
services in Ireland.  
(77) As the Commission found that the combined entity would have no ability to 
foreclose ISOs in Irela nd, it is not necessary to assess in detail the incentives of the 
combined entity or the overall impact of the Transaction on competition.  
5.5.3.  Conclusion  
(78) In light of the above considerations, the Commission concludes that the Transaction 
does not raise serious doubts as to its compatibility with the internal market as a 
result of either input or customer foreclosure on the markets for ISO services 
(upstream ) and merchant acquiring (downstream) . 
 
6.  CONCLUSION  
(79) For the above reasons, the European Commission has decided not to oppose the 
notified operation and to declare it compatible with the internal  market and with the 
EEA Agreement. This decision is adopted i n application of Article 6(1)(b) of the 
Merger Regulation and Article 57 of the EEA Agreement .  
 
 
For the Commission  
 
 
(Signed)  
Margrethe VESTAGER  
Member of the Commission