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, 6.11.2018  
C(2018) 7466 
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 show n thus 
[…]. Where possible the information omitted 
has been replaced by ranges of figures or a 
general description.   
PUBLIC VERSION  
To the notifying party  
 
 
 
Subject : Case M.8785 – The Walt Disney Company / Twenty- First Century 
Fox 
Commission decision  pursuant to Article 6(1)(b) in conjunction with 
Article 6(2) of Council Regulation No 139/20041 and Article 57 of the 
Agreement on the European Economic Area2 
Dear Sir or Madam,  
(1) On 14 September 2018, the European Commission received notification of a 
proposed concentration pursuant to Article 4 of the Merger Regulation by which 
The Walt Disney Company ("TWDC", USA) acquires within the meaning of 
Article 3(1)(b) of the Merger Regulation sole control of parts of Twenty -First 
Century Fox, Inc. ("Fox", USA ) ("the Transaction").3 TWDC is hereinafter 
referred to as the "Notifying Party", and TWDC and Fox are hereinafter referred 
to as the "Parties".  
1. THE PARTIES  
(2) TWDC is primarily active in the production and theatrical distribution of films, 
the supply/licensi ng of audio- visual content, the operation and wholesale supply 
                                                 
1  OJ L 24, 29.1.2004, p. 1 (the ' Merger Regulation '). With effect from 1 December 2009,  the Treaty on 
the Functi oning 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 338, 21.09.2018 , p. 27. 

 
2 of TV channels, consumer products, books and magazines, the provision of live 
entertainment, and the licensing of music. It also owns and operates a theme park 
in the EEA, Disneyland Paris, provides cruises through the Disney Cruise Line, 
and offers travel packages. TWDC is organized into four business segments: 
(i) direct -to-consumer and international; (ii) parks, experiences and consumer 
products; (iii) media networks; and (iv) studio entertai nment. 
(3) Fox is primarily active in the theatrical distribution of films, the supply/licensing 
of audio- visual content, and the operation and wholesale supply of TV channels. 
Fox is a diversified global media company with operations in three main industry 
segments: cable network programming, television ("TV") and filmed 
entertainment.  
2. THE CONCENTRATION  
(4) On 13 December 2017, TWDC and Fox entered into an agreement whereby 
TWDC would acquire certain assets of Fox4, including the Twentieth Century 
Fox Film and Te levision studios, along with cable and international TV 
businesses and Fox's stake in Sky plc ("Sky").  On 20 June 2018, TWDC and Fox 
entered into an amended and restated agreement and plan of merger, increasing  
the purchase value from approximately USD 52.4 billion to USD 71.3 billion. 
(5) The Transaction also takes place against the backdrop of Fox’s and Comcast 
Corporation's ("Comcast") attempts to acquire control over Sky. Comcast won the 
bidding war with Fox with an offer of 17.28 pounds per share for a tot al of 
USD 39 billion (against Fox's offer of 15.67 pounds per share).5 Comcast’s offer 
is conditional upon shareholders accounting for 50% +1 of the voting rights in 
Sky tendering their shares. Moreover, the City Code on Takeovers and Mergers 
prohibits Fox  (and TWDC, as a party deemed to be "acting in concert" with Fox) 
from posting a new bid for Sky within 12 months of its current bid lapsing.6 
Finally, Fox completed the sale of its shares  in Sky to Comcast on 
9 October  2018.7 Therefore the Commission asse sses the Proposed Transaction 
only consisting of the acquisition of sole control by Disney over Fox excluding 
Sky from the perimeter of the transaction.  
3. EU DIMENSION  
(6) The undertakings concerned have a combined aggregate world- wide turnover of 
more than EUR 5 000 million8 (TWDC: EUR 49 943 million; 
                                                 
4  The assets that do not form part of the Transaction are a portfolio of Fox's  news, sports, and broadcast 
businesses, including the Fox News Channel, Fox Business Network, Fox Broadcasting Company, Fox 
Sports, Fox Television Stations Group, and sports cable networks FS1, FS2, Fox Deportes, and Big 
Ten Network, and certain other assets. These will be grouped in a newly listed company that will b e 
spun off to its shareholders.  
5  See:  http://www.thetakeoverpanel.org.uk/publication/view/2018 -16-sky-plc. 
6  At the time of the notification, Fox owned a 39% stake in Sky and had made an offer to acquire the 
remaining 61%.  However, that stake did not confer Fox control over Sky . See Note on Sky Auction of 
27 September 2018. Fox's bid lapsed on 6 October 2018 (Reply to question 1 of RFI 19).  
7  Reply to question 1 of RFI  19. 
8  Turnover calculated in accordance with Article 5 of the Merger Regulation .  
 
3 Fox: EUR  26 149 million). Each of them has an EU -wide turnover in excess of 
EUR 250 million (TWDC: EUR […]  million; Fox: EUR […] million), but they 
do not achieve more than two- thirds of their aggregate EU -wide tur nover within 
one and the same Member State. The notified operation therefore has an EU 
dimension. 
4. RELEVANT  MARKETS  
4.1. Introduction 
(7) The Parties' activities mainly overlap  in the audio- visual sector. Additional 
overlaps and vertical relationships arise in other  areas, including the supply of 
advertising space, merchandising, live entertainment, music, theme parks, and 
travel. However, in the EEA horizontally and vertically affected markets only 
arise in the following areas:  
a. Production and distribution of films for theatrical exhibition;  
b. Distribution  of home entertainment content;  
c. Licensing  of audio- visual content for TV services;  
d. Wholesale supply of TV channels;  
e. Provision of retail audio- visual services.  
4.2. The theatrical release value chain  
(8) The theatrical value chain is comprised of different stages, starting with the 
production of films, then their distribution to exhibitors and finally their 
exhibition to the audience.  
(9) Production activities sit at the top of the audio -visual supply chain. Film studios 
produce  films in a number of ways, including various forms of cooperation with 
and acquisitions from other production companies. Film production involves a 
number of operations such as collecting financing, developing scripts, casting 
actors and directors, shooti ng etc.9 
(10) Distribution of films  is directly downstream from production and takes place after 
a film is completed. Producers either carry out the distribution of their films to 
exhibitors internally, through their own distributing arm, or they license the ri ghts 
to distribute their films to exhibitors to third -party distributors. Such third- party 
distributors can be either independent distributors or, in some cases, the 
distribution arm of another producer. The market for distribution of films for 
theatrical exhibition is further discussed below in S ection 4.4. 
(11) Exhibition of films  lies directly downstream from distribution and is the final 
stage of the theatrical release of a film. Theatrical exhibitors, commonly referred 
to as "movie cinemas", are the point where films are "consumed" (viewed) by the 
final consumers, i.e. the audie nce. Neither the Parties nor any of their competitors 
                                                 
9  See Form CO, Chapter 1A, paragraph 3.  
 
4 in the market for the production of films for theatrical exhibition are active in this 
segment of the value chain.  
(12) Starting from the end, exhibitors set the ticket prices final consumers pay for 
admission to the cinemas. Although the contractual relationships between, on the 
one hand, distributors and exhibitors and, on the other hand, producers and 
distributors can va ry significantly, the general rule is the following.  
(13) Distributors negotiate with exhibitors (i) the terms of exhibition, the main ones 
being the number of screens a film will be exhibited on and the length of the 
exhibition window; and (ii) the price of distribution which takes the form of a 
revenue sharing agreement between distributors and exhibitors, called the "rental 
fee". Typically an exhibitor retains approximately 50% of net box office revenues 
on the week of release of a film and the exhibitor's s hare increases for each 
consecutive week a film is shown. This is the case both when distribution takes 
place through third- party distributors as well as when it takes place through the 
distribution arm of a vertically integrated producer.  
(14) When it comes t o the relationship between distributors and producers there are 
two main variants. In the case of major film producing studios, distributors retain 
a distribution fee and remit the rest of their box office revenue share to the 
producer. The exact nature of  the distribution fee (fixed or variable or a 
combination of both, scalable or not) is subject to the negotiations between the 
contracting parties. Marketing and promotion activities will usually, but not 
always, be arranged, and the corresponding costs covered, by the producer. 
Distributors bare little to no financial risk in these cases. Alternatively, 
distributors may acquire the exhibition rights of a film for a certain price (again 
fixed or variable or a combination of both, scalable or not, subject to  
negotiations), which is usually the case vis -à-vis smaller independent studios, and 
subsequently retain the entirety of the distribution revenue share. In this case, 
normally the distributor arranges and pays for any marketing and promotion 
activities. Th is variant entails financial risks for distributors with the upside of 
significant financial rewards in case the film proves to be a major box office 
success.  
(15) The Parties are active in the production of films for theatrical exhibition (release) 
and the dir ect distribution of these films to exhibitors in some Member States, 
while in others they engage in licensing of distribution rights to third -party 
distributors . 
4.3. Production and licensing of distribution rights of films for theatrical 
exhibition  
4.3.1. Product mar ket definition  
(16) The Notifying Party submits that a single product market exists encompassing the 
production and acquisition of films for theatrical release. The Notifying Party 
further submits that a distinct market exists for the distribution of films to 
exhibitors separate from the market for the production of films. The Notifying 
Party considers that no further segmentation of this product market is warranted.   
(17) In previous decisions, the Commission has considered the question of whether 
production/acquis ition and distribution of films for theatrical release constitute a 
 
5 single or two or more separate product markets and while in some cases 
ultimately left the question open10 in others found that the production and 
distribution of films for theatrical relea se constitute two separate markets.11 
(18) The Commission has further considered, but ultimately left the question open, 
whether a distinction needs to be drawn between films produced by US studios 
and films produced by non- US studios.12  
(19) The Commission has not previously assessed the scope of the producers' activities 
with respect to the licensing of distribution rights to third -party distributors. The 
Commission notes however that simply producing a film cannot constitute a 
market before a market -based exchange,  such as the distribution of a film, takes 
place. The market investigation has not provided clear support either in favour or 
against the view that licensing of distribution rights to distributors and direct 
distribution to exhibitors constitute two separa te product markets.  
(20) The results of the market investigation support the view that production and 
distribution of films for theatrical release constitute two separate product 
markets.13  
(21) On the issue of whether a distinction should be drawn between films produced by 
US studios and films produced by non -US studios the results of the market 
investigation are inconclusive with most distributors and exhibitors considering 
that the question is irrelevant since every film represents a unique offering that is 
not substitutable by other films and with the opinion of producers being split in 
half.14     
(22) In light of the above, the Commission considers that, for the purpose of this 
Decision, the production and licensing of distribution rights to third- party 
distributors of films for theatrical release constitutes a relevant product market. 
The Commission also takes the conservative view that licensing of distribution 
rights to third -party distributors constitutes a product market separate from the 
distribution of films to exhibitors, given that it entails different commercial 
activities consisting of marketing, promoting films etc. carried out by different 
players, with the exhibitors being the distributors' customers. The question 
whether the market for the production and licensing of films for theatrical release 
should be further segmented based on whether the films were produced by US or 
non-US studios can be left open, since the Transaction does not raise serious 
doubts as to its compatibility with the internal market un der any plausible market 
definition. 
                                                 
10  Commission decision of 20 December 2012 in Case M.6791 -  The Walt Disney Company/Lucasfilm ; 
Commission decision of 13 July 2010 in Case M.5579 -  Comcast/NBC Universal .    
11  Commission decision of 14 June 2013 in Case M.6866 -  Time Warner/CME  ; Commission decision of 
21 September 1998 in Case M.1219 -  Seagram/Polygram . 
12  Com mission De cision of 30 March 2005 in Case M.3595 -  Sony/MGM . 
13  Replies to Questionnaire Q1 to Film Producers of 17 September 2018, question 4; replies to 
questionnaire  Q2 to Distributors of 17 September 2018; replies to questionnaire Q6 to Distributors of 
17 September 2018; replies to Questionnaire Q3 to Exhibitors of 17 September 2018.  
14  Replies to Questionnaire Q1 to Film Producers of 17 September 2018, question  7; replies to 
Questionnaire Q2  to Distributors of 17 September 2018, questions 6; replies to Questionnaire Q6 to 
Distributors of 17 September 2018; replies to Questionnaire Q3 to Exhibitors of 17 September 2018.  
 
6 4.3.2. Geographic market definition  
(23) The Notifying Party submits that the geographic scope of the market for the 
production and supply of films is at least EEA -wide and most likely global in 
scope.  
(24) In past decisions, the Commis sion found the geographic market for the production 
of films for theatrical release to likely be at least EEA -wide but ultimately left the 
question open.15 
(25) The market investigation in the present case has however shown that the licensing 
of distribution rig hts of films for theatrical release, in other words the relationship 
between producers and distributors that the Notifying Party refers to as supply, is 
more often than not national.16   
(26) In light of the above, the Commission considers that, for the purpose of this 
Decision, the relevant geographic market for the production and licensing of 
distribution rights of films for theatrical release is national in scope.  
4.4. Distribution to exhibitors of films for theatrical exhibition  
(27) As explained in S ection  4.2 above, theatrical distribution follows the production 
of a film and can be done internally, by players that are integrated through the 
value chain from production to distribution to exhibitors, or through external 
distributors to whom producers license the distri bution rights of their films.  
(28) The Parties are vertically integrated and carry out the distribution of their own 
films in some Member States: both Parties self -distribute in Austria, Belgium & 
Luxembourg, France, Germany, Italy, Spain, Sweden and the UK & I reland. In 
addition, TWDC also distributes its own films in Denmark, Finland, 
Liechtenstein , Netherlands, Poland and Norway. Elsewhere, the Parties rely on 
third party distributors. They also carry out the distribution of other studios' films 
in certain Member States, as will be explained in more detail below in 
Section  5.3.2.  
4.4.1. Product market definition 
(29) At the level of the distribution of films to ex hibitors, as is for the production of 
films (see Section 4.3), the Notifying Party argues that no further sub-
segmentation is applicable: neither (i) by country of production, given that 
different stages of production may take place in several countries for a variety of 
factors, nor (ii) between films produced by US producers or non -US producers 
since the origin of films is unrelated to their success and the distribution strategy 
is the same. In essence, all films compete equally for screen space.  
                                                 
15  Commission Decision of 20 December 2012 in Case M.6791 -  The Walt Disney Company / Lucasfilm , 
at para. 59; Commission Decision of 13 July 2010 in Case M.5779 - Comcast / NBC Universal , at 
para. 53.  
16  Replies to  Questionnaire 1 to Producers of 17 September 2018, question 17;  replies to Questionnaire 
Q2 to Distributors of 17 September 2018, question 19; replies to Questionnaire Q6 to Distributors of 
17 September 2018.  
 
7 (30) As mentioned above, in previous decisions the Commission considered a distinct 
market for the theatrical distribution of films, different from the production  of 
films. It also assessed whether a segmentation between US films and non- US 
films was applicable but left the exact product market definition open.17  
(31) In line with the views submitted with regard to the market for the production of 
films as set forth above (see paragraph (21) ), distributors' views  on whether films 
from US producers and non- US producers are substitutable at distribution level 
were divided. Distributors explained that US producers generally release larger 
budget films which are more likely to become blockbusters, however, they also 
stated that in the EEA local productions are numerous and often successful at 
national level. In addition, most distributors distribute both, films from US 
producers as well as local productions, and all films compete for space with 
exhibitors, which screen a variety of films and select them in a way as to ensure 
diversity.18 
(32) In light of the above, the Commission considers that, for the purpose of this 
Decision, the production of films for theatrical release and the distribution of 
films for theatrical releas e constitute two separate product markets. The question 
whether the market for the distribution of films for theatrical release should be 
further segmented based on whether the films were produced by US or non- US 
studios can be left open, since the Transac tion does not raise serious doubts as to 
its compatibility with the internal market under any plausible market definition.    
4.4.2. Geographic market definition  
(33) The Notifying Party submits that the geographic scope for the market of 
distribution of films for the atrical release is at least national.  
(34) The Commission has previously considered the relevant geographic market for 
theatrical distribution to be national or at most regional in scope, based on 
considerations such as language differences or the fact that dis tribution is often 
carried out on a national basis.19  
(35) The market investigation has confirmed that the distribution of films for 
exhibition is carried out at national level, regardless of considering the 
distribution of all films or US and non- US films. Most of the distributors 
confirmed that they are generally active only in one Member State with different 
distributors present in each Member State. This is also consistent with the fact 
that producers mostly licence the distribution rights for their films  on a national 
basis or at most per linguistic region, and the same films are not released in all 
Member States.20 
                                                 
17  Commission deci sion of 30 March 2005 in Cas e M.3595 -  Sony/MGM, para.11.  
18   Replies to Questionnaire Q2 to Distributors of 17 September 2018, questions 4 to 6; replies to 
Questionnaire Q6 to Distributors of 17 September 2018.  
19  Commission decision of 20 December 2012 in Case M.6791 -  The Walt Disney Company/Lucasfilm , 
paras 57 and 59; Commission decision of 13 October 2000 in Case M.2050 -  
Vivendi/Canal+/Seagram , para. 16; Commission decision of 21 September 1998 in Case M.1219 -  
Seagram/Polygram , para 53.  
20  Replies to Questionnaire Q2 to Distributors of 17 September 2018, questions 14 to 20; replies to 
Questionnaire Q6 to Distributors  of 17 September 2018.  
 
8 (36) In light of the above, the Commission considers that, for the purpose of this 
Decision, the relevant geographic market for the distribution of  films for 
theatrical release is likely to be national in scope, regardless of the exact product 
market. In any event, the Commission considers that for the purpose of this 
Decision the exact geographic market definition can be left open as the 
Transaction  does not raise serious doubts as to its compatibility with the internal 
market under any plausible market definition. 
4.5. Distribution of home entertainment content  
(37) After they leave cinemas, films and other audio -visual content (such as TV series) 
are distri buted for "home entertainment", in the form of physical and/or digital 
products (e.g. electronic sell -through "EST") or are also distributed in the 
subscription video on demand ("SVOD"), transactional video on demand 
("TVOD") and pay -per-view ("PPV") windo w in the TV markets.  
(38) "Home entertainment" refers to the provision of copies of films for consumers to 
buy or rent and watch at their convenience. Home entertainment products used to 
be available exclusively in physical formats (such as DVDs and Blu -ray di scs, 
which succeeded video tapes), but are now increasingly distributed in electronic 
form. With digital purchases, consumers can download a digital copy of the film 
"to own", or acquire unlimited rights to stream the content from a digital platform 
or vir tual storage locker. This window continues indefinitely, and remains open as 
long as there is consumer interest in purchasing the film.  
(39) TWDC and Fox supply or license their home entertainment content (films and 
television programmes) to third party wholesa le distributors in physical format 
(DVD and Blu -ray Discs) and to third party retailers in digital formats 
(transactional VOD (TVOD), electronic sell -through (EST)) across the EEA. 
(40) TWDC distributes its physical home entertainment films directly to retailer s in 
the following countries: Austria; Belgium; Denmark; Finland; France; Germany; 
Italy; Luxembourg, the Netherlands; Norway; Spain; Sweden; the UK and 
Ireland. TWDC distributes its content through third party distributors in the other 
EEA countries, name ly: Estonia, Latvia, Lithuania, Bulgaria, Croatia, Slovenia, 
Czech Republic, Slovakia, Greece, Cyprus, Iceland, Poland, Portugal, Romania 
and Hungary. With regards to other TV content, TWDC distributes it in all EEA 
countries except Bulgaria, Liechtenstein  and Malta.  
(41) Fox distributes its physical home entertainment films directly to retailers in the 
following countries: Austria; Belgium; Denmark; Finland; France; Germany; 
Italy; Luxembourg, the Netherlands; Norway; Spain; Sweden; the UK and 
Ireland. Fox dis tributes its content through third party distributors in the other 
EEA countries, namely: Estonia, Latvia, Lithuania, Bulgaria, Croatia, Slovenia, 
Czech Republic, Slovakia, Greece, Cyprus, Iceland, Poland, Portugal, Romania 
and Hungary. With regards to other TV content, Fox distributes it in all EEA 
countries except Malta.  
(42) TWDC and Fox license their digital home entertainment films directly to retailers 
across all EEA countries. With regards to other TV content, such as TV -series, 
Fox licenses its digital h ome entertainment content across all EEA countries 
while TWDC is only active in Austria, France, Germany and the UK.  
 
9 4.5.1. Product market definition 
(43) The Notifying Party submits that, due to the increasing convergence between the 
home entertainment and television  markets, it is not relevant to distinguish the 
distribution of audio- visual content for home entertainment from the distribution 
of the same content in the TV markets. Moreover, the Notifying Party submits 
that, it is not relevant to delineate the market for distribution of home 
entertainment content by genre, release window, or country of production. 
(44) In previous decisions, the Commission has distinguished between the licensing 
and supply of home entertainment content for physical exploitation and for digi tal 
exploitation.21 The Commission has also considered, but ultimately left open, 
whether the market should be segmented by type of content (such as films, TV 
series, and other content, e.g. documentaries and concerts), sell -through and 
rental, and motion picture new releases and catalogue. 22 
(45) In Time Warner/CME , the Commission also distinguished between different 
levels in the value chain, which are different for physical and digital home 
entertainment products. However, the Commission left open whether the retail 
distribution of home entertainment content should be further segmented between 
physical and digital products. 23 
(46) With regards to a possible segmentation of home entertainment content on the 
basis of the different type of distribution channel (physica l or digital), most of the 
respondents to the market investigation indicated that physical or digital home 
entertainment are substitutable from a customer perspective. However some 
respondents indicated that the two should be considered as complements sinc e 
physical and digital home entertainment target different consumer groups. 
Moreover, providers of physical content would not be able to impose a constraint 
on providers of digital content. Physical content requires the cost of a DVD, 
packaging, and delive ry (if ordered online). None of these costs exist for digital 
delivery. As such, even if they were perfectly substitutable from the consumers' 
perspective, physical content would not be able to constrain digital content.24 The 
existence of significant diffe rences in terms of costs between physical and digital 
home entertainment products has also been confirmed by respondents to the 
market investigation. 25 Finally, the significant differences between the two 
distribution channels have been confirmed by most of the respondents to the 
market investigation. Most of the physical home entertainment distributors are not 
active in the distribution of digital home entertainment content and would not be 
                                                 
21  Commission decision of 14 June 2013 in Case M.6866 - Time Warner/ CME ; Commission decision of 
20 December 2012 in Case M.6791 - The Walt Disney Company/Lucasfilm ; Commission decision of 
13 July 2010 in Case M.5779 - Comcast/NBC Universal ; Commission decision of 30 March 2005 in 
Case M.3595 -  Sony/MGM . 
22  Commission decision of 14 June 2013 in Case M.6866 - Time Warner/ CME ; Commission decision of 
20 December 2012 in Case M.6791 -  The Walt Disney Company/Lucasfilm . 
23  Commission decision of 14 June 2013 in Case M.6866 - Time Warner/ CME . 
24  Replies to Questionnaire Q1 to P roducers of 17 September 2018, question 19; r eplies to Questionnaire 
Q4 to Physical Home Entertainment Customers of 17 September 2018, question 5; replies to 
Questionnaire Q5 to Digital Home Entertainment Customers of 17 September 2018, question 5.  
25  Repl ies to Questionnaire Q1 to P roducers of 17 September 2018, question 21; r eplies to Questionnaire 
Q4 to Physical Home Entertainment Customers of 17 September 2018, question 8; replies to 
Questionnaire Q5 to Digital Home Entertainment Customers of 17 Septemb er 2018, question 8.  
 
10 able to start distributing digital content without incurring significant costs and 
investments. 26  Similarly, most digital home entertainment content distributors 
indicated that they will face significant barriers in order to start distributing 
physical home entertainment content. 27 
(47) With regards to a possible segmentatio n by type of content (such as films, TV 
series, and other content, e.g. documentaries and concerts), most respondents 
indicated that such a segmentation is not relevant for home entertainment content. 
However, some respondents, such as Sainsbury's, RTL and Telefonica, consider 
that a segmentation is still relevant when considering films, TV series and other 
TV contents since the target audience and pricing are different, and the 
distribution companies have a distinct focus on each of these sub- segments. 28 
(48) The market investigation provided mixed results on whether the market should be 
further segmented by type of releases into new releases and catalogue. On the one 
hand, some respondents, such as Orange and RTL, noted that new releases and 
catalogue content are commercialized distinctly and there are differences in terms 
of prices. On the other hand, other respondents, such as Talk Talk and Chili, 
consider that this distinction is artificial and that customers value both new 
releases and catalogue contents. 29 
(49) In any event, the Commission considers that for the purpose of this Decision the 
exact product market definition can be left open as the Transaction does not raise 
serious doubts as to its compatibility with the internal market under any plausible 
market d efinition.  
(50) In light of the above, the Commission considers that, for the purpose of this 
Decision, the distribution of content for physical home entertainment and the 
distribution of content for digital home entertainment constitute two separate 
product ma rkets. The question whether these markets should be further 
segmented based on the type of content or type of releases can be left open, since 
the Transaction does not raise serious doubts as to its compatibility with the 
internal market under any plausibl e market definition.    
4.5.2. Geographic market definition  
(51) The Commission has previously concluded that the relevant geographic market 
for both home entertainment and television rights is national in scope, or possibly 
regional along linguistically homogenous regions. 30 
                                                 
26  Replies to Questionnaire Q4 to Physical Home Entertainment Customers of 17 September 2018, 
question 6.  
27  Replies to Questionnaire Q5 to Digital Home Entertainment Customers of 17 September 2018, 
question 6. 
28  Replies to Question naire Q1 to P roducers of 17 September 2018, question 23; replies to Questionnaire 
Q4 to Physical Home Entertainment Customers of 17 September 2018, question 10; replies to 
Questionnaire Q5 to Digital Home Entertainment Customers of 17 September 2018, quest ion 10.  
29  Replies to Questionnaire Q1 to P roducers of 17 September 2018, question 24; replies to Questionnaire 
Q4 to Physical Home Entertainment Customers of 17 September 2018, question 11; replies to 
Questionnaire Q5 to Digital Home Entertainment Custome rs of 17 September 2018, question 11.  
30  Commission decision of 14 June 2013 in Case M.6866 -  Time Warner/ CME ; Commission decision of 
20 December 2012 in Case M.6791 -  The Walt Disney Company/Lucasfilm ; Commission decision of 
13 July 2010 in Case M.5779 - Comcast/NBC Universal . 
 
11 (52) The Notifying Party submits that in previous decisions, the Commission 
concluded that the market for distribution of home entertainment content is 
national in scope.  
(53) Most of the respondents to the market investigation confirm that the market for  
the distribution of home entertainment content either through physical31 or 
digital32 distribution channel is national in scope. In particular, some respondents 
highlighted how content and release strategies may differ across countries.  
(54) In light of the above, the Commission considers that the retail market for the 
distribution of home entertainment content, under any possible product market 
definition, is national in scope.  
(55) In any event, the Commission considers that for the purpose of this Decision the 
exact geographic  market definition can be left open as the Transaction does not 
raise serious doubts as to its compatibility with the internal market under any 
plausible market definition. 
4.6. Production and licensing of TV audio -visual content  
(56) Audio- visual ("AV")  content for television (TV content) comprises all products 
(films, sports, series, shows, live events, documentaries, etc.) that are broadcast via 
TV.33 In previous decisions, the Commission has identified different activities in the 
TV value chain, namely : (i) the production and supply of TV content (including 
the supply of pre -produced TV content and Commissioned TV content); (ii) the 
wholesale supply of TV channels; and (iii) the retail provision of TV services to 
end customers.34  
(57) TV production companies  produce new TV audio- visual content for either: 
(i) internal use on their own TV channels or retail TV services if they are 
vertically integrated in the wholesale supply of TV channels and/or in the retail 
provision of TV services (that is to say, captive  TV production); or (ii) supply to 
third -party customers (that is to say, non- captive TV production). Both Parties 
produce and license TV audio- visual content to third parties.  
(58) Third -party customers are typically: (i) TV broadcasters, which then incorporat e 
the TV content into linear TV channels, or (ii) content platform operators, which 
then retail the TV content to end users on a non -linear basis (that is to say, Pay -
Per-View ("PPV") or video on demand ("VOD")), including non -traditional 
platforms, that is to say internet or so- called Over -The-Top ("OTT") platforms.  
                                                 
31  Replies to Questionnaire Q1 to P roducers of 17 September 2018, question 25; replies to Questionnaire 
Q4 to Physical Home Entertainment Customers of 17 September 2018, question  13. 
32  Replies to Questionnaire Q1 to P roducers of 17 September 2018, question 25; replies to Questionnaire 
Q5 to Digital Home Entertainment Customers of 17 September 2018, question 13.  
33  Commission decision of 25 June 2008 in C ase M.5121 News Corp/Premi ere, recital 28.  
34  See, for example, Commission decision of 21 December 2010 in C ase M.5932 News Corp/BskyB ; 
Commission decision of 22 September 2006 in Case M.4353 Permira/All3Media Group, and 
Commission decision of 15 April 2013 in C ase M.6880 Liberty G lobal/Virgin Media, 15 April 2013.  
 
12 (59) TV broadcasters and TV distributors who source TV content for their TV 
channels or retail TV services generally have a choice between a number of 
sourcing models, which can be broadly categoris ed as follows:  
(a) Obtaining TV content produced on an 'ad hoc' basis (that is to say tailor -
made), by:  
– Commissioning TV content from a TV production company 
(which owns the relevant TV format);  
– Hiring a TV production company to provide the technical means 
and deliver the finished TV content based on a format owned by 
the broadcaster; or  
– Producing the content themselves by relying on their in- house 
facilities (captive TV production); or  
(b) Acquiring broadcasting rights from TV production companies for pre -
produce d TV content (pre -produced TV content, sometimes referred to as 
off-the-shelf or tape sales).  
(60) In most cases, TV production companies produce TV content tailored to the needs 
of their customers on the basis of original TV formats35 that they develop 
themselv es or that they acquire from right holders (commissioned production). 
However, in some instances, TV production companies are hired by TV 
broadcasters or content platform operators to simply provide the technical 
production means and deliver the finished p rogramme based on a TV format 
owned or acquired by the hiring company (production- for-hire or supply of TV 
production services).  
(61) The production costs are usually borne entirely or almost entirely by the TV 
broadcasters or content platform operators. As regards ownership of the various 
rights relating to the TV content (for example, primary TV broadcast rights, 
'catch -up', VOD, etc.), the extent to which those rights are retained by the 
production company – as opposed to the acquirer of TV content – may vary based 
on a number of factors, such as national regulation in the country concerned, the 
type of broadcasting, the outcome of the commercial negotiations between the 
parties, etc. Producers or the acquirers of TV content may then achieve secondary 
revenues  by further licensing/distributing the TV content or the TV format to 
third parties.  
(62) It follows that the supply -side of this market comprises TV production 
companies, while the demand- side comprises third parties that commission the 
production of TV content or hire TV production services, typically TV 
broadcasters or content platform operators. 
(63) As regards the market for production and supply of TV content, TWDC is mainly 
active in the production and supply of pre -produced TV content. […] . Fox is 
active in b oth the supply of pre -produced TV content and the supply of 
                                                 
35 TV format refers to the overall concept and branding of a copyrighted TV programme.  
 
13 commissioned TV content through its JV with Apollo, Endemol Shine Group 
("Endemol Shine").36  
4.6.1. Product market definition 
(64) The Notifying Party submits that the supply of commissioned TV content and the 
licensing of pre -produced TV content should be considered as part of the same 
product market. In this respect, TWDC claims that acquirers of content tend to 
have one overall budget for the acquisition of content. As a consequence, 
according to the Notify ing Party, investment decisions regarding content 
acquisition are based on considerations like budget, needs, return on investment 
or timing, whereas a distinction along categories such as in- house production, 
commissioning of content or acquisition of pre -produced content is less relevant.  
(65) With regard to the licensing of pre -produced TV content, the Notifying Party 
further submits that a sub -segmentation by genre (films; sports; other content), by 
release window or by country of production is not warranted. In this respect, 
TWDC, inter alia , notes that, from a demand side perspective, both its direct 
customers as well as end consumers will substitute content belonging to a specific 
genre for a different content category in reaction to a relative increase in price. 
Similarly, according to the Notifying Party, since licensees acquire content across 
different release windows, a significant portion would switch from the acquisition 
of specific content for one window to another window in response to a relative 
price increase. With regard to the country of production, TWDC claims that the 
distinction between films produced by US studios and other films is not 
meaningful, inter alia , because, in its view, the geographic origin of production 
does not determine the quality or commercial success of the f ilm.  
(66) Eventually, however, the Notifying Party considers that the precise definition of 
the relevant product market can be left open, as the Transaction does not raise 
competition concerns under any plausible market definition. 
(67) With regard to the market fo r the supply of TV audio- visual content, in previous 
decisions, the Commission has concluded that ther e are separate markets for: 
(i) the production and supply of commissioned TV content; and (ii) the licensing 
of broadcasting rights for pre -produced TV content (available 'off -the-shelf').37 
(68) With regard to the market for licensing of pre -produced TV content, the 
Commission has considered that it may be subdivided by content type, in 
particular: (i) films; (ii) sports; and (iii) other TV content; and potentia l sub-
segments within these content types, but ultimately left the market definition 
open.38 The question whether TV content could be further sub -divided by 
distinguishing between US and non- US films, premium and non- premium content 
or scripted and non- scripted content was also left open in previous decisions.39 
The Commission has also considered further sub- dividing the market for the 
                                                 
36  Commission decision of 10 July 2014 in C ase M.7279 –  Apollo / Endemol .  
37  Commission decision of 7 April 2017 in Case M.8354 –  Fox / Sky .  Commission decision of 
24 February 2015 in Case M.7194 –  Liberty Global / Corelio / W&W / De Vijver Media . 
38  Commission decision of 7 April 2017 in Case M.8354 –  Fox / Sky;  Commission decision of 
21 December 2011 in case M.6369 -  HBO/Ziggo/HBO Nederland;  Commission decision of 
24 February 2015 in Case M.7194 –  Liberty Global / Corelio / W&W / De Vijver Media .  
39  Commission decision of 7 April 2017 in Case M.8354 – Fox / Sky. 
 
14 licensing of pre -produced TV content by exhibition window: (i) subscription 
video on demand ("SVOD"); (ii) transactional vide o on demand ("TVOD"); 
(iii) pay-per-view ("PPV"); (iv) first pay -TV window; (v) second pay -TV 
window; and (vi) free -to-air ("FTA").40 In the market investigation, the 
Commission has also tested the role of OTT services as infrastructure used for the 
deliver y of TV content to the consumer.  
(69) The results of the market investigation indicate that a majority of producers, 
broadcasters and retail distributors of TV audio- visual services consider the 
segmentations by content type and by exhibition window still rele vant.41 As 
regards a sub -division by scripted and non -scripted content, the market 
investigation did not provide definite views.42  
(70) In any event, for the purpose of this Decision, the exact product market definition 
can be left open as the Transaction does not raise serious doubts as to its 
compatibility with the internal market under any plausible market definition.  
(71) In light of the above, the Commission considers that, for the purpose of this 
Decision, the licensing of television rights for films and the licensing of television 
rights for other TV content constitute two separate product markets. The question 
whether the market for the licensing of television rights for films should be 
further segmented by exhibition window or whether a distinction has to be made 
between US and non- US films can be left open, since the Transaction does not 
raise serious doubts as to its compatibility with the internal market under any 
plausible market definition. The question whether the market for the licensing of 
television r ights for other TV content should be further segmented can be left 
open, since the Transaction does not raise serious doubts as to its compatibility 
with the internal market under any plausible market definition.  
4.6.2. Geographic market definition  
(72) The Notifying Party makes reference to previous Commission decisions 
considering the relevant geographic market as either national or regional, based 
on linguistically homogenous areas.  
(73) The Commission has previously considered the geographic markets for both the 
product ion of TV content and broadcasting rights for TV content to be either 
national or regional, based on linguistically homogeneous areas.43  
                                                 
40  Commission decision of 7 April 2017 in Case M.8354 – Fox / Sky. 
41  See r eplies to Questionnaire Q1 to Producers of 17 September 2018, questions 26- 29; replies to 
Questionnaire Q7 to TV Channel Suppliers of 17 September 2018, questions 5- 9; replies to 
Questionnaire  Q9 to TV Channel Suppliers of 17 September 2018, questions  5-9; replies to 
Questionnaire Q8 to TV R etail Distributors of 17 September 2018, questions 7 -11; replies to 
Questionnaire Q10 to TV Retail Distributors of 17 September 2018, questions 7 -11. 
42  Replies to Questionnaire Q1 to Producers of 17 September 2018,  questions 30-33; replies to 
Questionnaire Q7 to TV C hannel Suppliers of 17 September 2018, questions 10- 12; replies to 
Questionnaire  Q9 to TV C hannel Suppliers of 17 September 2018, questions 10- 12; replies to 
Questionnaire Q8 to TV R etail Distributors of 17 September 2018, questions 12- 14; replies 
Questionnaire Q10 to TV Retail Distributors of 17 September 2018, questions 12- 14. 
43  Commission decision of 7 April 2017 in Case M.8354 –  Fox / Sky; Commission decision of 
24 February 2015 in Case  M.7194 – Liberty Global / Corelio / W&W / De Vijver Media .     
 
15 (74) Most TV broadcasters and TV retail distributors that provided a response to the 
market investigation indicated that the y purchase content nationally or for certain 
linguistic regions. Some TV broadcasters indicated to also purchase content on an 
EEA or worldwide basis.44  
(75) In any event, for the purpose of this Decision, the exact geographic market 
definition can be left open, as the Transaction does not raise serious doubts as to 
its compatibility with the internal market regardless of whether the scope of the 
market is considered to be national or by linguistic region. 
4.7. Wholesale supply of TV channels  
(76) TV broadcasters package  the TV content that they have acquired or produced in-
house into linear TV channels. Linear TV channels are broadcast to end users 
either on a FTA basis or on a pay -TV basis. This wholesale level is an 
intermediate activity between upstream production and licensing of content, and 
the downstream retail provision of TV services to customers.  
4.7.1. Product market definition 
(77) The Notifying Party considers that there is a single market for the wholesale 
supply of TV channels, within which a range of wholesale supplie rs compete, and 
that no segmentation should be made (i) between pay -TV and FTA channels; (ii) 
between basic and premium channels; (iii) by genre or theme; or, (iv) by 
infrastructure / technology.  
(78) Pay-TV and FTA channels. In particular, TWDC considers that pay -TV and FTA 
channels are substitutable from the demand- side perspective. According to 
TWDC pay -TV and FTA channels compete for and show similar content, 
including for example sports. TWDC notes that some channels, such as Disney 
Channel, are available o n both an FTA and pay -TV basis, depending on the 
country of broadcast, and show the same or very similar content on both versions 
of the service. The Notifying Party further submits that pay -TV and FTA 
channels compete for the same audiences as all pay -TV subscribers can access 
FTA channels and competition from FTA services therefore constrains pay -TV 
retailers’ willingness to pay to carry TV channels on their subscription service. 
TWDC also considers that no clear technical differences exist between viewin g 
content on FTA channels and pay -TV channels as set -top boxes for viewing 
digital FTA channels and connected TVs with additional functionality have 
similar technical capabilities to pay -TV set -top boxes.  
(79) Basic and premium channels. The Notifying Party su bmits that a subdivision 
between "basic" and "premium" channels is not appropriate as: (i) there is no 
consistent definition of "basic" and "premium" channels; (ii) it is not possible to 
generate reliable market shares for each segment; (iii) the same prog rams are 
often distributed to both types of channels that market themselves as "basic" and 
"premium"; and, (iv) retail TV services seek to acquire channels with content that 
                                                 
44  Replies to Questionnaire Q7 to TV C hannel Suppliers of 17 September 2018, question 13; replies to 
Questionnaire  Q9 to TV C hannel Suppliers of 17 September 2018, question 13; replies to 
Ques tionnaire Q8 to TV Retail Distributors of 17 September 2018, question 15; replies to 
Questionnaire  Q10 to TV Retail Distributors of 17 September 2018, question 15.    
 
16 will appeal to audiences, regardless of whether that content is deemed "premium" 
or "basic".  
(80) Segmentation by genre or theme. The Notifying Party submits that there is 
substitutability across various genres. TWDC further observes that: (i) content 
producers, TV retailers, and consumers vary in their classifications as to what 
constitutes  a particular "genre"; (ii) genre classifications are static and potentially 
misleading given that programming content available on a channel may vary over 
time; (iii) the retailers’ decision to acquire a particular channel does not turn on 
whether a chann el could be identified as belonging to a particular "genre"; and, 
(iv) applying genre segmentations within narrow wholesale markets would 
overlook constraints from similar content on FTA or pay -TV services.  
(81) Segmentation by infrastructure / technology. The Notifying Party refers to 
previous decisions of the Commission and the German FCO which found that no 
distinction by infrastructure or technology was appropriate. In addition, TWDC 
observes that wholesale suppliers of channels supplied on a non- exclusive b asis 
do not generally supply different channels to a retailer depending on the 
distribution technology they employ but will generally seek to supply the 
channels on all platforms/services that are secure and capable of carrying the 
channels. According to t he Notifying Party these technology distinctions are even 
less relevant with the rise of OTT services, accessible throughout the EEA.  
(82) In previous decisions, the Commission has identified a wholesale market for the 
supply of TV channels. Within that market, the Commission has further identified 
two separate product markets for: (i) FTA TV channels; and (ii) pay -TV channels. 
The Commission has further concluded that within the pay -TV channels market, 
there are separate markets for: (i) premium pay -TV channels ; and (ii) basic pay -
TV channels.45 
(83) In previous decisions, the Commission also examined a number of other potential 
segmentations, including: (i) genre or thematic content (such as films, general 
entertainment, sports, factual content, news, yo uth channels, and others); 
(ii) linear channels vs non- linear services (VOD, PPV); and (iii) the different 
means of infrastructure used for the delivery to the viewer (cable, satellite, 
terrestrial TV and IPTV).46 It has ultimately left the market definition open in all 
these regards.  
(84) The market investigation did not provide definite views as regards the definition 
of the relevant product market. While a broad majority of both TV broadcasters 
and TV distributors c onsidered cable, satellite, IPTV, terrestrial TV, and OTT 
substitutable,47 the views on a distinction between FTA channels and pay -TV 
channels and by genre were more diverse. On the one hand, the majority of TV 
                                                 
45  Commission decision of 15 June 2018 in Case M.8861 –  Comcast / Sky; Commission decision  of 
24 February 2015 in Case M.7194 –  Liberty Global / Corelio / W&W / De Vijver Media . 
46  Commission decision of 7 April 2017 in Case M.8354 –  Fox / Sky; Commission decision of 
24 February 2015 in Case M.7194 –  Liberty Global / Corelio / W&W / De Vijver M edia.   
47  Replies to Questionnaire Q7  to TV Channel Suppliers of 17 September 2018, question 19; replies to 
Questionnaire  Q9 to TV C hannel Suppliers of 17 September 2018, question 19 ; replies to 
Questionnaire Q8  to TV Retail Distributors of 17 September 2018, question 21;  replies to 
Questionnaire  Q10 to TV Retail Distributors of 17 September 2018, question 21.  
 
17 distributors agreed with the Commission's deci sional practice in this regard.48 On 
the other hand, a number of replies from TV broadcasters raised doubts regarding 
the relevance of a distinction between FTA and (premium and basic) pay -TV 
channels or a general distinction by genres.49 However, in relatio n to factual and 
children's channels, the overall majority of respondents stressed the particular 
content offerings based on the interests of the respective target audience. In the 
respondents' view, these particularities make these two genres too specific  from a 
consumer perspective to be substitutable by other genres.50  
(85) In light of the above, the Commission concludes that the relevant product markets 
for the purpose of this Decision are, irrespective of the type of infrastructure used 
for their transmission, each of the markets for the wholesale supply of (i) FTA, 
(ii) basic Pay -TV and (iii) premium Pay -TV channels. The question whether these 
markets should be further segmented based on the genre of the channel can be left 
open, as the commitments offered by TWDC solve the competition concerns also 
under any narrower product market definition (see Section 6).  
4.7.2. Geographic market definition  
(86) The Notifying Party submits that since languages may represent an important 
factor in the viewer’s decision to watch certain channels, it may theoretically be 
possible to identify markets that are narrower or larger than national in 
geographic scope where either two or more different languages are spoken by 
significant proportions of the population or the same language i s spoken in two or 
more neighbouring countries. The Notifying Party  further submits that audience 
shares for geographic regions wider than single EEA countries have limited value 
since channels are generally licensed by wholesale suppliers to retail platfo rms on 
a national basis and the same channels may not be available throughout a 
linguistically homogenous, supra -national region. Regardless of the geographic 
market definition, the Notifying Party submits no competition concerns would 
arise and the precis e geographic scope can be left open.  
(87) The Commission has previously considered that the market could be national,51 
sub-national52 or by linguistic region encompassing more than one Member 
State.53 
(88) A broad majority of respondents to the market investigation i ndicated that TV 
channels are licensed on a national level or within a linguistic region.54  
                                                 
48  Replies to Questionnaire  Q8 to TV Retail Distributors of 17 September 2018, question s 16-20; replies 
to Questionnaire  Q10 to TV R etail Distributo rs of 17 September 2018, question s 16-20. 
49  Replies to Questionnaire Q7 to TV Channel Suppliers of 17 September 2018,  questions 14 -16; replies  
to Questionnaire Q9 to TV Channel Suppliers of 17 September 2018, questions 14- 16. 
50  Replies to Questionnaire  Q8 to TV Retail Distributors of 17 September 2018, question s 19-20; replies 
to Questionnaire  Q10 to TV Retail Distributors of 17 September 2018, question s 19-20; r eplies to 
Questionnaire Q7 to TV Channel Suppliers of 17 September 2018, questions  17-18; rep lies to 
Questionnaire Q9 to TV Channel Suppliers of 17 September 2018, questions  17-18. 
51  Commission decision of 21 December 2011 in Case M.6369 -  HBO/Ziggo/HBO Nederland, recital 39; 
Commission decision of 14 April 2013 in Case M.6880 -  Liberty Global/Virgin Media, recital 41; 
Commission decision of 30 May 2018 in Case M.7000  - Liberty Global/Ziggo .   
52  Commission decision of 24 February 2015 in Case M. 7194 -  Liberty Global / Corelio / W&W / De 
Vijver Media . 
53  Commission decision of 21 December 2010 in  Case M.5932 -  News Corp/BskyB, recitals 86 –88; 
Liberty Global/Virgin Media .   
 
18 (89) In any event, for the purpose of this Decision, the exact geographic market 
definition can be left open, as the commitments offered by TWDC solve the 
competition co ncerns also under any plausible geographic market definition (see 
Section 6).  
4.8. Retail supply of TV services  
(90) In the market for the retail provision of TV services, the suppliers of linear and 
non-linear (mainly Video -On-Demand, "VOD") TV services serve end customers 
who wish to purchase such services. The TV services supplied by TV distributors 
to end users consist of: (i) packages of linear TV channel s (which they have either 
acquired or produced themselves); and (ii) content aggregated in non- linear 
services, such as Video on Demand ("VOD"), Subscription VOD ("SVOD"), 
Transactional VOD ("TVOD") and Pay Per View ("PPV"). TV content can be 
delivered to end users through a number of technical means including cable, 
satellite and IPTV55. So- called over -the-top ("OTT")56 players deliver channels 
and content in both a linear and non- linear fashion through the use of the internet.  
(91) TWDC (but not Fox) offers ret ail TV services across the EEA to end consumers. 
TWDC's retail TV services include DisneyLife which is available only in the UK 
and Ireland and ESPN Player, an OTT service available throughout the EEA. 
4.8.1. Product market definition 
(92) The Notifying Party submits that it is not relevant to delineate the market for the 
retail provision of TV services based on the segmentation analysed by the 
Commission in its previous decisions57, namely: (i) the type of technology used; 
(ii) the nature of TV services provided in ter ms of pay -TV and Free- To-Air 
("FTA") TV services; and, (iii) the nature of TV services provided in terms of 
linear and non- linear services.  
(93) In its previous decisions the Commission has considered the retail provision of 
FTA TV and pay -TV services as separate markets but ultimately left open the 
product market definition58. The Commission also considered whether retail TV 
                                                                                                                                                 
54  Replies to Questionnaire  Q9 to TV Channel Suppliers of 17 September 2018 Q7; replies to Questionnaire 
Q9 to TV Channel Suppliers of 17 September 2018, question  20; replies to  Questionnaire Q8  to TV 
Retail Distributors of 17 September 2018;  replies to Questionnaire  Q10 to TV R etail Distributors of 
17 September 2018, question 22. 
55  IPTV is the abbreviation for Internet Protocol TV; it is a system through which television servic es are 
delivered using the Internet protocol over a packet -switched network such as the internet, instead of 
being delivered through traditional terrestrial, satellite signal and cable television formats.  
56  Over -the-top (OTT) is any application or service  that provides a product over the Internet and bypasses 
traditional distribution. Applications and services that are provided as 'over -the-top' are most typically 
related to media and communication.  
57  Commission decision of 21 December 2010 in Case M.5932 - News Corp/BskyB ; Commission  decision 
of 22 September 2006 in Case M.4353  - Permira/All3Media Group ; Commission decision of 15 April  
2013 in Case M.6880 - Liberty Global/Virgin Media ; Commission decision of 24 February 2015 in 
Case M.7194 - Liberty Global/Corelio/W&W/De Vijver Media . 
58  Commission decision of 18 July 2007 in Case M.4504 - SFR/Télé 2 France , recital 40; Commission 
decision of 25 June 2008 in Case M.5121 -  News Corp / Premiere , recital 20; Commission decision of 
7 April 2017 in Case M.8354 –  Fox / Sky, paragraph 97; Commission decision of 3 August 2016 in 
Case M.7978 –  Vodafone/Liberty Global/Dutch JV , paragraph 56; Commission decision of 24 
February 2015 in Case M.7194 -  Liber ty Global / Corelio / W&W / De Vijver Media, recital 119 -120; 
 
 
19 can be segmented further according to: (ii) linear vs non- linear TV services59; 
(iii) according to distribution technologies (e.g. cable, OT T, satellite, IPTV or 
terrestrial)60; and (iv) premium pay -TV vs basic pay -TV services61 but, has left 
the market definition open with regard to each of these potential sub- segments.   
(94) With regards to a possible segmentation between FTA and pay -TV services, m ost 
of the respondents to the market investigation indicated that such a distinction is 
still relevant in the present case.62 Most of the respondents to the market 
investigation further noted that a segmentation between basic and premium pay -
TV services wou ld also be relevant. 63 
(95) With regards to a possible segmentation of TV retail services according to linear 
vs non- linear TV services, the market investigation provided mixed results. In 
particular, some respondents such as Telia and MEO noted that catch up s ervices 
are often acquired together with linear content. Some content like SVOD, TVOD 
and AVOD are acquired separately. 64 
(96) With regards to a possible segmentation of TV retail services depending on the 
type of infrastructure used for their transmission, the  results of the market 
investigation provided mixed results with some respondents arguing that most of 
the content is available on each technology and it does not matter how it reaches 
the household, while others stated that different infrastructures often have a 
varying quality, different types of services and as well as customer needs.65   
(97) Finally, the market investigation provided mixed results on whether VOD 
services by OTT players (such as Amazon, Netflix) should be considered as 
alternatives or complem ents to retail pay -TV services. On the one hand, some 
respondents, such as Magyar Telekom, noted that SVOD services are acquired as 
                                                                                                                                                 
Commission decision of 25 June 2008 in Case M.5121 -  News Corp/Premiere, recitals 15 and 21; 
Commission decision of 10 October 2014 in Case M.7000 -  Liberty Global/Ziggo , recital 108.  
59  Commis sion decision of 6 February 2018 in Case M.8665 –  Discovery / Scripps , paragraph 33; 
Commission decision of 7 April 2017 in Case M.8354 –  Fox / Sky, paras 98 and 99;  Commission 
decision of 3 August 2016 in Case M.7978 –  Vodafone/Liberty Global/Dutch JV , para 58; Commission 
decision of 24 February 2015 in case M.7194 -  Liberty Global / Corelio / W&W / De Vijver Media , 
recital 124; Commission decision of 25 June 2008 in Case M.5121 -  News Corp/Premiere, recital 21; 
Commission decision of 10 October 2014 in Ca se M.7000 -  Liberty Global/Ziggo, recitals 109 –110. 
60  Commission decision of 6 February 2018 in Case M.8665 –  Discovery / Scripps , paragraph 33; 
Commission decision of 7 April 2017 in Case M.8354 –  Fox / Sky, paragraph 100 ; Commission 
decision of 3 August  2016 in Case M.7978 – Vodafone/Liberty Global/Dutch JV , paragraph 62; 
Commission decision of 24 February 2015 in Case M.7194 -  Liberty Global / Corelio / W&W / De 
Vijver Media, recital 127; Commission decision of 25 June 2008 in Case M.5121 -  News 
Corp/Premiere , recital 22; Commission decision of 21 December 2010 in Case M.5932 -  News 
Corp/BskyB, recital 105; Commission decision of 10 October 2014 in Case M.7000 -  Liberty 
Global/Ziggo, recital 113.  
61  Commission decision of 24 February 2015 in Case M.7194 -  Liberty Global / Corelio / W&W / De 
Vijver Media , recital 119.  
62  Replies to Questionnaire Q8 to TV Retail Distributors of 17 September 2018; replies to Questionnaire 
Q10 to TV Retail Distributors o f 17 September 2018, question 26.  
63  Replies to Questionnaire Q8 to TV Retail Distributors of 17 September 2018; replies to Questionnaire 
Q10 to TV Retail Distributors of 17 September 2018, question 27.  
64  Replies to Questionnaire Q8 to TV Retail Distribu tors of 17 September 2018; replies to Questionnaire 
Q10 to TV Retail Distributors of 17 September 2018, question 25.  
65  Replies to Questionnaire Q8 to TV Retail Distributors of 17 September 2018; replies to Questionnaire 
Q10 to TV Retail Distributors of 1 7 September 2018, question 31.  
 
20 a complement of basic pay -TV package. On the other hand, other respondents, 
such as Orange, indicated that OTT players are a cquiring significant audio- visual 
content and they compete directly with their premium pay -TV services. 66 
(98) Given the fact that the assessment of the Transaction would remain the same 
whether (i) FTA services and pay -TV services, (ii) linear pay -TV services and 
non-linear pay -TV services, (iii) different distribution technologies, and 
(iv) SDUs and MDUs are considered to belong to the same product market or to 
give rise to separate markets, the exact scope of the relevant market for TV 
services can be left op en in this regard.  
(99) Therefore, the Commission considers that for the purpose of this Decision the 
exact product market definition can be left open as the Transaction does not raise 
serious doubts as to its compatibility with the internal market under any plausible 
market definition.  
4.8.2. Geographic market definition  
(100)  The Commission has in the past considered that the geographic scope of the 
market for the retail provision of TV services could be national, since providers of 
retail TV services compete on a nationwi de basis, or limited to the coverage area 
of each cable operator.67 
(101)  The Notifying Party considers that the question whether the scope of the market 
for the retail provision of TV services should be either national, since TV 
distributors compete on a nationw ide basis, or limited to the coverage area of each 
cable operator, could be left open.  
(102)  Most of the respondents to the market investigation consider that the market for 
the retail provision of TV services is national in scope.68 
(103)  In any event, the Commission considers that the exact geographic market 
definition can be left open in this case as the Transaction does not raise serious 
doubts as to its compatibility with the internal market under any plausible market 
definition. 
                                                 
66  Replies to Questionnaire Q8 to TV Retail Distributors of 17 September 2018; replies to Questionnaire 
Q10 to TV Retail Distributors of 17 September 2018, question 28.  
67  Commission decision of 26 February 2007 in Case M.4521 - LGI/Telenet , recital 25; Commission 
decision of 24 February 2015 in Case M.7194 -  Liberty Global/Corelio/W&W/De Vi jver Media , recital 
139; Commission decision of 25 June 2008 in Case M.5121 -  News Corp/Premiere , recital 24; 
Commission decision of 25 January 2010 in Case M.5734 -  Liberty Global Europe/Unitymedia, 
recitals 40 and 43; Commission decision of 21 December 2010 in Case M.5932 -  NewsCorp/BSkyB , 
recital 109; Commission decision of 21 December 2011 in Case M.6369 - HBO/Ziggo/HBO 
Nederland, reci tal 42; Commission decision of 15 April 2013 in Case M.6880 -  Liberty Global/Virgin 
Media , recital 54; Case M.7000 –  Liberty Global/Ziggo , recital 118.  
68  Replies to Questionnaire Q1 to Mobile Operators of 4 September 2018, question 22; replies to 
Question naire Q2 to Fixed Operators of 4 September 2018, question 22.   
 
21 5. COMPETITIVE ASSESSMEN T 
5.1. Analytical framework  
(104)  Under Article 2(2) and (3) of the Merger Regulation, the Commission must assess 
whether a proposed concentration would significantly impede effective 
competition in the internal market or in a substantial part of it, in particular 
through the cre ation or strengthening of a dominant position.  
(105)  In this respect, a merger may entail horizontal and/or non- horizontal effects. 
Horizontal effects are those deriving from a concentration where the undertakings 
concerned are actual or potential competitors of  each other in one or more of the 
relevant markets concerned. Non -horizontal effects are those deriving from a 
concentration where the undertakings concerned are active in different relevant 
markets.  
(106)  As regards non -horizontal mergers, two broad types of su ch mergers can be 
distinguished: vertical mergers and conglomerate mergers.69 Vertical mergers 
involve companies operating at different levels of the supply  chain.70 
Conglomerate mergers are mergers between firms that are in a relationship which 
is neither h orizontal (as competitors in the same relevant market) nor vertical (as 
suppliers or customers) .71 
(107)  A case where a merger entails both horizontal and non- horizontal effects may for 
instance be when the merging  firms are not only in a vertical or conglomerate  
relationship, but are also actual or potential competitors of each other in one or 
more of the relevant markets concerned. In such a case, the Commission will 
appraise horizontal, vertical and/or conglomerate effects in accordance with the 
guidance set ou t in the relevant notices.72 
(108)  The Commission appraises horizontal effects in accordance with the guidance set 
out in the relevant notice, that is to say the Horizontal Merger Guidelines.73 
Additionally, the Commission appraises non- horizontal effects in accor dance with 
the guidance set out in the relevant notice, that is to say the Non -Horizontal 
Merger Guidelines.74 
5.1.1. Horizontal effects  
(109)  The Horizontal Merger Guidelines 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.  
                                                 
69  Non-Horizontal Merger Guidelines, recital 3.  
70  Non-Horizontal Merger Guidelines, recital 4.  
71  Non-Horizontal Merger Guidelines, recital 5.  
72  Non-Horizontal Merger Guidelines, recital 7.  
73 Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of 
concentrations between undertakings ("Horizontal Merger Guidelines"), OJ C 31, 05.02.2004.  
74  Guidelines on the assessment of non -horizontal mergers under th e Council Regulation on the control 
of concentrations between undertakings ("Non -Horizontal Merger Guidelines"), OJ C 265, 18.10.2008.  
 
22 (110)  As regards horizontal non- coordinated effects, under the substantive test set out in 
Article 2(2) and (3) of the Merger Regulation, als o mergers that do not lead to the 
creation or the strengthening of the dominant position of a single firm may be 
incompatible with the internal market. Indeed, the Merger Regulation recognises 
that in oligopolistic markets, it is all the more necessary to maintain effective 
competition.75 This is in view of the more significant consequences that mergers 
may have on such markets. For this reason, the Merger Regulation provides that 
"under certain circumstances, concentrations involving the elimination of 
impo rtant competitive constraints that the merging parties had exerted upon each 
other, as well as a reduction of competitive pressure on the remaining 
competitors, may, even in the absence of a likelihood of coordination between the 
members of the oligopoly, result in a significant impediment to effective 
competition" .76 
(111)  The Horizontal Merger Guidelines list a number of factors which may influence 
whether or not significant horizontal 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 limited possibilities for customers to 
switch suppliers, or the fact that the merger would eliminate an important 
competitive force. That list of factors applie s equally regardless of whether a 
merger would create or 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 present to make signific ant non-
coordinated effects likely and it is not an exhaustive list.77 Finally, the Horizontal 
Merger Guidelines describe a number of factors, which could counteract the 
harmful effects of a merger on competition, including the likelihood of buyer 
power, entry and efficiencies.  
(112)  A merger in a concentrated market may also significantly impede effective 
competition due to horizontal coordinated effects  where, through the creation or 
the strengthening of a collective dominant position, it increases the likelihoo d that 
firms are able to coordinate their behaviour and raise prices, even without 
entering into an agreement or resorting to a concerted practice within the meaning 
of Article 101 TFEU. A merger may also make coordination easier, more stable 
or more effec tive for firms that were already coordinating before the merger, 
either by making the coordination more robust or by permitting firms to 
coordinate on even higher prices.78 
(113)  To assess whether a merger gives rise to horizontal coordinated effects, the 
Commiss ion should examine, first, whether it would be possible to reach terms of 
coordination and, second, whether the coordination would be likely to be 
sustainable.79  
                                                 
75 Merger Regulation, recital 25.  
76 Merger Regulation, recital 25. Similar wording is also found in paragraph 25 of the Ho rizontal Merger 
Guidelines. See also Commission decision of 2  July 2014 in Case M.7018 – Telefónica 
Deutschland/E -Plus, recital 113; Commission decision of 28  May 2014 in Case M.6992 –  Hutchison 
3G UK/Telefónica Ireland, recital 179; Commission decision of  12 December  2012 in Case M.6497 – 
Hutchison 3G Austria/Orange Austria, recital 88.  
77 Horizontal Merger Guidelines, paragraph 26.  
78 Horizontal Merger Guidelines, paragraph 39.  
79  Horizontal Merger Guidelines, paragraph 42.  
 
23 5.1.2. Vertical effects  
(114)  A merger is said to result in foreclosure where actual or potential rivals' a ccess to 
supplies or markets is hampered or eliminated as a result of the merger, thereby 
reducing these companies' ability and/or incentive to compete.80 Such foreclosure 
may discourage entry or expansion of rivals or encourage their exit. Such 
foreclosure  is regarded as anti -competitive where the merged entity — and, 
possibly, some of its competitors as well — are as a result able to profitably 
increase the price charged to consumers.81 
(115)  Two forms of vertical foreclosure can be distinguished. The first is wh ere the 
merger is likely to raise the costs of downstream rivals by restricting their access 
to an important input (input foreclosure). The second is where the merger is likely 
to result in foreclosure of upstream rivals by restricting their access to a 
sufficiently large customer base (customer foreclosure).  
5.2. Introduction 
(116)  As noted, the Transaction gives rise to both horizontal overlaps and vertical links 
between the activities of TWDC and Fox.  
5.3. Horizontally affected markets  
5.3.1. Production and licensing of distr ibution rights of films for theatrical exhibition  
5.3.1.1. Notifying Party's views  
(117)  The Notifying Party submits that the Transaction will not give rise to unilateral 
effects concerns in the market for the production and supply of films for theatrical 
release in any EEA Member State because: (i) there are strong competitors 
present on the market, market entry is common, and the Parties are not each 
other's closest competitor; (ii) the combined market share of the Parties remains 
modest; (iii) even the Parties' modest market share is not a reliable indicator of 
their competitive position, due to the hit -driven nature of the market; (iv) the 
merged entity will continue to be constrained by third -party distributors; and 
(v) TWDC remains committed to producing high -quality  content.  
5.3.1.2. Commission's assessment  
(118)  The Parties' activities overlap in a total of 15 EEA Member States, where the 
Parties' activities overlap in the production and licensing of distribution rights of 
films for theatrical release. These Member States are: Bu lgaria, Croatia, Cyprus, 
Czech Republic, Estonia, Greece, Hungary, Iceland, Latvia, Lithuania, Malta, 
Portugal, Romania, Slovakia and Slovenia.  
(a) Production and licensing of distribution rights of films for theatrical 
exhibition, all producers  
(119)  In the overall  market encompassing all film producing studios, the merged entity's 
market shares in 2017, calculated on the basis of gross box office receipts would 
                                                 
80  Non-horizontal Merger Guidelines, paragraph 29.  
81  Non-horizontal Merger Guidelines, paragraph 29.  



 
27 (129)  Moreover, TWDC and Fox do not appear to be  close competitors in the market 
for the production of US films for theatrical release for the same reasons outlined 
in paragraph (122)  above. 
(130)  In light of the above, the Commission concludes that the Transaction does not 
raise serious doubts as to its compatibility with the internal market in relatio n to 
the market for the production and supply of films for theatrical release that 
includes only US producers.  
5.3.2. Distribution of films for theatrical exhibition  
(131)  The Parties are active in the distribution of films for theatrical release in a number 
of Member States. Both TWDC and Fox have distribution activities in: Austria, 
Belgium, France, Germany, Ireland, Italy, Luxembourg, Spain, Sweden and the 
UK.89 In addition, TWDC, but not Fox, has distribution activities in: Denmark, 
Finland, the Netherlands, Poland, Liechtenstein and Norway.  
(132)  While the Parties mostly distribute their own films on an exclusive basis, in some 
Member States they also carry out the t heatrical distribution for other producers' 
films. TWDC distributes: In Finland for Sony, in Germany for Universum, and in 
Liechtenstein for Paramount.90 Fox distributes: in Belgium and Luxembourg for 
Warner Bros, in Germany for Prokino, Majestic, eOne and SquareOne, in Italy for 
Paramount, in the UK for Pathé, in Sweden for Nordisk and Warner Bros, and 
throughout the EEA for Regency Entertainment.91 
5.3.2.1. Notifying Party's views  
(133)  The Notifying Party submits that the Transaction will not give rise to unilateral 
effects in the market for the distribution of films for theatrical release in any EEA 
Member State. This is because the market for distribution is fragmented and 
TWDC will still face a large number of rivals in every Member State, including 
local distributors and providers of other content.92 Furthermore, the Notifying 
Party submits that the combined market shares of the Parties are limited, 
especially considering the hit -driven nature of theatrical distribution. Finally, the 
Notifying Party argues that exhi bition markets are highly concentrated with few 
exhibitors present in each Member State, capable of constraining distributors. The 
Notifying Party submits that these arguments are applicable even if one were to 
consider a potential  segmentation between US and non- US films.  
                                                 
89  The Notifying Party has provided market shares based on box office receipts collected from exhibitors. 
The data has been sourced primarily from IMDb and ComScore. Since ComScore provides data for 
Belgium & Luxembourg and for Ireland & the UK together, the Notifying Party has provided data for 
those countri es together.  
90  ComScore does not provide data for Liechtenstein and the Notifying Party was not able thus to provide 
data for Liechtenstein. In any case, Fox is not active in the distribution of films for theatrical release in 
Liechtenstein, therefore th ere is no overlap between the Parties' activities.  
91  Fox has a minority interest in Monarchy Enterprises Holdings B.V., which in turn owns, among others, 
Regency Entertainment Inc., which in turn owns a group of companies operating under the names 
Regency and New Regency (together these entities are referred to as "Regency"). Fox distributes 
Regency's films alongside its own films throughout the EEA.  
92  Non-film providers distribute content other than films, such as the broadcast of live including sports, 
concerts etc.  

 
29 particularly important for their portfolio.94 It releases a limited number of films 
per year, but represents nevertheless a share of exhibitors' turnover similar to that 
of other US majors due to the success of these films. On the other hand, Fox 
releases a significantly larger number of films that are more varied in content and 
on average less successful than those of TWDC. Several respondents explained  
that while TWDC is more focused on large blockbusters, Fox has a more 
diversified offer including arthouse type films through its Searchlight branch. The 
closest competitor of TWDC does not appear to be Fox, but Universal or Warner 
Bros in most instances, both at production level but also in terms of distribution.95 
The addition of Fox' films therefore will not significantly increase TWDC's 
bargaining position vis -à-vis exhibitors.  
(139)  In addition, competition between films is largely determined by respective f ilm's 
release schedule. The largest part of the box office revenue of a film is achieved 
during the first weeks of exhibition. The Parties' films achieve […] % of the box 
office revenue during the first two weeks of exhibition and […] % during the first 
three.96 The Parties rarely release films within one or two weeks of each other's. 
In 2017, there was only one weekend where both Parties released a film.97 The 
Commission considers that this is another indication of the Parties' not being close 
competitors pre -Transaction.   
(140)  In the same line, it is unlikely that the merged entity will occupy more screen 
space to the detriment of smaller, local producers, given the incentive is rather to 
limit the number of its own films that are screened at the same time to avoid 
competition for viewers between them, thereby freeing screens to other producers' 
films. In terms of offer, aside from TWDC and Fox, there are several distributors 
of US and non- US films carrying other films that exhibitors can screen. TWDC 
and Fox distr ibuted together only 101 films, out of the 331 films distributed by 
US films distributors in the EEA in 2017 and the additional 2721 non- US films.98 
(141)  Similarly, the Commission considers that the Transaction does not raise serious 
doubts as to its compatibility with the internal market even in the markets where 
the merged entity will hold more than [30- 40]%  shares, namely Belgium & 
Luxembourg and Sweden.99 The higher combined share of the Parties in both 
                                                 
94  Replies to Questionnaire Q3  to exhibitors  of 17 September 2018, question 25.  
95  Replies to Questionnaire Q6  to distributors  of 17 September 2018, questions  22 to 26 and Replies to 
Questionnaire Q3  to exhibitors  of 17 September 2018, question s 21 to 27.  
96  Commission's estimates based on film revenue data provided by the Parties in Annexes 5.1 and 5.2 in 
reply to RFI 5.  
97  Notifying Party's Submission on Theatrical Distribution of 15 October 2018.  
98  Notifying Party's Submission on Theatrical Distribution of 15 October 2018.  
99 It must be noted that the Notifying Party argues that sub -distribution agreements whereby Fox 
distributes films for Warner Bros and Regency in Belgium & Luxembourg, as well as Nordisk in 
Sweden should be excluded for the purpose of assessing the Parties' position on the market for the 
theatrical distribution of films. This is because producers retain rights of approval or control over 
certain key terms and parameters of distribution (such as release dates). The Commission however 
considers that the contractual arrangement between producer and distributor does not affect the 
bargaining position of distributors vis -á-vis exhibitors. As a result, sub -distribution agreements are 
treated as equivalent to full distribution agreements. If sub -distribution  would be  excluded, the market 
shares of the Parties would be [20 -30]% (TWDC [10 -20]% ; Fox [5-10]% ) in Belgium & Luxembourg 
and [30- 40]% (TWDC [20 -30]%; Fox [5-10]% ) in Sweden for the distribution of all films, [30 -40]% 
(TWDC [20 -30]%; Fox [10 -20]% ) in Belgium & Lu xembourg and [40 -50]%  (TWDC [20 -30]%; 
Fox [10-20]% ) in Sweden for the distribution of US films.  
 
30 territories can be explained by Fox's distribution activities on behalf of Warner 
Bros and Regency in Belgium & Luxembourg and Warner Bros, Regency and 
Nordisk in Sweden. Moreover, the 2017 market shares of Fox, both in Belgium & 
Luxembourg and Sweden, include the distribution of DreamWorks Animation's 
films, wh ile that distribution agreement ended in December 2017.  
(142)  In Belgium & Luxembourg, the combined market share of the Parties will be 
[40-50]% . It will still face important competitors such as Sony ( [20-30]% ) and the 
local distributor Belga Films ( [10-20]% ), which carries the distribution of local 
productions but also large films such as "The Hunger Games" series of Lionsgate. 
Kinepolis is also an important distributor in Belgium with a share of  [5-10]% , 
which is furthermore integrated downstream on the exhibit ion market in Belgium 
and Luxembourg where it is the largest exhibitor.  
(143)  Fox distributes Regency and Warner Bros' films in Belgium & Luxembourg and 
distributed DreamWorks Animation's films until 31 December 2017. The end of 
the agreement with DreamWorks Ani mation will carry a reduction in Fox's 
position on the distribution market as of 2018.100 […]101 If Fox would cease 
distributing for Warner Bros and Regency, in addition to DreamWorks, Fox's 
market share in Belgium & Luxembourg in 2017 would be [5 -10]% in the 
theatrical distribution of all films.102  
(144)  In addition, with respect to rental fees contracted with exhibitors in Belgium, they 
are capped by law at 50%.103 [Details on the Parties' contractual arrangements] , 
TWDC will not be able to increase rental fees to a si gnificant extent.  
(145)  In Sweden, the combined market share of the Parties will be [ 50-60]%. It will still 
face important competitors such as UIP, distributing for Paramount, Universal 
and Sony ( [20-30]%) and the local distributor SF Studios ( [10-20]%), which 
carries the distribution of local productions and large films such as "The Hobbit" 
series of Warner Bros.  
(146)  Fox distributes Regency, Warner Bros and Nordisk films in Sweden and 
distributed DreamWorks Animation's films until 31 December 2017. The end of 
the a greement with DreamWorks Animation will carry a reduction in Fox's 
position on the distribution market as of 2018.104 [Details on Fox's contractual 
arrangements] .105 [Details on Fox's contractual arrangements] .106 It is also unclear 
whether it would be in the interest of Warner Bros and Nordisk to keep 
distributing their films in Sweden through the distribution arm of a large 
competitor also on the upstream film production level. 
                                                 
100  Notifying Party's Submission on Theatrical Distribution of 15 October 2018, Annex 1.  
101  Reply to question 30 of RFI 10, Annex 31.1.  
102 Form CO, Chapter 4A.  
103 Article 2 of the ministerial decree of 13 March 1986 on "Rental charges for films intended for 
commercial screening". Rental fees can be exceptionally increased to 55% in certain circumstances 
through ministerial decree, but this is rarely used.  
104  Notifying Party's Submission on Theatrical Distribution of 15 October 2018, Annex 1.  
105  Reply to question 30 of RFI 10, Annex 31.1.  
106  Form CO, Chapter 2A - Theatrical distribution of films, footnote 54.  
 
31 (147)  If Fox would cease distributing for Warner Bros, Regency and Nordisk, in 
addition to DreamWorks, Fox's market share in Sweden in 2017 would be 
[5-10]%  in the theatrical distribution of all films.107  
(148)  Furthermore, despite the Parties distributing a larger sla te of films in Belgium & 
Luxembourg and Sweden, based on information provided by the Notifying Party, 
it is unclear whether the fact of controlling more films (including via distribution) 
results in a disproportionally larger share of revenues for the dist ributor.108 
(149)  There is also no practice of bundling or block booking films for theatrical release 
in the industry, nor have either of TWDC or Fox ever engaged in them anywhere 
in the EEA: the breadth of the portfolio of distributors is unrelated to the booking 
of the films which is done on an individual basis.109  
(150)  In the course of the market investigation, some exhibitors and distributors 
indicated that they feared that post -Transaction, TWDC would try to impose  
exhibition terms more favourable to TWDC which they  would not be able to 
refuse.110 However, the Commission does not consider that the Transaction will 
allow TWDC to worsen exhibition terms due to the addition of Fox films for all 
reasons explained above (see paragraphs (137)  to (139) ).  
(151)  Exhibitors also fear that this may result in reduced scree n space especially for 
smaller domestic producers,  preventing exhibitors from offering a diversified 
portfolio to cover all audiences' tastes. Similarly, the Commission does not 
consider that the Transaction would lead to TWDC occupying more space, as 
described in paragraph (140) . Moreover, the Commission notes that the concern 
that the Parties would occupy more screen space is in contradiction with t he 
concern that fewer films will be produced (see paragraph (123) ). 
(152)  In light of the above, the Commission concludes that the Transaction does not 
raise serious doubts as to its compatibility with the internal market in relation to 
the market for the distribution of films for theatrical release that includes all films 
in any EEA Member State.  
(b) Distribution of US films for theatrical exhibition  
(153)  Even on the narrower market for the distribution of US films, the combined 
market shares of the Parties are still below [30-40]% in all affected markets with 
the exception of Belgium & Luxembourg and Sweden. 
                                                 
107 Form CO, Chapter 4A.  
108 Notifying Party's Submission on Theatrical Distribution of 15 October 2018, Annex 5.  
109  Notifying Party's Submission on Theatrical Distribution of 15 October 2018.  
110  Replies to Questionnaire Q3  to exhibitors  of 17 September 2018, question s 41 and 42.  

 
33 o In the Netherlands  […] .  
o In Spain […] .  
o In Denmark, Finland, Sweden, Norway […] .  
o In United Kingdom  […] .  
(159)  With regards to the supply of digital home entertainment other TV content, such 
as TV -series, Fox licenses its digital home entertainment content across all EEA 
countries while TWDC is only active in Austria, France, Germany and the UK. 
(160)  As indicate d in pa ragraphs (40) and (41), the Parties are also active in almost all 
EEA countries in the supply of  physical home entertainment other TV content, 
such as TV -series.111   
5.3.3.1. Notifying Party's views  
(161)  The Notifying Party submits that the Transaction will not give rise to unilateral 
effects in the market for the distribution of home entertainment content in any 
EEA Member State. First, the Notifying Party submits that the combined market 
shares of the Parties are limited, especially considering that the market should not 
be segmented according to type of distribution (digital or physical) or content 
(films or othe r TV content). Second, the Notifying Party considers that several 
distributors would remain active across the EEA. Third, the Parties face strong 
competition from local content. Fourth, customers have significant buyer power 
and can switch easily to other distributors. 
5.3.3.2. The Commission's assessment  
(a) Physical home entertainment content  
(162)  The activities of the Parties in the distribution of physical home entertainment 
content give rise to affected markets in several countries across the EEA, namely:  
(a) Physical home  entertainment films: in Austria, Belgium, Croatia, Cyprus, 
Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, 
Hungary, Iceland, Ireland, Italy, Latvia, Lithuania, Luxembourg,  
Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia 
Spain, Sweden and the UK. 
(b) Physical home entertainment other TV content:  in Denmark, Finland, 
France, Norway, Spain and Sweden.  
(163)  However, the Commission considers that the Transaction does not raise serious 
doubts as to its compatibility with the intern al market in any EEA Member State 
for the reasons set out below. 
(164)  First, in most Member States the combined position of the Parties will remain 
modest. Post -Transaction, as shown in Table 5 the merged entity will hold market 
                                                 
111  "Other TV content" includes non- film, non -sport con tent, such as TV series, reality shows, game 
shows and cartoons.  


 
36 (167)  Fourth, the market invest igation has showed that TWDC and Fox are not  
particularly close competitors in neither the distribution of films nor other TV 
content for physical home entertainment. Most of the respondents have indicated 
that Universal and Warner Bros are closer competit ors to TWDC than Fox.116 
Most of the respondents further indicated that TWDC and Fox do not exert a 
particularly important competitive constraint on other market participants in the 
distribution of physical home entertainment content. In particular, it has been 
highlighted that a significant number of competitors would remain active in the 
market.117 Several respondents also noted that while, after the Transaction, the 
merged entity will increase its market position, consumer demand and the sale of 
physical hom e entertainment content has significantly reduced in the recent years 
and it is expected to continue declining.  118  
(168)  Finally, most of the respondents to the market investigation consider that the 
Transaction would have either a positive or a neutral impact on the physical home 
entertainment content markets and their businesses.119 For example, Colruyt 
indicated that offer, quality and quantity would stay the same. Hofer noted that 
the Transaction would have minimal impact on its business. AB Svensk 
considered that the physical home entertainment market is rapidly declining and 
the merger will not have any impact on current market conditions. 
(169)  In light of the above, the Commission concludes that the Transaction does not 
raise serious doubts as to its compatibilit y with the internal market in relation to 
the market for the distribution of physical home entertainment content, including 
both films and other TV content.  
(b) Digital home entertainment content  
(170)  The activities of the Parties in the distribution of digital home entertainment 
content give rise to affected markets in several countries across the EEA.  
(a) Digital home entertainment films  in Austria, Bulgaria, Cyprus, Czech 
Republic, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, 
Ireland, Latvia, Lithuania, Malta,  Poland, Portugal, Romania, Slovakia, 
Slovenia and the UK.  
(b) Digital home entertainment other TV content  in Austria, Germany and the 
UK. 
(171)  However, the Commission considers that the Transaction does not raise serious 
doubts as to its compatibility with the internal market in any EEA Member State 
for the reasons set out below. 
                                                 
116  Replies to Questionnaire Q4 to Physical Home Entertainment Customers o f 17 September 2018, 
question s 17, 19 and 20.  
117  Replies to Questionnaire Q4 to Physical Home Entertainment Customers of 17 September 2018, 
question  21.  
118  Replies to Questionnaire Q4 to Physical Home Entertainment Customers of 17 September 2018, 
question  23.  
119  Replies to Questionnaire Q4 to Physical Home Entertainment Customers of 17 September 2018, 
question s 26 and 27.  


 
39 5.3.4. Production and licensing of TV audio- visual content  
(177)  Both Parties produce and license TV audio- visual content to third parties 
throughout the EEA. Whereas the Transaction does not lead to affected markets 
in the produ ction and licensing of commissioned TV content, affected markets 
arise with regard to the production and licensing of rights for pre -produced film 
and other TV content.  
5.3.4.1. Notifying Party's views  
(178) The Notifying Party submits that the Transaction will not give rise to unilateral 
effects in the markets for the production and licensing of TV audio- visual content 
in any EEA Member State. In TWDC's view, post -transaction, it will continue to 
face competi tion from a large number of competitors licensing TV content within 
the EEA which include major US and European distributors. Furthermore, the 
Notifying Party submits that, with a portfolio mainly consisting of US produced 
content, it faces competitive con straints from local content producers that are able 
to adapt to local and regional cultural particularities. According to TWDC, this 
effect is reinforced by European and national legislation requiring TV retailers to 
reserve a percentage of their transmiss ion time to local and EU content. The 
Notifying Party further submits that the Parties' combined market shares are 
moderate and likely overstate their market position since the performance of 
licensors depends on the slate of films in a given year. Finally , TWDC submits 
that in -house production and commissioned content exercise competitive 
constraints on licensors of pre -produced TV content and that the Parties will face 
significant buyer power from large and sophisticated broadcasting groups, Pay -
TV retail ers and OTT operators.  
5.3.4.2. The Commission's assessment  
(a) Licensing of television rights for films  
(179)  In the past, the Commission has considered sub- dividing the markets for the 
licensing of television rights for films by exhibition window and distinguishing 
between the licensing of television rights of US films and other films in each 
exhibition window.  
(180)  While the Parties’ combined market share in certain countries and linguistic 
regions125 within the sub- segments is higher than their share in an overall market 
for th e licensing of television rights for films, the Commission considers that the 
Transaction does not raise serious doubts in any EEA Member State for the 
reasons set out below.  
                                                 
125  The Notifying Party confirms  that combined market shares for  linguistic regions would not materially 
differ from shares provided on a by -country basis. As regards certain territory groups (namely the 
Baltic countries; Belgium & Luxembourg; Germany & Austria; Greece & Cyprus; the Nordic 
countries and the UK & Irelan d), the Notifying Party submits that it is not able to provide data on a by-
country basis for these regions in a reliable manner. However, the Parties submit that they have no 
reliable  data indicating that market shares would materially differ  on a nationa l basis  from those 
provided to the Commission  (reply to question 11 of RFI 18).  

 
41 to its customers.129 However, the Commission considers that, even though the 
merged entity will hold a broader content portfolio post -Transaction, it will not be 
able to significantly degrade terms and condition vis -à-vis its customers due to its 
limited market share and the availability of alternative licensors in the market.  
(185)  The Parties' combined market shares exceed 35% in the market for licensing o f 
TVOD/PPV rights for US films in Greece & Cyprus ( [50-60]% ), in the market for 
the licensing of first pay -TV window rights for films in France ( [30-40]% ), in the 
market for the licensing of first pay -TV window rights for US films in France 
([40-50]% ), Gre ece & Cyprus ( [40-50]% ), and Malta ( [40-50]% ), and in the 
market for the licensing of FTA window rights for US films in Belgium & 
Luxembourg ( [40-50]% ). However, in the Commission's view, these market 
shares may be overstated for the reasons set out below.  
(186)  In Belgium & Luxembourg, Greece & Cyprus, and Malta, the shares provided by 
the Notifying Party for 2016 reflect a distribution agreement between Fox and 
[…] which is no longer in force. The Commission deems it likely that, in the 
absence of this distribution agreement, Fox' current market share is lower than 
suggested by the figures for 2016. Furthermore, TWDC's Maltese licensing 
revenues for 2016 exceptionally also included […], leading to inflated 2016 
revenues compared to 2015 and 2017. Finally, the provided market share for 
France in 2016 is likely to overstate Fox' current position: [Details on Fox’s 
contractual agreements] .   
(187)  In light of the above, the Commission concludes that the Transaction does not 
raise serious doubts as to its compatibility wi th the internal market in relation to 
an overall market for the licensing of television rights for films irrespective of 
whether separate markets exist for US films and/or for exhibition windows.  
(b) Licensing of television rights for other TV content  
(188)  The acti vities of the Parties in the licensing of television rights for other TV 
content give rise to affected markets in Germany & Austria and the UK & 
Ireland.130 The Commission nevertheless considers that the Transaction does not 
raise serious doubts as to its compatibility with the internal market in any EEA 
Member State for the reasons set out below. 
(189)  First, in most Member States, the combined position of the Parties will remain 
modest. Post -Transaction, as shown in Table 10, the Parties' combined market 
shares w ill be of [20- 30]% in Germany and [30- 40]% in the UK & Ireland, while 
it will be below [20- 30]%  in all other countries.  
                                                 
129  Replies to Questionnaire Q9  to TV Channel Suppliers of 17 September 2018, question s 31-32. 
130 The Notifying Party confirms  that combined market shares for linguistic regions would not materially 
differ from shares provided on a by -country basis. As regards certain territory groups (namely the 
Baltic countries; Belgium & Luxembourg; Germany & Austria; Greece & Cyprus; the Nordic 
countries and the UK & Ireland), the Notifying Party submits that it is not able to provide data on a by-
country basis for these regions in a reliable manner. However, the Notifying Party submits that such 
market shares would not materially diff er from those provided to the Commission ( reply to question 11 
of RFI 18).  

 
43 5.3.5. Wholesale supply of TV channels  
(194)  TWDC and Fox both licence TV channels in the EEA. TWDC also owns, through 
ABC, a 50% stake in A+E Television Networks, LLC (“A&E”), a joint venture 
with Hearst Corporation ("Hearst"). A&E operates six channels showing mostly 
general entertainment and factual content. The Notifying Party argues that A&E 
operates independently from TWDC; it neither manages the negotiating and/or 
licensing of A&E’s factual channels, nor controls A&E’s distribution and/or 
pricing decisions.  
(195)  The activities of the Parties overlap exclusively in the wholesale supply of basic 
pay-TV channels. In particular, the Transaction gives rise to horizontally affected 
markets in the wholesale supply of basic pay -TV channels (and possible segments 
thereof) in several Member States  namely, (i) the wholesale markets for the 
supply of basic pay -TV channels in Germany, Italy, Portugal and Spain; (ii) the 
wholesale market for the supply of general entertainment basic pay -TV channels 
in Italy, Portugal and Spain; (iii) the wholesale market for the supply of children 
basic pay -TV channels in Belgium , Bulgaria, France, Germany, Ireland, Italy, the 
Netherlands, Norway, Poland, Portugal, Romania, Spain and the UK; and (iv) the 
wholesale market for the supply of factual basic pay -TV channels in Belgium, 
Germany, Ireland, Italy, the Netherlands, Norway, S pain and the UK.  
5.3.5.1. Notifying Party's views  
(196)  The Notifying Party submits that the Transaction will not give rise to unilateral 
effects in either the market for the wholesale supply of TV channels or any 
narrower product market(s) in any EEA Member State. First , the audience shares 
held by the Parties in the wholesale market for the supply of pay -TV channels and 
its various segments vastly overstate the Parties' actual market position since even 
large audience shares are in no way indicative of market power given that FTA 
channels exert a strong competitive pressure on pay -TV channels across the EEA. 
Second, in relation to the wholesale supply of children basic pay -TV channels, the 
increment brought by the Transaction is minimal. Third, in relation to the 
wholesa le supply of factual basic pay -TV channels, the increment brought by the 
Transaction relates to A&E channels, whose day -to-day activities TWDC has no 
control over. Fourth, in each of the technically affected markets, strong third -
party rivals will remain p ost-Transaction. Fifth, given the ongoing shift towards 
non-linear consumption of TV content, share of supply data for the wholesale 
supply of TV channels (generally and on narrower market segmentations) 
substantially understate the competitive constraints  on wholesale TV channel 
suppliers. 
5.3.5.2. The Commission's assessment  
(a) Wholesale supply of basic pay -TV channels  
(197)  The activities of the Parties in the wholesale supply of basic pay -TV channels 
give rise to affected markets in four Member States, namely: in Germany , Italy, 
Spain and Portugal (see Table 11).  





 
49 (219)  The Commission considers that in this market the Transaction raises serious 
doubts as to its compatibility with the internal market in Belgium, Germany, 
Ireland, Italy, the Netherlands, Norway, Spain and the UK for the reasons set out 
below. 
(220)  First, as shown in Table  14, through the combination of Fox's and TWDC's 
(A&E) act ivities the merged entity will hold a significant market position in the 
market for the wholesale supply of factual basic pay -TV channels across the 
EEA. The Parties would hold particularly strong positions in Germany, Italy and 
Spain. While the combined m arket shares of the Parties in Norway, the UK and 
Ireland is not particularly high, the Transaction will combine the second and third 
largest providers of factual basic pay -TV channels in those counties. Moreover, 
Discovery would be the only main operator to remain active in the market with 
market shares of respectively [70- 80]%, [50-60]%  and [50-60]%  by audience in 
Norway, the UK and Ireland. 
(221)  Second, the market investigation has indicated that the Parties are close 
competitors in this market.142 In particular, most of the respondents indicated 
Fox's National Geographic143 channels as the first or second closest competitor to 
TWDC's A&E factual channels144 with Discovery as the only main competing 
provider of factual basic pay -TV channels that would r emain available in the 
EEA.  
(222)  Third, in relation to the Notifying Party's argument that the Transaction would not 
have any impact on the wholesale market for the supply of factual basic pay -TV 
channels due to the absence of control by TWDC on A&E's day -to-day activities, 
the Commission notes that TWDC has the ability of veto over significant aspect 
of A&E activities which may limit its ability to compete across the EEA with 
Fox's National Geographic channels.145  
(223)  Fourth, most of the respondents to the market i nvestigation indicated that the 
Transaction would have a negative impact on the markets for the wholesale 
supply of basic pay -TV channels.146 In particular, most of the respondents 
indicated that the Transaction would significantly strengthen TWDC's position in 
the supply of factual channels in the EEA. 147 
(224)  In light of the above, the Commission concludes that the Transaction raises 
serious doubts as to its compatibility with the internal market in relation to the 
                                                 
142  See replies to Questionnaire Q7 to TV C hannel Suppliers of 17 September 2018, question 23; replies 
to Questionnaire  Q9 to TV C hannel Suppliers of 17 September 2018, questions 23, 24; replies to 
Questionnaire Q8 to TV Retail Distributors of 17 September 2018, question 34; replies to 
Questionnaire Q10 to TV Retail Distributor s of 17 September 2018, questions 33.  
143  Fox's factual channels include National Geographic, National Geographic People, National 
Geographic Wild.  
144  A&E channels include History, A&E, H2, Blaze,  Crime + Investigation, and Lifetime channels.  
145 For example,  TWDC has veto rights on: […] ). 
146  See r eplies to Questionnaire Q7 to TV C hannel Suppliers of 17 September 2018, question 38; replies 
to Questionnaire  Q9 to TV C hannel Suppliers of 17 September 2018, question  47; replies to 
Questionnaire Q8 to TV Retail Distributors of 17 September 2018, question 46; replies to 
Questionnaire Q10 to TV Retail Distributors of 17 September 2018, question 56.  
147  See replies to Questionnaire Q8 to TV R etail Distributors of 17 September 2018, question 41; replies 
to Questionnair e Q10 to TV R etail Distributors of 17 September 2018, questions 45.  
 
50 markets for wholesale supply of factual basic pa y-TV channels in Belgium, 
Germany, Ireland, Italy, Netherlands, Norway, Spain and the UK.  
5.4. Vertically affected markets  
5.4.1. Production and licensing of rights (upstream) and distribution of films for 
theatrical release (downstream)  
(225)  The Parties' presence in both the production and licensing of rights (upstream) 
and the distribution to exhibitors (downstream) of films for theatrical release 
gives rise to vertically affected markets in a number of Member States. 
Considering the broader markets for the production and licensing of rights of all 
films and theatrical distribution of all films, affected markets arise in Belgium & 
Luxembourg, Germany, Spain, Sweden and UK & Ireland. On the narrower 
markets for the production and licensing of rights and theatrical distribut ion of US 
films, affected market arise in Austria, Denmark, Belgium & Luxembourg, 
Finland, France, Germany, Italy, Norway, Spain, Sweden, UK & Ireland.  
5.4.1.1. Notifying Party's views  
(226)  The Notifying Party submits that the Transaction will provide TWDC with 
neither the ability nor the incentive to engage in either input foreclosure or 
customer foreclosure. Concerning input foreclosure, the Notifying Party argues 
that TWDC will not be able  to engage in input foreclosure in view of the Parties' 
relatively modest combined market share in the upstream market for the 
production and licensing of rights of films and the fact that Fox's films are not a 
critical input for distributors. Concerning c ustomer foreclosure, the Notifying 
Party submits that it will not be able to foreclose other producers' films […] , but 
also because of the many alternative routes to market including other producers' 
distribution arms and independent distributors that woul d be available to them.  
5.4.1.2. The Commission's assessment  
(a) Input foreclosure  
(227)  In terms of input foreclosure, the Commission has assessed whether, in Member 
States where one of the Parties is vertically integrated into distribution, whereas 
the other party supplies  its films to third party distributors, the merged entity 
could foreclose third party distributors downstream by fully internalising the 
distribution process.148  
(228)  Input foreclosure concerns could arise in Member States where TWDC is 
vertically integrated into distribution whereas Fox supplies its films to third party 
distributors. These are Denmark, Finland, Norway, the Netherlands and Poland. 
There are no Member States where Fox is vertically integrated but TWDC is not. 
Affected markets only arise in Denmark , Finland and Norway in the narrower 
segment of distribution of US films. 149 The Commission nevertheless considers 
                                                 
148  In countries where both Parties are vertically integrated into distribution no vertical links arise between 
production and distribution and these markets are assessed horizontally in Se ction 5.3.2 .  
149  The combined market shares of the Parties on the upstream market for the production and licensing of 
rights of all films and TWDC's market share o n the downstream market for theatrical distribution of all 
 

 
52 market power and the availability of alternative suppliers, the Commission 
considers that, post -Transaction, TWDC  will not have the ability to foreclose 
third party distributors from access to US films f or theatrical release.  
(232)  During the market investigation only one respondent raised the concern that post -
Transaction distributors might be foreclosed from access to films. However, it did 
not concern any of the Member States where affected markets arise. Th e same 
respondent also considered that post -Transaction enough alternative providers of 
films for theatrical distribution will remain in the market.151  
(233)  Some distributors of Fox's films voiced specific concerns in Member States where 
none of the Parties are vertically integrated, especially in Bulgaria and Portugal. 
According to these respondents, the Transaction may cause increased 
concentration on the distribution market by consolidating the distribution of 
TWDC and Fox's films through TWDC's current distri butors.152 However, for the 
reasons explained in paragraph (125) , the Commission considers that these 
concerns are unfounded and in any event do not relate to a merger -specific 
change of the structure of the market.  
(234)  In view of the above, the Commission considers that the Transaction would not 
raise serious doubts as to its compatibility with the internal market in relation to 
potential input foreclosure with respect to the vertical relationship between the 
market for the production and supply of films for theatrical release and the market 
for the distribution of films for theatrical release.  
(b) Customer foreclosure  
(235)  In terms of customer foreclosur e, vertical links arise in Member States where the 
Parties are vertically integrated into distribution and besides their own films offer 
distribution services to competing production studios as well. The question is 
whether post -Transaction the merged enti ty would have the ability and incentive 
to cease distributing the films of competing studios actively foreclosing them 
from access to exhibitors. Since the competitive dynamics are the same on the 
markets for production and distribution of all films and pr oduction and 
distribution of US films, the assessment is applicable to both and they will thus be 
analysed together.  
(236)  TWDC carries out the distribution of films of other studios in Finland and 
Germany. Fox does so in all EEA Member States where it is active in distribution. 
(237)  Considering the markets for the production and licensing of rights (upstream) and 
theatrical distribution (downstream) of all films, the Parties' activities give rise to 
vertically affected markets in Belgium & Luxembourg, Germany, Spain,  Sweden 
and UK & Ireland.  
                                                 
151 Replies to Questionnaire Q2  to distributors,  of 17 September 2018, question 41.  
152 Replies to Questionnaire Q2  to distributors,  of 17 September 2018, questions 43 and 47.  


 
55 (243)  No concerns have been raised from customers of the Parties in this respect during 
the market investigation.153 
(244)  In view of the above, the Commission considers that the Transaction would  not 
raise serious doubts as to its compatibility with the internal market in relation to 
potential customer foreclosure with respect to the vertical relationship between 
the market for the production and supply of films for theatrical release and the 
market for  the distribution of films for theatrical release, both in the case of all 
films as well as for US films.  
5.4.2. Licensing of TV content and wholesale supply of basic pay -TV channels and retail 
supply of TV services  
(245)  The Transaction gives rise to vertical relation ships with regard to the Parties' 
activities in the upstream market for the production and licensing of TV audio-
visual content and their downstream activities in (i) the wholesale supply of TV 
channels, and in (ii) the retail supply of TV services. TWDC a nd Fox also acquire 
audio- visual content for incorporation into their own TV channels and retail TV 
services. More specifically, vertically affected markets arise due to the Parties' 
upstream activities in the in licensing of television rights for films154 and pre -
produced other TV content ( [30-40]% in the UK and Ireland), and TWDC's 
extremely limited downstream activity as a retail provider of SVOD (DisneyLife).  
5.4.2.1. Notifying Party's views  
(246)  The Notifying Party submits that the Transaction will provide TWDC with 
neither the ability nor the incentive to engage in either input foreclosure or 
customer foreclosure. Concerning input foreclosure, the Notifying Party argues 
that TWDC will not be able to engage in such conduct in view of the Parties' 
relatively modest comb ined market share in the upstream market for the 
production of films and the fact that Fox's films are not a critical input for 
distributors. Concerning customer foreclosure, the Notifying Party submits that it 
will not be able to foreclose other producers ' films due to the contractual 
obligations of the Parties with those producers, but also because of the many 
alternative routes to the market available to competitors including other 
producers' of films would be available to them.  
5.4.2.2. The Commission's assessme nt 
(a) Input foreclosure  
(247)  In terms of input foreclosure the Commission assesses whether post -Transaction 
the merged entity would have the ability and incentive to foreclose downstream 
competitors in the markets of (i) wholesale supply of TV channels and (ii) re tail 
supply of TV services from access to (US) films.  
                                                 
153  Replies to Questionnaire Q1  to studios,  of 17 September 2018, question 87.  
154  The Parties hold a combined market shares over [30 -40]%  in the markets for: (i) licensing of 
television rights for films  in France and the UK/Ireland; (ii) licensing of TVOD/PPV rights for films  
(Greece/Cyprus); (iii) licensing of first pa y-TV window rights for films  in France, Greece/Cyprus, 
Malta and Spain; (iv) licensing of FTA rights for films in Baltics (Estonia, Latvia, Lithuania), Belgium 
& Luxembourg, Bulgaria , Slovakia  and the UK & Ireland .. 
 
56 (248)  During the market investigation respondents have indicated that, post -
Transaction, the merged entity may (i) enjoy increased bargaining power and 
therefore degrade terms and conditions to which it make s its content available, 
and/or (ii) offer exclusively its TV content through its upcoming OTT 
subscription service, Disney Play.  
(249)  However, the Commission considers that the Transaction would not result in the 
foreclosure of third party wholesale channel s uppliers and TV retailers and is 
unlikely to have an overall negative impact on effective competition. 
(250)  First, the merged entity would not have the ability to foreclose access to films to 
its customers. With regards to the licensing of (US) films rights, as  indicated in 
Section 5.3.4.2.( a), the Parties hold a combined market shares over [30- 40]% in 
the following plausible markets: (i) licensing of television rights for (US) films in 
France and the UK/Ireland; (ii) licensing of TVOD/PPV rights for (US) films 
(Greece/Cyprus); (iii) licensing of first pay -TV window rights for (US) films in 
France, Greece/Cyprus, Malta and Spain; (iv) licensing of FTA righ ts for (US) 
films in Baltics (Estonia, Latvia, Lithuania), Belgium & Luxembourg, Bulgaria, 
Slovakia and the UK & Ireland. For the reasons set out in Section 5.3.4.2. (a), the 
Commission considers that the merged entity would not hold significant market 
power under any narrower product and geographic market definition. Moreover, it 
will not be able to significantly degrade terms and conditions vis -à-vis its 
customers due to the availability of several alternatives in the upstream markets. 
The Parties will still face significant competitive constraints post- Transaction. A 
significant number of competitors remain in all affected markets, including other 
major US studios. With regards to the licensing of other TV content, the 
Commission notes that the Parties hold a combined market share over [30- 40]% 
exclusively in the UK and Ireland (see Section 5.3.4.2.( b)). The Commission 
considers that the presence of t he other US majors such as Warner Bros (which 
includes HBO channels), Universal, Sony and Paramount suffices to guarantee 
that post -Transaction, wholesale suppliers of TV channels will be able to source 
other TV content from credible alternatives to the me rged entity.  
(251)  With respect to the potential foreclosure strategy in relation to competing 
providers of TV channels across the EEA, the Commission considers that, as 
shown in Section 5.3.5, the merged entity is mainly active in the wholesale supply 
of channels of specific genres such as factual and children and it would therefore 
not likely have the incentive to stop offering its films to third parties in order to 
use them on genre channels which target specific and distinct audiences.  
(252)  With respect to the potential foreclosure strategy in relation to competing 
providers of TV retail services across the EEA, the Commission considers that, 
since th e merged entity has no meaningful presence in the retail provision of 
audio- visual services across the EEA155, even if the merged entity would 
implement such conduct, it is unlikely to significantly affect other retail provider 
of TV services with high marke t shares in countries where they operate in the 
next three years.  
                                                 
155  The market position of the merged ent ity would not be materially different in the narrower plausible 
market for the provision of retail OTT audio -visual services. In this market, the main market players 
would be Netflix and Amazon.  
 
57 (253)  In view of the above, the Commission considers that the Transaction would not 
raise serious doubts as to its compatibility with the internal market in relation to 
potential input foreclosure  with respect to the vertical relationship between the 
upstream market for the production and licensing of TV content in general, and 
films in particular, and the downstream markets for the wholesale supply of pay -
TV channels and retail provision of TV ser vices.  
(b) Customer foreclosure  
(254)  In terms of customer foreclosure the Commission needs to assess whether post -
Transaction the merged entity would have the ability and incentive to foreclose 
upstream competitors in the market for the production and licensing of TV audio-
visual content from access to the market by no longer acquiring such content as 
an input to its activities in the downstream markets of (i) wholesale supply of 
basic pay -TV channels and (ii) retail supply of TV services.  
(255)  With respect to the merged  entity's ability to foreclose competitors from access to 
the market of wholesale supply of basic pay -TV channels , the Commission notes 
that, as discussed in Section 5.3.5, the merged entity would not hold significant 
market power under any product and geographic market definition other than the 
market for the wholesale supply of factual pay -TV channels in a number of 
Member States. With respect to  the vertical link between  the Parties' activities in 
producing films, the question of customer foreclosure concerns upstream 
competitors in the production of films and the Parties' acquisition of such content 
in their downstream activities. Therefore, any m arket power held by the Parties in 
the market for the wholesale supply of factual pay -TV channels is irrelevant in 
the assessment. With respect to  the vertical link between  the Parties' activities in 
supply of other TV content,  and in particular factual c ontent which could be 
relevant to competing providers of factual basic pay -TV channels, the 
Commission notes that pre -Transaction, […]156. […]. Moreover, no respondents 
to the market investigation raised concerns related to the potential foreclosure of 
third  party providers of factual content. In any event, any merger specific increase 
in the Parties' position in the market for the wholesale of factual basic pay -TV 
channels is removed by the commitments (see Section 6 below). 
(256)  With respect to the merged entity 's ability to foreclose competitors from access to 
the market of retail supply of TV services, and more specifically TWDC's SVOD 
service DisneyLife, the Commission considers that the merged entity will not 
hold significant market power in the downstream ma rket for the retail supply of 
TV services.  TWDC has a market share of less than [0 -5]% across the EEA 
through the supply of ESPN Player. As a result, and given numerous competitors 
will remain on the market, TWDC will not be able to foreclose competitors from 
access to the market of retail supply of TV services.  
(257)  In view of the above, the Commission considers that the Transaction would not 
raise serious doubts as to its compatibility with the internal market in relation to 
potential customer foreclosure wit h respect to the vertical relationship between 
the upstream market for the production and licensing of TV content in general, 
                                                 
156  […].  
 
58 and films in particular, and the downstream markets for the wholesale supply of 
pay-TV channels and retail provision of TV service s. 
6. COMMITMENTS  
6.1. Introduction 
(258)  In order to remove the serious doubts arising from the Transaction described in 
Section 5.3.5.2 (d)  in relation to the market for the wholesale supply of factual 
Pay-TV channels in Belgium, Germany, Ireland, Italy, the Netherlands, Norway, 
Spain and the UK, the Notifying Party submitted commitments pursuant to 
Article 6(2) of the Merger Regulation on 12 October 2018 (the "Initial 
Commitments").  
(259)  The Commission launched a market test of the Initial Commitments on 
16 Octobe r 2018. Following the feedback received from the Commission, the 
Notifying Party submitted  a final set of commitments on 24 October 2018 (the 
"Final Commitments").  
(260)  The Final Commitments are annexed to this decision and form an integral part 
thereof.  
6.2. Analy tical framework  
(261)  Where the Commission considers that a concentration will raise competition 
concerns the parties may seek to modify the concentration in order to resolve such 
competition concerns and thereby gain clearance of their merger.157 
(262)  In Phase I, comm itments offered by the parties can only be accepted where the 
competition problem is readily identifiable and can easily be remedied. The 
competition problem therefore needs to be so straightforward and the remedies so 
clear -cut that it is not necessary to  enter into an in- depth investigation. The 
commitments must be sufficient to clearly rule out "serious doubts" within the 
meaning of Article 6(1)(c) of the Merger Regulation. Where the assessment 
confirms that the proposed commitments remove the grounds for serious doubts 
on this basis, the Commission clears the merger in Phase I.158 
(263)  In assessing whether the proposed commitments will likely eliminate the 
competition concerns identified, the Commission considers all relevant factors 
including inter alia the ty pe, scale and scope of the proposed commitments, 
judged by reference to the structure and particular characteristics of the market in 
which the competition concerns arise, including the position of the parties and 
other participants on the market.159 
                                                 
157  Commission notice on remedies acceptable under Cou ncil Regulation (EC) No 139/2004 and under 
Commission Regulation (EC) No 802/2004 (the "Remedies Notice "), OJ 2008/C 267/01, 
Paragraph  5. 
158  Remedies Notice, Paragraph 81.  
159  Remedies Notice, Paragraph 12.  
 
59 (264)  In order for the commitments to comply with these principles, commitments must 
be capable of being implemented effectively within a short period of time.160 
Where, however, the parties submit remedies proposals that are so extensive and 
complex that it is not p ossible for the Commission to determine with the requisite 
degree of certainty, at the time of its decision, that they will be fully implemented 
and that they are likely to maintain effective competition in the market, an 
authorisation decision cannot be granted.161 
(265)  As concerns the form of acceptable commitments, the Merger Regulation leaves 
discretion to the Commission as long as the commitments meet the requisite 
standard.162 Structural commitments will meet the conditions set out above only in 
so far as the Commission is able to conclude with the requisite degree of certainty 
that it will be possible to implement them and that it will be likely that the new 
commercial structures resulting from them will be sufficiently workable and 
lasting to ensure that the significant impediment to effective competition will not 
materialise.163 
(266)  Divestiture commitments are generally the best way to eliminate competition 
concerns resulting from horizontal overlaps, although other structural 
commitments, such as access remedies, may be suitable to resolve concerns if 
those remedies are equivalent to divestitures in their effects.164  
(267)  It is against this background that the Commission analysed the proposed 
commitments in this case.  
6.3. Initial Commitments  
6.3.1. Description of the Initial Commitments  
(268)  The Initial Commitments consisted of the divestment of TWDC’s direct and 
indirect ownership interests in the legal entities that hold the "factual" channels 
currently operated by A&E LLC (including its subsidiaries and joint ventures) in 
the EEA, whi ch include the History, H2, and Crime + Investigation channels (the 
"Divestment Business").  
(269)  The Divestment Business also included all assets and staff that are primarily 
dedicated to and constitute 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 
but not including ownership rights in the: A&E, History, H2, Crime & 
Investigation, Blaze or Lifetime channel names or logos);  
b. all licences, permits and authorisations issued by any governmental 
organisation for the benefit of the Divestment Business;  
                                                 
160  Remedies Notice, Paragraph 9.  
161  Remedies Notice, Paragraphs 13, 14 and 61 et seq.  
162  Case T -177/04 easyJet v Commission [2006] ECR II -1913, Paragraph 197.  
163  Remedies Notice, Paragraph 10.  
164  Remedies Notice, Paragraph 61.  
 
60 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.  
(270)  In addition, the Initial Commitments included access to all current arrangements 
under which TWDC or its Affiliated Undertakings supply or make available 
assets, products or services to the Divestment  Business for a transitional period of 
up to [...] years on terms and conditions equivalent to those at present afforded to 
the Divestment Business. The assets, products and services would relate to the 
supply of content and shared IT and corporate functions.   
(271)  With regards to supply of content, the Divestment Business procures audio -visual 
content from A&E LLC for use on their channels, under arm’s length content 
licences. TWDC commits to procure that A&E LLC will amend the existing 
agreements in order to continue to supply such program rights to AETN Italy, 
THCG, AETN UK, and THCI (as appropriate) for a period of at least […]  
following the transfer of the Divestment Business to the Purchaser.  
(272)  With regards to supply of shared IT and corporate functions, AETN UK a nd 
AETN Italy rely on A&E LLC for certain software and IT support services.  
6.3.2. Commission's assessment  
(273)  The Commission initiated a market test of the commitments on 16 October 2018 
and received responses from TV distributors and TV broadcasters.  
(274)  The results of the market test were broadly positive on the concept of the Initial 
Commitment; market participants considered that in principle the Commitment 
constituted a structural solution for the competition concerns identified by the 
Commission with respect to the market for the wholesale supply of pay -TV 
channels. However, taking into account the responses from the market test, the 
Commission identified several shortcomings affecting the viability and the 
competitiveness of the Divestment Business.  
(275)  Taking into a ccount the responses from the market test, the Commission 
subsequently assessed the commitments and concluded that they did not entirely 
remove its competition concerns.  
(276)  First, several respondents to the market test indicated that in order to ensure the 
viability of the Divestment Business, it would be necessary to guarantee the 
future programming supply to the Divestment Business by extending the duration 
of agreements related to the supply of content. Most of the respondents indicated 
that […] is a short  duration and several respondents suggested that those 
agreements should remain in place for […] .165  
(277)  Second, on the basis of information provided by respondents to the market test, 
the Commission considered that the Initial Commitments did not clearly indic ate 
the duration, terms and conditions to which A&E, History, H2, Crime & 
                                                 
165  Replies to Market Test on Remedies  of 16 October 2018, quest ions 7, 11,  17. 
 
61 Investigation, Blaze or Lifetime trademarks,  channel names or logos would have 
been made available to the Divestment Business . Several respondents indicated 
that those tangible asset s are crucial to the viability of the Divestment Business. 
One respondent noted that channel carriage agreements are for branded channels 
and that without the brands there is a risk that those agreements will be terminated 
or renegotiated by the retail cus tomers.166  
(278)  With regards to personnel, most of the respondents to the market test did not 
identify difficulties or risks in the implementation of the transfer of personnel.167 
Respondents mainly highlighted that key personnel responsible for taking 
decisions on the acquisition of content, distribution of channels or other strategic 
decision should be part of the Divestment Business.168    
(279)  […]169  […] .170 
6.4. Final Commitments  
6.4.1. Description of the Final Commitments  
(280)  The Notifying Party submitted revised commitments on 24 October 2018, to 
address the shortcomings identified by the Commission subsequent to the market 
test. The Final Commitments consist of the revised version of the Initial 
Commitments and more precisely they contain the following main modifications.  
(281)  First, the Notifying Party has indicated the legal entities, with their assets and 
personnel, that hold the "factual" channels currently operated by A&E LLC 
(including its subsidiaries and joint ventures) in the EEA. Specifically:  […]171; 
[…].172 
(282)  Second, the duration of transitional agreements related to the supply of content to 
the Divestment Business has been extended. The existing content supply 
agreements between A&E LLC and the Divestment Business will remain in place 
for a period of at least […]  following the transf er of the Divestment Business to 
the Purchaser and on terms and conditions equivalent to those at present afforded 
to these entities.  
(283)  Third, the Final Commitments include the terms to which the Divestment 
Business will have access to A&E LLC’s trademarks, channel names, logos. The 
Divestment Business will have access to those intangible assets at no charge and 
for as long as it is necessary to ensure the continued viability and competitiveness 
of the Divestment Business. 
(284)  […]. 
                                                 
166  Replies to Market Test on Remedies  of 16 October 2018, quest ion 10.  
167  Replies to Market Test on Remedies  of 16 October 2018, quest ions 8.  
168  Replies to Market Test on Remedies  of 16 October 2018, quest ion 9.  
169  Replies to Market Test on Remedies  of 16 October 2018, quest ion 14.  
170  Replies to Market Test on Remedies  of 16 October 2018, quest ion 15.  
171 […].  
172 […].  
 
62 6.4.2. Commission's assessment  
(285)  In the Final Commitments, the Notifying Party's amendments appropriately 
address the shortcomings identified by the Commission affecting the viability and 
the competitiveness of the Divestment Business.  
(286)  First, under the Final Commitments, the duration of the cont ent supply 
agreements has been extended in line with the suggestions received by market 
participants in the market test.  
(287)  Second, the Final Commitments clearly indicate the duration, terms and 
conditions to which A&E, History, H2, Crime & Investigation, Bla ze or Lifetime 
trademarks,  channel names or logos will be made available to the Divestment 
Business.  
(288)  Moreover, the Final Commitments clearly indicate the legal entities, their main 
assets, agreements with customers and personnel which form part of the 
Dive stment Business.  
(289)  […].173 […]174 […] . 
6.4.3. Conclusion 
(290)  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.  
(291)  Under  the first sentence of the second subparagraph of Article 6(2) of the Merger 
Regulation, the Commission may attach to its decision conditions and obligations 
intended to ensure that the undertakings concerned comply with the commitments 
they have entered i nto vis -à-vis the Commission with a view to rendering the 
concentration compatible with the internal market.  
(292)  The fulfilment of the measure that gives rise to the structural change of the market 
is a condition, whereas the implementing steps which are neces sary to achieve 
this result are generally obligations on the Parties. Where a condition is not 
fulfilled, the Commission's decision declaring the concentration compatible with 
the internal market is no longer applicable. Where the undertakings concerned 
commit a breach of an obligation, the Commission may revoke the clearance 
decision in accordance with Article 6(3) of the Merger Regulation. The 
undertaking concerned may also be subject to fines and periodic penalty 
payments under Articles 14(2) and 15(1) of the Merger Regulation.  
(293)  In accordance with the basic distinction between conditions and obligations, the 
commitments in S ection B and the Schedule of the Annex 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 constitute obligations, as they concern the implementing 
                                                 
173 Paragraph 2 of the Final Commitments . 
174 Notice on r emedies, paragraph 55 . 
 
63 steps which are necessary to achieve the modifications sought in a manner 
compatible with the in ternal market.  
(294)  The full text of the Final Commitments is attached to this Decision as the Annex 
and forms an integral part thereof.  
7. CONCLUSION  
(295)  For the above reasons, the Commission has decided not to oppose the Transaction 
as modified by the Final Commitme nts 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 S ection B and the Schedule of the Final 
Commitments annexed to this decision and with the obligations  contained in the 
other paragraphs of the Final Commitments. 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
 
 Case M. 8785 – THE WALT DISNEY COMPANY / TWENTY-FIRST 
CENTURY FOX  
 
COMMITMENTS TO THE EUROPEAN COMMISSION 
 
Pursuant to Article 6(2)  of Council Regulation (EC) No 139/2004 (the “ Merger Regulation ”), 
The Walt Disney Company  (“TWDC ”) (the “ Notifying Party ”) hereby enter s into the following 
Commitments (the “ Commitments ”) vis -à-vis the European Commission (the “ Commission ”) 
with a view to rendering its acquisition of sole control of certain subsidiaries of Twenty -First 
Century Fox , Inc (the “ Concentration ”) compati ble with the internal market and the functioning 
of the EEA Agreement.   
 
This text shall be interpreted in light of the Com mission’s decis ion pursuant to Article 6(1)(b) of 
the Merger Regulation  of the Merger Regulation to declare 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:  
 
A&E LLC: A&E Television Networks, LLC  
 
Affiliated Undertakings : undertakings controlled by the Parties and/or by the ultimate 
parents of 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 " Consolid ated Jurisdictional Notice ").  
 
Assets: the assets that  are primarily related to the Divestment Business and  contribute to the 
current operation or are necessary to ensure the viability and competitiveness of the 
Divestment Business as indicated in Section  B, paragraph 5 (a), (b) and (c) and described 
more in detail in the Schedule.   
 
Closing : the transfer of the legal title to the Divestment Business to the Purchaser.  
 
Closing Period : the period of […] from the approval of the Purchaser and the terms of sa le 
by the Commission, or the date on which the Concentration closes, whichever is 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.  
 
 
2 Conflict of Interest : any conflict of interest that impairs the Trustee's objectivity and 
independence in dischar ging its duties under the Commitments.  
 
Divestment Business : the business or businesses as defined in Section B and in the Schedule 
which the Notifying Party  commit s to divest.  
 
Divestiture Trustee: one or more natural or legal person(s) who is/are approved by the 
Commission and appointed by TWDC  and who has/have received from TWDC 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 TWDC  or an Affiliated Undertaking for 
the Divestment Business 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 
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 TWDC , and who has/have the duty to monitor TWDC’s 
compliance with the conditions and obligations attached to the Decision.  
 
Parties:  the Notifying Party and the undertaking that is the target of the concentration.  
 
Personnel : all staff currently employed by the Divestment Business, including staff seconded 
to the Divestment Business, shared personnel primarily devoted to the Divestment Business 
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 17 of these Commitment s that the 
Purchaser must fulfil in order to be approved by the Commission.  
 
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.  
 
 
 
3 The Walt Disney Company (“TWDC”): The Walt Disney Company , incorporated under 
the laws of the State of Delaware, with its registered office at 500 South Buena Vista Street 
Burbank, California 91521.   
 
Section B.  The commitment to divest and the Divestment Business  
 
 Commitment to divest  
 
2. In order to maintain effective competition, TWDC  commits to divest, or procure the 
divestiture of, the Divestment Business by the end of the Tr ustee Divestiture Period as a 
going concern to a purchaser and on terms of sale approved by the Commission in 
accordance with the procedure described in paragrap h 18 of these Commitments 
(“Divestiture ”). To carry out the divestiture, TWDC  commits 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 TWDC  has not entered into such an agreement at the 
end of the First Divestiture Perio d, TWDC shall grant the Divestiture Trustee an exclusive 
mandate to sell the Divestment Business in accordance with the procedure described in 
paragraph 30 in the Trustee Divestiture Period.  The proposed concentration shall not be 
implemented before TWDC or the Divestiture Trustee and Purchaser have entered into a final 
binding sale and purchase agreement for the sale of the Divestment Business and the  
Commission has approved the Purchaser and the terms of sale in accordance with paragraph 
18.   
 
3. TWDC shall be deemed to have complied with this commitment  if: 
 
 (a) by the end of the Trustee Divestiture Period, TWDC or the Divestiture Trustee 
and the Purchaser ha ve 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 18 ; 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 struct ural effect of the Commitments, the Notifying Party shall, for a 
period of 10 years 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 Business , unless, following the submission of a reasoned 
request from the Notifying Party showing good cause and accompanied by a report from the 
Monitoring Trustee (as provided in paragraph 44 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 proposed 
concentration compatible with the internal market.  
 
 
4  Structure and definition of the Divestment Business  
 
5. The Divestment Business consists of TWDC’s ownership interests in the legal entities that 
hold the “factual” channels currently operated by A&E LLC (including its subsidiaries and 
joint ventures) in the EEA, which include the History, H2, and Crime + Investigation 
channels operated by A&E LL C (including its subsidiaries and joint ventures) in the EEA.  
The legal and functional structure of the Divestment Business as operated to date is described 
in the Schedule. The Divestment Business includes all assets and staff that are primarily 
dedicate d to and constitute 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  but not 
including ownership r ights in the: A&E, History, H2, Crime & Investigation, 
Blaze or Lifetime trademarks, channel names, or logos );  
 
 (b) all licences, permits and authorisations issued by any governmental organisation 
for the benefit of the Divestment Business;  
 
 (c) all co ntracts, leases, commitments and customer orders of the Divestment 
Business; all customer, credit and other records of the Divestment Business; and  
 
 (d) the Personnel.  
 
6. TWDC  commits to procure that A&E LLC will maintain the existing content supply 
agreem ents listed under 6(c) of the Schedule in order to continue to supply such program 
rights (including rights to new programs that become available during this period) to AETN 
Italy, THCG, AETN UK, and THCI (as appropriate) for a period of at least  […] years  
following the transfer of the Divestment Business to the Purchaser and on terms and 
conditions equivalent to those at present afforded to these entities.  At the Purchaser’s 
election, program rights made available to AETN Italy, THCG, AETN UK, and THCI (a s 
appropriate) under this clause will include rights to content made available to A&E LLC’s 
channels operating outside the EEA under the A&E, Blaze, Lifetime, History, H2, or Crime + 
Investigation (or similar) channel names.   
7. TWDC commits to enter into th e necessary contract arrangements to ensure that A&E LLC 
will make available to the Divestment Business at no charge the A&E LLC’s trademarks, 
channel names, and logos to AETN Italy, THCG, AETN UK, and THCI  for as long as it is 
necessary to ensure  the continued viability and competitiveness of the Divestment Business .  
8. In addition, the Divestment Business includes the benefit, for a transitional period of up to 
[…] after Closing and on terms and conditions equivalent to those at present afforded to the  
Divestment Business, of all other current arrangements under which TWDC  or its Affiliated 
Undertakings supply or make available assets, products or services to the Divestment 
Business, as detailed in the Schedule, unless otherwise agreed with the Purchaser. Strict 
firewall procedures will be adopted so as to ensure that any competitively sensitive 
information related to, or arising from such supply arrangements (for example, product 
roadmaps) will not be shared with, or passed on to, anyone outside the bus iness units 
supplying or making available such assets, products or services.   
 
 
5  Section C.   Related commitments  
 
 Preservation of viability, marketability and competitiveness  
 
9. From the Effective Date until Closing, the Notifying Party  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 of the Divestment Business. In particular TWDC  
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 activ ity, 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 t he 
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 Business,  and not to 
solicit or move any Personnel to TWDC’s remaining business. Where, 
nevertheless, individual members of the Key Personnel exceptionally leave the 
Divestment Business, TWDC  shall provide a reasoned proposal to replace the 
person or persons concerned to the Commission and the Monitoring Trustee. 
TWDC 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 Personnel. The replacement shall take place under the supervision of the 
Monitoring Trustee, who shall report to the Commission. 
 
 Hold -separate obligations  
 
10. The Notifying Party commits, from the Effective Date until Closing, t o procure that the 
Divestment Business is kept separate from the business(es) that the Notifying Party and A&E 
LLC will be retaining and, after c losing of the Concentration to keep the Divestment 
Business S eparate from the business that the Notifying Party and A&E LLC is retaining and 
to ensure that unless explicitly permitted under these Commitments: (i)  management and 
staff of the business (es) retained by TWDC  have no involvement in the Divestment Busines s; 
(ii) the Key Personnel and Personnel of the Divestment Business have no involvement in any 
business retained by TWDC  and do not report to any individual outside the Divestment 
Business.  
 
11. Until Closing, TWDC shall assist the Monitoring Trustee in ensuring that the Divestment 
Business is managed as a distinct and saleable entity separate from the business(es) which 
TWDC (including its Affiliated Undertakings) is retaining. Immediately after the adoption of 
the Decision, TWDC shall appoint, or procure the appointment of, 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 
 
6 ensuring its continued economic viability, marketability and competitiveness and its 
independence from the businesses retained by TWDC . 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 shall be subject to the procedure 
laid down in paragraph  8(c) of these Commitments. The Commission may, after having heard 
TWDC , require TWDC  to replace the Hold Separate Manager.    
 
 Ring -fencing  
 
12. TWDC 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 and that any such Confidential Information obtained by TWDC before 
the Effective Date will be eliminated and not be used by TWDC , except as is necessary to 
ensure the viability of th e Divestment Business (including as is necessary for any retained 
businesses to provide transitional services to the Divestment Business) and to meet TWDC ’s 
legal and statutory obligations .  This includes measures vis- à-vis TWDC's  appointees on the  
supervi sory board and/or board of directors of the A&E LLC . In particular, the 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 Bus iness. TWDC 
may obtain or keep information relating to the Divestment Business which is reasonably 
necessary for the divestiture of the Divestment Business or the disclosure of which to TWDC 
is required by law.  
 
 Non-solicitation clause  
 
13. TWDC  undertake s, 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 two years after Closing.  
 
 Due diligence  
 
14. In order to enable potenti al purchasers to carry out a reasonable due diligence of the 
Divestment Business, TWDC shall, subject to customary confidentiality assurances and 
dependent on the stage of the divestiture process , and to the extent reasonably possible :   
(a) provide to potential purchasers sufficient information as regards the Divestment 
Business;  
(b)  provide to potential purchasers sufficient information relating to the Personnel 
and allow them reasonable access to the Personnel.  
 
 Reporting  
 
15. TWDC 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 10 days after the end of every month 
following the Effective Date (or otherwise at the Commission’s request). TWDC 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 purchasers within five days of their receipt.  
 
7  
16. TWDC shall inform the Commission and the Monitoring Trustee on the preparation of the 
data room documentation and the due diligence procedure and shall s ubmit a copy of any 
information memorandum 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 the Notifying Party  and its 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 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.  
 
18. The final binding  sale and purchase agreement (as well as ancillary agreements) relat ing to 
the divestment of the Divestment Business shall be conditional on the Commission’s 
approval. When TWDC has reached an agreement with a purchaser, it shall submit a fully 
documented and reasoned proposal, including a copy of the final agreement(s), w ithin one 
week to the Commission and the Monitoring Trustee. TWDC must be able to demonstrate to 
the Commission that the purchaser 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 and 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 asset s or different personnel, if this  does not affect the 
viability and competitiveness of the Divestment Business after the sale, taking account of the 
proposed purchaser.  
 
Section E.  Trustee  
 
 I. Appointment procedure  
 
19. TWDC shall appoint  a Monitoring Trustee  to carry out the functions specified in these 
Commitments for a Monitoring Trustee. The Notifying Party  commits not to close the 
Concentration before the appointment of a Monitoring Trustee.  
 
8  
20. If TWDC has not entered into a binding  sale and purchase agreement regarding the 
Divestment Business one month before the end of the First Divestiture Period or if the 
Commission has rejected a purchaser proposed by TWDC  at that time or thereafter, TWDC 
shall appoint  a Divestiture Trustee. The appointment of the Dive stiture 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 Notifying Party and its/their Affiliated 
Undertakings;  
(ii) possess the necessary qualif ications to carry out its mandate, for example have 
sufficient relevant experience as an investment bank er or consultant or auditor; and  
(iii) neither have nor become exposed to a Conflict of Interest.  
 
22. The Trustee shall be remunerated by the Notifying P arty 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 su ccess premium may only be earned if the divestiture takes 
place within the Trustee Divestiture Period.  
 
  Proposal by TWDC  
 
23. No later than two weeks after the Effective Date, TWDC  shall submit the name or names of 
one or more natural or legal persons whom  TWDC proposes to appoint or cause  to be 
appointed 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, 
TWDC  shall submit a list of one or more pe rsons whom TWDC 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 21  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 fu lfil its obligations. If only one name is approved, TWDC  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, TWDC shall be free to 
 
9 choose 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 TWDC  
 
25. If all the proposed Trustees are rejected, TWDC  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 19 and 24  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 TWDC  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 TWDC , give any orders or instructions to the Trustee in order to ensure 
compliance with the conditions and obligations attached to the Decision.   
 
  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 
management of the Divestment Business with a view to ensuring its continued 
economic viability, marketability and competitiveness and monitor compliance by 
TWDC  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 business retained by the Parties (including its 
Affiliated Undert akings) , in accordance with paragraphs 9 and 10 of these 
Commitments;  
 
  (b) supervise the management of the Divestment Business as a distinct and 
saleable entity, in accordance with paragraph 11 of these Commitments;  
 
  (c) with respect to Confidential Information:  
 
10  
− determine all necessary measures to ensure that TWDC  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 TWDC before the Effective Date is eliminated 
and will not be used by TWDC and  
− decide whether such information may be disclosed to or kept by TWDC 
as the disclosure is reasonably necessary to allow TWDC 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 TWDC or Affiliated Undertakings;   
 
(iii) propose to TWDC such measures as the Monitoring Trustee considers necessary to 
ensure TWDC ’s compliance with the conditions and obligations attached to the 
Decision, in partic ular 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 competitively sensitive information;  
 
(iv) review and assess potential pu rchasers 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;  
 
(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 TWDC  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 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 
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 TWDC  a non- confidential 
copy  at the same time, if it concludes on reasonable grounds that TWDC is failing to 
comply with these Commitments;  
 
 
11 (viii) within one week after receipt of the documented proposal referred to in paragraph 18  
of these Commitments, submit to the Commission, sending TWDC 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 atta ched to the Decision, in particular, 
if relevant, whether the Sale of the Divestment Business without one or more Assets 
or not all of the 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.  
 
29. If the Monitoring and Divestiture Trustee are not the same legal or natural persons, the 
Monitoring Trustee and the Divestiture T rustee 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  
 
30. 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 final binding sale and purchase agreement (and ancill ary agreements) as in 
line with the Commission's Decision and the Commitments in accordance with paragraphs 1 7 
and 18 of these Commitments . The Divest iture 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 purchase agreement such customary 
representations and warranties and indemnities as are reasonably required to effect the sale. 
The Divestiture Trustee shall protect the legitimate financial interests of TWDC , subject to 
the Notif ying Party’s  unconditional obligation to divest at no minimum price in the Trustee 
Divestiture Period.  
 
31. 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 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 the Notifying Party . 
 
 III. Duties and obligations of the Parties  
 
32. TWDC  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 or TWDC shall procure full and complete access to a ny of 
TWDC’s 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 TWDC  and the Divestment Business shall provide the Trustee upon 
request with copies of any document. TWDC shall procure for the Divestment Business to  
 
12 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.  
 
33. TWDC shall provide or procure for the Monitoring Trustee 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. TWDC  shall provide and shall 
cause its advisors to provide the Monitoring Trustee, on request, with the information 
submitted to pote ntial purchasers, in particular give the Monitoring Trustee access to the data 
room documentation and all other information granted to potential purchasers in the due 
diligence procedure. TWDC  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. TWDC  shall grant or proc ure 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 sale and the Closing, including the 
appointment of advisors to assist with the sale process. Upon request of the Divestiture 
Trustee, TWDC  shall cause the documents required for effecting the sale and the Closing to 
be duly executed.  
 
35. TWDC  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 TWDC  for, any liabilities ari sing 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.  
 
36. At the expense of TWDC , the Trustee may appoint advisors (in particular for corporate 
finance or legal advice), subject to TWDC’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 TWDC  
refuse to approve the advisors proposed by the Trustee the Commission may approve the 
appointment of such advisors instead, after having heard TWDC . Only the Trustee shall be 
entitled to issue instructions to the advisors. Paragraph 35 of these Commitments  shall apply 
mutatis mutandis . In the Trustee Divestiture Period, the Divestiture Trustee may use advisors 
who served TWDC during the Divestiture Period if the Divestiture Trustee considers this in 
the best interest of an expedient sale.  
 
37. TWDC agrees that the Commission may share Confidential Information proprietary to 
TWDC 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 .  
 
 
13 38. The Notifying Party agrees  that the contact details of the 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 
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 TWDC , require TWDC  to replace the 
Trustee; or  
(b) TWDC may, with the prior approval of the Commission, replace the Trustee.  
41. If the Trustee is removed according to paragraph 40 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 procedure referred to in paragraphs 19- 26 of these Commitments .  
 
42. Unles s removed according to paragraph 40 of these Commitments , the Trustee shall cease to 
act as Trustee only after the Commission has discharged it from i ts 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 Commitments  in response to a 
request from TWDC  or, in appropriate cases, on its own initiative. Where TWDC requests an 
extension of a time period, it shall submit a reasoned request to the Commission no later than 
one 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-confidential copy of the report to the Notifying Party. Only in exceptional circumstances 
shall TWDC  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 the Notifying Party   
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 Notifying Party. The  request shall not have the effect of suspending the 
application of the undertaking and, in particular, of suspending t he expiry of any time period 
in which the undertaking has to be complied with.  
 
14  
Section G.  Entry into force   
 
45. The Commitments shall take effect upon the date of adoption of the Decision.  
 
 
……………………………………    
duly authorised for and on behalf of    
The Walt D isney Company  
 


 
3 7. TWDC commits to procure that A&E LLC will maintain the existing content supply 
agreements listed under 6(c) of this Schedule  in order to continue to supply such program 
rights (including rights to new programs that become available during this period) to 
AETN Italy, THCG, AETN UK, and THCI (as appropriate) for a period of at least […]  
years following the transfer of the Divestment Business  to the Purchaser and on terms and 
conditions equivalent to those at present afforded to these entities.  At the Purchaser’s 
election, program rights made available to AETN Italy, THCG, AETN UK, and THCI (as 
appropriate)  under this clause will include righ ts to content made available to A&E LLC’s 
channels operating outside the EEA under the A&E, Blaze, Lifetime, History, H2, or 
Crime + Investigation (or similar) channel names.   
8. TWDC commits to enter into the necessary contract arrangements to ensure that A &E LLC 
will make available to the Divestment Business at no charge the A&E LLC’s trademarks, 
channel names, and logos to AETN Italy, THCG, AETN UK, and THCI for as long as  it is 
necessary to ensure  the continued viability and competitiveness  of the Divestment 
Business.  
9. TWDC commits to procure that, during  a transitional period of up to […], A&E LLC will 
continue to make the necessary IT functions available to AETN UK and AETN Italy.   
10. TWDC commits to procure that, during  a transitional period of  up to […..] , A&E LLC will 
continue to make employees at its International Division and the Finance & Accounting, 
Legal & Business Affairs, Human Resources, Facilities, and Technology Departments 
available for consultation with AETN Italy, THCG, AETN UK, a nd THCI.   
11. The Divestment Business shall not include TWDC’s interests in any channels or 
businesses other than those  listed above, whether operated by A&E LLC , TWDC, or 21CF 
(or entities under their “control” for the purposes of the EU Merger Regulation).  
12. If there is any asset or personnel which is not covered by paragraphs 2 -10 of this Schedule 
but which is both used (exclusively or not) in the Divestment Business and necessary for 
its continued viability and competitiveness, that asset or adequate substi tute will be offered 
to the Purchaser. For avoidance of doubt this should also include personnel or assets 
owned or employed by A&E LLC.