2003/792/EC: Commission Decision of 30 April 2003 declaring a concentration to be compatible with the common market and the EEA Agreement (Case COMP/M.2903 — DaimlerChrysler/Deutsche Telekom/JV) (Text with EEA relevance.) (notified under document number C(2003) 1409)
Date: 2003-04-30
Institutions: European Commission
Subjects: economic concentration, merger control, motor vehicle industry, motorway, telecommunications

L 300/62

EN

Official Journal of the European Union

18.11.2003

COMMISSION DECISION

of 30 April 2003

declaring a concentration to be compatible with the common market and the EEA Agreement
(Case COMP/M.2903 — DaimlerChrysler/Deutsche Telekom/JV)
(notified under document number C(2003) 1409)

(Only the German version is authentic)

(Text with EEA relevance)

(2003/792/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Commu-
nity,

a newly established joint venture, Toll Collect GmbH
(Toll Collect), through the purchase of shares. Besides
the notifying Parties, the French enterprise, Compagnie
Financière et Industrielle des Autoroutes SA (Cofiroute),
is also a party to the joint venture, with a 10 % holding.

Having regard to the Agreement on the European Economic
Area, and in particular Article 57(2)(a) thereof,

(2)

Having regard to Council Regulation (EEC) No 4064/89 of
21 December 1989 on the control of concentrations between
undertakings (1), as last amended by Regulation (EC) No 1310/
97 (2), and in particular Article 8(2) thereof,

Having regard to the Commission's decision of 20 December
2002 to initiate proceedings in this case,

Having given the undertakings concerned the opportunity to
make known their views on the objections raised by the
Commission,

Having examined the notification, the Commission initi-
ally found that the notified transaction fell within the
scope of
the Merger Regulation and raised serious
doubts as to its compatibility with the common market
and the EEA Agreement. On 20 December 2002 the
Commission accordingly initiated proceedings pursuant
the Merger Regulation and
to Article 6(1)(c) of
Article 57 of the EEA Agreement. Following an in-depth
investigation of
the Commission has now
come to the conclusion that, although the notified
proposal has led to the creation of a dominant position
as a result of which effective competition is significantly
impeded in a substantial part of the common market,
the commitments given by the Parties allow the doubts
as
the concentration to be
removed.

to the compatibility of

the case,

Having regard to the opinion of the Advisory Committee on
Concentrations (3),

I. THE PARTIES AND THE TRANSACTION

Having regard to the final report of the Hearing Officer in this
case (4),

A. The Parties

Whereas:

(1)

On 11 November 2002 the Commission received noti-
fication of a proposed concentration in accordance with
Article 4 of Regulation (EEC) No 4064/89 (the Merger
Regulation). The transaction involves the following: the
Services AG
German
(DaimlerChrysler Services), a member of
the Daimler-
Chrysler group (DaimlerChrysler), and Deutsche Telekom
AG (Telekom) intend to acquire within the meaning of
Article 3(1)(b) of the Merger Regulation joint control of

enterprises, DaimlerChrysler

(1) OJ L 395, 30.12.1989, p. 1 (corrigendum in OJ L 257, 21.9.1990,

p. 13).

(2) OJ L 180, 9.7.1997, p. 1.
(3) OJ C 277, 18.11.2003.
(4) OJ C 277, 18.11.2003.

(3)

(4)

DaimlerChrysler Services is a subsidiary of Daimler-
Chrysler, which operates in the financial services and
mobility management sectors.
Its activities range from
financial planning for all DaimlerChrysler vehicle makes
to the management of
fleets of varied composition.
DaimlerChrysler develops, manufactures and markets
cars,
it
In addition,
has holdings in aerospace and armaments companies.

trucks, buses and diesel engines.

Telekom is a telecommunications undertaking that does
business principally in Europe and the USA. It operates,
directly or
in areas
such as fixed-line networks and mobile telephony and
in the Internet and systems solutions fields.

through associated undertakings,

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Official Journal of the European Union

L 300/63

(5)

(6)

(7)

(8)

(9)

(10)

(11)

together with its

Cofiroute operates various French motorways. In addi-
sister company, Société de
tion,
Construction des Autoroutes du Sud et de l'Ouest,
it
develops and constructs roads on behalf of the State.
Moreover, it provides consultancy services in the devel-
opment and operation of motorways for enterprises in
various countries other than France.

B. The proposed transaction

On 12 April 2002 the German law introducing mileage-
based charges for the use of motorways by heavy goods
vehicles (5) entered into force. After that date, a distance-
based charge, the truck toll, becomes payable on most
federal German motorways by trucks over 12 tonnes.

The truck toll scheme, i.e. the establishment and opera-
tion of a system for collecting the toll on German
motorways on behalf of the Federal Government, was
the subject of a public invitation to tender held by the
Federal Ministry of Transport, Construction and Housing
on behalf of
the Federal Republic of Germany. The
contract was awarded to a consortium formed by
DaimlerChrysler Services, Telekom and Cofiroute.

DaimlerChrysler Services, Telekom and Cofiroute intend
to form a joint venture, Toll Collect. Toll Collect is to
establish and operate the system for collecting the truck
toll on behalf of the Federal Republic of Germany.

II. CONCENTRATION

DaimlerChrysler Services and Telekom are each to have
a 45 % holding in Toll Collect, while Cofiroute will have
10 %. […] (*)

[…]* The notifying parties consider that this arrange-
ment precludes the view that Cofiroute enjoys joint
control. The Commission agrees, given the special
economic circumstances
surrounding the contractual
arrangements governing the present concentration.

the
Toll Collect will perform on a lasting basis all
It has
functions of an autonomous economic entity.
adequate financial
its own
resources,
technical equipment and its own management and as
such will operate independently on the market and
separately from its parents.

its own staff,

(12)

The fact that the agreement concluded on 25 June 2002
with the Federal Republic of Germany on the collection

(*) Parts of the text have been omitted to ensure that no confidential
information is published; they are indicated by square brackets and
an asterisk.

(5) Bundesgesetzblatt I, No 23, p. 1234.

the motorway toll

of the toll for the use of motorways by heavy goods
vehicles and the establishment and operation of a
system for the collection of
from
heavy goods vehicles (the Operator Agreement) stipu-
lates that the agreement is to terminate after 12 years
and can be extended only for three one-year periods is
not a bar to the joint venture being established on a
lasting basis. First, under Article 3 of the Joint Venture
Agreement, Toll Collect's existence is not subject to any
time limit. Secondly, a period of 12 years is sufficient to
introduce changes on a lasting basis to the structure of
the notifying undertakings.

(13)

The proposed transaction therefore constitutes a concen-
tration within the meaning of Article 3(1)(b) of
the
Merger Regulation.

III. COMMUNITY DIMENSION

(14)

(15)

(16)

and Telekom each have
turnover

The participating undertakings generate an aggregate
worldwide turnover of more than EUR 5 billion. Daim-
an aggregate
lerChrysler
than
more
Community-wide
EUR 250 million. Only Telekom generates more than
two thirds of its Community-wide turnover in a single
Member State,
i.e. Germany. The notified transaction
therefore has a Community dimension but does not
constitute a cooperation case under the EEA Agreement.

of

IV. ASSESSMENT UNDER ARTICLE 2 OF THE MERGER

REGULATION

A. The Toll Collect system

From summer 2003 a distance-based road usage charge,
the truck toll, will be payable for the use of
federal
German motorways by trucks with a maximum permis-
is to be
sible weight of 12 tonnes or more. The toll
collected without
i.e.
collection will be primarily automatic.

the traffic flow,

interruption of

Under
the system to be established by Toll Collect,
onboard units operating with a GPS (global positioning
system) receiver and a GSM mobile radio transmitter are
to be installed in trucks. The GPS receiver determines a
truck's current position and feeds it into the onboard
unit. These data are
then exchanged between the
onboard unit and an application services centre via the
GSM mobile
centre
processes the data, i.e., on the basis of the position as
determined and the section of the motorway used, the
toll due is calculated and charged to the owner or
keeper of the truck.

radio transmitter,

[…]*. The

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(17)

(18)

(19)

(20)

The tender documents indicate that, prior to the intro-
duction of the charging system, […]* onboard units will
initially be made available. During the first year of
operation of
figure will be
the charging system, that
increased to […]* and during the last year of operation
it will be increased to […]*. The onboard units will be
provided gratis
to transport undertakings against a
security in the form of a toll credit. The toll credit will
be charged on the basis of kilometres travelled. The
owner or keeper of
the truck will bear the cost of
installing the onboard unit.

A manual charging system will also be available in
addition to automatic toll collection. This entails the
purchase of payment vouchers over
the Internet or
from machines at filling stations or motorway entrances.
is required to fix his intended route in
The driver
advance and must keep to it during his journey.
In
such cases an onboard unit need not be installed.

B. The relevant product market

The notifying parties contend that the joint venture is to
collect the toll on behalf of the Government and conse-
quently will not be in competition with other private
service providers, so that no competition can be envis-
aged and no market affected.

thus

The onboard unit developed within the Toll Collect
consortium is equipped with a GPS and a GSM module
and is
in principle capable of collecting and
making available data for telematics services. This means
that the onboard unit installed for collecting the toll can
be used to offer value-added telematics services for the
transport industry. According to a press release issued
jointly by DaimlerChrysler Services, Telekom and Cofi-
route (6),
the
following telematics services:

the Toll Collect onboard unit offers

‘For example, the following telematics services are
available in modules, enabling customers to tailor
the system to their needs:

— precise positioning of specific trucks on a screen
located back at the truck haulage company,

— the communication of orders or order changes,

— driver status reports to the haulage operator,

— localisation of a broken-down or stolen truck,

— navigation and driver services’.

(21)

The notifying parties have already announced publicly
that they intend to provide telematics services through
this system (7):

capacity

‘“Telematics
services we can provide for you in
conjunction with Toll Collect cut bottlenecks and
transport
enhance
the
utilisation
network”, states Dr Klaus Mangold (8).
“This can
help to bring about clear improvements in efficiency
and savings in costs for the transport business. In
addition, the system can make a significant contri-
bution to the protection of the environment.”’

of

(22) On the basis of the notifying parties' public announce-
ments, the Commission understands that the system set
up and operated by Toll Collect will have an impact on
traffic
the development, production and operation of
telematics systems.

(23)

(24)

(25)

Traffic telematics is intended to exploit data exchange
between a service provider and vehicles in order to
enhance traffic information and communications and
improve traffic management processes. The transmission
routes used are mobile telephone networks and satellite
communications systems.

investigations have

The Commission's
shown that,
within traffic telematics systems, a further subdivision
is possible between traffic telematics for transport and
logistics undertakings and traffic telematics for private
customers. This follows inter alia from the different
nature of
those groups. On the
the requirements of
transport and logistics undertakings focus
one hand,
mainly on the monitoring and improvement of delivery
processes (such as vehicle localisation), cost optimisation
(particularly as regards fuel consumption) and the trans-
mission of news, while, on the other, car drivers'
requirements are limited by and large to traffic- and
safety-related services (route-planning, emergency calls,
congestion information, etc.) and entertainment.

This subdivision corresponds, moreover, to the different
tasks confronting providers of traffic telematics systems.
In the case of car drivers, both hardware and software
are designed to provide the information mentioned in
the preceding paragraph directly through a centre, while
in the case of truck users the services sought not only
require different hardware and software but they also
require fleet operators to be actively integrated in the
information exchange. The operator is the contractual
partner of the system supplier, the actual user of the
system and the receiver of the information generated in
individual trucks. On the other hand, in the case of cars,
the contractual partner is the owner or keeper of the
the
vehicle, who at
information services provided by the system supplier.

the same time avails himself of

(6) We are the partners of the transport industry, press release dated

20 September 2002, p. 3.

(7) See footnote 6.
(8) Author's note: Chairman of the Management Board of Daimler-

Chrysler Services AG.

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L 300/65

(26)

The range of products and services in traffic telematics
for transport and logistics undertakings covers hardware,
software and services.

(31)

(27)

The hardware consists of in-vehicle terminal equipment
(mobile telematics terminal equipment). The main func-
tion of
the equipment is to generate positioning and
status data on the vehicle via the GPS receiver and to
transmit those data over the mobile telephone network
or by satellite to a control centre. The centre compiles,
evaluates and prepares the data for the user (the fleet
operator).

(32)

(28) Mobile telematics

terminal equipment operates with
software capable of positioning and communication,
allowing the fleet operator
In
addition, data can be exchanged with the driver.

to monitor his fleet.

terminal

equipment. These

(29) A series of services can be provided through mobile
telematics
fleet
(analysis of vehicle operations, manage-
management
ment of vehicle fleets), traffic management (up-to-date
traffic information and dynamic route guidance), safety
(emergency and breakdown help) and ‘infotainment’
(travel and route-planning, weather, news).

include

telematics services the necessary
In the case of most
data transfer is effected via a GSM network, with the
result that such services necessarily involve recourse to
the services of mobile operators such as T-Mobile or
Vodafone. Some telematics systems provide a one-stop
shop on the basis of satellite communications and do
not need a mobile network. An example of this is the
Qualcomm system.

In defining the market, it must be borne in mind that
traffic telematics for transport and logistics undertakings
is a developing market which will change radically in
the next few years. According to a study that has been
carried out, turnover in this segment will increase from
EUR 160 million in 2001 to around EUR 4,7 billion in
2009 (the figures relate to Europe) (9). This growth of
the market may result in undertakings that operate on
the market specialising in the manufacture of hardware
or the supply of services. However, as ‘one-stop shops’
it must be
currently account for most of the market,
assumed that
for
transport and logistics
traffic telematics
software
undertakings
and
services. From the standpoint of
the customer (fleet
equally to one-stop shops,
operator),
suppliers of
and undertakings
equipment
providing services.

there is a separate relevant market

systems
comprising

hardware,

terminal

extends

this

for

(30)

for

the same time providers of

The operators currently on the market for traffic tele-
transport and logistics undertakings are
matics
mostly ‘one-stop shops’,
i.e. suppliers of hardware and
software and at
traffic
telematics services. These are, firstly, truck manufacturers
who in some cases themselves act as a one-stop shop
and in others cooperate with other, specialist suppliers
(e.g. supply of hardware and software by the truck
manufacturer, while services are provided by a specia-
lised firm so as to have a convincing, multi-brand
presence). Besides DaimlerChrysler Services with its
Fleetboard product, systems are offered by, for example,
MAN (in cooperation with gedas) with the MAN Tele-
matics system, Volvo with the Dynafleet system, and
Scania with the FAS system. Secondly, there are a large
number of smaller undertakings which produce hard-
such as
services,
and provide
ware
datafactory.
Socratec, Minor
and
protime
According to the Commission's market
investigation,
these undertakings currently achieve some 80 % of their
turnover with the sale of hardware and software, the
remaining 20 % or so being generated by services. In
addition to such one-stop shops, there are now already
some pure service providers, such as ADAC, which
provides breakdown and roadside assistance services,
and pure hardware suppliers who manufacture terminal
equipment
(inclusive of standard software). The hard-
ware suppliers include not only smaller manufacturers
such as EPSa, but also Bosch and Siemens VDO, both of
which also provide services.

and software

Planet,

C. The relevant geographic market

(33)

In defining the relevant geographic market, it must first
be borne in mind that there is no uniform European
telematics standard. Telematics equipment fitted in indi-
vidual vehicles consists mostly of proprietary systems,
where the user can make use only of
the services
provided by the specific telematics system operator or
by undertakings allowed to operate by the operators,
mostly as ‘partners’. The Commission's market investiga-
tion showed that telematics terminals open to a number
of service providers currently account for only a small
part of
It also showed that, as a conse-
quence, the telematics market for transport and logistics
undertakings must be considered highly fragmented, and
in
many undertakings operating on this market
Germany
is
operators. This
purely national
confirmed by a recent study, which points out that ‘the
number of suppliers in the retrofit market
is diverse
both across countries and within them, in other words
it is highly fragmented’ (10). This study also states that
retrofitted telematics systems account for over 90 % of
all systems sold in Europe in 2001 (11).

the market.

are

(9) Frost & Sullivan, European Commercial Vehicle Telematics Markets,

2002, pp. 2-27 to 2-29.

(10) See footnote 9, op. cit., pp. 3–17.
(11) See footnote 9, op. cit., pp. 3–9, 3–12, citing a total of
105 000 retrofitted systems as against approximately 8 000 systems
sold by truck manufacturers.

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(34)

to adapt

its fleet management product

the mostly small and medium-sized
The situation of
undertakings that offer to retrofit telematics systems is
somewhat different
truck manufacturers
from that of
acting as original
telematics equipment manufacturers
or companies like Qualcomm, which offers a satellite-
based telematics system worldwide. While these under-
takings in principle offer standard telematics platforms
for the whole of Europe, there are major differences in
the products they offer in the various Member States.
Qualcomm has entered into partnerships with hardware
and software manufacturers in the various States to
enable it
to
national circumstances. For the same reason, the under-
takings importing Scania vehicles into Germany and the
Netherlands have entered into partnerships with the
service provider gedas, a Volkswagen subsidiary, which
to the abovementioned two
are confined, however,
countries. DaimlerChrysler's
the United
in
Kingdom is based above all on VeMIS, a company
acquired in 2000, whereas in Germany Fleetboard is
the key company. According to the Commission's
in
fundamental
market
national
systems
that
must be adapted to the shipment programmes that
manage freight handling, freight invoicing and transport
planning. As these programmes are offered by a large
number of different software houses and differ greatly
from country to country,
in their
capacity as users of telematics systems, fleet operators
expect such systems to be adapted to the characteristics
of whichever shipment programme they are using.

investigation,
requirements

including Germany,

the telematics

difference

offer

a
is

D. Competition assessment

(38)

The proposed concentration raises significant competi-
tion law concerns with regard to the commercial exploi-
tation, apart from toll collection, of the infrastructure to
be established and operated by Toll Collect. It is to be
the concentration will place Daimler-
expected that
for
Chrysler
traffic telematics
transport and logistics
systems
undertakings in Germany.

in a dominant position on the market

for

1. The establishment of the Toll Collect platform for traffic

telematics for transport and logistics undertakings

1.1. The

t he

li nk s

le a d i n g

s u p p l i e r o f

c on centr ati on

l ea d ing
Ger ma n tr uck m anufacturer, whi ch is al s o
a
te l e m a t i c s
the le ad i n g G e r m a n
s y ste m s, w ith on e o f
two
m o b i l e
c ompan ies,
in iti al
op er ators
e njoy i n g
tele-
po si ti on in th e d el iver y of
m a t i c s s e r vi c e s

c o m m u n i c a t io n s

pro mi n ent

t r a f f i c

tra ff ic

a

(35)

The different
languages in the Member States are a
further impediment to transnational marketing of tele-
matics systems, as the systems must be adapted to them.
Such linguistic customisation becomes even more crucial
when telematics systems are combined with a particular
the language
shipment programme. One study sees
differences in Europe as a substantial barrier
to the
transnational marketing of telematics systems, particu-
larly in connection with the application of voice recog-
nition technologies and the provision of
localisation
services (12).

(39) DaimlerChrysler is by far the largest truck manufacturer
in Germany. Of
registered in
Germany, half are Mercedes-Benzes (13). It also offers a
traffic telematics system for trucks under the Fleetboard
brand and claims to be a leading provider of mobility
and telematics services (14).

the 960 000 trucks

(40)

a

Telekom is
leading German telecommunications
provider. A press release describes Telekom's contribu-
tion to the Toll Collect consortium as follows:

(36) Moreover, where telematics

services use GSM as a
communications channel, heavy roaming charges are a
major obstacle to the provision of standard telematics
services in the various Member States.

‘Collaboration between our group divisions, T-Mo-
bile, T-Online, T-Com and T-Systems, provides us
with an integrated product portfolio that brings
together experience in the fields of telecommunica-
tions and information technology and will enable us
to roll out the truck toll system successfully’ (15).

(37)

it can be considered that
In the light of these factors,
the market for traffic telematics systems for transport
and logistics undertakings affected by the proposed
concentration comprises the territory of Germany.

(12) See footnote 9, op. cit., pp. 2-32.

(41)

The Parties mentioned above set up a consortium
together with Cofiroute in order to participate in the
call for tenders at European level for a collection system
for the German truck toll.

(13) See footnote 6, op. cit., p. 4.
(14) Press release on CeBIT 2002.
(15) See footnote 6, op. cit., p. 1.

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(42)

in addition to manual collection,

The consortium has developed a system which, through
an onboard unit with integrated GPS and GSM technol-
ogies, enables the statutory tax to be collected and in
addition has a number of commercial applications (16).
However, the consortium's telematics approach was not
prescribed in the Federal Republic's call for tenders; the
award was made on the basis of the specification of
facilities that are functional and open as to technology.
The functional description of the toll collection system
required that,
there
in-vehicle collection facility
should be an automatic,
available. This left
the tech-
nology to be adopted. Thus the unsuccessful AGES
consortium,
formed by Vodafone and a number of
petrol companies including Shell, offered a ‘telematics-
neutral’ approach to the manual and automatic collec-
tion of the toll. The system developed and offered by
the consortium formed by the notifying parties and
Cofiroute is much more advanced than required by the
the
for tenders for the system for collection of
call
statutory toll.

tenderers the choice of

1.2. S p ec i f i c p l a n s have a l r e a dy b e en p r e p a r e d
to ap pl y t he onboa rd uni t p rovided f ree
for to ll c ol lect io n to tra ff ic telemati cs for
t r a n s p o r t a n d l o g i s t ics u nder takings

(43) All trucks over 12 tonnes maximum permissible weight
are liable to the toll. However, with the dual system for
toll collection there is no obligation to install an
onboard unit in every truck. Nevertheless, for practical
reasons,
trucks that use
federal German motorways regularly, especially as the
unit is available free.

this will be done in most

(44)

The system to be set up by Toll Collect will create a
platform that DaimlerChrysler Services intends to use
transport and
telematics systems for
for commercial
logistics. It was indicated in a press release for the IAA
Commercial Vehicles Show that (17):

‘Under
the project name “Truckmatix”, Daimler-
Chrysler Services Mobility Management GmbH is
developing a broad range of telematics services for
shipping companies, fleet managers and dispatchers.
These services can be offered on the basis of the
hardware used for Toll Collect once the German
Government has created the requisite framework.
They serve to optimise shipping operations on toll
roads as well as enhance the efficiency of business
processes and boost capacity utilisation. Moreover,

(16)

In this connection a press release issued jointly by DaimlerChrysler
‘The main reason, though, why
Services and Cofiroute states that:
we took part in the tender was because our system is the only one
to offer operators in the freight-haulage industry the potential to
work far more effectively, … DaimlerChrysler is thereby further
boosting its standing as a partner of the transport industry’. See
footnote 6, op. cit., p. 1.

fleet managers have easy access to Truckmatix via
computer and the Internet. […]*

The company intends to offer Truckmatix services in
either a “Compact” or a “Comfort” module, which
customers will be able to tailor according to their
own requirements. Given the simple system infra-
structure, which necessitates no additional capital
expenditure on hardware, all companies will be
able to finance the broad selection of
services
offered. These include a positioning function for
specific trucks,
the communication of orders or
changes to orders, status reporting by drivers to the
shipping company, localisation of a broken-down or
stolen truck as well as other navigational and driver-
related services.’

(45)

In a publicity brochure produced by DaimlerChrysler
Services Mobility Management GmbH (Telematics for all:
Truckmatix), it is indicated that the electronic toll collec-
tion system of Toll Collect, which is applicable world-
wide, can now provide cheap access to telematics for
small
and medium-sized enterprises. The brochure
states:

the

in-vehicle

‘A simple, uniform telematics platform exists, based
on the
electronic
equipment
for
the truck toll. … Truckmatix forms
collection of
the ideal supplement for the toll collect system; the
“basic” dispatch service packages can be used direct
from the in-vehicle equipment
for collecting the
truck charge. This provides undertakings with a
uniform system for all vehicles in their fleet that is
compatible with other characteristic haulage applica-
tions. This sets a new standard with direct advan-
tages for
transport undertakings and their custo-
mers’ (18).

(46) DaimlerChrysler Services has included the use of

Toll Collect system. […]*

the

1.3. I t ca n b e assu med t ha t, a s re qu ir ed u n d e r
t h e Pa r t i e s w i l l
t h e O p e r a to r A g r e e m en t ,
r ec e iv e
Fe d e ral
Republ ic of Ger m a ny for th e p rovisi on of
t r a f f i c
fo r m o f v a l u e -
in th e
a d de d se r vi c es

a ut h or i sa t i on

te l e m a t i c s

fro m t he

(47)

Value-added services did not form part of the call for
tenders for
the
Operator Agreement provides that additional services

the toll collection system. However,

(17) DaimlerChrysler Services

showcase innovative mobility and telematics

(18) DaimlerChrysler Services Mobility Management (Telematics for all:

services, 10 September 2002, pp. 2 and 3.

Truckmatix).

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may be delivered if authorised by the Federal Govern-
ment. In its information brochure of 17 December 1999
on participating in the competition for the truck toll
system, Germany already suggested that there might be
interest in using the toll collection system for value-
added services, stating that: ‘The contracting authority is
and other
considering allowing
telematics
services for third parties (value-added services)
to be
incorporated in the toll system. Whether such services
will be allowed will be for the contracting authority to
decide at a later date.’

services

majority of trucks equipped with one of Toll Collect's
onboard units using these also for
traffic telematics
for a consideration, of a
services. The installation,
second onboard unit
traffic telematics
capacity provided by competing suppliers is, however,
industry, not a
from the standpoint of
viable economic proposition.

for the use of

the transport

(48) On the basis of the official announcements by Daimler-
it
Chrysler Services referred to in recitals 44 and 45,
can be assumed that the Parties are counting on being
able to use the Toll Collect platform to provide value-
added services over and above road toll collection. In an
interview, Michael Rummel, head of DaimlerChrysler
Services Mobility Management, said in answer to the
question whether value-added services might be offered
‘In the call for
and, if so, under what conditions, that:
tenders
collection system, value-added
toll
services were not mentioned. This does not mean,
however, that it is forbidden to develop services based
on the onboard unit. We are working flat out to reach a
settlement with the State in good time before the
introduction of the toll …’ (19).

the

for

(49)

It is generally acknowledged that telematics services help
to reduce bottlenecks in the transport network and
the infrastructure. Not
hence optimise utilisation of
only does this benefit the transport industry, but it also
contributes to a cleaner environment. The creation of a
broad platform for the provision of additional
traffic
telematics services must therefore be deemed to be in
the general interest from the point of view of both the
traffic infrastructure and the environment and hence to
be desirable. It can thus be assumed that, provided toll
collection works
the Federal
Government will raise no objections of principle to
what
is a generally desirable authorisation of value-
added services using the Toll Collect infrastructure.

smoothly in practice,

(50)

It is therefore to be expected that the Parties will receive
the authorisation needed under the Operator Agreement
to provide traffic telematics in the form of value-added
services.

1.4. The provisi on of

the onbo ar d unit free of
in a
cha rge by Toll Coll ect wil l
d o m i n a n t
for
t r a f f i c te l e m a t i c s fo r t r a n s p o r t an d l o g i s -
t i c s u n d er ta k in g s i n G er m a ny

p l a t fo r m b e i n g

r esult
cr e a te d

(52) According to DaimlerChrysler estimates, the number of
trucks liable to pay tolls is between […]* million, of
which between […]* and […]* are foreign vehicles. The
number of
at
toll-paying vehicle-kilometres
[…]* billion a year, […]* % of which is accounted for
by foreign vehicles (20).

is put

(53)

Even if, as indicated in recital 43, there is no obligation
to install the onboard unit, it is to be expected that, for
practical reasons, both German and foreign fleet opera-
tors will to a large extent install the free onboard unit.
The notifying parties themselves assume that onboard
units for recording toll data will be installed in 70 to
80 % of trucks in Germany (21). It is also to be expected
that
through
travelling
Germany will use the onboard unit. According to the
[…]*
tender documents, as
onboard units are to be fitted in the first year of
operation of the charging system and the number of
installed onboard units is set to rise to […]* by the last
year of operation.

indicated in recital 17,

frequently

foreign

trucks

(54) At the same time, it is unlikely that the vast majority of
the trucks already fitted with a telematics-compatible
onboard unit will fit another telematics terminal in the
vehicle. The Commission's market investigation showed
that the simple announcement by DaimlerChrysler that
it would be possible to make use of telematics services
in future through the Toll Collect system without any
further hardware costs caused demand for
telematics
solutions on the market to slump. The reluctance of
fleet operators to bear the cost of further hardware is
due in particular to the tight margins within which
transport undertakings operate. One study concludes
that, given the small margins, the costs of
telematics
systems are currently prohibitive for many fleet opera-
tors, particularly small regional operators (22).
If
fleet
operators
through
Toll Collect without having to pay for any further
hardware, it is likely that they will be even less willing
to pay for telematics terminals.

telematics

services

can

use

(51)

The provision of telematics onboard units free of charge
in the vast
to those liable to pay tolls will

result

(19) VerkehrsRundschau 46/2002, p. 17.

(20) DaimlerChrysler, Erfassungssysteme für die Lkw-Maut, 2 December

2002, p. 6.

(21) See footnote 6, op. cit., p. 1.
(22) See footnote 9, op. cit., p. 2-25.

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(55)

(56)

telematics terminals already fitted in
The number of
trucks
relatively small when compared with the
is
Toll Collect onboard units that will have to be fitted.
According to market estimates, there are currently about
23 000 to 25 000 telematics terminals fitted in German
trucks equipped for telematics services by means of a
two-way communication system between the truck and
a services centre like that used by the Toll Collect
system.

It can accordingly be assumed that
the Toll Collect
system will cover almost all heavy goods vehicles in
Germany. As transport undertakings are likely to be
extremely reluctant to install another telematics terminal
in their vehicles in addition to Toll Collect, Toll Collect
is likely to become the dominant platform for traffic
telematics for transport and logistics undertakings in
Germany.

2. Foreclosure of

traffic
systems for transport and logistics undertakings

future market

the

for

telematics

(60)

(57)

for

The creation of a dominant platform for traffic tele-
matics
transport and logistics undertakings has
various effects depending on whether services or equip-
ment are involved.

the Toll Collect platform. With
future on use of
Toll Collect designed as a closed, proprietary system,
the joint venture gives DaimlerChrysler control over
access to the future market for traffic telematics systems
for transport and logistics undertakings. DaimlerChrysler
can thus offer its own traffic telematics services via the
platform and at the same time determine which direct
competitors will be active on the market
traffic
telematics systems for transport and logistics undertak-
ings, and under what conditions. Such a strategy seems
all the more likely as the market for traffic telematics
systems for transport and logistics undertakings can be
expected to enjoy huge growth over
few
years (23). The
[could]* give Daimler-
Chrysler control over the traffic information generated
by the Toll Collect system, and this information could
be used by DaimlerChrysler as a basis for its own traffic
telematics services.

joint venture

the next

for

2.2. Th e Tol l C ol le ct pl atfo r m wil l
s uppl iers of

di sap peara nce of
sy s tem s c ur re n tl y on th e m ar ke t

l e ad to the
te lemat ics

Traffic telematics systems for
transport and logistics
undertakings is a very young market which is only at
its early developmental stage. Accordingly, as indicated
in recitals 30 and 31, a large number of different
suppliers are currently active in this area, offering a
wide variety of
systems, hardware,
software and services. None of these suppliers has so
far succeeded in achieving with its telematics terminal
equipment a degree of market penetration such that its
equipment is likely to become the standard hardware
solution.

traffic telematics

2.1. O ut si d e

p r ovi d er s

o f

t r a f f ic

s e r v i c e s w i l l b e d e p e n de n t on ac c es s
th e Toll Co llect platfor m

te l e m a t i c s
to

for

transport and logistics undertakings

(58) As a result of the creation of a dominant platform for
traffic telematics services, providers of traffic telematics
in
services
Germany will in future be heavily dependent on use of
the Toll Collect onboard unit. The Toll Collect system is
a closed, proprietary system which makes no provision
for use by third parties, while the intellectual property
rights in it are held by the joint venture and the
notifying parties. For
toll collection,
this can be deemed reasonable as third parties do not
need to have access to the system and the function
must be protected against tampering.

the function of

(59)

The position is different when it comes to the provision
it must
of traffic telematics services. As already stated,
be assumed that Toll Collect will become the dominant
platform for traffic telematics systems for transport and
logistics undertakings in Germany. Providers of
traffic
telematics services for transport and logistics undertak-
ings in Germany will therefore be heavily dependent in

(61)

Toll Collect's onboard unit, on the other hand, will, as
DaimlerChrysler Services announces (see recital 44), be
capable of
integrating from both a software and a
hardware point of view all prerequisites for the tele-
matics activity even without the need for further tech-
nical measures. With the help of
the Toll Collect
onboard unit,
the following value-added services are,
according to the Parties, technically feasible: (1) localisa-
tion services, which can be tailored to fleet monitoring,
route planning or area monitoring; and (2) text services,
whereby written,
information can be
exchanged between the value-added service provider
and the onboard unit.

pre-defined

(62)

The traffic telematics services that are possible via the
Toll Collect onboard unit do not cover all the services
currently offered using the telematics terminal equip-
ment already on the market. However, they do consti-
tute core functions which are also part of the systems
the
currently available on the market. The prices of

(23) See the study submitted by the Parties entitled European Telematics
Industry, Commerzbank, 8 May 2001, p. 3,
in which the market
potential in Europe up to 2005 is estimated at EUR 2 billion; the
Frost & Sullivan study referred to in footnote 9, pp. 2-27 to 2-29,
puts the market potential in Europe at around EUR 4,7 billion in
2009.

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software — cost,

systems on the market vary. According to the Commis-
sion's enquiries, traffic telematics systems — hardware
and
between
EUR 1 000 and EUR 2 500 depending on their degree
of sophistication. To this must be added the monthly
cost of the services availed of as well as communication
charges.

vehicle,

per

Germany, as a result of which effective competition will
be significantly impeded in a substantial part of
the
common market.

V. COMMITMENTS

FROM DAIMLER

CHRYSLER,

DEUTSCHE TELEKOM AND COFIROUTE

(63) As already stated in recital 51, the Toll Collect onboard
unit will be made available free of charge. It is therefore
to be expected that fleet operators whose trucks have
already been equipped by Toll Collect with an onboard
telematics terminal
unit will not acquire any further
equipment
traffic telematics
offerings of competing system suppliers over and above
the Toll Collect onboard unit.

for the use of additional

(67)

for

telematics

systems and services

In order to remove the Commission's doubts concerning
the market
for
transport and logistics undertakings in Germany, Daim-
lerChrysler Services, Deutsche Telekom and Cofiroute
have
of
following
3 April 2003, the full wording of which can be found
in the Annex to this Decision.

commitments

offered

the

(64)

(65)

(66)

are

expenditure

now awaiting

Enquiries carried out by the Commission in this connec-
tion have established that fleet operators considering the
procurement of traffic telematics systems and the related
free
capital
Toll Collect system. Consequently, in the run-up to the
introduction of
traffic
telematics system suppliers on the market are having
considerable difficulty winning new customers for their
products and are therefore in danger of economic
annihilation.
this trend will
grow even stronger once traffic telematics services are
actually available via the Toll Collect onboard unit.

the Toll Collect onboard unit,

It must be assumed that

the

it

is

intensify if

the functions of

The ousting of other service and system suppliers will
further
the Toll Collect
onboard unit are extended in a second-generation unit.
In an article in VerkehrsRundschau,
stated in
connection with a planned second-generation unit that
‘Rummel
[Author's note: Michael Rummel, head of
DaimlerChrysler Services Mobility Management] has
already announced for 2004 the next generation of
onboard unit. Onboard Unit
integrates numerous
value-added services into a single device, toll payment
being only one function among many. A slogan has
already been invented: “Maut und Mehr” [The toll and
more ...]*’ (24). After such an extension of the functions
of the Toll Collect onboard unit, it will be even harder
for alternative suppliers of traffic telematics systems to
induce customers to buy an alternative system.

II

E. Conclusion of the competition assessment

The Commission accordingly concludes that the concen-
tration will lead to the creation of a dominant position
on the part of DaimlerChrysler through the Toll Collect
telematics
joint venture on the market
in
systems

transport and logistics undertakings

traffic

for

for

(24) See footnote 19, op. cit., p. 18.

(68) DaimlerChrysler Services, Deutsche Telekom and Cofi-

route undertake as follows:

the Toll Collect onboard units;

— they will set up a central telematics gateway through
which providers of value-added services will be
granted access to the basic functionalities and data
the telematics
of
gateway will be operated by
an independent
company which will not itself provide value-added
services unless DaimlerChrysler Services, Deutsche
than
Telekom and Cofiroute together hold less
50 % of
in the shareholders'
meeting of the telematics gateway company or it is
otherwise ensured that these three companies acting
together are not able to exert any dominant influ-
ence over the telematics gateway company,

the voting rights

— they will develop a GPS interface for onboard units
through which third-party providers of value-added
services are able to make use of the GPS functional-
ities of the onboard units (including first-generation
equipment),

— they will develop a module containing parts for the
hardware and software necessary for toll operation
so that third-party equipment can be developed and
produced by which tolls can be collected via a link
to a toll-collection module, to provide back-up for
adjustments to third-party equipment and to issue
the necessary approvals for the use of
third-party
equipment,

— they will not allow the use of the onboard unit of
the Toll Collect system save with the Commission's
approval, which will only be granted if the Parties
have established a functioning interface for the GPS
functionality of the onboard unit and have enabled
interested third parties to develop their own equip-
ment with which tolls can be collected via a link to
the toll module developed by the Parties.

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VI. COMPETITION ASSESSMENT OF THE NOTIFIED
CONCENTRATION TAKING ACCOUNT OF THE
COMMITMENTS OFFERED

(73)

(69)

The commitments described above are sufficient in the
Commission's view to remove the said competition
doubts in an appropriate fashion.

(70)

(71)

to provide back-up for

The Parties' undertaking to develop a toll module for
third-party equipment,
the
adjustment and development of third-party equipment
in line with the toll module and to grant the necessary
approvals for the use of equipment will make it possible
for third parties to manufacture their own telematics
equipment with a toll function. Such development may
begin once the Parties have made an interface available.
For the purposes of the defined interface, a toll module
will be developed by the Parties or the joint venture in
parallel with the development of third-party equipment.
The development of equipment by third parties and its
toll module developed in
adjustment
parallel is secured by the listing of the various develop-
ment stages to be performed by all sides and by the
back-up provided by an independent body of experts.
On the matter of costs, the German Federal Ministry of
Transport, Construction and Housing has undertaken
vis-à-vis the Commission to ensure that the costs-related
position of
telematics equip-
ment with a toll module is no different from that of
the operators of the truck toll system.

third-party providers of

to the Parties'

is likely that

It
the development and manufacture of
third-party equipment with which tolls can be collected
in connection with a toll module will be taken up by
truck manufacturers and their equipment suppliers. On
this basis, and in accordance with the findings of the
Commission's market
it should be assumed that
granting third parties the possibility of integrating a toll
module into their own equipment
largely limits the
chances of Toll Collect becoming the dominant platform
and acquiring the gatekeeper function on the market for
telematics systems for transport and logistics undertak-
ings in Germany.

test,

third parties

(72) Moreover, the Parties have undertaken to open up the
toll collect onboard unit so as to enable third-party
providers of value-added services to make use of
the
GPS functionality of the onboard units. The ability to
use this GPS functionality enables
to
provide their own telematics equipment without such a
function and to avoid the costs they would otherwise
have had to incur. According to the Commission's
market
question
amounts to some EUR 150 to 200 per unit. Despite
the need to integrate further terminal equipment in the
vehicle, this puts third parties in a position to compete
on telematics
the
Toll Collect system. An interface of
this nature thus
further limits the anticipated dominance of Toll Collect
as a telematics platform.

services offered on the basis of

investigation,

cost-saving

the

in

be

telematics

operational

services may themselves be
In addition,
offered on the Toll Collect onboard unit. The Parties
undertake to grant providers of value-added services
access to the basic functionalities and raw data of the
onboard units via a central
telematics gateway. This
to be operated by a telematics gateway
gateway is
company which is open to other shareholders and will
only
if DaimlerChrysler, Deutsche
Telekom and Cofiroute (together) do not have any
control over it. When accessing the gateway, providers
of telematics services will not be technically, commer-
cially or otherwise discriminated against. At the same
time,
the Parties undertake to use the Toll Collect
system to provide value-added services solely via the
telematics gateway.
shareholders'
the telematics gateway
meeting and a management,
company will have an advisory board designed to serve
as a pluralistic body with representatives of associations
of firms active in the telematics industry. In addition to
deciding on complaints from providers of value-added
services,
the advisory board will be responsible for
monitoring the management with regard to decisions
concerning conditions of access, technical standards and
the company's general terms and conditions.

In addition to a

(74)

(75)

(76)

if

telematics

services are offered via
Consequently,
Toll Collect onboard units, the central service hub via
which these services are provided will be neutralised
with regard to the Parties. On the one hand, providers
of value-added services will obtain non-discriminatory
access to the telematics gateway irrespective of whether
they are shareholders of the gateway company or not.
On the other hand, the gateway company will not be
controlled by the Parties. The company's neutral struc-
ture will be enhanced by the establishment of a plur-
issues
alistic advisory board to deal with essential
relating to the supply and future development of tele-
matics services.

that

The activity of the telematics gateway is restricted by the
fact
the toll-collection function takes precedence
within the Toll Collect system and that the Parties have
established arrangements to guarantee the security of
toll collection. Since this is true for all those involved,
i.e. for the Parties, third-party shareholders and provi-
ders of
to a certain extent,
follows from the sharing of Toll Collect onboard units
for the provision of value-added services, these restric-
tions are acceptable to the Commission.

telematics services and,

An essential element of the Parties' commitments is that
it will not be possible to provide telematics services via
the onboard unit unless this has been approved by the
Commission. The Commission will not approve the
provision of
telematics
gateway unless a functioning interface to the GPS func-
tionality of the onboard unit is available and the Parties
have made it possible for interested third parties to

services via

telematics

the

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develop their own equipment capable of collecting tolls
by means of a link to a toll module. The form taken by
the commitments means that the same conditions of
competition will apply to all firms active on the market
right up to the realisation of the equipment interfaces
the telematics gateway
and the toll module and that
cannot become established as the dominant platform.

(77) Overall, the commitments ensure that the market for
telematics systems for transport and logistics undertak-
ings in Germany will remain open and that the Parties
and third parties will continue to enjoy equal conditions
of competition. The Commission has therefore come to
the conclusion that, having regard to the commitments
offered by the Parties,
the notified concentration will
not lead to the creation of a dominant position on the
part of DaimlerChrysler through the joint venture on
transport and
telematics systems for
the market
logistics undertakings in Germany.

for

VII. CONDITIONS AND OBLIGATIONS

(81)

(78) Under the first sentence of

the second paragraph of
Article 8(2) of the Merger Regulation, the Commission
may attach to its decision conditions and obligations
the undertakings concerned
intended to ensure that
comply with the commitments they have entered into
vis-à-vis the Commission with a view to rendering the
concentration compatible with the common market.

and to use the Toll Collect system for purposes of
providing value-added services only via the telematics
gateway company. The Commission's consent
to the
providing of value-added services via the Toll Collect
system will be given only if a GPS interface for the
onboard unit and a toll module for incorporation in
third-party equipment are developed. These commit-
ments serve to prevent the emergence of a dominant
position on the part of DaimlerChrysler on the German
market for traffic telematics systems for transport and
logistics undertakings and the emergence of a dominant
platform. By contrast, all other aspects of the commit-
ments, in particular the details concerning the establish-
ment of
the telematics gateway company, should be
made the subject of obligations since they are merely
the above-
intended to ensure the implementation of
mentioned conditions.

VIII. CONCLUSION

For these reasons, it can be assumed, provided that the
commitments entered into by DaimlerChrysler Services
and Deutsche Telekom are complied with in full, that
the concentration will not create or strengthen a domi-
nant position as a result of which effective competition
would be significantly impeded in the common market
or in a substantial part of it. Provided the commitments
the
set out
concentration should thus be declared compatible with
the common market and the EEA Agreement pursuant
to Articles 2(2) and 8(2) of the Merger Regulation and
Article 57 of the EEA Agreement.

in the Annex are complied with in full,

fulfilled,

(79) Measures that give rise to a structural change in the
market must be made subject to conditions, while the
implementing steps which are necessary to achieve this
result constitute obligations on the Parties. Where a
the Commission decision
condition is not
declaring the merger
compatible with the
to be
common market is void. Where the Parties commit a
breach of an obligation, the Commission may revoke
the clearance decision in accordance with Article 8(5)(b)
of
the Parties may also be
subject to fines and periodic penalty payments under
the Merger Regula-
Articles 14(2)(a) and 15(2)(a) of
tion (25).

the Merger Regulation;

(80)

In accordance with this basic distinction, the Commis-
sion decision should be made subject to the condition
of
full compliance with those commitments given by
DaimlerChrysler and Deutsche Telekom, relating to their
undertakings not to supply value-added services via the
Toll Collect system without the Commission's consent

(25) See paragraph 12 of the Commission Notice on remedies accep-
table pursuant to Regulation (EEC) No 4064/89 and Commission
Regulation (EC) No 447/98 (OJ C 68, 2.3.2001, p. 3).

(82)

This Decision is without prejudice to the decision which
the Commission is required to take in connection with
the compatibility with Community law of the German
rules on the imposition of a road charge on German
motorways,

HAS ADOPTED THIS DECISION:

Article 1

The notified concentration by which DaimlerChrysler Services
AG and Deutsche Telekom AG are to acquire joint control of
Toll Collect GmbH within the meaning of Article 3(1)(b) of
Regulation (EEC) No 4064/89 is hereby declared compatible
with the common market and with the EEA Agreement.

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Article 2

Article 4

Article 1 shall apply on condition that
the commitments
offered by DaimlerChrysler Services AG and Deutsche Telekom
AG as set out in paragraphs B I and B II 15 of the Annex are
complied with in full.

Article 3

This Decision is addressed to:

DaimlerChrysler AG
Epplestraße 225
D-70546 Stuttgart

Deutsche Telekom AG
Friedrich-Ebert-Allee 140
D-53113 Bonn

Done at Brussels, 30 April 2003.

This Decision is issued subject to the obligation on Daimler-
Chrysler Services AG and Deutsche Telekom AG to comply in
full with the other commitments entered into, as set out in the
Annex.

For the Commission

Mario MONTI

Member of the Commission

ANNEX

The full original text of the conditions and obligations referred to in Articles 2 and 3 may be consulted on the
following Commission website:

http://europa.eu.int/comm/competition/index_en.html