2004/322/EC: Commission Decision of 2 September 2003 declaring a concentration to be compatible with the common market and the functioning of the EEA Agreement (Case COMP/M.3083 — GE/Instrumentarium) (notifed under document number C(2003) 3156) (Text with EEA relevance)
Date: 2003-09-02
Institutions: European Commission
Subjects: economic concentration, exchange of information, medical device, merger control

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II

(Acts whose publication is not obligatory)

COMMISSION

COMMISSION DECISION

of 2 September 2003

declaring a concentration to be compatible with the common market and the functioning of the
EEA Agreement

(Case COMP/M.3083 — GE/Instrumentarium)

(notifed under document number C(2003) 3156)

(Only the English text is authentic)

(Text with EEA relevance)

(2004/322/EC)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Whereas:

Having regard to the Treaty establishing the European
Community,

(1)

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

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 3 April 2003
to initiate proceedings in this case,

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

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

(1) OJ L 395, 30.12.1989, p. 1; corrected version OJ L 257, 21.9.1990,

p. 13.

(2) OJ L 180, 9.7.1997, p. 1.
(3) OJ C 92, 16.4.2004.
(4) OJ C 92, 16.4.2004.

the Commission received
On 28 February 2003,
notification of a proposed concentration pursuant
to
Article 4 of Regulation (EEC) No 4064/89 (the Merger
Regulation), whereby the US company General Electric
Company (hereinafter referred to as GE) proposes to
the Finnish
acquire sole control of
company
(hereinafter:
Instrumentarium), by way of a public tender offer
announced on 18 December 2002.

Instrumentarium

the whole of

OYJ

(2)

(3)

On 3 April 2003, having examined the notification, the
Commission concluded that the notified operation fell
within the scope of the Merger Regulation and that it
raised serious doubts as to its compatibility with the
EEA Agreement. The
the
common market
proceedings
initiated
Commission
in
the Merger
of
6(1)(c)
accordance with Article
Regulation.

and
therefore

On 28 April 2003, the Commission adopted a decision
pursuant to Article 11(5) of the Merger Regulation, due
to the fact that GE had not provided full responses to a
request for information dated 7 April 2003 relating in
to bidding and other data which was
particular
necessary to determine the competitive position of GE
in the markets for patient monitors, mammography
devices and C-arms. GE had been requested to supply
the information by 14 April 2003. GE supplied the
requested information on 15 May 2003. Accordingly,

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pursuant to Article 9 of Commission Regulation (EC)
No 447/98 of 1 March 1998 on the notifications, time
limits and hearings provided for in Council Regulation
(EEC) No 4064/89 (5) on the control of concentrations
between undertakings, the time periods referred to in
Article 10(1) and (3) of the Merger Regulation were
suspended for a total of 18 days.

(10)

(4)

the case,

the
Following an in-depth investigation of
Commission takes the view that, although the notified
proposal is liable in itself to lead to dominant positions
as a result of which effective competition would be
significantly impeded in a substantial part of
the
commitments given by the
common market,
notifying party serve to remove the concerns as to the
compatibility of the concentration.

the

(5)

The Advisory Committee discussed the draft of
Decision on 12 August 2003.

this

I. THE PARTIES

is

company,

technology

a diversified

active
and service

in various
GE
businesses,
manufacturing,
including medical
Systems
specialises in medical diagnostic imaging technology,
including patient monitors, and related services and
health care products.

systems. GE Medical

in

the

active
and sale of medical

development,
Instrumentarium is
manufacture
and
technology related to the areas of anaesthesia and
critical care, including patient monitors and anaesthesia
delivery machines,
the names
Datex-Ohmeda, Spacelabs Medical and Ziehm.

in particular, under

equipment

II. THE OPERATION AND THE CONCENTRATION

(12)

The proposed operation concerns the acquisition of sole
Instrumentarium by GE. The acquisition,
control of
according to a Combination Agreement
signed on
18 December 2002 by the two parties, is performed by
way of a voluntary public tender offer, made through a
newly formed Finnish entity that is a wholly owned
subsidiary of GE.

(9)

On the basis of the foregoing, the proposed acquisition,
whereby GE acquires sole control over Instrumentarium,

(5) OJ L 61, 2.3.1998, p. 1.

constitutes a concentration within the meaning of
Article 3(l)(b) of the Merger Regulation.

III. COMMUNITY DIMENSION

The undertakings concerned have a combined aggregate
world-wide turnover of more than EUR 5 billion (GE
EUR 141,023 million and Instrumentarium EUR 1,163.8
million in 2001) (6). Each of GE and Instrumentarium
have a Community-wide turnover in excess of EUR 250
million (GE EUR […] (*) million and Instrumentarium
EUR […]* million in 2001), but they do not achieve
more
aggregate
Community-wide turnover within one and the same
Member State. The notified operation therefore has a
Community dimension within the meaning of Article
1(2) of the Merger Regulation.

two-thirds

their

than

of

IV. COMPETITIVE ASSESSMENT OF THE NOTIFIED
CONCENTRATION

THE RELEVANT MARKETS

A. THE RELEVANT PRODUCT MARKETS

(11)

The proposed concentration relates
to the field of
medical equipment, the main market segments affected
by the notified transaction being patient monitors,
mobile C-arms and mammography devices.

1. Patient Monitors

General description of the products

Patient monitors are machines that take measurements
of physiological parameters as a representation of a
patient's well-being. These functions are performed
whilst a patient
is either undergoing treatment or
recovering. Sensors attached to the patient detect
different parameters (electrical, mechanical and chemical
events) which are
signals
displayed on a screen (or printouts). The parameters are

converted to electrical

(6) Turnover calculated in accordance with Article 5(1) of the Merger
Regulation and the Commission Notice on the calculation of
turnover (OJ C 66, 2.3.1998, p. 25). To the extent that figures
include turnover for the period before 1 January 1999, they are
calculated on the basis of average ECU exchange rates and
translated into EUR on a one-for-one basis.

(*) Parts of

this text have been edited to ensure that confidential
information is not disclosed; those parts are enclosed in square
brackets and marked with an asterisk.

(6)

(7)

(8)

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very

to the

advanced (such as

vital signs, which vary from the very basic (namely
temperature)
an
electroencephalograph). Patient monitors can measure a
number of them simultaneously and are used together
with other medical equipment, in particular ventilators,
anaesthesia machines and, in some cases, with clinical
information systems.

(13)

Patient monitors can be sold either configured or in
modules. In configured monitors the parameters to be
measured are built-in during the manufacturing process
and are fixed for the monitor's life. Modular monitors
have a display and a central unit which contains a
processor and a number of slots where modules to
measure different parameters can be inserted.

(14)

(15)

(16)

Distinction between different types of monitors

The notifying party has submitted that patient monitors
are used in various care areas within a hospital and that,
in each of the care areas, the parameters to be measured
determine the characteristics needed for the monitors. In
each area, the shares of the merging parties and the
purchasing processes are different,
there are price
variations, and the building up of a reputation as a
credible supplier is difficult.

context,

the notifying party

a
In this
segmentation whereby
be
distinguished: (i) Perioperative Monitors (PO), (ii) Critical
Care Monitors (CC) and (iii) General Ward Monitors
(GW).

suggests
can

three markets

the

and

rooms

inhaled

recovery

and exhaled

to ensure a sufficient

PO monitors are used in the perioperative area, that is,.
mainly in the operating rooms (OR) as well as in the
induction
room
(post-anaesthesia care units — PACU). This type of
monitor can be connected to anaesthesia machines in
operations performed under general anaesthesia, where
gases need continuous
the
monitoring in order
level of
anaesthesia and successful recovery. PO monitors usually
include specific modules to measure parameters not
used in CC, such as respiratory gases (O2, CO2, N2O),
anaesthetic
(in connection with anaesthesia
machines), the BIS (a parameter which measures the
effects of anaesthesia on the patient) or neuromuscular
transmission (to measure the patient's response to nerve
stimulation and regional block). Other monitoring needs
vary depending on the complexity of the operation. PO
monitors, as opposed to CC monitors, are not yet
the
frequently networked with other care areas of
hospital.

gases

(17)

CC monitors are used in areas of a hospital where a
high level of patient care is required such as intensive
care units (ICU), neo-natal intensive care units (NICU),
coronary care units (CCU), and emergency rooms (ER).
This type of monitor generally measures a large number
of parameters also measured by PO monitor, such as
ECG (electrocardiogram), SpO2 (haemoglobin oxygen
saturation), NH3P (non-invasive blood pressure),
IBP
(invasive blood pressure), temperature, CO2 or cardiac
output, but not the effects of anaesthesia on patients.
CC monitors are often networked and linked to a central
station where the data can be processed or stored and
where the patient's vital signs can be observed at a
remote location.

(18) GW monitors are less complex than PO and CC
monitors, and only measure basic parameters such as
NIBP, SpO2, temperature and ECG. This type of monitor
is used for sub-acute activities such as general medical
and surgical wards or obstetrics. GW monitors are
configured rather than modular and can be linked to a
central station or used as stand- alone units. Not all
patients in the general ward area need to be monitored
and consequently monitors are moved from bedside to
bedside according to patient's monitoring requirements;
for this they need to be physically easy to shift around
the area.

(19)

The market
investigation has confirmed the product
market segmentation submitted by the notifying party
regarding patient monitors. The arguments that support
this product market definition come from both the
demand side and the supply side. Since the GW market
is not an affected market (Instrumentarium is not active
in this market), the analysis focuses only on the PO and
CC markets.

(i) Demand side considerations

(20)

First, their technical requirements are so different that,
even if PO monitors can sometimes be used in the CC
area,
the substitution of PO for CC monitors is not
possible in the vast majority of cases. These technical
requirements refer not only to the specific types of
parameters to be measured in each care area, but also to
the network capabilities and physical characteristics
needed (7).

(7) Form CO pages 40, 41 and 42.

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(21) With regard to the substitutability of PO monitors for
CC monitors or vice-versa, the investigation has shown
that each type of monitor is exclusively used in its
intended care area, because of the initial specifications
and parameters
the time of
purchase (8).

that are required at

Since patients usually spend only a few hours in the OR
area while they can spent days or even weeks in the CC
area, this leads to different software configurations and
to different needs in the time scale for printed reports.

(22)

(23)

differences

Furthermore, as was emphasised by the notifying party,
these
are
confirmed by the differences in prices that can be
observed between the three segments (9).

requirements

technical

in

(ii) Supply side considerations

The purchasing decision also differs from one segment
to another. The market investigation has shown that, for
PO monitors, the decision about the monitor's technical
specifications is mainly taken by the anaesthesiologist,
whereas for CC monitors the clinicians of the relevant
departments (namely ICU, NICU or CCU) have a great
influence in the final decision (10). Moreover, for the
the
acquisition of equipment by either hospitals or
public
hospitals'
procurement, separate tenders are usually organised for
each care area, with particular specifications for each
case (11).

authorities

charge

the

of

in

(24) Moreover, it is a common practice in the industry (in
studies carried out by independent consultants and the
the general
manufacturers
patient monitor market according to the care area
involved.

to segment

themselves),

(26)

that

party

submits

notifying

The
from the
manufacturing point of view, switching production from
one type of monitor to another is easy and can be
achieved at a low cost. Different care area monitors can
be manufactured on the same production platforms.
Moreover,
are mainly
the monitor's manufacturers
assemblers and source a large proportion of their inputs
from third parties, which are component manufacturers.
Co-operation with third parties can therefore enhance
this flexibility in production (12).

before

(27) However, each supplier manufactures models that can
be specifically designed for the PO or the CC area.
including the main suppliers, are more
Some players,
active only in some care areas than in others (for
Spacelabs,
example,
in CC
Instrumentarium was only marginally present
monitors and is not active,
in GW
monitors, whereas GE and Philips are present in the
three segments) (13). This is particularly true as regards
small suppliers, which tend to focus more on CC areas,
where technological barriers to enter the market remain
generally lower than in the perioperative area.

like Siemens,

acquisition

the

of

(25)

There are also important differences with regard to the
type of software used. The software defines the settings
the monitors (alarms, algorithm performance or
of
report configurations), that are directly linked to the
intended use of the monitor, that is, to the care area.

(28)

(8) Customers

they would
in each country were asked whether
sometimes use perioperative monitors in the critical care area and
vice versa. A vast majority of respondents indicated that this would
not be the case (France, 81 %; Spain: 86 %; the United Kingdom:
62 %; Sweden: 69 %; Italy: 58 %).

(9) Form CO, p. 43.
(10) For
the

that:

level,

for PO monitors,

five bigger markets at national

the market
investigation shows
to
purchase a given type of monitor is made in most of the cases by
the anaesthesiologist
Italy 94 %,
Spain 100 % and the United Kingdom 72 %) and only in a few
cases by other medical departments; for CC monitors the influence
is exerted by the relevant medical departments.

(France 95 %, Germany 97 %,

the proposal

(11) The market investigation results regarding the last tender organised
by the respondents show that the percentage of tenders organised
exclusively for PO or CC monitors is France 65 %, Germany 69 %,
Italy 73 %, Spain 70 % and the United Kingdom 67 %.

(12) Form CO, p. 47.
(13) Form CO, p. 44.

innovative

developments have

the critical care areas.

The market investigation has also shown that the R&D
efforts of monitor suppliers are focused on the specific
applications of
their products and differ substantially
depending on whether their products are designed for
In that
the perioperative or
respect, the various suppliers have indicated that the
latest
indeed been
for perioperative and critical care monitors.
different
Amongst
technological
area,
to
developments
suppliers mention, inter alia, the introduction of software
specifically adapted to the operating room, networked
monitoring
integrated
anaesthesia record keeper and specific ergonomics. As
regards parameters, the various suppliers also mention
important developments, varying according to the

important
the

perioperative

operating

specific

room,

most

the

the

for

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and

concern

monitors

in order
CC
For
focused,
have

market concerned. For instance, the latest innovations
elaborate
for
PO
electroencephalogram
neuro-muscular
to measure the effects of
measurements,
technological
anaesthesia.
the
on
alia,
developments
introduction of non-invasive parameters
aimed at
measuring cardiac output and blood pressure. All these
elements indicate that, given the costs of R&D and the
time required to develop new products adapted to the
care area for which they are used, there are important
technological barriers to recustomizing CC monitors as
PO monitors, and vice versa.

monitors,
inter

(29)

The market shares of the parties and their competitors
in each care area are also quite different, suggesting the
same market segmentation. Were PO and CC to be
considered as belonging to the same relevant product
market, similar market shares for each segment would
be expected, which is not the case.

2. Anaesthesia equipment

(32) Anaesthesia equipment

is used to deliver anaesthetic
gases to patients during operations, to supply them with
to provide artificial
oxygen during the operation,
respiration if necessary and to monitor
the patient
during the entire period of narcosis.

(33)

In case COMP/M.2861–Siemens/Drägerwerk/JV (16) the
Commission concluded that anaesthesia equipment as a
whole constitutes a relevant product market, the key
arguments being the high differentiation of the product
the equipment
and the particular specifications that
must meet. The Commission's market investigation did
not
this
reveal any new evidence
conclusion is not valid any more.

indicating that

3. Clinical Information Systems (CIS)

(30)

and,

costs

suitable

the
product

These facts constitute a clear indication of the difficulties
in switching from one segment to the others. In this
respect, the notifying party acknowledges (14): that ‘The
costs of switching between the different care areas is
and time of
foremost determined by
developing
even more
a
importantly, of building up a reputation as a reliable
area.' The market
certain care
supplier within a
investigation has indeed shown that, among the various
reasons both to change or not to change of supplier,
decision (15).
reputation is
factor
Consequently, a given company not present in one of
the markets is unlikely to obtain a reliable reputation for
the provision of these services, at least in the short
term. These switching difficulties suggest that the three
defined care areas are distinct product markets.

in the

key

a

(34) According to the notifying party,

IT solutions

for
medical equipment are commonly divided between
hospital information systems (HIS), clinical information
systems
(CIS) and picture archiving communication
systems (PACS). CIS is used for automating patient
records, patient medical
readings and other clinical
information. The parties' activities overlap in CIS. GE is
active in the critical care and perioperative areas with its
‘Centricity Critical Care' and ‘Centricity Perioperative'
products. Instrumentarium is present in the same care
areas through its ‘Deio' and ‘Clinisoft' products.
In
addition to CIS, GE is also active in HIS and PACS. From
a demand-side perspective, hospitals which require a CIS
product to satisfy their needs for automated recording,
for electronic exchange of data between different devices
and automated patient records cannot turn to substitute
products. Likewise, from a supply-side perspective, CIS
has distinct characteristics which differentiate it from
other types of software, notably its ability to exchange
medical electronic data in real time at the point of care.
Accordingly, for the purpose of this Decision and taking
into account the fact that it is still an emerging market,
the Commission considers
strong
indications pointing towards a distinct CIS product
market.

there

that

are

(31)

In the light of the above, PO, CC and general ward
monitors constitute separate relevant product markets.

(14) Form CO, p. 43.
(15) The results from the market investigation (questionnaire sent to
patient monitors customers on 7 May 2003, questions 19 and 21)
indicate that, for example, for PO monitors the more important
reasons not to change of supplier are:
in France and Spain the
proven track record and better technology of the current supplier,
in the United Kingdom the proven track record and the avoidance
of switching cost, and in Germany that PO and CC are of the
same brand. The more important reasons to change are: in France
and Spain the proven track record and better technology of the
new supplier, in the United Kingdom the better technology, the
connection capabilities and the proven track record and in
Germany the better technology and the electronic interoperability.

4. Mobile C-arms

General description of the product

(35)

C-arms are mobile fluoroscopic X-ray machines used in
hospitals and clinics to provide continuous viewing in

(16) OJ L 311, 14.12.2002, p. 12.

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real-time during diagnostic, surgical and interventional
procedures.
radiography
In comparison to general
where a static X-ray or an X-ray picture is provided,
fluoroscopy offers a dynamic X-ray, or X-ray movie,
used for the imaging of the flow of contrast media in a
variety of body parts and organs.

C-arms comprised 941 unit shipments and produced
revenues of USD 63 000 000 whereas the market for
shipments and
mini C-arms comprised of 49 unit
USD 3 000 000 in revenues (21).
the
European mini C-arms market is about 10 % of the size
of
and
Instrumentarium
C-arms,
manufacture
Instrumentarium does not manufacture mini C-arms.

the US market (22). Whereas

In comparison,

both GE

full-size

(36) A C-arm consists of a piece of metal forged in the shape
of letter ‘C' with an X-ray tube at one end of the ‘C' and
an image intensifier attached to the other. The image
intensifier enhances the picture generated by the X-ray
which would otherwise not be clearly visible for the
human eye (17).

Possible distinction between different types
of mobile C-arms

(37)

(38)

the

during

patient

operations

C-arms can be either large C-arm systems which are
mounted on the ceiling (‘fixed C-arm systems') and form
a fixed part of a radiology and fluoroscopic room of a
hospital, or mobile C-arms, which are attached to a
wheeled device that allows the machine to be brought
to
and medical
procedures (18). Mobile C-arms are used in the operating
room as well as outside the perioperative units in the
coronary care unit or the intensive care unit. According
to the notifying party (19), fixed fluoroscopic systems
account for more than 80 % and mobile C-arms less
than 20 % of
is
the fluoroscopic X-ray market.
the price of a fixed system can be
understood that
significantly higher than that of a mobile C-arm. The
notifying party takes the view that even if fixed systems
are technically capable of offering an alternative to
some, especially high-end, C-arms and provide to an
extent a competitive constraint to mobile systems, it is
not necessary to determine whether C-arms are part of
a larger market for fluoroscopic X-ray devices, as no
competition concern arise in a narrower defined mobile
Instrumentarium
C-arms market.
manufacture mobile C-arms but Instrumentarium does
not manufacture fixed C-arm systems.

Both GE

and

It

It is also stated by the notifying party that most mobile
C-arms on the market are full-size C-arms but that there
also mini C-arms. Mini C-arms also provide
are
real-time X-ray imaging but their use is limited to basic
orthopaedic procedures on extremities, namely arms
and legs. The size of
is
full-size C-arms.
significantly smaller
According to a report by the industry consultancy Frost
& Sullivan,
and Mobile C-arms
Markets' (20), in 2001 the European market for full-size

the mini C-arms market

‘US Fluoroscopy

than that of

(17) Frost & Sullivan US Fluoroscopy and Mobile C-arms Markets

2002, 2-1, 2-2.

(39)

(40)

images of

the part of

The notifying party submits that even if all
full-size
C-arms perform the same basic function in providing
the body under
real-time
examination, a possible distinction may be drawn
between mobile C-arms by distinguishing the medical
application for which the equipment is utilised, given
the various degree of complexity of the treatment, the
necessary technical properties and the price of
the
C-arm.

into:

Consequently,
the notifying party suggests a possible
segmentation of
the mobile C-arms market
(i)
(ii) vascular C-arms and (iii) cardiac
low-end C-arms,
C-arms. The notifying party takes, however, the view
that regardless of the market definition adopted, namely
the overall full-size mobile C-arms or the segmentation
raise
by
competition concerns. Both parties are active in vascular
and low-end C-arms but only GE is active in cardiac
C-arms.

transaction would not

application,

the

(41) Medical applications,

for which all

full-size C-arms,
include all
including low-end C-arms, can be utilised,
orthopaedic examinations (extremities, hip and spine),
general
placements,
(catheter
fluoroscopy
lithotripsy), pain
gastro-intestinal procedures, urology,
(abdominal
management
imaging), endoscopy, ear nose and throat procedures,
pacemaker
pathology. The
applications of a lower tier of C-arms (low-end C-arms)
therefore cover in essence orthopaedic applications and
simpler surgical procedures.

laparoscopy

procedures,

insertion

speech

and

(18) Form CO, p. 62, footnote 77.
(19) Form CO, p. 62, footnote 78.
(20) Frost & Sullivan US Fluoroscopy and Mobile C-arms Markets

(21) Frost & Sullivan US Fluoroscopy and Mobile C-arms Markets

2002, Chapter 6 World Mobile C-arm Market, 6-2.

(22) Frost & Sullivan US Fluoroscopy and Mobile C-arms Markets

2002, Chapter 6 World Mobile C-arm Market, 6-1.

2002, Chapter 6 World Mobile C-arm Market, 6-1.

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(42)

(43)

(44)

The middle tier of C-arms (vascular C-arms) perform
additionally basic minimally invasive and diagnostic
vascular procedures (procedures involving blood vessels)
including
and
lymphography.

phlebography,

arteriography

The high tier of C-arms (cardiac C-arms) consists of
in addition to the functions also
equipment which,
carried out by low-end and vascular C-arms, can in
most cases (23) also be used for advanced vascular
including coronary
procedures and vascular surgery,
aortic
abdominal
the placement of
angiography,
and
neurosurgery
as
as well
aneurysm stents
neurovascular examinations.

investigation has

The Commission's market
largely
confirmed the above product market segmentation (24).
A number of market participants (25) consider, however,
that a market definition based on a distinction of
C-arms by their application is not appropriate. They
suggest, for example, a distinction between high and
low-end mobile C-arms or alternatively an overall
market for mobile C-arms. The Commission concludes,
change
however,
significantly even if another segmentation or a wider
market for mobile C-arms be applied. The arguments
put
forward by the notifying party for a further
segmentation of the mobile C-arms market, which were
investigation, are,
largely confirmed by the market
however, assessed in more detail below.

assessment would not

that

the

(i) Demand side considerations

(45) According to the notifying party, as

regards

the
technical differences, low-end C-arms, which represents
typically
some 500 units annually sold in the EEA,
provide for a low generator power (1,4 to 5 kW (26)), a
stationary anode X-ray tube, basic imaging features,
minimal image processing and image storage capacities
is stated that
and limited image display capacity.
low-end C-arms are limited in their use for vascular
procedures by their
to provide
imaging for the time required for the procedure. The
price for a low-end C-arm is typically below EUR
65 000 (27).
In this range, GE manufactures the OEC
7 700 models and Instrumentarium the Ziehm Compact

inadequate power

It

(23) The use of C-arms for cardiac applications is not permitted in

national legislation in France and Germany.

(24) Replies to the Commission's Article 11 letter to hospitals (mobile

C-arms customers) of 11 March 2003.

(25) Replies to the Commission's Article 11 letter to competitors of 11

March 2003.

(26) Annex 6.8 to the Form CO.
(27) Annex 6.8 to the Form CO.

and the Ziehm 8 000 (previously Exposcop 8 000
Compact and Exposcop 8 000) (28).

(46) Middle-tier vascular C-arms, which, according to the
notifying party, also represent some 500 units annually
sold in the EEA, also have lower generator power (1,3
to 5 kW (29)) than cardiac C-arms and typically use a
stationary anode X-ray tube. This is said to limit the use
of vascular C-arms to more basic vascular procedures
(such as orthopaedic and gastro-intestine examinations)
and provides only for a lower penetration capability.
The price for a vascular C-arm varies between EUR
60 000 and EUR 100 000 (30). GE manufactures the
OEC Flexiview 8 800 and Instrumentarium the Ziehm
Vision, Ziehm Vista Vascular and Ziehm Vista Endo
(previously Exposcop 8 000 Endo) (31).

(47)

that high tier cardiac
The notifying party submits
C-arms, which represent approximate sales of 300 units
annually in the EEA, feature a rotating anode X-ray tube
enhancing the capacity of the machine, high generator
(5 to 20 kW (32)), high resolution image
power
processing and digital image storage capacity. Rotating
anode allows for a continuous viewing during a cardiac
procedure. The price for a cardiac C-arm is said to
range between EUR 80 000 and EUR 200 000 (33). GE
manufactures the OEC 9 800 models which can be
upgraded for cardiac functions. […]* (34).

investigation (35)

(48) With regard to the substitutability between the different
largely
types of C-arms,
the market
showed that, from a hospital's point of view, there are
types of C-arms,
differences between the various
although from technical and medical point of view the
cut-off point is not always clear since the product lines
to a certain extent provide for a continuum. The
the
Commission also observes
from the
equipment and the required service level
supplier vary according to the complexity of
the
C-arm (36).

the price of

that

(49)

It must also be noted that despite technical differences
is a
between the proposed segments,

there

first,

(28) Form CO, p. 64.
(29) Annex 6.8 to the Form CO.
(30) Annex 6.8 to the Form CO.
(31) Form CO, p. 64.
(32) Annex 6.8 to the Form CO.
(33) Annex 6.8 to the Form CO.
(34) Form CO, p. 63.
(35) Replies to the Commission's Article 11 letter to hospitals (mobile

C-arms customers) of 11 March 2003.

(36) Annex 6.16 to the Form CO.

L 109/8

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16.4.2004

possibility for one-way substitution in the utilisation of
technically more advanced C-arms (cardiac and vascular
C-arms) to perform procedures typically appropriate for
the application of the low-end C-arms. This is, however,
not perceived by the surveyed hospitals as a factor
influencing the preferred choice of a mobile C-arm,
owing to other related factors such as the difference in
price (37). Secondly, according to a number of market
participants it is possible to upgrade a low-end C-arm to
a vascular C-arm or a vascular C-arm to a cardiac
inter alia,
C-arm. Such an upgrade would include,
installing necessary software options. The additional cost
for upgrading a low-end C-arm to a vascular C-arm was,
in general, estimated as EUR 10 000 to 20 000 and the
cost was estimated significantly higher for an upgrade of
a vascular C-arm to a cardiac C-arm. The latter would
also require improvements to other specifications of the
C-arm (38).

(52)

Frost & Sullivan does not further segment the market in
its Reports on fluoroscopy and C-arms markets but
makes a distinction between mobile full-size and mini
C-arms and generally acknowledges,
in respect of
smaller suppliers of C-arms on the European market,
that these mainly provide more general C-arms instead
of C-arms used for a particular applications,
like
surgery (39).
Commission's market
vascular
investigation indicates
the smaller
suppliers tend to concentrate either on the low-end
C-arms or cardiac/vascular C-arms due to more limited
resources
and
marketing of a full range of mobile C-arms (40).

for R&D, manufacturing

in general,

The
that,

available

of C-arms could easily respond to an increase in
demand. An increase
in production would entail
procurement of more materials and acquiring more
personnel. The notifying party takes the view that
although patents are common in the C-arms business,
none of the competitors possess unique technology and
that they source a large proportion of their inputs from
third parties which are component manufacturers.

(GE,

investigation has confirmed that, of

the
The market
major players on the market
Instrumentarium,
Siemens and Philips), all, apart from Instrumentarium,
have a strong presence in all three proposed segments
of mobile C-arms (41). At the EEA level, GE is the clear
market leader in cardiac C-arms, Siemens the market
leader in vascular C-arms and GE again in low-end
the parties and their
C-arms. The market shares of
competitors in each segment vary from segment
to
segment which is considered as an indication of the
segmentation of
for
low-end, vascular and cardiac applications to belong to
an overall product market, such divergence in market
shares in different segments would not be expected. The
divergence in market shares in different segments is
indicated in the table below (year 2002).

the market. Were the C-arms

Table 1

Market shares (in value) in the EEA in 2002

2002

Cardiac

Vascular

Low-end

Total

GE

[50-60]* % [20-30]* % [20-30]* % [30-40]* %

Instrumen-
tarium

[0-10]* % [20-30]* % [20-30]* % [10-20]* %

(ii) Supply side considerations

Combined

[50-60]* % [40-50]* % [40-50]* % [40-50]* %

Philips

[20-30]* % [20-30]* % [20-30]* % [20-30]* %

Siemens

[20-30]* % [20-30]* % [20-30]* % [20-30]* %

Others

[0-10]* %

[0-10]* %

[0-10]* %

[0-10]* %

Source: the notifying party.

that have

and Siemens

The notifying party submits that
from the suppliers
point of view, there are credible rivals in the market like
extensive product
Philips
offerings and in-depth geographic coverage, in addition
to other competitors that successfully compete with the
large
and
their
there are no
geographic areas.
production,
significant
distribution or after-sales service and that any supplier

in
is also stated that
expanding

chosen product

It
barriers

competitors

to

(50)

(51)

(37) Replies to the Commission's Article 11 letter to hospitals (mobile

C-arms customers) of 11 March 2003.

(38) Replies to the Commission's Article 11 letter to hospitals (mobile

C-arms customers) of 11 March 2003.

(39) Frost & Sullivan, US Fluoroscopy and Mobile C-arms Markets,

Chapter 6 World Mobile C-arm Market (2002), 6-1.

(53)

Furthermore, the Commission considers that technical
differences related to the level of complexity of
the
medical procedures and the necessary after-service
obligations, render the entry into the cardiac C-arms
segment considerably difficult. […]*

(40) Replies to the Commission's Article 11 letter to competitors of

(41) Replies to the Commission's Article 11 letter to competitors of

11 March 2003.

8 May 2003.

16.4.2004

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Official Journal of the European Union

L 109/9

(54)

the

that

to indicate

conditions of

Therefore, on the basis of an overall assessment of the
information gathered from the market investigation it
competition appear
seems
that
sufficiently different
three
these
segments of mobile C-arms constitute separate relevant
product markets. However, the question of the precise
product market definition can be left open, since, even
if another segmentation of
the C-arms market or a
wider product market comprising all mobile C-arms
were appropriate, as suggested by the notifying party,
lead to the
the notified concentration would not
creation or strengthening of a dominant position as a
result of which effective
competition would be
significantly impeded in the common market or in a
substantial part of it.

5. Mammography devices

General description of the product

(55) Mammography is a specific type of X-ray imaging
device exclusively used for medical examination of the
internal
female breast: X-rays produce an image of
breast tissue with the purpose of detecting malignant
growths. The device can be used both for screening,
namely early detection of any malignant growth, and for
diagnostic or interventional purposes. Breast screening
campaigns aim at detecting any malignant growth in a
large fraction of the female population at an early stage.

(56)

The image of the breast made by X-ray can be recorded
on a film, using an X-ray cassette, or digitally recorded
and displayed through a digital receptor (plate) and the
utilisation of a computer. This factor distinguishes the
analogue
two types of mammography equipment:
mammography and digital mammography.

(57) According to a Frost & Sullivan report on World X-Ray
Mammography Market (42),
the European
market for analogue mammography comprised of 1 277
revenues of USD
unit
shipments
106 800 000 whereas
digital
for
mammography amounted to 27 unit shipments and
USD 10 400 000 in revenues.

and produced

the market

in 2001,

Distinction between analogue and digital
mammography

(59)

(60)

(61)

technology has recently been
in the market. Digital
introduced into the market and its growth is expected to
be rapid in the years
to come along with new
developments in digital detectors with higher spatial
resolution (smaller pixel
resolution,
size),
low-dose X-rays and 3D imaging.

contrast

Both parties are active in analogue mammography
devices but only GE currently manufactures digital
mammography devices.
Instrumentarium does not
currently manufacture full-field digital mammography
devices […]*.

The notifying party submits that there are factors such
as the significant price difference between analogue and
digital devices that suggest distinct product markets for
the
devices.
the relevant product
Nevertheless,
they propose that
market definition be left open as the market
is in
transition.

of mammography

categories

two

The market investigation has confirmed that there are
substantial price differences between analogue and
digital mammography devices: the average price for an
analogue mammography device is around EUR 50 000
whereas it is around EUR 300 000 for a digital device.
Currently digital devices form a small percentage of the
overall sales of mammography device units in the EEA.
In line with these figures, the overwhelming majority of
customers
responding to the Commission's market
investigation (43) indicated that they would not switch
from an analogue to a digital mammography device if
the price of the former were to rise permanently by 5
to 10 %.

types

of mammography

(62) Moreover, there are significant differences in technical
performance (image quality and storage) between the
two
devices. Digital
mammography devices are expected to offer better
contrast resolution and other image characteristics that
will improve the capability to detect cancer at an early
stage and to reduce errors
in detection (so called
false-positive).
Improvements offered by the digital
technology relate also to lower radiation doses and
such as
general
digital
imaging.
and
Furthermore, it is expected that digital technology will
enhance new applications, such as three dimension
(tomosynthesis) or a combination with ultrasound (44).

functionality of digital
transmission

technology,

storage

of

(58) Analogue technology has been available for

some
decades and constitutes the most established technology

(63)

The notifying party states that digital mammography is
more efficient than analogue in that it captures up to

(42) Frost & Sullivan, World X-Ray Mammography Market, 2001,

Chapter 3.

(43) Replies to questionnaire to customers of 11 March 2003.
(44) Competitors' reply to the Commission's questionnaires on R&D in

Mammography dated 28 May 2003.

L 109/10

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16.4.2004

20 % more of the original X-ray signal and increases
productivity, namely the number of examinations per
day, by approximately 40 to 50 % (45). The Commission
observes, however, that there has been some uncertainty
as to the sharpness of the image resolution of digital
mammography devices and the size of the X-rayed area
in comparison to those offered by analogue equipment.
Digital mammography devices have so far not been
accepted in the national breast screening programs in
some EEA countries, because screening requires both a
in terms of patient
precise
throughput. However,
it is merely a question of time
before these technical limitations are overcome.

and efficient device

some

(64) Although analogue and digital mammography devices
share
and can be
common characteristics
manufactured on the same product line, there is not a
sufficient degree of supply-side substitutability between
the two segments. There are substantial differences
among the two kinds of devices. The development of
digital mammography devices requires, on the part of
the manufacturer, significant investments (46) in research
and development to address specific issues related to
digital devices, namely the conversion of X-ray signal
into digital signal with respect to image resolution and
speed. This requires innovation in the technology for
full-field radiation detector as well as digital processing
of the image for the visualisation of small structures
inside dense breast
such
tissues. As
developments in digital mammography, GE holds more
than […]* patents (47)
field. As a halfway
solution between analogue and fully digital devices,
companies (48) have developed solutions
some
to
upgrade analogue devices to produce digital images.

result of

in this

a

(65) All these factors indicate a product market distinction
digital
analogue mammography

and

between
mammography.

monitors, C-arms
increasingly becoming EEA-wide.

and mammography devices

are

(67)

The Commission's market
shown,
however, that the markets for patient monitors, C-arms
and mammography devices are national in scope.

investigation has

1. Patient monitors

(68)

Since the GW market is not affected (only GE is active
in this market)
is
focused only on the PO and CC markets.

the relevant geographic analysis

Presence in the individual Member States

(69)

The market penetration of
manufacturers differs among the Member States,
particular as regards perioperative monitors.

the major monitoring
in

(70)

For example, GE has no reported sales of such products
in countries such as […]*, […]*, and […]*, while being
present in neighbouring countries (Spain: [10 to 20 %]*;
Denmark: [10 to 20 %]* and Germany [0 to 10 %]*)
Similarly,
Instrumentarium, although present on all
markets, has higher market shares in Spain ([60 to
70 %]*) than in France ([40 to 50 %]*) or Portugal ([30
to 40 %]*). The same applies for other manufacturers:
Siemens only has a [5 to 10 %]* market share in the
United Kingdom, while having [20 to 25 %]* in Ireland,
and [5 to 10 %]* in Spain compared to [50 to 55 %]* in
Portugal. Similarly, Philips has a [20 to 25 %]* market
share in France, but only [5 to 10 %]* in Spain and the
United Kingdom.

B. THE RELEVANT GEOGRAPHIC MARKETS

(71)

(66)

significant

The notifying party takes the view that factors such as a
common legal framework for a wide range of medical
devices (49),
supply substitution,
centrally organised production, minimal transport costs
and the non-existence of
insurmountable barriers to
entry in terms of setting up a distribution network,
for patient
suggest

geographic markets

level of

that

the

even

structures,

different market

between
These
neighbouring countries, suggest that the conditions of
competition vary significantly amongst Member States.
In particular, there is no evidence that a grouping of
Member
a distinct
geographic market. These discrepancies in market shares
across the Member States are also present in the market
for CC monitors to a similar extent.

considered as

can be

States

(45) Form CO, p. 93.
(46) According to Frost & Sullivan, GE has

spent over USD
100 000 000 over 10 years, while Siemens USD 50 000 000, and
Fischer Imaging almost USD 30 000 000.

(47) Philip' reply to the Commission's questionnaire dated 28 May

2003 and dealing with R&D in Mammography, p. 3.
(48) For instance: Instrumentarium, Siemens and Philips.
(49) Medical Devices Directive 93/42/EC of 14 June 1993.

Price differences in the Member States

(72)

The notifying party submits that the differences in their
list prices are due to the different discounting schemes
in each country: where list prices are relatively higher in
this is offset by higher levels of
one Member State,
discount.

16.4.2004

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L 109/11

(73) However,

there

the Commission found that

are
differences in transaction prices.
In particular, when
analysing the information provided by the notifying
party (50) even the distinct discounts applied in each
country do not offset these price differences. The table
below, where GE's list prices and average discounts are
summarised for some Member States, shows that there
are countries with similar list prices but with different

that

final selling
average discounts, which indicates
prices are different. For example, list prices for DASH
2 000 in […]* are higher
than in […]*, while the
average discount is lower, which leads to a higher final
price. The same pattern can be found for other products
final
and countries,
selling prices do vary across the Member States.

supporting the conclusion that

Table 2

Average list prices

Models

Average discount

Country

Dash 2 000

Dash 3 000

Dash 4 000

Solar 8 000

Solar 9 500

Dash models

Solar models

Austria

Belgium

France

Germany

Italy

Ireland

Netherlands

Portugal

Spain

Sweden

United Kingdom

[3-8]*

[3-8]*

—

[3-8]*

[3-8]*

[4-9]*

[3-8]*

[2-7]*

[2-7]*

[3-8]*

[4-9]*

[6-11]*

[6-11]*

[7-12]*

[6-11]*

[5-10]*

[7-12]*

[6-11]*

[5-10]*

[5-10]*

[6-11]*

[7-12]*

[8-13]*

[8-13]*

[9-14]*

[8-13]*

[7-12]*

[1-15]*

[8-13]*

—

—

[9-14]*

[10-15]*

[5-10]*

[5-10]*

—

[5-10]*

[5-10]*

[6-11]*

[5-10]*

[4-9]*

[4-9]*

[5-10]*

[6-11]*

[13-18]*

[14-19]*

—

[13-18]*

[13-18]*

[15-20]*

[14-19]*

[10-15]*

[10-15]*

[15-20]*

[15-20]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

Source: the notifying party. (*) Solar 8000.

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

[…]*

(74)

are

are

final

customer

calculated

differences

These
also
price
confirmed by independent studies (51), where average
prices
for multi-parameter patient
monitoring systems and for all brands in Europe. The
results show substantial price differences ranging from
16 % to 32 % between countries such as for example
France or Spain and the United Kingdom.

issue stating that

this
local distribution operations,
including the provision of after-sales services, appears
necessary to be an effective competitor in the country
concerned. This need of services has been confirmed by
the Commission market investigation, where, together
with specification and quality, factors such as after-sales
training and the
service,
capacity of providing maintenance and service over the
whole life-cycle of the product are the more appreciated
by the customers when taking the final purchasing
decision (52).

continuous maintenance,

Distribution and after-sales service

(75) As stated above in the product market section, aspects
such as after-sales service, maintenance and training are
key factors in taking the final purchasing decision. The
notifying party has also pointed out the importance of

(50) Annex 6.16 to the Form CO.
(51) Frost & Sullivan report on the European Anaesthesia and
Respiratory Equipment, 2001 (3981-56), pages 5 to 18, 6 to 17, 7
to 17, 8 to 17, 9 to 17, 10 to 15, 11 to 17.

(52) In the market investigation the customers in the various countries
were asked to assess the importance of 20 different factors when
choosing a patient monitor's supplier. In Germany and Spain, the
ability of the supplier to provide maintenance and service over the
life cycle of the product was the second most important factor for
respondents.
this was
mentioned as the third most important factor, and in Sweden the
fourth.

In France and the United Kingdom,

L 109/12

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Official Journal of the European Union

16.4.2004

(76)

the difficulties

Furthermore, most small competitors in critical care
monitoring are not present in all the Member States,
which is a clear
in
indication of
obtaining a reliable after-sales service network even
through third parties. By contrast, the main suppliers
are present in, at least, all the large markets (53). Their
distribution structure may however vary depending on
the countries. For instance Instrumentarium sells direct
to final customers in countries such as […]*, while
selling on a national basis
in
neighbouring countries. In that respect, the Commission
has found no evidence that any group or cluster of
Member States could form a distinct geographic market.

through distributors

that

suggest

the relevant geographic
CC monitors
market for CIS is also national. In particular, it should
also be noted that the sales of CIS go through the same
distribution channels as the ones for patient monitors,
on a national basis, and that the penetration rates differ
across the various EEA member states.

4. Mobile C-arms

(77)

In light of these factors, the Commission has reached
the conclusion that each Member State constitutes a
separate relevant geographic market.

Presence in the individual Member States

2. Anaesthesia equipment

(80) According to the information submitted by the notifying
the parties' market position and that of
significantly in different Member

party,
competitors varies
States (54).

(78)

In Case COMP/M.2861–Siemens/Drägerwerk/JV the
Commission concluded that
the geographic market
anaesthesia equipment was national. Key arguments
supporting this view were the fact that the parties had
very different market shares in the individual EEA
countries and that
they had different competitors in
them, that most competitors operated in only one or
two Member States,
that a local distribution and
servicing structure was of crucial importance to market
success and that anaesthesia equipment was distributed
predominantly through invitations
to tender, with
customer preferences playing an important role in the
final purchasing decision.

(81)

3. Clinical Information Systems (CIS)

For example, in low-end C-arms, on the basis of 2002
figures, Instrumentarium has a strong market position
in Finland ([50 to 60 %]*), Denmark ([30 to 40 %]*),
Germany ([30 to 40 %]*) and Belgium ([30 to 40 %]*),
while in some other Member States the markets shares
are much lower. For example, in Italy ([10 to 20 %]*),
Norway ([10 to 20 %]*) and France ([0 to 10 %]*) its
position is much weaker and in some Member States it
did not have sales at all
in 2002. These
discrepancies in market shares are present for the main
competitors
in both low-end and vascular C-arms.
Moreover, a number of smaller competitors are present
in some Member States,
Italy, Portugal,
Spain and Greece. (55) The following table shows some
the parties and their main
of
competitors.

these differences for

in particular,

([…]*)

equipment

to enhance

(79) As explained above, CIS are mainly IT solutions used as
to medical
its
accessories
capabilities.
Indeed, CIS is a complicated IT system
which requires installation by experts. Installation can
take up to 18 months and is
tailor-made to the
hospital's needs. Training is also offered to the hospital
the CIS system. As such, a
staff by the installer of
installation, maintenance and
dedicated distribution,
service network operating on a national basis is of great
importance.
arguments
context,
supporting the national market definition for PO and

In this

same

the

(53) See also T for G, 2000, 3.3. p. 131.

(54) Annex 6.9 to the Form CO. The total size figures are based on the
parties' best estimates initially derived from publicly available data
complied by COCIR. Companies not providing information to
COCIR include GMM, SIMAD, Sia, Eurocolumbus, Technix,
Metaltronica, Gilardoni, and Villa, mainly active in Italy, Greece,
Spain, Portugal. COCIR provides information on C-arms sales in
the United
Belgium, France,
Kingdom, Spain and Sweden. The parties do not have COCIR
information for
Ireland, Greece, Portugal,
Denmark and Austria.

Finland, Norway,

the Netherlands,

Italy, Germany,

(55) Frost & Sullivan, US Fluoroscopy and Mobile C-arms Markets,
Chapter 6 World Mobile C-arm Market (2002), 6-1 considers these
as ‘smaller local companies and the value end of the market that
are considered to be assemblers of
full-size C-arms and not
manufacturers. They procure parts such as X-ray tubes and image
intensifiers from other manufacturers and assemble a general
mobile C-arm as opposed to a user focused C-arms used for
specific purposes such as vascular surgery'.

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Table 3

Low-end C-arms: market shares 2002

Company

High market shares

Low market shares

Instrumentarium

GE

Finland

Denmark

Spain

France

[50-60]* %

France

[30-40]* %

Niederlande

[40-50]* %

United Kingdom

[40-50]* %

Austria

Philips

Netherlands

[50-60]* %

Italy

Sweden

Austria

Belgium

Siemens

Source: the notifying party.

[50-60]* %

Finland

[40-50]* %

[30-40]* %

Italy

Spain

Table 4

Vascular C-arms: market shares 2002

Company

High market shares

Low market shares

Instrumentarium

GE

Philips

Siemens

Source: the notifying party.

Austria

Finland

Norway

France

Finland

Belgium

Denmark

France

[70-80]* %

[40-50]* %

France

Spain

[60-70]* %

Germany

[50-60]* %

Finland

[50-60]* %

Denmark

[50-60]* %

[50-60]* %

France

Austria

[30-40]* %

Belgium

[0-10]* %

[0-10]* %

[0-10]* %

[0-10]* %

[10-20]* %

[0-10]* %

[0-10]* %

[0-10]* %

[0-10]* %

[0-10]* %

[0-10]* %

[0-10]* %

[10-20]* %

[0-10]* %

[0-10]* %

[0-10]* %

Price differences in the Member States

(82)

The investigation has shown that there are significant
price differences between the Member States, suggesting
national markets. The prices referred to in recital 83
have been obtained from GE and are average net prices
by country of direct sales for GE's mobile C-arms for a
basic model for year 2002.

[15 to 20 %]*). When
Norway (price difference of
considering the basic configuration of the […]* (56), for
example in Germany, the product is priced at EUR […]*
and in comparison in Italy at EUR […]* and in Norway
at EUR […]* (price difference up to [25 to 30 %]*).
Similarly, significant differences in the price of […]* can
be established from EUR […]* in Germany to EUR […]*
in Italy and EUR […]* in Norway (price difference up to
[40 to 45 %]*) (57).

(83)

For instance, as regards GE's product […]*, the price
ranges from EUR […]* in Germany to EUR […]* in

(56) […]*.
(57) Annex 6.16 to Form CO. GE's average net price 2002 with most

basic configurations.

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Distribution and after-sales service

5. Mammography devices

(84)

(85)

(86)

(87)

and

after-sales

low-end C-arms

The market investigation has confirmed that as regards
vascular
service,
maintenance and training are important factors when
final purchasing decision. Third parties
taking a
including
emphasise that local distribution operations,
is necessary for a
the provision of after-sales services,
supplier
in the country
concerned (58).

to be a credible supplier

specifications

In addition to product
and quality,
after-sales service, continuous maintenance, training and
the capacity of providing maintenance and service over
the whole life-cycle of the product are considered as
important when taking the final purchasing decision. As
regards training of personnel, the market investigation
has indicated that training is considered as an important
element and the level required varies. The notifying
party acknowledges that, for example, in Sweden a high
level of training is required for in-house technicians (59).

the market

insignificant part of

investigation indicate that
The results of
service is estimated to amount annually up to 10 % of
the final price of
the product but with appreciable
variations between Member States (60). Therefore, it also
constitutes a not
the supplier's
revenues. In Italy, where the cost to the customer of the
servicing of GE C-arms appears the highest (up to [10
to 20 %]* per annum of the original equipment price),
its C-arms.
GE itself
Instrumentarium's
also indicate
servicing constituting approximately [10 to 20 %]* of its
diagnostic imaging sales in Europe and identify […]* as
focus markets for its new strategy on service contract
business (61). GE distributes direct in all EEA Member
States, whereas Instrumentarium uses distributors in
[…]*.

[40 to 60 %]* of

internal documents

services

the purposes of

For
therefore, each
Member State constitutes a separate relevant geographic
market.

this Decision,

(58) Most hospitals' responses to Question 6 of

the Commission's
Article 11 letter of 23 to 27 May 2003 gave most weight to
factors such as continuous maintenance, local customer support,
and after-sales service in addition to specifications, quality and
price.

(59) Annex 6.16 to Form CO, p. 9.
(60) Replies to the Commission's Article 11 letter to hospitals (mobile
C-arms customers) of 11 March 2003. See also Annex 6.13 to
Form CO.

(61) Instrumentarium Diagnostic Imaging — Strategic plan 2002.

Presence in the individual Member States

(88)

The Commission's market investigation has shown that
the markets for mammography devices are national in
scope, as several factors generally accepted as indicators
of a national dimension of a geographic market
definition are present.

(89) According to the figures submitted by the notifying
party (62) and the market-shares calculation performed
by the Commission, the relative market positions of GE
and
between
different Member States. The market penetration of the
other principal multinational
such as
Siemens, Philips, or Planmed and Hologic/Lorad, also
varies according to the Member State.

Instrumentarium vary

competitors,

significantly

(90)

(91)

For example, in 2002, GE had a market share above [40
to 50 %]* in Belgium, Germany, Greece and Portugal
but only [10 to 20 %]* in the Netherlands. Equally,
Instrumentarium had a market share above [40 to
50 %]* in Finland and Norway, [10 to 20 %]* in Italy
but only [0 to 10 %]* in Germany. Furthermore, GE did
not have any sales in Denmark, Finland, Sweden and
Norway, while Instrumentarium was either not present
or had market shares below [0 to 10 %]* in Austria,
Germany, Ireland, and Portugal.

Similarly, the presence of the parties' competitors varies
significantly from one Member State to another. Even
though Siemens is generally represented throughout the
EEA area, albeit with different levels of market presence
in individual Member States, all the other competitors,
such
and
Philips, Giotto
Metaltronica, operate in only a few Member States.

Planmed, Hologic,

as

Price differences in individual Member States

(92)

The Commission's market investigation has shown that
purchases by private and public customers are made at
local
level and that manufacturers are able to apply
different prices at national level.

(93) GE

has

national

price

lists

for

presenting substantial price differences

its

products
in different

(62) Annex 6.11 to Form CO.

16.4.2004

EN

Official Journal of the European Union

L 109/15

Member States (63): GE's list prices are significantly
higher, for instance,
in […]* than in […]*, […]* and
[…]*. They are even lower in Spain. Instrumentarium
has used EEA-wide price lists for the last years but
applies differentiated
to its distributors
discounts
depending on the country. These discounts vary from
[…* %] to almost […* %] (64).

Regional or national distribution networks

(94)

instance,

its mammography

Instrumentarium sells

The distribution strategy followed by each of the parties
from one country to another. GE and
also varies
Instrumentarium sell direct to the final customers in
certain countries while they rely on distributors in
[90 to
others. For
100 %]*
through
of
distributors (65) in […]* but […]* (only [20 to 30 %]* of
sales effected through distributors), […]* and […]* ([80
to 90]* % through distributors), […]* and […]*. These
distributors are independent companies that operate in
one given Member State or
in a region within a
Member State. This enhances the local characteristics of
the markets for mammography devices.

devices

(95) GE used to sell through distributors only in […]*. It
ceased to sell through its […]* distributors in 2001 and
early
acquired
2003.
distributor
in
its mammography
Consequently, GE currently sells
devices to final customers through its own distribution
network.

Irish

its

Distribution and after-sales service

(96)

The Commission's market investigation has showed that
customer/supplier relationships are formed principally
on a national basis. Successful sales and the degree of
each mammography producer's penetration in a given
national market depend quite
decisively on the
distribution activity and after-sales servicing staff being
available and ready to provide assistance to hospitals
and to private practitioners on an immediate basis.
generally
Training

and maintenance

services

are

provided by the manufacturers and are usually agreed as
part of the purchase of the equipment (66).

of

by

are

the

States

primary

importance

(97) When it comes to purchasing decisions in hospitals or
and decisions on tender
in private organisations
the familiarity and reputation of each
specifications,
manufacturer
to
decision-makers. The purchase decision is taken in most
Member
administration's
commercial department or by private organisations in
coordination with the appropriate medical staff familiar
with the equipment,
the radiologists. Specifications
defined by doctors and their needs in terms of product
specificity and application priorities are decisive factors
in purchase
reason why
manufacturers present their equipment at trade fairs and
medical congresses and pursue customer contacts with
practitioners.

decisions. This

hospital

the

is

(98)

The results of the investigation confirm that customers
require assistance and expert knowledge on the part of
the supplier's distribution and servicing staff.
In fact,
customers consider it very important that manufacturers
service and
should be able
continuous maintenance over
the
equipment. Local distribution services are particularly
necessary for customers of mammography devices,
given the number of private practitioners and private
level being among the
local
clinics that operate at
customers of these devices.

to provide after-sales

the life span of

(99)

Furthermore, GE and Instrumentarium, as well other
competitors, are not present in all Member States. This
indicates that there are some difficulties in obtaining a
reliable after-sales service network even through third
parties. For example, GE is not active in […]*, […]*,
[…]* and […]*, while Instrumentarium is not present in
[…]* and […]*.

Conclusion

(100)

In the light of the above elements supported by the
geographic
Commission's market
markets for mammography devices are considered to be
national in scope.

investigation,

the

(63) See GE's answer to question 9 of the Article 11 letter dated 8 May

2003.

(64) See Instrumentarium's answer to question 4 in the Commission's

questionnaire dated 16 May 2003.

(65) See Instrumentarium's answer to question 1 of the Article 11

letter dated 8 May 2003.

(66) In the market investigation public and private customers were
factors when
asked to assess the importance of 20 different
choosing
11
(Article
supplier
questionnaires). The more valued factors in each national market
were: specifications, quality continuous maintenance, maintenance
and service over the whole life-cycle of the product, after-sales
service, price and training.

a mammography

devices

L 109/16

EN

Official Journal of the European Union

16.4.2004

C. COMPATIBILITY OF THE CONCENTRATION WITH THE

COMMON MARKET

A. Horizontal effects

1. Patient monitors

1.1 Perioperative patient monitors

G e n e r a l m a r k e t f e a t u r e s

(101) External studies (67) provided by the notifying party
underline that the perioperative monitoring market has
in the various
been experiencing several
European countries in the last few years. The market
has become a stable and mature market (68) in which
pricing
and
technological
consolidation have become crucial factors.

innovation

strategy,

changes

(102) Perioperative

for

are

patient monitors

tenders. Their product preferences

differentiated
products. The products offered by the various suppliers
present different strengths and weaknesses depending on
customers' preferences. This is also the case where
hospitals meet their needs for these products through
calls
find
expression via detailed technical specifications and thus
into
restrict
have
consideration.
the
established in particular that,
anaesthesiologist, who is
this
equipment, plays an important
role in making the
choice of a perioperative patient monitor.

in most countries,
the primary user of

range of products
Commission's

come
enquiries

that

The

the

why hospitals award procurement contracts on the basis
of the ‘most economically advantageous' procedure that
allows them to select products primarily on the basis of
their quality and performance, rather than exclusively
on the basis of a ‘lowest price' offer. Furthermore, the
technical specifications requested by customers have
become more and more complex and demanding for
manufacturers. Not only multiparameter monitors have
now become standard practice within the perioperative
area, but manufacturers have also added new features
and capabilities to their monitors as a result of a
demand for sophisticated measurements from hospitals
in particular, anaesthesiologists (69). The latest
and,
innovative developments include new parameters
to
measure the depth of anaesthesia and the effects of
anaesthetics on the brain, which are becoming more
important for the users (70). Computer technology has
also become an important
these products
with the upgrading or development of new software
specifically adapted to the operating room in order to
enhance the quality of the anaesthesia record.

feature of

(104) Finally, the market has been going through a strong
period of consolidation. According to Frost & Sullivan
(F&S),
‘a few market players are indeed in control of
most of the market and the other players tend to divest
and focus their resources on a country basis or they
even tend to concentrate on other markets' (71). More
generally, F&S observes that the European anaesthesia
and respiratory
the
equipment market
perioperative monitoring market) is a mature market, in
which even a small gain in market share can be of
important value (72).

(including

M a r k e t s h a r e s

(103) Although they generally want to obtain lower prices,
technical specifications required from hospitals therefore
play a major role in their purchasing decisions. That is

(105) According to the information provided by the notifying
in the case of perioperative
in the

concentration would result

party in their Form CO,
monitors,
the
following market shares:

is going through a period of

(69) F&S, page 4-41; T for G, p. 31.
(70) See also T for G, p. 16.
(71) F&S, p. 4-50.
(72) F&S, p. 3 and 4 ‘The European anaesthesia and respiratory
equipment market
significant
consolidation. Smaller players are leaving the market and focusing
their resources on other sectors of healthcare. F&S also noticed a
trend toward divesting, that is, some companies are focusing on a
specific country. Finally,
there has been a high degree of
collaborations and alliances between companies. The major issue is
to understand which are the companies that will take advantage of
this situations. In a mature market, even a small gain in market
thus market consolidation
important value,
share can be of
represents a major challenge for all the market players'.

(67) Frost & Sullivan (F&S), European Anaesthesia and Respiratory
Equipment Markets Report, 2001, 3981-56; T for G market report:
Monitors and Ventilators (December 2000).

(68) T for G, page 10; F&S, 2001, p. 4-47.

16.4.2004

EN

Official Journal of the European Union

L 109/17

Table 5

Perioperative patient monitors

(%)

2002

EEA

A

BE

DK

DE

FI

FR

GR

UK

IRL

IT

NL

PT

ES

SW

NO

GE

[0-10]* [0-10]* [0-10]* [0-10]*

[0-10]*

[0-10]* [0-10]* [0-10]* [0-10]* [10-20] [0-10]* [0-10]* [0-10]* [10-20] [0-10]* [0-10]*

Instrumen-
tarium

[40-50] [50-60] [30-40] [20-30]

[30-40]

[80-90] [30-40] [20-30] [60-70] [30-40] [40-50] [30-40] [20-30] [50-60] [40-50] [0-10]*

Combined

[40-50] [50-60] [30-40] [20-30] [30-40]* [80-90] [30-40] [20-30] [70-80] [40-50] [40-50] [40-50] [20-30] [60-70] [50-60] [0-10]*

Philips

[10-20] [0-10]

[10-20] [20-30]

[10-20]

[0-10]* [10-20] [20-30] [10-20] [20-30] [20-30] [10-20] [20-30] [10-20] [10-20] [20-30]

Siemens

[10-20] [30-40] [20-30] [10-20]

[10-20]

[0-10]* [10-20] [10-20] [0-10]* [10-20] [10-20] [10-20] [40-50] [10-20] [20-30] [20-30]

Datascope

[0-10]* [0-10]* [0-10]* [0-10]*

[0-10]*

[0-10]* [0-10]* [0-10]* [0-10]* [10-20] [0-10]* [0-10]* [0-10]* [0-10]* [0-10]* [0-10]*

Others

[10-20] [0-10]* [20-30] [30-40]

[30-40]

[0-10] [30-40] [30-40] [0-10]* [10-20] [10-20] [20-30] [10-20] [10-20] [0-10]* [50-60]

Source: the notifying party.

(106) The notifying party thus estimates the merging parties'
combined EEA market share in 2002 at [40 to 50 %]*,
having been [40 to 50 %]* in 2000 and [40 to 50 %]*
in 2001, with fringe
a
substantial part of the market ([10 to 20* %], but [30 to
40 %]* and above in some national markets).

representing

competitors

(107) The notifying party indicates (73) that, because of a lack
of reliable publicly available sources, they have based
these market share calculations on their own estimates,
after having used two sources: their respective patient
monitoring sales and the sales data provided by the
European Coordination Committee of the Radiological
Electromedical
five
medical
(Instrumentarium,
Dräger, GE, Philips, and Siemens). The notifying party,
however, considers that COCIR understates the sales of
small rivals by approximately [30 to 40 %]* in the
perioperative market. They explain that they have thus
accordingly and that,
adjusted the data
in some
countries,
this ratio was adapted to reflect national
differences.

Industry (COCIR), a grouping of

companies

equipment

(108) However, despite the indication by the notifying party
that fringe manufacturers account for around [20 to
30 %]* of the EEA market (and for [30 to 40 %]* in
some
external market
studies (74)
indicate substantially lower market shares

national markets),

large

(73) Annex 6.5 of the Form C/O.
(74) See for instance, Frost & Sullivan 2001, ‘European Anaesthesia and
(F&S 2001); T for G

Respiratory Equipment Markets Report',
market report: Monitors and Ventilators (December 2000).

for small competitors and consequently, higher market
shares for the parties.

(109)

In view of the discrepancies between the estimates of
the parties and external market studies, the Commission
has done its own market share calculations based on the
sales figures of perioperative monitors given by them
during the investigation and by companies quoted by
the notifying party as competitors on the relevant
market (75). The Commission also requested from the
parties and their competitors to provide a breakdown of
their sales between direct sales to final consumers and
sales to distributors, as well as an estimate of the profit
margins of these distributors. These figures were used to
calculate the sales of perioperative monitors of each
player to end-users (76).

(110) The concentration leads to significant market shares
in some national markets. The following

additions
picture emerges for the years 2000, 2001 and 2002:

(75) The small players mentioned in the form CO (p. 44) as being
for perioperative monitors were Criticare
active in the market
Medical Systems, Datascope, Fukuda-Denshi, Huntleigh,
Invivo,
Nihon Kohden, and Welch Allyn Protocol. In the course of the
investigation, the parties were asked, in respect of the unattributed
market shares, to give a full list of their competitors.

(76) When firms did not provide the requested breakdown between
direct and indirect sales,
the average margin indicated by the
parties (as being common in the industry) was added to the
companies' turnover. This methodology was used in order not to
over-estimate the market shares of the parties to the concentration.

L 109/18

EN

Official Journal of the European Union

16.4.2004

Table 6

Perioperative monitors: Commission's findings*

(%)

2002

EEA

A

BE

DK

DE

FI

FR

GR

UK

IRL

IT

NL

PT

ES

SW

GE

[0-5]*

[0-5]*

[0-5]* [10-15]* [5-10]*

[0-5]*

[5-10]*

[0-5]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

[0-5]* [15-20]* [5-10]*

Instrumen-
tarium

[55-60]* [75-80]* [55-60]* [35-40]* [40-45]* [95-100]* [45-50]* [45-50]* [70-75]* [50-55]* [50-55]* [65-70]* [35-40]* [65-70]* [70-75]*

Combined

[65-70]* [75-80]* [60-65]* [50-55]* [45-50]* [95-100]*[55-100]* [45-50]* [80-85]* [55-60]* [50-55]* [65-70]* [35-40]* [80-85]* [75-70]*

Philips

[10-15]* [5- 10]* [10-15]* [30-35]* [15-20]*

[0-5]*

[20-25]* [35-40]* [5-10]* [20-25]* [15-20]* [15-20]* [5-10]*

[5-10]*

[5-10]*

Siemens

[15-20]* [10-15]* [20-25]* [15-20]* [30-35]*

[0-5]*

[10-15]* [10-15]* [5-10]* [20-25]* [20-25]* [15-20]* [50-55]* [5-10]* [10-15]*

Datascope

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[5- 10]*

[0-5]*

[0-5]*

[0-5]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

Others

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

125,4

4,6

3,9

2,3

23

4,3

15,6

1,6

32,9

1,4

14

5,3

2

7,8

4,2

Market size
(EUR
million)

Source: the Commission's investigation.

Table 7

(%)

2001

EEA

A

BE

DK

DE

FI

FR

GR

UK

IRL

IT

NL

PT

ES

SW

GE

[5-10]*

[5-10]* [5-10]*

[0-5]*

[10-15]*

[0-5]*

[5-10]*

[0-5]*

[5-10]*

[0-5]*

[5-10]* [15-20]* [0-5]* [25-30]* [10-15]*

Instrumen-
tarium

[55-60]* [55-60]* [45-50]* [70-75]* [40-45]* [95-100]* [45-50]* [80-85]* [70-75]* [60-65]* [50-55]* [50-55]* [55-60]* [50-55]* [65-70]*

Combined

[65-70]* [60-65]* [55-60]* [70-75]* [50-55]* [95-100]* [55-60]* [80-85]* [80-85]* [60-65]* [60-65]* [70-75]* [55-60]* [80-85]* [75-80]*

Philips

[10-15]* [5- 10]* [10-15]* [5- 10]* [10-15]* [5- 10]* [20-25]*

[0-5]*

[10-15]* [20-25]* [10-15]* [10-15]* [10-15]* [5- 10]* [5- 10]*

Siemens

[15-20]* [30-35]* [25-30]* [20-25]* [30-35]*

[0-5]*

[10-15]* [10-15]*

[0-5]*

[10-15]* [15-20]* [10-15]* [30-35]* [5- 10]* [15-20]*

Datascope

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

5,9

[0-5]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

Others

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

118,4

3

3,7

2,2

23,5

2,8

15,4

1,1

29,5

1,4

13,5

6,1

2,0

8,0

3,4

Market size
(EUR
million)

Source: the Commission's investigation.

16.4.2004

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Official Journal of the European Union

L 109/19

Table 8

(%)

2000

EEA

A

BE

DK

DE

FI

FR

GR

UK

IRL

IT

NL

PT

ES

SW

GE

[10-15]* [0-5]*

[5-10]*

[0-5]*

[5-10]*

[0-5]*

[10-15]*

[0-5]*

[10-15]* [15-20]* [5-10]* [25-30]* [0-5]* [25-30]* [5-10]*

Instrumen-
tarium

[50-55]* [65-70]* [55-60]* [65-70]* [45-50]* [85-90]* [45-50]* [50-55]* [60-65]* [35-40]* [50-55]* [35-40]* [30-35]* [50-55]* [60-65]*

Combinded [65-70]* [70-75]* [60-65]* [65-70]* [55-60]* [85-90]* [55-60]* [50-55]* [75-80]* [55-60]* [60-65]* [65-70]* [30-35]* [75-80]* [65-70]*

Philips

[10-15]* [0-5]*

[5- 10]* [10-15]* [10-15]* [10-15]* [15-20]*

[0-5]*

[10-15]* [25-30]* [10-15]* [5- 10]* [5- 10]* [5- 10]* [5- 10]*

Siemens

[15-20]* [20-25]* [25-30]* [15-20]* [30-35]*

[0-5]*

[20-25]* [35-40]* [0-5]*

[10-15]* [15-20]* [25-30]* [55-60]* [5- 10]* [25-30]*

Datascope

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[5- 10]*

[0-5]*

[5- 10]*

[0-5]*

[0-5]*

[5- 10]*

[0-5]*

Others

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

111,3

3,7

3,5

2,9

23,5

2,0

15,1

0,7

23,0

1,6

13,6

5,2

3,2

8,3

2,9

Market size
(EUR
million)

Source: the Commission's investigation.

significantly

(111) The parties' market share estimates in the Form CO are
thus
shares
estimated by the authors of external studies on the
European market known to the Commission and by the
Commission's market investigation itself.

than the market

lower

countries where GE had no activity or de minimis sales
in 2002 ([…]* (79)).

(112) The merger would therefore bring together two of the
four largest suppliers of perioperative patient monitors
in the EEA. At the EEA-wide level, the merging parties
would become the leading supplier of perioperative
patient monitors with only two remaining sizeable
competitors, Philips and Siemens.

(113) The notifying party argues (77) that, even on the basis of
the Commission's figures, their market position does not
give rise to dominance since the overlap is minimal,
with GE having around [5 to 10 %]* at the EEA level in
2002, behind Philips and Siemens. Furthermore, during
the course of the market investigation, Instrumentarium
has contested the provisional estimate made by the
Commission of
the
perioperative patient monitoring market by arguing that
they did not match the estimates of
the publicly
available external studies. However, the Commission's
estimates are consistent with F&S's forecasts (78).

the overall market

size of

(114) On the basis of

the
parties' market position at a national level will indeed
lead to a minimal overlap in a certain number of

the Commission's investigation,

(77) Response to the 6.1.c decision, p. 3.
(78) See the F&S's report (2001), at p. 4-44.

(115) However, the parties' combined market shares would be
close to or in excess of 50 % with an overlap exceeding
least 5 % in a certain number of countries. At
at
the merger would lead to significant
level,
national
combined shares (80)
([…]*),
Germany ([…]*), Spain ([…]*), Sweden ([…]*), and the
United Kingdom ([…]*) (81).

in particular,

France

(116) At least in countries where they exceed 50 % (France,
Spain, Sweden and the United Kingdom), the combined
market shares may in themselves be evidence of the
existence of a dominant position, in particular in view
of the fact that the merged entity would be twice the
size of its two main competitors, namely Philips and
Siemens. In Germany, the combined market share of the
merged entity is indicative of a dominant position
insofar as it would be in excess of 40 % and well above
the market shares of its two main competitors, Siemens
and Philips.

(79) In […]*, GE's 2002 market share corresponded to sales amounting
to EUR […]* and, in 2000 and 2001, […]*. As a result, market
shares for 2002 on their own are not sufficiently reliable.

(80) 2002 market shares.
(81) The Commission notes that,

the market shares were to be
if
calculated on the weighted average over the last three years, the
market shares of the new entity would be as follows — France:
[55 to 60 %]**; Germany: [50 to 60 %]**, Spain : [80 to 85 %]**,
the United Kingdom: [80 to 85 %]** and Sweden: [75 to 80 %]**.

L 109/20

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16.4.2004

(117) The notifying party

considers

this
combined share, the elimination of Instrumentarium as
an independent entity would not lead to the creation of
a dominant position on these markets because of the
following factors (82):

despite

that,

(a)

the market is a bidding market, characterised by
intense rivalry, where GE is not a major player in
the perioperative area and is not a close competitor
to Instrumentarium;

(b) major

rivals as well as

smaller players would
constrain any hypothetical attempt by the merged
entity to increase prices;

(c)

the competitive pressure will remain enhanced by
hospitals, which are to be considered powerful
buyers.

P u r c h a s i n g p r o c e s s e s

(118) Most purchases of perioperative patient monitors in
and the United
France, Germany, Spain, Sweden,
Kingdom are made through a tendering procedure. In
these countries, a high proportion of hospitals are
public sector facilities (83), which, as such, are subject to
public tendering rules. As is shown by bidding data
provided by the notifying party and their competitors,
private
tenders.
tend
Accordingly, the notifying party estimates at about 60 %
to 100 % the proportion of the sales made through a
tendering procedure depending on the Member State
concerned (84).

organise

clinics

also

to

(119) When deciding to launch a tender for patient monitors
the decision-making process is generally described as
follows by customers. Purchasing decisions typically
include the clinicians working in the relevant medical
department where the monitors are to be used. They
also involve, to a lesser or greater degree, the hospital's
biomedical engineers responsible for maintaining the
equipment, and the administrative staff who have
responsibility
the
the
triggers the
hospital. The need for new equipment
purchase of new material. As regards perioperative
patient monitors, the customers' survey has confirmed
this is largely done by anaesthesiologists who
that

financial operations of

for

(82) Form CO p. 54.
(83) Form CO, Annex 6.1: This goes from 40 % in France, 45 % in
Spain, 50 % in Germany, to 80 % in the United Kingdom and
Sweden.

(84) Form CO Annex 6.1. 60 % in Spain and Germany, 70 % in France,

80 % in the United Kingdom and Sweden.

in particular

in the
primarily use this equipment,
Operating room. They are therefore mainly responsible
for determining the technical specifications that
the
monitors must meet. Depending on the countries, the
purchasing decision is then triggered by the general
manager (85) or by an economic committee (86) or by a
commission of medical
in all
instances after negotiations with the doctors and the
medical staff needing the equipment.

specialists (87) but

are not generally

(120) Because hospitals primarily value the quality and the
specifications of the products when they make a choice,
winning bids
allocated to the
lowest-price bidder, but to the supplier that best meets
the individual hospital's requirements on both technical
and economic grounds. As was observed in recital 103,
procurement contracts are awarded on the basis of the
‘most economically advantageous offer', rather than by
following the ‘lowest price' procedure.

(121) The qualitative requirements are expressed mostly by
anaesthesiologists via detailed technical specifications,
which thus restrict the range of the products in question
according to their preferences. Suppliers respond to the
official tender by submitting bids and hospitals then
choose the supplier that best meets their requirements
on the basis of various cumulative criteria. According to
the market investigation, the following criteria are the
most important when choosing a monitor with slight
countries (88):
variations
and
specifications of the product, the price, the technical
service (training and after-sale maintenance over the
whole life-cycle of the product), and the ability of the
and develop new products.
supplier
Conversely,
to offer
the ability of a manufacturer
anaesthesia machines as well plays a very limited role in
the final decision (89).

to innovate

quality

across

the

(85) This is the case in the United Kingdom, Germany and Spain (See

customers' survey and also T for G, Section 3.2, p. 4-7).

(86) This is the case in France (See customers' survey and also T for G,

Section 3.2, p. 6).

(87) This is mostly the case in Sweden according to the customers'

survey.
(88) According

in

to

the

survey,

France,

quality,
customers'
important
specifications, and after-sales service were the most
factors before price. In Germany, the long-term prospects of the
supplier and its ability to innovate are also mentioned as
important factors before price. In Spain, customers put emphasis
on quality and specifications as well as on after-sales, training and
compatibility with existing monitors. In the United Kingdom, the
to provide training came as the first
ability of
mentioned factor,
service and
specifications. In Sweden, after-sales service, quality and training
came as the first mentioned factors.

just before quality, after-sales

the supplier

(89) In all countries, this came as one of the least important factors

together with the need to have a local production plant.

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A c t u a l c o m p e t i t i o n

(122)

In this case, the fact that purchases mostly go through a
tendering procedure in the various Member States does
not fundamentally affect the value of market shares as a
strong indication of the merged entity's market power.
The market investigation has shown that, on average, in
each of the Member States concerned, the value of each
contract won on a tender is relatively low and the
number of tenders for perioperative monitors annually
is fairly high (90).
In addition, customisation in this
market is fairly restricted since the specifications of the
tender already determine whether a given supplier will
submit a bid or not. Finally, there are no significant
variations in the size of the market for perioperative
monitors in particular in France, Germany, Spain, the
United Kingdom and Sweden, and in the market
shares (91) of the main competitors, between 2000 and
2002.

(123) Furthermore, the market for perioperative monitors is
not significantly different from a standard differentiated
product market. Although products
are procured
through a tendering process, customers' preferences are
reflected in the technical specifications of the tender
in turn, determine the number of eligible
which,
bidders. Customers have
for
switching to
specific devices
another model only in response to a more or less
significant price rise (relative to competitors). The
relative closeness of substitution between the various
products, even within one and the same relevant
product market, thus forms an important parameter of
competition in these markets and has an important
influence on suppliers' market power. Market shares
thus contain important information as they reflect real
purchasing decisions by customers in a given year.

individual preferences

and would consider

(124) Consequently, the Commission does not share the view
that market shares are meaningless in this particular
market.

(125)

In order to assess whether the market shares of the
merging parties overestimate or underestimate their

(90) Bidding data submitted by Instrumentarium thus revealed that, out
of […]* bids in the EEA, [80 to 90 %]* of them were less than
EUR 100 000 in value. In France, for example, the proportion
reached [90 to 100 %]* between 1998 and 2002.
In Spain,
Instrumentarium mentions […]* bids to which it participated
between 1998 and 2002. Out of […]* bids that they won, […]*
were less than EUR 100 000. The same proportions can be
observed in Germany ([…]* won bids, out of which […]* were
less than EUR 100 000) and the United Kingdom ([…]* won bids
out of which […]* were less than EUR 100 000).

(91) […]*.

market power, the Commission has proceeded to an
in-depth analysis of the nature of competition in this
bidding market. First, given that competition in these
tenders is determined by the number and identity of
competitors present, the frequency of encounters of the
various market players has been scrutinised. Secondly,
since in a differentiated product market competition is
all the more intense as competitors are close substitutes,
the closeness of substitution is further analysed both on
qualitative
the
Commission sought to determine, on the basis of the
available data, the possible price impact of the proposed
operation.

quantitative

grounds.

Last,

and

GE's positioning on the perioperative market

(126) The notifying party claims that GE is not a major player
such, does not
in the perioperative area and, as
appreciably
current
affect
position (92). According to the notifying party, GE and
Instrumentarium are not, therefore, close competitors in
the perioperative monitoring market (93). Market shares
thus overstate — it is argued — the competitive impact
of the transaction.

Instrumentarium's

(127) The notifying party relies,

inter alia, on the range of
products offered by GE and its market positioning
primarily focused on the critical care area. However, the
notifying party acknowledges that GE offers several
types of monitors for use in the perioperative area (the
Solar 9500, the Solar 8000M and the DASH Series (94)),
in
them present
and that each of
comparison to competitors' products. GE's offerings thus
include a wide range of monitors, from the low to the
high-end, with parameters and functionalities specifically
adapted to this market. GE is even quoted by several
market participants as a leader in terms of research and
development in the field of perioperative monitors (95).
Therefore, the fact that GE is a stronger player in the
critical care area does not disqualify it as one of the four
major suppliers of perioperative monitors.

some strengths

(128) The

good

reputation of GE's monitors

in the
perioperative area is
further confirmed by external
studies. T for G thus stresses, as regards the image
perception of the parties' products, that ‘GE- Marquette

(92) Form CO p. 54.
(93) Form CO p. 51.
(94) Form CO p. 52.
(95) See responses to the Commission's Article 11 letter to competitors

on R&D of 28 May 2003.

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16.4.2004

has a rather high image in anaesthetics' (96). Frost &
second tier of
Sullivan also include GE in the
competitors
Siemens, with
and
alongside
Instrumentarium being in the first tier (97).

Philips

Siemens

generally

consider
and

(129) The hospitals surveyed by the Commission's market
GE,
investigation
Instrumentarium,
supply
perioperative patient monitors of comparable quality. In
each country, GE's monitors
by
respondents as high quality monitors in the operating
room, with the highest average mark in some Member
States in terms of specifications (98). On average, all four
major suppliers are ranked at the same high level in the
various countries concerned.

considered

that
all

Philips

are

(130) These elements contradict the assumption made by the
notifying party that, from a qualitative viewpoint, GE
should be considered neither a major player nor a close
competitor to Instrumentarium.

Statistical analysis conducted by the Commission

(131)

In order to assess the intensity of competition between
the merging parties, the Commission conducted a series
of statistical analyses based on the bidding data provided
by Instrumentarium, GE, Draeger, Philips and Siemens.
The data provided by Siemens were not useable for this
type of analysis. The bidders present
in each tender
were identified in 3 355 cases throughout the EEA over
the last
the
Commission considered the sample of bids won by
either GE (either direct or via Draeger), Instrumentarium
or Philips to be representative.

In the following analysis,

five years.

it has no chance of winning,

the more
believes
frequently two firms face each other in a given country
relative to other potential bidders the more likely it is
that their products can be considered close substitutes
— at least from the sellers' perspective. In addition, the
presence of a supplier in a tender is constrained by the
technical specifications required by the hospital which
thus
can
potentially win the bid.

competitors

range of

restricts

that

the

(133) At the EEA level,

it appears that the merging parties
encountered each other in [50 to 60 %]* of the cases.
Moreover, they faced no competitor in [20 to 30 %]* of
the cases and only one single competitor in [20 to
30 %]* of the cases. When looking at the identity of the
parties' competitors, it turns out that in [30 to 40 %]*
of the cases, irrespective of how many competitors were
present, the merging parties faced neither Siemens nor
Philips but only various fringe players. This would
suggest that the merger may result in a reduction of the
number of significant players from two to one in one
tender out of three.

of

(134) The competitive constraint exerted by the merging
parties on each other also appears in the bidding
data (99) provided by Philips:
the latter won [70 to
80 %]*
nor
neither GE
tenders where
the
Instrumentarium were present, [60 to 70 %]* of those
where only Instrumentarium was present, [50 to 60 %]*
of those where GE only was present and only [30 to
40 %]* of
those were both GE and Instrumentarium
were present. Therefore, Instrumentarium appears to bid
In addition, when both
lower when GE is present.
Instrumentarium and GE are present, Philips tends to
bid lower. The merging parties together thus exert a
stronger competitive constraint on Philips.

(132) The Commission first analysed how often the merging
parties encountered each other within those 3 355
the auctions in
tenders. Given that suppliers select
which they participate, so that a firm does not bid if it

(135) At

the national

level

there

are

strong contrasts,

depending on the country.

(96) T for G, p. 26.
(97) F & S 3981-56, p. 4-49.
(98) This is the case for instance in France.

In Sweden, GE and
Instrumentarium come first before Philips and Siemens.
In the
United Kingdom, Instrumentarium comes first before Philips, GE
In Spain, customers ranked Instrumentarium first
and Siemens.
Instrumentarium
before GE, Siemens and Philips.
comes first, before GE, Philips and Siemens at the same level.

In Germany,

(136) As regards the German market, the results suggest that
GE provided by far the strongest competitive constraint
on Instrumentarium. Both met in [70 to 80 %]* of all

(99) 551 data points out of Philips' bidding data were useable for this

analysis.

16.4.2004

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Official Journal of the European Union

L 109/23

figure may
432 tenders under consideration. This
overestimate (100) the proportion of bids where both
parties actually met in Germany, since it has not been
possible to use in this analysis the bidding data provided
by Siemens.
Indeed, Germany is the national market
where Siemens' turnover is the highest. Nevertheless,
the above figure strongly contrasts with those relating to
Philips or Siemens: Philips only participated in bids
against Instrumentarium in [10 to 20 %]* of cases and
Siemens in [20 to 30 %]* of the cases.

70 %]*) but less than GE and all three firms compete in
only [40 to 50 %]* of the cases. Philips,
in contrast,
competes against
Instrumentarium rather infrequently
([30 to 40 %]*). Besides, the merging parties face no, or
only one, extra competitor in [60 to 70 %]* of
the
tenders where they encounter each other. Among these
tenders, the merging parties face neither Siemens nor
Philips in [20 to 30 %]* of the cases.

(137)

Furthermore, the statistical analysis of the bidding data
revealed that the merging parties encounter no other
competitor in [40 to 50 %]* of the tenders where they
meet (101), and only one single competitor in a further
[30 to 40 %]* of these tenders. As a result, the merging
parties face one or no competitor in [70 to 80 %]* of
the tenders where they encounter each other. Moreover,
it turns out that,
in [80 to 90 %]* of the cases, this
extra competitor is neither Siemens nor Philips, but a
fringe player. These figures
that, given the
impact of technical specifications on the presence of
competitors in tenders, the merger is likely to lead to a
reduction of the number of significant players from two
to one in most of the tenders where the merging parties
used to compete head-to-head.

suggest

the

strongest

competitive

(139) As far as France is concerned, GE also appears to be by
far
on
Instrumentarium: GE competed with Instrumentarium
in [70 to 80 %]* of all 1 122 tenders analysed.
In
contrast, Siemens faced Instrumentarium only in every
other tender ([50 to 60 %]*), Philips only in less than 1
tender out of […]* ([10 to 20 %]*). All four competitors
meet very rarely ([0 to 10 %]*).

constraint

(140)

for

instance,

Kingdom,

In the remaining countries, the figures suggest that GE
In the
and Instrumentarium met more occasionally.
United
faced
GE
Instrumentarium in [20 to 30 %]* of a total of […]*
tenders, while Philips competed with Instrumentarium
([40 to 50 %]*).
in almost
Nevertheless,
and
Instrumentarium met, they faced no other competitor in
[60
one
the
extra-competitor in further [20 to 30 %]* of the tenders.
This suggests that there is one or less competitor facing
the merging parties in [80 to 90 %]* of the tenders
where they meet.

every other
among

bids where GE

70 %]*

tender

cases

only

and

the

to

of

(138)

source

In Spain, the figures also suggest that GE again provides
the main
to
Instrumentarium. They face each other in [60 to 70 %]*
tenders (out of a total of 542 tenders). Siemens,
of
([60 to
however, also remains a close competitor

competition

actual

of

(100) Under certain assumptions, it is possible to assess to what extent
the analysis overestimates the frequency of encounters of both
parties in Germany. As a matter of fact, it could reasonably be
assumed that GE and Instrumentarium met in the bids won by
Siemens roughly as often as in the bids won by Philips, i.e. [20 to
30 %]* of the cases, according to a study submitted by Philips on
8 May 2003. Since Siemens' market share (i.e. won bids in value)
in Germany is in the range of [30 to 40]* %, it can be inferred
that GE and Instrumentarium meet in [70 to 80 %]* of the cases
in [70 to 80 %]* of
either
the bids
Instrumentarium, GE or Philips) and in [20 to 30 %]* of the cases
in [30 to 40 %]* of the remaining bids (those won by Siemens).
This lead to an extrapolated frequency of encounter of [50 to
60]* %. This figure shows that Instrumentarium encounters GE
still significantly much more often than Siemens ([20 to 30 %]*)
or Philips ([10 to 20 %]*).

(those won by

(101) Among the 432 tenders in Germany where the information about
the present bidders was available, the parties were simultaneously
present in [300 to 350]* tenders. Among those, the parties were
the only bidders in [100 to 150]* tenders, faced one single other
competitor in [100 to 150]* bids, among which [50 to 100]*
corresponded to a fringe player (i.e. any player but Siemens,
Philips or the parties).

(141) The picture is similar in Belgium (both parties competed
against each other in [10 to 20 %]* of […]* tenders) as
well as in Finland (they met in [0 to 10 %]* of […]*
tenders). In other EEA countries, the number of useable
tenders was too limited to draw any reliable conclusion.
For instance, in Sweden, the results tend to show that
Instrumentarium slightly more
GE competed against
often ([40 to 50 %]*) than Philips ([30 to 40 %]*) or
Siemens ([30 to 40 %]*). However, the Commission only
had at its disposal all the necessary information to run
this analysis for 19 tenders in Sweden over the last five
years. Therefore, only limited statistically significant
results can be derived from these data.

Win-loss analysis provided by the notifying party

(142) Economics Ridyard, Bishop & Baker

(RBB) has
submitted, on behalf of the notifying party, an analysis

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16.4.2004

they overstate,

of win-loss data to corroborate the contention that the
shares of GE and Instrumentarium do not
market
in fact,
accurately reflect, and,
the
the notified transaction. The
competitive impact of
‘to the extent that GE
notifying party considers that,
constraint on the
competitive
a more
provides
behaviour of Instrumentarium than other suppliers in
the relevant market, one would expect to see GE as the
second-placed bidder for a large number of those bids
won by Instrumentarium and vice-versa' (102).

(143) The RBB win/loss study is based on [2 000 to 2 500]*
tenders for perioperative monitors that Instrumentarium
won across the EEA (103) between 1998 and 2003 (104).
‘runner-up', meaning the
The
tender won
second-placed
by
each
Instrumentarium for which the
information was
available to the merging parties. The runner-up is taken
to be the closest competitor to Instrumentarium.

study identifies
bidder

the
in

Siemens is a runner-up in […]* (106), […]*, […]* (107),
whilst Philips is a runner-up in […]*, […]*, and in the
[…]*.

(146) Of the [300 to 400]* tenders that occurred in France for
which the parties had relevant
information, GE's
monitors were runners-up to Instrumentarium's in [50
the cases, either when they were sold
to 60 %]* of
through Draeger ([100 to 200]* tenders) or when GE
directly participated in the tender ([0 to 100]*). Philips
was a runner-up in […]* tenders, or [10 to 20 %]* of
cases, while Siemens and Datascope came in second
place in […]* and […]* tenders respectively. In the [300
to 400]* tenders for Germany, GE's monitors were
runners-up to Instrumentarium's in [70 to 80 %]* of
cases, either when sold through Draeger ([…]*) or when
GE directly participated in the tender ([…]*), before
Siemens ([…]* — [10 to 20 %]* of cases), and Philips
([…]* — [10 to 20 %]*). In Spain ([400 to 500]* data
points), GE is runner-up in [60 to 70]* % of cases
either through Draeger ([200 to 300]*) or direct ([0 to
100]*), that is significantly more often than Philips ([20
to 30 %]*) and Siemens ([10 to 20 %]*).

frequent

the most

(144) Although the notifying party primarily relies on this
study to argue that GE was not
Instrumentarium's
closest rival, these data show that between 1998 and
runner-up to
2003 GE was
Instrumentarium in the perioperative monitoring in
Europe. According to the data submitted by the parties,
at
the EEA level, bids containing GE's perioperative
monitors are reported as runners-up in [30 to 40 %]* of
all tenders won by Instrumentarium, either when they
were sold through Draeger then acting as an exclusive
distributor for GE ([700 to 800]*) or when GE directly
participated in the tender ([100 to 200]*). Philips' bids
the
are recorded as runner-up in [30 to 40 %]* of
tenders, and [10 to 20 %]* for those of Siemens. Other
competitors account for [10 to 20 %]* of the runner-up
bids, including Datascope with [0 to 10]* %.

(145) GE

far

is by

the most

runner-up to
[…]* and
Instrumentarium in three countries:
[…]* (105). GE's monitors qualify as
runner-up less
frequently than Siemens or Philips in all other countries:

frequent

[…]*,

(102) RBB Study, p. 3.
(103) The data include only less than ten data points in Austria and

Norway.

(104) The data set contains more than 10 observations

the
following countries: Belgium ([200 to 300]*), Finland ([200 to
300]*), France ([300 to 400]*), Germany ([300 to 400]*), Greece
([0 to 100]*), Italy ([100 to 200]*), the Netherlands ([0 to 100]*),
Spain ([400 to 500]*) and the United Kingdom ([300 to 400]*).
(105) GE/Draeger is also identified as the runner-up in Norway in [50

for

to 60 %]* of cases but on the basis of nine data.

appreciably

(147) This would therefore suggest that, at least in France,
Germany, and Spain, GE is the closest competitor to
Instrumentarium. These data would strengthen the
presumption that, alongside a high market share on
these markets, the merged entity would have the ability
to
significant
proportion of its customers without being challenged by
its competitors. In such a situation, the take-over of the
rival would lead to a considerable loss of
closest
competition since,
the
merged entity will have the ability to increase its price
in the knowledge that the dissatisfied customer would
tend to buy its alternative product line.

in any new bidding round,

increase

prices

for

a

(148) The notifying party, however, considers
not,

factors
that GE was
Instrumentarium's closest competitor.

indicate

that other
fact,

in

(149) First (108), according to the notifying party, the absence
of a systematic correlation in substitution patterns
across the different countries show that there is nothing
intrinsic in the features of the products supplied by the
parties. The Commission notes however that, if brand
preferences vary across countries, this only reflects the
still different conditions of competition within each

(106) There are, however, only [0 to 10]* observations relating to

Portugal.

(107) Siemens is actually identified by the sales forces as the runner-up

in […]* out of [100 to 200]* bids.

(108) RBB study, p. 10.

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Member State. Furthermore, the fact that Draeger was
not the runner-up in certain countries is also explained
by the fact that it had a limited presence in the Member
countries where,
State
according to the parties' data, Draeger was not
the
it appears that Draeger
runner-up (Belgium, Finland),
had a very limited presence in the tenders.

concerned.

in the

Indeed,

(150) Secondly (109),

its

that

despite

Philips's)

the notifying party argues

the
competitive
constraint provided by Draeger/GE is
overstated insofar as, during this period, Draeger was
also actively marketing other suppliers' monitors (such
alliance with GE. The
as
Commission however notes that there is no evidence
that Draeger was actively selling other manufacturers'
monitors during the period in question where it had an
exclusive distribution contract with GE. In response to a
the notifying
Commission's question in that respect,
party was only able to quote two examples of bids
where it believed that Draeger had actively marketed
other suppliers' monitors (110). Bidding data provided by
Draeger show that its sales of competitors' monitors
have in fact been extremely limited. Finally, even
assuming that Draeger had been occasionally bidding
third parties' products, these bids would not alter the
significant
trend evidenced by the parties' data, as
Philips and Siemens were each considered as runners-up
in only limited proportions.

message that emerges from GE's internal documents is
that the rationale for this agreement was to allow GE to
have access to Draeger's distribution network and its
good relationship with anaesthesiologists. This
is
because GE had entered the market in 1998 with the
purchase of Marquette and needed to have access to the
perioperative market through an established distribution
for example,
network. GE's internal documents state,
‘one was
that there were two reasons for the alliance:
distribution;
closer
a
the other was
relationship with anaesthesiologists' (112).

to ensure

(154) The Commission acknowledges that Draeger's presence
in the upstream market
anaesthesia delivery
machines may have had a positive effect on GE's sales of
perioperative monitors.

for

from this

(155) However, far from suggesting that GE had no strong
internal
product offerings in the perioperative market,
documents also indicate that Draeger's position could
clearly benefit
to GE's
products. An internal document of 1999 (113) thus states
that, amongst other things, Draeger would have […]*
[…]*. This therefore suggests that Draeger
and that
would equally benefit
from GE's patient monitors
offerings on the anaesthesia machine market when
competing with Datex-Ohmeda.

alliance

thanks

The GE-Draeger alliance

(156)

(151) The notifying party also considers (111) that the relative
success enjoyed by GE/Draeger during the alliance was
due to Draeger's established anaesthesia products, to its
and to its
strong
distribution infrastructure, but not to the strength of
GE's perioperative monitoring offering.

relationship with anaesthetists

(152) GE entered into an alliance with Draeger in March
1999, whereby Draeger distributed GE's monitors to the
perioperative area on an exclusive basis in all EEA
countries. The alliance then turned into a non-exclusive
distribution agreement from February to May 2002, at
which date Draeger announced its new joint venture
agreement with Siemens.

(153)

In the course of the investigation, the notifying party
provided the Commission with internal documents
relating specifically to its commercial relationship with
Draeger during the period 1999-2002. The general

had

respondents

customers
The

In the course of the investigation, the Commission has
in those countries where GE/Draeger
tried to assess,
the
appeared as a runner-up to Instrumentarium,
bought
reasons why Draeger's
perioperative monitors.
only
represented a very small sample and the results appear
contradictory depending on the countries. In Germany,
a large majority of respondents indicated that they had
bought GE's monitors
own
characteristics rather than because they were sold by
Spain,
their
respondents tend to put more emphasis on the fact that
the monitors were provided by Draeger, whilst in France
the results were split.

supplier. Conversely,

anaesthesia

because

their

of

in

(157) More generally, however, the customers' survey seem to
contradict the suggestion by GE that its selection in bids
as the most frequent runner-up in the perioperative area
should only be attributed to Draeger's position in the
anaesthesia equipment market. Indeed, a vast majority
of customers choose a particular brand of monitors
because they meet the technical specifications required.
They also strongly rely on the ability of the supplier to
rely on a good distribution network able to provide

(109) RBB Study, p. 10.
(110) Response to Article 11 request of 10 June 2003, p. 2.
(111) RBB Study, p. 10.

(112) See e-mail of 25 September 2001 (from P. van Ryzin to K. King).
(113) Internal document of GE, […]*.

L 109/26

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Official Journal of the European Union

16.4.2004

and

after-sales

quality products

rank GE's monitors amongst

services.
continuous maintenance
the
Customers further
highest
together with those of
Instrumentarium, Philips and Siemens. Conversely, the
ability of a supplier to also offer anaesthesia machines
factor. The
does not
Commission's survey also shows that, when purchasing
new perioperative monitors, customers rely mainly on
the proven track record of the monitors' supplier and
the technology offered, whether or not switching from
one supplier to another.

an important

appear

as

(158)

when

bidding

competitors,

its monitors and the effectiveness of

In light of the foregoing, there is reason to consider that
GE's position in the perioperative area compared to
other
against
should also be attributed to the
Instrumentarium,
quality of
its
distribution network through Draeger, rather than only
to the fact that Draeger also had a product offering in
the anaesthesia and the ventilation markets. This seems
submission in its
also confirmed by GE's
notification (114),
relationship with
regards
Draeger, that the success of a competitor's product in
the market depends on the effectiveness of
its sales
force, as well as its size.

initial
its

as

(159) The notifying party claims

that GE was only the
runner-up in countries where Draeger had a strong
position in the anaesthesia machine market and mostly
in tenders where monitors were sold together with the
anaesthesia machine. Nevertheless, they provide figures
which, in some countries, show no correlation between
Draeger's market shares in the anaesthesia market and
runner-up to
the number of bids where GE was
the notifying party
Instrumentarium. Thus,
to
runner-up
submits
Instrumentarium despite a [20 to 30 %]* market share
for Draeger
anaesthesia machines market.
Similarly, the notifying party acknowledges that GE was
never a runner-up to Instrumentarium in […]*, and
the bids in […]*, despite
only in [0 to 10 %]* of
Draeger's market shares amounting to [20 to 30 %]*
and [30 to 40 %]* respectively in those countries.

in […]*,
never

that GE was

in the

a

as

the

the

([200
party

the winner

identified as

minor part of all bids in France where Instrumentarium
([300 to 400]*) and
was
to 300]*).
runner-up
GE/Draeger
Furthermore,
themselves
notifying
acknowledges that, even when taking into account this
remained the
limited sample of bids, GE/Draeger
runner-up
other
competitors (GE/Draeger […]*; Siemens, […]*; Philips
[…]*) (116). In Spain, the notifying party indicates that
Draeger was only a runner-up in packaged bids, but
relies on [100 to 200]* identified bids out of [400 to
500]* previously identified bids.

Instrumentarium before

all

to

in Germany. There,

(161) The parties were also asked to provide figures for solo
the parties
and package bids
where
examples
provided
Instrumentarium won (117). Draeger was a runner-up to
Instrumentarium not only in packaged bids ([…]* out of
[…]*, i.e. [80-90 %]*) but also in [60-70 %]* of the solo
bids won by Instrumentarium ([…]* out of […]*).

[0-100]*

bids

of

(162) Finally, the notifying party argues that, following the
termination of the Draeger alliance in February 2002,
GE's market position has significantly deteriorated whilst
Draeger's position in the perioperative segment has not
weakened (118). The notifying party relies on the fact
that GE's perioperative monitoring sales have declined
in 2002 and that GE was rarely selected as a runner-up
to Instrumentarium between October 2002 and March
2003.

(163) The Commission notes however

rather

supplier's

that GE's

a
deteriorates,

relative
to a
decline in market shares in 2002 is inherent
relationship with its
situation where
distributor
than to Draeger's
activities as such. The notifying party acknowledges that
any supplier on the perioperative monitoring market
needs a dedicated distribution and sales staff (119) and
that GE's relationship with Draeger had deteriorated as
from February 2002. An internal document suggests
that GE itself viewed this decline in market shares as a
mere ‘transition' (120).

(160) As to the argument that GE was mostly a runner-up to
Instrumentarium when Draeger was not bidding for
solo monitors, the study relies on [100 to 200]* bids
won by Instrumentarium in France and [100 to 200]*
in Spain (115). In France, the notifying party claims that,
of the [0 to 100]* projects where Draeger was selected
as a runner-up, [70 to 80 %]* were for packaged bids
and [20 to 30 %]* for solo monitors. The Commission
notes that the study relies on data that only represent a

(114) Form CO, p. 47.
(115) RBB Study, p. 14.

(164) Because of

its size and its financial means, GE has
indeed the ability to establish a distribution network and
force on the perioperative market.
dedicated sales

(116) See pp. 14 and 15 of the RBB study.
(117) Response to Article 11 request dated 10 June 2003.
(118) RBB Study, page 16.
(119) Form CO page 47.
(120) […]*

16.4.2004

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Official Journal of the European Union

L 109/27

in

its

and

presence

Furthermore, given its position in the critical care
monitoring market
other
neighbouring markets for medical equipment such as
Clinical Information Systems, GE would have a strong
incentive in maintaining and growing its activities on
the perioperative monitoring market in order to present
customers with a full range of products. Finally, even
during this transitory period where it has to re-establish
a distribution network, GE was still able in 2002 to
in particular in […]*
retain a sizeable market share,
[…]*,
in […]*,
where it remains the number […]*,
[…]*, and […]*, and to remain present
in tenders,
thereby constituting a significant competitive constraint
to other major bidders such as Instrumentarium.
In
[…]*, GE was even able to gain market shares despite
not being distributed there in previous years.

has

exerted

that GE

constraint

(165) Therefore, the Commission considers that the temporary
reduction of GE's sales cannot be assumed to reflect the
competitive
on
Instrumentarium prior to the merger and would have
been likely to exert in the absence of the merger. It
follows in particular that the 2002 market shares only
reflect partially GE's actual presence in the market. As a
result, average market shares over the years 2000, 2001,
2002 better capture the likely market position of the
merging
under
the
consideration (France, Germany, the United Kingdom,
Spain, Sweden).

countries

parties

five

in

competitors (Philips and Siemens), and of a series of
paper invoices and bidding documents from the parties.
Based on the available data, the Commission attempted
the merger
to measure the likely price effects of
various
between GE
linear
econometric models, mainly multi-variable
regressions.

Instrumentarium using

and

(169) The price impact is measured via the impact on the
discounts proposed by the various competitors, in order
individual projects vary
to account
greatly in terms of specifications, equipment packages,
and accessories, so that the actual transaction prices are
not immediately comparable between different tenders.

for the fact that

(170) A number of problems were encountered in matching
form with the
the invoice data recorded in paper
bidding data
form. These
submitted in electronic
problems prevented the Commission from computing
the percentage discount applied to the list price for
many observations. As a result, the Commission was
not able to use the data for Instrumentarium.

Price impact due to the merger

The likely price effect in France

(166)

In order to better assess the impact of the transaction
the Commission has conducted a series of econometric
analyses
studies
examined
provided by a third party and the parties.

econometric

and

has

(167) The Commission has conducted its own analysis of the
likely price effect of the merger, based on the set of
bidding data collected from the parties and the main
competitors. The objective was to identify the effect that
Instrumentarium has on the price
the presence of
charged by GE/Draeger to its customers, and vice versa.
The Commission also analysed data from Philips and
Siemens to determine the price impact of
the joint
presence of GE and Instrumentarium on the market.

(171) The Commission gathered data from bids submitted by
the useable
and by Draeger. Most of
GE alone
observations were recorded in tenders organised in
France.

(172) The analysis of

average discount offered by the

the bidding data (121) provided by
Draeger suggests that the presence of Instrumentarium
in tenders does indeed impact on the Draeger's prices:
the
latter when
Instrumentarium was present in the bid is [35 to 45 %]*
35 %]* when
to
Instrumentarium was not present. This difference is
statistically significant at 99 % level of confidence.

compared with

[25

be

to

(168) The data set for this analysis consists of electronic files
submitted by each party to the merger as well as

(121) [50 to 100]* tenders where Draeger won, from 2000 through

2002 in France.

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Official Journal of the European Union

16.4.2004

(173) When using linear regressions controlling for various
parameters (122), the econometric analysis carried out by
the Commission led to the conclusion that Draeger's
discount is [5 to 10 %]* to [5 to 10 %]* higher when
Instrumentarium is present than when Instrumentarium
does not participate in the tender. This leads to an
average impact on Draeger's discount of [5 to 10 %]* on
average. These results are statistically significant at 99 %
level of confidence. They provide empirical evidence
that Instrumentarium impacts on he pricing behaviour
of Draeger in France (123).

(174) As regards the bidding data provided by GE, an analysis
of the discounts offered by GE shows that they are on
average in the range of [20 to 30* %], when GE faces
only Siemens, [30 to 40 %]* when facing only Philips
and [40 to 50 %]* when facing only Instrumentarium.
As for Draeger, the Commission also ran regressions in
order to identify Instrumentarium's influence on GE's
discounts, if any. Given the characteristics of GE's data
set, the econometric model used by the Commission is
slightly different from the one used with the Draeger
discount data. The results from the estimation show that
GE discounts are on average [10 to 20 %]* higher when
Instrumentarium is present alone
than that when
Instrumentarium is not present. This result is statistically
significant at 99 % level of confidence. The Commission
notes, however,
these econometric results were
obtained using a small number of observations (124).

that

(175) The results of the data analysis for France shows that
the Draeger's (selling GE's monitors) and GE's discounts

(122) Given the data limitation, several variables were included in the
model to explain variations in Draeger's discount. For example,
the value of the final tender is one of these variables. Large
discounts may be associated with high tender value. Also, when
some customers may receive larger discount either because they
organise many tenders, or the overall value of their tenders is
important. The presence of other major bidders may also affect
the size of the discount offered by Draeger. In the [50 to 100]*
bid recorded that Draeger won, Instrumentarium and Siemens but
not Philips participated in the bids. Interestingly enough, when
Siemens is present, Instrumentarium is always bidding as well.
Conversely, when Instrumentarium participate
tender,
Siemens is not always a rival bidder. As a result, we let the
impact of Instrumentarium varies with the presence of Siemens.
[5 to 10 %]* and [5 to 10 %]* refer to the variation of Draeger's
discount due
Instrumentarium along with
to,
Siemens and Instrumentarium alone.

respectively,

in a

analysis

are larger when Instrumentarium participates in a bid
In addition, the Commission
than when it does not.
econometric
additional
appears
evidence that Instrumentarium constrains the sales of
GE's monitors. It thus further supports the presumption
associated with the merging parties high combined
market share.

to bring

T h e l i k e l y p r i c e e f f e c t a t t h e E E A l e v e l

Philips's bidding data

(176) Philips submitted an econometric analysis of its bidding
the merging parties are
data aimed at showing that
close competitors and that the merger would lead to
price increases.

(177) NERA Economic Consulting (NERA) on behalf of Philips
submitted, on 10 June 2003, an econometric study in
order to assess the possible impact of the merger on
prices in the perioperative and critical care patient
monitors markets. The study uses Philips' own data
based on recorded information about
the calls for
tenders in which Philips participated in 1999, 2000 and
2001 in several EEA countries, namely, Belgium,
Finland, France, Germany, Italy, Netherlands, Spain, the
United Kingdom, Portugal and Sweden. The data set
in most countries where the
contains observations
merging parties hold strong positions,
for
Ireland and Greece were no data were
Denmark,
available. The database
each tender,
according to Philips, which suppliers were present,
which one won,
the bid submitted by
Philips and the relating discount offered by Philips on its
list prices.

the value of

specifies

except

for

(178) The study considers the level of discount offered by
the level of price. NERA
Philips as an indicator of
considers
that a direct comparison between prices
would not be possible because the characteristics of
each product sold in the bids are different.

(123) The Draeger average discount when Instrumentarium is present is
about [30 to 40 %]*. Using this as a basis, a decrease of [5 to
10 %]* (respectively [5 to 10 %]*) in the discount of Draeger after
the removal of Instrumentarium would lead to a price increase of
[5 to 10 %]* (respectively [15 to 20 %]*) for the tenders in which
Instrumentarium was present.

(124) [50 to 100]* tenders where GE won, from 1998, 1999, 2001 and

2002 in France.

(179) Controlling for other relevant factors, the study attempts
to show to what extent the discount offered by Philips is
affected by the presence of certain competitors, and
more specifically whether the combined presence of GE
and Instrumentarium affects the final discount offered
by Philips to win a bid. The explanatory variables
include, inter alia, a set of country dummies to control

16.4.2004

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Official Journal of the European Union

L 109/29

for the possible difference in discount from one country
to another, the total value of the auction (in logarithm)
and a set of competitor dummies.

would be stronger in countries where the parties hold a
high combined market share,
the
United Kingdom, Germany and Sweden.

i.e. France, Spain,

(180) The results of the econometric estimation show that
Philips discounts are [5 to 10]* percentage points lower
when GE is present, but not Instrumentarium, and [5 to
10]* percent lower when Instrumentarium is present,
but not GE compared to situations where both merging
parties are participating in the bidding round (125).
These reductions of discounts correspond to price
increases of [15 to 20 %]* and [5 to 10* %], respectively,
given Philips' average discount (126). These results are
in which Philips participated
based on tenders
irrespective of whether Philips won or lost
the bid.
These results, therefore, measure the likely impact of the
merger on Philips' pricing behaviour.

(181)

In order to assess the impact on actual market prices,
the Commission requested NERA to reproduce the same
analysis on Philips' winning bids only (127). In this case,
there is still a difference in the discount offered by
Philips when GE is present but not Instrumentarium
compared to a situation where both merging parties are
participating to the bid. However, there is no longer any
statistically significant difference in the discount when
Instrumentarium is present but no GE compared to
when both parties are present.

(182)

It thus emerges from the analysis provided by Philips
that Instrumentarium provides a competitive constraint
to Philips, as the latter is forced to significantly increase
its discount. When focusing on the win and loss data, it
appears that Philips offers higher discount when the two
merging parties are present in a bid relative to when
only one of them is present. This would suggest that, as
the result of the merger, Philips would be likely to offer
lower discounts and would therefore be less constrained
when bidding in tenders.

Siemens' bidding data

(184) The Commission conducted a separate econometric
analysis based on bidding data supplied by Siemens. As
for the Instrumentarium data, no information on list
prices or discounts was available. In addition, it was not
possible to identify winning bids from losing bids. Using
the price deviation from average as described above, the
analysis aim at measuring the impact of the combined
presence of GE and Instrumentarium on the price
offered by Siemens in tenders where it either won or
lost. The results indicate that on average the combined
presence of the merging parties has a substantial effect
on the pricing behaviour of Siemens. The Commission,
however, is cautious about these results given the poor
quality of the original data.

GE's econometric study

(185) RBB on behalf of

the notifying party submitted an
econometric study (128) based on Instrumentarium's
bidding data. For the same reason indicated above with
regard to the NERA study,
the econometric model
presented by RBB uses the percentage discount off the
list price as the relevant variable of interest, and not on
the final transaction price. The study concludes that the
in those bids won by
presence of GE/Draeger
the final discount
Instrumentarium does not affect
the
addition,
In
offered
econometric results suggest that Philips represent the
main competitive constraint to Instrumentarium. Several
questions,
the
remain
empirical method used by RBB, which cast significant
doubts about the validity of the results presented by
RBB.

Instrumentarium.

unanswered

however,

on

by

(183) The Commission's

analysis of Philips'
econometric
bidding data led to similar results to those presented by
Philips,
thus confirming the latter. Although these
results relate to the average price effect of the merger at
the EEA level, it can be expected that this price effect

(125) The results are statistically significant.
(126) Philips' average discount for perioperative monitors is around
[30 to 40]* %, based on the study submitted by Philips on 8 May
2003.

(127) See exhibit 3 in Philips' study dated 10 June 2003, column (a).

(186) The econometric study uses data from four countries,
namely Italy, Germany, Spain and the United Kingdom.
However, a previous win/loss analysis submitted by RBB
contained a large amount of data points from France. It
is not clear at this stage why these data points were
the
discarded from the econometric study. Finally,

(128) RBB study ‘A preliminary critique of NERA's econometric analysis
of the perioperative monitoring market', dated 24 June 2003.

L 109/30

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Official Journal of the European Union

16.4.2004

Instrumentarium discount data used by RBB appears to
be based on the recollection of the company's country
managers. As
the
Commission to verify the validity of these discounts, the
Commission cannot
the
rely on the
econometric study submitted by RBB.

is no objective way for

results of

there

F r i n g e p l a y e r s a n d p o t e n t i a l c o m p e t i t i o n

(187) The notifying party argues that smaller competitors on
the perioperative market would be able to prevent the
merging
prices
from unilaterally
following the transaction.

parties

raising

Actual market presence

(188)

In its Form CO (129), GE mentions several companies as
being active on the perioperative market: Criticare,
Datascope, Fukuda-Denshi, Invivo, Nihon Kohden, and
Welch Allyn Protocol. In the course of the investigation,
the notifying party
also mentioned Tyco-Nellcor,
Kontron, Huntleigh, and Schiller. According to the
notifying party's estimates, the companies together hold
a market share of [10 to 20 %]* of all sales in the EEA
and more than [30 to 40 %]* in France and Germany.

(189) These

figures

from 2000. According

largely exceed the various

estimates
provided by external surveys and by the Commission's
own reconstruction exercise based on competitors' sales
to the Commission's
as
investigation,
the aggregate market shares of smaller
manufacturers was, as a result, close to [0 to 10 %]* in
the EEA and represented less than [0 to 10 %]* of total
sales in all countries in 2002, except in Italy ([0 to
10 %]*).

notifying party suggest that this firm does not actually
represent
the competitive constraint alleged by the
notifying party. In their win-loss analysis submitted to
the Commission,
identified
Datascope as
runner-up in only [0 to 10 %]* of
perioperative projects won by Instrumentarium in the
EEA (132).

notifying

party

the

(191) On the basis of the bidding data provided during the
investigation, the Commission, also examined the level
of presence of Datascope reported by Instrumentarium.
[1 500 to 2 000]* bids
Of
for perioperative
the
monitors
reported by Instrumentarium in which it
participated in France between 1998-2002, Datascope is
the
mentioned only [50 to 100]* times as one of
suppliers present in the bid and only [0 to 50]* times as
a runner-up. Of the [500 to 1 000]* bids in Germany
between 1998 to 2002, Datascope is mentioned only [0
to 50]* times as one of the suppliers present in the bid
(and at the same time as a runner-up). Of the [1 000 to
1 500]* bids reported by Instrumentarium in which it
participated in the United Kingdom between 1998 to
2002, Datascope is mentioned [100 to 150]* times as
one of the suppliers present in the bid. Finally, of the
[200 to 250]* bids reported by Instrumentarium in
which it participated in Spain between 1998 to 2002,
Datascope is not mentioned at all.

(192) With respect the bids reported by GE, there is reliable
data on other bidders only for France. Of the [1 000 to
1 500]* bids reported by GE for the French market
between 1998 and 2002, Datascope is mentioned only
[0 to 50]* times as one of the suppliers present in the
bid and only […]* as a runner-up. Other firms, quoted
in the form CO as credible rivals, are not even
mentioned or only once (Welch Allyn; Nihon Kohden).

(190) According to the notifying party, Datascope is a credible
rival. The notifying party considers that Datascope's
market share is somehow comparable to the one of
GE's (130). However, although Datascope constitutes the
strongest
its
position is not comparable to GE's. First, Datascope's
positioning in the perioperative area still
remains
focused on the low-end (131). Contrary to GE, and the
other
three main suppliers, Datascope does not
therefore offer a range of monitors from the low to the
high end. Secondly, bidding data provided by the

the smaller competitors,

firm amongst

(129) Form CO, p. 44.
(130) Form CO, p. 50.
(131) See T for G, Positioning and tactics, 3.3.2 at p. 130.

(193) The absence of small manufacturers

also confirmed by

in tenders for
perioperative monitors
the
is
customers' survey. Hospitals were asked, in particular, to
specify the strengths and weaknesses of
the various
suppliers, including of small competitors mentioned by
the notifying party. Hospitals were also asked to identify
the various companies that had been bidding in the last
tenders
care patient
monitors. Fringe players quoted by GE as being credible
rivals were only present, short-listed, and ultimately
selected in tenders for perioperative monitors in a very
few number of bids reported by customers.

for perioperative or

critical

(132) RBB study p. 9.

16.4.2004

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Official Journal of the European Union

fields of,

the
inter
monitoring and computer technology.

alia,

in-depth of

L 109/31

anaesthesia

(194) The absence of

factors

alongside

customers

fringe players in most short-lists in
tenders for perioperative monitors results from the fact
that,
rank
the price offered,
specifications and quality, as well as the ability of the
supplier to provide after-sales services and continuous
maintenance over the life cycle of the product as the
main
patient
monitors. As a consequence, customers favour high-end
suppliers, since they meet
their specifications/quality
requirements, as well as suppliers with an established
distribution network. In addition, when purchasing new
monitors either from the incumbent supplier or from
new suppliers, customers clearly put the priority on the
proven
its
of
technology (133).

perioperative

choosing

supplier

record

track

and

the

for

Barriers to entry and expansion

(195) The notifying party also claims

that

there are no
significant barriers to entry or expansion on the patient
monitoring market, neither
capacity
constraints or R&D nor at the distribution level (134),
preventing other companies, including smaller suppliers,
to pose a real competitive constraint.

in terms of

(196) The market for perioperative monitors is a differentiated
product market. In particular, the market investigation
has
four main
the offerings of
manufactures highly differentiate them from those of
smaller competitors. Capacity plays a minor role in
manufacturers' decisions on prices.

shown that

the

(197) Conversely, as shown by the market investigation and
external studies (135), innovation in the field of patient
monitoring is an important parameter of competition.
the Commission's
From a customer' point of view,
survey has also shown that the ability of a supplier to
develop new products constitute an important factor
when
participants
generally rank the development of new parameters (in
particular for measuring the in-depth of anaesthesia),
the development of software specifically adapted to the
operating room, as well as the product range, as the
latest
Further
important innovations are expected in the next years in

purchasing monitors. Market

developments.

innovative

important

(198) The notifying party however

claims

that many
components of patient monitors are bought from OEMs
on a non-exclusive basis and that none of them has
exclusive access to third-party suppliers. Nevertheless,
several market participants have expressed concerns in
that respect, underlining that access to technologies
developed by innovative OEM suppliers
is almost
impossible for small suppliers because of their alliances
with major manufacturers.

ranking of

(199) Furthermore, the market investigation has shown that
the development of a new perioperative monitor takes
between two to five years and requires many internal
and regulatory steps, as well as financial capabilities. In
their
the various market players in the
perioperative area, GE and Instrumentarium appear as
the main innovative suppliers, together with Siemens
and Philips, while small competitors are not mentioned.
In those conditions, entry or expansion of
small
competitors in the market for perioperative monitors
does not appear to be likely, or sufficient in magnitude
and scope to pose a significant competitive constraint to
the merged entity.

(200) As concerns more specifically Siemens and Philips, the
time required to develop new products would also
inevitably render difficult and costly a repositioning of
their product lines in the medium term in order to
respond to a price increase by the merged entity.

purchasing

the market

(201) As regards the importance of service and support to
investigation has shown that,
customers,
when
patient monitors,
perioperative
customers put emphasis on the ability to provide
maintenance and service over the whole-life cycle of the
product, that is from seven to ten years. It follows that
suppliers must not only have a good reputation and a
proven track record, but also rely on a good distribution
network.
party
In
for patient
acknowledges
monitoring have well-established sales and distribution
networks throughout Europe' (136). Conversely,
it has
not been shown, nor submitted, that this is also the case
for smaller competitors.

respect,
‘the main players

that
that

notifying

the

(133) Preference for the brand is also mentioned as the next important
factor but, logically, only by customers who have not switched.

(134) Form CO, p. 47.
(135) See for example F & S 2001, at pp. 4-49 and 4-50, which lists,
among the competitive factors ‘the gaining of a competitive
advantage through technological
is
stated that
technological
‘pricing strategy and the degree of
innovation will always remain crucial issues that will play a key
role in this market'.

innovation' and where it

(202) The absence of smaller companies and the strategic
advantage held by large companies in this respect is
actually confirmed by external studies such as T for G. T
for G's study states, in particular, that ‘all big players in

(136) Form CO, p. 47.

L 109/32

EN

Official Journal of the European Union

16.4.2004

and
the markets of patient monitors, ventilators
anaesthesia machines are present in the large markets.
The larger companies are directly present in all markets:
Siemens. A
Agilent, Draeger, GE-Marquette
strong
company
of
distributors
in
performance,
these distributors can be looked on as
directly present. Small companies are not present in all
countries' (137).

like Datex works
certain

through very

countries.

terms

and

In

decisive

influence

engineers.

anaesthesiologists, sometimes in co to ordination with
biomedical
of
The
anaesthesiologists in deciding to purchase a specific type
of patient monitors is further enhanced by the fact that,
according to the customers' survey, quality, performance
(which means the ability of the product to meet the
specifications
the most
and service
important
factors in the final decision taken by a
hospital. External studies such as T for G confirm this
ranking of priorities in the purchasing decision process:
‘Performance and quality are the most important criteria
followed by service and product durability. Price is
obviously less important' (139).

required),

are

(203)

In light of the foregoing, the Commission considers that,
contrary to the notifying party' submissions, the merged
entity would not be faced with a significant competitive
constraint
for
perioperative monitors in the various Member States
where it will already hold a strong position.

firms on the market

from other

(207)

L a c k o f c o u n t e r v a i l i n g b u y e r p o w e r

Internal documents submitted by the notifying party
also show that suppliers are conscious that influencing
anaesthesiologists in defining the specifications for the
tender may be decisive for winning a bid. For example,
is stated that
in one of GE's internal documents,
[…]* (140). These various elements strongly suggest that
the
technical
specifications still prevails as the most important factor
for hospitals when deciding to purchase a specific brand
of monitors, whilst prices offered by suppliers are only a
secondary element in practice.

ability of

to meet

supplier

the

it

a

by

(204) The notifying party considers that the merged entity will
still face powerful buyers who seek to obtain the most
competitive offers available. The notifying party bases its
argument on the following factors: (i) whilst technical
specifications are important, they can almost always be
met
faced with
increasingly tight hospital budgets, typically fixed well in
advance, suppliers have to submit competitive prices; (ii)
hospitals can defer purchases unless offered improved
technology and/or cheaper prices because of the ready
(iii) buyers can switch to
availability of upgrades;
incurring
products of competing suppliers without
disproportionate switching costs (138).

suppliers;

however,

various

(205) The Commission's investigation has not corroborated

the notifying party's assertions.

is acknowledged by the notifying party,
(206) First, as
in the
specifications
important
technical
purchasing decision taken by a hospital.
In each
country, a vast majority of respondents has confirmed
that the proposal to purchase perioperative monitors,
including the definition of the specifications that must
taken by
the patient monitors,
be met by

remain

is

(137) T for G, p. 131. T for G further also indicates that, with respect to
large companies, ‘there is a national training and response centre
in all countries'.
(138) Form CO, p. 45.

(208) Secondly, as was previously explained, the Commission's
investigation has shown that, contrary to the notifying
party's argument, only major suppliers are generally able
to meet the technical requirements of hospitals. This
considerably restricts the number of suppliers actually
short-listed by hospitals in the course of the purchasing
process. In practice, buyers are therefore faced with a
limited choice when purchasing perioperative monitors
since, in the vast majority of cases, only (some of) the
four major suppliers are short listed by hospitals in the
course of
the bidding process. Furthermore, once
tenders are organised in order to meet the hospitals'
needs, the actual purchase cannot realistically be delayed
for a substantial period of time and competition occurs
as from the opening of the tendering procedure.

(209) Thirdly, the customer base is highly fragmented. Each
individual tender accounts for a very limited proportion
of a supplier's turnover. Bidding data submitted by
Instrumentarium thus revealed that, out of [7 000 to
8 000]* bids in the EEA, [80 to 90* %] were worth less
the
than EUR 100 000.

In France,

example,

for

(139) T for G, p. 25.
(140) GE/Draeger alliance, minutes of a meeting of 12 May 2000.

16.4.2004

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Official Journal of the European Union

L 109/33

proportion reached [90 to 100* %] between 1998 and
2002. The same proportions can be observed in the
other relevant countries (141). The lack of importance of
each individual hospital in the overall amount of sales
of a supplier is further reinforced by the fact that, due
to the life cycle of monitors, tenders only need to be
organised occasionally. For instance, Instrumentarium's
bidding data reveal
[70 to 80 %]* of French
hospitals only organised a tender once between 1998
and 2002 in which it participated.

that

(210) Therefore, the Commission considers that customers of
the merged entity on the relevant market will not have
the ability to exercise a significant countervailing buyer
power.

[0 to 10 %]* and Siemens less than [0 to 10 %]* of the
market. The merger would be all the more detrimental,
as the merging parties face no competitor in [60 to
70 %]* of the tenders where GE and Instrumentarium
compete against each other, and no, or only one, extra
competitor in [80 to 90 %]* of them.

the

over

(214) On the Swedish market, the average combined market
shares of the merging parties were as high as [70 to
Given
last
80 %]*
Instrumentarium's high market shares ([60 to 70 %]*),
the addition of GE's [0 to 10 %]* market shares is likely
to have a significant impact on the market. The bidding
data did not contradict the strong indications given by
the combined market shares as to the significant market
power of the new entity.

years.

three

C o n c l u s i o n

(211)

In light of the foregoing, the Commission concludes that
the proposed operation would create
a dominant
position significantly impeding effective competition in
five countries: Spain,
the United Kingdom, Sweden,
France and Germany.

(215)

(212)

In Spain, the merger would lead to the combination of
the first player by far (Instrumentarium, [50 to 60 %]*)
with the second one (GE, [20 to 30 %]*) and would
provide the merged entity with [80 to 90 %]* market
shares in average over the past three years. The second
largest remaining player, Siemens, holds [0 to 10 %]*
market shares. Besides, GE turns out to be the main
competitive constraint on Instrumentarium: it competed
against the latter in [60 to 70 %]* of all tenders and has
been recorded as the runner-up to Instrumentarium in
[60 to 70 %]* of the tenders won by the latter. Last, the
merging parties faced no, or only one, extra competitor
in [60 to 70 %]* of the tenders where they meet.

years. The

second player,

In Germany, the merger would allow the merged entity
to become the market leader by far, holding average
combined market shares of [50 to 60 %]* over the last
three
Siemens, holds
significant market shares ([0 to 10 %]*). However, the
analysis of past tenders showed that GE, despite being a
smaller player, exerts a much stronger competitive
constraint on Instrumentarium than Siemens or, to an
even larger extent, Philips. Indeed, in terms of presence,
GE bid against Instrumentarium in [50 to 60 %]* to [70
to 80 %]* of all tenders while Siemens competed with
Instrumentarium in only [20 to 30 %]* of the cases and
Philips [10 to 20* %]. Furthermore,
tenders
where GE and Instrumentarium competed, they faced
no other competitor ([40 to 50 %]*) or only one fringe
player ([30 to 40 %]*). In terms of runner-up, the study
submitted by the notifying party comes
to the
conclusion that GE was reported as the runner-up to
Instrumentarium in [30 to 40 %]* of the bids won by
Instrumentarium, to be compared with [30 to 40 %]*
for Philips and [10 to 20 %]* for Siemens.

in most

(213) As regards the United Kingdom, on average over the
past three years the combined market share of the new
entity would be [80 to 90 %]* while Philips would hold

(216)

(141) In Spain, Instrumentarium mentions [1 500 to 2 000]* bids to
which it participated between 1998 and 2002. Out of [500 to
1 000]* bids that they won, [500 to 1 000]* were less than EUR
100 000. The same proportions can be observed in Germany
([1 000 to 1 500]* won bids, out of which [500 to 1 000]* were
less than EUR 100 000) and the United Kingdom ([1 500 to
2 000]* won bids out of which [1 000 to 1 500]* were less than
EUR 100 000).

Finally,
in the case of France, the merged entity held
over the last three years high market shares ([50 to
60 %]*) with a significant overlap ([0 to 10 %]*). The
next player, Philips, held twice as less market shares ([20
to 30 %]*) as the parties and encountered them very
occasionally ([10 to 20 %]*) whereas GE competes with
Instrumentarium in [70 to 80 %]* of all tenders. GE and
Instrumentarium thus
the strongest
competitive constraint on each other. This has been
further confirmed by the econometric analysis of GE's
and Draeger's discounts. This analysis shows that the
presence of Instrumentarium in a tender led GE or its

seem to exert

L 109/34

EN

Official Journal of the European Union

16.4.2004

distributor, Draeger,
10 %]* to [15 to 20 %]* on average.

to offer prices lower by [5 to

(217) Therefore, the Commission has come to the conclusion
that, in the above mentioned Member States, the merger
will not only lead to the creation of a new entity
holding high market shares but also will remove the
significant competitive constraint
to the
operation, the two merging firms exerted on each other.
As a result of the merger, the merged entity would thus
have the ability in those five countries to act, to an
appreciable extent,
independently from its competitors
and ultimately consumers, and therefore to significantly
raise prices charged to customers.

that, prior

(218)

For all the above reasons, the Commission has come to
the view that the notified concentration is incompatible

with the common market and the functioning of the
since it would create a dominant
EEA agreement,
position in the market
for perioperative patient
monitors in France, Germany, Spain, Sweden, and the
United Kingdom,
result of which effective
competition would be significantly impeded within the
meaning of Article 2(3) of the Merger Regulation.

as

a

1.2. Critical care monitors

(219) According to the information provided by the notifying
in the case of critical care
in the

concentration would result

party in the Form CO,
the
monitors,
following market shares:

Table 9

Critical care patient monitors

2002

EEA

A

BE

DK

DE

FI

FR

GR

UK

IRL

IT

NL

PT

ES

SW

NO

GE

[10-20]* [0-10]*

[20-
30]*

[10-20]*[10-20]* [0-10]* [10-20]*[10-20]*[10-20]*[10-20]*[10-20]*[10-20]* [0-10]* [10-20]*

[10-20]*

[20-
30]*

(%)

Instrumen-
tarium

Combined

Philips

Siemens

[10-20]*[10-20]*[10-20]* [0-10]* [0-10]*

[20-
30]*

[30-
40]*

[20-
30]*

[30-
40]*

[40-
50]*

[10-20]*

[20-
30]*

[30-
40]*

[20-
30]*

[20-
30]*

[20-
30]*

[20-
30]*

[20-
30]*

[30-
40]*

[20-
30]*

[20-
30]*

[30-
40]*

[20-
30]*

[20-
30]*

[0-10]* [0-10]* [10-20]* [0-10]* [10-20]* [0-10]* [0-10]* [10-20]*[10-20]*[20-30]*

[10-20]*

[20-
30]*

[10-20]*

[30-
40]*

[30-
40]*

[10-20]*

[30-
40]*

[10-20]*[10-20]*[10-20]*

[30-
40]*

[20-
30]*

[20-
30]*

[20-
30]*

[20-
30]*

[20-
30]*

[30-
40]*

[20-
30]*

[0-10]*

[40-
50]*

[20-
30]*

[20-
30]*

[30-
40]*

[20-
30]*

[30-40]*

[30-40]*

[30-
40]*

[40-
50]*

[0-10]* [10-20]*

Datascope

[0-10]* [0-10]* [0-10]* [0-10]* [0-10]* [0-10]* [0-10]* [0-10]* [0-10]* [0-10]* [0-10]* [0-10]* [0-10]* [0-10]* [0-10]* [0-10]*

Others

[20-
30]*

[0-10]* [0-10]*

[20-
30]*

[20-
30]*

[20-
30]*

[20-
30]*

[30-
40]*

[20-
30]*

[20-
30]*

[20-
30]*

[10-20]*

[20-
30]*

[20-
30]*

[10-20]* [10-20]*

Source: the notifying party.

16.4.2004

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Official Journal of the European Union

L 109/35

(220) On the basis of the Commission's investigation (142), the market shares would be as follows:

Table 10

(%)

2002 %

EEA

A

BE

DK

DE

FI

FR

GR

UK

IRL

IT

NL

PT

ES

SW

NO

GE

[10-20]* [0-10]* [0-10]* [0-10]* [10-20]* [0-10]* [10-20]*

[10-20]*

[30-
40]*

[20-
30]*

[10-20]*

[20-
30]*

[0-10]* [10-20]*[10-20]*[20-30]*

[0-10]* [10-20]*[10-20]* [0-10]* [10-20]*[10-20]* [0-10]* [10-20]*[10-20]*[20-30]*

Instrumen-
tarium

[10-20]*

Combined

Philips (143)

Siemens

[20-
30]*

[30-
35]*

[20-
25]*

[20-
30]*

[30-
40]*

[20-
25]*

[25-
30]*

[10-20]* [0-10]* [0-10]*

[20-
30]*

[45-
50]*

[25-
30]*

[0-10]*

[30-
35]*

[40-
45]*

[20-
30]*

[25-
30]*

[35-
40]*

[40-
50]*

[40-
50]*

[35-
40]*

[20-
30]*

[45-
50]*

[40-
50]*

[25-
30]*

[30-
40]*

[25-
30]*

[0-5]* [15-20]* [10-15]* [10-15]*

Others

[15-20]*[15-20]* [0-5]* [15-20]*[15-20]* [5-10]* [10-15]*

[20-
25]*

[25-
30]*

Source: the Commission's market investigation.

[20-
30]*

[25-
30]*

[30-
35]*

[30-
40]*

[35-
40]*

[20-
25]*

[0-10]*

[20-
25]*

[55-
60]*

[30-
40]*

[35-
40]*

[10-15]*

[30-
40]*

[40-
45]*

[20-
25]*

[40-50]*

[40-
45]*

[0-5]*

[15-20]* [5-10]* [5-10]*

[0-5]*

[0-5]*

[5-10]*

[30-
40]*

[30-
35]*

[20-
25]*

[20-
25]*

(221) The EEA market share of the parties would reach [25 to
30 %]* behind Philips ([30 to 35 %]*) and would be
similar to Siemens ([20 to 25 %]*). GE/Instrumentarium
the three big market players
will become one of
alongside Siemens and Philips. At national
the
merger would lead to substantial overlaps in some
countries (Austria, Finland, Greece, the United Kingdom,
Ireland, Italy, the Netherlands).

level,

has

the relevant medical department,

the
the doctors of
actual
Commission
competitive
the
merging firms on the market, as well as the likely effect
of the merger on prices.

exercised by each of

constraints

examined

further

the

(222) Contrary

to

the

perioperative market,

other
manufacturers have more important market shares in
the critical care monitoring market. As shown by the
market investigation, this is because the need for highly
technical parameters is less acute in many of the critical
care areas than in the perioperative are. The overall
market share of the small and medium size companies,
including Datascope,
important.
However, many of these fringe players are not known to
many customers and are considered as the low end of
the market. Most customers do not consider them as
credible competitors to GE, Instrumentarium, Siemens
or Philips.

therefore more

is

(223) Furthermore, since the purchasing process of critical
care monitors mostly involves a bidding procedure,
where the technical specifications are mostly done by

(142) The same method as described for perioperative monitors was

followed in the case of critical care monitors.

(143) Philips has not provided its sales for GR, DK and NO. The market
shares indicated on this table are based on the figures that the
notifying party has submitted in the Form CO.

C l o s e n e s s o f s u b s t i t u t i o n

(224) The analysis of the conditions of competition in this
Instrumentarium

bidding market also confirmed that
and GE could be not considered as close substitutes.

identified in the EEA where all

(225) The Commission conducted the same type of statistical
analysis as described in the part relating to perioperative
patient monitors. This analysis showed that, among the
2 727 tenders
the
necessary information were available, Instrumentarium
met GE in [20 to 30 %]* of the cases, whilst it faced
Philips in [30 to 40 %]* of the cases and Siemens in [20
to 30]* %. Therefore, Instrumentarium has to compete
against Philips more often than with GE. Moreover, in
the tenders where the merging parties were both
present, they faced two or more extra-competitors in
[70 to 80 %]* of these instances and either Philips or
Siemens or both competitors in [80 to 90 %]* of the
cases. Therefore, in most tenders where the parties met,
they are faced with a significant number of competitors.

L 109/36

EN

Official Journal of the European Union

16.4.2004

(226) The notifying party carried out a statistical study (144) in
order to assess how often GE and Instrumentarium were
winner/runner-up. In bids won by GE over the last five
years, Instrumentarium appears as the runner-up in only
[10 to 20 %]* of cases (145)
[200 to 300]*
tenders) on an EEA basis, far behind Philips ([60 to
70 %]*). On a country-by-country basis, the proportion
is similar but in the Netherlands where Instrumentarium
is considered GE's runner-up in [70 to 80 %]* of cases.
Nevertheless, the result is based on only four tenders
and is therefore not statistically significant.

(out of

P r i c e i m p a c t

to be close substitutes,

(227) However, even though Instrumentarium and GE appear
not
they may exert a price
constraint on each other through their pricing policy. In
order to assess this possible impact, the Commission ran
the same type of price analysis as described in the part
relating to perioperative patient monitors based on the
bidding data provided by the notifying party and their
main competitors (146).

(228) Contrary to the analysis carried out on perioperative
patient monitors, no statistically significant price impact
has been identified in analysing Philips' as well as
Instrumentarium's and GE's bidding data.

C o n c l u s i o n

(229) The merger will strengthen the parties' market position
in critical care. GE/Instrumentarium will become one of
the three big market players alongside Siemens and
Philips. However, given the above mentioned market
shares and the statistical analysis of bidding data, the
Commission concludes that
the
parties market positions would not lead to the creation
of a dominant position as a result of which effective
competition would be significantly impeded.

the combination of

2. Mobile C-arms

Market shares

(230) The parties' activities overlap horizontally in (i) vascular
C-arms and (ii) low-end C-arms in a number of Member
States. In cardiac C-arms, no overlap occurs as only GE,
but not Instrumentarium, is active in this market.

(231) According to the notifying party, the operation would
lead to the following market shares in vascular and
value (147). The bottom row
low-end C-arms by
indicates each country's
size in EUR
million.

total market

Table 11

Vascular C-arms — National market shares by value

(%)

2002

AT

BE

DK

D

FI

FR

GR

UK

IRL

IT

NL

PT

ES

SW

NO

GE

[10-20]* [10-20]* [0-10]*

[0-10]*

[0-10]* [50-60]*

[0-10]* [20-30]* [30-40]* [30-40]* [20-30]* [0-10]* [20-30]* [20-30]* [60-70]*

Instrumen-
tarium

[70-80]* [30-40]* [30-40]* [30-40]* [40-50]* [0-10]*

[0-10]* [10-20]* [0-10]* [10-20]* [0-10]*

[0-10]* [0-10]*

[0-10]*

[0-10]*

Combined

[80-90]* [50-60]* [30-40]* [40-50]* [40-50]* [50-60]*

[0-10]* [30-40]* [30-40]* [40-50]* [20-30]* [0-10]* [20-30]* [20-30]* [60-70]*

Philips

[0-10]* [50-60]* [10-20]* [30-40]* [50-60]* [0-10]*

[0-10]* [20-30]* [30-40]* [10-20]* [40-50]* [0-10]* [30-40]* [30-40]* [10-20]*

Siemens

[0-10]*

[0-10]* [50-60]* [20-30]* [0-10]* [30-40]*

[0-10]* [30-40]* [30-40]* [20-30]* [20-30]* [0-10]* [30-40]* [40-50]* [10-20]*

Others

[0-10]*

[0-10]* [0-10]*

[0-10]*

[0-10]*

[0-10]*

[0-10]*

[0-10]* [0-10]* [10-20]* [0-10]*

[0-10]* [0-10]*

[0-10]*

[0-10]*

2,0

0,6

0,6

15

0,2

5,0

0

4,0

0,2

2,0

2,0

0

2,0

0,8

0,8

Market size
EUR million
(EEA: 35,1)

Source: the notifying party.

(144) RBB study, p. 20 et seq.
(145) RBB study, Table 8, p. 20.
(146) Siemens and Philips. Eventually, Siemens' data set could not be
used for the analysis because of the poor quality of the data.

(147) The volume market shares do not differ significantly.

16.4.2004

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Official Journal of the European Union

L 109/37

Table 12

Low-end C-arms — National market shares by value

2002

AT

BE

DK

D

FI

FR

GR

UK

IRL

IT

NL

PT

ES

SW

NO

GE

[0-10]* [20-30]* [0-10]* [20-30]* [10-20]* [40-50]* [10-20]* [0-10]* [0-10]* [20-30]* [10-20]* [20-30]* [40-50]* [0-10]* [20-30]*

Instrumen-
tarium

[20-30]* [30-40]* [30-40]* [30-40]* [50-60]* [0-10]*

[0-10]* [20-30]* [0-10]* [10-20]* [0-10]*

[0-10]* [0-10]* [20-30]* [10-20]*

Combined

[20-30]* [50-60]* [40-50]* [60-70]* [70-80]* [40-50]* [10-20]* [20-30]* [0-10]* [40-50]* [10-20]* [20-30]* [50-60]* [20-30]* [30-40]*

Philips

[20-30]* [10-20]* [20-30]* [20-30]* [0-10]* [10-20]*

[0-10]* [30-40]* [0-10]* [10-20]* [50-60]* [0-10]* [20-30]* [50-60]* [20-30]*

Siemens

[40-50]* [30-40]* [20-30]* [10-20]* [30-40]* [20-30]*

[0-10]* [30-40]* [0-10]*

[0-10]* [20-30]* [0-10]* [0-10]* [20-30]* [40-50]*

Others

[0-10]*

[0-10]* [0-10]*

[0-10]*

[0-10]*

[0-10]*

[80-90]* [0-10]* [0-10]* [30-40]* [0-10]* [70-80]* [10-20]* [0-10]*

[0-10]*

(%)

0,4

1,3

0,4

8

0,2

5

0,3

4,0

0

3,0

0,4

0,2

2,0

0,7

0,6

Market size
EUR million
(EEA: 26,5)

Source: the notifying party.

(232) The Commission's market investigation broadly confirms
the market shares submitted by the notifying party, in
particular with regard to the relative sales of the four
largest players, GE,
and
Philips.

Instrumentarium, Siemens

(237) The majority of respondents to the market investigation
for C-arms had been stable or

stated that prices
declining in the past five years.

(238) Capacity constraints appear to play a relatively minor

role in manufacturers' decisions on price and quantity.

(233)

In vascular C-arms, high market
in Austria
particular,
Germany
([…* %]),
([…* %]).

shares occur,

in
([…* %]), Belgium ([…* %]),
and in Italy

([…* %])

France

(234)

In the market for low-end C-arms, the combined entity
shares with overlapping
will obtain high market
activities, for example,
in Belgium ([…* %]), Denmark
([…* %]), Germany ([…* %]), Finland ([…* %]), France
([…* %]) and Spain ([…* %]).

(235) The parties' average market

the EEA,
according to their own figures,
is [40 to 50 %]* for
vascular C-arms and [40 to 50 %]* for low-end C-arms,
respectively.

share across

(236) Whereas market shares have been quite stable in the
larger markets between 2000 and 2002, they fluctuate
widely in the smaller Member States, where sometimes
only a handful of devices is sold each year and single
orders can cause large swings in market shares. For
example, GE/Instrumentarium had a combined market
share of [80 to 90 %]* in Austria in 2002, but only [30
to 40 %]* in 2000. In Belgium, the parties had [50 to
60 %]* in 2002 after [10 to 20 %]* a year earlier.
Similar fluctuations in market shares can be observed in
low-end C-arms.

(239) The market share tables show, furthermore, that four
players, GE,
Instrumentarium (Ziehm), Siemens and
Philips each achieve significant market shares across a
range of EEA countries. GE, Siemens and Philips,
in
addition, all manufacture an extensive range of medical
equipment and have strong distribution capabilities
throughout
indeed, worldwide).
Instrumentarium equally has strong positions in several
medical
although its product
equipment markets,
portfolio is somewhat narrower.

EEA (and,

the

(240) Besides, the Commission's market investigation has also
found that customers consider C-arms as relatively less
differentiated than other medical devices, such as in
particular anaesthesia delivery systems and patient
monitors. Although failure of a C-arm device can have
serious consequences,
it does not normally lead to
immediately life threatening situations (as for example in
anaesthesia delivery or
ventilation).
Moreover, the main quality and performance parameters
of a C-arm device (such as image quality or handling)
are observable by a potential customer in advance,
they are
types of
whereas
‘embedded' in the supplier's track record and reputation.
(Again, anaesthesia delivery systems are the most salient
the latter product category.) Switching
example for
thus,
between the main suppliers of C-arms
comparatively easier.

equipment

for other

intensive

care

is,

L 109/38

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Official Journal of the European Union

16.4.2004

(241) A number

of

niche

players,

including

Sias,
Eurocolumbus, Apelem, Metaltronica and other achieve
modest market shares, mainly in Italy. They are not
generally known to customers outside their home
country and are attributed to the bottom end of the
market. Most customers do not consider them credible
competitors to GE, Instrumentarium, Siemens or Philips.

Spain

([…]*).

According

for [0 to 10]* %. They show up significantly only in
Italy, in addition to Finland ([…]* from 1998 to 2003)
and
data,
Instrumentarium qualifies as runner-up substantially less
in all
frequently than both Siemens
[…]* with
countries, except
Philips. (150) It occurs as runner-up less frequently than
one would expect
if all suppliers were equally close
substitutes (151).

and Philips
is

in […]*, where it

this

to

Siemens

consider
Philips

investigation generally
and

(242) By contrast, the hospitals surveyed by the Commission's
that GE,
market
Instrumentarium,
supply
vascular and low-end C-arms of comparable quality and
would be a viable alternative in response to even a small
relative price rise. There will, hence, remain after the
merger three competitors with an extensive portfolio of
medical equipment and strong distribution capabilities
the national markets where the parties'
in each of
activities overlap in either vascular or low-end C-arms.

all

(245) Based on bids where Instrumentarium won (in Germany
only), Philips was runner-up in [50 to 60 %]* of cases,
followed by Siemens ([20 to 30 %]*) and GE ([10 to
20 %]*). No other companies occur as runner-up in this
country. Again, GE is listed as runner-up less frequently
than one would expect if all suppliers were equally close
substitutes.

Closeness of substitution

(246) Hence, the bidding data presented by the notifying party
tend to indicate that market shares in this case overstate
the impact of GE's and Instrumentarium's combined
market power further to the merger.

(243) The notifying party has

submitted an analysis of
win-loss data to corroborate their contention that
GE/Instrumentarium's market shares do not accurately
reflect and, in fact, overstate the competitive impact of
the notified transaction. Because only a limited number
of data points is included in the study, the notifying
party' analysis relates to bids for all types of mobile
C-arms during the period 1998 to 2003. It looks at the
number of times that Instrumentarium, as opposed to
other competitors, was selected as runner-up in tenders
that GE (148) won. Only for Germany the same analysis
is also performed on tenders that Instrumentarium (149)
won.

(244) On the basis of bids where GE won, at the EEA level
Siemens is reported as runner-up in [40 to 50 %]* of all
cases,
and
Instrumentarium ([0 to 10 %]*). Other competitors,
including SIAS, Eurocolumbus and Gilardoni, account

([30 to 40 %]*)

followed by

Philips

(148) The GE win data presented by the parties contains [400 to 500]*
data points from tenders across the EEA from 1998 to 2003 that
GE won. The cross-country distribution of the data seems to be
based simply on availability. More than 15 data points each are
included from the following countries: Belgium ([50 to 100]*),
France ([50 to 100]*), Germany ([50 to 100]*),
Italy ([50 to
100]*), Spain ([0 to 50]*) and the United Kingdom ([50 to 100]*).
(149) The Instrumentarium win data presented by the parties contains
[0 to 100]* data points from 1998 to 2002, all from Germany.
Instrumentarium sells
The
predominantly through independent distributors,
they were
unable to gather accurate bidding data for more EU countries to
be included in their analysis.

claim that,

because

parties

Price impact

from the

(247) As for patient monitors, the Commission has conducted
its own analysis on a more extensive set of bidding data
collected
the main
competitors (152). The objective was
to identify the
and
of GE
presence
effect
Instrumentarium had on prices in past bidding rounds
and, further, the price effect, if any, that the removal of
Instrumentarium as an independent competitor would
have.

parties

joint

that

and

the

(248) The results of this extended empirical assessment were
that the presence of Instrumentarium as an independent
bidder in the auction and the number of bidders does
not appear to have had any systematic influence over
the size of the discount offered by GE in its bids. In
none of the models that the Commission estimated was
the dummy variable capturing the
the coefficient of

(150) There are, however, only [0 to 10]* observations relating to

Portugal.

(151) The parties' conclusion from this analysis appears to go further,
implying that GE and Instrumentarium would need to be closest
substitute for a merger to lead to any competitive harm: […]*
The Commission does not follow this analysis.

(152) I.e. Siemens and Philips. Eventually, Philips' data set could not be
used for the analysis because of the poor quality of the data.

16.4.2004

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Official Journal of the European Union

L 109/39

presence of Instrumentarium in the auction statistically
significant. Such findings hold irrespectively of how the
discount is computed or its proxy and whether the key
European markets
or
individually (where data permit) or whether the focus is
on winning bids only or all bids (both winning and
losing bids).

collectively

considered

are

G e n e r a l M a r k e t F e a t u r e s

(253) The market investigation has shown that the analogue

mammography market has become a mature market.

Conclusion

(249) The notified transaction will

some medical product markets

lead to relatively high
shares in the markets for vascular and low-end C-arms
in several Member States. Nevertheless, there will after
the operation remain three credible competitors in both
markets, which all have an extensive portfolio of
medical products with market leading positions in at
least
and strong
distribution capabilities across all EEA countries. The
power of market shares as an indicator of market power
is limited in this case by the high volatility of market
shares, particularly in the smaller Member States, the
fact
the parties' products are relatively distant
substitutes as indicated by the win-loss analysis and the
leading
low level of differentiation between the
suppliers' product
the Commission's
ranges. Finally,
econometric analysis of bidding data has not shown any
price
from the joint presence of GE and
Instrumentarium in tenders for C-arm equipment.

effects

that

(254) From the

both

supply

the market
side,
investigation (153) and external studies provided by the
notifying party (154) underline that analogue technology
is a mature technology (‘technology has reached its
limits') and innovations are limited mostly to features
such as image quality.

(255) Producers of

analogue mammography devices

are
mainly assemblers as they source a large proportion of
their inputs (around [70 to 80 %]*) from third party
component manufacturers. Competition in this market
is mainly driven by investment on reputation, quality
and the services offered with these products, as well as
on prices.

(256) From the

the

side,

demand

analogue
mammography devices are overall declining both in
terms of units and value and the main part of
the
demand arises
replacement of obsolete
equipment.

from the

sales of

(250) The analysis leads to the same conclusion if a wider
product market, comprising all mobile C-arm devices, is
used as a basis.

(251)

In view of these elements, the Commission concludes
that the combination of the parties market positions
would not lead to the creation of a dominant position
as a result of which effective competition would be
significantly impeded as
far as mobile C-arms are
concerned.

(257) This declining trend in the demand for analogue
mammography equipment is expected to increase in the
future because of the transition to digital equipment.
The market investigation has showed that a significant
number of customers envisage to upgrade analogue
mammography to digital or to procure a full field digital
equipment in the next three years. All producers have
confirmed this transition to the digital field (155): It is
expected that
for
mammography will come from digital, going up to
60 % in 2006 (156).

in 2004, 40 % of

the revenues

3. Mammography devices

M a r k e t s h a r e s

A. Analogue mammography

and

(252) Both GE and Instrumentarium are active in analogue
mammography
the proposed operation will
therefore lead to horizontal overlaps. As a result of the
transaction GE/Instrumentarium will become the market
leader in analogue mammography devices in the EEA
and in almost all the Member States.

(258) As for monitors and C-arms, the notifying party in the
lack of reliable
notification indicates that, because of
publicly available sources, market share calculations

(153) Competitors' reply to the Commission's questionnaires on R&D in

Mammography dated 28 May 2003.

(154) Frost & Sullivan, World X-Ray Mammography Market, 2001,

Chapter 3.

(155) Competitors' reply to the Commission's questionnaires on R&D in

Mammography dated 28 May 2003.

(156) Frost & Sullivan, World X-Ray Mammography Market, 2001,

Chapter 4.

L 109/40

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Official Journal of the European Union

16.4.2004

Industry (COCIR), a grouping of

were based on their own best estimates using their
respective sales and the sales data provided by the
European Coordination Committee of the Radiological
Electromedical
five
medical
(Instrumentarium,
Dräger, GE, Philips, and Siemens) (157). The notifying
this calculation overstates their
party considers that
position because of
the difficulty in establishing the
sales of the smaller competitors through independent
distributors.

companies

equipment

(259) Therefore, the Commission has made its own market
for
share calculations on the basis of
information on the sales
figures of mammography
devices addressed to the merging parties and to its
competitors on the relevant market.

requests

its

(260) Based on the replies to these requests for information,
the Commission estimates that the concentration leads
to an EEA combined market share of [35 to 40 %]* for
analogue mammography. The main competitor, Siemens
accounts for [20 to 25 %]* of the market. Among the
other players, Planmed accounts for around [10 to
15]* %, while Hologic/Lorad, Giotto and Metaltronica,
for less than [10 to 15]* %.

(261) According to the data collected, at national

level the
operation would lead to the following market shares in
analogue mammography by value (158). The bottom row
indicates each country's total market size in million
EUR.

Table 13

Analogue mammography — National market shares 2002

2002 by
value

EEA

AT

BE

DK

DE

ES

FIN

FR

GR

IRL

IT

NL

PT

SW

UK

NO

(%)

GE

[25-30] [25-30] [40-45]

[0-5]

[40-45] [30-35]

[0-5]

[30-35] [40-45] [35-40] [25-30] [10-15] [65-70]

[0-5]

[30-35]

[0-5]

Instrumen-
tarium

[5-10]

[0-10]

[5-10]

[5-10]

[0-5]

[5-10]

[60-65]

[5-10]

[5-10]

[0-5]

[15-20] [15-20]

[0-5]

[5-10]

[5-10]

[45-50]

Combined [35-40] [25-30] [45-50]

[5-10]

[40-45] [40-45] [60-65] [40-45] [50-55] [35-40] [45-50] [25-30] [70-75]

[5-10]

[35-40] [45-50]

Siemens

[20-
25]*

[45-
50]*

[20-
25]*

[5-10]*

[30-
35]*

[30-
35]*

[20-
25]*

[15-20]* [10-15]*

[5-10]*

[60-
65]*

[20-
25]*

[5-10]*

[90-
95]*

[40-
45]*

[55-60]*

Philips

[0-5]* [15-20]* [0-5]*

[0-5]* [10-15]* [5-10]*

[0-5]*

[0-5]* [15-20]* [0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

Hologic

[5-10]*

[0-5]* [15-20]* [10-15]* [0-5]*

[0-5]*

[0-5]*

[5-10]* [5-10]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]* [10-15]* [0-5]*

Planmed

[10-15]* [0-5]*

[0-5]* [70-75]* [5-10]*

[0-5]* [15-20]*[15-20]* [0-5]*

[0-5]*

[5-10]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

[45-
50]*

Giotto

[5-10]* [5-10]* [5-10]*

[0-5]*

[5-10]* [5-10]*

[0-5]*

[5-10]* [10-15]* [0-5]* [15-20]* [0-5]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

Metal-
tronica

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

[0-5]* [15-20]* [0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

Market size 47,85

1,82

1,33

0,80

5,10

3,40

0,61

12,1

1,01

0,39

9,33

1,31

1,72

0,85

5,91

0,44

Source: the Commission's investigation.

(157) Annex 6.11 of the Form C/O.

(158) The volume market shares do not differ significantly.

16.4.2004

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Official Journal of the European Union

L 109/41

Table 14

Analogue mammography — National market shares 2001

2001 by
value

EEA

AT

BE

DK

DE

ES

FIN

FR

GR

IRL

IT

NL

PT

SW

UK

NO

(%)

GE

[10-15]*

[35-
40]*

[0-5]*

[45-
50]*

[40-
45]*

[65-
70]*

[0-5]*

[40-
45]*

[55-
60]*

[40-
45]*

[35-
40]*

[25-
30]*

[65-
70]*

[0-10]*

[30-
35]*

[0-5]*

Instrumen-
tarium

[10-15]* [0-5]*

[5-10]*

[5-10]*

[0-5]*

[30-
35]*

[85-
90]*

[5-10]*

[0-5]*

[0-5]* [10-15]*

[15-20]*

[55-
60]*

[35-
40]*

[0-5]* [60-65]*

Combined

[10-15]*

[50-
55]*

[50-
55]*

[30-
35]*

[45-
50]*

[70-75]* [0-5]*

[50-
55]*

[60-
65]*

[40-
45]*

[50-
55]*

[85-
90]*

[80-
85]*

[35-
40]*

[30-
35]*

[60-65]*

Siemens

[25-
30]*

[75-80]*

[25-
30]*

[15-20]*

[30-
35]*

[10-15]* [0-5]* [15-20]*

[20-
25]*

[35-
40]*

[10-15]* [5-10]*

[0-5]*

[60-
65]*

[55-
60]*

[35-40]*

Philips

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

Hologic

[5-10]*

[0-5]* [10-15]*

[35-
40]*

[0-5]*

[5-10]*

[0-5]*

[5-10]* [10-15]* [0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[5-10]*

[0-5]*

Planmed

[5-10]*

[0-5]*

[5-10]* [10-15]* [5-10]*

[0-5]* [10-15]* [15-20]* [0-5]* [15-20]*[10-20]* [0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

Giotto

[0-5]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[5-10]*

[0-5]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

Metal-
tronica

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[20-
25]*

Market size 48,00

0,75

2,20

0,41

4,33

3,33

0,91

14,2

0,75

0,61

8,03

1,46

1,73

0,59

8,2

0,55

Source: the Commission's investigation.

L 109/42

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Official Journal of the European Union

16.4.2004

Table 15

Analogue mammography — National market shares 2000

(%)

2000 by
value

GE

Instrumen-
tarium

Combined

Siemens

EEA

AT

BE

DK

DE

ES

FIN

FR

GR

IRL

IT

NL

PT

SW

UK

NO

[40-
45]*

[35-
40]*

[45-
50]*

[0-5]*

[25-
30]*

[60-
65]*

[0-5]*

[45-
48]*

[35-
40]*

[45-
50]*

[40-
45]*

[25-
30]*

[60-
62]*

[0-5]*

[25-
30]*

[0-5]*

[5-10]*

[0-5]*

[5-10]* [0-10]* [5-10]* [10-15]*

[45-
50]*

[25-
30]*

[40-
45]*

[35-
40]*

[55-
60]*

[20-
25]*

[0-5]*

[25-
30]*

[30-
35]*

[35-
40]*

[70-75]*

[5-10]*

[50-
55]*

[50-
55]*

[30-
35]*

[0-5]*

[0-5]*

[0-5]* [10-15]* [15-20]* [10-15]* [0-5]*

[0-5]*

[0-5]*

[50-
55]*

[15-20]*

[35-
40]*

[35-
40]*

[45-
50]*

[55-
60]*

[55-
60]*

[45-
50]*

[70-75]* [0-5]*

[10-15]* [15-20]* [10-15]*

[95-
100]*

[25-
30]*

[50-
55]*

[0-5]*

[95-
100]*

Philips

[0-5]* [10-15]* [5-10]*

[0-5]* [15-20]* [5-10]*

[0-5]*

[0-5]*

[5-10]*

[0-5]*

[0-5]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

[30-
35]*

Hologic

[0-5]*

[0-5]* [10-15]*

Planmed

[5-10]*

[0-5]*

[0-5]*

[45-
50]*

[20-
25]*

[0-5]*

[0-5]*

[0-5]*

[5-10]* [10-15]* [0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[5-10]*

[0-5]*

[10-15]* [0-5]* [10-15]* [15-20]* [0-5]*

[0-5]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

[5-10]*

[0-5]*

Giotto

[0-5]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[5-10]*

[0-5]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

Metal-
tronica

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

[5-10]*

[0-5]*

[0-5]*

[0-5]*

[0-5]* [15-20]* [0-5]*

[0-5]*

[0-5]*

[0-5]*

[0-5]*

Market size 52,29

1,06

2,42

0,26

4,05

3,50

0,84

14,6

0,72

0,80

10,2

1,33

1,46

0,76

10,7

0,25

Source: the Commission's investigation.

(262) The Commission considers that market shares provide a
first proxy to determine the relative market position of
the various competitors from a customer point of view.
Market shares contain important information as they
reflect real purchasing decisions by customers in a given
year.

55 %]* in 2001 and to [40 to 45 %]* in 2002, while in
Italy the market share declined from [55 to 60 %]* in
2000, to [50 to 55 %]* in 2001 and to [45 to 50 %]* in
2002.

(263) The merger would lead to significant overlaps in many
national markets with combined market shares above
40 % in 2002 in Belgium, France, Germany, Greece,
Italy, Portugal, Spain. Only in Greece the parties will
attain market shares above 50 % and a substantial
overlap (exceeding at
[…* %]),
least 5 %)
while in Portugal the parties will reach a [70 to 75 %]*
market shares but with a minimal overlap (GE: [65 to
70]* %; Instrumentarium: [0 to 5 %]*).

(combined:

(264) Looking at

the evolution of

the GE/Instrumentarium
combined market shares, these are declining both at the
EEA level ([35 to 40 %]* in 2002 from [50 to 55 %]* in
2001 and [45 to 50 %]* in 2000) and in all
the
countries where the merger
to a significant
overlap. For example, in France, the combined Market
shares decreased from [50 to 55 %]* in 2000, to [50 to

leads

(265)

In Greece and Portugal where the parties' market shares
are above 50 %, the combined market shares decreased
in 2002. In Portugal the market share declined from [80
to 85 %]* in 2001 to [70 to 75 %]* in 2002 and in
Greece from [60 to 65 %]* in 2001 to [50 to 55 %]* in
2002.

(266) Furthermore,

in all

countries with significant
the
remain
overlaps, a number of credible competitors
present.
In addition to Siemens which will be the
number two player in almost all the markets, Planmed,
Hologic/Lorad, Philips, Giotto and Metaltronica will
remain credible competitors in many of these countries.
For example Hologic/Lorad had a significant market
share in Belgium and is present in France, Greece and
Spain, while Planmed has a significant market share in
France and is present
in Italy and Portugal. Finally,
Giotto and Metaltronica have a significant presence in
Italy.

16.4.2004

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Official Journal of the European Union

L 109/43

P r i v a t e / p u b l i c c u s t o m e r s a n d p u r c h a s i n g
p r o c e s s

C-arms,

(267) The market investigation has shown that, contrary to
patient monitors
for
and
mammography devices comes to a significant extent
from private organisations. According to GE's sales data,
almost [50 to 70* %] (159) of its customers over the last
same
years were private organisations. The
five
proportion
by
true
also
Instrumentarium (160).

demand

sales

the

for

is

(268) Furthermore, the percentage of public/private demand
differs in each Member State depending also on the
and by
existence of national
national provisions allowing the involvement of private
practitioners. For example, while in France private
purchases account
the
market, in Italy [70 to 80 %]* of mammography devices
are acquired by public hospitals (161).

screening programs

[80 to 90 %]* of

for almost

(269) Contrary to public organisations, where equipment is
mostly acquired through invitations to tender, private
purchases do not require any tendering process. Even
though some private practitioners may use tendering
processes, most purchases are based on quotes provided
the
by the local agent or
suppliers.

the local distributor of

equipment

to purchase

is necessary.

its distributor

(270) Also for public organisations that are obliged to launch
tenders
such as
expensive
mammography devices a local presence of the supplier
or
It resulted from the
market investigation that the choice for a given supplier
is based on the principle of
economically
advantageous' offer rather than on the ‘lowest price'
offer, price being one important factor in addition to
and
specifications,
quality,
maintenance of
the mammography device. Therefore,
once the potential suppliers have responded to the
invitation to tender, they may need to demonstrate the
different
to the
radiologist who is the relevant decision maker in the
acquisition process (162).

the tendered equipment

features of

after-sale

services

‘most

(159) Among GE's bids for which the distinction private/public is made,
around [1 500 to 2 000]* were private and around [500 to
1 000]* public (for a total number of bids available of [2 500 to
3 000]*).

(160) Among

Instrumentarium's bids

for which the distinction
private/public is specified, [100 to 150]* were private and [0 to
50]* public (total bids available to the Commission: [300 to
400]*).

(161) […]*
(162) In the questionnaires sent to customers was required to indicate
who makes the proposal to purchase and it came out that in all
the countries this Decision is mostly taken by radiologists (90 %
in France, 95 % in Spain, 72 % in Italy).

(271) The notifying party also argues that

the market

for
mammography devices
is a bidding market, where
market shares cannot be considered a proxy for market
power. In addition, the notifying party has submitted an
analysis of win-loss data to corroborate their contention
do not
that GE/Instrumentarium's market
accurately reflect and, in fact, overstate the competitive
impact of the notified transaction.

shares

(272) The market

for mammography devices does not
significantly differ from a standard differentiated product
market. When products are procured through a tender
process, customers' preferences are reflected in the
technical specifications of the tender which,
in turn,
determine the number of eligible bidders. Customers
have individual preferences
for specific devices and
would consider switching to another model only in
response to a more or less significant price rise (relative
to competitors). The relative closeness of substitution
between the various products, even within one and the
same relevant product market, thus forms an important
parameter of competition in these markets and has an
important influence on suppliers' market power. Market
shares
they
reflect real purchasing decisions by customers in a given
year.

thus contain important

information as

C l o s e n e s s o f s u b s t i t u t i o n

(273) As for patient monitors and C-arms, the notifying party
conducted a statistical analysis in order to assess the
closeness of substitution of the merging parties using as
in comparison
a proxy how often Instrumentarium,
with other competitors, has been recorded as
the
runner-up in bids where GE won (163).

(274) Siemens turns out to be the competitor that is reported
as the runner-up to GE most often at the EEA level as
well as in every country. At the EEA level, Siemens is
the runner-up in [50 to 60 %]* of the tenders whilst
Philips in [0 to 10 %]* and Instrumentarium, Planmed
and Hologic/Lorad in [0 to 10 %]* of the cases. These
should nevertheless be considered cautiously
results
tenders across the various
since the distribution of
countries does not
the
national markets.

the relative size of

reflect

(163) The parties were able to gather the information necessary to
carry out this type of analysis for [600 to 700]* tenders from
1998 through 2003. There are more than 15 observations in all
countries (e.g. France:
[100 to 200]*;
[300 to 400]*;
Germany: [0 to 100]*; the United Kingdom: [0 to 100]*; Spain: [0
to 100]*) but Ireland ([0 to 15]*).

Italy:

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16.4.2004

(275) At

(Belgium).

the national

to [80 to 90 %]*

level, Siemens is the most

frequent
runner-up with percentages ranging from [40 to 50 %]*
(France)
In contrast,
Instrumentarium has been recorded as the runner-up in
proportions ranging from [0 to 10 %]* (Italy) to [30 to
40 %]* (Spain) of the cases. It is worth noting that, in
some countries, Instrumentarium does not appear by far
as the competitor that exert the strongest competitive
constraint on GE. This is the case for example in France
(Siemens:
[10 to 20* %];
Philips: [0 to 10* %]; Instrumentarium: [0 to 10 %]*), in
Germany (Siemens: [70 to 80* %]; Philips [10 to 20 %]*;
Instrumentarium:
in the United
[0 to 10 %]*) or
Kingdom (Siemens: [80 to 90* %]; Hologic/Lorad: [0 to
10 %]* Instrumentarium: [0 to 10 %]*).

[40 to 50* %]; Planmed:

Commission considers that the acquisition will not lead
to the creation or strengthening of a dominant position
in the market for analogue mammography devices as a
competition would be
result of which effective
significantly
common market or
substantial part of it.

impeded in the

B. Digital mammography

(276) Therefore, the analysis submitted by the notifying party
tend to show that Siemens exerts a stronger competitive
constraint on GE than Instrumentarium. This is also the
case of other competitors at the national level.

E m e r g i n g m a r k e t — p o t e n t i a l c o m p e t i t i o n

P r i c e i m p a c t

(277)

the Commission has conducted its own
In addition,
analysis of the likely price effect of the merger, based on
an extensive set of bidding data collected from the
parties and the main competitors (164). The objective
was to identify the effect that the joint presence of GE
and Instrumentarium had on prices in past bidding
if any, that the
rounds and, further, the price effect,
removal
independent
an
of
competitor would have.

Instrumentarium as

(278) The results of this empirical assessment were that the
presence of Instrumentarium as an independent bidder
in the auction and the number of bidders does not
appear to have had any systematic influence over the
size of the discount offered by GE in its bids. In none of
the Commission estimated was the
the models that
coefficient of
capturing the
the dummy variable
presence of Instrumentarium in the auction statistically
significant. Such findings hold irrespectively of how the
discount is computed or its proxy and whether the key
European markets
or
individually (where data permit) or whether the focus is
on winnings bids only or all bids (i.e. winning and
losing bids).

collectively

considered

are

(281)

(280) Demand for digital equipment

represent 40 % of

resolution and other

is expected to grow
substantially as digital mammography is generally seen
image
to offer better contrast
characteristics that will
improve the capability for an
early detection of cancer and reduce errors in detection
process (so called false-positive). It is expected that in
the total
2004 this market will
revenues for mammography instruments, going up to
60 % in 2006. This growth is also expected to result
from other benefits offered by the digital technology
such as a lower radiation dose and other functions
for
generally
technology,
software, digital
example,
transmission and storage of
further
is
anticipated that digital technology will bring about new
applications,
and
such
these factors will
combination with ultrasound. All
introduce new elements into the competitive situation.

digital
suitability of user

connected with
the

3D (tomosynthesis)

imaging.

as

It

In digital mammography, GE is the leading company
having been the first to introduce a digital equipment
three years ago. The notifying party acknowledges that
it has a […]* however […]* (165). As there are no
the
overlaps between the parties,
concentration in this market would arise from the
reduction
because
potential
Instrumentarium has plans to enter this market.

competition

effects of

the

of

C o n c l u s i o n

(279)

In the light of all the above elements, general market
the
features, market

shares and economic analysis,

(282) The market investigation has shown that all the actual
suppliers of analogue mammography equipment are
entering the digital market (166). In particular, Siemens,
Hologic/Lorad and Fischer are already active in selling
digital equipment, while Planmed, Giotto, Metaltronica
have actively started marketing their digital appliances.
these companies have already made significant
All
field in order to
investments in R&D in the digital

(164) That is: Siemens and Philips. Eventually, Philips' data set could not
be used for the analysis because of the poor quality of the data.

(165) […]*
(166) Competitors' reply to the Commission's questionnaires on R&D in

Mammography dated 28 May 2003.

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L 109/45

achieve a comparable or superior product to that of GE.
It is also expected that new competitors will enter the
market, such as Sectra and Kodak.

(283) More generally, entry in this market has been favoured
by companies offering digital appliances comparable to
those used by GE, in particular detector plates. In fact,
many producers are acquiring digital detectors from
third companies such as Anrad, or by competitors such
as Hologic/Lorad.
it has also to be
In this context,
considered that other branches of radiography enjoy full
field digital capability and that many fields of R&D are
common to the radiological sector.

(284) Finally, the market investigation has shown that as far as
R&D investments and achievements in the digital field
are
not
Instrumentarium is
considered the most important and effective competitor
to GE (167).
of
Strategic
the
Instrumentarium it is stated that […]* (168).

involved,

generally

2002

Plan

In

be

for

primarily

concentration would

significant market power

Commission also identified serious doubts as to the
compatibility of the concentration, as originally notified,
in that it would be likely to have significant vertical
effects on the markets
anaesthesia machines,
perioperative and critical care patient monitors and
Clinical Information Systems (CIS). The vertical effects of
due
the
to
Instrumentarium's
in the
‘upstream' market for anaesthesia delivery machines and
the technical interface (the need of the various devices
to be integrated mechanically and/or exchange data
electronically)
machines,
perioperative and critical care monitors and CIS (areas
in which the merged entity would be active). Such
vertical concerns were also recently found by the
Commission in its Article 8(2) decision in the
case (169) which
Siemens/Draeger
similar
characteristics with the present case.

anaesthesia

between

presents

C o n c l u s i o n

(285) Given the above elements, the Commission concludes
that there is a sufficient number of actual and potential
competitors that are in a position to compete with GE
in the digital
field also following the acquisition of
that many companies are
Instrumentarium. The fact
currently entering the digital mammography market
renders
the merger
likely the possibility that
between GE and Instrumentarium could reduce to a
significant extent the actual or potential competition in
this market or limit innovation in the digital field.

less

(288) Concerns were expressed that the merged entity would
be able to prevent competing manufacturers of patient
monitors, anaesthesia machines and CIS from having
effective access
to the merged entity's anaesthesia
machine equipment, patient monitors and CIS systems
and could thus result in foreclosure effects and hence
higher prices and reduced choice for hospitals.

(286)

In the light of these elements, the Commission considers
that the acquisition of Instrumentarium will not lead to
the creation or strengthening of a dominant position in
for digital mammography as a result of
the market
which effective
significantly
impeded in the common market or substantial part of
it.

competition would be

(289)

B. Vertical effects — Serious doubts due to Foreclosure

of the Patient Monitors and CIS Markets

1. Introduction

(287) Apart

from the horizontal effects in the market

perioperative

monitors

identified

above,

for
the

the parties offered a commitment

It should be noted from the outset that, following the
communication of the Commission's serious doubts in
the Article 6(1)(c) decision initiating proceedings in this
case,
in order to
dispel the Commission's serious doubts relating to the
abovementioned vertical
issues. The commitment was
submitted formally on 11 June 2002 whilst the in-depth
investigation was on-going. This commitment appeared
to eliminate the serious doubts relating to the vertical
issues and was therefore market tested in order to assess
its viability and effectiveness and was further improved
by the notifying party and re-submitted in a revised
version on 4 July and then on 24 July 2003 as part of a
In the light of the
revised package of commitments.
it was
positive market test results and its assessment,
concluded that
to
eliminate the serious doubts relating to vertical issues in
this case. As a result, no objections were raised as far as
those vertical issues were concerned.

commitment was

sufficient

the

(167) Competitors' reply to the Commission's questionnaires on R&D in

Mammography dated 28 May 2003.

(168) Instrumentarium Diagnostic Imaging — Strategic plan 2002.

(169) See case No COMP/M.2861 — Siemens/Drägerwerk/JV (not yet

published), point 149.

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Official Journal of the European Union

16.4.2004

2. Background information

(290) The ability of

the merged entity to foreclose would
primarily arise from (i) its significant market power in
anaesthesia machines and (ii)
interface
between anaesthesia machines, monitors and CIS which
requires cooperation between the anaesthesia machine
manufacturer, the patient monitor manufacturer or CIS
supplier.

the technical

(i) Instrumentarium's market power in the upstream market

for anaesthesia delivery machines

(293)

(291) Anaesthesia machines,

the

found

like other items of critical care
are highly differentiated products with
equipment,
anaesthetists' preferences playing a key role in the
choice of a clinic's anaesthesia equipment. As
the
Commission
Siemens/Draeger
in
decision (170), customers have as a rule a preference for
a specific item of equipment and would consider
switching to a competing product only in the event of a
the
fairly
compared with
increase
the
competition. Given the differentiated nature of
capacity
product
restrictions are, on the other hand, of only minor
importance
and
volumes, market shares provide a starting point from
which to determine the relative market positions of the
from the customer's point of
various competitors
view (171).

to suppliers' decisions on prices

in question and the

price

large

that

fact

(292)

In order to assess the market power of Instrumentarium
and its rivals in the anaesthesia machine market, the

Commission looked first at the market shares of the
various suppliers and then at other factors such as
barriers to entry, switching costs, the differentiation of
the products in question and customer preferences. The
Commission based its findings on data provided by the
parties, independent studies and the results of its market
investigation. The Commission also had regard at its
findings in the Siemens/Draeger decision where a similar
analysis was performed.

level.

It is widely acknowledged that the anaesthesia machine
is highly concentrated both at an EEA and
market
national
Instrumentarium (Datex Ohmeda),
Draeger, and to a much lesser extent Siemens, are the
only suppliers with significant EEA-wide activities. An
independent study by Frost and Sullivan (172) (the F&S
Anaesthesia Report 2001) puts Instrumentarium and
Draeger on a par estimating their market shares at 38 %
and 39 % respectively on an EEA basis. Apart from the
two leading suppliers,
there is also a number of
suppliers such as Blease, Dameca, Penlon, Samed, Siare,
Taema and Temel (Others) which have market shares in
only a small number of Member States. At European
level, the largest of these niche suppliers have market
shares of 3 % or less, according to the estimates by Frost
& Sullivan.

(294) The market shares in the anaesthesia delivery machine
market in the EEA and individual EEA countries, as
provided by the parties in their notification, can be seen
in the table below:

Table 16

Anaesthesia delivery machines — National market shares

A

BE

DK

DE

ES

FIN

FR

GR

IRL

IT

L

NL

PT

SW

UK

N

(%)

[50-
60]*

[30-
40]*

[50-
60]*

[30-
40]*

[0-10]* [0-10]*

[0-10]*

[40-
50]*

[40-
50]*

[40-
50]*

[30-
40]*

[20-
30]*

[40-
50]*

[0-10]* [0-10]* [0-10]*

[70-
80]*

[10-
20]*

[0-10]* [0-10]* [0-10]* [0-10]*

[0-10]* [0-10]*

[20-
30]*

[80-
90]*

[0-10]* [0-10]*

[20-
30]*

[20-
30]*

[60-
70]*

[10-
20]*

[10-
20]*

[20-
30]*

[60-
70]*

[0-10]*

[0-10]*

[30-
40]*

[40-
50]*

[20-
30]*

[20-
30]*

[10-
20]*

[40-
50]*

[40-
50]*

[0-10]*

[40-
50]*

[40-
50]*

[20-
30]*

[50-
60]*

[20-
30]*

[20-
30]*

[0-10]*

[0-10]*

[10-
20]*

[50-
60]*

[10-
20]*

[10-
20]*

[10-
20]*

[40-
50]*

[10-
20]*

[0-10]*

[30-
40]*

[30-
40]*

[30-
40]*

[0-10]*

[30-
40]*

EEA
(173)

[40-
50]*

[20-
30]*

2002 by
value

Instrumen-
tarium

Dräger

Siemens

Others

EEA

[30-
40]*

[30-
40]*

[10-
20]*

[10-
20]*

Source: the parties (174).

(170) Point

125

of Decision

in

case

COMP/M.2861 —

(171) Points

Siemens/Drägerwerk/JV.
72-74
Siemens/Drägerwerk/JV.

of Decision

in

case

COMP/M.2861 —

(172) Frost

and Sullivan, European Anaesthesia

and Respiratory
Equipment Markets Report, 2001 ‘F&S Anaesthesia Report 2001'.

(173) Excluding Germany.
(174) Provided in the Notification.

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Official Journal of the European Union

L 109/47

(295)

In addition to the above figures provided by the parties which, it should be noted, do not appear to contradict the findings of
Frost and Sullivan at least on an EEA level, the Commission performed an exercise of reconstructing market shares on the
basis of information it received through its market investigation (175). The table below relies on figures communicated by the
parties, Siemens, and Draeger concerning their own turnover. The market shares of the remaining competitors are based on
the data communicated by the parties in their notification (176).

Table 17

(%)

2002 by
value

EEA

EEA
(177)

A

BE

DK

DE

ES

FIN

FR

GR

IRL

IT

L

NL

PT

SW

UK

N

Instrumen-
tarium (178)

[25-
30]*

[35-
40]*

[25-
30]*

[50-
55]*

[0-5]* [5-10]*

[45-
50]*

[25-
30]*

[20-
25]*

[25-
30]*

[50-
55]*

[35-
40]*

Dräger (179)

[45-
50]*

[30-
35]*

[50-
55]*

[35-
40]*
(180)

[50-
55]*

[85-
90]*

[40-
45]*

[45-
50]*

[45-
50]*

[35-
40]*

[5-10]*

[30-
35]*

Siemens
(181)

Others

[5-10]* [5-10]*

[15-
20]*

[5-10]* [0-5]* [0-5]* [0-5]*

[10-
15]*

[10-
15]*

[25-
30]*

[15-
20]*

[15-
20]*

[15-
20]*

[20-
25]*

[0-5]* [0-5]*

[40-
45]*

[0-5]* [0-5]*

[15-
20]*

[15-
20]*

[5-10]*

[25-
30]*

[10-
15]*

-

-

-

-

[45-
50]*

[30-
35]*

[60-
65]*

[40-
45]*

[45-
50]*

[30-
35]*

[15-
20]*

[5-10]*

[20-
25]*

[45-
50]*

[0-5]*

[40-
45]*

[15-
20]*

[0-5]* [0-5]*
(182)

[0-5]*

[15-
20]*

[15-
20]*

[35-
40]*

[5-10]*

Source: Commission findings and information provided by the parties.

(296) The above tables show that Instrumentarium is one of
leaders in anaesthesia delivery machines
two market
with an EEA market share, according to figures provided
by the parties of at least […* %] (30 to 40 % on the
basis of
(sales of
EUR[…]*) with Draeger having an EEA market share of
[…* %] (30 to 40 % on the basis of the Commission's
[…]* of
reconstruction]*

the Commission's

[…]*). Almost

reconstruction)

(sales of

(175) A similar

shares

exercise was performed in the Siemens/Draeger
proceedings (see Siemens/Draeger decision at point 116). Due to
the inability to obtain data from all competitors in the market,
the reconstruction of market
in the Siemens/Draeger
the
decision remained incomplete (see point 116 in fine of
Siemens/Draeger decision). Therefore, a new reconstruction of
market shares in the context of the current case was performed. It
should, nonetheless be noted, that, according to the figures in the
Siemens/Draeger decision, Instrumentarium would be the leading
company in at least Ireland, Sweden and the United Kingdom.
Draeger was found to be presumptively dominant in the following
EEA countries (see point 153): Denmark, Germany, Finland,
France, the Netherlands and Norway.

(176) Many smaller

competitors were unable

to provide precise

turnover data on a national basis.

(177) Excluding Germany.
(178) Form CO.
(179) Business secret-confidential

information: Reply to question 15,
sent on 28 April 2003 referring to Answer No 2 of Article 11
request dated 27 January 2003, sent on 4 February 2003
(M.2861 Siemens/Draeger).

(180) Including Luxembourg.
(181) Business secret-confidential information: Answer to Question 15
of Article 11 request, dated 11 April 2003 sent on 28 April
2003.

(182) No data provided for Norway.

[…* %]

(30 to 40 % on the basis of

Draeger's sales are achieved in Germany, the company's
home market. If German sales are excluded, on the basis
of the parties' data, Instrumentarium achieves a market
share of
the
Commission's reconstruction) and Draeger only […]* %
(30 to 40 % on the basis of
the Commission's
reconstruction) on an EEA basis with respective sales of
EUR […]* m and […]*. According to the above tables,
at national
Instrumentarium's position on the
market for anaesthesia delivery machines reaches levels
indicative of a dominant position in a number of
Member States where Instrumentarium has high market
shares such as Belgium, Ireland, Sweden (above 50 %),
Spain, the Netherlands and the United Kingdom (above
40 %).

level,

high

(297) The above market shares should be considered in the
light of additional relevant factors such as the existence
of
requires
considerable sunk costs including a well developed
distribution and service network as well as close
commercial relations with hospitals and investment in
R&D (183)),
for

the strong preference of customers

barriers

(market

entry

entry

the

(183) For example, Instrumentarium spent EUR 66 600 000 million on
research and development in 2001 representing 7 % of net sales
(See
for
F&S
Instrumentarium's
Anaesthesia Report
is fairly
(2001) reports that
concentrated' and that there is ‘difficulty for new players to enter
the market', p. 4-13.

business.
care
report 2001, p. 19). The

‘the market

anaesthesia

annual

critical

and

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Official Journal of the European Union

16.4.2004

record

a proven track

and
manufacturers with
well-established products, the differentiated nature of the
product and its critical
importance for the life of the
patient which increases the reluctance of doctors to
switch suppliers of machinery, and the high brand
recognition and quality of Instrumentarium's anaesthesia
machines (184).

(298)

In the light of the above information,
it appears that
Instrumentarium enjoys a significant degree of market
power over its customer base throughout the EEA. The
high market shares and the nature of the market (high
to entry, differentiated
concentration, high barriers
nature
consumer
and
the
preferences), confirm the existence of serious doubts
that Instrumentarium enjoys significant market power in
at least the following national markets Belgium, Ireland,
Sweden (above 50 % with rivals being significantly
smaller), and the United Kingdom (approximately [40 to
50 %]* with rivals being significantly smaller).

products

strong

of

ii) Interoperability between anaesthesia machines, monitors

and CIS

it

is undergoing anaesthesia,

(299) Anaesthesia machines and perioperative monitors are
used in the same area of the hospital, the perioperative
area. As the parties state in the notification ‘whilst a
patient
is necessary to
monitor the patient's vital signs to ensure his or her
safety. This monitoring is undertaken by a Perioperative
patient monitor' (185). Given this use,
anaesthesia
machines
are
perioperative
complementary products as both products are needed in
order to perform surgery on a patient. The same applies
to CIS systems which, without being necessary, are also
used in conjunction with both anaesthesia machines and
perioperative and critical care monitors in a number of

monitors

and

and

‘high'

quality

specifications

(184) The overwhelming majority of respondents to the Commission's
survey (anaesthesia questionnaire) stated that Datex-Ohmeda had
‘high'
respectively.
Instrumentarium's leadership in anaesthesia machines vis-à-vis its
smaller competitors is also evidenced by Instrumentarium's own
documents. Instrumentarium's annual report of 2001 states that
‘with sales of EUR 714 million, it became clear during the year
that we are now the largest supplier in the world of anaesthesia
and critical care equipment and solutions. This position is highly
advantageous
from
economies of scale in many areas, and hence it allows us to take
carefully
new businesses.'
Instrumentarium's leadership is such that it is ‘the only company
in the world to be able to offer a broad family of anaesthesia
machines for varying applications'. See Instrumentarium Annual
Report (2001), pp. 4 and 8.

it allows us

developing

to benefit

calculated

in that

for us

risks

in

(185) Form CO, p. 121.

EEA hospitals. Due to this simultaneous use in the same
department of the hospital, there are commercial links
in the marketing of those products to hospitals. The
market investigation has shown that anaesthesiologists
play an important
role in influencing or actually
deciding on purchases of both anaesthesia machines and
perioperative monitors and, to a more limited extent,
critical care monitors.

(300)

the two
In addition to the complementary use of
products there is also a technical, vertical
link or
interface between anaesthesia machines and monitors.
is
Even though both are necessary when a patient
undergoing surgery,
the two products can be used
completely separately, in the sense that the anaesthesia
machine delivers gases to the patient and displays the
delivery of gas on an anaesthesia display and the patient
monitor connects via sensors to the patient and displays
the patient's vital
signs on the monitor display.
However, as the market investigation shows, in practice,
there
two
is normally a connection between the
(in the overwhelming
machines, either a mechanical
majority of cases) or electronic connection or both. The
market investigation also showed that cooperation by a
device supplier such as an anaesthesia machine supplier
is necessary so that
independent suppliers of other
devices such as patient monitors or CIS can integrate
their devices mechanically or electronically with the
anaesthesia machine.

M e c h a n i c a l i n t e g r a t i o n

the monitor

requires that

(301) Mechanical integration, which is commonly used in EEA
is mechanically
hospitals,
integrated with the anaesthesia machine in that it stands
on top of
the anaesthesia machine (with clips and
Velcro straps or mounting solutions) or is mounted onto
the anaesthesia machine by means of a mobile ‘side
arm'; the latter configuration is increasingly popular due
to the popularity of
flat panel displays which are
integrated in this way (186). Many different mechanical
configurations
the
possible
anaesthesiologist's needs. The parties' patient monitors
are mechanically
and third-party patient monitors
integrated with Instrumentarium or other
suppliers'
anaesthesia machines.

depending

are

on

(302) The reason for the desirability of mechanical integration
is put clearly in a third party submission which explains
that ‘Because space in the operating room is limited and

(186) Instrumentarium's response to the Article 11 request dated 9
April 2003, Question 14:
‘new monitors have an incorporated
flat panel and LCD displays, which make it possible to mount
monitoring elements on a side arm'.

16.4.2004

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Official Journal of the European Union

L 109/49

the

anaesthesiologists need constant access to the patient
monitor and the anesthesia machine, a monitor must be
securely attached to the anesthesia machine in a manner
and location — “configuration” — which is
fully
compatible with
anesthesiologist's workplace
requirements (187)'. The F&S Anaesthesia Report (2001)
also concludes that ‘the market is moving towards a
greater level of integration and computerisation which
means
integration between the various
equipment' (188). Documentation submitted by third
parties shows that there is clear demand for mechanical
integration solutions by hospitals. This is also evidenced
by the
existence of dedicated mounting solution
suppliers such as the major US mounting solutions
supplier, GCX.

a greater

to

for

and

In their

validated

solutions

according

supplier (189).

(303) Despite the parties claims that mechanical integration is
very simple, third party documents and the parties' own
internal documents show that mechanical interfacing is
more complicated and requires cooperation between the
anaesthesia machines supplier, monitor supplier and
mounting
Different
configurations of monitor-anaesthesia machine
are
tested
international
to the Commission's
responses
standards.
relevant
list
information, both parties
requests
standards (190) such as the IEC 601-1. Whilst such
standards are not obligatory, they are considered ‘best
practices' and suppliers conform to them as there is
increasing customer awareness and demand. Information
provided by the parties, third party monitor suppliers
and mounting solutions suppliers shows that tests are
indeed habitually performed and the suppliers certify
the validity of a given configuration before it is sold
commercially to customers. GE acknowledges the need
for cooperation by stating that ‘mechanical integration is
facilitated by using standard patient monitor mounts
physically attached to the anaesthesia machine. The

(187) Submission by third party dated 24 March 2003, p. 2.
(188) F&S Anaesthesia Report (2001), p. 4-31.
(189) A number of competitors stated that the completion of a validly
tested configuration requires significant time of approximately six
months and in some cases well over six months. (Third party
responses dated 24 April 2003, 14 May 2003, 30 April 2003 and
in particular third party response to Article 11 letter dated 11
the
April 2003, Question 4.) One third party stated that
minimum information
achieve
mechanical integration was ‘Specification of the maximum weight
that can be borne by the wheels; Specification of the channels
and the weight they support, if channels are available; Location of
fixing points for mounting hardware and their specified intended
to adapt mounting
use;
solutions for the patient monitors;
the
possible set-ups, including all parts required in order to perform
tests according IEC and UL;
technical
questions'.

Information about possible places

Information about all

contact person for

required

support

and

to

(190) Including, for example, the following standards: EN 740: 1998
and EN 12218: 1998 + A1: 2002 (harmonised standards related
to medical devices under Council Directive 93/42/EEC); EN 740:
1998 (European standard relating to anaesthetic workstations).

a

cooperative

effort between GE,

the
design is
anaesthesia machine company and a manufacturer of
patient monitor mounting systems' (191). A third party
stated that ‘The development process requires access to
detailed product specifications and other information
available only from the manufacturers of both the
monitor
be
interconnected' (192).
Instrumentarium also provided
information showing that cooperation between the
suppliers of the devices is necessary for an effective,
Instrumentarium
validated mechanical
claims that
it has provided such cooperation in the
past (193).

the machines

integration;

that

and

are

to

E l e c t r o n i c i n t e g r a t i o n

(304)

integration,
anaesthesia machine

electronic
In addition to mechanical
integration between the
and
monitor is used by a number of hospitals. Electronic
integration involves exchange of data between the
those
anaesthesia machine and monitor or input of
devices' data into a CIS (194) or even a full integration of
the anaesthesia machine, patient monitor and possibly
CIS in one single device (such as Instrumentarium's
ADU).

(305) Electronic

integration of anaesthesia machines and
monitors or those devices with CIS systems appears to
offer a number of significant clinical and administrative
the
advantages

to hospitals. Data

generated

by

(191) GE's

response to the Commission's Article 11 request

for

information dated 9 April 2003, p. 4.

(192) See third party submission of 24 March 2003, p. 2.
(193) In its response of 18 June 2003, Instrumentarium discussed its
suppliers and mounting solution
cooperation with monitor
‘it is important to note that the latest machine from
suppliers:
in late June 2003,
Datex-Ohmeda,
already has mounting solutions
for Philips, Siemens, GE,
Spacelabs and Datex-Ohmeda monitors developed and tested by
GCX. This is due to Instrumentarium's proactive collaboration
with GCX to develop the mounts. […]*. Instrumentarium worked
with the third-party mounting solution provider before the
product launch.'

the S/5 Avance, due out

(194) Electronic

between

connection

anaesthesia machines

and
monitors can be achieved by means of small interface devices in
which the machines are plugged. Each manufacturer has created
its own solution (e.g. GE's ‘Octicomm' or Philips'
‘VueLink'
components may be necessary for
device). Such physical
connection between an anaesthesia
achieving an interface
machine and patient monitor.

L 109/50

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16.4.2004

electronic

anaesthesia machine can be displayed direct and in
‘real-time' (195) on the monitor's display in addition to
appearing on the anaesthesia machine display. The
market investigation showed (196) that those hospitals
using
ability of
integration value
displaying data generated by the anaesthesia machine
and monitor in a single display as this enables the
doctor to address the patient's needs more effectively. At
the same time, the keeping of patient's clinical records is
effortless, as data is generated automatically.

the

develop quickly and at low cost the software needed for
the anaesthesia machine and monitor
to interface
electronically.
Instrumentarium's
specifications are publicly available in its machines'
service manuals or on the internet (198).

example,

For

are

their

actually

interfaced

(306) Despite the parties' claims that electronic integration is
of limited use in the EEA, the Commission found that a
significant number of hospitals responding to its market
investigation
anaesthesia
machines and monitors electronically. An additional
number of hospitals, replied that they had plans to use
CIS electronic interfaces in the next two to three years.
For this reason major monitor suppliers offer monitors
integration.
that
ADU
Instrumentarium's
machine
of
sales of anaesthesia
Instrumentarium's
machines (197). A third-party monitor supplier claimed
that [20 to 25 %]* of its monitor sales included interface
modules in 2001. GE's ‘dear customer' letter of 4 April
2003, sent to all its customers on the occasion of its
Instrumentarium,
bid
the
of
announcement
evidences GE's
electronic
commitment
integration.

for
to provide

already capable of

approximately

total annual

electronically

represents

integrated

electronic

25 %

(307) As acknowledged by the parties, electronic integration
requires the cooperation of both the monitor and the
anaesthesia machine supplier as the output specification,
information needs to be
protocol and other technical
known to a patient monitor manufacturer
for an
interface to be created. The parties have, however,
claimed that
Instrumentarium (and other anaesthesia
machine manufacturers) practice an ‘open architecture'
policy which enables other monitor manufacturers to

(195) ‘Real-time' transmission of data means that data generated by the
anaesthesia machine are displayed alongside physiological data
measured by the patient monitor on the patient monitor's display.
This makes it easier for the physician to assimilate information on
the patient's actual condition at any given point in time and to
adjust the therapy accordingly.

(196) A significant number of respondents stated specific advantages
arising from electronic integration. Results of responses to the
Commission's questionnaire to customers show that a very large
number of respondents stated convenience of displaying data on a
single display and producing automated record as the main
advantages of such electronic integration.

(197) [25 to 30 %]* of sales in 2000 and [20 to 25 %]* of sales in

2002.

(308) Given that

the

need

interfaces

acknowledges

are proprietary,

suppliers (199). A number

cooperation
between the various suppliers appears to be necessary
for a seamless exchange of electronic data between an
anaesthesia machine and monitor. Third party suppliers
of patient monitors produced documentation showing
that efforts to produce electronic interfaces have not
always met with effective cooperation by anaesthesia
machine
hospitals
of
responding to the Commission's market
investigation
stated that they had faced problems of connectivity in
the past and concluded that they needed assistance from
the suppliers in order to achieve a seamless electronic
interface (200). GE
for
cooperation by stating that ‘developing, verifying and
validating the protocol
interpreter software generally
requires cooperation between GE and the device vendor.
The development process occurs in the following way.
Based on an informal partnership with the anaesthesia
the vendor provides protocol and
machine vendor,
operation manuals
and
typically loans equipment (or provides for the use of
equipment at their facilities) to develop the interface
software. The monitor manufacturer
the
requirements, writes the software then performs the
data mapping,
and
validation' (201). In response to a direct question by the
Commission on the ability of third party suppliers to
create interfaces without cooperation by the anaesthesia
machine supplier,
Instrumentarium also acknowledges
that this would not be possible (202). It is also to be
noted that
integration requires
electronic
adaptation to the relevant interfaces when the supplier
of the anaesthesia machine upgrades or modifies the
machine's protocol and output specifications.

verification

assistance,

technical

as well

effective

defines

and

its

as

(198) See

Instrumentarium's

the
Commission's Article 11 request for information dated 9 April
2003.

to question 28 of

response

(199) Third party response to Question 15 of the Article 11 request for
information dated 11 April 2003 providing information on
electronic interoperability problems.

(200) Customers were asked to state whether they had faced difficulties
in electronic connectivity and whether it was easy to connect a
monitor and anaesthesia machine electronically without assistance
from the supplier. A large number of customers responding to
this question states that they had faced difficulties and that it was
not easy to connect without supplier assistance.

(201) GE's

response to the Commission's Article 11 request

for

information dated 9 April 2003, p. 6.

(202) See

Instrumentarium's

the
Commission's Article 11 request for information dated 9 April
2003 where it states that […]*. […]*.

to question 29 of

response

16.4.2004

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Official Journal of the European Union

L 109/51

L i n k s b e t w e e n p e r i o p e r a t i v e a n d c r i t i c a l
c a r e m o n i t o r s a n d C I S - S t a n d a r d i s a t i o n

machines]*' and ‘integration into CIS being the next
step' (206).

C o n c l u s i o n o n i n t e r f a c i n g o f r e l e v a n t
d e v i c e s

a

stated

number

investigation

(309) Finally, standardisation (the need to use the same brand
of devices throughout the various areas of the hospital)
and increasing use of CIS systems and generally
electronic connectivity of devices lead to an interface
issue not only in the perioperative area but
in the
critical care area as well. A number of customers during
the market
of
standardisation benefits such as portability, no need to
parts,
of
training
cables,
remove
equipment. Third party
compatibility with other
information
a
existence
standardisation trend. Standardisation advantages have
been
of
the
Anaesthesiologists: ‘In many hospitals across Europe, we
see an increasing desire for standardisation of patient
monitoring equipment across all acute care settings,
since this offers
in terms of
standardisation on cables and accessories,
training,
continuity
equipment
data
maintenance' (203).

the hospital benefits

underlined

confirmed

European

Society

patient

spare

staff,

also

and

the

by

of

of

(311)

is

to

that

to conclude

also reasonable

interface mechanically

to be necessary in order
to integrate

It is therefore reasonable to conclude that there appears
to be an ever increasing need for anaesthesia machines
and
and monitors
electronically with one another as well as with CIS (207).
It
continued
cooperation between anaesthesia machines suppliers and
suppliers of patient monitors or CIS
independent
to allow those
appears
independent
their products
mechanically and/or electronically with Instrumentarium
to meet
anaesthesia machines
their
and
interoperability.
need
increasing
customers'
Integration of devices such as anaesthesia machines and
monitors with CIS systems appears to be a desirable aim
for hospitals in the EEA and that, in the light of this
integration, seamless connectivity of devices is required
the
in
for
perioperative and critical care areas of the hospital.

environments

hence
for

digitalised

suppliers

effective

that

exist

supplier (204),

system up-time,

they
including

acknowledge
‘maintenance,
training,

(310) Whist the parties submitted that standardisation benefits
are outweighed by the disadvantage of being tied to a
single
such
in-house
benefits
knowledge,
spare parts,
suppliers one partner and solution provider, easy to
improve the total system performance' (205). In addition,
both parties acknowledge the desirability and trend
towards the creation of a digital hospital environment
with seamless and effective connectivity of various
devices and the use of CIS in the perioperative and
critical care areas. GE internal documents provided as
an Annex to the Notification speak about the benefits of
electronic connectivity throughout the OR with the aim
being to create a ‘digital cockpit for the OR' by offering
‘device integration, information convergence: monitor to
and equipment, OR and
anaesthesia,
enterprise'. GE also speaks of a trend for
‘tighter
anaesthesia
with monitoring
integration

IT systems

[and

(203) Professor […]*,

Industrial Liaison Officer, European Society of
Anaesthesiologists quoted in a third party's response to Question
17 of the Article 11 request for information of 11 April 2003.
(204) The market investigation also showed that a significant number

of customers values the ability to ‘mix and match'.

(205) See Annex 17 to GE's response to the Article 11 request of 9

April 2003, presentation ‘System Selling Go'.

3. Serious doubts that the merger may lead to

foreclosure effects

as

doubts

to the

compatibility of

(312) The above information led the Commission to find
the
serious
concentration with the common market on the basis
that
the merged entity would have the ability to
foreclose its rivals. This ability would arise from the
merged entity's significant market power in anaesthesia
machines and the need for cooperation between the
anaesthesia machine manufacturer
and the patient
monitor manufacturer or CIS supplier (208) as explained
above.

(313)

Instrumentarium so wishes,

If
simply
withhold its cooperation or, more likely, engage in

can

it

(206) See Annex 5.4 to the Notification, GEMS presentation on the

rationale of the Instrumentarium deal.

(207) A significant percentage of respondents to the Commission's
market investigation stated that they had plans to connect their
anaesthesia machines and monitors to CIS systems.

(208) As noted above, the parties do not deny that cooperation is
necessary for effective and seamless mechanical and electronic
integration nor that an anaesthesia machine supplier would have
to degrade
the ability to withhold necessary cooperation or
cooperation.

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it

subtler ways (209) of degrading
cooperation thus
making
anaesthesia
difficult
machine or monitor manufacturers or CIS suppliers
to connect
the
merged entity thus raising their costs.

their devices or systems to those of

independent

for

(314) When it

initiated proceedings,

the Commission also
expressed serious doubts as to the compatibility of the
concentration with the common market on the basis
that the merger could change or enhance the incentives
of
the merged entity to use its ability to foreclose
contrary to the parties' claims that the merger would
not change anything in either the anaesthesia or the
patient monitors markets compared to the incentives of
Instrumentarium (an
integrated
already
company) before the merger.

vertically

(315)

requirement

It appears that, despite the parties' claims that such
incentives could be excluded on the basis of
limited
extend of integration of the various devices, mechanical
interoperability of anaesthesia machines and monitors is
a relevant
for a significant number of
hospitals due to the limited space of the OR and the
need for ergonomics and patient safety. Even electronic
interoperability, which is not as prevalent in the EEA
today, is used by a significant number of customers with
an even greater number of customers stating that they
had plans of introducing electronic connectivity in the
next two to three years.

(209) There are many ways

in which GE/Instrumentarium could
attempt to achieve such foreclosure. Refusal of cooperation or
‘closure' of architecture could be an extreme measure that would
immediately deprive independent monitor manufacturers from
being able to sell monitors to customers using Instrumentarium
anaesthesia machines. According to third party submissions a
to detect ways could be
variety of more subtle and difficult
employed including for example frequent modifications and
upgrades resulting in constant need for cooperation which the
merged entity could delay or refuse, manipulation of the output
to optimise performance when GE/Instrumentarium monitors are
connected rather than another manufacturer's monitor; use of
more proprietary protocols; provision of inferior connectivity to
CIS systems;
frequent changes in software code resulting in
problems in the interoperability of rival monitors; manipulation
of machine mounting brackets
to reduce rivals' mechanical
integration; refusal to loan equipment or cooperate in testing
for validation in accordance with international
equipment
standards;
competing
delayed
manufacturers from showing their products in a timely way at
important
trade fairs; etc. Third party and the
parties' internal documents reveal certain cooperation problems
with interoperability in the past.

international

cooperation

preventing

(316)

to the great benefit of

it is to be noted that the merged entity
In addition,
would enjoy significant market power in anaesthesia
delivery machines which could give GE/Instrumentarium
the ability to exploit its anaesthesia market power, as
described above,
its own
perioperative monitors business as well as critical case
monitor business and CIS. The merged entity's overall
position in products for the perioperative and critical
care areas of the hospital would be stronger than that of
In
Instrumentarium alone before
patient monitors (combined sales of perioperative and
critical care monitors) the merged entity would be the
leading company with a market share of [30 to 35* %].
In critical care monitors,
the merged entity's market
share would […]* from [10 to 15 %]* to [25 to 30 %]*
at an EEA level (211) exceeding [30 to 35 %]* in eight
EEA countries (Austria, Finland, the United Kingdom,
Greece,
Sweden and
Norway). In CIS, the merged entity would be able to
combine its various solutions and to offer leading CIS

Ireland, Netherlands,

the merger (210).

Spain,

(210) In its Annex 5.4 documents (Annex to the Notification), GE
explains that one of the main reasons for the Instrumentarium
deal was to combine the respective strengths of Instrumentarium
and GE in the perioperative and critical care areas:
‘Continuing
GEMS IT commitment to clinical excellence at the point of care
with a corresponding expansion of parameter base and core
area
competencies';
‘expand presence
the
(Datex-Ohmeda: Global
Leader)',
‘provide a significantly strengthened
perinatal care offering',
position and platform for
‘expands
non-invasive cardiology line-up',
‘provides additional building
blocks for the convergence of devices and IT systems'.

in the perioperative
enhance
‘significantly

growth in Europe',

(211) [20 to 25 %]* taking into account

the horizontal divestiture

offered by the notifying party.

16.4.2004

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L 109/53

to
solutions
customers (212).

perioperative

and

critical

care

across

and CIS

their monitors

the
standardise
perioperative and critical care areas) had therefore a
stronger incentive to insist on a ‘mix-and-match' policy
in order to be able to obtain the monitor they preferred
and to be able to use it with their anaesthesia machine
of choice. As a result, Instrumentarium was only to a
more limited extent able to use its market power in
order
to
increase its sales of critical care monitors and CIS.
Instrumentarium's business strategists had acknowledged
internal
by
those
reason behind GE's
documents, one
acquisition of
the
to exploit
Instrumentarium was
merged entity's complementary strong positions in the
perioperative and critical care areas.

to impose closed architecture policies or

problems (216). As

commercial

suggested

(317) As regards the possible strategy of the merged entity, it
should be noted that, even before the merger, it appears
that
Instrumentarium attempted to follow a strategy
whereby it would ‘leverage its franchise as the global
leader in the anaesthesia market to become the global
leader also in the related market for critical care systems
and equipment' (213). However, before
the merger,
to have had certain
Instrumentarium would appear
disadvantages which would limit
the success of a
potential foreclosure strategy and which have resulted in
an acceptance of an ‘open' architecture policy by
Instrumentarium (214)
technical
interoperability is concerned. Instrumentarium's product
range
relatively
narrow (215). Hospitals
(especially those wishing to

equipment was

in critical

least

care

far

as

as

at

from the parties,

(212) GE is active in the critical care and perioperative areas with its
‘Centricity Critical Care' and ‘Centricity Perioperative' products.
Apart
the other main medical sector CIS
suppliers are Siemens and Philips. Instrumentarium is present in
the same care areas through its ‘Deio' and ‘Clinisoft' products. The
notifying party has not provided market shares in CIS claiming
that
this is a fragmented, nascent and growing market. The
notifying part, in the notification, also claims that their market
share would remain below [25 to 30* %]. In subsequent responses
both parties stated that their market share would be minimal and
the market, market share
that, given the nascent nature of
calculation is not meaningful.
Information collected by the
Commission during its investigation by the main market players
shows that in terms of 2001 and 2002 sales GE/Instrumentarium
would be larger than Philips and Siemens and slightly smaller
than Philips but much larger than Siemens in terms of installed
base In addition, in its web site GE speaks of its ‘leadership' in
CIS: ‘With over 700 Clinical Information Systems world-wide, GE
Information Technologies proven leadership
Medical Systems
for all your
means we can deliver highly evolved systems
Instrumentarium also
perinatal and critical care applications.'
in the
its CIS product
claims that
management of perioperative
information
through solutions that allow healthcare professionals offer better
quality of care while conserving resources' (See www.deio.com).
(213) This claim was included not only in Instrumentarium's internet
site and in strategy documents of marketing advisers but also in
Instrumentarium's Annual Report of 2001.

‘Deio is a world leader

and critical

care

(318)

as

doubts

devices

compatibility of

In the light of the above and in particular the strength
of the merged entity in anaesthesia machines and the
standardisation trends
and
integration of
identified above the Commission therefore expressed
serious
the
to the
concentration with the common market as it appeared
the
that, by closing the architecture of
merged entity would have the ability and possibly the
incentives to pursue a foreclosure strategy in the whole
perioperative and critical care hospital spectrum: using
its strength in anaesthesia machines to foreclose rivals
in
strengthen
and
anaesthesia machines, perioperative monitors, critical
care monitors and CIS.

its devices,

dominance

dominate

its

or

(319)

Following the Commission's Article 6(1)(c) decision the
parties claimed that the abovementioned serious doubts
would not be
to a number of
arguments (217) (discussed to some extent above) and in

confirmed due

(214) In its response of 18 June 2003, Instrumentarium states that it
‘has
consistently supported open interfacing of anaesthesia
machines and monitors. To support this effort, the company's
long-standing policy has been to publish and support interfaces to
its machines and monitors'.

(215) In its response of 18 June 2003, Instrumentarium explains that it
had certain limitations in its product range, parameter capabilities
and networking capabilities that did not allow it
to adopt a
standardisation strategy contrary to the major players such as GE,
Philips and Siemens: […]*

(216) In internal presentations submitted in response to the Article 11
questionnaire of 9 April 2003, Instrumentarium states that […]*.
(see slide 4 of the presentation ‘ICU outside US strategy plan' of
response of 18 June 2003,
18 August 1999).
Instrumentarium explained that […]*.

In its

(217) See Notification, p. 122 et seq. and the parties' letter of 28 April
2003 with comments to the Article 6(1)(c) decision in which they
already suggested their willingness to offer a commitment
to
dispel the expressed foreclosure-related serious doubts. See also
the parties' economic advisers', RBB, paper of 19 June 2003.

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the lack of

incentives (218) of

the merged
particular
entity to engage in foreclosure strategies on the basis
that interfacing would not be an issue for the majority
of patient monitor sales as electronic connectivity is not
prevalent in the EEA, that Instrumentarium had been
following an open architecture policy and the merger
would not change the dynamics of competition in either
the market for anaesthesia machines or perioperative
monitors and that a foreclosure strategy would not be
commercially
given that
customers would resist it by turning to rivals which
could satisfy their needs and which could engage in
similar counter-strategies.

reasonable or

successful

(320) However,

the

party

decision,

notifying

in the light of the serious doubts as to the
compatibility of
the transaction with the common
market due to the foreclosure issues identified in the
6(1)(c)
submitted
commitments in order to dispel the abovementioned
serious doubts. This commitment appeared to eliminate
the serious doubts relating to the vertical issues and was
therefore market tested in order to assess its viability
and effectiveness and was further
improved by the
notifying party and re-submitted in a revised version on
4 July and then on 24 July 2003 as part of a revised
package of commitments. In the light of the positive
market test results and its assessment, it was concluded
that
to eliminate the
serious doubts relating to vertical issues in this case. As
a result, no objections were raised as
the
above-mentioned vertical issues.

the commitment was sufficient

regards

1.1. COMMITMENTS SUBMITTED TO THE COMMISSION

Instrumentarium)

(322) As regards the market for perioperative monitors, the
notifying party submitted on July 24 a package of
remedies, based on the divestiture of Spacelabs
(a
in conjunction with a
division of
series of OEM supply agreements
(Instrumentarium
anaesthesia machines,
Instrumentarium/Datex-Ohmeda
perioperative monitor Cardiocap5 and Instrumentarium
latest gas module model) aiming at making the divested
business more appealing to potential purchasers and a
more effective competitive force.

(323) The set of undertakings can be summarised as follows:

(a) Divested Business

(324) Divestment of

all

assets,

tangible

and intangible
(including proprietary know-how) and all businesses
belonging to ‘Spacelabs', a division of Instrumentarium,
acquired by and incorporated into Instrumentarium in
July 2002 and managed in conjunction with and
through Datex-Ohmeda Inc. a fully owned subsidiary of
Instrumentarium. The
Spacelabs Divested Business
comprises, inter alia, Datex-Ohmeda's Spacelabs medical
and
manufacturing,
development operations and sales channel operations
for multi-parameter patient monitoring and associated
equipment
is
in Schedule 1 of the Undertakings
described in detail
and annexes thereto.

and services. The divested business

distribution

research

and

V. COMMITMENTS

1. HORIZONTAL COMMITMENTS

(321)

to remove the abovementioned horizontal
In order
competition concerns on the market for perioperative
monitors, GE has submitted a package of commitments.
The commitments are attached to this Decision as
Annex I.

(218) The parties deny that

Instrumentarium has market power in
anaesthesia machines. This argument has been discussed above in
the
in
section describing Instrumentarium's market power
anaesthesia delivery machines in specific national countries where
its market share exceeds 50 %. The parties do not deny that an
anaesthesia machine supplier could ‘close' the architecture of its
machines or degrade
interoperability and thus prevent or
prejudice sales of rival patient monitor or CIS products that need
to interface, mechanically or electronically, with anaesthesia
machines.

(b) OEM Supply agreements

(325) As mentioned, the undertakings offered by GE include
three OEM supply agreements aimed at
rendering
Spacelabs more competitive in the relevant market and
thus allowing the purchaser of Spacelabs to be present
as a more viable competitor in tenders requiring both
monitors and other pieces of equipment as part of
perioperative monitor ‘systems'.

The OEM supply agreement for anaesthesia
machines

(326) GE is committed to supplying on an OEM basis
anaesthesia machines and related supplies, accessories
to the
and start-up kits, on a non-exclusive basis,
purchaser of Spacelabs for the purpose of resale to

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to whom the

supplies
end-customers
perioperative monitors for sale, and for the purpose of
allowing the purchaser to make combined perioperative
monitor/anaesthesia machine bids and sales.

purchaser

(327) The OEM supply agreement will be in force for a
duration of five years and will allow the purchaser of
Spacelabs to supply the relevant products within the
territory of the EEA and all future EU Member States
(all accession countries). Moreover, the agreement also
provides that successor and upgraded versions of the
current products shall be supplied under the same terms
and conditions. The products
shall be priced at
substantially similar conditions as those offered to GE
distributors. The agreement also includes the supply of
spare parts
the
expiration of
supply of
agreement
maintenance and repair services by GE, upon request by
favourable conditions. This supply
the purchaser, at
agreement is described in detail
in Schedule 2 of the
Undertakings.

for a duration of 10 years after

and the

the

(330)

The OEM supply agreement for Cardiocap5/Gas
monitor

(328) GE

is

to

the

supply

committed

leads and cables,

the EEA and all

Cardiocap/5
perioperative monitors (including the gas monitors), and
to the
related supplies, accessories,
purchaser on an exclusive basis. The agreement shall be
in force for a duration of 10 years and will allow the
purchaser of Spacelabs to supply the relevant products
within the territory of
future EU
Member States (all accession countries). Moreover, the
agreement also foresees that successor and upgraded
versions of the current products shall be supplied under
the same terms and conditions. The products shall be
supplied at ‘cost plus' pricing conditions, i.e. including
GE direct production, distribution intellectual property
and warranty and costs plus a margin of [20 to 30 %]*.
The agreement shall also include the supply of spare
parts for a duration of 10 years after the expiration of
the agreement and the supply of maintenance and repair
services by GE, upon request by the purchaser, at
favourable conditions. This agreement
is described in
detail in Schedule 3 of the Undertakings.

The OEM supply agreement for gas modules

(329) GE is

the Datex-Ohmeda Gas module.

committed to supply to the purchaser of
Spacelabs
The
agreement shall be in force for a duration of 10 years
and will allow the purchaser of Spacelabs to supply the
relevant products on a world-wide basis. Moreover, the
agreement also foresees that successor and upgraded
versions of the current products shall be supplied under
the same terms and conditions. The products shall be
supplied on pricing terms no less favourable than those

the same ‘cost-plus'

offered to other third parties or, alternatively, on the
basis of
terms foreseen for the
supply of Cardiocap5. The agreement shall also include
the supply of spare parts for a duration of 10 years and
the supply of maintenance and repair services by GE,
upon request by the purchaser, at favourable conditions.
This OEM agreement is described in detail in Schedule 4
of the Undertakings.

(c) Instrumentarium commitment

a

is

to

to the

commitment

to be mentioned that,

to this Decision. The purpose of
ensure

in addition to the
It has
submitted by GE, on 17 July 2003
undertakings
Instrumentarium submitted
(the
Instrumentarium Commitment) which is reproduced in
the
Annex III
Instrumentarium Commitment
full
compliance with the provisions of Section C and
Section D of the Commitment text, as submitted by GE,
effective date (219), when such
also prior
commitments will be assumed by GE. In practice, most
Instrumentarium commitment will
importantly the
and
ensure
the
the
and the
the divested business
competitiveness of
compliance with
fencing
hold-separate
obligations prior to GE effectively acquiring control of
the
Instrumentarium. The Commission takes note of
Instrumentarium
this
commitment does not
condition for
clearance.

However,
a

commitment.

preservation

constitute

viability

ring

and

of

1.2. ASSESSMENT OF THE NOTIFIED CONCENTRATION AS

MODIFIED BY THE UNDERTAKINGS

(331)

including major hospitals

In the framework of the market test on the proposed
undertakings, the Commission contacted approximately
200 third parties,
in all
Member States,
the parties' main competitors and
prospective purchasers of the divested business. Many
respondents put
and substantial
forward concrete
suggestions for amendments to the package proposed by
the notifying party with a view to improving the overall
package and making the divested business a more viable
competitor. The most substantial suggestions related to
the duration and the geographic scope of
the OEM
supply agreements; the need to ensure timely access to
successor and upgraded versions; the spare parts supply
provisions; and the pricing terms and conditions.

(219) As defined in the undertakings: ‘Effective Date: the closing date as
defined in the Combination Agreement dated 18 December 2002
between GE and Instrumentarium, whereby GE will acquire sole
control of Instrumentarium.'

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incorporates

(332) The final package of undertakings, submitted on July 24
and described above,
the
suggestions and comments made by third parties in the
context of the market test. The undertakings in their
final form thus meet the concerns expressed by third
parties as regards the need to ensure the greatest
possible viability and competitiveness of
the divested
business.

the bulk of

(333) The commitment

relating to the divested business
implies the transfer of all assets and activities belonging
to Spacelabs. This company achieved,
in 2002, global
sales revenues of about EUR 180 000 000.

(336)

(334)

the divestiture of

In terms of product
the
range,
Spacelabs' business will more particularly comprise
Spacelabs' patient monitoring platform known as the
Ultraview Care Network. The Ultraview Care Network
Monitors includes a variety of models (220) and in
particular, as confirmed by independent surveys (221),
two high-end monitors which are equivalent
to GE's
high-end monitors
(the Solars 9500 and 8000).
Specifically, the Ultraview 1700 is Spacelabs' highest end
patient monitor and is particularly suitable for use in
high-end perioperative areas.

the

throughout

perioperative

hospitals. Specifically, a clinical information system for
use
environment
(Caremaster Plus OR Chart) has been designed for use
by anaesthesia providers in order to address the needs
of preoperative, operative
and postoperative data
management to provide the perioperative patient record.
through
This CIS can be
Spacelabs' highest-end monitor.
in 2003,
Spacelabs will introduce the next generation networking
infrastructure via its Intesys Clinical Database, providing
an even opener network communication capability and
enabling application via web services
remote
information review.

accessed in particular

Finally,

for

the transfer of Spacelabs'
current

In terms of product range and monitoring capabilities in
the perioperative area, Spacelabs thus offers technical
solutions similar to those of GE prior to the merger.
The Commission notes that the divestiture of Spacelabs
intellectual
also includes
agreements
property
concluded by Spacelabs with third parties as regards
technology licences, some of which are particularly
relevant
for the integration of modules used in the
perioperative area (e.g contract with Aspect Medical
Systems with respect to BIS module, and licence under
Nellcor's pulse oxymetry sensor coding patents).

as well

rights

the

and

that

sales

development

together with the requirement

(337) As to the capability for the purchaser of Spacelabs to
rely on effective sales forces and R&D, the Commission
notes that,
the
purchaser shall have, inter alia, the financial resources
and proven expertise in order to develop the business,
Spacelabs will also comprise distribution and research
channel
operations
and
operations
for multi-parameter patient monitoring,
currently managed through Datex-Ohmeda's Spacelabs
the
medical manufacturing.
transfer of key personnel,
the
Spacelabs business would also include the creation of
sales
level of
perioperative monitor business in each EU country to
the extent
the purchaser does not have distribution
capacity in the country concerned. Moreover, in order
to ensure that
the sales personnel concerned has
sufficient market experience, and can thus be expected
to have an effective access to anaesthesiologists, this
transfer would include distribution staff of Spacelabs
currently employed by Instrumentarium and its affiliated
undertakings.

alongside
the divestiture of

that are appropriate

In addition,

to the

teams

Index Module;

(335) The Spacelabs' UCN system also comprises various
modules that are available to meet specific monitoring
needs,
including in the perioperative area (e.g the
the capnograph and EEG
Bispectral
monitoring modules). Options are also available to
mix-and-match screen sizes, display types
(CRT or
flat-panel), and networks (stand-alone, hard-wired or
wireless). Clinicians are therefore enabled to customise
monitor operation to specific patient preference and
needs. Spacelabs Ultraview Care Network also supports
seamless data acquisition and interfaces for access to the
longitudinal patient record at the point of use, including
and
hospital-based,
home-based
provides
networking and connectivity solutions adapted to the
needs on the market.
In that perspective, Spacelabs'
highest-end monitor can, for instance, provide access to
clinical information systems at the point of care through
different systems (Dynamic Network Access or Windows
Dynamic Network Access) in order to give clinicians the
ability
information systems
interfaced with the network. Finally, Spacelabs' offering
includes information systems solutions which,
in the
near future, are expected to become critical for many

office-based,
thus

to view and control

clinic/physician

healthcare.

Spacelabs

(220) The Ultraview 1030, 1050, 1500, 1600 and 1700.
(221) See T for G, Section 3.1 ‘Products and Markets', p. 6.

(338) With regard to the market presence of Spacelabs, the
commitments are aimed at ensuring that the divestiture,
together with the other commitments submitted by GE,

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the business to be a
will enable the purchaser of
competitive force of size, presence and strength similar
to GE's prior
for
perioperative monitors.

to the-merger on the market

(339) First of

of

integration

all, whilst

share then estimated at

[5 to 10 %]*,
Spacelabs

Spacelabs'
base of
installed
perioperative monitors
in Europe was on its own
reported to be similar to that of GE in 2000 ([5 to
10 %]* compared to [5 to 10 %]* for GE) (222), with a
the
market
subsequent
within
Instrumentarium in 2002 has been accompanied by a
slight decline in its sales of perioperative monitors. With
the objective of fully restoring and enhancing Spacelabs'
competitiveness in this area, the commitment package
thus includes the undertaking by GE to supply to the
purchaser, on an exclusive basis, Datex-Ohmeda's
‘Cardiocap5/gas monitor'. This monitor, considered as
equivalent to the UV 1500, has been offered with a
view to ensuring that the sales of the divested business
would on their own — i.e. without taking account of
the possible sales of perioperative monitors by the
purchaser — correspond, to the greatest possible extent,
to GE's own sales of perioperative monitors pre-merger,
in particular on markets where the transaction would
lead to the creation of a dominant position.

the overall 2002 direct sales of
and Germany would
France

(340) The Commission notes, in this regard, that the EEA sales
of Cardiocap/5 perioperative monitors during the year
2002 were, on their own, higher than the overall direct
sales of GE's perioperative monitors, representing more
than EUR [10 to 15]* million compared to EUR [5 to
10]* million for GE's direct sales. In the Member States
where the Commission identified competition concerns,
the
combination of Spacelabs' own monitors and
Cardiocap 5 perioperative monitors will eliminate or
considerably reduce the overlap resulting from the
these
merger. Thus,
monitors
have
in
represented, respectively, a [5 to 10 %]* and a [5 to
10 %]* market share, compared to [5 to 10 %]* and [5
to 10 %]* for GE pre-merger. In other countries, on the
the corresponding market
basis of
shares would even be substantially higher.
In Spain,
sales of Spacelabs
and Cardiocap 5 perioperative
monitors would thus represent a [15 to 20 %]* market
share compared to [10 to 15 %]* for GE. In the United
Kingdom,
these sales would correspond to a [15 to
20 %]* market share, compared to [5 to 10 %]* for GE.
share was
in Sweden, where GE's market
Finally,
between [5 to 10]* and [5 to 10 %]* in 2002,
the
overlap would be substantially reduced, down to only [0
to 5]* %. In view of the duration (10 years), the scope

the 2002 figures,

(222) T for G, Section 3.3.1, ‘Market Shares Monitors Europe' p. 6.

(the EEA including all accession countries) and the
exclusivity of the supply agreement for Cardiocap 5, the
Commission considers that the purchaser will be in a
position to maintain over
time a significant market
presence while also being in a position to develop its
the
own manufacturing business.
respect,
Commission further notes
the Cardiocap 5
perioperative monitor is indeed one of the best-selling
products of
Instrumentarium in the various EEA
countries.

In that

that

an effective

the purchaser

In addition to offsetting the overlaps resulting from the
merger, the commitments submitted by the notifying
party are aimed at ensuring that
is
actually put in a position to exert, also in qualitative
constraint on the
competitive
terms,
merging parties by offering products of comparable
quality. In that regard, the Commission is of the opinion
that the exclusivity foreseen by the commitment relating
to the sale of Cardiocap 5 perioperative monitors, or
any successor or upgraded versions, will ensure that the
purchaser can be immediately perceived as offering
close substitutes to Instrumentarium's patient monitors.

of

(10

that

time

years),

period

successor

the purchaser will have access,

for a
In parallel,
considerable
to
Instrumentarium's renowned gas modules, on favourable
pricing terms. The Commission considers
the
relating to the gas module, and its
commitment
the
versions, will
upgraded or
purchaser to further develop Spacelabs' own monitors
by incorporating Instrumentarium's high-end technology
in the field of gas monitoring, a feature which is crucial
for effective and successful presence in the perioperative
It also has to be underlined that, prior to the
area.
merger, GE did not have access to these gas modules.
Spacelabs will thus be in a more advantageous position
than GE pre-merger in this respect, by virtue of this
specific commitment.

enable

(341)

(342)

in a position to effectively

(343) Finally, the Commission considers that, thanks to the
commitment
relating to the supply of anaesthesia
machines and related supplies at favourable conditions,
the purchaser of Spacelabs, similarly to the merged
entity, will be
and
successfully participate in package bids, that is to say,
perioperative
tenders
monitor/anaesthesia machine
at
sales,
competitive prices. Similarly to the case of gas modules,
it has to be underlined also here that, prior to the
merger, GE did not have access to these anaesthesia
machines at the conditions set out in the OEM supply
agreement. Moreover, Spacelabs will be in a position to
offer a full range of patient monitors, not limited to the

combined
bids

involving

and

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16.4.2004

perioperative area, but also including the critical area,
for which it has, already at
this stage, a significant
presence.

Conclusion on the commitments for perioperative
monitors

(344) The Commission is of the opinion that the undertakings
can be regarded as sufficient to remove the competition
concerns
to the
identified by the Commission as
the transaction with the common
compatibility of
final overall package offered by the
market. The
notifying party incorporates
to a very considerable
extent the comments and reactions by third parties. In
particular,
the
competition concerns identified by the Commission by
offsetting the overlap between the merging parties in
the market for perioperative monitors and by restoring
competitive conditions equivalent to those existing prior
to the merger.

commitments will

these

solve

(345) The Commission wishes nonetheless to emphasise that
the identity of the purchaser, which remains subject to
the approval of
to
ensure the efficacy of the undertakings. As a matter of
fact, in view of the specificities of the functioning of the
relevant market, the ‘proven expertise'
(such as being
active in the market for perioperative or intensive care
equipment and products) will be of particular relevance.

the Commission, will be crucial

(346) The

(the

described

commitments

effective
above
divestiture of
the divestment business and the full
compliance with the OEM supply agreements) constitute
conditions of
this Decision, as only through full
compliance therewith (subject to any change pursuant to
the review clause of
the Annex), can the structural
change on the
relevant market be achieved. The
remaining commitments constitute obligations (subject
to any change pursuant
the
Annex), as they concern the implementing steps, which
are necessary to achieve the sought structural change.

to the review clause of

2. VERTICAL (INTERFACE) COMMITMENT

(347) Following the communication of

in this

the Commission's
serious doubts in the Article 6(1)(c) decision initiating
proceedings
in-depth
investigation was ongoing, the notifying party, by letter
of 11 June 2003, submitted commitments (The Original
to Article 8(2) and
Interface Commitment) pursuant
10(2) of the Merger Regulation with a view to removing

case and whilst

the

Commission's

the
the
interoperability between anaesthesia machines, patient
monitors and CIS.

serious

doubts

to

as

(348) The commitment appeared to eliminate in principle the
Commission's serious doubts relating to the vertical
issues and was therefore market-tested in order to assess
its viability and effectiveness. The commitment was
revised by the notifying party on 4 July 2003 following
comments received from market participants. Some
further revisions were made following the market test of
the ‘horizontal commitment'. The final version of the
Interface Commitment was therefore submitted on 24
July 2003 (the Interface Commitment) and appears in
Annex II to this Decision.

THE MARKET TEST OF THE ORIGINAL INTERFACE
COMMITMENT

(349) The market test of the original Interface Commitment
produced largely positive results (223). The majority of
hospitals responding to the Commission's questionnaire
appeared satisfied with the commitment and believed
that
vertical
competition concerns identified above. A number of
respondents, however, highlighted certain misgivings
which were focused on a number of provisions which
respondents felt could be improved in order to ensure
the viability and effectiveness of the commitment.

to eliminate

sufficient

it was

the

(350)

that

some

thought

the
respondents
In particular,
obligation to keep interfaces open as defined in the
Original Interface Commitment was not comprehensive
as it excluded two-way exchange of data (from and to
the merged entity's devices) and provided for open
interfaces of the merged entity's patient monitors only
as regards their connection with third party CIS and not
with third party anaesthesia machines; open interfaces
for CIS were not covered. The ‘open interface' definition

(223) Questionnaires were sent to approximately 200 hospitals which
had participated in the Commission's in-depth investigation as
well as
to patient monitor, anaesthesia machine and CIS
competitors of the parties. A significant number of responses
were received by both competitors and customers. Overall,
the
competitors were split
proposed commitment. Overall,
customers
expressed satisfaction that the commitment would eliminate the
vertical concerns identified by the Commission. A minority of
customers expressed certain concerns while others provided no
or only unclear answers.

fairly evenly as to the efficacy of

a majority of

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treatment

also considered rather

to the obligation to provide

interface commitment was
in clause 3 of the original
considered too vague
(reference only to ‘industry
practice') and ineffective by a number of respondents as
it did not include a specific benchmark. It would not
guarantee non-discriminatory treatment of third party
devices and the merged entity's devices and therefore
could still
to degrade
allow the merged entity
interoperability of third party devices. The provisions
relating
interfacing
information ‘without undue delay' and ‘from product
vague.
development' were
Information should be provided according to a principle
of non-discriminatory
the
information was sufficiently complete to enable third
parties to achieve an open interfacing early enough so
that third party suppliers could achieve interoperability
of
their devises in good time so as to be able to
compete effectively with new products launched by the
merged entity. The market test also highlighted some
practical problems associated with the information and
the Original
certification cooperation obligations of
Interface Commitment, namely that more
specific
procedures need to be included in the commitment and,
in particular,
third party
information not be compromised when cooperating
with the merged entity. Finally, it was stressed that the
compliance with the
Commission should
commitment by closely monitoring its
application
through a trustee.

confidentiality of

soon as

ensure

that

as

ASSESSMENT OF THE CONCENTRATION AS MODIFIED BY
THE INTERFACE COMMITMENT

(351) The positive results of

of

the

test,

viability

the market

the further
improvements made by the notifying party and the
Commission's
and
assessment
effectiveness of the Interface Commitment,
led to the
conclusion that the Interface Commitment would dispel
in an appropriate fashion the abovementioned serious
doubts relating to vertical, interoperability issues. As a
result, no objections were raised as to the compatibility
of the proposed concentration, as modified, with the
common market as regards the abovementioned vertical
concerns.

devices.

(352) The Interface Commitment aims at ensuring electrical
interoperability between the different
and mechanical
relevant
Interface
to
According
Commitment, GE/Instrumentarium undertake to keep
therapy devices
interfaces of
(anaesthesia machines and ventilators), patient monitors
(including perioperative and critical care monitors), and
CIS ‘open' by providing reasonable, safe, seamless and
effective interface options in accordance with industry
and relevant
practice,

accepted industry standards

and future

existing

the

of

principle

non-discriminatory

to allow interfacing of additional

regulatory requirements. The commitment does not
preclude GE/Instrumentarium from producing integrated
machines (such as Instrumentarium's ADU) which are
popular with a number of hospitals in the EEA provided
that the interfaces of such machines remain open in
third party
order
relevant devices. According to the commitment which
took into account comments made by third parties
during the market test, open interfaces should adhere to
a
by
providing third party devices with options as effective as
those available to GE/Instrumentarium's own devices
with the exception, of course, of situations where the
third party device characteristics are such (for example
inferior to those of GE/Instrumentarium's own devices)
as not
to permit such equivalent, open interfacing.
GE/Instrumentarium will have an obligation to state in
its product literature or web site that its devices have
open interfaces. Customers would therefore have no
reason to doubt that they could continue to ‘mix and
match' GE/Instrumentarium devices with third party
devices.

treatment

be

and

protocol

new devices would

including for
other

(353) Further, GE/Instrumentarium would have an obligation
to provide third party suppliers with the interfacing
example
information and data,
the
communication
specifications
including necessary technical clarifications, which is
necessary for third parties to develop open interfaces.
interfacing information on modifications,
Requisite
upgrades
provided
or
automatically without
further specific requests being
necessary.
Information would be provided on a
non-discriminatory basis, free of charge or at cost and
without undue delay. The information on upgrades and
new devices would be provided at a sufficiently early
stage having regard to a principle of non-discriminatory
treatment and with the aim of providing third parties
the opportunity to develop competing interfaces as early
as GE/Instrumentarium. GE/Instrumentarium would
therefore have to provide the requisite information
immediately from the
sufficiently
time
developed to enable third parties to develop interfaces
and in any event no later than product development.
Specific obligations are included ensuring that
third
parties would receive
information or an adequate
reasoned response explaining why the information is
not available within twenty working days from making
a request. Having considered comments by a third party
information was
stressing that
the
paramount,
the
that
believes
such timely provision. The
commitment
ensures
commitments give
that
Commission considers
adequate guarantees that competitors will receive such

early provision of
Commission

that

the

is

it

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Official Journal of the European Union

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in addition, in view of the
information in good time;
relatively long product cycles of therapy equipment and
patient monitors and the duration of tender procedures
any foreclosure effects would be excluded.

(354)

of

for

the

lending

to further

efficacy of

cooperation,

In order
the
ensure
commitment, GE/Instrumentarium undertook to provide
technical assistance and consultation to enable third
parties
to use the interfacing information. Contact
points would be advertised in its documentation or on
its web site. Moreover, the commitment includes specific
requisite
obligations
equipment in order to perform interoperability tests and
for certification purposes;
third parties can therefore
perform necessary tests in order to obtain certificates
(such as the IEC 601 mechanical integration test) which
they may find necessary. Confidentiality provisions are
included in order to ensure that third party information
provided to GE/Instrumentarium personnel
in the
context of the commitment would not be used by the
merged entity for other purposes. Further, GE also
accepted an obligation to provide third party suppliers
with the necessary physical components and devices at
reasonable and non-discriminatory market prices
to
enable them to achieve open Interfaces or to make
demonstrations of interoperability to customers and at
trade shows.

to

upon

request.

the Commission

(355) Finally, the commitment includes provisions designed to
ensure its compliance. GE will have an obligation to
report
The
Commission will also have the ability to monitor
compliance through the appointment of an independent
trustee which will be appointed from the moment GE
acquires control over Instrumentarium. The trustee will
be assisted by an independent expert with knowledge of
the relevant industry. In addition, third parties would
have
track arbitration dispute
resolution procedure (as set out in the Annex to the
Interface Commitment) which would enable
third
parties
to receive speedy and effective adjudication
the
through
Commission would retain control of the procedure as
the arbitrators would have to seek and be bound by the
Commission's interpretation of the Commitments where
necessary.

Importantly,

independent

arbitrators.

recourse

to a

fast

CONCLUSION — THE INTERFACE COMMITMENT
ELIMINATES THE COMMISSION'S SERIOUS DOUBTS
RELATING TO VERTICAL ISSUES

(356)

In addition and further to the horizontal commitments
in
which

the merged

position

entity's

reduce

perioperative and critical care monitors, the Interface
Commitment removes foreclosure-related serious doubts
by ensuring that it will continue to be possible in the
future to connect
the patient monitors, anaesthesia
machines and CIS of third-party manufacturers to the
merged entity's devices and CIS. The merged entity
would be under an obligation to provide safe, seamless
and effective interface options,
to provide interface
information on a non-discriminatory basis and to
cooperate with third parties where certification of a
configuration is necessary. The monitoring and dispute
resolution procedures
included in the commitment
would ensure the merged entity's compliance with the
commitment by giving both the Commission and third
and
parties
enforcement.

of monitoring

adequate

powers

(357)

it

the above,

is considered that

the
In the light of
commitments would prevent
the merged entity from
engaging in foreclosure strategies. Hospitals in the EEA
would benefit from continuing to enjoy the ability to
mix and match devices and components from those
suppliers they prefer on the merits of
the supplier's
product. This was confirmed by a number of specific
positive customer responses in the market test of the
commitment.

(358)

It could therefore be concluded that, provided that the
Interface Commitment entered into by the parties is
complied with in full, the serious doubts identified by
the Commission in relation to interoperability issues
would be dispelled and the concentration, as modified
could be declared
by the
compatible with the common market.

Interface Commitment,

VI. CONDITIONS AND OBLIGATIONS

(359) Under the first sentence of the second subparagraph of
Article 8(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 into
vis-à-vis the Commission with a view to rendering the
concentration compatible with the common market.

(360) Where a condition is not

fulfilled,

the Commission
decision declaring the merger to be compatible with the
the
common market
longer
an
undertakings
obligation, the Commission may revoke the clearance

stands. Where
a breach of

concerned commit

no

16.4.2004

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Official Journal of the European Union

L 109/61

the
decision in accordance with Article 8(5)(b) of
Merger Regulation;
the undertakings concerned may
also be subject to fines and periodic penalty payments
under Articles 14(2)(a) and 15(2)(a) of
the Merger
Regulation.

(361)

In accordance with the basic distinction described
above, the Commission makes its decision subject to the
condition of
following
commitments:

compliance with the

full

(a)

the commitments set out in points 1 to 6, 15, 16, 17
and 20 of Annex I (the Spacelabs Commitment);

(b) the whole of

the Interface Commitment and its
Annex concerning interoperability issues which is
attached as Annex II to the Decision except for the
the
of
the
provisions
reporting
trustee's
appointment set out in clauses 8 and 9.

specificities
the

regarding
obligations

and

of

(362)

In accordance with the basic distinction described
above, the Commission makes its decision subject to the
obligations on GE to comply in full with the
commitments entered into in points 7 to 14, 18, 19, and
21 to 42 of Annex I (the Spacelabs Commitment), and
with the provisions regarding the reporting obligations
and the trustee's appointment set out in clauses 8 and 9
of Annex II (the Interface Commitment).

VII. CONCLUSION

the

(363) The Commission has concluded that the commitments
to
submitted by the notifying party are sufficient
this
address
competition concerns
concentration. Accordingly,
full
compliance with the commitments submitted by the
to
notifying party,
it
oppose
compatible with
the
common market
functioning of
the EEA Agreement. This Decision is
adopted in application of Article 8(2) of the Merger
Regulation and of Article 57 of the EEA Agreement.

the Commission has decided not
the notified operation and to declare

raised by
the

subject

and

the

to

HAS ADOPTED THIS DECISION:

Article 1

The notified operation whereby General Electric Company
would acquire sole control of Instrumentarium OYJ within the
meaning of Article 3(1)(b) of Regulation (EEC) No 4064/89 is,
as modified according to Annexes I and II to this Decision,
hereby declared compatible with the common market and the
functioning of the EEA Agreement.

Article 2

Article 1 is subject to full compliance with the conditions set
out in points 1 to 6, 15, 16, 17 and 20 of the Spacelabs
Commitment in Annex I to this Decision and with the whole
of the Interface Commitment, including its annex, set out in
Annex II to this Decision, except for clauses 8 and 9 of the
Interface Commitment, which shall apply as obligations
pursuant to Article 3.

Article 3

Article 1 is subject to full compliance with the obligations set
out in points 7 to 14, 18, 19, and 21 to 42 of the Spacelabs
Commitment in Annex I to this Decision and with clauses 8
and 9 of
to this
Decision.

the Interface Commitment

in Annex II

Article 4

This Decision is addressed to:

General Electric Company
3135 Easton Turnpike
Fairfield
Connecticut 06431
USA

Done at Brussels, 2 September 2003.

For the Commission

Mario MONTI

Member of the Commission

L 109/62

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ANNEX I

The full original text of the conditions and obligations referred to in Articles 1, 2 and 3 may be consulted on the
following Commission website:

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

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Official Journal of the European Union

L 109/63

ANNEX II

The full original text of the conditions and obligations referred to in Articles 1, 2 and 3 may be consulted on the
following Commission website:

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