Opinion of the Advisory Committee on concentrations given at its 135th meeting on 6 December 2005 concerning a draft decision relating to case COMP/M.3696 — E.ON/MOL   (Text with EEA relevance)
Date: 2005-12-06
Institutions: Advisory Committee on Restrictive Practices and Dominant Positions
Subjects: Germany, Hungary, economic concentration, electrical energy, gas industry, merger control

C 223/14

EN

Official Journal of the European Union

16.9.2006

Opinion of the Advisory Committee on concentrations given at its 135th meeting on 6 December
2005 concerning a draft decision relating to case COMP/M.3696 — E.ON/MOL

(2006/C 223/08)

(Text with EEA relevance)

1. The Advisory Committee agrees with the Commission that
the notified operation constitutes a concentration within
the meaning of Article 1(3) and 3(1)(b) of the Merger
Regulation and that it has a Community dimension as
defined by the Merger Regulation.

2. The Advisory Committee agrees with the Commission that
for the purpose of assessing the present operation, the
relevant product markets are

in the gas sector:

a) Transmission of gas

b) Storage of gas

c) Supply of gas to traders

d) Supply of gas to RDCs

in the gas sector:

a) Transmission of gas

b) Distribution of gas

c) Storage of gas

d) Supply of gas to traders

e) Supply of gas to Regional Distribution Companies

(‘RDCs’)

f) Supply of gas to large power plants

g) Supply of gas to large industrial customers (with an

hourly consumption exceeding 500 m3/hour)

h) Supply of gas to small commercial and industrial custo-
mers (with an hourly consumption below 500 m3/
hour)

e) Supply of gas to large power plants

f) Supply of gas to large industrial customers (with an

hourly consumption exceeding 500 m3/hour)

g) Supply of gas to small commercial and industrial custo-
mers (with an hourly consumption below 500 m3/
hour)

h) Supply of gas to residential customers (after July 2007

when residential customers become eligible)

in the electricity sector:

i) Transmission of electricity

j) Provision of balancing power

k) Wholesale supply of electricity to traders

l) Wholesale supply of electricity to the public utility

wholesaler

i) Supply of gas to residential customers

m) Wholesale supply of electricity to RDCs

in the electricity sector:

j) Transmission of electricity

k) Distribution of electricity

l) Provision of balancing power

m) Wholesale supply of electricity to traders

n) Wholesale supply of electricity to the public utility

wholesaler

o) Wholesale supply of electricity to RDCs

p) Retail

supply of electricity to medium and large

commercial and industrial customers

q) Retail supply of electricity to small commercial and

industrial customers

n) Retail

supply of electricity to medium and large

commercial and industrial customers

o) Retail supply of electricity to small commercial and

industrial customers

p) Retail supply of electricity to residential customers
(after July 2007 when residential customers become
eligible)

4. The Advisory Committee agrees with the Commission that
for the purpose of assessing the present operation, the
relevant geographic markets are at present sub-national
for the following markets

in the gas sector:

a) Distribution of gas

b) Supply of gas to residential customers until July 2007

r) Retail supply of electricity to residential customers

in the electricity sector:

3. The Advisory Committee agrees with the Commission that
for the purpose of assessing the present operation, the
relevant geographic markets are national
the
following markets

for

c) Distribution of electricity

d) Retail supply of electricity to residential customers until

July 2007

16.9.2006

EN

Official Journal of the European Union

C 223/15

5. The Advisory Committee agrees with the Commission that
the proposed transaction will create a fully vertically inte-
grated entity along the gas and electricity supply chains by
combining MOL's almost exclusive control over gas
resources and storage and E.ON's strong market positions
in the retail supply of gas through its ownership of
regional distribution companies in both gas and electricity,
and E.ON's activities in electricity generation/wholesale.

6. The Advisory Committee agrees with the Commission that
therefore after the transaction, the new entity will have
both the ability and incentive to foreclose access to gas for
its competitors in the downstream gas and electricity
markets.

7. The Advisory Committee agrees with the Commission that
the merged entity has a dominant position in the
following markets in the gas sector:

a) Supply of gas to traders in Hungary

b) Supply of gas to RDCs in Hungary

c) Supply of gas to large power plants in Hungary

d) Storage of gas in Hungary

8. The Advisory Committee agrees with the Commission that
the proposed concentration is likely to result in a signifi-
cant
to effective competition in the
common market or in a substantial part of it and the EEA
for the following markets

impediment

in the gas sector:

a) Supply of gas to large industrial customers in Hungary

through the creation of the dominant position

b) Supply of gas to small commercial and industrial custo-

mers in Hungary

c) Supply of gas to residential customers in Hungary (in
each of the RDCs' areas separately before July 2007)

in the electricity sector:

d) Wholesale supply of electricity to traders in Hungary

e) Retail

supply of electricity to medium and large

commercial and industrial customers in Hungary

f) Retail supply of electricity to small commercial and

industrial customers in Hungary

g) Retail supply of electricity to residential customers in
Hungary (in each of the RDCs' areas separately before
July 2007)

9. The Advisory Committee agrees with the Commission that
the maintenance of cross-shareholdings between MOL and
the new entity will allow the new entity to reinforce its
foreclosure strategy through its position in the gas storage
market and MOL's position in the transmission market.

10. The Advisory Committee agrees with the Commission that
the undertakings are sufficient to remove the significant
impediment to competition in the following markets

in the gas sector:

a) Supply of gas to large industrial customers in Hungary

b) Supply of gas to small commercial and industrial custo-

mers in Hungary

c) Supply of gas to residential customers in the Hungarian

RDCs' areas (in Hungary after 2007)

d) Storage of gas in Hungary

in the electricity sector:

e) Wholesale supply of electricity to traders in Hungary

f) Retail

supply of electricity to medium and large

commercial and industrial customers in Hungary

g) Retail supply of electricity to small commercial and

industrial customers in Hungary

h) Retail supply of electricity to residential customers in
the Hungarian RDCs' areas (in Hungary after July 2007)

11. The Advisory Committee agrees with the Commission
that, subject
to full compliance with the undertakings
offered by the parties, and considered all undertakings
together, the proposed concentration does not significantly
impede effective competition in the common market or in
a substantial part of it, in particular as a result of the crea-
tion or strengthening of a dominant position, within the
meaning of Article 2(2) of the Merger Regulation and that
the proposed concentration is therefore to be declared
compatible with Article 2(2) and 8(2) of the Merger Regu-
lation and Article 57 of the EEA Agreement.

12. The Advisory Committee asks the Commission to take into
account all the other points raised during the discussion.