Source: EURLEX
Language: en
Format: md

Arrêt du Tribunal

**Case T-114/02**   
  
  
**BaByliss SA  
v  
Commission of the European Communities**  
  
«(Competition – Concentrations – Regulation (EEC) No 4064/89 – Action brought by a third party – Admissibility – Commitments in the course of the first phase of examination – Trade mark licence – Modification of commitments – Time-limits – Financial aid by the State – Nominal purchase price – Serious doubts as to the compatibility of the concentration with the common market – Absence of commitment on markets with serious competition problems)»

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|  | |  | | --- | | Judgment of the Court of First Instance (Third Chamber), 3 April 2003 | |  |  |
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Summary of the Judgment

*1..
:   Actions for annulment – Natural or legal persons – Measures of direct and individual concern to them – Decision declaring a concentration compatible with the common market – Third-party undertaking which actively participated in the administrative procedure and which has the status of a potential
    competitor – Whether admissible
  
(Art. 230, fourth para., EC)*

*2..
:   Competition – Concentrations – Administrative procedure – Commitments entered into by the undertakings concerned – Modifications notified after the time-limit – Account taken by the Commission of the modified commitments in order to find the concentration compatible with the common
    market – Whether permissible – Conditions
  
(Commission Regulation No 447/98, Art. 18(1); Commission Notice on remedies acceptable under Regulations No 4064/89 and No
447/98, para. 37)*

*3..
:   Competition – Concentrations – Investigation by the Commission – Commitments entered into by the undertakings concerned likely to make the notified concentration compatible with the common
    market – Nature of commitments allowing the Commission to refrain from initiating the Phase II procedure – Commitments excluding all serious doubts – Behavioural commitments – Whether included
  
(Council Regulation No 4064/89, Art. 6(1); Commission Notice on remedies acceptable under Regulations No 4064/89 and No 447/98)*

*4..
:   Competition – Concentrations – Assessment of compatibility with the common market – Commitments entered into by the undertakings concerned likely to make the notified concentration compatible – Concentration between undertakings active on the markets for small electrical household appliances – Commitment to grant trade-mark licences – Remedy for competition problems raised by the concentration – Conditions
  
(Council Regulation No 4064/89, Art. 8(2))*

*5..
:   Competition – Concentrations – Assessment of compatibility with the common market – Commitments entered into by the undertakings concerned likely to make the notified concentration compatible – Concentration between undertakings active on the markets for small electrical household appliances – Commitment to grant trade-mark licences – Limited obligation to obtain supplies imposed on one licensee – Whether permissible – Conditions
  
(Council Regulation No 4064/89, Art. 8(2))*

*6..
:   Competition – Concentrations – Assessment of compatibility with the common market – No dominant position impeding competition created or strengthened – Assessment criteria – Absence of a significant overlap between the parties to a concentration – Relevance – Limits
  
(Council Regulation No 4064/89, Art. 2(2) and (3))*

*7..
:   Competition – Concentrations – Assessment of compatibility with the common market – No dominant position impeding competition created or strengthened – Assessment criteria – Presence of competitors – Relevance dependent on strength of competitors
  
(Council Regulation No 4064/89, Art. 2(2) and (3))*

*8..
:   Competition – Concentrations – Assessment of compatibility with the common market – No dominant position impeding competition created or strengthened – Independent assessment of the various markets for the products concerned – Limits – Need to take account of the overall competition situation and the factors liable to strengthen the economic power of the entity
    arising from the concentration – Failure to establish the absence of serious risks in the case of a concentration of the turnover of the entity arising from
    the concentration on the sectors not dominated
  
(Council Regulation No 4064/89, Art. 2(2) and (3))*

*9..
:   Procedure – Intervention – Plea in law not raised by the applicant – Inadmissible
  
(EC Statute of the Court of Justice, Art. 37, third and fourth paras; Rules of Procedure of the Court of First Instance, Art.
116(3))*

*10..
:   Competition – Concentrations – Assessment of compatibility with the common market – Commitments entered into by the undertakings concerned likely to make the notified concentration compatible with the common
    market – Requirement of compatibility with Article 81 EC – Commitment to grant trade-mark licences containing a clause requiring the licensee to concentrate sales on the territory of
    a Member State – Whether permissible
  
(Art. 81(1) and (3) EC; Council Regulation No 4064/89, Art. 2(1))*

1.
A Commission decision declaring a concentration compatible with the common market is not of individual concern within the
meaning of the fourth paragraph of Article 230 EC to third undertakings not party to the concentration or addressees of the
decision unless it affects them by reason of certain attributes peculiar to them, or by reason of a factual situation which
differentiates them from all other persons and distinguishes them individually in the same way as the addressee. Although mere participation in the procedure leading to the decision is not, in itself, sufficient to show that the decision
is of individual concern to a third-party undertaking, particularly in the field of concentrations, the careful examination
of which requires regular contact with numerous undertakings, active participation in the administrative procedure is nevertheless
a factor regularly taken into account in competition matters, including in the more specific area of the control of concentrations,
to establish, in conjunction with other specific circumstances, the admissibility of an action brought by a third-party undertaking.
Thus, where the parties to the concentration operate on oligopolistic markets characterised by substantial barriers to entry
arising from strong brand loyalty and by the difficulty of access to retail trading, an action brought by such an undertaking
is admissible if it has actively participated in the procedure and may claim the status of a potential competitor. see paras 91, 95, 99

2.
Article 18(1) of Regulation No 447/98 on the notifications, time-limits and hearings provided for in Regulation No 4064/89
on the control of concentrations between undertakings must be interpreted as meaning that, whilst the parties to a concentration
cannot oblige the Commission to take account of commitments and modifications to them submitted after the three-week time-limit
for notification prescribed in Article 18(1), the Commission must nevertheless be able, where it considers that it has the
time necessary to examine them, to authorise the concentration in light of those commitments, even if modifications are made
to them after that time-limit. Consideration of such modifications made after that time-limit is also in keeping with the Notice on remedies acceptable under
Regulations No 4064/89 and No 447/98, adopted by the Commission and binding on it in so far as it does not depart from the
rules in the Treaty and from Regulation No 4064/89 if those modifications can be regarded as limited modifications within
the meaning of paragraph 37 of that notice. see paras 140, 143, 150

3.
Neither Regulation No 4064/89 nor the Commission Notice on remedies acceptable under Regulations No 4064/89 and No 447/98
expressly stipulate what kind of commitments can or must be accepted on the completion of Phase II or in the framework of
Phase I. As Regulation No 4064/89 aims to prevent the creation or strengthening of market structures as a result of which
effective competition in the common market would be significantly impeded, the proposed commitments must be such as to permit
the Commission to conclude that the concentration in question will not create or strengthen a dominant position. In that connection
there is no material difference between the commitments made in Phase I and those in Phase II although, as an in-depth market
study is not carried out in Phase I, the former must not only permit such a conclusion, but must also be sufficient to rule
out clearly any serious doubt on that point. Although a sale of assets is often the most suitable corrective measure for easily remedying a competition problem, particularly
in the case of horizontal overlap, the possibility cannot in principle be ruled out that a licence agreement may be suitable
for remedying identified competition problems. Thus, the possibility cannot automatically be ruled out that commitments which
are prima facie behavioural, for instance not to use a trade mark for a certain period, or to make part of the production
capacity of the entity arising from the concentration available to third-party competitors or, more generally, to grant access
to essential facilities on non-discriminatory terms, may themselves also be capable of preventing the emergence or strengthening
of a dominant position. Moreover, whilst the effectiveness of such a licence depends on several factors which are more difficult
to assess than a sale of assets, it cannot automatically be ruled out that the Commission will be able to assess the relevant
parameters in the course of Phase I. Thus, where neither the competition problems in question nor the nature of the commitments proposed by the undertakings concerned
are such as to prevent the Commission from concluding that the serious doubts can be removed on the completion of Phase I,
the Commission does not err in law in not initiating Phase II. see paras 169-170, 176, 181-182

4.
A commitment which is behavioural is capable of remedying the competition problems created by a concentration in so far as
it prevents the emergence or strengthening of a dominant position. This is true, in the case of a concentration between undertakings
operating on markets for small electrical household appliances which are characterised by the fact that trade marks are the
most important factor in competition on those markets, of a commitment to grant a trade-mark licence. However, the duration
of that commitment must be such that, given the average life of the products concerned, it enables the licensees, over a transitional
period during which they will be entitled to use their own trade mark together with the licensed trade mark (
co-branding), to ensure the migration from that trade mark to their own trade marks, so that they can compete effectively against the
trade mark concerned after the transitional period. see paras 191-193, 195, 205, 207, 210

5.
In the context of a commitment by the parties to a concentration to grant trade-mark licences in respect of a variety of products
to different licensees in different Member States, which is designed to remedy the competition concerns, a clause providing
for the imposition on one of the licensees, for a limited period of two years, of an obligation partly to obtain supplies
of a single product at a supply price equal to the industrial cost price plus general costs, so as to preserve jobs at certain
sites, is permissible since it does not have the effect of strengthening the position of the new entity arising from the concentration
or of rendering the licence less effective. The same is true where the commitment provides the licensees with a mere option
of obtaining their supplies from the new entity. see paras 238-242

6.
The genuine absence of any significant overlap between the parties to a concentration is such as to rule out serious doubts
as to the compatibility of the concentration with the common market, even with respect to the product markets in which the
new entity arising from the concentration has a market share of more than 40% because, in that case, the dominant position
is not being created or strengthened by the concentration, since it already exists. However, in order for the Court to be able to exercise its power of review properly, a Commission decision declaring that
the concentration does not raise serious doubts because there is no overlap must not merely indicate the market shares of
the parties concerned within a 10% bracket, since, although it may be true that there is no significant overlap where the
market share of one of the undertakings is close to 0%, the same cannot be true where it is close to 10%. Moreover, whilst such an absence of significant overlap is a valid reason for concluding that there are no serious doubts
when the Commission is at first examining competition in an individual product market, there are no grounds for taking that
factor into account when carrying out a more general examination of all the product markets of a particular country. see paras 318, 320-321, 326

7.
The mere finding that, although it would hold a market share equal to or exceeding 40%, the entity arising from the concentration
would face competitors does not mean that the concentration does not raise doubts in relation to that market. The presence
of competitors is likely to modify, or even eliminate, that entity's dominant position only if those competitors hold a strong
position which acts as a genuine counterweight. see para. 329

8.
Where the Commission bases its assessment of whether a notified concentration raises serious doubts as to its compatibility
with the common market on a finding that each of the products sold by the parties to the concentration corresponds to a distinct
market and that the various national markets are likewise distinct, it must appraise the competition situation on a each market
separately. It is not, however, an absolute rule that different product markets constitute distinct markets and it may be found necessary
to modify the assessment of a particular product market in the light of the competition situation in all other product markets
of the Member State concerned. There is particular justification for taking the overall competition situation into account where the parties to the concentration
operate in a sector in which the brand is the most important competition factor and in which the reputation of the brand is
to the advantage of all the products carrying it even though they represent the same number of distinct markets. Likewise, in order to assess an undertaking's competition position, the Commission may have to take into account its portfolio
of brands or the fact that it has large market shares in a number of markets for the products concerned. Where, having regard to the likelihood that a dominant position will be created or strengthened, that assessment of the overall
competition situation gives rise to serious doubts as to the compatibility of the proposed concentration with the common market,
the Commission cannot rule out those doubts by arguing that they will become a reality only if the markets affected by the
dominant position created by the concentration generate the largest part of the turnover achieved by the entity arising from
the concentration, which could then adopt anti-competitive practices without there being a risk that distributors would penalise
that conduct by spurning its products on the markets on which, in total, it achieves the largest part of its turnover, even
though its position is not dominant. Not only does Regulation No 4064/89 aim to prohibit the creation or strengthening of a dominant position rather than the abuse
of one, but the unavoidability and dissuasive effect of the retaliation by distributors and, therefore, the absence of a risk
of abusive conduct by the entity arising from the concentration may not be presumed but rather must be established by the
Commission to the requisite legal standard. see paras 339, 342-343, 349, 353, 360, 362-365

9.
Whilst the third paragraph of Article 37 of the Statute of the Court of Justice and Article 116(3) of the Rules of Procedure
of the Court of First Instance do not preclude the intervener from advancing arguments which are new or which differ from
those of the party he supports, lest his intervention be limited to restating the arguments advanced in the application, it
cannot be accepted that those provisions permit him to alter or distort the context of the dispute defined in the application
by raising new pleas in law. Therefore, an intervener, who must, under Article 116(3) of the Rules of Procedure, accept the
case as he finds it at the time of his intervention and whose submissions in an application to intervene are, under the fourth
paragraph of Article 37 of the Statute of the Court of Justice, to be limited to supporting the submissions of one of the
main parties, does not have standing to raise a plea which has not been raised by the applicant. Such a plea must be rejected
as inadmissible. see paras 417-418

10.
The Commission cannot, when applying Regulation No 4064/89, approve commitments which are contrary to the competition rules
laid down in the Treaty because they impair the preservation or development of effective competition in the common market.
In that context, the Commission must appraise the compatibility of those commitments in particular according to the criteria
of Article 81(1) and (3) EC. A clause which, in the context of a commitment to grant trade-mark licences imposed on the parties to the concentration, obliges
a licensee to concentrate the sale of the products covered by the licence on his territory does not, in principle, have as
its object or effect the restriction of competition within the meaning of Article 81(1) EC and, even if it has to be interpreted
as prohibiting the licensees from exporting products bearing the trade mark in question to other Member States, is not such
as to restrict competition appreciably on the relevant markets in the Community or affect significantly trade between the
Member States within the meaning of that provision if it is clear that, in respect of the products concerned, the markets
are national in dimension and are not affected by significant parallel imports. see paras 421-423

  
   
   

JUDGMENT OF THE COURT OF FIRST INSTANCE (Third Chamber) 3 April 2003 [(1)](#Footnote1)

((Competition – Concentrations – Regulation (EEC) No 4064/89 – Action brought by a third party – Admissibility – Commitments in the course of the first phase of examination – Trade mark licence – Modification of commitments – Time-limits – Financial aid by the State – Nominal purchase price – Serious doubts as to the compatibility of the concentration with the common market – Absence of commitment on markets with serious competition problems))In Case T-114/02,**BaByliss SA,**  established in Montrouge (France), represented by J.-P. Gunther, lawyer,

applicant,

supported by**De'LonghiSpA,**  established in Trévise (Italy), represented by M. Merola, D. Domenicucci and I. van Schendel, lawyers,

intervener,

v

**Commission of the European Communities,**  represented by V. Superti, K. Wiedner and F. Lelièvre, acting as Agents, with an address for service in Luxembourg,

defendant,

supported by**SEB SA,**  established in Écully (France), represented by D. Voillemot and S. Hautbourg, lawyers,

intervener,

APPLICATION for the annulment of the Commission's Decision SG (2002) D/228078 of 8 January 2002 not to oppose the concentration
between SEB and Moulinex and to declare it compatible with the common market and with the Agreement on the European Economic
Area, subject to compliance with the proposed commitments (Case COMP/M.2621 ─ SEB/Moulinex),  
  

THE COURT OF FIRST INSTANCE OF THE EUROPEAN COMMUNITIES (Third Chamber),

  
  
composed of: K. Lenaerts, President, J. Azizi and M. Jaeger, Judges,Registrar: J. Palacio González, Principal Administrator,

having regard to the written procedure and further to the hearing on 9 October 2002,

gives the following

  
  

### Judgment

  
  
**: Relevant legislation**

1
Article 1 of Council Regulation (EEC) No 4064/89 of 21 December 1989 on the control of concentrations between undertakings
(OJ 1990 L 257, p. 13), as last amended by Council Regulation (EC) No 1310/97 (OJ 1997 L 180, p. 1, hereinafter
Regulation No 4064/89) provides that the regulation is to apply to concentrations with a Community dimension as defined in Article 1(2) and (3).

2
Under Article 4(1) of Regulation No 4064/89, concentrations with a Community dimension must be notified to the Commission
in advance.

3
Moreover, Article 7(1) of Regulation No 4064/89 provides that a concentration with a Community dimension may not be put into
effect either before its notification or until it has been declared compatible with the common market. However, Article 7(4)
allows the Commission to grant, on request, a derogation from that obligation to suspend the concentration.

4
Under Article 6(1)(b) of Regulation No 4064/89, where the Commission finds that the notified concentration, although falling
within the scope of Regulation No 4064/89, does not raise serious doubts as to its compatibility with the common market, it
must decide not to oppose it and must declare it compatible with the common market (
Phase I Procedure).

5
Conversely, under Article 6(1)(c), where the Commission finds that the notified concentration falls within the scope of Regulation
No 4064/89 and raises serious doubts as to its compatibility with the common market, it must decide to initiate proceedings
(
Phase II Procedure).

6
Article 6(2) of Regulation No 4064/89 provides as follows: Where the Commission finds that, following modification by the undertakings concerned, a notified concentration no longer
raises serious doubts within the meaning of paragraph 1(c), it may decide to declare the concentration compatible with the
common market pursuant to paragraph 1(b). The Commission may attach to its decision under paragraph 1(b) 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.

7
Under Article 18(1) of Commission Regulation (EC) No 447/98 of 1 March 1998 on the notifications, time-limits and hearings
provided for in Regulation No 4064/89 (OJ 1998 L 61, p. 1),
commitments proposed to the Commission by the undertakings concerned pursuant to Article 6(2) of Regulation (EEC) No 4064/89
which are intended by the parties to form the basis for a decision pursuant to Article 6(1)(b) of that Regulation shall be
submitted to the Commission within not more than three weeks from the date of receipt of the notification.

8
In its Notice on remedies acceptable under Regulation No 4064/89 and under Regulation No 447/98 (OJ 2001 C 68, p. 3, hereinafter
the
Remedies Notice), the Commission sets out its guidelines with respect to commitments.

9
Article 21(1) of Regulation No 4064/89 provides that the Commission is to have sole competence to take the decisions provided
for in that regulation. Article 21(2) states that no Member State is to apply its national legislation on competition to any
concentration that has a Community dimension.

10
However, Article 9 of Regulation No 4064/89 allows the Commission to refer the examination of a concentration with a Community
dimension to a Member State where the concentration threatens to create or to strengthen a dominant position as a result of
which effective competition will be significantly impeded on a market within that Member State which presents all the characteristics
of a distinct market.**Facts**

I ─
The undertakings concerned

11
The application in the present case, made by BaByliss SA (hereinafter also referred to as
the applicant), seeks the annulment of the Commission's decision approving, subject to conditions, the concentration between SEB and Moulinex.

12
The applicant is a French company, controlled by the American group Conair, which specialises in the manufacture and marketing,
under the trade mark BaByliss, of small electrical household appliances known as
beauty aids (for example, hair-dryers, heated hair curlers and brushes, clippers, female epilation and body care appliances). The Conair
group manufactures all types of small electrical household appliances (kitchen, beauty, cleaning) in the United States and
throughout the world, mainly under the trade marks Conair, BaByliss, Interplak, Forfex, Cuisinart, Revlon and Vidal Sassoon.

13
SEB is a French company active worldwide in the development, production and marketing of small electrical household appliances.
It markets its products in more than 120 countries under two trade marks with an international dimension (Tefal and Rowenta)
and four local trade marks (Calor and SEB in France and Belgium, Arno in Brazil and the Mercosur countries, and Samurai in
the Andean Pact countries). The categories of products marketed by SEB under the various trade marks are cooking appliances
(mini-ovens, deep friers, toasters, informal meals), machines for making hot drinks (electric filter coffee machines, espresso
machines, kettles), food mixers, irons and ironing stations, personal care appliances (epilation, hairdressing, shaving, etc.),
vacuum cleaners, domestic heating and ventilation appliances and kitchen utensils.

14
Moulinex is also a French company active worldwide in the development, production and marketing of small electrical household
appliances. It markets the same categories of products as SEB under two international trade marks (Moulinex and Krups) and
one local trade mark (Swan in the United Kingdom). Moulinex also markets microwave ovens.

II ─
National proceedings

15
On 7 September 2001 bankruptcy proceedings were initiated against the Moulinex group before the Tribunal de Commerce (Commercial
Court), Nanterre, France. In accordance with French law, administrators were appointed by the court to establish whether Moulinex
should continue its activities, be transferred to a third party or be liquidated. Since, in the present case, the continuation
of its business activities was found to be impossible, the administrators set out to find a purchaser for all or part of the
business activities of Moulinex.

16
In the course of those proceedings, SEB put forward a proposal to purchase certain elements of Moulinex's business relating
to small electrical household appliances, namely:

─
the right to exploit the trade marks Moulinex, Krups and Swan in respect of all the products concerned; and

the right to exploit the trade marks Moulinex, Krups and Swan in respect of all the products concerned; and

─
part of the production facilities (eight of the 18 Moulinex production sites and some of the equipment located at the sites
not purchased) allowing the production of at least certain models of all the products manufactured by Moulinex apart from
vacuum cleaners and microwave ovens; and

part of the production facilities (eight of the 18 Moulinex production sites and some of the equipment located at the sites
not purchased) allowing the production of at least certain models of all the products manufactured by Moulinex apart from
vacuum cleaners and microwave ovens; and

─
some of the marketing companies, namely, for Europe, solely the German and Spanish companies.

some of the marketing companies, namely, for Europe, solely the German and Spanish companies.

17
In a letter of 25 September 2001 to the administrators of Moulinex, BaByliss, with a view to expanding its presence in the
sector of small electrical household appliances in France and throughout the world, submitted an offer to acquire Krups' worldwide
business, including plant, equipment, stocks, industrial property rights and distribution networks.

18
By judgment of 22 October 2001, the Nanterre Tribunal de Commerce accepted the purchase offer made by SEB.

III ─
Procedure before the Commission

19
On 27 September 2001, at the request of SEB, the Commission granted a derogation with suspensive effect as provided for by
Article 7(4) of Regulation No 4064/89. The Commission's decision was principally based on the fact that the administrators
had demanded that all purchase offers be unconditional. The derogation granted by the Commission was limited to the management
of the purchased assets.

20
On 13 November 2001 the proposed acquisition by SEB of certain assets of Moulinex was notified to the Commission under Article
4 of Regulation No 4064/89.

21
On 21 November 2001 the Commission published the notice provided for by Article 4(3) of Regulation No 4064/89 in the
*Official Journal of the European Communities*. In paragraph 4 of that notice, the Commission invited
interested third parties to submit their possible observations on the proposed operation.

22
In response to the notice, BaByliss informed the Commission, by letters of 27 and 29 November 2001, of its concern regarding
the proposed concentration, in view of the considerable anti-competitive effects of the closer relations between SEB and Moulinex
in the sector which BaByliss envisaged entering very shortly. In that connection BaByliss observed that it was positioning
itself as a potential competitor of SEB-Moulinex in the sector of small electrical household appliances and, in particular,
the sector of small kitchen equipment, in which it was expanding under the trade mark Cuisinart. By letter of 29 November
2001, annexed to the letter of the same date, BaByliss sent the Commission a proposal for a total purchase, including the
entire workforce and assets of Moulinex in France, together with a business plan for Cuisinart (
*Cuisinart Strategy France*) dated November 2001.

23
By letter of 30 November 2001, BaByliss replied to the questionnaire sent by the Commission to the competitors on 27 November
2001.

24
On 5 December 2001 the parties to the concentration proposed commitments to the Commission.

25
The applicant's representatives had a meeting with the Commission concerning the proposed concentration on the same day.

26
By letter of 6 December 2001, BaByliss informed the Commission of its reservations regarding the possibility that the Commission
might refer the whole or part of the case to the national competition authorities if they so requested.

27
On 7 December 2001 the French competition authorities requested the Commission to refer part of the case under Article 9(2)(a)
of Regulation No 4064/89 with respect to the effects of the concentration on competition on certain markets for the sale of
small electrical household appliances in France.

28
In response to concerns expressed by the Commission, the parties to the concentration revised their initial commitments on
18 December 2001.

29
On 20 December 2001 BaByliss submitted to the Commission its observations concerning the market shares which SEB-Moulinex
would have in the categories of products examined by the Commission as a result of the concentration.

30
By letter of 21 December 2001 BaByliss replied to a questionnaire, sent by the Commission on 20 December 2001, concerning
the commitments of the parties to the concentration.

31
As a result of observations submitted by interested third parties, the parties to the concentration revised their commitments
once again.

32
On 28 December 2001 the applicant submitted an offer for the purchase of part of Moulinex.

33
On 3 January 2002 BaByliss gave additional replies to the questionnaire, sent by the Commission on 20 December 2001, concerning
the commitments of the parties to the concentration. The applicant reaffirmed its interest in acquiring all or part of Moulinex
assets. It also repeated its concern regarding its position and the dominant position of SEB-Moulinex which would result from
the concentration in relation to a certain number of categories of small electrical household appliances in the main European
countries.

34
On 8 January 2002 the Commission approved, subject to conditions, the concentration between SEB and Moulinex on the basis
of Article 6(1)(b) and (2) of Regulation No 4064/89 and Article 57 of the Agreement on the European Economic Area (
EEA) (
the contested decision).

35
However, the contested decision does not deal with the French market as, on the same day, the Commission acceded to the French
authorities' request for a referral of part of the case.

36
On 8 July 2002 the French Minister for the Economy authorised the concentration, without imposing commitments, on the basis
of the
failing firm doctrine.**The contested decision** 

I ─
The relevant product markets

37
Paragraph 16 of the contested decision states that the economic sector affected by the concentration in issue is that of the
sale of small electrical household appliances, which can be divided into 13 product categories: deep friers and skillets;
mini ovens; toasters; sandwich and waffle makers; appliances for the preparation of informal meals (
stone grill,
wok party,
raclette,
fondue, etc.); electrical barbecues and indoor grills; rice and steam cookers; electric filter coffee machines; kettles; espresso
machines; blenders and mixers; irons and ironing stations; and personal care appliances (health and beauty appliances). The
first 11 product categories are commonly referred to as kitchenware.

38
The Commission considers that each category of small electrical household appliances can constitute a distinct product market
(paragraph 25 of the contested decision). The Commission's findings are based essentially on an analysis of demand-side substitutability,
inasmuch as each category has a specific function and is intended for a distinct end use. Furthermore, the Commission rejects
supply-side substitutability by the supplier. It points out that, even if all the manufacturers were in a position to manufacture
all types of small electrical household appliances, the cost and time involved in entering a new market may be substantial.

II ─
The relevant geographical markets

39
According to the Commission,
a national definition of the relevant geographical markets must be regarded as having the greatest credibility at the end
of the Phase I examination (paragraph 30 of the contested decision).

III ─
Importance of the trade marks

40
The Commission states that trade marks are one of the principal factors influencing the choice of the ultimate consumer and
therefore constitute one of the major elements of competition between manufacturers of small electrical household appliances
(paragraph 36 of the contested decision).

41
In that connection, it points out that SEB and Moulinex invest significant sums in maintaining the reputation of their trade
marks (paragraph 38 of the contested decision). It also states that the offers received in the course of the sale of Moulinex
related almost exclusively to the trade marks of that group rather than to the production units (paragraph 39 of the contested
decision).

IV ─
Competition analysis

42
With respect to the effects on competition of the concentration at issue, the Commission, first of all, rejects the argument
that the effects of the concentration are no different from those of the competitive situation which would have arisen from
the liquidation of the Moulinex group. In that regard, it states: Following the Phase I examination, such an argument cannot be accepted since, from the start of the court-supervised reorganisation
of the Moulinex group, a number of undertakings indicated their interest in acquiring trade marks owned by that group. Furthermore,
the possibility cannot be ruled out that certain items of equipment or industrial property would have been acquired by third
parties other than SEB. Given the importance of the trade mark on the relevant markets, those third parties would probably
have been in a position to restore, entirely or partially, the competition capacity of Moulinex (paragraph 41 of the contested decision).

43
At the end of its analysis, the Commission concludes that the notified concentration raises serious doubts as to its compatibility
with the common market on a number of markets for kitchenware (paragraph 44 of the contested decision). With respect to the
geographical markets examined in the contested decision, it observes in essence that:

─
in Portugal, Greece, Belgium and the Netherlands, where, prior to the concentration, SEB and Moulinex at times held significant
positions in the small household electric appliances sector, the situation of SEB would be strengthened by the addition of
Moulinex and the transaction would lead to combinations of ─ in some cases, large ─ market shares with respect to a large
number of the categories of goods concerned. According to the Commission, that market strength will be increased by an unrivalled
portfolio of several trade marks, whereas operators such as Philips, Braun or Taurus have only one single trade mark (paragraphs
43 and 45 to 47 of the contested decision);

in Portugal, Greece, Belgium and the Netherlands, where, prior to the concentration, SEB and Moulinex at times held significant
positions in the small household electric appliances sector, the situation of SEB would be strengthened by the addition of
Moulinex and the transaction would lead to combinations of ─ in some cases, large ─ market shares with respect to a large
number of the categories of goods concerned. According to the Commission, that market strength will be increased by an unrivalled
portfolio of several trade marks, whereas operators such as Philips, Braun or Taurus have only one single trade mark (paragraphs
43 and 45 to 47 of the contested decision);

─
in Germany, Austria, Denmark, Sweden and Norway, the transaction would substantially change the competition conditions on
a number of product markets (paragraph 43 of the contested decision);

in Germany, Austria, Denmark, Sweden and Norway, the transaction would substantially change the competition conditions on
a number of product markets (paragraph 43 of the contested decision);

─
lastly, in other Member States, the transaction would change competition conditions only marginally (paragraph 43 of the contested
decision).

lastly, in other Member States, the transaction would change competition conditions only marginally (paragraph 43 of the contested
decision).

44
According to the Commission, the notified transaction thus raises serious doubts as to its compatibility with the common market
on the following markets (paragraph 128 of the contested decision);

─
Germany: deep friers and barbecues/grills;

Germany: deep friers and barbecues/grills;

─
Austria: deep friers and informal meals;

Austria: deep friers and informal meals;

─
Belgium: food mixers, espresso machines, kettles, toasters, informal meals, barbecues/grills, irons and ironing stations;

Belgium: food mixers, espresso machines, kettles, toasters, informal meals, barbecues/grills, irons and ironing stations;

─
Denmark: deep friers and portable ovens;

Denmark: deep friers and portable ovens;

─
Greece: deep friers, kettles, sandwich/waffle makers, espresso machines and food mixers;

Greece: deep friers, kettles, sandwich/waffle makers, espresso machines and food mixers;

─
Norway: deep friers and portable ovens;

Norway: deep friers and portable ovens;

─
the Netherlands: deep friers, espresso machines, mini-ovens, informal meals, barbecues/grills, irons and ironing stations;

the Netherlands: deep friers, espresso machines, mini-ovens, informal meals, barbecues/grills, irons and ironing stations;

─
Portugal: deep friers, toasters, coffee machines, espresso machines, kettles, mini-ovens, sandwich/waffle makers, informal
meals, barbecues/grills and food mixers;

Portugal: deep friers, toasters, coffee machines, espresso machines, kettles, mini-ovens, sandwich/waffle makers, informal
meals, barbecues/grills and food mixers;

─
Sweden: deep friers.

Sweden: deep friers.

45
On the other hand, the Commission concluded that the concentration did not raise serious doubts as to the personal care market
in any of the countries (with the exception of France) regardless of how the product market is defined since the parties'
combined share of the market is less than 20% (paragraph 44 of the contested decision).

V ─
Commitments of the parties to the concentration

46
Nevertheless, following the commitments proposed by the parties to the concentration, the Commission found that the serious
doubts as to the compatibility of the concentration with the common market could be overcome since those commitments constituted
a direct and immediate response to the competition problems identified in the decision with respect to markets outside France.

47
Initially, the commitments submitted by the parties to the concentration on 5 December 2001 envisaged a withdrawal from the
entire European Economic Area for a period of two years of goods with the Moulinex trade mark in the following categories:
deep friers, portable ovens, informal meals, barbecues/grills, irons and ironing stations. However, according to the Commission,
those initial commitments would not allow the substitution of another operator for the Moulinex group and did not concern
all of the markets in respect of which the transaction potentially raised serious doubts (paragraph 135 of the contested decision).

48
On 18 December 2001 the parties therefore
improved their proposal so as to make it practicable and effective (paragraph 135 of the contested decision). That new proposal provided for an exclusive licence to use the trade mark Moulinex
for a period of three years (coupled with a commitment not to enter the market under the trade mark Moulinex for a further
year) in respect of all the product categories in Belgium, Greece, the Netherlands and Portugal and in respect of deep friers
in Germany, Austria, Denmark, Norway and Sweden. The holders of such a licence would be subject to an obligation to obtain
supplies of toasters, coffee machines, kettles and food mixers from the licensor.

49
However, the third parties invited to submit observations were critical of those commitments, particularly with respect to
the licence period and period of non-entry, the obligation to obtain supplies, the absence of any corrective adjustment to
offset the effects of the notified transaction on competition on certain markets, the absence of any circumstances sufficiently
serious to warrant, in economic terms, the entry of a new operator on the relevant markets and the lack of effective control
by the licensee over the Moulinex trade mark within the framework of the remedies relating specifically to deep friers, since
SEB would continue to enjoy the use of the trade mark on the other goods (paragraph 136 of the contested decision).

50
According to the contested decision, SEB therefore
perfected its commitments by extending the licence to use the trade mark to cover all small household electrical appliances for Germany,
Austria, Denmark, Norway and Sweden. SEB thus aligned the commitment in respect of those five countries with that already
proposed in respect of Belgium, Greece, the Netherlands and Portugal. SEB also extended the term of the licence to five years
(and to three years for the non-entry commitment) and withdrew the obligation requiring the licensee to obtain supplies from
the licensor (paragraph 137 of the contested decision).

51
The contested decision summarises the commitments accepted by the Commission as follows:

129
In each of those States, the SEB group will grant to a third party an exclusive licence to use the trade mark Moulinex, covering
the sale of all 13 categories of small electrical household appliances.

130
According to the commitments, the licence will be granted to one or more third parties for a period of five years. During
the term of the licence and for a further period of three years following its expiry, SEB will be prohibited from marketing
any products for domestic use under the trade mark Moulinex in the States concerned. Furthermore, the SEB group undertakes
not to market the models of the Moulinex range under a different trade mark in the countries concerned for as long as the
licensee chooses to obtain its supplies from SEB or to benefit from an industrial property licence.

131
The purpose of that licence is to authorise the use of the trade mark Moulinex with the aim of enabling the licensee to establish
or strengthen its own trade mark on the relevant geographical market. For that purpose, during the licence period, the licensee
will be authorised to use the Moulinex trade mark alone or together with its own trade mark and, subsequently, to change from
co-branding to its own trade mark at any time. SEB will have the power to ensure that the Moulinex logotype is respected by the licensee
or licensees.

132
The licensee or licensees will be free to choose the manner of the provision of supplies for all of the products and for all
the countries concerned. If they so wish, they may require SEB to enter [into] a supply contract in respect of all or part
of the licence period and for all or some of the product categories covered. Such supply should correspond to 65% of sales
under the trade mark Moulinex in 2000. It should be noted that SEB nevertheless proposes to impose on the German licensee
a supply obligation in respect of food mixers. SEB justifies this exception by reference to the need to maintain the workforce
of the production units in Germany which it acquired following the judgment of the Tribunal de Commerce, Nanterre.

133
Moreover, to the extent required by a licensee, SEB undertakes to grant a licence covering the industrial property rights
(designs, models, patents and know-how) relating to one or more Moulinex models to enable the licensee either to manufacture
the models in question itself or to subcontract the manufacture to a third party of its choice.

134
The SEB group undertakes to nominate an agent whose initial task it will be, in particular, to ensure the satisfactory fulfilment
of its commitments. SEB has undertaken to entire into the trade mark licence agreements provided for in the commitments within
a period of [...] from the date of receipt of the Commission's authorisation. If, after expiry of that period, SEB has not
entered into all or any of the agreements provided for by the commitments, the agent will be responsible for finding one or
more licensees and for concluding those agreements within a period of ... The choice of licensees will be subject to approval
by the Commission.

52
The Commission considers that those commitments will lead to a significant reduction in the overlap of market shares arising
from the notified concentration. It states that it is only that resulting from sales under the Krups trade mark which will
not be eliminated. However, according to the Commission, the increased market share linked to the Krups trade mark is likely
to give rise to competition problems only on the espresso machine markets and informal meals market in Portugal (paragraph
139 of the contested decision).

53
In the Commission's view, the proposed commitments will enable the conditions for effective competition to be restored on
a lasting basis. The five-year period envisaged for the licence will enable the licensee to induce the migration of Moulinex
products to its own brand with limited losses to SEB when it is in a position to reintroduce the Moulinex brand to the relevant
markets. In that respect, the Commission points out that the average lifetime of small electrical household products is approximately
three years. According to the Commission, the migration to the licensee's own trade mark is facilitated all the more since
the licensee will be the sole beneficiary of the Moulinex trade mark in respect of all small electrical household products
in the geographical zone concerned (paragraph 140 of the contested decision).

54
The Commission considers that the extension of the exclusive licence commitments to all small electrical household products
and thus to products in respect of which the Commission had no serious doubts is necessary to ensure the efficiency and viability
of those remedies. If those licences had covered only a limited number of products, the licensee would have seen its room
for manoeuvre to effect re-branding severely reduced since the trade mark Moulinex would have been used by two competing entities
in the countries concerned, namely SEB and the holder of the licence limited to certain products (paragraph 141 of the contested
decision).

55
Moreover, the Commission observes that the licensee will be able to produce Moulinex products itself if it so wishes, whilst
SEB can be required to provide it with new models which it develops for the Moulinex product range in the countries not covered
by the commitments (paragraph 142 of the contested decision).

56
Finally, the Commission points out that, according to the commitments, the licensee or licensees must be currently present
on the market or potentially capable of entering it, viable, independent without any links to the SEB group and in possession
of the competence and motivation necessary to provide active and effective competition on the markets concerned. The commitments
also provide that the licensee or licensees must have their own trade mark which is capable of being associated with the trade
mark Moulinex (paragraph 144 of the contested decision).

57
The Commission therefore considers (paragraph 146 of the contested decision) that the commitments proposed by the parties
are sufficient to overcome the doubts as to the compatibility of the concentration with the common market in those nine countries
on condition that the parties fulfil the following commitments:

(a)
the commitment to grant an exclusive licence to sell household electrical appliances under the Moulinex trade mark for a period
of five years covering the 13 categories of products mentioned in this decision, as defined in Section 1(a) of the commitments
set out in the annex to this decision;

(b)
the commitment not to market products bearing the Moulinex trade mark in the countries concerned during the term of the licence
and for a further period of three years following the expiry of the licence, as provided for in Section 1(c);

(c)
the commitment not to market models of Moulinex products under a trade mark other than Moulinex in the territories in respect
of which the licensee or licensees have concluded a supply contract or been granted an industrial property licence as provided
for in Section 1(e);

(d)
the commitment to enter into supply agreements (at a supply price corresponding to the industrial cost price plus the general
costs associated with production and delivery of the products to the licensee) with, and/or grant licences covering industrial
property rights in respect of all products concerned, with the exception of food mixers in Germany, to any licensee requesting
such a contract or licence, as provided for in paragraph 1(d) of the commitments;

(e)
the commitment to pursue the general policy of the development of new models and to maintain the full economic and competitive
value of the Moulinex trade mark in each of the nine States concerned until the conclusion of the licence agreements as provided
for in Section 1(h) of the commitments;

(f)
the commitment to enter into exclusive trade mark licensing agreements for the nine countries in question within the period
specified in sections 1(h) and 2(e)(iv) of the commitments;

(g)
the commitment relating to approval of the licensee or licensees by the Commission, as provided for in section 1(i) of the
commitments, and

(h)
compliance with any suggestion useful for the fulfilment of the commitments or the performance of his/its task which may be
made by the representative as provided for in section 2(e)(ii) of the commitments.

58
The details of the commitments offered by SEB are set out in the annex to the contested decision.

59
In Section 2(g) of the annex it is provided that: If the approval of this concentration by a different competition authority is made subject to commitments which either run
counter to the present commitments or give rise to a situation going beyond what is necessary in order to re-establish competition
on each of the relevant markets, the SEB group may request a review of the present commitments by the Commission with a view
to removing those contradictions or releasing the SEB group from all or part of the conditions and obligations contained in
the present commitments which are no longer necessary.

VI ─
State aid

60
In reply to the submissions of certain third parties complaining that SEB is receiving State aid from the French authorities
in connection with its proposed takeover, the Commission finds, in paragraph 10 of the contested decision, that, upon a preliminary
examination of the scheme drawn up by the French authorities, it does not appear that the State intervention envisaged in
connection with the court-supervised reorganisation proceedings is a measure which will benefit SEB. Therefore the Commission
considers that its effect should not be taken into account in examining the proposed concentration under Regulation No 4064/89.**Procedure and forms of order sought by the parties**

61
The applicant brought the present action by application lodged at the Registry of the Court of First Instance on 15 April
2002. By a separate document of the same date, the applicant applied for the case to be dealt with by means of the expedited
procedure provided for by Article 76a of the Rules of Procedure of the Court of First Instance.

62
By letter of 30 April 2002, the Commission informed the Court that it had no objection to the application for expedited proceedings.
However, the Commission submitted that the applicant had not shown that it was individually concerned by the contested decision.

63
By letter of 8 May 2002, the Registrar of the Court of First Instance informed the defendant of the grant of its request for
extension of the time-limit for lodging its defence until 24 June 2002. In order not to delay the proceedings, the Registrar
also requested the defendant to raise any questions of admissibility together with its defence on the substance of the case.

64
By way of a procedural organisation measure, the Registrar requested the applicant, by letter of 17 June 2002, to reply to
a number of written questions by 28 June 2002.

65
On 24 June 2002 the Commission lodged its defence containing its objections to the admissibility of the application and, in
the alternative, its defence on the substance of the case.

66
The applicant lodged its replies to the Court's questions on 28 June 2002.

67
By decision of 2 July 2002, the Court (Third Chamber) granted the application for the expedited procedure provided for by
Article 76a of the Rules of Procedure.

68
On 18 July 2002 the applicant, in compliance with the Registrar's request, lodged its observations on admissibility in reply
to the Commission's statement of defence.

69
By application lodged at the Registry of the Court on 19 July 2002, SEB requested leave to intervene in support of the forms
of order sought by the Commission. By application lodged at the Registry of the Court on 29 July 2002, De'Longhi sought leave
to intervene in support of the forms of order sought by the applicant. Those requests were granted by order of the President
of the Third Chamber of 16 September 2002. At their respective requests, SEB and De'Longhi were granted leave to lodge a statement
in intervention and, for the second, to submit certain documents cited in its application for leave to intervene.

70
Upon hearing the report of the Judge-Rapporteur, the Court of First Instance (Third Chamber) decided to open the oral procedure
and, within the framework of measures of organisation of procedure, asked the parties to produce certain documents and answer
written questions. The parties complied with those requests within the prescribed time-limit.

71
The oral arguments of the parties and their answers to the oral questions were heard at the hearing on 9 October 2002.

72
The applicant, supported by De'Longhi, claims that the Court should:

─
annul the contested decision;

annul the contested decision;

─
order the Commission to pay the costs.

order the Commission to pay the costs.

73
The Commission contends that the Court should:

─
dismiss the application as inadmissible or, in the alternative, unfounded;

dismiss the application as inadmissible or, in the alternative, unfounded;

─
order the applicant to pay the costs.

order the applicant to pay the costs.

74
SEB contends that the Court should:

─
dismiss the application as inadmissible or, in the alternative, unfounded;

dismiss the application as inadmissible or, in the alternative, unfounded;

─
order the applicant to pay the costs.

order the applicant to pay the costs.**Admissibility**

I ─
Arguments of the parties

75
The applicant, supported by De'Longhi, submits that the contested decision is of direct and individual concern to it within
the meaning of Article 230 EC. BaByliss is a new entrant to the market in small electrical cooking appliances and is therefore
positioning itself as a direct competitor of SEB and Moulinex. In addition, the applicant points out that it took an active
part in the administrative procedure leading to the adoption of the contested decision.

76
The Commission contends that the contested decision is not of individual concern to the applicant.

77
The Commission observes, first that the mere fact that BaByliss reacted spontaneously to the publication in the
*Official Journal of the European Communities*, as provided for by Article 4(3) of Regulation No 4064/89, of the notice relating to the proposed concentration, by contacting
the Commission, is not sufficient to show that the contested decision is of individual concern to BaByliss. It has not shown
in any way that the contested decision affects it by reason of certain attributes peculiar to itself or by reason of a factual
situation which distinguishes it individually in the same way as SEB.

78
The Commission notes that several undertakings, like the applicant, took an active part in the procedure. The fact that an
undertaking submitted observations does not of itself prove that the undertaking is individually concerned. The careful examination
of concentrations necessitated regular contact with a number of persons involved in the sector concerned.

79
Secondly, the Commission points out that, pursuant to article 2 of the applicant's articles of association,
the company has the following objects: all operations of production, processing, representation, importation and export, wholesale
trading, wholesale trading in small quantities and retail trading in all articles and goods relating in particular to hair-styling
and beauty, perfumery and gift goods, whereas the concentration authorised by the contested decision relates to the sector of small electrical household appliances,
which has no connection with
hair-styling, beauty, perfumery and gift goods.

80
Third, the Commission observes that the applicant describes itself as a
new entrant to the market in small electrical kitchen appliances but that, by its own admission, it had not brought onto the market any
electrical household appliance either at the date of the contested decision or the date of instituting its action. BaByliss
also describes itself as a
potential competitor. The Commission adds that, although the applicant announced that it would launch such products
officially on the market on 15 May 2002, it has not produced any documentary evidence to support that announcement.

81
Fourth, the Commission contends that the products marketed by BaByliss, a company established in France, could not be said
to compete directly with the appliances sold by SEB on the geographical markets in respect of which the Commission has expressed
serious doubts, as it did not give an opinion on the situation in the French market, which was to be examined by the French
competition authorities.

82
Fifth, the Commission maintains that the applicant is wrong in seeking to rely on the
*Air France* judgments. The applicant's situation differs completely from that of Air France. In the judgment in Case T-2/93
*Air France* v
*Commission* [1994] ECR II-323, the Court found, first, that the competition situation on the markets concerned had been assessed by the
Commission by taking account primarily of the situation of Air France (paragraph 45 of the judgment), which was the only serious
competitor of the undertakings participating in the concentration, whereas the applicant is totally absent from the markets
affected by the concentration. The Commission adds that the Court noted that Air France had been obliged, pursuant to an agreement
between it, the French Government and the Commission, to give up the whole of its interest in TAT (paragraph 46 of the judgment)
whereas, in the present case, BaByliss cannot plead an agreement or decision of any kind with an equivalent effect which would
show that its
*de facto* situation distinguishes it individually in the same way as SEB. The Commission observes that, in Case T-3/93
*Air France* v
*Commission* [1994] ECR II-121, Air France was the main competitor of British Airways whereas, in the present case, BaByliss is only one
company among several others which regards itself as a (potential) competitor of SEB.

83
Finally, the Commission wishes to point out that the new interpretation of Article 230 EC given by the Court in the judgment
in Case T-177/01
*Jégo-Quéré SA* v
*Commission* [2002] ECR II-2365, paragraph 51, does not render the application admissible because, first, the contested decision is an
individual decision without general effect and, secondly, the contested decision in no way restricts the rights of the applicant
(which is not present in the markets affected by the concentration) and imposes no obligations on it. The applicant's legal
situation is not affected in a manner which is both definite and immediate.

84
SEB argues that the contested decision is not of individual concern to the applicant. On this point, SEB observes that the
applicant could itself, just like SEB, have submitted a genuine, concrete offer in the framework of the court-supervised administration
if it had really been interested in acquiring all or some of Moulinex assets. However, according to SEB, the applicant's first
offer for the acquisition of Moulinex was not genuine and was found unacceptable by the Tribunal de Commerce, Nanterre, whereas
the subsequent offers were made after the concentration and only aimed to call into question the sale plan proposed by SEB.
It adds that the applicant showed no interest whatever in obtaining the licence for the Moulinex trade mark, although such
licence could have enabled the applicant, with regard to the development strategy it mentions, to enter the relevant markets
and establish itself there permanently and effectively.

85
SEB adds that, to this day, BaByliss products have not been marketed on any of the geographical markets concerned by the contested
decision, not even in France, where the applicant's activity has been limited to a presentation in a restaurant in Lyons in
May 2002. SEB points out that the applicant is not mentioned by the Commission in its competition analysis, whether as an
actual or potential competitor.

86
Finally, SEB notes that the applicant did not participate in the detailed investigation conducted by the rapporteurs of the
French Competition Council and was not even present or represented at the hearing before the Council.

II ─
Findings of the Court

87
Under the fourth paragraph of Article 230 EC,
any natural or legal person may ... institute proceedings against a decision addressed to that person or against a decision
which, although in the form of a regulation or a decision addressed to another person, is of direct and individual concern
to the former.

88
The applicant is not one of the parties to the concentration and the contested decision is not addressed to it. Therefore
it is necessary to ascertain whether it is directly and individually concerned.

89
It cannot be denied that the effect is direct. As the contested decision permits the proposed operation to be put into effect
immediately, it is such as to bring about an immediate change in the situation in the markets concerned, depending solely
on the wishes of the parties (see the judgment in Case T-3/93
*Air France*  v
*Commission*, cited above, paragraph 80).

90
Consequently the Court must determine whether the decision is also of individual concern to the applicant.

91
It has consistently been held that persons other than the addressees of decisions can claim to be individually concerned only
if that decision affects them by reason of certain attributes peculiar to them, or by reason of a factual situation which
differentiates them from all other persons and distinguishes them individually in the same way as the addressee (Case 25/62
*Plaumann* v
*Commission* [1963] ECR 95, 107).

92
In this connection, the Court finds that, first, regarding participation in the procedure, it is common ground that the applicant,
in response to the publication provided for by Article 4(3) of Regulation No 4064/89, informed the Commission, by letters
of 27, 29 and 30 November 2001 and 6, 20, 21 and 28 December 2001, of its observations concerning the consequences of the
concentration in question on the competition situation in the relevant markets and on its own situation. Furthermore, the
Commission heard the applicant at a meeting on 5 December 2001 and in a telephone conference on 4 January 2002 with the officials
in charge of the examination of the proposed concentration.

93
Moreover, on those occasions BaByliss raised, in substance, the same objections as those in its application to the Court.
They concerned mainly the assessment of the effects of the concentration on the different geographical markets and the relevant
product markets and, in particular, the situation of BaByliss, as well as the appraisal of the effectiveness of the commitments
proposed by SEB to mitigate the competition problems created by the acquisition of Moulinex.

94
Finally, it must be observed that the applicant's letters to the Commission are not merely a unilateral step, uninvited by
the Commission, but that the Commission asked the applicant to submit its observations on the commitments proposed by the
parties to the concentration.

95
It follows that the applicant actively participated in the procedure. Although, as the Commission rightly points out, mere
participation is in itself not sufficient to show that the decision is of individual concern to the applicant, particularly
in the field of concentrations, the careful examination of which requires regular contact with numerous undertakings, nevertheless
active participation in the administrative procedure is a factor regularly taken into account by case-law in competition matters,
including in the more specific area of the control of concentrations, to establish, in conjunction with other specific circumstances,
the admissibility of the action (Case 169/84
*Cofaz and Others* v
*Commission* [1986] ECR 391, paragraphs 24 and 25; Joined Cases C-68/94 and C-30/95
*France* v
*Commission* [1998] ECR I-1375, paragraph 54, and Case T-2/93
*Air France* v
*Commission,* cited above, paragraph 44).

96
Secondly, regarding the applicant's status of competitor, BaByliss asserted, and it was not disputed by the Commission or
SEB, that it is one of the main operators active in the markets for small electrical household appliances known as
beauty aids or personal care products (for example, hair-dryers, heated hair curlers and brushes, clippers, female epilation appliances
and personal care appliances, etc.).

97
According to paragraph 16 of the contested decision, the economic sector affected by the concentration is that of the sale
of small electrical household appliances, which can be divided into 13 product categories, namely the 11 categories of kitchenware,
irons and ironing stations, and the category of personal care appliances. It follows that market for the latter category is
affected by the concentration in issue, as stated in paragraph 16 of the contested decision. Neither the Commission nor SEB
has denied that the applicant is one of the main competitors or operators in the market for beauty products or personal care
appliances.

98
It must also be noted that the commitments likewise relate to all 13 categories of small electrical household appliances,
including beauty products and personal care appliances.

99
Furthermore, although the applicant was not, at the date of adoption of the contested decision or the date of its action,
directly present in any of the 12 other markets affected by the concentration, it has contended that it is at least a potential
competitor in so far as it is at present entering the European market for small electrical household appliances.

100
The Commission and SEB have not denied the admissibility of an action brought by a potential competitor where, as in the present
case, there are oligopolistic markets characterised by substantial barriers to entry arising from strong brand loyalty and
by the difficulty of access to retail trading (see, to that effect, Case T-290/94
*Kaysersberg* v
*Commission* [1997] ECR II-2137).

101
On the other hand, the Commission and SEB observe that the claim that the applicant is a potential competitor was not proved
or supported by cogent evidence. However, in its replies to the Court's written questions and in its observations on the objection
of inadmissibility, the applicant contends that, strengthened by its experience in the American market, in early 2001 it began
to implement its strategy of entering the European market for small electrical household appliances under the trade mark Cuisinart,
and more particularly the market segments of mini-ovens, toasters, espresso machines, food blenders and mixers. It claims
that this is shown by the following facts: the first study of the European market for small electrical household appliances
(February 2001), the technical study on adaptation of the voltage of Cuisinart products (February-August 2001), the three-year
partnership agreement with Paul Bocuse (October 2001) and the trade shows with Paul Bocuse in Orlando and Chicago presenting
Cuisinart products (September 2001 and May 2002), finalisation of the strategy and 2002 budget for launching Cuisinart in
Europe (November 2001), negotiation with the main French customers on listing the Cuisinart trade mark (December 2001-May
2002), official launch in the French press (planned for March 2002 but ultimately postponed) and, finally, on 16 May 2002,
the
official date for the launch of Cuisinart in France at Paul Bocuse's establishment in Lyon, in the presence of fifty invited
guests. BaByliss also stated that it was considering eventually entering the market segments of electric filter coffee machines
and espresso machines, and also that of deep friers.

102
The fact, emphasised by the Commission and SEB, that the applicant's actual entry into the markets affected by the concentration
was deferred several times, by comparison with its announcements, is not a sufficient reason for concluding that BaByliss
cannot be regarded as a potential competitor. The mere fact it takes longer than planned to enter the market does not mean
that such entry will not take place, particularly since, as the Commission recognises in paragraph 24 of the contested decision,
the cost and time necessary for entering a new product market may be considerable, having regard to the characteristics of
the market, that
to enter a new product market, a competitor, whether present or not in other neighbouring markets or the product market in
question in another geographical area, must ensure that he will have sufficient outlets and therefore a sufficient sales volume
[and for that] he will have to have his products listed by retailers and get his brand known by ultimate consumers, which
takes a certain time and involves considerable marketing and advertising costs.

103
It also follows that, even before BaByliss products are actually put on sale in the markets, the applicant found itself in
direct competition with SEB-Moulinex for the listing of its products by the main distributors. On this point the applicant
added that demonstration tests are planned in
a certain number of selected shops at Auchan and Monoprix from October 2002. To that extent BaByliss appears to be an actual competitor of the parties to the
concentration in all the markets in small electrical household appliances which it is preparing to enter shortly under the
Cuisinart trade mark. Likewise the applicant observed ─ and it was not disputed ─ that personal care products and kitchenware
belong in the same department in all customers' stores, that the same buyers list the products and that their purchasing policies
are linked, with the result that the total turnover for those categories is taken into account in common targets for discounts
based on overall turnover.

104
Although, as the Commission points out, the applicant's business plan dated November 2001 apparently envisages, at least in
the short time, entering only the French market, which is not covered by the contested decision, the applicant has explained
that the BaByliss group's strategy was to launch the Cuisinart brand on the French market first in order to gain experience
in marketing the products and to concentrate large investments where the group's organisation as a whole is strong and that
the group hoped to use successful penetration of the French market as a basis for expansion into other Member States later
on.

105
It must also be noted that BaByliss is wholly owned by Conair, a company incorporated under American law, which is active
in all segments of the small electrical household appliances market (kitchenware, beauty and cleaning products) in the United
States and worldwide, mainly under the BaByliss, Conair and Revlon brands.

106
Although BaByliss is not situated in an affected market for the purpose of Regulation No 4064/89, its position in the market
for personal care appliances and the business and experience of its parent Conair provide it with a sufficient basis to justify
the description of
potential competitor and to facilitate its entry into the small electrical household appliances market.

107
Finally, regarding the Commission's argument concerning the applicant's objects, it is sufficient to note that BaByliss has
not confined its activity to the sector of hairstyling appliances and beauty products, which is shown by the use of the words
in particular in defining its objects.

108
Third, with a view to its plan to enter the European small electrical household appliances market, BaByliss offered on several
occasions to acquire Moulinex or, at least, some of its assets.

109
Accordingly on 25 September 2001 the applicant made a first offer of a partial acquisition, in respect of the entire assets
of Krups (intellectual property rights, plant and equipment, factory in Mexico, stocks, distribution network) for a price
of EUR 100 million.

110
SEB contends that this offer cannot distinguish the applicant because it was inadmissible and was not even considered by the
Tribunal de Commerce, Nanterre.

111
In this connection the applicant claimed that it was not able to submit a full offer for the entire assets and personnel of
Moulinex because it was not given access to any financial information whatever on the company in spite of written requests
to that effect. Only SEB was in a position to make a full valuation of Moulinex factories and to submit to the administrators
a fuller offer to purchase Moulinex.

112
De'Longhi likewise wrote to the Commission on 3 December 2001 complaining of the lack of transparency in the procedure for
selling Moulinex, observing as follows: SEB formulated its offer as a partial acquisition, limited to certain production factories of Moulinex and the associated
activities, but then obtained consent to the acquisition of moulds and other production tools used for activities which were
not being transferred ... without any change in the proposed price. In the same way, SEB obtained consent in practice to use
the Moulinex brand for all its products without offering anything in exchange, in spite of the value of the brand, which is
the European leader in the sector in question ... This explains the uncertainty surrounding the details of the sale when
expressions of interest were submitted. This situation resulted in most of SEB's competitors not making an offer, and explains
the reasons why the terms and conditions of the transaction were not made public or became public only very recently, after
the contract had been awarded.

113
SEB denied these allegations. It observed that, as it was not a matter of a court-supervised liquidation, only offers aiming
at a reconstruction of the company could be submitted and only three offers for the acquisition of all or some of Moulinex
assets were submitted to the administrators within the time-limits of the reconstruction procedure, namely the offers of Euroland,
Société Participation Industrielle and the SEB group. The first two offers were deemed inadmissible by the Tribunal de Commerce,
Nanterre, while the other expressions of interest received by the administrators related, in essence, only to the Krups brand.
These different expressions of interest, particularly that of BaByliss, which did not relate to the Krups shares but only
to some of its assets, were, according to SEB, very restrictive and were not consistent with a reconstruction plan because
they did not entail the acquisition of any of Moulinex industrial sites or the takeover of any jobs and were therefore inadmissible.
In those circumstances the Tribunal de Commerce is said to have decided that the offer
submitted by the SEB group was therefore in reality the only one subsisting. SEB points out that, in the appeal against that judgment, the Cour d'Appel, Versailles, dismissed all the complaints concerning
the procedure followed by the administrators, even though BaByliss in particular, which had intervened voluntarily in the
procedure, had claimed that
the speed and undue haste in the purchase did not enable the interested companies, in particular Euroland and BaByliss, to
examine the file and draw up, in normal conditions and within a sufficient period, a continuation plan for the former and
a transfer plan for the latter.

114
In this connection it must be observed that domestic classifications are irrelevant to the assessment of an activity from
the viewpoint of Community law (Case T-128/98
*Aéroports de Paris* v
*Commission* [2000] ECR II-3929, paragraph 128). Furthermore, the finding that the applicant's offer was inadmissible under French law
because it was not consistent with a reconstruction plan by way of transfer does not alter the fact that, by means of the
offer, the applicant expressed its interest, as from 25 September 2001, in acquiring at least a part of Moulinex.

115
Subsequently, the applicant continued to express interest in Moulinex by making three additional offers to purchase all or
part of it, namely:

─
an offer dated 29 November 2001 for the total acquisition of Moulinex, comprising all workforces in France, totalling approximately
5 500 persons, and the assets of Moulinex, including stocks, for a token price of one euro; the offer was notified to the
Commission in the framework of its examination of the concentration in question, to the Directorate-General for Competition,
Consumer Affairs and the Prevention of Fraud and to the representative of the French Minister for the Economy;

an offer dated 29 November 2001 for the total acquisition of Moulinex, comprising all workforces in France, totalling approximately
5 500 persons, and the assets of Moulinex, including stocks, for a token price of one euro; the offer was notified to the
Commission in the framework of its examination of the concentration in question, to the Directorate-General for Competition,
Consumer Affairs and the Prevention of Fraud and to the representative of the French Minister for the Economy;

─
an offer dated 28 December 2001 for the partial acquisition of Moulinex: this new offer was for the acquisition of the worldwide
Krups activities, its production facilities and the personnel attached to them, for a sum to be fixed according to the area
of the fixed assets concerned; this offer was submitted to the Commission in the framework of its examination of the concentration
in question and transmitted to the French authorities;

an offer dated 28 December 2001 for the partial acquisition of Moulinex: this new offer was for the acquisition of the worldwide
Krups activities, its production facilities and the personnel attached to them, for a sum to be fixed according to the area
of the fixed assets concerned; this offer was submitted to the Commission in the framework of its examination of the concentration
in question and transmitted to the French authorities;

─
an offer dated 15 February 2002 to purchase certain assets of Moulinex: BaByliss sent to its administrators a new offer to
acquire Moulinex, including the assets not acquired by SEB and consisting in the Alençon, Bayeux and Falaise sites and all
the equipment for the production of microwave ovens; the purchase price offered by BaByliss was EUR 150 000.

an offer dated 15 February 2002 to purchase certain assets of Moulinex: BaByliss sent to its administrators a new offer to
acquire Moulinex, including the assets not acquired by SEB and consisting in the Alençon, Bayeux and Falaise sites and all
the equipment for the production of microwave ovens; the purchase price offered by BaByliss was EUR 150 000.

116
Even if these offers did not meet the prescribed conditions or were not sent to the correct authorities for dealing with them
or were drawn up after the concentration and even, in the case of the offer of 15 February 2002, after the contested decision,
they nevertheless show the applicant's sustained and continuous interest from 25 September 2001 in acquiring Moulinex or certain
of its assets.

117
For all those reasons it is clear that the concentration between SEB and Moulinex is of direct and individual concern to the
applicant and that its action for the annulment of the contested decision is admissible.**The substance of the case**

118
The applicant puts forward four pleas in law in support of its action for annulment. The first claims that there was a breach
of essential procedural requirements in that the Commission accepted the belated submission of commitments by SEB. By the
second plea, the applicant contends that the Commission erred in law in authorising the concentration at the end of phase
I, without opening phase II. The third plea alleges that the decision is vitiated by a manifest error of assessment in that
the commitments are insufficient to overcome the competition problems. By the fourth plea, the applicant contends that the
Commission erred in law in failing to consider whether the nominal price paid by SEB for the acquisition of Moulinex and the
financial aid provided by the French State were not such as to strengthen SEB's position.

I ─
First plea:breach of essential procedural requirements in that the Commission accepted the belated submission of commitments
by SEBArguments of the parties

119
The applicant argues that the contested decision is formally defective in that it authorised the concentration in question
on the basis of commitments submitted by SEB after the expiry of the prescribed period of three weeks from the date of receipt
of the notification.

120
The applicant observes that, pursuant to Article 18(1) of Regulation No 447/98,
commitments [in the course of phase I] shall be submitted to the Commission within not more than three weeks from the date
of receipt of the notification. The applicant also cited paragraph 37 of the Remedies Notice: Given that phase I remedies are designed to provide a straightforward answer to a readily identifiable competition concern,
only limited modifications can be accepted to the proposed commitments. Such modifications, presented as an immediate response
to the result of the consultations, include clarifications, refinements and/or other improvements which ensure that the commitments
are workable and effective.

121
The applicant claims that, in the present case, the Commission breached Article 18 of Regulation No 447/98 and paragraph 37
of the Remedies Notice by accepting new commitments by SEB more than ten days after the prescribed three-week period.

122
On 5 December 2001, the deadline for the submission of commitments, SEB proposed to the Commission a commitment to discontinue
the sale of certain categories of products with the Moulinex trade mark for a period of two years throughout the EEA (paragraph
135 of the contested decision). The Commission itself considered that such a commitment did not resolve the competition problems
created by the concentration. In that connection, it is symptomatic that the Commission did not deem it necessary to conduct
a market test to assess the effectiveness of such commitments.

123
The applicant observes that it was not until 18 December 2001, namely five weeks after the notification of the concentration,
that SEB submitted new commitments, consisting in the grant to a third party of an exclusive licence to use the Moulinex mark
for three years in respect of all the product categories affected by the concentration. The applicant adds that this second
proposal was itself the subject of a third proposal which entailed substantial modifications on the day before the adoption
of the contested decision and led to the solution finally adopted by the Commission (paragraphs 129 to 134 of the contested
decision).

124
According to the applicant, it therefore appears the second and third proposals submitted by SEB differed fundamentally in
nature, effect and duration from SEB's original proposal. Therefore in no way could they be regarded as a mere improvement
of the original commitments, within the meaning of the Remedies Notice, but constituted new commitments. Consequently at that
stage of the procedure, the Commission ought to have decided to open phase II.

125
The applicant points out, by way of comparison, that in the case which led to the Commission decision of 14 March 2000 declaring
a concentration to be incompatible with the common market and the functioning of the EEA Agreement (Case No COMP/M.1672 ─
*Volvo/Scania*) (OJ 2001 L 143, p. 74, at paragraphs 359 and 362), Volvo had submitted a first proposal for commitments within the period
laid down for that purpose (phase II, in that case) and had then put forward a new proposal 15 days later. The Commission
refused to consider the second set of commitments on the ground that the new proposal contained nothing which Volvo could
not have included in a commitment submitted within the three-month period.

126
The Commission maintains that there is no foundation for the claim that it breached essential procedural requirements in accepting
the late submission of commitments by SEB.Findings of the Court

127
It must be observed that the parties to the concentration proposed commitments to the Commission on three occasions during
the phase I procedure, namely on 5 December 2001, 18 December 2001 and on an unspecified subsequent date before the adoption
of the contested decision on 8 January 2002.

128
The tenor of each of those commitments was, essentially, as follows: ─ in the initial version of 5 December 2001 (
the initial version of the commitments), the commitments provided for the withdrawal, from the entire EEA for a period of two years, of five categories of the products
under the Moulinex trade mark; ─ in the modified version of 18 December 2001 (
the modified version of the commitments), the commitments provided for an exclusive licence to the Moulinex trade mark for a period of three years, together with
a commitment not to enter the market under the Moulinex trade mark for a further year after expiry of the licence, in respect
of all the product categories in Belgium, Greece, the Netherlands and Portugal and for deep friers in Germany, Austria, Denmark,
Norway and Sweden, as well as an obligation of the licensees to obtain supplies in respect of four categories of the relevant
products; ─ finally, in the final version accepted in the contested decision (
the final version of the commitments), the commitments provide for an exclusive licence to the Moulinex trade mark for a period of five years, together with a
commitment not to enter the market under the Moulinex trade mark for three years following expiry of the licence, in respect
of all the categories of small electrical household appliances in Austria, Germany, Belgium, Denmark, Greece, Norway, the
Netherlands, Portugal and Sweden, as well as an obligation of the licensee in Germany to obtain supplies for a period of two
years in respect of one category of the relevant products.

129
It should be noted that Article 18(1) of Regulation No 447/98 states: Commitments proposed to the Commission by the undertakings concerned pursuant to Article 6(2) of Regulation (EEC) No 4064/89
which are intended by the parties to form the basis for a decision pursuant to Article 6(1)(b) of that Regulation shall be
submitted to the Commission within not more than three weeks from the date of receipt of the notification.

130
In the present case, since the concentration was notified on 13 November 2001, the time-limit for the proposal of commitments
to the Commission during phase I expired, in accordance with the method of calculating time-limits laid down in Articles 6
to 9 and 18(3) of Regulation No 447/98, on 5 December 2001. It follows that the initial version of the commitments was lodged
with the Commission within the time-limit prescribed by Article 18(1) of Regulation No 447/98.

131
However, it is undisputed that the initial version of the commitments is not that which was finally accepted by the Commission
in the contested decision. According to recital 135 of the contested decision, the initial version of the commitments did
not permit the Commission to dispel all serious doubts as to the compatibility of the concentration with the common market
because it did not permit Moulinex to be replaced by an agent and did not cover all the markets on which the concentration
might raise serious doubts.

132
It is undisputed that both the modified version and the final version of the commitments were submitted by the parties to
the concentration after expiry of the three-week time-limit prescribed by Article 18(1) of Regulation No 447/98. Accordingly,
it must be examined whether the Commission was entitled to accept those commitments without infringing that provision.

133
For the purpose of that examination, regard must first be had to the terms of the applicable provisions of Regulation No 4064/89
and Regulation No 447/98.

134
Under Article 18(1) of Regulation No 447/98, the parties to the concentration have a period of three weeks within which to
submit to the Commission the commitments which
are intended by the parties to form the basis for a decision adopted at the end of phase I.

135
Likewise, the second subparagraph of Article 10(1) of Regulation No 4064/89 provides that phase I is to be extended to six
weeks if, after notification of a concentration, the undertakings concerned submit commitments pursuant to Article 6(2) of
that regulation which
are intended by the parties to form the basis for a decision at the end of phase I.

136
It follows from the wording of those provisions that the three-week time-limit prescribed by Article 18(1) of Regulation No
447/98 is intended to be binding on the parties in the sense that the Commission is not obliged to take commitments into consideration
in phase I if the parties submit them after expiry of that time-limit. On the other hand, it is not apparent from the wording
of those provisions that the Commission is prohibited from considering such commitments submitted out of time.

137
In order to determine whether Article 18(1) of Regulation No 447/98 must be interpreted in that way, its wording must nevertheless
be considered in the light of the aims pursued by it.

138
In that connection, it should be pointed out that that provision was introduced by Regulation No 447/98, which repealed Commission
Regulation (EC) No 3384/94 on the notifications, time-limits and hearings provided for in Regulation No 4064/89 (OJ 1994 L
377, p. 1) following the adoption of Regulation No 1310/97. The latter regulation inserted into Regulation No 4064/89 rules
on the offering of commitments during Phase I. In recital 16 in the preamble to Regulation No 447/98, the Commission states
that the time-limits for the submission of commitments prescribed by that regulation are necessary
in order to enable the Commission to carry out a proper assessment of commitments that have the purpose of rendering the concentration
compatible with the common market, and to ensure due consultation with other parties involved, third parties and the authorities
of the Member States.

139
That recital therefore indicates that, by the introduction of the time-limit prescribed by Article 18(1) of Regulation No
447/98, the Commission intended to ensure that it would have sufficient time to assess the proposed commitments and consult
third parties. While the pursuit of that aim necessarily requires that the time-limit laid down by that provision is binding
on the parties to the concentration, so as to preclude them from submitting commitments, before expiry of phase I, at a time
which does not leave the Commission a sufficient period within which to assess them and consult third parties, it in no way
requires that the time-limit be likewise binding on the Commission. The Commission is perfectly able to find that, having
regard to the circumstances of the case, a shorter period is sufficient for such assessments and consultations.

140
It follows that Article 18(1) of Regulation No 447/98 must be interpreted as meaning that, whilst the parties to a concentration
cannot oblige the Commission to take account of commitments and modifications to them submitted after the time-limit of three
weeks, the Commission must nevertheless be able, where it considers that it has the time necessary to examine them, to authorise
the concentration in light of those commitments even if modifications are made after expiry of the three-week time-limit.

141
It follows from the foregoing that the Commission was entitled to accept the modified version of the commitments and the final
version of those commitments after the three-week period provided for by Article 18(1) of Regulation No 447/98, that period
not being binding on it.

142
In any event, contrary to what the applicant claims, the Commission, in accepting those commitments, complied with the relevant
principles laid down by it in the Remedies Notice.

143
First of all, it should be noted in that regard that, contrary to what the Commission suggests in its defence, that notice
is not devoid of any binding legal obligation. The Commission is bound by notices which it issues in the area of supervision
of concentrations, provided they do not depart from the rules in the Treaty and from Regulation No 4064/89 (see, to that effect,
Case C-382/99
*Netherlands* v
*Commission* [2002] ECR I-5163, paragraph 24, and Case C-351/98
*Spain*  v
*Commission* [2002] ECR I-8031, paragraph 53). Moreover, the Commission cannot depart from rules which it has imposed on itself (see,
in particular, Case T-7/89
*Hercules Chemicals* v
*Commission* [1991] ECR II-1711, paragraph 53).

144
In the Remedies Notice, the Commission stated: 37 Where the assessment shows that the commitments offered are not sufficient to remove the competitive concerns raised by
the merger, the parties will be informed accordingly. Given that phase I remedies are designed to provide a straightforward
answer to a readily identifiable competition concern, only limited modifications can be accepted to the proposed commitments.
Such modifications, presented as an immediate response to the result of the consultations, include clarifications, refinements
and/or other improvements which ensure that the commitments are workable and effective.

145
In the present case, it is clear, and undisputed by the applicant, that the changes made to the modified version of the commitments
by the final version are limited modifications within the meaning of paragraph 37 of the Remedies Notice. As compared with
the previous version, the final version of the commitments merely prolongs the term of the exclusive licence and of the subsequent
obligation not to enter the market, extends to five additional Member States the principle applied in respect of the first
four that the licence is to cover all small electrical household products and, finally, reduces the scope of the supply obligation.
Since those modifications relate only to the scope, in terms of temporal and geographical application and in terms of products,
of the obligations provided for in the modified version of the commitments, they can be regarded as limited modifications
designed to improve or refine the initial version of the commitments for the purposes of paragraph 37 of the Remedies Notice.

146
With respect to the changes made to the initial version by the modified version of the commitments, which converted the obligation
to withdraw the Moulinex trade mark into an obligation to grant an exclusive licence to use that trade mark, it should be
observed that, like the withdrawal of the trade mark, the grant of an exclusive licence has the effect of depriving the proprietor
of the Moulinex trade mark, in this case SEB, of the right to use that trade mark in the territories concerned. To that extent,
the fact that the grant of an exclusive licence permits a third party to use the trade mark can therefore be regarded as an
improvement as compared to a mere withdrawal.

147
Moreover, in the present case, the commitments provide, in Section 1(c), that SEB is to abstain from using the Moulinex trade
mark for a period of three years after expiry of the licence agreements. In addition, the second subparagraph of Section 1(a)
provides that the licensees are entitled to stop using the Moulinex trade mark at any time during the term of the licence
for the purpose of migrating definitively to their own trade mark. In accordance with those two provisions, the Moulinex trade
mark will be withdrawn from the market for a period of at least three years and, at least in theory, of eight years at most.
It follows that, contrary to what the applicant claims, the final version of the commitments is not limited to substituting
the grant of licences to use the Moulinex trade mark for the withdrawal of that trade mark provided for by the initial version
but reinforces such non-use of the Moulinex mark by SEB by compelling SEB to grant a licence. For that reason also, the final
version of the commitments is an
improvement as compared with the initial version.

148
Furthermore, even though third parties were not expressly consulted on the initial version of the commitments, that improvement
can be regarded as
an immediate response to the result of the consultations with third parties intended to render the commitments
workable and effective. In response to question 25 of the questionnaire sent to the competitors, the applicant itself stated that, for a sustainable
position on each national product market concerned, two factors are of critical importance: brand loyalty of the consumers
and access to the various distribution channels. Having regard to that answer, the Commission was entitled logically to conclude
from the consultation of third parties that an exclusive licence for the Moulinex trade mark constituted an immediate response
to the problems identified by them since, in contrast to a mere withdrawal of the trade mark, such a licence permits an operator
with a reputable trade mark and access to distribution channels to be substituted for Moulinex.

149
It is also apparent from the file before the Court that, in a note dated 17 December 2001
on the possible commitments of SEB, De'Longhi expressly suggested to the Commission that
as an alternative to the transfer, SEB could be required to undertake to grant licences to use the Moulinex trade mark to
third party purchasers in all the national markets on which the concentration entails particularly significant anti-competitive
effects. Even if, as it claimed at the hearing, De'Longhi qualified that statement in its response to the questionnaire on the commitments
of 3 January 2002, the fact nevertheless remains that it constitutes evidence confirming that the Commission was reasonably,
and in any case without manifest error, entitled to consider that a commitment to grant licences constituted an immediate
response to the consultations with third parties, as De'Longhi itself recommended that option before it was proposed by SEB.

150
For all those reasons, the modified version and the final version of the commitments can be regarded as limited modifications
which, in accordance with paragraph 37 of the Remedies Notice, may be accepted by the Commission after expiry of the period
prescribed by Article 18(1) of Regulation No 447/98.

151
Consequently, the first plea must be dismissed in its entirety.

II ─
Second plea: the Commission erred in law in authorising the concentration without opening phase IIArguments of the parties

152
The applicant contends that Commission erred in law in not initiating phase II on the basis of Article 6(1)(c) of Regulation
No 4064/89 when the conditions for authorisation on the completion of phase I had not been fulfilled because the commitments
submitted by SEB did not clearly rule out serious doubts as to the compatibility of the concentration with the common market.

153
The applicant observes that the Remedies Notice provides that
commitments submitted to the Commission in phase I must be sufficient to clearly rule out serious doubts as to the compatibility of the concentration with the common market. In particular, commitments offered during phase I can
lead to authorisation without the initiation of phase II only where:

─
the competition problems created by the concentration are easily identifiable;

the competition problems created by the concentration are easily identifiable;

─
the commitments are sufficient clearly to remove all serious doubts and are therefore designed to provide a straightforward
answer to a readily identifiable competition concern;

the commitments are sufficient clearly to remove all serious doubts and are therefore designed to provide a straightforward
answer to a readily identifiable competition concern;

─
the commitments are presented as an
immediate response to the result of the Commission's consultations with the operators present in the market and the parties.

the commitments are presented as an
immediate response to the result of the Commission's consultations with the operators present in the market and the parties.

154
Accordingly, the Commission concludes as follows in the Remedies Notice: Commitments in phase I can only be accepted in certain types of situation. The competition problem needs to be so straightforward
and the remedies so clear-cut that it is not necessary to enter into an in-depth investigation.

155
The applicant adds that, in the case of
*Volvo/Scania*, cited above, the Commission rejected proposed commitments submitted by the parties to the concentration after finding as
follows: It is not possible to conclude that the new proposal in an obvious and clear-cut way would remove all the identified competition
concerns. The complexity of the new proposals would have made it impossible, in the short time remaining before the expiry
of the deadline under Article 10(3) of the Merger Regulation, for the Commission to evaluate them effectively. Further investigation
would have been called for, and it would also have been necessary to seek the views of interested third parties pursuant to
the relevant provisions of the Merger Regulation.

156
For the reasons given above, the applicant considers that the Commission was not entitled, without erring in law, to authorise
the concentration at the end of phase I because, according to the applicant, the Commission could not have been sufficiently
certain, at the end of that phase alone, that the commitments removed all doubt as to the compatibility of the concentration
with the common market.

157
Three factors show that the Commission was not in a position, at the end of phase I, to determine with the requisite certainty
that the commitments were sufficient to resolve all the competition problems created by the concentration.

158
First, the applicant states that, to its knowledge, in the past the Commission has never authorised a concentration on the
sole basis of commitments concerning a trade mark licence, such commitments having always been used by the Commission to accompany
or supplement other remedies such as the sale of assets. On this point the applicant observes that the Commission itself recommends,
in paragraph 16 of the Remedies Notice, that
where the competition problem results from horizontal overlap, the most appropriate business has to be divested. According to the applicant, the Commission did not have at its disposal the experience to enable it to determine with sufficient
certainty whether a mere commitment relating to a trade mark licence would clearly resolve the identified competition problems.

159
Second, the applicant claims that the Commission could not have had sufficient information regarding the effectiveness of
the commitments. According to the applicant, unlike a straightforward commitment to divest, the effects of which can easily
be assessed by the Commission, the effectiveness of a commitment to licence the use of a trade mark is, by its nature, more
difficult to evaluate in so far as it depends on several factors such as the duration of the licence, the duration of the
subsequent surrender of the mark and the exact scope of the licence. Furthermore, the fact that the licences for the Moulinex
mark may, in the scheme of commitments proposed by the Commission, be granted to different undertakings, depending on the
products and countries concerned, was likely to complicate further the assessment of the effect of those commitments. To that
extent, the applicant considers that the Commission was not in a position, without conducting an in-depth examination, to
assess with sufficient precision whether the third-party licensee or licensees would actually be able to act as a real counterbalance
to SEB-Moulinex on the day after the concentration, in respect of each of the product ranges and each country concerned.

160
Third, the applicant observes that the questionnaire for assessing the effectiveness of the modified version of the commitments
submitted by SEB was addressed to interested third parties on 20 December 2001, a reply being required by 21 December 2001.
However, in the applicant's opinion, the very short time allowed for a reply prevented the third parties in question from
giving a precise and detailed opinion regarding the foreseeable effects of the proposed commitments. The applicant admits
that a very short time-limit for a reply may be accepted in certain cases involving commitments the effects of which can easily
be assessed, such as the divesture of assets. On the other hand, where the commitments are complex and, furthermore, uncommon,
a period of one day can hardly be regarded as sufficient to enable third parties to give a detailed opinion.

161
The Commission denies that it erred in law in deciding to authorise the concentration at the end of phase I without initiating
the in-depth procedure.Findings of the Court

162
First of all, in so far as the applicant contends that the Commission erred in law by not initiating phase II on the ground
that the commitments submitted by SEB were not sufficient clearly to remove all serious doubts, the applicant is calling into
question the economic assessment which led the Commission to accept the commitments proposed by SEB. Consequently this plea
is the same as the third plea claiming manifest error of assessment of the capacity of the commitments to resolve the competition
problems. Therefore this aspect of the present plea will be examined in connection with the third plea.

163
The eighth recital in the preamble to Regulation No 1310/97 states that phase I remedies can only be accepted
where the competition problem is readily identifiable and can easily be remedied. Likewise, paragraph 37 of the Remedies Notice repeats that
phase I remedies are designed to provide a straightforward answer to a readily identifiable competition concern.

164
In the present case it must be noted that, regarding the nature of the competition problems arising, the applicant has not
identified any competition problems other than those identified by the Commission in the contested decision.

165
Furthermore, it must be said that the Commission's analysis of competition is prudent. Contrary to the assertions of the notifying
parties in the course of the administrative procedure, who took the view that the geographical dimension of the markets was
worldwide, the Commission found, at the end of paragraph 30 of the contested decision, that
a national definition of the relevant markets must be regarded as having the greatest credibility at the end of the phase
I examination. Likewise, to assess the competitive position of the new entity on completion of the concentration, the Commission aggregated
the market shares of SEB and Moulinex on the assumption that Moulinex would not lose sales, whereas the context of the acquisition
was likely to lead to such losses and it is not disputed that the marketing of certain Moulinex models had been discontinued.
Accordingly in paragraph 42 of the contested decision the Commission observed that it could not be ruled out,
at least on the conclusion of phase I of the examination, that the combined entity will be able to restore the competitive
capacity of Moulinex to the level before the commencement of the reorganisation proceedings.

166
It must therefore be accepted that the Commission accurately identified the competition problems created by the concentration
in question.

167
The applicant adduces three grounds to show that the Commission could not have been sufficiently certain that the proposed
commitments would remove the doubts as to the compatibility of the concentration and that it therefore erred in law in authorising
the concentration at the end of phase I. The said grounds are, first, the nature of the commitments, second, the Commission's
lack of information for assessing the effectiveness of the commitments and, third, the period allowed to third parties for
submitting observations on the commitments.

168
First, regarding the nature of the proposed commitments, they consist in the conclusion of exclusive licensing agreements
for the Moulinex trade mark in nine Member States, covering all of the 13 relevant products for a term of five years and a
commitment by the SEB group, for the term of the licensing agreement and three years after it expires, to refrain from marketing
any products under the Moulinex mark.

169
Neither Regulation No 4064/89 nor the Remedies Notice expressly stipulate what kind of commitments can or must be accepted
on the completion of phase II or in the framework of phase I. As Regulation No 4064/89 aims to prevent the creation or strengthening
of market structures as a result of which effective competition in the common market would be significantly impeded, the proposed
commitments must be such as to permit the Commission to conclude that the concentration in question will not create or strengthen
a dominant position. In that connection there is no material difference between the commitments made in phase I and those
in phase II although, as an in-depth market study is not carried out in phase I, the former must not only permit such a conclusion,
but must also be sufficient to rule out clearly any serious doubt on that point.

170
Although a sale of assets is often the most suitable corrective measure for easily remedying a competition problem, particularly
in the case of horizontal overlap, the possibility cannot in principle be ruled out that a licence agreement may be suitable
for remedying identified competition problems. Thus in the judgment in Case T-102/96
*Gencor* v
*Commission* [1999] ECR II-753, paragraph 319, the Court observed that
the possibility cannot automatically be ruled out that commitments which are
*prima facie*  behavioural, for instance not to use a trade mark for a certain period, or to make part of the production capacity of the
entity arising from the concentration available to third-party competitors or, more generally, to grant access to essential
facilities on non-discriminatory terms, may themselves also be capable of preventing the emergence or strengthening of a dominant
position.

171
The applicant's observation that the Commission has never in the past authorised a concentration on the sole basis of commitments
concerning a trade mark licence is irrelevant. If the commitments proposed by SEB are capable of effectively overcoming the
identified competition problems, the Commission cannot be criticized for accepting them merely because it has never before
authorised a concentration on such a basis. This question, which relates to the substance of the commitments, will be examined
in connection with the plea that the commitments are insufficient.

172
It is also clear from the file that, during the administrative procedure, several third parties, including De'Longhi, suggested
to the Commission that a licensing agreement might, under certain circumstances, be sufficient to overcome the competition
problems identified in the present case (see paragraph 149 above).

173
It is common ground that trade marks are of vital importance in the sector affected by the concentration and are one of the
main factors in the final consumers' choice. In addition, the offers to purchase Moulinex related almost exclusively to that
group's trade marks rather than the production units, the applicant itself expressing its primary interest in acquiring the
Krups trade mark. It is not denied in the present case that a transfer of tangible assets would have had only a marginal effect
on the structure of competition. As for requiring the transfer of intangible assets in the form of trade mark rights, that
would have amounted in substance to partially prohibiting the concentration, which would have been contrary to the principle
of proportionality if commitments relating to a trade mark licence were likely to prevent the creation or strengthening of
a dominant position held by SEB-Moulinex.

174
The applicant has not shown that the Commission was not in a position to determine whether the third-party licensee or licensees
would be able to act as a genuine counterweight to SEB-Moulinex. In this connection it must be observed that, on the contrary,
the Commission included, in the final version of the commitments, a paragraph on the status of the licensee and required the
licence holder or holders to be submitted to it for approval, also requiring them to be viable and independent and to be in
possession of the competence necessary to provide active and effective competition on the market concerned.

175
Finally, contrary to the applicant's allegation, it is clear from the commitments proposed by SEB that there cannot be more
than one licensee in one country, as Section 1(a) of the commitments expressly provides that the licence is exclusive in each
of the Member States concerned and Section 1(c) provides that the licence will be for all small electrical household appliances
and that neither the licensee nor SEB will be able to use the Moulinex trade mark for other products.

176
Second, with regard to the complaint that the Commission could not have had enough information concerning the effectiveness
of the commitments, it is sufficient to note that, although the effectiveness of a trade mark licence depends on several factors
which are more difficult to assess than a sale of assets, it cannot automatically be ruled out that the Commission will be
able to assess the relevant parameters in the course of phase I.

177
Moreover, the Commission took into account precisely all the criteria cited by the applicant and was able to test them in
the market. As a result of its own examination and the replies given by the third parties who were asked, the Commission was
in a position to better identify the shortcomings of the commitments originally proposed and to make the necessary improvements
to them with regard to the duration of the licence, the duration of the subsequent surrender of the trade mark and the exact
scope of the licence. Accordingly the final version of the commitments includes in particular the following provisions: ─ two-year extension of the term of the licence agreement (originally proposed for three years) and of the duration of the
obligation to refrain from competing thereafter (originally one year) (subparagraph 1 of section 1(c) of the commitments);─ extension of the licence agreements to all the relevant products and an obligation for SEB not to market any products at
all (even those not concerned) under the Moulinex trade mark in the nine Member States concerned (section 1(a) and second
subparagraph of section 1(c) of the commitments);─ deletion of the obligation for licensees to obtain supplies of certain products concerned from SEB (subject to the special
case of Germany) (section 1(d) of the commitments);─ obligation of prospective licensees to be currently present on the market or potentially capable of entering it (section
1(g) of the commitments).

178
In those circumstances, the commitments cannot be considered to be of such an extent and complexity that the Commission found
it impossible to determine with the requisite degree of certainty that effective competition would be restored in the market,
because the final version of the commitments reflects in large measure the objections of the third parties. For the same reason,
the commitments accepted by the Commission were sufficiently specific to enable the Commission to assess all the details.

179
Third, regarding the time allowed to third parties to submit their comments, it must be observed that, in paragraph 34 of
the Remedies Notice, the Commission provides as follows: 34. In order to form the basis of a decision pursuant to Article 6(2), proposals for commitments must meet the following requirements:

(a)
they shall be submitted in due time, at the latest on the last day of the three-week period;...At the same time as submitting the commitments, the parties need to supply a non-confidential version of the commitments,
for purposes of market testing.

180
The applicant complains that its observations on the modified version of the commitments which it received on 20 December
2001 had to be submitted by 21 December 2001. As the Commission points out, it is clear from the file that there is no factual
basis for this complaint as the Commission's letter expressly states that the period allowed would expire on 2 January 2002,
not 21 December 2001. It follows that the third parties, of whom the applicant was one, had 12 days in which to lodge their
observations on the modified version of the commitments, which was manifestly more than sufficient, particularly in view of
the need for speed in the procedure for appraising concentrations. Accordingly, in the judgment in the case of
*Kaysersberg* v
*Commission*, cited above, the Court upheld a period of 24 hours granted to third parties in which to submit comments on the new version
of the commitments in question. It must also be observed that, although the applicant complains of the time allowed in which
to comment on the last proposed commitments, it does not deny that it was able to lodge written comments on the modified version
of the commitments in spite of the short period allowed. Finally, the applicant has not put forward any considerations to
show how a longer period would have enabled it to produce evidence likely to change the contested decision. On this point
it is relevant to note that the applicant's objections before the Court are substantially the same as those raised in the
course of the administrative procedure. Therefore it must be concluded that the Commission adopted the contested decision
in full knowledge of the facts, after profitably consulting third parties on the effectiveness of the proposed measures for
overcoming the identified problems of competition.

181
It follows that neither the competition problems in question nor the nature of the commitments proposed by SEB nor the period
allowed to third parties were such as to prevent the Commission from concluding that the serious doubts could be removed on
the completion of phase I.

182
It follows that the plea that the Commission erred in law in not initiating phase II must be dismissed.

III ─
Third plea: manifest error of assessment in that the commitments were insufficient to overcome the competition problems

183
The applicant maintains that the contested decision is vitiated by a manifest error of assessment in that the commitments
entered into by SEB are insufficient to overcome the competition problems created by the concentration.

184
This plea is divided into five limbs. The applicant considers that there was a manifest error of assessment by the Commission
in so far as: ─ the commitment to grant a trade mark licence is not by nature capable of overcoming the competition problems created by
the concentration;─ the commitments are of insufficient duration;─ the commitment to obtain supplies in respect of the German market and the conditions attached to the option for all licensees
to obtain supplies will have the effect of strengthening the position of SEB-Moulinex;─ the fact that the Commission agreed that the same trade mark could be used by different undertakings in the European Union
may give rise to collusion between SEB-Moulinex and the third-party licensee or licensees;─ no commitment is imposed with regard to markets which nevertheless have serious competition problems.

185
De'Longhi contends, moreover, that the commitments bring about a sharing of the market in the Moulinex trade mark.First limb: a commitment to grant a trade mark licence is not by nature capable of remedying the competition problems caused
by the concentrationA ─ Arguments of the parties

186
The applicant considers that the commitment to grant a trade mark licence is not by nature capable of remedying the competition
problems in the present case. A mere commitment to licence a trade mark does not offset the negative effects of a market share
of approximately 40% of the market for small electrical household appliances as a whole, outside France.

187
The applicant notes that, in the Remedies Notice, the Commission itself observes that: ─ where the competition problem results from horizontal overlap, the most appropriate business has to be divested (paragraph
16); ─ in exceptional cases, a divestiture package including only brands and supporting production assets may be sufficient to
create the conditions for effective competition. In such circumstances, however,
the Commission would have to be convinced that the buyer could integrate these assets effectively and immediately (paragraph 18).

188
The applicant adds that, on the other hand, in the Notice the Commission does not anticipate that a trade mark licence alone
can overcome problems of horizontal overlap. The Commission had never previously imposed, in the form of a commitment, a measure
involving a trade mark licence unaccompanied by other remedies, such as the divestiture of brands and businesses, divestiture
of production capacity, the transfer of part of the sales and administrative personnel and the workforce attached to the industrial
site sold (see, for example, Commission Decision 96/435/EC of 16 January 1996 relating to a proceeding pursuant to Regulation
No 4064/89 declaring a concentration to be compatible with the common market and the functioning of the EEA Agreement (Case
No IV/M.623
*Kimberly-Clark/Scott*) (OJ 1996 L 183, p. 1)).

189
As an example, the applicant refers to the Commission Decision of 27 July 2001 declaring a concentration to be compatible
with the common market (Case No IV/M.2337 ─
*Nestlé/Ralston Purina*, OJ 2001 C 239, p. 8), in which the Commission required commitments for the divestiture of brands so as to eliminate the
horizontal overlap of the parties' businesses and to give the new entity a market share equivalent to that held by Ralston
Purina prior to the operation. In addition, the Commission had required the divestiture of all products in the range covered
by the commitments so as to enable the purchaser of the brand to avoid indirect competition by Nestlé/Ralston Purina. The
Commission had decided on similar measures in the case of
*Kimberly-Clark/Scott*, cited above.

190
The Commission denies that a commitment to grant a trade mark licence cannot remedy the competition problems created by the
concentration.B ─ Findings of the Court

191
First of all, as observed in connection with the previous plea, it cannot automatically be ruled out that a commitment which
is behavioural, such as one to grant a trade mark licence, may be capable of remedying the competition problems created by
a concentration and the relevant question is not whether the Commission has already accepted concentrations on the sole basis
of commitments to grant a trade mark licence, but whether such commitments were, in the present case, capable of preventing
the emergence or strengthening of a dominant position.

192
On this point it is common ground that trade marks are the most important factor in competition on the relevant markets. Furthermore,
many producers have chosen to outsource all or part of their production and to retain only the brands, sales forces and marketing
teams.

193
It is likewise not disputed that, since the average life of small electrical household appliances is approximately three years,
a trade mark licence for a term of five years accompanied by a commitment by SEB not to market any such appliances under the
Moulinex trade mark for a further three years is likely to enable the licensees to induce customers of Moulinex products to
migrate to their own brand. This is all the more true in so far as, according to the commitments, the licensee or licensees
must be viable, independent and in possession of the competence necessary to provide effective competition on the market concerned
and, in any case, must be approved by the Commission.

194
It must also be observed that the grant of a trade mark licence is a remedy which was envisaged and asked for by third parties.
Consequently this remedy appeared to be appropriate for remedying the competition problems in the present case.

195
It follows that, leaving aside the question whether the commitment is of a sufficient duration, which will be considered below,
the commitments relating to a trade mark licence offered by SEB are capable of remedying the competition problems arising
from the concentration concerned.

196
This conclusion is not called into question by the examples cited by the applicant. First, several of the applicant's allegations
are mistaken in fact. Thus the average market shares of SEB-Moulinex in the sector of small electrical household appliances
in Europe are less than 30% and are therefore not 40%. Likewise, in the case of
*Nestlé/Ralston Purina,* the Commission did not require the divestiture of brands for the Spanish markets, but accepted, as one of two options, commitments
whereby the parties agreed to grant licences for the brands for a total of approximately eight years (in two stages), which
made it possible to establish the new brand on the market (paragraph 68 of the said decision). Secondly, in any case, the
applicant has not shown that the markets and the problems created by those concentrations possessed characteristics fundamentally
similar to those in the present case. The fact, assuming it to be proven, that the Commission considered that commitments
relating only to trade mark licences were not such as to overcome the competition problems caused by a particular concentration
does not mean that such commitments are not sufficient to eliminate the risks of creating or strengthening a dominant position
that arise from another concentration on a different market with different characteristics.Second limb: manifest error of assessment by the Commission in accepting commitments of insufficient durationA ─ Arguments of the parties

197
The applicant submits that the commitments accepted by the Commission are of insufficient duration. According to the applicant,
the restoration of effective competition requires that the purchaser of the Moulinex brand should have the resources to develop
the brands concerned and has an inducement to do so. In the contested decision (paragraph 36), the Commission itself stated
that
trade marks are one of the principal factors influencing the choice of the ultimate consumer and therefore constitute one
of the major elements of competition between manufacturers of small electrical household appliances. According to BaByliss, this position is justified by the fact that, in a sector where the technological characteristics
of products are not a factor which determines the purchase of the product by the consumer, the brand image plays an essential
part in gaining customer loyalty.

198
In that context, public awareness of brands is one of the main elements of the markets concerned and keeping such awareness
at a high level requires substantial investment in advertising in order to overcome consumer habits and the obstacles connected
with the reputation of well-established manufacturers. In the applicant's opinion, such investment can pay for itself only
over a very long period and to the extent that the profits from the investment accrue to the investor. Consequently, whereas
firms already active in the market may content themselves with relatively modest advertising expenditure aimed at maintaining
an image which has already been created, the situation is different for a new entrant, particularly where a powerful group
has very well-known brands.

199
The applicant claims that the economic literature shows specifically that a reasonable manufacturer systematically underinvests
if he can expect only a partial return on his investment. Therefore a purchaser who does not own the brands and is in the
position of investing in order to increase awareness of them, knowing at the same time that he will ultimately have to return
them to a competitor, would have no incentive whatever to maintain or develop the brands. This leads to a serious weakening
of the brands he has purchased. The duration of the licence and of the period of non-use which must follow it are therefore
decisive for the effectiveness of the commitment.

200
As an example, the applicant notes that, in the
*Kimberly-Clark/Scott* case, cited above, where the entity created by the concentration was the leader in the toilet tissue market in the United
Kingdom and Ireland, with an aggregate market share of between 50 and 60%, the Commission required the conclusion of a licence
agreement for the trade marks concerned for a total of 15 years.

201
Commission decision C (2001) 3014 final of 10 October 2001 declaring a concentration to be incompatible with the common market
and the functioning of the EEA Agreement (Case No COMP/M.2238 ─
*Schneider-Legrand*) expressly approved that approach as follows: The Commission's investigation has confirmed the disadvantage of not owning one's own brand from the beginning and shows that
a purchaser would need a long period (approximately seven years) to complete successfully the substitution of the proposed
brand. At the same time, the Commission's investigation shows that a purchaser would have to be protected by commitments not
to re-enter the markets concerned under the original brand for a period of more than ten years.

202
The applicant considers that the factors mentioned by the Commission to show the inadequacy of the commitments proposed in
the
*Schneider-Legrand* case are directly applicable to the present case.

203
Therefore, according to the applicant, the Commission manifestly erred in its assessment by finding, in the present case,
that a commitment to grant a trade mark licence for a term of five years, combined with a commitment by SEB not to use the
Moulinex brand for a further three years
will enable the licensee to induce the migration of Moulinex products to its own brand with limited losses to SEB when the
latter is in a position to reintroduce the Moulinex brand to the relevant markets.

204
The Commission, supported by SEB, denies that it erred manifestly in its assessment in accepting commitments of an allegedly
insufficient duration.B ─ Findings of the Court

205
When considering the applicant's pleas as to the duration of the commitments, it should be borne in mind that, according to
the second subparagraph of Section 1(a) of the commitments, their purpose is to permit the use of the trade mark Moulinex
in combination with a trade mark of the licensee in order to enable the licensee, during and after that period of
co-branding, to establish or reinforce its own trade mark on the relevant market. For that purpose, the licensee will, for the term of
the Moulinex trade mark licences, be authorised either to use immediately the Moulinex trade mark in combination with its
own trade mark or to use it alone, temporarily, in order to change subsequently to
co-branding. According to that provision, the licensee will also be free to change from
co-branding to its own trade mark at any time during the term of the licence.

206
Moreover, in order to achieve that purpose, the commitments provide, in the third subparagraph of Section 1(g), that the licensees
must be operators possessing their own trade mark which can be used in association with the Moulinex trade mark, but not operators
whose principal activity involves retail sales.

207
It follows that the purpose of the commitments is not to permit the use of the Moulinex trade mark as such by each of the
licensees but to enable them, over a transitional period during which they will be entitled to use their own trade mark together
with the Moulinex trade mark, to ensure the migration from the Moulinex trade mark to their own trade marks, so that they
can compete effectively against the Moulinex trade mark after the transitional period, when SEB will again be entitled to
use the Moulinex trade mark in the nine Member States concerned.

208
Consequently, contrary to what the applicant claims, the commitments are not designed to introduce a new trade mark to the
nine Member States concerned but to enable the licensees to establish or strengthen their own trade mark as a mark effectively
competing with the Moulinex trade mark.

209
Moreover, since the purpose of the commitments is to enable the licensees to establish or strengthen their own trade mark
as a mark effectively competing with the Moulinex trade mark, it is irrelevant for the applicant to claim that, in view of
its current large market share, its trade mark portfolio and the reputation of the Moulinex trade mark, SEB will be able to
reintroduce the Moulinex trade mark easily in the nine Member States concerned. The question is not whether SEB will be able
to reintroduce the Moulinex trade mark in the Member States concerned ─ which must, after all, be presumed when determining
whether the commitments accepted in the contested decision are sufficient ─ but whether the licensees will be able to establish
or strengthen their own position as effective competitors of SEB.

210
It is therefore necessary to examine whether the duration of the transitional period established by the commitments is sufficient
to achieve that aim.

211
In that regard, it must be observed, first, that, according to the first subparagraph of Section 1(c) of the commitments,
each of the licences to the Moulinex trade mark in the nine Member States concerned will run for a term of five years. In
addition, according to that provision and the second subparagraph of Section 1(c), SEB is to abstain, for the term of the
licence and for a period of three years after its expiry, from marketing under the Moulinex trade mark in the nine Member
States concerned small electrical household appliances coming under one or other of the 13 product categories in question
and other household appliances not included in those product ranges, such as vacuum cleaners and microwave ovens.

212
Those provisions indicate that, contrary to what the applicant suggests, the total duration of the commitments pursuant to
which SEB will not be able to market products under the Moulinex trade mark is not five years but eight years, namely the
five-year duration of the first period, during which the licensee will have the exclusive right to use the Moulinex trade
mark alone or together with its own trade mark, and the three-year duration of the second period, during which SEB will abstain
from marketing under the Moulinex trade mark in the countries concerned. It follows that SEB will be deprived of the right
to use the Moulinex trade mark in the Member States concerned for eight years.

213
Those provisions also indicate that any use of the Moulinex trade mark in the nine Member States concerned will cease for
a period of at least three years and, at least in theory, of eight years at most. Under the commitments, each licensee remains
free to decide when to switch from
co-branding to its own trade mark alone. In its statement in intervention, SEB stated that the current candidates for the grant of a
licence intend to migrate from
co-branding to their own trade mark after a period of three to four years, which will mean that, in the Member States concerned, the
Moulinex trade mark will disappear for a period of about five years.

214
Such an absence of product lines of the Moulinex brand will enable the licensees to establish with lasting effect the reputation
of their own trade mark. In addition, such an absence also means that SEB will not be able to recover automatically the positions
held by Moulinex once it is able to reintroduce the trade mark to the relevant markets at the end of the non-marketing period.

215
Moreover, in recital 140 of the contested decision, the Commission stated that the average life cycle of small electrical
household appliances is about three years and the applicant has not contradicted that statement.

216
It is therefore clear that the duration of the commitments will cover a period equal to about three product life cycles, whilst
the period during which all use of the Moulinex trade mark will cease will be equal to at least one product life cycle.

217
The Commission correctly stated, without being contradicted by the applicant, that, on a neighbouring market to that for the
products in question, namely the market for large household electrical appliances, Whirlpool successfully migrated from the
Philips trade mark to the Whirlpool trade mark in three years between 1990 and 1993, which is equivalent to the life cycle
of the product. That migration was successful despite the fact that the Philips trade mark continued to be present and was
maintained by Philips on adjacent markets. The Commission also observed, by way of comparison, that in markets for similar
products Dyson became the leader in the British market for vacuum cleaners in less than five years, Colgate gained a significant
share of the French market for electric toothbrushes in one year and Moulinex, originally absent from the electric kitchen
appliances sector (informal meals), succeeded in five years in gaining a market share of between 5 and 15% in the various
European countries.

218
Moreover, in its Notice on restrictions directly related and necessary to concentrations (OJ 2001 C 188, p. 5, paragraph 15),
the Commission stated that, in the event of the transfer of an undertaking, the maximum acceptable duration of a ban on competition
imposed on the seller in order to guarantee the transfer to the buyer of the full value of the transferred assets is three
years where the transfer of the undertaking includes the goodwill and know-how and two years where only the goodwill is transferred.
In the present case, the period for which SEB will abstain from using the Moulinex trade mark in the licensees' territories
is eight years.

219
Contrary to the applicant's submission, far from systematically underinvesting by reason of not being the owner of the brand,
the licensee will, on the contrary, be encouraged to invest strongly in the development of his own brand, of which he will
be the owner, after benefiting initially from the support of the Moulinex brand to launch or strengthen it. As the purpose
of the commitments is not to use the Moulinex trade mark for a period of five years but to enable migration to take place
from the Moulinex mark to others, the licensee or licensees will have every incentive to invest in their own brand so as to
prolong the benefits of using the Moulinex brand during the first years. Consequently, the period of association of the two
brands is only a necessary stage in the transition to the licensee's own brand. Therefore the return on the investment will
continue long after the eight years laid down by the commitments and will not stop on the date when it will be possible for
SEB to reuse the Moulinex brand.

220
Second, it should be pointed out that, according to the first subparagraph of Section 1(g) of the commitments, the licensees
must be
operators currently present on the market or potentially capable of entering it, viable, independent without any links to
the SEB group and in possession of the competence and motivation necessary to provide active and effective competition on
the relevant markets. Moreover, as was pointed out above, according to the third subparagraph of Section 1(g), the licensees must have their own
trade mark which is capable of being associated with the Moulinex trade mark and not be operators whose principal activity
is retail sales.

221
The Court finds that, by limiting the grant of licences to operators who are already on the market or capable of penetrating
it in the short term and who possess their own trade mark, those provisions are capable of effectively ensuring that the licensees
will become effective competitors within the period provided for by the commitments. This is confirmed still further by the
fact that, even if they have their own trade marks, operators whose principal activity is retail sales are nevertheless excluded
under the third subparagraph of Section 1(g) from the circle of potential holders of a licence to the Moulinex trade mark.
In recitals 27(d) and 37 of the contested decision, the Commission stated ─ and has not been contradicted by the applicant
─ that those operators' own trade marks, namely the
distributors' brands, do not have a strong presence on the relevant markets.

222
In light of those circumstances, it must be concluded that there was no manifest error of assessment by the Commission in
finding that the duration of the commitments is sufficient to enable the licensees of the Moulinex trade mark to establish
or strengthen their own trade mark as a mark which can effectively compete with the Moulinex trade mark in the nine Member
States concerned.

223
Accordingly, the applicant's complaints as to the duration of the commitments must be rejected.

224
This conclusion is not called into question by the two decisions cited by the applicant. The characteristics of the two markets
concerned in the cases of
*Kimberly-Clark/Scott* and
*Schneider/Legrand* are not comparable to the markets in question in the present case so that, as stated above, the comparison claimed by the
applicant is irrelevant.

225
In the
*Kimberly-Clark/Scott* case, the long duration of the commitments (licence for a maximum of 10 years with a five-year period of non-use) was justified,
according to the Commission (and not disputed by Kimberly-Clark), because the introduction of a new brand on the market in
toilet paper, kitchen towels and paper tissues was particularly difficult in so far as there were only two significant brands
(Kleenex and Andrex), while the others were hardly promoted and had little customer loyalty. In the present case, by contrast,
there are established brands to which customers of the Moulinex brands can migrate.

226
Likewise, in the
*Schneider/Legrand* case ─ apart from the fact that the Commission's decision was annulled by the Court ─ the parties' proposed offer of an option
to use several trade marks for three years had been rejected because the market test had shown that a purchaser would need
about seven years to complete the proposed trade mark substitution, the lifetime of
low-voltage electrical appliances being very long, whereas that of small electrical household appliances is short. In addition, Schneider
proposed that the trade mark, on the same national market, be split and used by Schneider and the licensee whereas in the
present case there will be no Moulinex brand products from two different companies on one and the same market as the commitments
provide for an exclusive licence and a subsequent prohibition on using the Moulinex mark.Third limb: the commitment to provide supplies on the German market and the conditions attached to the option for all licensees
to obtain supplies will have the effect of strengthening the position of SEB-MoulinexA ─ Arguments of the parties

227
The applicant contends that, regarding food mixers in Germany, the two-year commitment of the Moulinex mark licensee to obtain
supplies of all appliances in that category from SEB, equivalent to 65% of the sales of products in that category by Moulinex
in 2000, is such as to strengthen further the position of SEB-Moulinex in the German market.

228
First, the applicant claims that such a commitment gives SEB-Moulinex a guaranteed outlet for its products. To that extent,
it would enable SEB-Moulinex to benefit from greater economies of scale and would thus contribute to reducing its marginal
production costs.

229
Second, the applicant considers that the fact that SEB agrees to supply the licensee on the average internal transfer terms
within the SEB group, between the industrial companies and the marketing subsidiaries, in the territory or territories concerned,
will prevent the licensee from using less costly sources of supply which it may identify. Therefore the licensee would be
able to compete with SEB on prices only by manipulating the level of its margin.

230
Third, the applicant considers that this measure is likely to take away any incentive for the licensee to offer technologically
innovative products in so far as it will enable SEB, the market leader, to determine the technical standards of the different
products, thus eliminating any competition in relation to product characteristics.

231
Fourth and last, the applicant considers that this measure is not essential to the licensee's business. In particular, it
takes the view that merely giving the licensee an option to obtain supplies from SEB, as proposed for the other countries,
would have been sufficient to enable it to carry on its business even if it did not have the necessary production capacity.

232
Therefore the applicant concludes that there was a manifest error of assessment by the Commission in accepting a commitment
likely to lead to the strengthening of the position of SEB-Moulinex on the German market.

233
Alternatively, the applicant observes that the aspects of the commitment relating to obtaining supplies from SEB-Moulinex
could lead to greater restraint of price competition in the market segments concerned.

234
First, the applicant notes that the commitment gives the licensee the option of obtaining supplies from SEB-Moulinex for one
or more of the products or countries concerned. However, should the licensee wish to obtain supplies from SEB for Moulinex
products, such supply should correspond to 65% of sales under the Moulinex brand in 2000 (paragraph 132 of the contested decision).
In the applicant's opinion, such an obligation gives SEB a guaranteed outlet, but takes away the licensee's freedom to choose
its sources of supply.

235
Second, the applicant claims that compelling the licensee to obtain supplies from SEB-Moulinex equivalent to a minimum of
65% of sales by Moulinex in 2000 may lead to uniformity in the selling prices of SEB-Moulinex and those of the licensee for
the products in question. According to the applicant, the licensee will in effect share in the entire production costs of
SEB-Moulinex and probably for a very significant proportion of its total requirements for the product concerned. Such a degree
of similarity in cost structures could lead to automatic or collusive alignment of the selling prices of the products concerned
in so far as price competition will be possible only by means of commercialisation costs and the level of the licensee's margin.
The applicant adds that the more concentrated the markets situated downstream of the market for selling the finished products,
the greater the risks of collusive behaviour. The Commission had expressly referred of the existence of such risks in the
Guidelines on the applicability of Article 81 EC to horizontal cooperation agreements (OJ 2001 C 3, p. 2).

236
The Commission denies that the commitment to obtain supplies on the German market will have the effect of strengthening the
position of SEB-Moulinex in the German market.B ─ Findings of the Court

237
Essentially the applicant objects, first, to the obligation imposed on the German licensee with regard to obtaining supplies
of food mixers and, second, the option of all licensees in the nine Member States to conclude a supply contract for any of
the products covered by the decision.

238
Regarding the obligation concerning supplies imposed on the licensee in Germany, it must be observed, first, that, according
to the decision, which is not challenged by the applicant on this point, the purpose of that commitment is to maintain production
at the sites in question so as to preserve jobs.

239
Second, the obligation relates to a single product, food mixers, in a single country for a limited period of two years. Furthermore,
the Commission did not find that SEB-Moulinex has a dominant position on the market for food mixers in Germany, the new entity
having a market share of only 20 to 30%. It must also be observed that the obligation to obtain supplies relates to only 65%
of Moulinex sales in 2000, so that it is still open to the licensee to obtain supplies from a third party or to make the product
concerned itself as regards its other sales. Consequently technological innovation will not be impeded in so far as there
is nothing to prevent the licensee from developing its own products to complement those purchased from SEB with a view to
replacing the appliances supplied by SEB, taking account of the short duration of the commitment in question.

240
Finally, SEB's commitment to sell to the licensee at a supply price equal to the industrial cost price plus general costs,
far from affecting the licensee's ability to compete, ensures that he is given an advantageous price. In any case, contrary
to the applicant's submissions, SEB is not a competitor of the licensee who has the obligation to obtain supplies of Moulinex
products because, by reason of the commitments, SEB cannot sell any Moulinex product on the German market for the duration
of the licence and for three years after it expires.

241
It follows that, contrary to the applicant's argument, the limited obligation concerning the obtaining of supplies, as provided
for by the commitment, does not have the effect of strengthening the position of SEB-Moulinex or of rendering the licence
less effective.

242
Regarding the complaint concerning the obtaining of supplies from SEB for markets other than that of food mixers in Germany,
this is not an obligation on the part of the licensees, but merely an option which they are free to exercise in accordance
with their interests. As for the fact that, if they exercise the option, they must purchase certain minimum quantities, this
is not such as to render the provision objectionable.

243
It follows that the applicant's complaint must be dismissed.Fourth limb: the fact that the Commission agreed that the Moulinex trade mark could be used by different undertakings in different
States of the European Union may give rise to collusion between SEB-Moulinex and the licensee or licenseesA ─ Arguments of the parties

244
According to the applicant, the fact that the Commission agreed that the same trade mark could be used by different undertakings
in the European Union is liable to give rise to collusion between SEB-Moulinex and the licensee or licensees.

245
The applicant considers that the use of a single trade mark cannot be split across the territory of the Member States without
setting up a system for coordinating sales, marketing and advertising and without endangering the durability of the mark itself.
This approach was formulated very explicitly by the French Minister for the Economy in the case of
*Pernod-Ricard/Coca-Cola* (decree of 24 November 1999 on the proposed acquisition by Coca-Cola of assets of the Pernod-Ricard group relating to Orangina
brand beverages) and upheld by the French Conseil d'État (judgment of 6 October 2000,
*Société Pernod-Ricard*). Likewise, the Commission has traditionally stressed that it is necessary to coordinate the sales and marketing approaches
on markets which are very close to each other (the
*Schneider/Legrand* decision, cited above, paragraph 796).

246
In the present case, the applicant observes that, in the contested decision, the Commission did not envisage the possibility
of collusion arising from the fact that trade mark licences could be granted to different undertakings in different countries
and for different products.

247
The Commission contends that the applicant's complaint is unfounded.B ─ Findings of the Court

248
It is common ground that the markets for small electrical household appliances have a national dimension. As stated in paragraph
27 of the contested decision, the
characteristics of products may vary between the Member States on account of the peculiarities and preferences of consumers; customer/supplier
relationships are forged principally on a national basis; most makers of well-known brands have their own local sales organisation
in each Member State, and distribution structures are national.

249
Therefore the Commission correctly took the view that one and the same trade mark may be used by different operators in different
Member States, each having its own marketing and advertising organisation and strategy and its own sales organisation, and
that a licensee would be able to manage the Moulinex brand independently of SEB and to develop its own brand without the need
for coordination with SEB or the other licensees.

250
Furthermore, SEB will not be able to grant a licence to another licensee for the same territory or use the Moulinex mark itself
in that territory. Consequently there would be no reason to coordinate competition policy in relation to the Moulinex mark.
In addition, the choice of licensees will require the Commission's consent. Finally, in any case, the Commission will be in
a position to ensure that the risks of the coordination of policy between licensees mentioned by the applicant are removed.

251
It follows that the applicant's objection is unfounded.

252
This conclusion is not called into question by the cases cited by the applicant since the characteristics of the markets concerned
in each case are completely different. In the
*Pernod-Ricard/Coca-Cola* case, it was not shown that the licensee was independent, whereas in the present case the licensee will have to be independent
in order to be approved by the Commission. Moreover, according to the Conseil d'État, the two markets for non-alcoholic carbonated
drinks,
away from home and
dietary, were not partitioned in France and the two markets in question were markets in neighbouring products, not geographically
distinct markets, as in the present case, with national dimensions and characteristics. Consequently, the risk of coordination
between the licensee and the Coca-Cola company was far from being ruled out, particularly as the proprietor of the trade mark
continued to carry out the quality control of the products, packaging and advertising. That situation is not therefore comparable
with the concentration in question because the different national markets are distinct and the licensees will be free to carry
out the quality control of products, packaging and advertising and will be able to develop their own brand in their own interest.

253
It follows that the fourth limb of this plea is unfounded.Fifth limb: the Commission authorised the concentration without commitments relating to markets with serious competition problemsA ─ Arguments of the parties

254
The applicant complains that the Commission required no commitments whatever relating to markets with serious competition
problems. For example, no commitment was required with regard to the Italian market although, on the completion of the concentration,
SEB-Moulinex held a share of 65-75% of the market in electric kettles and 40-50% of the market in informal meals and food
mixers. Likewise, the applicant observes that, in Norway, on the completion of the concentration, Moulinex held a 55-65% share
of the market in deep friers, espresso machines and informal meals, and 70-80% of the market in mini-ovens.

255
According to the applicant, the situation was also found to be problematical in the British, Irish, Spanish, Finnish and Norwegian
markets.

256
The applicant considers that the commitments required by the Commission are not sufficient to remedy the competition problems
created by the concentration.

257
By way of comparison, the applicant observes that an equivalent market share in other segments gave rise to the imposition
of commitments by the Commission. In Portugal a commitment had been required although SEB-Moulinex had, on the completion
of the concentration, a 65-75% share of the market in mini-ovens, informal meals and food mixers, and 40-50% of the market
in coffee machines and deep friers. Furthermore, the Commission had required commitments in market segments where the new
entity held a smaller market share.

258
In reply to a written question from the Court asking the applicant to give details of its complaints concerning the British,
Irish, Spanish, Finnish and Norwegian markets, it states as follows.

259
Regarding Spain, the applicant observes that the concentration gave SEB-Moulinex a market share exceeding 35% or even 40%
in four markets for small electrical household appliances. The Commission had nevertheless concluded, on completing its examination,
that the concentration on the Spanish market was compatible in observing that: ─ the entity would not be able to act anti-competitively in so far as it would be faced by significant competitors;─ any attempt at anti-competitive conduct on the relevant markets would be penalised by smaller purchases of SEB-Moulinex
products on markets other than those in electric kettles and portable ovens, where the new entity would obtain between 85
and 95% of its turnover.

260
The applicant submits that the Commission has not shown that there are no serious doubts as to the compatibility of the concentration
with the common market, which would obviate the imposition of commitments in that country, in so far as: ─ in each of the Member States mainly examined by the contested decision (Portugal, Belgium, Netherlands, Greece), the Commission
concluded that there were serious doubts which would necessitate the imposition of commitments and based that view on the
value represented by the markets where SEB-Moulinex had an aggregate market share of more than 40% as a proportion of the
total value of all markets in the kitchen appliance range (Portugal, Belgium, Netherlands, Greece) ─ therefore the Commission
was able to establish that in Belgium, for example, the six markets where SEB-Moulinex had a market share exceeding 40% on
the day before the concentration represented in aggregate 44% of the value of all of the kitchen appliance markets concerned;─ regarding Greece in particular, the Commission required commitments from SEB in spite of the fact that the four markets
where SEB-Moulinex held an aggregate market share of over 40% represented 24% of the value of all the kitchen appliance markets.

261
Therefore, according to the applicant, regarding Spain, the Commission could not conclude that there was no risk of anti-competitive
behaviour by SEB-Moulinex in the markets concerned without measuring exactly the value represented by the markets where SEB-Moulinex
had a market share of more than 40% in Spain in comparison with all markets in the kitchen appliance range. However, in its
examination, the Commission had measured the share represented by only two of the markets where SEB-Moulinex had a significant
position (the markets in electric kettles and portable ovens), as a proportion of the total turnover of SEB-Moulinex in all
the kitchen appliance markets. Consequently the Commission's assessment was erroneous in so far as its calculations had not
taken account of the turnover accounted for by the markets in food mixers and informal meals, although the share of SEB-Moulinex
in those markets was 55-65% and 35-45% respectively.

262
For all those reasons, the applicant considers that the Commission was not justified in concluding, solely on the basis of
the data set out in the contested decision, that the implementation of the SEB-Moulinex concentration raised no serious doubt
as to its compatibility with the common market in Spain, and in ruling out the imposition of commitments in that country.

263
According to the applicant, these submissions apply,
*mutatis mutandis*, to the competition situation on the Finnish market. The Commission had not measured the value represented by the markets
where SEB-Moulinex had an aggregate market share of more than 40% as a proportion of the total value of all markets in the
kitchen appliance range. Furthermore, the Commission had merely appraised the competition situation on the toaster market
and concluded that there was no serious risk to competition on the markets concerned in Finland, without taking account of
the existence of three other product markets where SEB-Moulinex had a market share exceeding 40% on the day before the concentration
(mini-ovens 35-45%, espresso machines 40-50%, and barbecues/grills 40-50%). In addition, the Commission had not observed (which
it did in its examination of the Greek market) that the new entity also had a strong position on the food mixer market in
Finland (30-40%).

264
With regard to Italy, the applicant observes that the same arguments can be raised against the Commission's examination of
the competition situation in that Member State. According to the applicant, although the Commission had referred to the value
represented by the electric kettle and informal meals markets in Italy in comparison with value of the entire kitchen appliance
market, it had failed to take account of the food mixer market where SEB-Moulinex had a market share of 40-50%. According
to the applicant, the Commission was therefore not justified in concluding that the concentration raised no serious doubts
as to compatibility with the common market in Italy.

265
Regarding the United Kingdom and Ireland, the applicant considers that the Commission did not apply to the British market
all the relative value and/or turnover criteria which it used in its examination of competition in the other countries. The
Commission thus failed to measure the extent of the risks caused by the concentration on the British and Irish markets. It
merely applied the 40% appraisal threshold, noted the existence of one competitor holding a market share of 15-25% and the
existence of a limited overlap of business, and found on that basis that there were no risks to competition, but in no way
assessed the impact on competition of the significant combined market shares of SEB-Moulinex in the deep frier market (30-40%),
the steamer market (30-40%) and the irons market (35-45%) on the completion of the concentration.

266
The Commission denies the applicant's assertion that no commitment at all was obtained with regard to markets with serious
competition problems.

267
The Commission observes first, that, contrary to what the applicant says, it is clear from paragraph 137 of the contested
decision that SEB
perfected its commitments by extending the licence to use the trade mark to cover all small household electrical appliances
for ... Norway.

268
Secondly, regarding the Italian market, the Commission considers that the applicant cannot use the entity's shares of the
markets for food mixers, informal meals and kettles as the sole basis for concluding that commitments were necessary. Regard
should be had to all the relevant factors for determining whether the concentration would create or strengthen a dominant
position in the common market. In the food mixer market, three significant competitors were in a position to confront the
new entity. Likewise, as the decision showed, the parties' positions in the market in informal meals and kettles in Italy
had to be put into perspective in so far as some of their competitors had large shares of several other markets in products
such as portable ovens, deep friers and espresso machines. The Commission considers that any attempt at anti-competitive conduct
on the markets in informal meals and electric kettles would be penalised by smaller purchases of SEB and Moulinex products
on the other markets.

269
Furthermore, the situation in those markets, which was particularly questioned by the applicant, was totally different from
that in Portugal in so far as in the Portuguese market the new entity held market shares of over 40% in ten of eleven product
categories. The new entity had acquired unrivalled strength in Portugal in practically all the relevant product markets, which
had not been countered by other producers or by the distributors.

270
Finally, the applicant's argument that the Commission had ignored the competition problems in the British, Irish, Spanish,
Finnish and Norwegian markets is inadmissible under Article 44(1)(c) of the Rules of Procedure because the argument is not
accompanied by the slightest explanation or statement of reasons.

271
In reply to the Court's written questions, the Commission sets out first, its reasons for concluding that the existence of
serious doubts in Portugal, Greece, Belgium, the Netherlands, Germany, Austria, Denmark, Sweden and Norway justified the imposition
of commitments covering all the product markets in those nine countries, and that it was not necessary to impose commitments
covering Italy, Spain, the United Kingdom, Ireland and Finland as no serious doubts were found in relation to those countries.

272
Before setting out its reasoning in four stages, the Commission notes that, in conducting its examination, it proceeded on
the basis of its past decisions and the information concerning the functioning of the market which it obtained in the course
of its investigation.

273
Accordingly, the Commission found that two factors are essential for competition in the markets in question: the possession
of a recognised brand (paragraph 36 of the contested decision) and access to retailer customers (see, for example, paragraph
35 of the contested decision), which are the same for all product categories.

274
Regarding the first factor, the Commission refers to decision 98/602/EC of 15 October 1997 declaring a concentration to be
compatible with the common market and the functioning of the EEA Agreement (Case No IV/M.938- Guinness/Grand Metropolitan)
(OJ 1998 L 288, p. 24), in which it observed that
the holder of a portfolio of dominant brands may have a number of advantages and that, in particular,
he has a stronger position vis-à-vis his customers because he can offer them a range of products and it represents a higher
proportion of his turnover (paragraph 38
*et seq*. of the decision). Paragraph 41 of the decision explains that
the importance of these advantages and their potential effect on the competition structure of the market depend on several
factors, namely: the fact that the holder of the portfolio has brand number one or one or more dominant brands in a given
market; the market shares of the different brands, particularly in relation to those of competing products; the relative importance
of the markets of which the parties hold shares and of the important brands in all the product markets covered by the portfolio;
the number of markets in which the portfolio holder has a number one brand or a dominant brand.

275
The distributors' negotiating strength is said to be the second important factor for competition in the market in question.
On this point, SEB had stated that
any attempt [by it] to increase its prices for the different product lines ... for which its theoretical market share exceeds
35% is likely to entail retaliation by trade buyers in respect of other product lines in small electrical household appliances,
such retaliation being all the more damaging in that it would then affect two thirds of the sales of small electrical household
appliances.

276
In arriving at the conclusion that it was unnecessary to impose commitments covering Italy, Spain, the United Kingdom, Ireland
and Finland, the Commission took account of four factors arising from identification of the competition conditions peculiar
to the concentration in question.

277
The first factor concerned ascertaining the markets where the new entity has market shares of more than 40%. The second aimed
to determine whether there was a significant overlap between the parties in the relevant product market (see paragraphs 86
to 88, 90 to 92, 95, 97, 98, 101, 102, 107, 110, 111, 113, 121 and 123 of the contested decision). The third factor consisted
in determining the position of the merged entity in relation to its competitors (see paragraphs 87, 92, 96 to 98, 101, 102,
105, 107, 110, 111, 113, 116, 119 and 123 of the contested decision). Finally, the last factor was a matter of determining
the size of the relevant product market as a proportion of the total sales of the combined entity and, correspondingly, the
opportunities for retaliation by distributors (see paragraphs 83, 97, 101, 102, 105, 110, 116, 119 and 123 of the contested
decision). The Commission explains that, when examining competition, it was found necessary to take account of the last-mentioned
factor, known as the
range effect, because the same brands and the same intermediate customers are present in all the product markets of the same country.

278
Taking into account the different criteria mentioned above, the Commission found that the concentration raised serious doubts
as to compatibility with the common market in Portugal, the Netherlands, Belgium and Greece in relation to all products. As
regards the first factor, the Commission observed that the new entity had market shares of over 40% for most of the products
in the range (paragraphs 48, 55, 63 and 72 of the contested decision). The Commission went on to find (paragraph 83
*et seq.* of the contested decision) that the markets where the entity had shares exceeding 40% represented more than 50% of the total
sales of the combined entity. The Commission concluded that, in those conditions, the range effects added further to the strength
which the parties could have in the markets in question. That is why the Commission imposed commitments covering all the product
markets of those countries.

279
As the first criterion was not fulfilled in relation to the other countries, the Commission considered whether the concentration
entailed a significant overlap between the parties in the relevant product markets. The Commission began by finding that there
were no serious doubts in relation to the product markets where the overlap was minimal because the concentration would not
make a perceptible change in the competition situation. This applied to Finland in relation to portable ovens (paragraph 87
of the decision), Germany in relation to informal meals (paragraph 88), Finland, Norway and Sweden in relation to the market
for espresso machines (paragraph 90). In the market for informal meals and food mixers in Spain the overlaps were very slight.
In that connection the Commission took account of parties' combined position in relation to their competitors. For example,
on the food mixer market in Italy, the combined entity eliminated only the fourth largest manufacturer in the market. In the
absence of a significant overlap between the parties and taking account of the competitors' strong position (Braun 10-20%,
Philips 10-20%, De'Longhi 0-10%), the Commission considered that the concentration raised no serious doubts in that market
(paragraph 121 of the contested decision).

280
For the same countries, the Commission then sought to determine which were the countries where the concentration would have
an impact in terms of range effect which would materially change the relative strength of SEB-Moulinex and demand. To do this,
the Commission evaluated the size of the relevant product market or markets affected by the concentration in relation to the
total sales of the combined entity in the same country. Where the ratio between the relative strengths was small, namely less
than 10%, the Commission considered that the capacity of retailer customers for retaliation was not modified by the concentration
and was at a sufficient level to cause the range effect to operate to their advantage. In that connection, the Commission
had naturally taken account of the fact that retailer customers had at their disposal alternative offers on the national market
(see paragraphs 116, 119, 122 and 123 of the contested decision). On the other hand, the Commission had expressed serious
doubts concerning all markets where the concentration would entail a significant change in the parties' position in relation
to demand.

281
In particular, regarding the markets for electric kettles and informal meals in Italy, the Commission had found that, in view
of the small proportion of turnover represented by those product markets for the merged entity and the fact that retailer
customers could seek alternative well-known brands, the concentration could not raise serious doubts (paragraphs 115 to 117
and 121 to 124 of the contested decision).

282
In reply to the Court's question whether the Commission's conclusion concerning Italy would have been different if, to determine
the retailers' capacity to
punish potential anti-competitive conduct by SEB-Moulinex, the food mixer market had been aggregated with the markets for kettles
and informal meals, the Commission observes that aggregating the three markets is quite unjustified and that, in any case,
even if it had been necessary to do so, the Commission's conclusion would have been the same.

283
With regard to Italy, the markets for kettles and informal meals each represented 0-10% of the value of the whole
kitchen category of small electrical household appliances. The informal meals markets represented 0-10% of the same category, and the food
mixer market represented 25-35% of it. Consequently those three product markets together represented 30-40% of the value of
the whole
kitchen category of small electrical household appliances in Italy.

284
Because of the strength of competitors such as Braun, Philips and De'Longhi in the food mixer market, there was no possibility,
according to the Commission, of the concentration leading to the creation or strengthening of a dominant position. Furthermore,
because of weakness in the food mixer market, the aggregation of SEB-Moulinex's share of that market with its shares of the
kettles and informal meals markets was not justified.

285
In any case, the Commission adds that it would not have reached a different conclusion having regard to the particular characteristics
of the Italian market. There are two strong, long-standing manufacturers (see paragraph 123 of the contested decision): Saeco,
the world leader in espresso machines, holding 60-70% of the Italian market, and De'Longhi, the leader in four product markets,
namely portable ovens, deep friers, toasters and barbecue/grills. Those four markets together represented 30-40% of the total
value of the
kitchen category of small electrical household appliances in Italy.

286
However, the Commission adds that any deterrent effect which can be brought to bear by retailer customers depends largely
on the value represented by the product markets where SEB-Moulinex has a market share of at least 40% as a proportion of SEB-Moulinex's
total sales. Accordingly, paragraph 123 of the contested decision states that
retailers will be able to penalise any attempted anti-competitive conduct on those markets by reducing their purchases of
SEB-Moulinex products on the other markets where the joint entity realises 90-100% of its turnover [which] would render unprofitable
any price increase by the parties.

287
The Commission adds that account must be taken not only of the competition pressure from existing competitors in the market
in question, but also the potential pressure from manufacturers in neighbouring markets. For example, in the Italian food
mixer market, the strong presence of the existing competitors Braun, Philips and De'Longhi, limits the strength of the new
entity. Moreover, Saeco could enter that product market at any time because of its decisive weight in the neighbouring markets.

288
Regarding the possibility, not originally contemplated by the Commission, of interference with competition by means of a price
reduction, the Commission considers that this question must be examined from the viewpoint of practices seeking to keep other
manufacturers out of the market, as the different products affected by the concentration are
independent or substitute products and, therefore, a temporary price reduction could cause certain competitors to leave the market or prevent new ones from
entering it, particularly as manufacturers are aiming at the same intermediate level of demand, namely retailers, for all
the products concerned.

289
In reply to the Court's question on this point, the Commission stated that nothing had been revealed during its investigation
which suggested that the concentration in question would lead to such practices. A company could consider taking such action
only if it were able to finance long-term prices below marginal cost, in the belief that that would lead to the elimination
of competitors.

290
However, there was nothing to indicate that SEB was financially stronger than its competitors or that its marginal costs were
lower. Moreover, a competitor driven out of the market could return if prices recovered to a level which made trading viable
once again because the competitor would still have its brand, which was an essential element for competition in the small
electrical household appliances market.

291
The Commission goes on to assert that it is not certain that a reduction in prices would be sufficient to prevent the entry
of new competitors such as the applicant, which considers that its market shares could reach ...% in ... with trading commencing
in 2002 (paragraphs 7 and 11 of its observations to the Court dated 28 June 2002 and 25 July 2002).

292
Finally, the Commission submits that a supplier who embarks on a price-cutting policy which has the effect of driving competitors
away is influenced by the behaviour of distributors. The incentive which a supplier could have in adopting such a policy would
be reduced in so far as the shelf prices of small electrical household appliances would be determined by the distributors,
who could, if suppliers reduced their prices, continue to charge the same retail prices and thus obtain an additional profit
at the expense of their suppliers.

293
Consequently the Commission states that it limited its examination to the immediate and definite effects of the concentration
and took no account of the later and less certain effects in the present case, such as exclusion practices.

294
Regarding the possibility that retailers determine the ultimate consumers' choice of the relevant products, the Commission
begins by observing that the market test showed that consumers had a clear preference for well-known brands, even though,
first, they are more expensive than unknown brands and, second, as mentioned above, access to distribution was an essential
condition for competing in the relevant markets.

295
During its investigations, the Commission was able to identify the determining characteristics of relations between manufacturers
and retailers and, thereby, the power of retailers to determine consumer choice.

296
The Commission stresses the importance of product listing policies, whereby distributors avoid competing with each other with
the same models and seek specific references so that consumers do not compare too strictly the selling prices of different
shops.

297
The Commission adds that the applicant, in its reply of 30 November 2001 to the Commission's questions, states in paragraph
11 that
a good product with a good price/quality ratio has no chance of being present in the market if distributors do not list it.

298
Accordingly, retailers determined consumer choice both by their capacity to influence product listing and to decide on selling
prices and promotions of the products sold.B ─ Findings of the Court1. Admissibility

299
The applicant submits that the Commission authorised the concentration without commitments as to markets with serious competition
problems.

300
The Commission and SEB consider that this plea, as put forward by the applicant in response to the Court's written questions
and at the hearing, is inadmissible under the first subparagraph of Article 48(2) of the Rules of Procedure, which provides
that no new plea in law may be introduced in the course of proceedings, and Article 44(1)(c), which provides that an application
instituting proceedings must state the subject-matter of the proceedings and contain a summary of the pleas in law on which
the application is based, in order to respect the rights of defence.

301
On this point it must be observed, first, that the application contains the express plea that the Commission authorised the
concentration without commitments as to markets with serious competition problems. As the first subparagraph of Article 48(2)
of the Rules of Procedure prohibits only the introduction of new pleas in law, the objection of inadmissibility must be dismissed.

302
With regard to the Italian markets, the Commission replied to the merits of this plea in its defence, without raising any
objection as to admissibility.

303
However, in its replies to the Court's written questions, the Commission argued that, regarding Italy and, all the more, the
other countries where the Commission did not impose commitments, the applicant has not criticized the Commission's reasoning
that retailers would be able to penalise any attempt at anti-competitive conduct.

304
Although it must be admitted that the submissions in the application were brief, in particular concerning the British, Irish,
Spanish, Finnish and Norwegian markets, regarding which the applicant merely stated that problematic situations had also been
found there, nevertheless the applicant's arguments, in its replies to the Court's written questions asking for details of
the nature of its complaints and during the hearing, cannot be deemed a new inadmissible plea, but only as matters capable
of supporting the plea relied upon in the application. This finding applies also to the submissions concerning the Italian
markets.

305
Second, the objection based on Article 44(1)(c) of the Rules of Procedure must also be dismissed because, in conformity with
that provision, a summary of the plea in law is given in the application. Furthermore, the purpose of that provision is to
secure respect for the rights of defence. It must be said that the Commission was fully enabled to reply to the applicant's
complaints on that point. In particular, in its statement of defence the Commission had already set out its argument that
it was unnecessary to impose commitments in respect of the Italian markets on the ground that any attempt at anti-competitive
conduct by SEB-Moulinex would be penalised by smaller purchases of SEB-Moulinex products on the other markets in Italy. The
Commission was also asked by the Court to give written replies to a number of questions on those complaints. Finally, at the
hearing, the Commission was once again able to set out in detail the substance of its position on this point.

306
Third, in so far as the Commission complained that the Court itself raised a new plea, because it was not raised by the applicant,
it is sufficient to observe that the plea concerning the lack of commitments in countries with competition problems was indeed
formulated by the applicant in its application. It was only in response to the Commission's arguments in its defence that
the Court found it necessary to ask a number of written questions, by way of measures of organisation of procedure provided
for by Article 64 of the Rules of Procedure, in order to clarify the respective arguments of each of the parties. Furthermore,
in that connection it must be observed that in Case C-252/96 P
*Parliament* v
*Gutiérrez de Quijano y Lloréns* [1998] ECR I-7421, paragraph 30, the Court of Justice held that from a straightforward reading of the first subparagraph
of Article 48(2) of the Rules of Procedure in the context of Title 2, Chapter 1, of those Rules, which is entitled
Written Procedure, it is clear that this is a rule which applies to the parties and not the Court of First Instance.

307
It follows that the plea concerning the lack of commitments in relation to markets with serious competition problems is admissible,
also in so far as it relates to the Spanish, British, Irish, Finnish and Norwegian markets.2. Substance

308
First of all, in the contested decision the Commission found that the concentration raised serious doubts with regard to certain
product markets in Portugal, Greece, Belgium, the Netherlands, Germany, Austria, Denmark, Sweden and Norway (paragraph 128
of the contested decision). Consequently the Commission required commitments in those countries.

309
Second, according to the contested decision, the Commission found that the geographical markets in question are national (paragraph
30) and took the view that each of the 13 product categories is a distinct market (paragraphs 17 to 25 of the contested decision).
It follows that the competition situation must, at least initially, be examined in relation to each market separately, both
in geographical terms and in terms of products. However, the exclusive licences for the Moulinex trade mark provided for by
the commitments in each of those nine Member States still cover all 13 product markets, although serious doubts were expressed
only in respect of one or two product markets. The Commission rightly found, in paragraph 141 of the contested decision, that
the extension of the exclusive licence commitments to all small electrical household products and thus to products in respect
of which the Commission has no serious doubts is necessary to ensure the efficiency and viability of the remedies provided
for by the commitments, because the same mark cannot be held simultaneously on the same geographical market by two different
undertakings.

310
It follows that the finding that the concentration raised serious doubts on a single product market of one country was sufficient
to require a commitment for all the product markets of the country in question. Accordingly, paragraphs 113, 114 and 128 of
the contested decision show that commitments were imposed in Sweden although the Commission considered that the concentration
raised serious doubts only on the deep friers market in Sweden.

311
On the other hand, regarding the markets in Italy, Spain, the United Kingdom, Ireland and Finland, the Commission found that
the concentration changes competition conditions only marginally and therefore it did not require commitments covering those
countries.

312
The applicant contends, in essence, that serious competition problems arose on certain markets in Norway, Italy, Spain, the
United Kingdom, Ireland and Finland and that, in conformity with the investigation of the competition situation which it had
carried out in the Member States affected by the commitments, the Commission ought also to have imposed commitments concerning
those markets.

313
In reply to the Court's written questions, the Commission explained that it had carried out its investigation taking account
of four factors flowing from the identification of the competition conditions peculiar to the concentration in question, namely:

─
in which markets does the new entity have market shares of more than 40%;

in which markets does the new entity have market shares of more than 40%;

─
is there a significant overlap between the parties on the relevant product market;

is there a significant overlap between the parties on the relevant product market;

─
what is the position of the merged entity in relation to its competitors;

what is the position of the merged entity in relation to its competitors;

─
what is the size of the relevant product market by comparison with the total sales of the combined entity and, correspondingly,
to what extent are distributors able to apply counter pressure (
the range effect)?

what is the size of the relevant product market by comparison with the total sales of the combined entity and, correspondingly,
to what extent are distributors able to apply counter pressure (
the range effect)?

314
Before considering whether this four-stage examination serves to rule out any serious doubts in respect of each of the geographical
markets for which it did not impose commitments, it is necessary to ascertain whether the Commission actually used such an
examination in the decision in order to assess the effects of the concentration on the different markets.(a) The four stages of the examination─ The dominance threshold of 40%

315
It is clear from the contested decision, in particular paragraphs 44, 48, 55, 56, 63, 72 and 83, that, in conformity with
the first stage mentioned by the Commission in its replies to the Court's questions, the entire examination of the competition
situation in the decision is based on the consideration that a market share of 40% was a sign of dominance. Where the combined
entity SEB-Moulinex attained or exceeded the 40% market share threshold in a product market, it had to be concluded that,
subject to examination of the three other factors, it had a dominant position and that commitments would be required. The
Commission, as it stated in its replies to the Court's questions, even found that a dominant position existed in the food
mixer market in Greece although SEB-Moulinex had a market share of only 39%. Furthermore, it appears from paragraphs 55, 58,
62 and 128 of the contested decision, that the Commission considered that the concentration raised serious doubts on the toaster
market in Belgium although the parties only had a market share of 20-30% and had to face competition from Philips, which had
a market share of 25-35%.─ No significant overlap

316
According to the explanation given by the Commission in its reply to the Court's written questions, the Commission then considered
whether, for the markets where the new entity's market share was more than 40%, there was a significant overlap between the
parties on the relevant product markets. The Commission observed that, when it found that there was no overlap or only a minimal
overlap, it ruled out serious doubts for the relevant product market on the ground that the concentration caused no perceptible
change in the competition situation.

317
As it stated in its reply to the Court's written questions, the absence of a significant overlap led the Commission to rule
out serious doubts for a number of product markets where the overlap was minimal [(see, in particular, the portable ovens
market in Finland (paragraph 87 of the contested decision), the informal meals market in Germany (paragraph 88 of the contested
decision), the espresso machines market in Norway and Sweden (paragraph 90 of the contested decision)].

318
The absence of any significant overlap between the parties is, as the Commission correctly points out, such as to rule out
serious doubts even for the product markets in which the entity has a market share of more than 40% because, in that case,
the dominant position is not being created or strengthened by the concentration, but is already in existence.

319
However, two qualifications are called for.

320
First, even where the overlap is slight, the concentration entails strengthening of the dominant position and therefore serious
doubts can be ruled out only where the overlap is really insignificant.

321
On this point, the decision merely indicates the market shares within a 10% bracket. Although it may be true that there is
no significant overlap where a market share is close to 0%, the same cannot be true where it is close to 10% and in that case
it would have to be found that a dominant position is being created or strengthened. Consequently the decision does not enable
the Court to review the legality of that decision. Furthermore, although the Court, in its written questions, expressly requested
the Commission to state the exact market share of SEB-Moulinex in the markets for kettles and informal meals in Italy, the
Commission confined itself, in its replies, to reproducing the figures within a 10% bracket given in the decision.

322
The impossibility of carrying out an effective review of the decision follows from the findings of the decision itself because
the facts it contains are too vague. The fact that one of the parties to the concentration had a market share of 0-10% is
taken by the Commission as a basis for finding sometimes that there are no serious doubts on the ground that there is no significant
overlap, and sometimes for finding that there are such doubts.

323
This applies, in particular, to the food mixer market in Greece, where the new entity had a combined market share slightly
below the dominance threshold (39%, see paragraph 72 of the contested decision and the reply to the Court's questions). The
Commission did not rule out serious doubts in spite of an overlap varying between 0 and 10%, Moulinex's market share for the
products in question being 30-40% and that of SEB only 0-10% (see the table annexed to the contested decision).

324
Likewise the Commission found that there were serious doubts in relation to the irons market in the Netherlands, where the
parties to the concentration had a combined market share of 40-50% with an overlap of 0-10% for Moulinex.

325
On other product markets where the combined entity had a market share of 40-50%, the Commission also found that the concentration
raised serious doubts in spite of the fact that one of the parties held a market share of only 0-10%. This applies, in particular,
to the barbecues market in Germany (paragraph 97), where the parties will also face major competitors, including Severin,
with a market share of 25-35%, the markets for irons and ironing stations in Belgium (paragraphs 55, 56 and 59 of the contested
decision), and the markets for deep friers, toasters and electric coffee machines in Portugal (paragraphs 48, 49 and 54 of
the contested decision).

326
On the other hand, while the absence of significant overlap is a valid reason for ruling out serious doubts when the Commission
is at first examining competition in an individual product market, there are no grounds for taking that factor into account
when carrying out a more general examination of all the product markets of a particular country.

327
Moreover on several occasions the Commission relied on the fact that one of the parties to a concentration held strong positions
in markets where the other party was weak, and vice-versa, to conclude that the concentration raised serious doubts. For example,
with regard to Greece, the Commission observes as follows in paragraph 73 of the contested decision: The parties had very large market shares (30-40% and 20-30%) simultaneously only in the market for sandwich and waffle makers.
Therefore the effect of the concentration is to add to Moulinex's position in espresso machines significant dominating positions
in the markets for deep friers, kettles, sandwich makers and food mixers.─ The position of the merged entity in relation to competitors

328
The Commission states that it went on to take account of the joint position of the parties to the concentration in relation
to their competitors and so concluded that the concentration raised no serious doubts.

329
In this connection it must be observed, first, that as the dominance threshold used by the decision is 40%, the mere finding
that the combined entity would face competitors on a product market does not mean that the concentration does not raise doubts
in relation to that market. The presence of competitors is likely to modify, or even eliminate, the combined entity's dominant
position only if those competitors hold a strong position which acts as a genuine counterweight.

330
Secondly, the markets in question are markets with a rather oligopolistic structure and several undertakings have both an
extensive product range and a pan-European presence. They are, as mentioned in paragraph 32 of the contested decision, essentially
companies such as SEB, Moulinex, Philips, Bosch, Braun and De'Longhi. Therefore the presence in a given market of one or other
of those competitors does not appear of itself to justify the conclusion that the concentration raises no doubts in relation
to that market. The same applies to undertakings which either have a wide product range but are present only in some countries
(Taurus in Spain and Morphy in the United Kingdom), or have a limited number of products (Saeco for espresso machines).

331
It is also clear from the contested decision that, in almost all the markets where the Commission found that the concentration
raised serious doubts, it nevertheless noted the presence of one or more of those competitors.

332
It follows that the presence of one or other of those competitors in markets where the combined entity held a market share
of 40% or more was not, of itself, such as to rule out serious doubts and it could have had that effect only if the competitors
had sufficiently large market shares to constitute a genuine counterweight to the position of SEB-Moulinex and thus eliminate
those doubts.

333
On this point the Commission also found that there were serious doubts in relation to several markets where the competitors
of the parties to the concentration held significant market shares.

334
Accordingly in the deep friers market in Greece, the Commission did not rule out serious doubts as to the compatibility of
the concentration although the main competitor of the parties to the concentration, De'Longhi, held a market share of 35-45%,
which was not only a very large share, but even equal to that of SEB-Moulinex (paragraph 72 of the contested decision).

335
Likewise the Commission found that there were serious doubts in relation to the market for irons and ironing stations in the
Netherlands although SEB-Moulinex, which held a market share of 40-50% (paragraph 63 of the contested decision) was faced
with competition from Philips with a share of 35-45% (paragraph 67).

336
The Commission also refused to rule out serious doubts in spite of the presence of competitors with large shares of the markets
for kettles and irons in Belgium. In the former market, the new entity held a share of 35-45% (paragraph 55 of the contested
decision), and the main competitor, Braun, had 20-30% (paragraph 58). In the latter, the new entity's share was 40-50% (paragraph
55) and the main competitor, Philips, held 25-35% (paragraph 59).

337
Finally, in the toasters market in Belgium, where the main competitor, Philips, held a 25-35% share (paragraph 58 of the contested
decision), the Commission did not rule out serious doubts concerning the compatibility of the concentration although the new
entity itself held a market share of only 20-30% (paragraph 55), namely a share not only considerably below the dominance
threshold fixed by the Commission, but also less than that of its main competitor.

338
It follows that, according to the Commission's analysis in the contested decision, the presence of competitors, even where
they held quite substantial market shares, was not considered in principle to rule out a finding that the concentration raised
serious doubts.─ The range effect

339
First of all, it must be observed that each product market constitutes a distinct market. It follows that the competition
conditions in each product market in each Member State must, in principle, be appraised independently of the conditions in
each or all of the other markets. With regard to the nine Member States covered by the commitments, although the Commission
sometimes fleshed out its assessment with observations concerning the global situation in all the product markets of a given
geographical market, it always began by finding serious doubts as to certain product markets by appraising each product market
separately.

340
Accordingly, in the case of Portugal, Greece, the Netherlands and Belgium, the Commission, after finding serious doubts as
to a number of product markets, added that, in view of the combination of significant positions of dominance, the parties
to the concentration would be able to extend their strong market position to all the other product markets (paragraphs 54,
62, 71 and 82 of the contested decision).

341
According to paragraph 83 of the contested decision, the risk of creating market power over the entire product range can be
ruled out where the product markets in which the combined entity has a market share exceeding 40% do not represent more than
35% of the parties' aggregate turnover. However, this distinction between countries where the combined entity would be able
to extend its market power to all the product markets and those countries where the concentration raises serious doubts in
relation to only some product markets, or even only one (as in the case of Sweden), appears in actual fact to be irrelevant
because, as stated above, the same commitments were required in both cases.

342
It is, however, not an absolute rule that different product markets constitute distinct markets and it may be found necessary
to modify the assessment of a particular product market in the light of the competition situation in all other product markets
of the Member State concerned.

343
In the present case there was all the more justification for taking the overall competition situation into account because
it is common ground that the brand is the most important competition factor in the markets concerned and the reputation of
the brand is to the advantage of all the products carrying it. Likewise, in order to assess an undertaking's competition position,
the Commission may have to take into account its portfolio of brands or the fact that it has large market shares in numerous
product markets (
the portfolio effect).

344
In the present case the Commission took the portfolio effect into account. Throughout the contested decision, except in the
discussion concerning the countries not covered by the commitments, the Commission pointed out that the strength of the combined
entity was accentuated by a unique portfolio of brands (whereas its competitors had only a single brand), by a strong presence
on numerous markets and by the juxtaposition of the respective positions of SEB and Moulinex.

345
Accordingly, paragraph 52 of the contested decision reads as follows:
in view of the importance, discussed above, of brands in this type of market, the weight of the parties in almost all the
markets in question and the new entity's product range and brand portfolio, it is unlikely that competitors will be able to
challenge the parties' positions and bring to bear sufficient competition pressure on the new entity.

346
It must be observed that the portfolio effect operates not only in relation to consumers and competitors, but also, and above
all, retailers. The Commission explains, in paragraph 53 of the contested decision, that
the same applies to retailers who, in spite of their theoretical negotiating strength (using the threat of de-listing, for
example), will not be able to discipline the parties' conduct in response to a price rise; that
the brand portfolio and the uniformly strong presence of the new entity in all the relevant product markets will be such that
the new entity will be able to deter retailers from resisting a price rise, for example, by the threat of de-listing brands
of the new entity; that
the combined entity could, for example, offer combined discounts or as a threshold and that
likewise, the predominant position of the SEB and Moulinex brands will make it difficult for a retailer to dispense with them
on its shelves. These observations, which arose in the examination of Portuguese markets, are also reproduced in connection with the markets
in Belgium (paragraphs 60 and 61 of the contested decision), the Netherlands (paragraphs 69 and 70) and Greece (paragraphs
80 and 81). Furthermore, as the Commission was led to conclude, because of the portfolio effect, that the new entity SEB-Moulinex
would be able to extend its market power to all the product markets of those four countries, even though it had market shares
below the 40% threshold, the portfolio effect is all the more likely to confirm that the concentration raises serious doubts
in respect of markets where the new entity has shares exceeding 40%.

347
In its past decisions, the Commission had already pointed out the need to take the portfolio effect into account to determine
the true market strength of an undertaking. For example, in the
*Guinness/Grand Metropolitan* decision cited above, the Commission had explained that the holder of a portfolio of dominant brands may have a number of
advantages and that, in particular, he has a stronger position vis-à-vis his customers because he can offer them a range of
products which represents a higher proportion of their turnover.

348
In its observations addressed to the Commission (Annex 2 to the letter of 3 December 2001), De'Longhi drew the Commission's
attention to the risks arising from the concentration, within the same industrial group, of all the main brands and a complete
range of products. It stated as follows: The aspect which causes most concern to De'Longhi is the relationship which will exist, after the concentration, between SEB-Moulinex
and the major distributors, taking into account the increased negotiating strength which the buyer will have in markets where
it will hold a dominant position. That strength will be all the greater thanks to the complete range of products and brands
which it will have as a result of the concentration ... There is no doubt that SEB-Moulinex will considerably extend its portfolio
of products in such way that it will be able, in some cases, to provide a complete range, which will create detrimental effects,
particularly with regard to distribution channels.

349
In its replies to the Court's written questions, the Commission stated that the presence of the same brands and the same intermediate
customers in all the product markets of one and the same country necessarily entailed taking account of range effects when
examining competition. According to the Commission, where the concentration helps to give the parties strong positions in
product markets which in total represent a marginal part of their turnover, the entity resulting from the concentration will
not be induced to make use of its strength in those markets because the retaliation which it must expect in other product
markets, where it does not have a position of strength, represents lost profits considerably greater than the gains which
it could expect in the markets where it has a strong position. Where the sales of the combined entity in the dominated markets
represented less than 10% of the entity's total sales in the same country, the Commission stated, in its pleadings before
the Court and in the course of the hearing, that it considered that the retailers' capacity for retaliation was not affected
by the concentration and was at a sufficient level to cause the range effect to operate in their favour. By that the Commission
means that any attempt at anti-competitive conduct by SEB-Moulinex on the markets where the combined entity holds a dominant
position would be penalised by smaller purchases by retailers of SEB and Moulinex products on the other markets.

350
According to the Commission, the range effect rules out serious doubts only if the turnover of the parties to the concentration
in the dominated product markets represents only a marginal portion of their total turnover in the same country. The Commission
fixed at a maximum of 10% the marginal portion of turnover in the dominated markets above which the range effect can no longer
operate. The 10% figure is not disputed. Accordingly in paragraph 123 of the contested decision the Commission explained that
any attempt at anti-competitive conduct in the kettles and informal meals markets in Italy, where the parties hold combined
market shares of 65-75% and 40-50% respectively, would be penalised by smaller purchases of SEB and Moulinex products on the
other markets in Italy where the combined entity obtains 90-100% of its turnover, which means that the dominated markets account
for only 0-10% of their turnover. Regarding Spain and Finland, the Commission found, in paragraphs 116 and 119 of the contested
decision respectively, that the entity obtained 85-95% of its turnover in the non-dominated markets, which means that the
dominated markets account for 5-15% of their turnover, or slightly more than 10%. However, in its replies to the Court's written
questions, the Commission expressly confirmed that where the ratio between sales on the dominated markets and total sales
in the same country was low, namely less than 10%, it considered that retailers could use their capacity for retaliation.
At the hearing the Commission once again confirmed the maximum limit of 10% up to which, in its opinion, the range effect
could operate.

351
The abovementioned 10% of turnover which permits the range effect to operate must not be confused with the portion under 35%
mentioned in paragraph 83 of the contested decision, which relates to the different question of the level above which the
portion of turnover obtained on the dominated markets is of such an amount that the parties would be able to extend their
market power to all the other markets of the country concerned. In paragraph 83, the Commission found that, where the relative
shares of the parties' combined turnover on the dominated markets was below 35%, it was possible to rule out serious doubts
as to the creation of a market power over the entire product range for those countries and therefore all that remained was
to examine individual product markets. Apart from the fact that, as mentioned above, this question does not appear to be relevant
in the present case, because the same commitments were imposed independently, whether the parties have market power in a single
product market or in all the product markets of the country concerned, it must not be confused with the question whether retailers
are able to penalise the parties to the concentration if they attempt to abuse their dominant position on certain markets.
Whereas the 35% figure is the limit above which the Commission considered that there was a risk of extending the dominant
position to all the product markets of a country, the 10% figure is the limit below which the parties' dominance on a product
market is, according to the Commission, jeopardised by the possibility of retaliation by retailers.

352
The range effect, as applied by the Commission in the present case, calls for the following observations.

353
To begin with, as the Commission considered that each product market constitutes a distinct market, the competition situation
must in principle be examined market by market. Therefore although, as indicated above, it may be necessary to refine the
examination of competition in one product market by means of data relating to other product markets or even other countries,
the fact remains that the principle is that each market is to be assessed independently and any exception to or modification
of that principle must be based on specific and consistent evidence showing the existence of such interactions.

354
First, whereas the concept of portfolio effect aims to assess the true competition situation of an entity resulting from the
concentration and, as the case may be, to conclude that it has a dominant position in spite of a market share which does not
in itself give rise to a dominant position, by taking into account not only the aggregate market shares of the parties, but
also the additional market strength arising from the fact that the new entity owns a large number of brands and is present
in numerous markets, the range effect as used by the Commission to justify the absence of serious doubts in the countries
not covered by the commitments seeks, on the contrary, to put into perspective the strength of the entity resulting from the
concentration and thus to rule out a finding of a dominant position to which the aggregation of market shares leads.

355
It is common ground that the two parties to the concentration each had strong positions in numerous markets and owned several
well-known brands. In addition to resulting in the aggregation of market shares, the concentration had the effect of enlarging
the brand portfolio and the number of markets where SEB and Moulinex were present, thus enhancing their market power, particularly
in relation to retailers. The Commission observed in several passages of the contested decision that the strong positions
they already held before the concentration in numerous product markets were strengthened further by the contribution of market
shares and brands in several other markets (paragraphs 46, 47, 50 to 52, 56, 60, 69, 73, et seq.).

356
Second, the Commission has not established to the requisite legal standard the allegation that any attempt at anti-competitive
conduct in the dominated markets would be penalised by smaller purchases of SEB-Moulinex products in the other markets.

357
As De'Longhi contended at the hearing, the situation envisaged by the Commission of a conflict between SEB-Moulinex and the
retailers is no more plausible than that of an agreement between them to maximise their respective interests.

358
Moreover, the Commission has not even shown how its underlying assumption, namely a price increase by SEB-Moulinex, necessarily
affects the retailers' interests and thereby induces them to penalise SEB-Moulinex.

359
When questioned by the Court on the economic principles underlying the
range effect factor, the Commission admitted that it had no economic study available to it on the subject. Apart from a reference to the
*Guinness/Grand Metropolitan* decision which, as stated above, applies the very different concept of the portfolio effect, the Commission in reality merely
pointed out that this argument had been put forward by the parties to the concentration in their notification.

360
In addition, the Commission considered only the possibility of a price rise by SEB-Moulinex. However, the latter is capable
of other types of anti-competitive behaviour. In particular, the concentration will enable SEB-Moulinex to make economies
of scale and implement various rationalisation measures, thus generating a reduction in costs of which it could take advantage
to reduce prices or allow retailers a bigger margin in order to increase its market share. Likewise SEB-Moulinex could induce
retailers to de-list its competitors.

361
Moreover, the assertion that retailers can penalise SEB-Moulinex in the event of a price rise is based on the unproven assumption
that the retailers determine the choice of ultimate consumers. As the retailers' function is to resell to consumers the products
which they buy, the possibility of their penalising SEB-Moulinex by reducing their purchases of SEB-Moulinex products in other
markets must be qualified, particularly as the brand is the primary factor of choice in competition in the markets in question.

362
Third, the range effect as defined by the Commission, in so far as it consists in the assumption that retailers will be able
to penalise any anti-competitive conduct by the new entity, amounts rather to saying that retailers will be able to prevent
SEB-Moulinex from abusing its position, than to proving that the combined entity will not have a dominant position. Regulation
No 4064/89 aims to prohibit the creation or strengthening of a dominant position, not the abuse of one.

363
It follows that the Commission has not established to the requisite legal standard the correctness of its theory of the range
effect, which it has used to justify the absence of serious doubts in countries not covered by the commitments.

364
However, even assuming that the Commission was able to use the theory as a basis for finding that there were no serious doubts
in certain markets notwithstanding the entity's strong position in those markets, on the ground that they represented only
a small proportion of all the markets concerned, account ought to have been taken in any case of all the markets where the
parties held a dominant position, in particular those where SEB-Moulinex had a market share exceeding 40% but in relation
to which the Commission ruled out serious doubts on the ground that there was no significant overlap in the parties' market
shares.

365
Even if the concentration does not create or perceptibly strengthen the dominant position held by one of the parties before
the concentration, the new entity nevertheless has a dominant position in those markets. The absence of overlap does not dispose
of the dominant position. Therefore it cannot be concluded that a retailer will be able to penalise the entity created by
the merger of two undertakings, each with a monopoly over one half of the relevant markets.(b) The countries not covered by the commitments

366
It is now necessary to consider whether, in the light of the foregoing observations, the Commission's reasons are capable
of justifying its finding that the concentration did not raise serious doubts regarding the relevant product markets in Italy,
Spain, Finland, the United Kingdom and Ireland or whether, as the applicant contends, the Commission should not have approved
the concentration without imposing commitments in relation to those geographical markets.

367
As stated in paragraph 315 above, the existence, in a distinct geographical market, of a single relevant product market in
which the concentration raised serious doubts was sufficient, according to the contested decision, to entail the automatic
imposition of commitments in relation to all the relevant product markets in that geographical market.─ Norway

368
The applicant's complaint is based on a misunderstanding of the contested decision because that decision concludes precisely
that there are serious doubts on certain product markets concerned in Norway and therefore provides that the commitments are
to cover Norway also (paragraph 137 of the contested decision).

369
On this point, therefore, the plea is manifestly unfounded in fact and must be dismissed.─ Spain

370
According to paragraph 115 of the contested decision, the combined market shares of the parties to the concentration in Spain
are 40-50% (SEB 5 to 15%) for kettles and 75-85% (SEB 0 to 10%) for portable ovens.

371
However, in paragraph 116 of the contested decision, the Commission concluded that these very strong positions would not enable
the new entity to engage in anti-competitive conduct. That conclusion is based solely on the ground that,
as competitors such as De'Longhi, Taurus, Bosch and Philips have significant positions in numerous product markets, including
the two relevant product markets ... the retailers have alternative trade marks with a strong reputation which are used for
the entire range of small electrical household appliances in place of those of the parties, so that
any attempt at anti-competitive conduct on those markets would therefore be penalised by reduced purchases of SEB and Moulinex
products on the other markets where the merged entity achieves 85-95% of its turnover.

372
It follows that, in this geographical market, the Commission ruled out any serious doubts on the basis of two factors, namely
the position of the merged entity in relation to its competitors and, secondly, the range effect.

373
First, regarding the position of the merged entity in relation to its competitors, contrary to the Commission's assertion,
on the kettles market many competitors, such as De'Longhi, Taurus, Bosch and Philips, cannot have significant positions because
SEB-Moulinex has market shares of 75-85%. Consequently the competitive pressure on SEB-Moulinex arises from either only one
competitor with a market share of 20% at the most, which is almost one quarter of that of the parties to the concentration,
or from several competitors whose market shares must be very small and, in any case, of minimal significance in comparison
with those of the parties. Therefore in no product market, not even in the countries covered by the commitments, does the
new entity have a position as strong as its position in the portable ovens market in Spain.

374
In the present case, therefore, the Commission has not shown any particular reason why, in spite of the parties having market
shares of 40-50% (SEB 5-15%) for kettles and 75-85% (SEB 0-10%) for portable ovens, the concentration did not give rise to
serious doubts.

375
Secondly, for the reasons given in paragraphs 364 and 365 above, the range effect did not justify ruling out serious doubts.

376
In any case, even if it is accepted, as the Commission argues in paragraph 116 of the contested decision and in its replies
to the Court's written questions, that the range effect justified ruling out serious doubts where, in a given geographical
market, the turnover of SEB-Moulinex on the relevant product markets where the combined entity had a market share above 40%
was below 10% of its total turnover on all the relevant product markets in that geographical market, the Commission did not
show, either in the contested decision or before the Court, that that was the case in Spain.

377
Admittedly, it is clear from paragraph 116 of the contested decision that the kettles and portable ovens markets in Spain
accounted for not more than 5-15% of the combined entity's total turnover on all the relevant product markets in Spain. However,
according to paragraphs 88 and 92 of the contested decision, the new entity also had a share of more than 40% of the informal
meals and food mixers markets. Table no. 2, compiled by the Commission in reply to the Court's questions, shows that the markets
where SEB-Moulinex had a share above 40%, including the informal meals and food mixers markets, accounted for 25-35% of their
total sales in Spain. Consequently, for the reasons given in paragraphs 364 and 365 above, the Commission ought to have taken
account of those markets to assess the possibility of penalisation by retailers.

378
Furthermore, SEB-Moulinex has a market share exceeding 40% in no less than four relevant product markets in Spain. In paragraph
43 of the contested decision, the Commission stated that the concentration's effects on competition could be listed in four
categories, namely France, where the concentration had been referred to the national authorities, the countries where the
concentration would change competition conditions only marginally, the countries where it raised serious doubts in only some
product markets and, finally, the four countries (Portugal, Greece, Belgium and the Netherlands) where it led to a combination
of market shares at sometimes high levels in respect of many of the product categories in question, so that the parties would
be able to extend their market power to all the other relevant markets. However, SEB-Moulinex has a market share exceeding
40% in no less than four product markets in Spain, that is to say, as many product markets as in Greece, which however is
one of the countries in respect of which the Commission considered that the concentration raised serious doubts in a large
number of markets.

379
Finally, as De'Longhi and the applicant correctly observed at the hearing, the Commission refrained from examining the portfolio
effect induced by the concentration and, in particular, the fact that the concentration enabled the strong positions of SEB
on the kettle, informal meals and iron markets to build onto those of Moulinex on the toaster, coffee machine, portable oven
and food mixer markets. Likewise, the contested decision does not explain why the fact that the new entity will hold, because
of the concentration, an array of four brands is not such as to strengthen its market power whereas the Commission took care
on numerous occasions to point out, with regard to the geographical markets covered by the commitments, that SEB-Moulinex
has two brands whereas its competitors have only one.

380
It follows that the factors found in paragraphs 115 and 116 of the contested decision did not justify the Commission in ruling
out serious doubts as to the kettle and portable oven markets in Spain.─ Finland

381
According to paragraph 118 of the contested decision, the combined market share of the parties to the concentration is 45-55%
of the Finnish toaster market. Although this is above the 40% threshold, the Commission considered that the concentration
raised no serious doubts in that country because, in view of the presence of competitors such as Philips and Bosch, any attempt
at anti-competitive conduct on that market would be likely to be penalized by smaller purchases of SEB-Moulinex products on
the other markets where the combined entity achieves 85-95% of its turnover.

382
It follows that, in that geographical market, it is only by applying the range effect that the Commission found that the concentration
raised no serious doubts in respect of the toaster market in Finland. However, for the reasons given in paragraphs 364 and
365 above, the range effect did not justify ruling out serious doubts.

383
In any case, even if it is accepted, as the Commission argues in paragraph 119 of the contested decision and in its replies
to the Court's written questions, that the range effect justified ruling out serious doubts where, in a given geographical
market, the turnover of SEB-Moulinex on the relevant product markets where the combined entity had a market share above 40%
was below 10% of its total turnover on all the relevant product markets in that geographical market, the Commission did not
show, either in the contested decision or before the Court, that that was the case in Finland.

384
Although, according to paragraph 119 of the contested decision, the toaster market accounted for only 5-15% of the new entity's
turnover on all the relevant product markets in Finland, it nevertheless also had a share of over 40% in the Finnish markets
for espresso machines (40-50%), portable ovens (35-45%) and barbecues (40-50%) (paragraphs 87, 90 and 91 of the contested
decision). Table no. 2, compiled by the Commission in reply to the Court's questions, shows that the markets where SEB-Moulinex
had a share above 40%, including the espresso machine, portable oven and barbecue markets, accounted for 10-20% of their total
sales in Finland. Consequently, for the reasons given in paragraphs 364 and 365 above, the Commission ought to have taken
account of those markets to assess the possibility of penalisation by retailers.

385
Moreover, SEB-Moulinex has a market share exceeding 40% in no less than four relevant product markets in Finland, that is
to say, as many product markets as in Greece, which is one of the countries in respect of which the Commission considered
that the concentration raised serious doubts in a large number of markets.

386
Finally, as De'Longhi and the applicant correctly observed at the hearing, the Commission refrained from examining the portfolio
effect induced by the concentration and, in particular, the fact that the concentration enabled the strong positions of SEB
on the barbecue and toaster markets to build onto those of Moulinex on the toaster, coffee machine, espresso machine, portable
oven and food mixer markets. Likewise, the decision does not explain why the fact that the new entity will hold, because of
the concentration, an array of four brands is not such as to strengthen its market position, whereas the Commission took care
on numerous occasions to point out, with regard to the geographical markets covered by the commitments, that SEB-Moulinex
has two brands whereas its competitors have only one.

387
It follows that the factors specified in paragraphs 87, 90, 91 and 118 to 120 of the contested decision did not justify the
Commission in ruling out serious doubts in respect of the portable oven, espresso machine, barbecue and toaster markets in
Finland.─ Italy

388
According to paragraphs 121 to 124 of the contested decision, in Italy the new entity will have a market share exceeding 40%
in three product markets, namely food mixers, informal meals and kettles.

389
With regard to, first, the food mixer market, the Commission found, in paragraph 121 of the contested decision, that the parties'
combined market shares were 40-50% (SEB 0-10%), that there would be competition from Braun (10-20%), Philips (0-10%) and De'Longhi
(0-10%) and concluded that the concentration would have little impact on competition in eliminating the fourth largest undertaking
from the market.

390
It follows that only one of the factors referred to by the Commission led it to rule out serious doubts in Italy, namely,
the merged entity's market position in relation to competitors.

391
However, for the reasons given in paragraph 329 above, unless it is shown that those competitors held such a strong position
as to create a genuine counterweight to SEB-Moulinex, the fact that the latter was confronted by three competitors was in
itself irrelevant in a market where the leader had a market share of 40-50%.

392
In the present case, two of the three competitors mentioned in the food mixer market, namely Philips and De'Longhi, held only
marginal positions of 0-10%. The third, Braun, had a more representative market share of 10-20%, but this was between one
quarter and one half of the share of the new entity. In contrast, regarding the new entity's position in Portugal, the Commission
found, in paragraph 51 of the contested decision, that serious doubts were raised by the fact that the parties to the concentration
were market leaders with shares at least twice the size of that of their nearest competitor.

393
Likewise, the assertion that the concentration would have little effect on competition in eliminating the fourth largest undertaking
from the market does not appear convincing. In actual fact, SEB had only a small market share (0-10%), like two of Moulinex's
other competitors, Philips and De'Longhi. Only Braun had a larger, although modest, market share. Therefore the elimination
of the fourth competitor does not have substantially different effects from those which would have resulted from the elimination
of the second or third competitor.

394
Therefore the factor specified in paragraph 121 of the contested decision did not justify the Commission in ruling out serious
doubts in relation to the food mixer market in Italy.

395
Secondly, regarding the informal meals market, in paragraph 122 of the contested decision the Commission found that the combined
share of the parties to the concentration was 40-50% (Moulinex 0-10%), while Philips, the only competitor identified by the
parties, had 0-10%. With regard to the kettle market, in the same paragraph the Commission found that the combined share of
the parties to the concentration was 65-75% (Moulinex 15-25%), while De'Longhi, Philips and Braun all had 0-10%. However,
in paragraph 123 of the contested decision, the Commission found that, as the kettle and informal meals markets each represented
only 0-5% of the value of the whole
kitchen range of small electrical household appliances, retailers would be able to penalise any attempted anti-competitive conduct
on those markets by reducing their purchases of SEB-Moulinex products on the other markets where the joint entity realised
90-100% of its turnover. According to the Commission, that possibility would render unprofitable any price increase by the
parties on the two relevant markets. Consequently, the Commission concluded that the concentration raised no serious doubts
in relation to those markets.

396
It follows that, on that market, the Commission ruled out serious doubts solely on the basis of the range effect. It is true
that, in paragraph 122 of the contested decision, the Commission mentioned the position of the merged entity in relation to
its competitors. However, that consideration did not lead the Commission to rule out serious doubts in respect of the markets
concerned. Moreover, the Commission was not justified in relying on that factor. Regarding the informal meals market, in contrast
to the food mixers market, the Commission identified only one competitor, not three. Furthermore, on the basis of the figures
in the contested decision, the possibility cannot be ruled out that the concentration brings together the two leading undertakings
in the market because Moulinex and Philips both had a share of 0-10%. Regarding the kettles market, the factors mentioned
in the contested decision do not appear to justify the absence of serious doubts in so far as, although there are three competitors,
the concentration brings together the two leading undertakings in the market, which will have a market share of 65-75%, namely
almost three quarters of the market.

397
With regard to the range effect, the reasons why it prevented the Commission from ruling out serious doubts are given in paragraphs
364 and 365 above. In that connection the fact, emphasised by the Commission, that in Italy De'Longhi was the leader in four
other relevant product markets and that Saeco held 60-70% of the espresso machine market is irrelevant. By definition, the
fact that SEB-Moulinex did not have a market share exceeding 40% outside the food mixer, informal meals and kettle markets
must mean that other manufacturers were likely to have strong positions in those markets.

398
In any case, even if it is accepted, as the Commission argues in paragraph 123 of the contested decision and in its replies
to the Court's written questions, that the range effect justified ruling out serious doubts where, in a given geographical
market, the turnover of SEB-Moulinex on the relevant product markets where the combined entity had a market share above 40%
was below 10% of its total turnover on all the relevant product markets in that geographical market, the Commission did not
show, either in the contested decision or before the Court, that that was the case in Italy.

399
Admittedly, it is clear from paragraph 123 of the contested decision that the informal meals and kettles markets in Italy
accounted for not more than 0-10% of the combined entity's total turnover on all the relevant product markets in Italy. However,
according to paragraph 121 of the contested decision, the new entity also had a share of more than 40% of the food mixer market.
Table no. 2, compiled by the Commission in reply to the Court's questions, shows that the markets where SEB-Moulinex had a
share above 40%, including the food mixer market, accounted for 25-35% (and even 30-40%, according to the Commission's reply
to the Court's written question) of their total sales in Italy. Apart from the fact that, for the reasons given above, the
Commission could not rule out serious doubts on that product market solely on the basis of the criterion referred to in paragraph
121 of the contested decision, it ought to have taken account of that market, as stated above, to assess the possibility of
penalisation by retailers because the new entity had a share of that market exceeding 40%.

400
Finally, as De'Longhi and the applicant correctly observed at the hearing, the Commission refrained from examining the portfolio
effect induced by the concentration and, in particular, the fact that the concentration enabled the strong positions of SEB
on the kettles, informal meals, barbecues and irons markets to build onto those of Moulinex on the coffee machines, kettles,
steamers and food mixer markets. Likewise, the decision does not explain why the fact that the new entity will hold, because
of the concentration, an array of four brands is not such as to strengthen its market power whereas the Commission took care
on numerous occasions to point out, with regard to the geographical markets covered by the commitments, that SEB-Moulinex
has two brands whereas its competitors have only one.

401
For those reasons it must be concluded that the factor referred to in paragraph 123 of the contested decision did not justify
the Commission in ruling out serious doubts in relation to the informal meals and kettles markets in Italy.

402
Therefore the plea is well founded so far as Italy is concerned.─ United Kingdom and Ireland

403
In paragraphs 125 and 126 of the contested decision the Commission states that the parties to the concentration have a combined
market share of 35-45% of the irons and ironing stations market in the United Kingdom and Ireland. Table No. 2, supplied by
the Commission, shows that the said market share exceeds 40%. However, in the contested decision, the Commission concluded
that the concentration raised no serious doubts in the United Kingdom and Ireland because, first, it changed only
marginally the competition conditions with a small addition of market share (additional 0-5%) and, second,
the parties to the concentration will be faced by Philips in particular (market share 15-25%).

404
It follows that, in that geographical market, the Commission ruled out serious doubts by reason of two factors, namely, first,
the absence of significant overlap and, second, the merged entity's position in relation to its competitors.

405
Regarding first, the absence of significant overlap, because the figures are vague the Court cannot verify whether this factor
justified ruling out serious doubts. However, although the additional market share is small, it is nevertheless sufficient
to result in a market share exceeding the dominance threshold of 40% used in the decision.

406
Secondly, as to the merged entity's position in relation to its competitors, Philips is one of four manufacturers named in
paragraph 32 of the contested decision as having both a broad range of products in the small electrical household appliances
sector and a pan-European presence, and therefore its presence in the market in question is not of particular significance.
Similarly, as stated above, it is inconceivable that a producer with a market share of approximately 40% would not have competitors.

407
In addition, although the Commission stressed the small additional market share for irons and ironing stations, it did not,
as the applicant correctly points out, examine the impact on competition of the significant combined shares of SEB-Moulinex
in numerous other markets, in particular the deep friers market (where SEB's share rises from 15-25% to 30-40%), the steamers
market (where SEB's share rises from 25-35% to 35-40%), the informal meals market (where SEB's share rises from 15-25% to
25-35%) and the espresso machines market (where SEB's share rises from 0-10% to 20-30%). Although the new entity does not
attain the dominance threshold in any of these markets, which therefore do not give rise to serious doubts, this significant
strength in several markets is capable, having regard to the portfolio effect described above, of reinforcing the dominance
which the entity already has on the irons and ironing stations market.

408
Finally, as the applicant correctly observes, the Commission did not apply to the relevant geographical market the relative
turnover criterion which it used in its examination of the competition situation in the other geographical markets at the
stage of applying the range effect. Whereas the Commission (wrongly) ruled out serious doubts in relation to the relevant
product markets in Italy, Spain and Finland, on the ground that those markets where SEB-Moulinex held a dominant position
accounted for less than 10% of their total turnover in all the product markets concerned in those geographical markets, the
Commission drew no conclusion from the fact that the irons and ironing stations market accounted for 35-40% of their total
turnover in the relevant product markets in the United Kingdom and Ireland.

409
Finally, as De'Longhi and the applicant correctly observed at the hearing, the Commission refrained from examining the portfolio
effect induced by the concentration and, in particular, the fact that the concentration enabled the strong positions of SEB
on the deep frier, portable oven, informal meals, steamer and irons markets to be built onto those of Moulinex on the deep
frier, espresso machine and food mixer markets. Likewise, the contested decision does not explain why the fact that the new
entity will own, because of the concentration, an array of five brands is not such as to strengthen its market power whereas
the Commission took care on numerous occasions to point out, with regard to the geographical markets covered by the commitments,
that SEB-Moulinex has two brands whereas its competitors have only one.

410
For those reasons, it must be concluded that the factors set out in paragraphs 125 and 126 of the contested decision did not
justify the Commission in ruling out serious doubts as to the irons and ironing stations market in the United Kingdom and
Ireland.(c)Conclusion

411
Therefore the contested decision must be annulled in relation to the markets in Italy, Spain, Finland, the United Kingdom
and Ireland.The plea that the commitments bring about a sharing of the market for the Moulinex trade markA ─ Arguments of the parties

412
At the hearing De'Longhi claimed, for the first time, that the commitments accepted in the contested decision result in a
sharing of the market with regard to the Moulinex trade mark. The market sharing is said to be strengthened by the last subparagraph
of Section 1(c) of the commitments, which prohibits licensees from exporting products which they market under the Moulinex
trade mark in the territories of the other licensees and in those of SEB.

413
According to De'Longhi, such market sharing is not covered by Commission Regulation (EC) No 240/96 of 31 January 1996 on the
application of Article 85(3) of the Treaty to certain categories of technology transfer agreements (OJ 1996 L 31, p. 2) and
consequently it is prohibited by Article 81(1).

414
As De'Longhi drew the Commission's attention to this problem in the course of the administrative procedure, it considers that
the Commission ought to have ascertained whether the commitments gave rise to doubts in that connection.

415
The Commission, supported by France and SEB, contends that De'Longhi's submissions should be dismissed.B ─ Findings of the Court

416
In contending that the commitments result in sharing of the market with regard to the Moulinex trade mark, De'Longhi is raising
a plea which was not raised by the applicant.

417
Whilst the third paragraph of Article 40 of the EC Statute of the Court of Justice and Article 116(3) of the Rules of Procedure
do not preclude the intervener from advancing arguments which are new or which differ from those of the party he supports,
lest his intervention be limited to restating the arguments advanced in the application, it cannot be held that those provisions
permit him to alter or distort the context of the dispute defined in the application by raising new pleas in law (see, to
that effect, Case 30/59
*De Gezamenlijke Steenkolenmijnen in Limburg*  v
*High Authority* [1961] ECR 1, 37; Case C-313/90
*CIRFS and Others*  v
*Commission* [1993] ECR I-1125, paragraph 22; Case C-245/92 P
*Chemie Linz*  v
*Commission* [1999] ECR I-4643, paragraph 32; Case T-459/93
*Siemens*  v
*Commission* [1995] ECR II-1675, paragraph 21; Joined Cases T-371/94 and T-394/94
*British Airways and Others*  v
*Commission* [1998] ECR II-2405, paragraph 75; Joined Cases T-125/96 and T-152/96
*Boehringer* v
*Council and Commission* [1999] ECR II-3427, paragraph 183, and Case T-395/94
*Atlantic Container Line and Others* v
*Commission* [2002] ECR II-875, paragraph 382).

418
Therefore, since an intervener must, under Article 116(3) of the Rules of Procedure, accept the case as he finds it at the
time of his intervention and since, under the fourth paragraph of Article 40 of the EC Statute of the Court of Justice, the
submissions made in an application to intervene are to be limited to supporting the submissions of one of the main parties,
De'Longhi, as an intervener, does not have standing to raise the present plea alleging that the commitments lead to market
sharing. Consequently, the present plea raised by De'Longhi must be dismissed as inadmissible.

419
In any event, even if it were admissible (
*quod non*), the plea raised by De'Longhi would be unfounded.

420
It is clear from Article 2(1) of Regulation No 4064/89 that when, in the course of examining the compatibility of a concentration
with the common market, the Commission is appraising whether the concentration creates or strengthens a dominant position
within the meaning of Article 2(2), it must
take into account the need to maintain and develop effective competition within the common market in view of, among other
things, the structure of the markets concerned and the actual or potential competition from undertakings located either within
or outwith the Community.

421
It is therefore correct that, as De'Longhi submits, the Commission cannot, when applying Regulation No 4064/89, approve commitments
which are contrary to the competition rules laid down in the Treaty inasmuch as they impair the preservation or development
of effective competition in the common market. In that context, the Commission must appraise the compatibility of those commitments
in particular according to the criteria of Article 81(1) and (3) EC (which, in reference to Article 83 EC, constitutes one
of the legal bases for Regulation No 4064/89, see Case T-251/00
*Lagardère and Canal +*  v
*Commission* [2002] ECR I-4825, paragraph 85).

422
However, in the present case, it must be observed, first, that the last subparagraph of Section 1(c) of the commitments provides
that
the licensee or licensees shall undertake to market products bearing the Moulinex trade mark only in the territory or territories
licensed to them and for which the products are intended. Contrary to what De'Longhi claims, it does not follow from the terms of that clause that the commitments expressly impose
on the licensees of the Moulinex trade mark a ban on exports to the other Member States. The clause can be interpreted as
merely obliging the licensees to market products bearing the Moulinex trade mark in the territory licensed to them. A clause
obliging a licensee to concentrate the sale of the products covered by the licence on his territory does not, in principle,
have as its object or effect the restriction of competition within the meaning of Article 81(1).

423
Second, it should be noted that, even if, as De'Longhi maintains, the clause at issue had to be interpreted as prohibiting
the licensees from exporting products bearing the Moulinex trade mark to other Member States, De'Longhi has not shown how,
in the present case, that clause would be contrary to Article 81(1). De'Longhi does not explain how, having regard to the
national dimension of the relevant product markets and the absence of significant parallel imports between the Member States,
the clause at issue might appreciably restrict competition on the relevant market in the Community or significantly affect
trade between the Member States within the meaning of Article 81(1). It is settled case-law that even an agreement imposing
absolute territorial protection may escape the prohibition laid down in Article 81(1) if it affects the market only insignificantly
(Case 5/69
*Völk* [1969] ECR 295, paragraph 7; Joined Cases 100/80 to 103/80
*Musique Diffusion française and Others*  v
*Commission* [1983] ECR 1825, paragraph 85, and Case C-306/96
*Javico* [1998] ECR I-1983, paragraph 17).

424
Moreover, De'Longhi does not establish that a licensee of the Moulinex trade mark who is not protected against, at least,
active competition from the other licensees in respect of the territory licensed to him would be prepared to accept the risk
of marketing products bearing that trade mark together with his own trade mark by way of
co-branding. The purpose of the commitments is to enable the licensees, over a transitional period during which they will be entitled
to use their own trade mark together with the Moulinex trade mark, to ensure the migration of customers of products with the
Moulinex trade mark to their own trade marks, so that the licensees' marks can compete effectively with the Moulinex trade
mark after the transitional period, when SEB will again be entitled to use the Moulinex trade mark in the nine Member States
concerned. It must be held that, in such a context, the absence of any protection of the licensees against, at least active,
competition from the other licensees could undermine the strengthening of the trade marks competing with the Moulinex trade
mark and thus adversely affect competition on the relevant market in the territory of the Community. Consequently, in so far
as they prohibit active sales, the provisions of the clause at issue cannot be regarded as necessarily restricting competition
within the meaning of Article 81(1) (see, to that effect, Case 258/78
*Nungesser and Eisele*  v
*Commission* [1982] ECR 2015, paragraph 57, and Case 262/81
*Coditel* [1982] ECR 3381, paragraph 15).

425
It follows that De'Longhi's complaint that the commitments result in market sharing is inadmissible and, in any case, unfounded.

IV ─
Fourth plea in law: the Commission erred in law in failing to consider whether the nominal price paid by SEB for the acquisition
of Moulinex and the financial aid provided by the French State were not such as to strengthen SEB's position in the markets
concerned, to the detriment of competitorsArguments of the parties

426
The applicant submits that the Commission erred in law in failing to consider whether the nominal price paid by SEB for the
acquisition of Moulinex and the financial aid provided by the French State were not such as to strengthen SEB's position in
the markets concerned, to the detriment of competitors.

427
The applicant states that, in the contested decision, the Commission merely observed, without giving details, that it did
not appear, from a preliminary examination of the scheme provided for by the French authorities, that the government assistance
envisaged in connection with the court-supervised reorganisation proceedings was a measure which would benefit SEB. In the
applicant's opinion, the nominal price paid by SEB was manifestly such as to permit the strengthening of the new entity's
position on completion of the transaction.

428
In this connection the applicant observes that, in the judgment in Case T-156/98
*RJB Mining* v
*Commission* [2001] ECR II-337, the Court annulled the Commission's decision because the Commission failed to consider whether, and to
what extent, the new entity's market power could be increased by the nominal acquisition price. Therefore it was incumbent
on the Commission to determine whether the acquisition price was such as to strengthen the new entity's position on completion
of the transaction, regardless of whether the financial arrangements could be described as aid within the meaning of the Treaty.

429
In the present case, the applicant contends, first, that the Commission was fully informed of the financial conditions of
SEB's acquisition plan. In particular, it knew of the obvious disproportion between Moulinex's acquisition price (EUR 15 million)
and the true value of the assets acquired (estimated at more than EUR 850 million). The Commission was also aware of the reason
for the disproportion, in particular the fact that the French Government had agreed to accept responsibility for redundancy
payments, thus reducing Moulinex's debts and enabling SEB, first, to acquire the company at a price which in no way reflected
its true value and, second, to have additional funds available for strengthening its market position further.

430
By way of comparison, the applicant notes that:

─
it originally made an acquisition offer of EUR 100 million for the assets of Krups alone (namely, an amount almost seven times
more than that offered by SEB for the whole of the Krups and Moulinex businesses;

it originally made an acquisition offer of EUR 100 million for the assets of Krups alone (namely, an amount almost seven times
more than that offered by SEB for the whole of the Krups and Moulinex businesses;

─
by letter of 29 November 2001, it submitted to the Commission an offer which included taking over all Moulinex employees,
adding that, if the desired objective of profitability could not be attained, it might reduce the workforce. In the negotiations
it transpired that the redundancy of the 3 600 employees not taken over by SEB was likely to entail a total charge of approximately
EUR 175 million;

by letter of 29 November 2001, it submitted to the Commission an offer which included taking over all Moulinex employees,
adding that, if the desired objective of profitability could not be attained, it might reduce the workforce. In the negotiations
it transpired that the redundancy of the 3 600 employees not taken over by SEB was likely to entail a total charge of approximately
EUR 175 million;

─
it submitted to the administrators of Moulinex an offer to purchase for EUR 150 000 the assets of Moulinex not acquired by
SEB.

it submitted to the administrators of Moulinex an offer to purchase for EUR 150 000 the assets of Moulinex not acquired by
SEB.

431
The applicant considers that the particularly advantageous financial conditions for the acquisition of Moulinex by SEB enabled
the latter to benefit from synergies arising from an external expansion without the associated costs. The measures taken by
the French authorities clearly benefited SEB in so far as they enabled it to use for its business activity the financial resources
which it would normally have had to allocate to the acquisition of Moulinex.

432
Therefore the applicant considers that it was incumbent on the Commission to determine whether the financial conditions for
acquiring Moulinex were in themselves, directly or indirectly, capable of strengthening the market position of the new entity
SEB-Moulinex, and it was not even necessary to establish whether the financial contribution by the government constituted
State aid within the meaning of the Treaty.

433
According to the applicant, it follows that the Commission erred in law in confining itself to a
preliminary examination of the impact of the financial measures taken by the French Government and in concluding, on the basis of a superficial study,
that
the government assistance envisaged in connection with the court-supervised reorganisation proceedings had not benefited SEB.

434
The Commission contends that the plea is manifestly totally unfounded.Findings of the Court

435
In substance, the applicant raises two objections. It complains that the Commission did not consider whether SEB had strengthened
its position, first, by paying only a nominal acquisition price and, second, because the French Government had agreed to accept
responsibility for redundancy payments.

436
First of all, it must be observed that the price paid by SEB was assessed by the Tribunal de Commerce, Nanterre, in the context
of the court-supervised reorganisation proceedings and cannot be challenged. On the basis of the criteria of French law, it
took the view that SEB's offer was in the best interest of the creditors.

437
Secondly, the applicant has in no way shown that the price paid by SEB was nominal. At the most, the applicant points to the
balance sheet value of Moulinex's assets in 2000 which were acquired by SEB, and the applicant's own offers.

438
However, first, to determine the true value of an undertaking is a complex calculation which also entails subjective appraisals,
and the value shown in the balance sheet is not necessarily the true value or the acquisition value. In particular, Moulinex's
acquisition value at the end of 2001,when it was faced with liquidation, cannot be considered to be the same as the acquisition
value indicated by the consolidated accounts published by Moulinex almost two years earlier.

439
Secondly, the applicant's offers do not at all show that the price offered by SEB was nominal. The applicant offered prices
of EUR 100 million, EUR 1 and EUR 150 000. The first offer was for the Krups trade mark rights alone and expressly excluded
all liabilities. Therefore it cannot be taken into account for appraising SEB's acquisition offer. Furthermore, the amounts
vary considerably according to what was included in the offer and the applicant does not even specify which of the offers
relates to the same assets as those acquired by SEB, nor how the applicant's offers can determine the value of the Moulinex
assets acquired by SEB. Therefore no appraisal could be made of the price of EUR 15 million paid by SEB to acquire Moulinex.

440
Regarding the complaint that the French Government's acceptance of responsibility for redundancy payments enabled SEB to acquire
Moulinex without having to meet all its debts, it must be observed, first, that, contrary to the situation in the case of
*RJB Mining* v
*Commission*, cited above, upon which the applicant relies, the Commission asked the French authorities, by letters of 27 September and
9 November 2001, for information concerning any action by the French Republic in connection with the petition for voluntary
liquidation and the acquisition of the Moulinex group. Second, the French Republic replied, by a note of 16 November 2001,
that no State assistance to the Moulinex group was being considered and that only redeployment measures of direct benefit
to employees were envisaged. Moreover, the file does not show that the French Government made redundancy payments and the
applicant has produced no evidence that the French Republic paid debts for which SEB was liable. The Commission observed (and
it was not denied) that it would have been absurd for the French Republic to make redundancy payments because in France all
undertakings are required by law to take out insurance against the risk of non-payment of sums payable under contracts of
employment in the event of a court-supervised reconstruction so that, in the case of insolvency, redundancy payments would
have had to be made by the insurers and not the French Republic. In any case, according to the Commission and the French Republic,
any potential State assistance does not relate to the assets acquired by SEB and therefore has no effect at all on their value.
This is not denied by the applicant.

441
Finally, the Commission cannot be required to conduct a State aid procedure in connection with every concentration procedure,
which must be completed within strict time-limits. Although the Court annulled the Commission's decision in the judgment in
*RJB Mining* v
*Commission*, cited above, on the ground that the Commission had not considered whether the level of the purchase price was such as to
strengthen the new entity's position, this was by reason of the particular circumstances of that case, where the purchase
price itself had been notified as aid by the German authorities. That situation cannot be compared with a concentration of
two private companies, such as that in the present case.

442
It follows that this plea in law is unfounded. **Costs**

443
Under Article 87(3) of the Rules of Procedure, where each party succeeds on some and fails on other heads, or where the circumstances
are exceptional, the Court may order that the costs be shared or that each party bear its own costs. In the present case,
as both the applicant and the Commission have failed on several heads, each must be ordered to bear its own costs.

444
SEB and De'Longhi, interveners, are ordered to bear their own costs pursuant to the third subparagraph of Article 87(4).

On those grounds,

THE COURT OF FIRST INSTANCE (Third Chamber)
hereby:**1.
**Annuls, in relation to the markets in Italy, Spain, Finland, the United Kingdom and Ireland, Commission Decision SG (2002)
D/228078 of 8 January 2002 not to oppose the concentration between SEB and Moulinex and to declare it compatible with the
common market and with the Agreement on the European Economic Area, subject to compliance with the proposed commitments (Case
COMP/M.2621 ─ SEB/Moulinex);** 

2.
**Dismisses the remainder of the application;** 

3.
**Orders the applicant and the Commission to bear their own costs;** 

4.
**Orders SEB SA and De'Longhi SpA to bear their own costs.****

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| Lenaerts | Azizi | Jaeger |
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Delivered in open court in Luxembourg on 3 April 2003.

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| --- | --- |
| H. Jung | K. Lenaerts |

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| Registrar | President |

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