CELEX: 32020M9604
Language: en
Date: 2020-04-30 00:00:00
Title: Commission Decision of 30/04/2020 declaring a concentration to be compatible with the common market (Case No COMP/M.9604 - NENT / TELENOR / JV) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                 Brussels, 30.04.2020
                                                                 C(2020) 2978 final
                                                                                 PUBLIC VERSION
                                                                 To the notifying parties
Subject:             Case M.9604 – NENT/Telenor/JV
                     Commission decision pursuant to Article 6(1)(b) of Council Regulation
                     No 139/20041 and Article 57 of the Agreement on the European Economic
                     Area2
Dear Sir or Madam,
    (1)       On 23 March 2020, the European Commission received notification of a proposed
              concentration pursuant to Article 4 of the Merger Regulation by which Nordic
              Entertainment Group AB (“NENT”, Sweden) and Telenor ASA (“Telenor”,
              Norway) acquire within the meaning of Articles 3(1)(b) and 3(4) of the Merger
              Regulation joint control of the joint venture (“JV”, Sweden) (the “Transaction”).3
              NENT and Telenor are designated hereinafter as the “Notifying Parties” and each
              individually as “Notifying Party”. The Notifying Parties together with the JV are
              designated hereinafter as the “Parties”.
1     OJ L 24, 29.1.2004, p. 1 (the “Merger Regulation”). With effect from 1 December 2009, the Treaty on the
      Functioning of the European Union (“TFEU”) has introduced certain changes, such as the replacement of
      “Community” by “Union” and “common market” by “internal market”. The terminology of the TFEU will
      be used throughout this decision.
2     OJ L 1, 3.1.1994, p. 3 (the “EEA Agreement”). 2020/C 108/04
3     Publication in the Official Journal of the European Union No C 108, 1.4.2020, p. 4.
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak--- 1.       THE PARTIES
   (2)      NENT provides TV distribution services and TV channels in Norway, Sweden,
            Denmark and Finland. NENT also creates, produces and distributes TV shows,
            commercials, feature films and branded content. In Sweden, NENT also provides
            broadband internet services on open fibre networks. Outside the Nordic region,4
            NENT operates production companies in other European countries and sells
            content to customers worldwide.
   (3)      Telenor provides mobile and fixed telecommunications services and TV
            distribution services in Norway, Sweden, Denmark and Finland. Outside the
            EEA, Telenor provides mobile telecommunications services in Asia. Telenor’s
            subsidiary Telenor Satellite AS ("Telenor Satellite") is active in the supply of
            satellite transponder capacity. Telenor’s largest shareholder is the Norwegian
            state.
   (4)      The JV will be active in the provision of TV distribution services in Norway,
            Sweden, Denmark and Finland. NENT and Telenor will contribute to the JV their
            respective retail AV businesses i.e. the satellite and IPTV pay-TV operator and
            broadband provider of NENT, and the satellite pay TV operator of Telenor.
2.       THE OPERATION
   (5)      On 22 October 2019, Nordic Entertainment Group Sweden Holding AB and
            Telenor Broadcast Holding AS entered into a Merger Agreement. At closing,
            NENT will contribute its Viasat Consumer business (“Viasat”) to the JV, which
            will be carved out of NENT prior to closing into a separate corporate structure
            ("VCB Group") as part of an internal reorganisation of NENT. Telenor will
            contribute its wholly owned subsidiary, Canal Digital AS (“Canal Digital”), to the
            JV. Following the closing, the Notifying Parties will each hold 50% of the shares
            in the JV.
3.       THE CONCENTRATION
3.1.     Joint control
   (6)      The Notifying Parties will each hold 50% of the shares in the JV and will each
            have the ability to exercise decisive influence over the JV. In particular, the Board
            of the JV will consist of six Board members ("Directors"), with each Notifying
            Party nominating three Directors. The Notifying Parties will share the right to
            nominate the Chairman of the Board, with the right alternating between the
            Notifying Parties on a yearly basis in conjunction with an annual shareholders
            meeting.5
   (7)      Each Notifying Party can require the replacement of any Director nominated by
            the other Notifying Party with a new Director. The appointment of the Chief
4   In the present Decision, the terms “Nordic region”, “Nordics” and “Nordic countries” refer to Norway,
    Sweden, Denmark and Finland.
5   The Chairman shall not have a casting vote. The Notifying Party not nominating the Chairman of the
    Board that year will be entitled to nominate the Vice Chairman of the Board.
                                                           2
 ---pagebreak---             Executive Officer ("CEO") and Chief Financial Officer ("CFO") must be
            approved by a minimum of two Directors from both of the Notifying Parties and
            either Notifying Party can request the removal of the CEO and CFO.
   (8)      The annual budget and business plan (including any amendment, updating,
            supplementing or replacement of a business plan) requires approval from the
            Board of the JV, by a minimum of two Directors from both of the Notifying
            Parties.
   (9)      Therefore, as a result of the Transaction, NENT and Telenor will jointly control
            the JV within the meaning of Article 3(1)(b) of the Merger Regulation.
3.2.     Full-functionality
   (10)     The JV will be fully functional. First, the JV will employ its own management
            dedicated to its day-to-day operations. The JV will also have access to sufficient
            resources, including finance, staff and tangible and intangible assets that will
            enable it to operate independently on the market for the retail supply of AV
            services, performing the functions normally carried out by undertakings operating
            on the same market.
   (11)     Second, the JV will operate a TV distribution platform as a fully independent
            company with its own personnel (sales and marketing, customer service, technical
            and content negotiation and purchasing teams). Its market-facing activities will
            include the retail supply of AV services via satellite in each of Norway, Sweden,
            Finland and Denmark, and via IPTV in Sweden and Norway. The JV will have its
            own access to, and presence on, the market, and its activities are not limited to the
            distribution or sale of its parent companies' products.6
   (12)     Third, the JV will be active as an autonomous economic entity and all
            relationships with the Notifying Parties and their affiliates (including, but not
            limited to, agreements concerning NENT's content and channels and Telenor's
            satellite transponder capacity) will be at arm's length on the basis of normal
            commercial conditions. Moreover, the vast majority of the JV's turnover will be
            achieved through relationships with third parties.
   (13)     Finally, the JV is intended to operate on a lasting basis. The Merger Agreement
            does not provide for finite duration of the JV and the Transaction therefore brings
            about a lasting change in the structure of the undertakings concerned.
   (14)     Therefore, the Transaction will lead to the creation of a full-function joint venture
            within the meaning of Article 3(4) of the Merger Regulation.
4.       EU DIMENSION
   (15)     The undertakings concerned have a combined aggregate world-wide turnover of
            more than EUR 5 000 million (NENT: EUR 1 420 million; Telenor:
6   In addition to NENT, for example, the JV will acquire content from the main providers of TV channels
    and content for retail distribution in each of Norway, Sweden, Denmark and Finland. It follows that the JV
    will be engaged in activities beyond one specific function for the parents.
                                                           3
 ---pagebreak---             EUR 11 437 million; combined: EUR 12 857 million).7 Each of them has an
            EU-wide turnover in excess of EUR 250 million (NENT: EUR […]; Telenor:
            EUR […]), but they do not achieve more than two-thirds of their aggregate
            EU-wide turnover within one and the same Member State. The notified operation
            therefore has an EU dimension.
5.      RELEVANT MARKETS
5.1.    Introduction
   (16)     The Transaction relates to the two lower levels of the AV value chain, namely
            (i) the wholesale supply of TV channels where NENT is active and will post-
            Transaction remain independently active; and (ii) the retail supply of AV services
            to end customers where the JV will be active but also Telenor will remain active
            through technologies other than satellite,8 and NENT will remain active with its
            OTT offer.
   (17)     In addition, the Transaction relates to the market for the supply of satellite
            transponder capacity where Telenor Satellite is active as a supplier and Telenor’s
            Canal Digital and NENT’s Viasat are customers.
5.2.    Structure of the value chain
   (18)     In previous cases, the Commission set out the different levels of the TV value
            chain as follows: (i) the (upstream) markets for the production and the licensing
            of AV content, (ii) the (intermediate) market for the wholesale supply of TV
            channels, and (iii) the (downstream) market for the retail supply of TV services.9
            The market investigation10 confirmed that this three-layer classification remains
            accurate with regard to AV content.11
5.3.    Wholesale supply of TV channels
   (19)     TV broadcasters package the AV content and broadcasting rights for AV content
            that they have produced in-house or acquired into linear TV channels, which are
            supplied to retail suppliers of AV services, and then broadcast to end users either
            on a FTA basis or on a pay TV basis. Ancillary services have gradually been
            associated to TV channels in order to complement the TV offering and enhance
            the viewer experience of traditional linear TV channels.
7   Turnover calculated in accordance with Article 5 of the Merger Regulation.
8   Telenor will remain active through (i) cable and IPTV in Norway and Sweden, and (ii) cable, IPTV and
    OTT in Finland. It will not remain active in Denmark.
9   Commission decisions of 12 November 2019 in case M.9064 – Telia Company/Bonnier broadcasting
    Holding, recital 113; of 6 February 2018 in case M.8665 - Discovery/Scripps, recital 12.
10  With regard to market definition, given that markets participants were asked the same set of questions for
    Norway, Sweden, Finland and Denmark, respondents active across the Nordics may have given several
    times the same responses to some questions. Therefore, for the purpose of analysing the results of the
    market investigation, the Commission set the following calculation rule: for each question, identical
    responses of a same respondent are counted once.
11  Responses to questionnaires Q2, Q4, Q6 and Q8 to TV broadcasters in Norway, Sweden, Finland and
    Denmark, and to questionnaires Q1, Q3, Q5 and Q7 to retail suppliers of AV services in Norway, Sweden,
    Finland and Denmark, question C.1.
                                                          4
 ---pagebreak---    (20)      The wholesale supply of TV channels is an intermediate layer between the
             upstream production and licensing of content, and the downstream retail
             provision of AV services to end customers.
5.3.1. Product market definition
5.3.1.1. Previous Commission decisions
   (21)      In its past decisional practice, the Commission identified a wholesale market for
             the supply of TV channels. Within that market, in certain decisions, the
             Commission further identified two separate product markets for (i) FTA TV
             channels, and (ii) pay TV channels.12 The Commission further stated that within
             the pay TV channels market, there could be different segments for (i) basic pay
             TV channels; and (ii) premium pay TV channels,13 for which end customers pay a
             premium in addition to their basic subscription fee. In other decisions, including
             its recent decision of 12 November 2019 in case M.9064 – Telia
             Company/Bonnier Broadcasting Holding, the Commission concluded that at the
             level of the wholesale supply of TV channels there were two separate product
             markets, one consisting of the wholesale supply of premium pay TV channels and
             one consisting of the wholesale supply of FTA and basic pay TV channels.14
   (22)      In addition, in previous decisions including its recent decision of
             12 November 2019 in case M.9064 – Telia Company/Bonnier Broadcasting
             Holding, the Commission considered that there was no need to draw a distinction
             between linear TV channels and their ancillary services, which are licensed by
             TV broadcasters to TV distributors along with, or in addition to those linear TV
             channels.15
   (23)      Further, in previous decisions, the Commission examined a number of other
             potential additional segmentations, including genre or thematic content (such as
             sports, films, general entertainment, news, youth, and others), and ultimately left
             the market definition open in these regards.16
   (24)      Last, in its recent decision of 12 November 2019 in case M.9064 – Telia
             Company/Bonnier Broadcasting Holding, the Commission considered that the
             market for wholesale supply of TV channels, and any other possible
12  See Commission decisions of 20 September 2013 in case M.6990 – Vodafone/Kabel Deutschland,
    paragraph 41.
13  Commission decisions of 6 November 2018 in case M.8785 – Disney/Fox, recital 77; of 15 June 2018 in
    case M.8861 – Comcast/Sky, recital 50; of 6 February 2018 in case M.8665 - Discovery/Scripps, recitals
    19- 20; of 7 April 2017 in case M.8354 - Fox/Sky, recitals 80- 81.
14  Commission decisions of 12 November 2019 in case M.9064 – Telia Company/Bonnier Broadcasting
    Holding, recital 157; of 24 February 2015 in case M.7194 - Liberty Global/Corelio/W&W/De Vijver
    Media, recitals 90 and 91.
15  Commission decisions of 12 November 2019 in case M.9064 – Telia Company/Bonnier Broadcasting
    Holding, recital 163; of 24 February 2015 in case M.7194 - Liberty Global/Corelio/W&W/De Vijver
    Media, recital 94.
16  Commission decisions of 7 April 2017 in case M.8354 – Fox/Sky, recital 82-83; of 24 February 2015 in
    case M.7194 - Liberty Global/Corelio/W&W/De Vijver Media, recital 92; of 2 April 2003 in case M.2876
    - Newscorp/Telepiù, 2 April 2003, recital 76; of 18 July 2007 in case M.4504 - SFR/Télé 2 France,
    recitals 41–42; of 26 August 2008 in case M.5121 - News Corp/Premiere, recital 35; of 21 December
    2010 in case M.5932 - News Corp/BskyB, recital 81; of 10 October 2014 in case M.7000 - Liberty
    Global/Ziggo, recital 89.
                                                         5
 ---pagebreak---              segmentation, should not be further segmented according to the type of
             infrastructure used for the delivery to the viewer (cable, satellite, terrestrial TV
             and IPTV).17
5.3.1.2. The Notifying Parties’ view
   (25)      The Notifying Parties submit that the Transaction should be assessed on the basis
             of an overall market for wholesale supply of TV channels in all four geographies,
             and that any segmentation according to (i) pay and FTA TV channels, (ii) genre,
             (iii) distribution platform, or (iv) premium and basic pay TV channels would be
             inappropriate.18
5.3.1.3. The Commission’s assessment
   (26)      A majority of respondents to the market investigation across the four geographies
             indicated that it remains appropriate to segment the wholesale supply of TV
             channels (i) between FTA and pay TV channels, and (ii) within pay TV channels
             between basic and premium TV channels continues to be appropriate.19
             However, a number of well-substantiated responses to the market investigation
             suggested that these segmentations are not clear-cut for the following reasons.
   (27)      First, some respondents active across the Nordics indicated that, in the countries
             at stake, it might be relevant to consider FTA, basic pay and premium pay TV
             channels together. In that respect, some indicated that these types of channels are
             substitutable from the supply side, given that (i) all TV broadcasters would be
             able to provide all types of TV channels (Telia),20 and (ii) they effectively
             compete with each other for the same content as well as viewers' time, attention
             and spending (HBO Nordic),21 while others consider that they are interchangeable
             from the demand side, as many households switch from one to another when
             making content choices (The Walt Disney Company).22
   (28)      Second, some respondents considered that it would be more accurate to
             distinguish between the wholesale supply of (i) FTA and basic pay TV channels
             on the one hand and (ii) premium pay TV channels on the other hand. In that
             respect, the Swedish retail provider of AV services Tele2 submitted that for FTA
             and basic pay TV channels, which have advertising as their main source of
             income, audience reach is the key variable, while for premium TV channels,
             which are usually advertising free, the key variable would rather be willingness to
             pay.23 Discovery also considered that in Norway, Sweden and Finland, the
17  Commission decisions of 12 November 2019 in case M.9064 – Telia Company/Bonnier Broadcasting
    Holding, recital 162.
18  Form CO, paragraphs 177 and 178.
19  Responses to questionnaires Q2, Q4, Q6 and Q8 to TV broadcasters in Norway, Sweden, Finland and
    Denmark, and to questionnaires Q1, Q3, Q5 and Q7 to retail suppliers of AV services in Norway, Sweden,
    Finland and Denmark, questions C.2 and C.2.1.
20  Telia's responses to questionnaires Q1, Q3 and Q7 to retail suppliers of AV services in Norway, Sweden
    and Denmark, and to questionnaire Q4 to TV broadcasters in Sweden, question C.2.1.
21  HBO Nordic's responses to questionnaires Q1, Q3, Q5 and Q7 to retail suppliers of AV services in
    Norway, Sweden, Finland and Denmark, question C.2.1.
22  The Walt Disney Company's responses to questionnaires Q1 and Q3 to retail suppliers of AV services in
    Norway and Sweden, and to questionnaires Q2, Q4 and Q6 to TV broadcasters in Norway, Sweden and
    Finland, question C.2.1.
23  Tele2's response to questionnaire Q3 to retail suppliers of AV services in Sweden, question C.2.3.
                                                           6
 ---pagebreak---              division between FTA and basic pay TV (on one hand) and premium pay TV (on
             the other) is accurate.24 Indeed, for instance, in Norway, end users essentially
             need to subscribe to a basic TV package to receive FTA channels.25
   (29)      Third, some respondents to the market investigation considered the distinction
             between basic pay TV channels, which are part of the basic cable or IPTV
             subscription, and premium pay TV channels, for which end customers pay a
             premium in addition to their basic subscription fee, to be blurred.26 In that respect,
             TV2 Norge submitted that several TV distributors are introducing point based
             optional packages, where subscribers may use points to select between a range of
             TV channels and services that include both traditional basic channels, and
             channels and services which have traditionally been regarded as "premium
             content".27 Notwithstanding this trend, ITV stressed that premium sports and
             "first run" films should continue to be seen as complements rather than substitutes
             for pay TV, as they tend to be packaged within narrow genre-specific bundles,
             premium sports and films TV channels tend to be purchased "through" a basic
             subscription package, and their content is not included in the subscription
             offerings of the OTT operators.28
   (30)      Fourth, some market participants stressed the specificities of the Finnish and
             Danish markets. Indeed, in Finland there would be a limited offer of basic pay TV
             channels,29 in view of the national legislative framework, which prevents housing
             companies from collecting basic TV fees from households.30 In Denmark, there
             would be a minor offer of premium pay TV channels.31
   (31)      In addition, the results of the market investigation indicated that the wholesale
             supply of pay TV channels could be further divided according to genre
             (e.g., films, sports, youth, general entertainment, news). Indeed, most respondents
             stressed that (i) distributors would seek to offer a variety of genres to end-
             customers, and (ii) end customers would consider thematic channels of a given
24  Discovery's responses to questionnaire Q1 to retail suppliers of AV services in Norway, questions C.2.3
    and C.2.3.1; to questionnaire Q2 to TV broadcasters in Norway, questions C.2.3 and C.2.3.1; to
    questionnaire Q3 to retail suppliers of AV services in Sweden, question C.2.1; to questionnaire Q4 to TV
    broadcasters in Sweden, questions C.2.3 and C.2.1, to questionnaire Q5 to retail suppliers of AV services
    in Finland, question C.2.1; to questionnaire Q6 to TV broadcasters in Finland, questions C.2.3
    and C.2.3.1.
25  Discovery's responses to questionnaire Q1 to retail suppliers of AV services in Norway, question C.2.3.1,
    and to questionnaire Q2 to TV broadcasters in Norway, question C.2.3.1.
26  ITV's responses to questionnaires Q1 and Q3 to retail suppliers of AV services in Norway and Sweden;
    RiksTV's response to questionnaires Q1 to retail suppliers of AV services in Norway; HBO Nordic's
    responses to questionnaires Q1, Q3, Q5 and Q7 to retail suppliers of AV services in Norway, Sweden,
    Finland and Denmark; TV2 Norge's response to questionnaire Q1 to retail suppliers of AV services in
    Norway, question C.2.1.
27  TV2 Norge's response to questionnaire Q1 to retail suppliers of AV services in Norway, question C.2.1.
28  ITV's responses to questionnaire Q1 and Q3 to retail suppliers of AV services in Norway and Sweden,
    question C.2.1.
29  Telia's responses to questionnaire Q5 to retail suppliers of AV services in Finland, and to questionnaire
    Q6 to TV broadcasters in Finland, question C.2.1; Sanoma's response to questionnaire Q6 to TV
    broadcasters in Finland, question C.2.1.
30  Sanoma's response to questionnaire Q6 to TV broadcasters in Finland, question C.2.1.
31  TV2 Danmark's and Discovery's responses to questionnaire Q8 to TV broadcasters in Denmark,
    question C.2.1.
                                                          7
 ---pagebreak---              genre as a complement to thematic channels of a different genre. Channels of
             different genres would thus be complementary.32
   (32)      With regard to a possible segmentation of TV channels depending on the
             infrastructure used for their transmission, the results of the market investigation
             did not provide reasons to conclude that different means of infrastructure used for
             the delivery to the viewer (cable, satellite, terrestrial TV and IPTV) could
             constitute different product markets. Indeed, nothing in the Commission's file
             indicated that the competitive conditions in the market for the wholesale supply of
             TV channels, and any possible segmentation, would be different according to the
             distribution technology and type of infrastructure used for the distribution of the
             TV channels.
   (33)      With regard to a possible distinction between linear TV channels and their
             ancillary services, the results of the market investigation did not provide reasons
             to depart from the Commission's previous approach.
   (34)      In light of the above, the Commission considers that, for the purpose of this
             Decision, the relevant product market is the market for the wholesale supply of
             TV channels, including their ancillary services and covering all types of
             infrastructure. The question whether this product market can be further segmented
             between (i) FTA and pay TV channels, and in turn whether pay TV channels can
             be further segmented between basic pay and premium pay TV channels, or
             (i) FTA and basic pay TV channels on the one hand, and premium pay TV
             channels on the other hand could be left open, as the Transaction does not raise
             serious doubts as to its compatibility with the internal market or the functioning
             of the EEA Agreement under any plausible product market definition. The
             question whether this product market can be further segmented by genre
             (e.g., sports, films and series) could be left open, as the Transaction does not raise
             serious doubts as to its compatibility with the internal market or the functioning
             of the EEA Agreement under any plausible product market definition.
5.3.2. Geographic market definition
5.3.2.1. Previous Commission decisions
   (35)      In its past decisional practice, the Commission has previously considered that the
             market for wholesale supply of TV channels could be national,33 sub-national34 or
             potentially comprising a broader linguistically homogeneous area.35 In its recent
             decision of 12 November 2019 in case M.9064 – Telia Company/Bonnier
32  Responses to questionnaires Q2, Q4, Q6 and Q8 to TV broadcasters in Norway, Sweden, Finland and
    Denmark, and to questionnaires Q1, Q3, Q5 and Q7 to retail suppliers of AV services in Norway, Sweden,
    Finland and Denmark, questions C.3 and C.11.
33  Commission decisions of 6 November 2018 in case M.8785 – Disney/Fox, recital 86; of 7 April 2017 in
    case M.8354 – Fox/Sky, recital 89; of 21 December 2011 in case M.6369 - HBO/Ziggo/HBO Nederland,
    recital 39; of 15 April 2013 in case M.6880 - Liberty Global/Virgin Media, recital 41; of 10 October 2014
    in case M.7000 - Liberty Global/Ziggo, recital 98.
34  Commission decisions of 7 April 2017 in case M.8354 – Fox/Sky, recital 89; of 24 February 2015 in case
    M.7194 - Liberty Global/Corelio/W&W/De Vijver Media, recital 108.
35  Commission decisions of 7 April 2017 in case M.8354 – Fox/Sky, recital 89; of 21 December 2010 in
    case M.5932 - News Corp/BskyB, recitals 86–88; of 15 April 2013 in case M.6880 - Liberty
    Global/Virgin Media, recital 41.
                                                          8
 ---pagebreak---              Broadcasting Holding, the Commission concluded that the market was national in
             scope.36
5.3.2.2. The Notifying Parties’ view
   (36)      The Notifying Parties submit that the market for wholesale supply of TV channels
             is national.37
5.3.2.3. The Commission’s assessment
   (37)      The results of the market investigation indicated that, despite being sometimes
             negotiated on a regional basis, that is to say, encompassing the Nordic region, the
             agreements between TV broadcasters and retail suppliers of AV services for the
             wholesale supply of TV channels are mainly negotiated on a national basis.38
   (38)      In light of the above, for the purpose of this Decision, the Commission concludes
             that the relevant geographic market for the wholesale supply of TV channels, and
             all its possible sub-segments, is national in scope.
5.4.     Retail supply of AV services
   (39)      Retail providers of AV services offer packages of linear AV services and/or non-
             linear AV services to end customers. Such linear and non-linear AV services can
             be augmented with ancillary services, such as catch-up TV or TV everywhere.
   (40)      The retail supply of AV services is the lower level in the AV value chain. Retail
             AV services can be delivered to end-users though a number of technical means
             including cable, satellite and IPTV. OTT players deliver channels and content in
             both a linear and non-linear fashion through the use of the open Internet.
5.4.1. Product market definition
5.4.1.1. Previous Commission decisions
   (41)      In its past decisional practice, the Commission considered the retail supply of
             FTA TV and pay TV as separate markets, but ultimately left open the product
             market definition.39 The Commission also considered whether pay TV could be
             segmented further according to: (i) linear vs non-linear pay TV services;40
36  Commission decisions of 12 November 2019 in case M.9064 – Telia Company/Bonnier Broadcasting
    Holding, recital 169.
37  Form CO, paragraph 213.
38  Responses to questionnaires Q2, Q4, Q6 and Q8 to TV broadcasters in Norway, Sweden, Finland and
    Denmark, and to questionnaires Q1, Q3, Q5 and Q7 to retail suppliers of AV services in Norway, Sweden,
    Finland and Denmark, question D.1.
39  Commission decisions; of 6 November 2018 in case M.8785 - Disney/Fox, recital 98; of 8 October 2018
    in case M.8842 – Tele2/ComHem, recital 37; of 30 May 2018 in case M.7000 – Liberty Global/Ziggo,
    recital 137; of 6 February 2018 in case M.8665 - Discovery/Scripps, recital 33; of 7 April 2017 in case
    M.8354 – Fox/Sky, recital 101; of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV,
    recital 56; of 24 February 2015 in case M.7194 - Liberty Global/Corelio/W&W/De Vijver Media,
    recital 152.
40  Commission decisions of 18 July 2019 in case M.8864 - Vodafone/certain Liberty Global assets,
    recitals 79 and 83; of 6 November 2018 in case M.8785 - Disney/Fox, recital 98; of 8 October 2018 in
    case M.8842 – Tele2/ComHem, recital 37; of 15 June 2018 in case M. 8861 - Comcast/Sky, recital 59; of
    30 May 2018 in case M.7000 – Liberty Global/Ziggo, recital 137; of 6 February 2018 in case M.8665 -
                                                       9
 ---pagebreak---              (ii) premium vs basic pay TV services.41 However, the Commission left open the
             market definition with regard to each of these potential sub-segments.
   (42)      In addition, the Commission considered a possible segmentation of the market for
             the retail supply of AV services according to distribution technology (for
             example, cable, OTT, satellite, IPTV or terrestrial). In its decisions of
             12 November 2019 in case M.9064 – Telia Company/Bonnier Broadcasting
             Holding, and of 30 May 2018 in case M.7000 – Liberty Global/Ziggo, the
             Commission considered that all the different distribution technologies were part
             of the same product market,42 while leaving the exact product market definition
             open in a number of other decisions.43
   (43)      In Sweden, Finland, and Denmark retail suppliers of AV content can enter into
             either collective agreements (with landlords or housing cooperatives, the so-called
             multiple dwelling units ("MDUs")) or individual agreements (with individual
             households, the so-called single dwelling units ("SDUs")). In SDUs the end
             customer typically chooses its own TV distributor and pays directly for its
             subscription. In MDUs, on the other hand, it is common to have a collective
             agreement between the landlord / housing association and a single TV distributor
             / cable operator.
   (44)      The Commission also previously considered whether retail TV services to SDUs
             and MDUs form part of the same product market but ultimately left the market
             definition open.44
5.4.1.2. The Notifying Parties’ view
   (45)      The Notifying Parties submit that the Transaction should be assessed on the basis
             of an overall market for retail supply of TV channels in all four geographies, and
             that any segmentation according to (i) the type of distribution platform, (ii) pay
             TV vs FTA TV services, (iii) basic pay and premium pay TV services, (iv) linear
             vs non-linear services, or (iv) SDUs vs MDUs.45
    Discovery/Scripps, recital 32; of 7 April 2017 in case M.8354 – Fox/Sky, recitals 98 and 101; of 3 August
    2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV, recital 58; of 24 February 2015 in case
    M.7194 - Liberty Global/Corelio/W&W/De Vijver Media, recital 124.
41  Commission decisions of 18 July 2019 in case M.8864 - Vodafone/certain Liberty Global assets,
    recitals 79 and 83; of 6 November 2018 in case M.8785 - Disney/Fox, recitals 94 and 98; of 15 June 2018
    in case M. 8861 - Comcast/Sky, recital 59. of 30 May 2018 in case M.7000 – Liberty Global/Ziggo,
    recitals 135 and 137; of 6 February 2018 in case M.8665 - Discovery/Scripps, recital 33; of 7 April 2017
    in case M.8354 - Fox/Sky, recitals 100-101; of 24 February 2015 in case M.7194 - Liberty
    Global/Corelio/W&W/De Vijver Media, recital 119.
42  Commission decisions of 12 November 2019 in case M.9064 – Telia Company/Bonnier Broadcasting
    Holding, recital 200; of 30 May 2018 in case M.7000 – Liberty Global/Ziggo, recital 137. See also
    Commission decision of 21 December 2010 in case M.5932 - News Corp/BskyB, recital 105.
43  Commission decisions of 18 July 2019 in case M.8864 - Vodafone/certain Liberty Global assets, recitals
    80, 81 and 83; of 6 November 2018 in case M.8785 - Disney/Fox, recital 98; of 8 October 2018 in case
    M.8842 – Tele2/ComHem, recital 37; of 6 February 2018 in case M.8665 - Discovery/Scripps, recital 33;
    of 7 April 2017 in case M.8354 – Fox/Sky, recitals 99 and 101; of 3 August 2016 in case M.7978 –
    Vodafone/Liberty Global/Dutch JV, recital 62.
44  Commission decisions of 6 November 2018 in case M.8785 - Disney/Fox, recital 98; of 8 October 2018 in
    case M.8842 – Tele2/ComHem, recital 37; of 20 September 2013 in case M.6990 – Vodafone/Kabel
    Deutschland, recitals 92-96.
45  Form CO, paragraphs 130 and 131.
                                                          10
 ---pagebreak--- 5.4.1.3. The Commission’s assessment
   (46)     The results of the market investigation were mixed as regards the product market
            for the retail supply of AV services.
   (47)     As regards a possible segmentation between FTA and pay AV services, some
            respondents considered that that the retail supply of FTA TV channels and the
            retail supply of pay TV channels form separate product markets as pay TV
            bundles tend to bought “through” a package which includes FTA TV. Other
            respondents stressed that FTA and pay TV channels are often bundled within the
            same packages, and should therefore be considered as part of the same product
            market at retail level.46
   (48)     As regards a possible segmentation between basic and premium pay AV
            services, some respondents considered that the retail supply of pay TV services
            should be further segmented between basic and premium pay AV services, as
            basic pay TV content tends to be of a “general entertainment” nature while
            premium content tends to be more niche or genre-specific (e.g., sports, films).
            Other respondents considered that these are alternative products, notably from the
            supply-side, and, as such, part of the same product markets.47
   (49)     As regards a possible segmentation between linear and non-linear pay AV
            services, some respondents consider that the market for the retail supply of AV
            services should be further segmented between linear services (namely TV
            channels) and non-linear services, such as SVOD.48 In that respect, TV2 Norge
            stressed that between 2010 and 2018 in Norway, the number of pay TV
            households has been stable and reported pay TV revenue has grown, while
            several SVOD services have been launched in the market. TV2 Norge added that
            around 90% of SVOD subscribers are also linear pay TV subscribers, and that
            there would be no sign of steep decline in the linear pay TV market (except for
            linear premium pay films and series products), while the SVOD market is
            forecasted to grow.49 Other respondents, such as HBO Nordic,50 considered that
            linear and non-linear services are part of the same markets given that they all
            compete for consumers' attention and spending.51
   (50)     As regards distribution technologies, a majority of respondents to the market
            investigation considered that the market for the retail supply of AV services
            should not be further segmented according to distribution forms, given that
            (i) retail suppliers typically use several platforms to deliver their services,
46  Responses to questionnaires Q2, Q4, Q6 and Q8 to TV broadcasters in Norway, Sweden, Finland and
    Denmark, and to questionnaires Q1, Q3, Q5 and Q7 to retail suppliers of AV services in Norway, Sweden,
    Finland and Denmark, question C.4.
47  Responses to questionnaires Q2, Q4, Q6 and Q8 to TV broadcasters in Norway, Sweden, Finland and
    Denmark, and to questionnaires Q1, Q3, Q5 and Q7 to retail suppliers of AV services in Norway, Sweden,
    Finland and Denmark, question C.5.
48  SVOD stands for “Subscription Video On Demand”. A SVOD service consists of on-demand access to a
    catalogue of films, series, sports and/or other AV content for a subscription fee.
49  TV2 Norge’s response to questionnaire Q1 to retail suppliers of AV services in Norway, question C.7.1.
50  HBO Nordic’s response to questionnaires Q1, Q3, Q5 and Q7 to retail suppliers of AV services in
    Norway, Sweden, Finland and Denmark, questions C.6.1 and C.7.
51  Responses to questionnaires Q2, Q4, Q6 and Q8 to TV broadcasters in Norway, Sweden, Finland and
    Denmark, and to questionnaires Q1, Q3, Q5 and Q7 to retail suppliers of AV services in Norway, Sweden,
    Finland and Denmark, question C.7.
                                                          11
 ---pagebreak---             (ii) most households have access to different combinations distribution
            networks,52 and (iii) end customers would mainly consider the different
            distribution forms as alternative to each other.53
   (51)     As regards a possible segmentation between SDUs and MDUs, some respondents
            considered that the retail supply of AV services to SDUs and the retail supply to
            MDUs belong to distinct product markets notably given (i) differences in terms of
            pricing, (ii) contract length, and (iii) breath of content. Other respondents simply
            considered that the distinction is not relevant or needed.54
   (52)     In light of the above, the Commission considers that, for the purpose of this
            Decision, the relevant product at retail level is the market for the retail supply of
            AV services encompassing all distribution technologies. The question whether the
            retail supply of AV services should be further segmented between (i) FTA and
            pay AV services can be left open, as well as the question whether in turn the retail
            supply of pay AV services should be segmented according to (ii) linear and non-
            linear pay AV services, (iii) premium and basic pay AV services, and (iv) AV
            services to MDUs and SDUs, as the Transaction does not raise serious doubts as
            to its compatibility with the internal market or the functioning of the EEA
            Agreement under any plausible product market definition.
5.4.2. Geographic market definition
5.4.2.1. Previous Commission decisions
   (53)     In previous decisions, the Commission considered that the market for the retail
            provision of TV services is either national, or limited to the geographic coverage
            of a supplier's cable network.55 In its recent decision of 12 November 2019 in
            case M.9064 – Telia Company/Bonnier Broadcasting Holding, the Commission
            concluded that the market was national in scope.56
5.4.2.2. The Notifying Parties’ view
   (54)     The Notifying Parties submit that the market for retail supply of AV services is
            national.57
52  Responses to questionnaires Q2, Q4, Q6 and Q8 to TV broadcasters in Norway, Sweden, Finland and
    Denmark, and to questionnaires Q1, Q3, Q5 and Q7 to retail suppliers of AV services in Norway, Sweden,
    Finland and Denmark, question C.9.
53  Responses to questionnaires Q2, Q4, Q6 and Q8 to TV broadcasters in Norway, Sweden, Finland and
    Denmark, and to questionnaires Q1, Q3, Q5 and Q7 to retail suppliers of AV services in Norway, Sweden,
    Finland and Denmark, question C.10.
54  Responses to questionnaires Q2, Q4, Q6 and Q8 to TV broadcasters in Norway, Sweden, Finland and
    Denmark, and to questionnaires Q1, Q3, Q5 and Q7 to retail suppliers of AV services in Norway, Sweden,
    Finland and Denmark, question C.12.
55  Commission decisions of 6 November 2019 in case M.8785 - Disney/Fox, recital 100; of 6 February 2018
    in case M.8665 - Discovery/Scripps, recital 21; of 15 June 2018 in case M. 8861 - Comcast/Sky, recital
    63; of 7 April 2017 in case M.8354 - Fox/Sky, recital 106; of 24 February 2015 in case M.7194 - Liberty
    Global/Corelio/W&W/De Vijver Media, recital 139.
56  Commission decisions of 12 November 2019 in case M.9064 – Telia Company/Bonnier Broadcasting
    Holding, recital 207.
57  Form CO, paragraph 168.
                                                        12
 ---pagebreak--- 5.4.2.3. The Commission’s assessment
   (55)      The results of the market investigation indicated that retail suppliers of AV
             services mainly acquire license rights to distribute AV services at national level.58
             In addition, the market investigation in this case did not provide any new
             elements justifying a departure from Commission's previous decisional practice.
   (56)      In light of the above, for the purpose of this Decision, the Commission concludes
             that the relevant geographic market for the retail supply of AV services, and all its
             possible sub-segments, is national in scope.
5.5.       Retail supply of fixed internet access services
5.5.1.     Product market definition
5.5.1.1. Previous Commission decisions
   (57)      In recent cases, the Commission considered but ultimately left open possible
             segmentations according to (i) product type (distinguishing narrowband,
             broadband, and dedicated access), and (ii) distribution technology (distinguishing
             xDSL, fibre, cable). Moreover, the Commission acknowledged that the retail
             market for fixed internet access services should not be divided according to
             download speed.59
   (58)      The Commission has also considered possible segmentations as to customer type,
             distinguishing between (i) residential and small business customers, on the one
             hand, and larger business and public authorities, on the other hand;60 and
             (ii) MDUs such as housing associations or apartment buildings, and SDUs such as
             individual households.61
5.5.1.2. Notifying Party’s view
   (59)      In its initial submission, the Notifying Party submits that there is one overall
             product market for retail fixed internet access services.62
58  Responses to questionnaires Q2, Q4, Q6 and Q8 to TV broadcasters in Norway, Sweden, Finland and
    Denmark, and to questionnaires Q1, Q3, Q5 and Q7 to retail suppliers of AV services in Norway, Sweden,
    Finland and Denmark, question D.1.
59  Commission decisions of 12 November 2019 in case M.9064 – Telia Company/Bonnier Broadcasting
    Holding, recital 218; Commission decision of 8 October 2018 in case M.8842 – Tele2/Com Hem,
    paragraph 26; of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV, recital 38; of
    20 September 2013 in case M.6990 - Vodafone/Kabel Deutschland, recital 194.
60  Commission decision of 8 October 2018 in case M.8842 - Tele2/Com Hem, paragraph 26; Commission
    decisions of 19 May 2015 in case M.7421 - Orange/Jazztel, recital 42; of 10 October 2014 in case M.7000
    - Liberty Global/Ziggo, recital 132; of 7 October 2016 in case M.8131 - Tele2 Sverige/TDC Sverige,
    recital 32.
61  Commission decisions of 12 November 2019 in case M.9064 – Telia Company/Bonnier Broadcasting
    Holding, recital 218; Commission decisions of 19 May 2015 in case M.7421 - Orange/Jazztel, recital 42;
    of 10 October 2014 in case M.7000 - Liberty Global/Ziggo, recital 132; of 7 October 2016 in case M.8131
    - Tele2 Sverige/TDC Sverige, recital 32.
62  Form CO, paragraph 562 and 563.
                                                       13
 ---pagebreak--- 5.5.1.3. Commission’s assessment
   (60)       With regard to a possible segmentation of the market for the retail provision of
              fixed internet access services according to product and customer type or
              according to distribution technology (that is to say, xDSL, cable or fibre), the
              Commission considered that nothing in the Commission’s file provided reason to
              depart from its approach in previous cases.
   (61)       In light of the foregoing, the Commission does not depart from its previous
              assessment, and concludes, for the purposes of this Decision, that the exact scope
              of the product market definition in relation to the provision of retail fixed internet
              access services can be left open, as the Transaction does not raise serious doubts
              as to its compatibility with the internal market or the functioning of the EEA
              Agreement under any plausible product market definition.
5.5.2.      Geographic market definition
5.5.2.1. Previous Commission decisions
   (62)       In its previous decisions, the Commission concluded that the retail market for the
              provision of fixed internet services was national in scope.63
5.5.2.2. Notifying Party’s view
   (63)       The Parties submit that the relevant geographic market should be defined as
              national and not local or broader than national (i.e. Scandinavian or pan-
              Nordic).64
5.5.2.3. Commission’s assessment
   (64)       The market investigation did not provide any indication that the Commission
              should depart from its findings in previous cases, according to which the
              geographic market should be national.
   (65)       In light of the foregoing, the Commission does not depart from its previous
              assessment, and concludes, for the purpose of this Decision, that the relevant
              market for the provision of fixed internet services is national.
5.6.      Provision of satellite transponder capacity
   (66)       Satellite transmission is used for the distribution of TV signals and provision of
              telecommunication services.65
63  Commission decisions of 12 November 2019 in case M.9064 – Telia Company/Bonnier Broadcasting
    Holding, recital 239; Commission decisions of 8 October 2018 in case M.8842 – Tele2/Com Hem; of
    29 June 2010 in case M.5532 – Carphone Warehouse/Tiscali UK, recital 47; of 29 January 2010 in case
    M.5730 - Telefonica/Hansenet, recital 28; of 20 September 2013 in case M.6990 - Vodafone/Kabel
    Deutschland, recital 197; of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV,
    recital 40.
64  Form CO, paragraph 562 and 563.
65  The focus of the present Decision is on the provision of TV signals, as it is vertically related to the JV’s
    activities in the retail supply of AV services. For completeness, the telecommunication services that can
    be provided via satellite apart from broadcasting are the following: (i) telephony, (ii) internet connectivity,
    (iii) private data circuits, (iv) mobility/data mobility services, (v) mobile backhaul and (vi) occasional use
                                                             14
 ---pagebreak---    (67)      Each satellite transmits signals via a number of transponders and antennas
             (i.e. beams), which are typically tailored to a frequency band.66 The function of a
             satellite transponder is to receive the signal from the uplink, translate the signal in
             frequency and amplify the signal before routing the signal to a downlink antenna.
             For the distribution of TV signals, the TV content is fed into an uplink antenna,
             which in turn is beamed up to a satellite; the signal is then beamed from the
             satellite down into the receiving customers’ dishes. Customers of such
             broadcasting services can either be TV broadcasters or TV (DTH) distributors.67
             The antennas on board the satellites used to emit the DTH signals are shaped to
             optimize the footprint to the desired geographical region and such shaping is
             frequency dependent. There are a number of different satellite frequency bands
             that are used for different applications, i.e. the C-band, X-band, Ku-band, Ka-
             band, the Q-band, V-band and the W-band.68
   (68)      In the Nordics, satellite customers have access to satellite transponder services
             offered by Telenor, via its subsidiary Telenor Satellite (“TS”), and SES ASTRA
             AB ("SES"), subsidiary of globally active SES ASTRA S.A. (“SES Group”).
             While TS provides satellite transponder capacity from four satellites (Thor 5,
             Thor 6, Thor 7 and 10-0269) located at the 1°W orbital position, SES provides its
             services from two satellites (Astra 4A and SES-5) located at the 5°E orbital
             position. Both operators’ satellites mainly carry Ku-bands and a limited number
             of Ka-bands, while SES’ satellites are also equipped with C-bands.
5.6.1. Product market definition
5.6.1.1. Previous Commission decisions
   (69)      In its past decisional practice, the Commission identified a possible market for the
             provision of satellite transponder capacity used for distribution of TV signals and
             telecommunication services (e.g. telephony, data services).70 The Commission
             considered that such market may include the provision of uplink services
             (transmission to the satellite), encoding, and various other technical ground
    (product where a broadcaster in need of contribution of a news story, a concert, a sport event – lasting for
    shorter transmission periods (i.e. not 24/7/365) could purchase available satellite capacity on a minute-by-
    minute basis). Notifying Parties’ reply to RFI 12, question 9(a).
66  It is possible to introduce a degree of frequency agility by carrying additional hardware in the satellite, but
    for cost reasons this occurs only exceptionally (Form CO, paragraph 1862).
67  In addition, satellite operators may enter into a separate agreement with a cable operator to give the cable
    operator the right to use the satellite signals for cable feeding, subject to the cable operator having
    procured the required content rights. However, drop-off from satellites has generally become very rare in
    the Nordics, as contribution of TV channels is normally conducted through fibre networks (Notifying
    Parties’ reply to RFI 9, question 9 and to RFI 12, question 6).
68  Form CO, paragraphs 1849-1870.
69  10-02 is co-owned and operated by Intelsat. The 10-02 satellite is primarily used for data transmission as
    [Confidential information relating to Telenor's satellite business, and details of confidential commercial
    arrangements between Telenor and Intelsat] (Form CO, Table 31). In addition, Intelsat owns [Confidential
    information relating to Telenor's satellite business, and details of confidential commercial arrangements
    between Telenor and Intelsat] transponders on Thor 6 and leases capacity on [Confidential information
    relating to Telenor's satellite business, and details of confidential commercial arrangements between
    Telenor and Intelsat] transponders on Thor 5 and Thor 7 from TS, however, it does not currently sell any
    capacity in the Nordics (Notifying Parties’ reply to RFI 9, question 7).
70  Commission decision of 17 December 2018 in case M.9152 – BC Partners/United Group, paragraph 11;
    Commission decision of 13 October 1999 in case M.1439 Telia / Telenor, recital 266.
                                                            15
 ---pagebreak---             services for broadcasting. In the Commission’s most recent decision, the precise
            market definition was left open.71
5.6.1.2. The Notifying Parties’ view
   (70)     The Notifying Parties submit that the supply of satellite transponder capacity for
            broadcasting on the Ku-band and for telecommunication services are distinct
            product markets.72 They explain that the Ku-band is the specific frequency band
            in Europe used for broadcasting, while other frequency bands cannot readily be
            used for broadcasting. For instance, to use the Ka-band for broadcasting, which
            has in any case a higher signal attenuation, TS would have to launch a new Ka-
            band satellite designed to deliver broadcasting services and replace customers’
            antennas and set-top boxes. In contrast, telecommunication services are provided
            via the Ku-band as well as the dedicated Ka- and C-bands.
   (71)     The Notifying Parties argue that the supply of satellite transponder capacity for
            broadcasting on the Ku-band at the orbital positions of 1°W and 5°E are distinct
            product markets.73 On the one hand, TV distributors cannot readily switch to the
            purchase of capacity from a satellite located at another orbital position due to
            prohibitively high switching costs.74 In particular, customers' satellite dishes are
            pointed towards a specific orbital position such that a switch to another orbital
            position would involve dish turning. On the other hand, TV broadcasters currently
            require transmission over both 1°W and 5°E to reach all Nordic satellite
            customers, as TV-signals transmitted over 1˚W cannot be received by household
            satellite dishes pointed to 5˚E and vice versa.75
5.6.1.3. The Commission’s assessment
   (72)     The market investigation conducted in the present case has not provided clear
            evidence with regard to the exact delineation of the product market definition.
   (73)     As regards the question whether satellite transponder capacity used for
            broadcasting on the Ku-band and telecommunication services via all frequency
            bands constitute distinct product markets, the market investigation has not
            resulted in many meaningful responses and the received responses were not
            consistent.76 While one satellite operator in principle confirmed the Notifying
            Parties’ view, it also explained that “large portion of the transponders can be
            used for various applications, i.e., it is not possible to fully distinguish between
            transponders for broadcasting versus other applications”.77 Nevertheless, this
            satellite operator also indicated that the type of the contracted frequency band (i.e.
            Ku-, Ka- or C-bands) is one of the main price determining factors.78 [Confidential
71  Commission decision of 17 December 2018 in case M.9152 – BC Partners/United Group, paragraph 13.
72  Form CO, paragraphs 1870 and 1878.
73  Form CO, paragraphs 1879-1881.
74  According to the Notifying Parties, in case of the Transaction, the migration of Viasat’s customers from
    SES (5°E) to TS (1°W) is a long-term decision which eliminates the duplication of costs, whereas a
    hypothetical price increase of 5-10% would not induce switching.
75  Post-Transaction, once the dishes of all Nordic satellite customers are turned towards 1°W, broadcasters
    will no longer require transmission over 5°E.
76  Responses to questionnaire Q9 to satellite customers and competitors, question B.3.
77  SES’ non-confidential reply to RFI 1, question 4.
78  SES’ non-confidential reply to RFI 2, question 2(c).
                                                         16
 ---pagebreak---             strategic information relating to Telenor's satellite business].79 In contrast, another
            satellite operator indicated that transponders are not dedicated to, or configured
            specifically for, one of these two services only.80 In particular, there seems to be
            some flexibility with regard to the use of the Ku-band for broadcasting and
            telecommunication purposes.81
   (74)     As regards the question whether satellites at different orbital positions constitute
            distinct product markets, the market investigation has not fully confirmed the
            Notifying Parties’ arguments. While the majority of respondents confirmed that
            switching is a difficult, lengthy and costly process for TV distributors, which
            requires the repointing of customers’ satellite dishes, they also provided several
            past switching examples between satellite operators in Europe.82 With regard to
            TV broadcasters, respondents explained that some smaller channels only require
            distribution via one satellite platform and thus see suppliers at different orbital
            positions as substitutes.83 However, neither TS nor SES indicated that the
            presence of a competing satellite operator at a different orbital position would be
            […].84 At the same time, the Notifying Parties explained in a different context
            that satellite operators may grant discounted prices for switching customers as
            support for the migration costs.85
   (75)     The Commission considers that, in any event, for the purposes of this decision,
            the exact product market definition with regard to the market for satellite
            transponder capacity can be left open. The question whether the supply of satellite
            transponder capacity should be further segmented between satellite transponder
            capacity used for (i) broadcasting (via the Ku-band) and telecommunication
            services (via all frequency bands) can be left open as well as the question whether
            the supply of satellite transponder capacity should be segmented between the
            provision from (ii) orbital position 1°W and orbital position 5°E, as the
            Transaction does not raise serious doubts as to its compatibility with the internal
            market or the functioning of the EEA Agreement under any plausible product
            market definition.
5.6.2. Geographic market definition
5.6.2.1. Previous Commission decisions
   (76)     The Commission has previously concluded that the geographic scope of the
            market for satellite transponder capacity only encompassed the Nordic countries,
            and not the EEA as a whole.86 In the Commission’s most recent decision, the
            gathered information suggested that the market for the supply of satellite
79  Notifying Parties’ reply to RFI 9, question 4.
80  Eutelsat’s responses to questionnaire Q9 to satellite customers and competitors, question B.3.
81  Notifying Parties’ reply to RFI 15, question 4; SES’ non-confidential reply to RFI 2, question 4(b).
82  Responses to questionnaire Q9 to satellite customers and competitors, question B.2.
83  Responses to questionnaire Q9 to satellite customers and competitors, question B.1.
84  Notifying Parties’ reply to RFI 9, question 4; SES’ non-confidential reply to RFI 2, question 2(c).
85  Notifying Parties’ reply to RFI 9, question 15.
86  Commission decision of 13 October 1999 in case M.1439 - Telia/Telenor, recital 284.
                                                           17
 ---pagebreak---             transponder capacity is regional in scope, however, the precise market definition
            was left open.87
5.6.2.2. The Notifying Parties’ view
   (77)     The Notifying Parties consider that the geographic scope of the market for the
            supply of satellite transponder capacity would correspond to the combined
            footprints of the respective satellites at an orbital position, taking into account the
            strength of the beam over a particular area and the number of dishes in that area
            pointed towards the satellites.88 Accordingly, the geographic market for the
            supply of satellite transponder capacity for broadcasting at the 1°W orbital
            position would be at least the Nordics, if not the Nordics and Central and Eastern
            Europe (“CEE”).89
5.6.2.3. The Commission’s assessment
   (78)     The results of the market investigation confirmed that it is relevant to look at
            satellites’ combined footprint from an orbital position (technical reach) and the
            location of the customer base (number of dishes pointed towards an orbital
            position). The results also confirmed the specific footprints of TS’ and SES’
            satellites provided by the Notifying Parties.90
   (79)     TS’ Ku-band transponders for broadcasting at the 1°W orbital position cover the
            Nordic and CEE region. In the former, TS supplies Canal Digital while it supplies
            customers in Czechia, Hungary, Romania and Slovakia in the latter. From the
            1°W orbital position, TS also covers the Middle East for data services. TS
            currently does not have any capacity dedicated to [Confidential strategic
            information relating to Telenor's satellite business].91
   (80)     SES’ Ku-band transponders for broadcasting at the 5°E orbital position also cover
            the Nordic and CEE region. In the former, SES currently supplies Viasat while it
            supplies customers in Estonia, Latvia, Lithuania and Ukraine in the latter. In
            addition, from the 5°E orbital position, SES also covers the Middle East and Sub-
            Saharan Africa for broadcasting, and the whole of Africa for telecommunication
            services.92
   (81)     Both TS’ and SES’ satellites have a dedicated number of Nordic and European
            transponders for broadcasting. The Nordic beam covers the Nordic countries and
            the Baltics. The European beam covers a wider geographic area, including the
87  Commission decision of 17 December 2018 in case M.9152 – BC Partners/United Group, paragraph 17
    (“covering Central and Eastern Europe, or more broadly, encompassing Western, Central and Eastern
    Europe”).
88  Form CO, paragraph 1895.
89  The CEE region covers the following countries in this context: Austria, Belarus, Bosnia and Herzegovina,
    Bulgaria, Croatia, Czechia, Estonia, Germany, Hungary, Latvia, Lithuania, Moldova, Montenegro, North
    Macedonia, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Switzerland and Ukraine. All of these
    countries are covered by TS’ satellites at the 1°W orbital position and SES’ satellites at the 5°E orbital
    position.
90  Responses to questionnaire Q9 to satellite customers and competitors, questions C.1 and C.2.
91  Form CO, paragraph 1856.
92  Responses to questionnaire Q9 to satellite customers and competitors, question C.2.
                                                         18
 ---pagebreak---             Nordic countries as well as the CEE region where the signal strength93 is the
            highest. In addition, SES transmits broadcasting services via a Sub-Sahara
            African beam. Both satellite operators have wider beams for offering
            telecommunication services, which also cover maritime areas around Europe,
            such as the Mediterranean See and parts of the Atlantic Ocean.94
   (82)     Satellites have some built-in flexibility to adjust the broadcasting capacity per
            coverage area.95 One the one hand, capacity can be flexible between beams,
            i.e. the satellite operator can configure which beam a given transponder uses
            (transponder routing flexibility). On the other hand, satellites may have flexible
            antenna deployment mechanisms which allow antennas to be moved by one
            (older satellites) or several (modern satellites) degrees (beam location flexibility),
            however, movement is limited by interference issues with neighbouring satellite
            operators. Satellite operators decide in the design phase of a satellite whether to
            include such flexibility on their satellite, with such flexibility having an impact on
            cost. Both TS and SES confirmed that their satellites at the 1°W and 5°E orbital
            position [Confidential strategic information relating to Telenor's satellite
            business].96 Hence, there is some supply-side substitutability between the
            transponders and/or beams typically used for different geographic regions.
   (83)     The overlapping footprints of TS’ and SES’ satellites from the 1°W and 5°E
            orbital position suggest a certain degree of homogeneity in the competitive
            conditions in the Nordic and CEE region. Nevertheless, despite TS’ and SES’
            similar footprints, the supply structure may differ between the Nordic and CEE
            region depending on the presence of other competitors and the number of dishes
            pointed towards an orbital position. The latter determines how likely it is that TV
            broadcasters or TV distributors would switch between orbital positions. The
            supply structure in the Middle East and Africa seems to be significantly different
            from the Nordic and CEE region.
   (84)     In terms of pricing, neither TS nor SES indicated that customers’ geographic
            location is […] in the supply of satellite transponder capacity from the 1°W and
            5°E orbital positions.97
   (85)     While the information gathered confirms the regional scope (Nordics, or Nordics
            and CEE region), the Commission considers that, in any event, for the purposes of
            this decision, the exact geographic market definition with regard to the market for
            satellite transponder capacity and its possible sub-segments can be left open, as
            the Transaction does not raise serious doubts as to its compatibility with the
            internal market or the functioning of the EEA Agreement under any plausible
            geographic market definition.
93  For satellite footprints, different areas can be distinguished according to whether a given satellite antenna
    emits the same power level (Equivalent Isotropic Radiated Power ("EIRP")). In such areas, viewers can
    enjoy the same availability of transmission if the same size antenna is used. Up to a certain lower signal
    strength, the DTH service is usable but users either must accept lower service availability or deploy a
    larger antenna to compensate for the lower power lever emitted by the satellite. Form CO,
    paragraph 1858.
94  Notifying Parties’ reply to RFI 15, question 5.
95  Notifying Parties’ reply to RFI 12, question 2(b).
96  Notifying Parties’ reply to RFI 12, question 2(b); SES’ non-confidential reply to RFI 2, question 4(c).
97  Notifying Parties’ reply to RFI 9, question 4; SES’ non-confidential reply to RFI 2, question 2(c).
                                                            19
 ---pagebreak--- 6.       COMPETITIVE ASSESSMENT
6.1.     Identification of affected markets
6.1.1. Economic units with an independent power of decision
6.1.1.1. Relationship between the Norwegian state and Telenor
    (86)      Telenor’s largest shareholder is the Norwegian State, which has a 54.7%
              shareholding interest.98
    (87)      Telenor submits that it is operated independently, and that the Norwegian State
              does not solely or jointly, exercise any positive or negative, de jure or de facto,
              power over strategic decisions of Telenor for the following reasons.
    (88)      First, the Norwegian State does not determine Telenor's strategic commercial
              decision making. While the Norwegian State accounts for a majority of votes at
              Telenor’s General Meetings, Telenor considers that certain provisions of the
              Norwegian Public Limited Liability Companies Act 1997 ("PLLCA") would limit
              the Norwegian State’s ability, as majority owner, to instruct Telenor in a manner
              inconsistent with its strategy or general activities.99
    (89)      Second, strategic decisions of Telenor (such as approval of budget, business plan,
              major investments and appointment of senior management) are made by the
              Board of Directors of Telenor, [Confidential information relating to internal
              Telenor decision making]. The Norwegian State has not appointed any
              representative on the Board. As a majority shareholder, the Norwegian State is
              represented with one out of four members on Telenor's Nomination Committee,
              which nominates shareholder representatives to Telenor's Corporate Assembly
              and the Board, as well as the Nomination Committee itself.100
    (90)      The Commission considers that, in any event, it is not necessary for the
              Commission to reach a definitive conclusion on the independence of Telenor
              from the Norwegian State as the Transaction does not raise serious doubts as to its
              compatibility with the internal market regardless of whether or not Telenor has an
              independent power of decision from the Norwegian state.
6.1.1.2. Relationship between the Norwegian state and NRK
    (91)      The public broadcaster NRK is fully owned by the Norwegian State.
    (92)      Telenor submits that the Ministry of Culture holds a 100% shareholding interest
              in NRK, which is a tax-funded broadcaster. The Norwegian Broadcasting Act
              authorises NRK to engage in broadcast activities. NRK is obliged to offer public
              service broadcasting via radio, TV and the Internet to the entire population
98   The Ministry of Trade, Industry and Fisheries (Nærings- og fiskeidepartementet) ("Ministry of Trade")
     holds the Norwegian State's 54.0% shareholding interest in Telenor. Form CO, paragraph 51.
99   Section 5-21 of the PLLCA indicates that a general meeting may not adopt any resolution which is suited
     to give unreasonable benefit at the expense of other shareholders or the company. (see FromCO,
     Annex 90). Telenor considers that [Confidential strategic views of Telenor in relation to the Norwegian
     State's ownership stake]. Paragraph 60, Form CO.
100  [Confidential strategic views of Telenor in relation to the Norwegian State's ownership stake]. Form CO,
     paragraph 69.
                                                           20
 ---pagebreak---              covering a broad range of content. NRK is active in the market for (i) the retail
             supply of AV services through RiksTV, a joint venture with TV2 and its own
             OTT streaming service; (ii) the wholesale supply of TV channels where NRK
             provides its channels to TV distributors.
    (93)     The Commission considers that, in any event, it is not necessary for the
             Commission to reach a definitive conclusion on the independence of NRK from
             the Norwegian state as the Transaction does not raise serious doubts as to its
             compatibility with the internal market regardless of whether or not Telenor has an
             independent power of decision from the Norwegian state.
6.1.1.3. Conclusion
    (94)     The Commission considers that the questions whether each of Telenor and NRK
             makes up a separate economic unit with an independent power of decision from
             the Norwegian State or whether they belong to the same economic unit can be left
             open as the Transaction does not raise serious doubts as to its compatibility with
             the internal market regardless of the answer to these questions.101
6.1.2. Affected markets in Norway, Sweden, Finland and Denmark
    (95)     The Transaction gives rise to the following possible horizontally affected
             markets:102
         -         in Norway: (i) the overall market for the retail supply of AV services
                   (including or excluding non-linear OTT services), and any of the following
                   possible sub-segments: (ii) the market for the retail supply of pay AV
                   services (including or excluding non-linear OTT services), (iii) the market
                   for the retail supply of basic pay AV services (including or excluding non-
                   linear OTT services), (iv) the market for the retail supply of premium pay
                   AV services (including or excluding non-linear OTT services), (v) the market
                   for the retail supply of pay AV services for MDUs (including or excluding
                   non-linear OTT services), (vi) the market for the retail supply of pay AV
                   services for SDUs (including or excluding non-linear OTT services), (vii) the
                   market for the retail supply of basic pay AV services to MDUs (including or
                   excluding non-linear OTT services), (viii) the market for the retail supply of
                   basic pay AV services to SDUs (including or excluding non-linear OTT
                   services), (ix) the market for the retail supply of premium pay AV services
                   for MDUs (including or excluding non-linear OTT services), and (x) the
                   market for the retail supply of premium pay AV services for SDUs
                   (including or excluding non-linear OTT services);
         -         in Sweden: (i) the overall market for the retail supply of AV services
                   excluding non-linear OTT services, and any of the following possible sub-
                   segments: (ii) the market for the retail supply of pay AV services (including
                   or excluding non-linear OTT services), (iii) the market for the retail supply of
101  See Section 6.3.3 for the Commission’s assessment of the competitive effects of the Transaction related to
     potential horizontal non-coordinated effects. See Section 6.4.2.1 for the Commission’s assessment of the
     competitive effects of the Transaction related to potential total or partial foreclosure of competing
     providers of retail AV services by limiting access to NRK’s TV channels.
102  In these possible markets, the Parties’ combined market share including NENT’s OTT service and
     Telenor’s retail AV services is above 20% by value in 2018.
                                                           21
 ---pagebreak---                   basic pay AV services (including or excluding non-linear OTT services),
                  (iv) the market for the retail supply of premium pay AV services (including
                  or excluding non-linear OTT services), (v) the market for the retail supply of
                  pay AV services for MDUs, (vi) the market for the retail supply of pay AV
                  services for SDUs (including or excluding non-linear OTT services);103
                  (vii) the market for the retail supply of basic AV services for MDUs
                  (including or excluding non-linear OTT services), (viii) the market for the
                  retail supply of premium AV services for MDUs (including or excluding
                  non-linear OTT services), (ix) the market for the retail supply of basic AV
                  services for SDUs (including or excluding non-linear OTT services), (x) the
                  market for the retail supply of premium AV services for SDUs (including or
                  excluding non-linear OTT services).
         -        in Finland: (i) the overall market for the retail supply of AV services
                  excluding non-linear OTT services, and any of the following possible sub-
                  segments: (ii) the market for the retail supply of pay AV services (including
                  or excluding non-linear OTT services), (iii) the market for the retail supply of
                  basic pay AV services (including or excluding non-linear OTT services),
                  (iv) the market for the retail supply of pay AV services for MDUs (including
                  or excluding non-linear OTT services), (v) the market for the retail supply of
                  pay AV services for SDUs (including or excluding non-linear OTT services),
                  (vi) the market for the retail supply of basic pay AV services to MDUs
                  (including or excluding non-linear OTT services), (vii) the market for the
                  retail supply of basic pay AV services to SDUs (including or excluding non-
                  linear OTT services), (viii) the market for the retail supply of premium pay
                  AV services to SDUs excluding non-linear OTT services;
         -        in Denmark: (i) the market for the retail supply of basic AV services for
                  SDUs; and (ii) the market for the retail supply of premium pay AV services
                  for SDUs excluding non-linear OTT services.
    (96)     The Transaction gives rise to vertically affected markets as a result of (i) NENT’s
             activities in the upstream markets for wholesale supply of TV channels and the
             JV’s activities in the downstream markets for the retail supply of AV services in
             Norway, Sweden, Finland and Denmark; and (ii) Telenor’s activities in the
             upstream market for the provision of satellite transponder capacity and the JV’s
             activities in the downstream markets for the retail supply of AV services.
    (97)     Furthermore, both Notifying Parties will remain independently active in a number
             of the same markets as the JV, notably: (i) the retail supply of AV services in
             Norway, Sweden and Finland, and (ii) under the alternate scenario, in which
             Telenor and the Norwegian state are considered part of the same economic unit,
             the markets for the retail supply of AV services and the wholesale supply of TV
             channels in Norway.
    (98)     Each of these potential effects is discussed in turn in the following sections. After
             setting out the market shares in the relevant markets and possible sub-segments
             (section 6.2), the Commission will first assess the potential horizontal non-
103  As regards the possible market for the retail supply of AV services for SDUs in Sweden, the Parties have
     presented shares including and excluding all revenue generated by dual analogue-digital cable subscribers.
     This possible market remains horizontally affected in both scenarios.
                                                           22
 ---pagebreak---             coordinated effects stemming from the Transaction (section 6.3). Then the
            Commission will assess the potential non-horizontal effects stemming from the
            Transaction (section 6.4). Finally, the Commission will assess the potential
            cooperative effects of the Transaction (section 6.5).
6.2.     Market shares
    (99)    According to the Horizontal Merger Guidelines and the Non-Horizontal Merger
            Guidelines,104 in the assessment of the effects of a merger, market shares
            constitute a useful first indication of the structure of the markets at stake and of
            the competitive importance of the relevant market players.
6.2.1. TV value chain and fixed broadband services
6.2.1.1. Norway
         (A)        Wholesale supply of TV channels
    (100) Table 1, reproduced below, shows the market shares of NENT and its main
            competitors in the market for the wholesale supply of TV channels in Norway
            (based on 2018 data) by share of viewing. NENT’s market share (based on 2018
            data) was respectively [5-10]% for the wholesale supply of combined FTA/pay
            TV channels, and [10-20]% for the wholesale supply of pay TV channels and
            [10-20]% for the wholesale supply of basic pay TV channels, and [20-30]% for
            the wholesale supply of premium pay TV channels, and [20-30]% for the
            wholesale supply of premium pay TV sports channels, and [30-40]% for the
            wholesale supply of premium pay TV non-sports channels.
                                     Table 1: Market shares in 2018
            in the market for the wholesale supply of TV channels by share of viewing
                    Wholesale Wholesale Wholesale Wholesale Wholesale        Wholesale  Wholesale
                    supply of supply of supply of supply of supply of         supply of  supply of
                    FTA and      pay-TV     FTA and basic pay- premium        premium    premium
                     pay-TV     channels basic pay-       TV       pay-TV       sports  non-sports
                    channels                   TV      channels channels       pay-TV     pay-TV
                                            channels                          channels   channels
        NENT          [5-10]     [10-20]      [5-10]    [10-20] [20-30]      [20-30]    [30-40]
        TV2          [20-30]     [30-40]     [20-30]    [40-50] [70-80]      [70-80]    [50-60]
        Norge
        Discovery    [10-20]     [30-40]     [10-20]    [30-40]     -            -         -
        Others       [40-50]     [10-20]     [40-50]    [10-20]     -            -         -
                                         Source: Form CO, Annex 68.
    (101) Table 2, reproduced below, shows the market shares of NENT and its main
            competitors in the market for the wholesale supply of TV channels in Norway
            (based on 2018 data) by value. NENT’s market share in 2018 was respectively
            [10-20]% for the wholesale supply of pay TV channels and [5-10]% for the
            wholesale supply of basic pay TV channels, and [30-40]% for the wholesale
104  Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of
     concentrations between undertakings ("Horizontal Merger Guidelines"), OJ C 31, 05.02.2004,
     paragraph 14; Guidelines on the assessment of non-horizontal mergers under the Council Regulation on
     the control of concentrations between undertakings ("Non-Horizontal Merger Guidelines"), OJ C 265,
     18.10.2008, paragraph 24.
                                                        23
 ---pagebreak---                       supply of premium pay TV channels, and [40-50]% for the wholesale supply of
                      premium pay TV sports channels, and [20-30]% for the wholesale supply of
                      premium pay TV non-sports channels.
                                                Table 2: Market shares in 2018
                            in the market for the wholesale supply of TV channels by value
                                          Wholesale Wholesale Wholesale Wholesale Wholesale
                                           supply of supply of supply of supply of supply of
                                            pay-TV basic pay- premium premium premium
                                           channels        TV        pay-TV        sports    non-sports
                                                        channels channels         pay-TV       pay-TV
                                                                                 channels channels
                              NENT          [10-20]       [5-10]    [30-40]      [40-50]      [20-30]
                              TV2           [50-60]      [50-60] [50-60]         [50-60]      [70-80]
                              Norge
                              Discovery     [20-30]      [30-40] -               -            -
                              Others         [5-10]       [5-10]    [0-5]        [0-5]        -
                                                    Source: Form CO, Annex 68.
                   (B)       Retail supply of AV services
              (102) Table 3 reproduced below presents the market shares of the Parties in the market
                      for the retail supply of AV services, and any possible sub-segment. The JV will
                      hold a market share of [10-20]% by value in the Norwegian market for the retail
                      supply of AV services (based on 2018 data) and below 30% in all market
                      segments except for the market for the supply of premium pay-TV retail AV
                      services, excluding non-linear OTT providers and the market for the retail supply
                      of premium AV services for SDUs, excluding non-linear OTT players. The
                      Parties will hold a market share of [40-50]% by value in the Norwegian market
                      for the retail supply of AV services (based on 2018 data).
                                                Table 3: Market shares in 2018
                              in the market for the retail supply of AV services by revenue
                                               Basic pay-                  Premium                            Pay-TV
                       Pay-TV                      TV                       pay-TV                          for MDUs Pay-TV
                     (excluding                (excluding                 (excluding                        (excluding for SDUs
                     non-linear                non-linear                 non-linear Pay-TV          Pay-TV non-linear (excluding
                        OTT          Basic        OTT        Premium         OTT           for         for     OTT     non-linear
           Pay-TV providers) pay-TV providers) pay-TV providers) MDUs                                 SDUs providers)    OTT)
Canal
           [10-20]     [10-20]     [10-20]       [10-20]     [10-20]      [20-30]       [10-20]     [10-20] [10-20]    [20-30]
Digital
Viasat      [0-5]       [0-5]        [0-5]        [0-5]      [5-10]       [10-20]       [0-5]       [0-5]   [0-5]      [5-10]
JV         [10-20]     [20-30]     [10-20]       [10-20]     [20-30]      [30-40]       [10-20]     [20-30] [10-20]    [20-30]
Telenor    [10-20]     [20-30]     [20-30]       [20-30]     [5-10]       [10-20]       [20-30]     [10-20] [30-40]    [10-20]
Viaplay     [0-5]         -          [0-5]           -       [0-5]        -             [0-5]       [0-5]   -          -
Parties    [40-50]     [40-50]     [40-50]       [40-50]     [30-40]      [40-50]       [40-50]     [40-50] [40-50]    [40-50]
Telia      [10-20]     [10-20]     [10-20]       [10-20]     [5-10]       [5-10]        [10-20]     [10-20] [20-30]    [10-20]
RiksTV     [10-20]     [10-20]     [10-20[       [10-20]     [0-5]        [5-10]        [5-10]      [10-20] [5-10]     [10-20]
Non-
linear
OTT
(excluding
Viaplay)   [10-20]        -          [0-5]           -       [30-40]      -             [10-20]     [10-20] -          -
Others     [20-30]     [20-30]     [20-30]       [20-30]     [20-30]      [30-40]       [10-20]     [20-30] [20-30]    [20-30]
                                                    Source: Form CO, Annex 12.
                                                                     24
 ---pagebreak---    (103) Tables 4 and 5, reproduced below, shows the market shares of the JV and its main
           competitors in the market for the retail supply of AV services and possible sub-
           segments by subscribers. The JV would have even a more limited market position
           with a market share of approximately [10-20]%. The Parties would have a
           combined market share of [20-30]%.
                                 Table 4: Market shares in 2018
                in the market for the retail supply of AV services by subscribers
                                     Overall                                        Basic pay-
                                     market                     Pay-TV                  TV
                        Overall    (excluding                (excluding             (excluding
                         market    non-linear                non-linear             non-linear
                                       OTT                        OTT    Basic pay-    OTT
                                   providers)     Pay-TV     providers)       TV    providers)
Canal Digital             [5-10]     [10-20]        [5-10]      [10-20]    [10-20]    [10-20]
Viasat                     [0-5]       [0-5]         [0-5]        [0-5]      [0-5]     [0-5]
JV                       [10-20]     [10-20]       [10-20]      [10-20]    [10-20]    [10-20]
Telenor                  [10-20]     [10-20]       [10-20]      [20-30]    [20-30]    [20-30]
Viaplay                   [5-10]          -         [5-10]          -      [10-20]       -
Parties                  [20-30]     [30-40]      [20-30]       [30-40]    [40-50]    [40-50]
Telia                    [10-20]     [10-20]      [10-20]       [10-20]    [10-20]    [10-20]
RiksTV                    [5-10]      [5-10]        [5-10]       [5-10]     [5-10]    [10-20]
Non-linear     OTT
(excluding Viaplay)      [30-40]          -        [30-40]          -        [0-5]       -
Others                   [20-30]      [40-50]     [20-30]       [30-40]    [20-30]    [20-30]
                                     Source: Form CO, Annex 12.
   (104) The JV’s market position would not significantly differ in a market segment for
           the retail supply of premium pay AV services where it will have a combined
           market share of approximately [10-20]% in the premium pay market segment
           excluding non-linear OTT services, such as Netflix. The Parties’ combined
           market share will also be similar and of approximately [20-30]%.
                                 Table 5: Market shares in 2018
                in the market for the retail supply of AV services by subscribers
                                  Premium                               Pay-TV for
                                   pay-TV                                  MDUs     Pay-TV for
                                 (excluding                             (excluding     SDUs
                                 non-linear                             non-linear  (excluding
                     Premium         OTT       Pay-TV for Pay-TV for        OTT     non-linear
                      pay-TV     providers)       MDUs          SDUs    providers)     OTT)
Canal Digital           [0-5]      [10-20]         [0-5]      [10-20]      [5-10]     [20-30]
Viasat                  [0-5]        [0-5]         [0-5]         [0-5]      [0-5]      [0-5]
JV                     [5-10]      [10-20]         [0-5]      [10-20]      [5-10]     [20-30]
Telenor                 [0-5]       [5-10]       [10-20]        [5-10]    [30-40]     [10-20]
Viaplay                 [0-5]           -         [5-10]       [5-10]         -          -
Parties               [10-20]      [20-30]       [20-30]      [20-30]     [30-40]     [30-40]
Telia                  [5-10]       [5-10]       [10-20]       [5-10]     [20-30]     [10-20]
RiksTV                  [0-5]        [0-5]         [0-5]       [5-10]       [0-5]     [10-20]
Non-linear OTT
(excluding
Viaplay)              [50-60]           -        [30-40]      [30-40]         -          -
Others                [20-30]      [60-70]       [20-30]      [20-30]     [30-40]     [30-40]
                                     Source: Form CO, Annex 12.
                                                      25
 ---pagebreak---        (105) Table 6 reproduced below presents the market shares of the Parties in the market
              for the retail supply of AV services, sub-segmenting the SDUs and MDUs market
              segment by basic and premium market segment by revenue. The JV will have a
              higher market position of [40-50]% in the market for the retail supply of premium
              AV services for SDUs, excluding non-linear OTT players. The Parties will have a
              higher market position of [50-60]% in the market for the retail supply of premium
              AV services for SDUs, excluding non-linear OTT players.
                                     Table 6: Market shares in 2018
   in the market for the retail supply of AV services for MDUs and SDUs segmented by basic and
                                           premium by revenue
                                      Pay-TV
                                                  Pay-TV
                                         for                                      Pay-TV      Pay-TV
                                                 for SDUs
                                       MDUs                                     for MDUs for SDUs
                 Pay-TV     Pay-TV                 (excl.     Pay-TV    Pay-TV
                                        (excl.                                  (excl. non- (excl. non-
               for MDUs for SDUs                    non-    for MDUs for SDUs
                                        non-                                       linear      linear
                  (basic)    (basic)               linear   (premium) (premium)
                                       linear                                      OTT)         OTT)
                                                   OTT)
                                        OTT)                                    (premium) (premium)
                                                  (basic)
                                       (basic)
                [10-20]%   [10-20]% [10-20]%     [20-30]%     [5-10]%  [10-20]%  [10-20]%    [20-30]%
Canal Digital
Viasat            [0-5]%     [0-5]%    [0-5]%     [0-5]%       [0-5]%   [5-10]%   [0-5]%     [10-20]%
JV              [10-20]%   [20-30]% [10-20]%     [20-30]%     [5-10]%  [20-30]%  [10-20]%    [40-50]%
Telenor         [30-40]%   [10-20]% [30-40]%     [10-20]%    [10-20]%   [5-10]%  [20-30]%     [5-10]%
Viaplay           [0-5]%     [0-5]%    [0-5]%     [0-5]%       [0-5]%    [0-5]%   [0-5]%       [0-5]%
Combined        [50-60]%   [40-50]% [50-60]%     [40-50]%    [20-30]%  [30-40]%  [30-40]%    [50-60]%
Telia/Get       [20-30]%   [10-20]% [20-30]%     [10-20]%     [5-10]%   [5-10]%  [10-20]%    [10-20]%
RiksTV           [5-10]%   [10-20]%   [5-10]%    [10-20]%      [0-5]%   [5-10]%   [0-5]%      [5-10]%
Lyse/Altibox     [5-10]%   [10-20]%   [5-10]%    [10-20]%      [0-5]%    [0-5]%   [0-5]%      [5-10]%
Others          [10-20]%   [10-20]%   [5-10]%    [10-20]%    [60-70]%  [40-50]%  [30-40]%    [20-30]%
                                          Source: RFI 16, Annex 1.
                                                         26
 ---pagebreak---            (106) Table 7 reproduced below presents the market shares of the Parties in the market
                     for the retail supply of AV services, sub-segmenting the SDUs and MDUs market
                     segment by basic and premium market segment by revenue. The JV will have a
                     higher market position of [20-30]% in the market for the retail supply of premium
                     AV services for SDUs, excluding non-linear OTT players. The Parties will have a
                     higher market position of [20-30]% in the market for the retail supply of premium
                     AV services for SDUs, excluding non-linear OTT players.
                                           Table 7: Market shares in 2018
        in the market for the retail supply of AV services for MDUs and SDUs segmented by basic and
                                                premium by subscribers
                                               Pay-TV        Pay-TV                            Pay-TV      Pay-TV
                                             for MDUs       for SDUs                         for MDUs for SDUs
               Pay-TV for                                                 Pay-TV    Pay-TV
                               Pay-TV for    (excl. non-   (excl. non-                       (excl. non- (excl. non-
                   MDUs                                                 for MDUs for SDUs
                              SDUs (basic)      linear        linear                            linear      linear
                   (basic)                                              (premium) (premium)
                                                 OTT)         OTT)                              OTT)         OTT)
                                                (basic)      (basic)                         (premium) (premium)
Canal Digital     [5-10]%       [10-20]%       [5-10]%      [20-30]%       [0-5]%   [5-10]%    [0-5]%     [10-20]%
Viasat             [0-5]%        [0-5]%         [0-5]%       [0-5]%        [0-5]%    [0-5]%    [0-5]%      [5-10]%
JV                [5-10]%       [20-30]%       [5-10]%      [20-30]%       [0-5]%   [5-10]%    [0-5]%     [20-30]%
Telenor          [30-40]%       [10-20]%      [40-50]%      [10-20]%       [0-5]%    [0-5]%   [10-20]%      [0-5]%
NENT               [10-20]%      [10-20]%        [0-5]%        [0-5]%       [0-5]%    [0-5]%     [0-5]%      [0-5]%
Combined         [50-60]%       [40-50]%      [40-50]%      [40-50]%      [5-10]%  [10-20]%   [10-20]%    [20-30]%
Telia/Get        [20-30]%       [10-20]%      [20-30]%      [10-20]%      [5-10]%    [0-5]%   [10-20]%     [5-10]%
RiksTV             [0-5]%       [10-20]%        [0-5]%      [10-20]%       [0-5]%    [0-5]%    [0-5]%       [0-5]%
Lyse/Altibox      [5-10]%       [10-20]%      [10-20]%      [10-20]%       [0-5]%    [0-5]%    [0-5]%       [0-5]%
Others           [10-20]%       [10-20]%      [10-20]%      [10-20]%     [80-90]%  [80-90]%   [60-70]%    [50-60]%
                                                  Source: RFI 16, Annex 1.
        6.2.1.2. Sweden
                (A)        Wholesale supply of TV channels
           (107) Table 8, reproduced below, shows the market shares of NENT and its main
                     competitors in the market for the wholesale supply of TV channels in Sweden
                     (based on 2018 data) by share of viewing. NENT’s market share (based on 2018
                     data) was respectively [10-20]% for the wholesale supply of combined FTA/pay
                     TV channels, and [20-30]% for the wholesale supply of pay TV channels and
                     [10-20]% for the wholesale supply of basic pay TV channels, an [50-60]% for the
                     wholesale supply of premium pay TV channels, and [50-60]% for the wholesale
                     supply of premium pay TV sports channels, and [50-60]% for the wholesale
                     supply of premium pay TV non-sports channels.
                                                                 27
 ---pagebreak---                                 Table 8: Market shares in 2018
        in the market for the wholesale supply of TV channels by share of viewing
               Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale
               supply of supply of supply of supply of supply of supply of supply of
               FTA and    pay-TV      FTA and basic pay- premium premium premium
                pay-TV    channels basic pay-        TV      pay-TV     sports  non-sports
                channels                 TV      channels channels    pay-TV     pay-TV
                                      channels                        channels channels
   NENT          [10-20]   [20-30]     [10-20]    [10-20]    [50-60]   [50-60]   [50-60]
   SVT           [30-40]       -       [30-40]    [50-60]    [40-50]   [40-50]   [40-50]
   Telia         [30-40]   [40-50]     [30-40]    [50-60]        -         -        -
   Discovery [10-20]       [20-30]     [10-20]    [20-30]        -         -        -
   Others         [5-10]   [10-20]      [5-10]     [5-10]      [0-5]     [0-5]
                                   Source: Form CO, Annex 68.
(108) Table 9, reproduced below, shows the market shares of NENT and its main
        competitors in the market for the wholesale supply of TV channels in Sweden
        (based on 2018 data) by value. NENT’s market share (based on 2018 data) was
        respectively [20-30]% for the wholesale supply of pay TV channels and [10-20]%
        for the wholesale supply of basic pay TV channels, and [50-60]% for the
        wholesale supply of premium pay TV channels, and [50-60]% for the wholesale
        supply of premium pay TV sports channels, and [40-50]% for the wholesale
        supply of premium pay TV non-sports channels.
                                Table 9: Market shares in 2018
              in the market for the wholesale supply of TV channels by value
                         Wholesale Wholesale Wholesale Wholesale Wholesale
                         supply of supply of supply of supply of supply of
                          pay-TV basic pay- premium premium premium
                          channels       TV      pay-TV       sports non-sports
                                      channels channels      pay-TV   pay-TV
                                                            channels channels
               NENT        [20-30]     [10-20]    [50-60]    [50-60]   [40-50]
               Telia       [40-50]     [40-50]    [40-50]    [40-50]   [40-50]
               Discovery [10-20]       [20-30]        -          -         -
               Others       [5-10]     [10-20]      [0-5]      [0-5]     [0-5]
                                   Source: Form CO, Annex 68.
    (B)        Retail supply of AV services
(109) Table 10, reproduced below, presents the market shares of the Parties in the
        market for the retail supply of AV services, and any possible sub-segment. The
        JV will hold a market share of [20-30]% by value in the Swedish market for the
        retail supply of AV services (based on 2018 data) and below 30% in all market
        segments except for the market for the supply of premium pay-TV retail AV
        services, excluding non-linear OTT providers as well as market for the supply of
        pay-TV retail AV service, excluding non-linear OTT providers as well as the
        supply of pay-TV retail premium AV services for SDUs, excluding non-linear
        OTT providers. The Parties will hold a market share of [30-40]% by value in the
        Swedish market for the retail supply of AV services (based on 2018 data).
                                                  28
 ---pagebreak---                                         Table 10: Market shares in 2018
                          in the market for the retail supply of AV services by revenue
                                                                 Premiu                       Pay-TV
                                         Basic                   m pay-                       for
                   Pay-TV                pay-TV                  TV                           MDUs     Pay-TV
                   (excludi              (excludi                (excludi                     (excludi for
                   ng non-               ng non-                 ng non-                      ng non-  SDUs
                   linear                linear      Premiu      linear                       linear   (excludi
                   OTT                   OTT         m pay-      OTT       Pay-TV    Pay-TV   OTT      ng non-
                   provider    Basic     provider    TV          provider  for       for      provider linear
          Pay-TV   s)          pay-TV    s)          sector      s)        MDUs      SDUs     s)       OTT)
Canal
           [10-20]  [10-20]     [10-20]   [10-20]      [5-10]     [10-20]   [10-20]    [5-10]  [10-20]  [10-20]
Digital
Viasat     [10-20]  [10-20]      [5-10]   [10-20]     [10-20]     [20-30]    [0-5]    [10-20]    [0-5]  [10-20]
JV         [20-30]  [30-40]     [20-30]   [20-30]     [20-30]     [30-40]   [10-20]   [20-30]  [10-20]  [30-40]
Telenor     [5-10]   [5-10]     [10-20]   [10-20]       [0-5]      [5-10]   [10-20]    [5-10]  [10-20]   [5-10]
Viaplay      [0-5]      -        [5-10]       -         [0-5]         -        -       [5-10]      -        -
Parties    [30-40]  [30-40]     [30-40]   [30-40]     [20-30]     [30-40]   [20-30]   [30-40]  [20-30]  [40-50]
Tele2/
ComHe
m          [20-30]  [30-40]     [30-40]   [40-50]     [20-30]     [30-40]   [40-50]   [20-30]  [40-50]  [30-40]
Telia      [10-20]  [10-20]     [10-20]   [10-20]     [10-20]     [10-20]   [10-20]   [10-20]  [10-20]  [10-20]
Non-
linear
OTT
(excludin
g
Viaplay)   [20-30]      -         [0-5]       -       [20-30]         -        -      [20-30]      -        -
Others      [5-10    [5-10]       [0-5]    [5-10]      [5-10]      [5-10]   [10-20]     [0-5]  [10-20]   [5-10]
                                                Source: Form CO, Annex 12.
                                                             29
 ---pagebreak---    (110) Tables 11 and 12, reproduced below, shows the market shares of the JV and its
           main competitors in the market for the retail supply of AV services and possible
           sub-segments by subscribers. The JV would have even a more limited market
           position with a market share of approximately [5-10]%. The Parties would have a
           combined market share of [10-20]%.
                                 Table 11: Market shares in 2018
                in the market for the retail supply of AV services by subscribers
                                 Overall                                              Basic pay-
                                 market                       Pay-TV                       TV
                   Overall     (excluding                   (excluding                (excluding
                    market     non-linear                   non-linear                non-linear
                                   OTT                           OTT       Basic pay-     OTT
                               providers)       Pay-TV      providers)          TV    providers)
Canal Digital         [0-5]       [5-10]           [0-5]        [5-10]         [0-5]     [5-10]
Viasat                [0-5]       [5-10]           [0-5]        [5-10]         [0-5]      [0-5]
JV                   [5-10]      [10-20]          [5-10]       [10-20]        [5-10]     [5-10]
Telenor              [5-10]       [5-10]          [5-10]        [5-10]       [10-20]    [10-20]
Viaplay               [0-5]          -             [0-5]           -          [5-10]        -
Parties             [10-20]      [20-30]         [10-20]      [20-30]        [20-30]    [20-30]
Tele2/
ComHem              [20-30]      [40-50]         [20-30]      [40-50]        [40-50]    [40-50]
Telia               [10-20]      [20-30]         [10-20]      [20-30]        [10-20]    [10-20]
Non-linear
OTT
(excluding
Viaplay)            [30-40]          -           [30-40]           -          [5-10]        -
Others              [10-20]      [10-20]          [5-10]      [10-20]         [5-10]    [10-20]
                                      Source: Form CO, Annex 12.
   (111) The JV’s market position would not significantly differ in a market segment for
           the retail supply of premium pay AV services where it will have a combined
           market share of approximately [10-20]% in the premium pay market segment
           excluding non-linear OTT services, such as Netflix. The Parties’ combined
           market share will also be similar and of approximately [20-30]%.
                                 Table 12: Market shares in 2018
                in the market for the retail supply of AV services by subscribers
                                Premium pay-                           Pay-TV for     Pay-TV for
                                TV (excluding                              MDUs          SDUs
                                  non-linear        Pay-TV  Pay-TV (excluding non-    (excluding
                      Premium         OTT             for      for     linear OTT     non-linear
                       pay-TV     providers)         MDUs    SDUs       providers)       OTT)
Canal Digital            [0-5]       [5-10]          [0-5]    [0-5]         [0-5]        [5-10]
Viasat                   [0-5]      [10-20]          [0-5]   [5-10]         [0-5]       [10-20]
JV                      [5-10]      [10-20]          [0-5]  [10-20]         [0-5]       [20-30]
Telenor                  [0-5]        [0-5]         [10-20]   [0-5]       [10-20]        [5-10]
Viaplay                  [0-5]          -               -       5.9            -            -
Parties                [10-20]      [20-30]         [10-20] [10-20]       [10-20]       [20-30]
Telia                  [10-20]      [30-40]         [50-60] [10-20]       [50-60]       [30-40]
RiksTV                 [10-20]      [20-30]         [10-20]  [5-10]       [10-20]       [20-30]
Non-linear    OTT
(excluding Viaplay)    [50-60]          -               -   [40-50]            -            -
Others                 [10-20]      [20-30]         [10-20]  [5-10]       [10-20]       [10-20]
                                      Source: Form CO, Annex 12.
                                                       30
 ---pagebreak---    (112) Table 13 reproduced below presents the market shares of the Parties in the market
          for the retail supply of AV services, sub-segmenting the SDUs and MDUs market
          segment by basic and premium market segment by revenue. The JV will have a
          higher market position of [30-40]% in the market for the retail supply of premium
          AV services for SDUs, excluding non-linear OTT players. The Parties will have a
          higher market position of [40-50]% in the market for the retail supply of premium
          AV services for SDUs, excluding non-linear OTT players.
                                Table 13: Market shares in 2018
in the market for the retail supply of AV services for MDUs and SDUs segmented by basic and
                                        premium by revenue
                                 Pay-TV
                                             Pay-TV
                                    for                                      Pay-TV      Pay-TV
                                            for SDUs
            Pay-TV               MDUs                                      for MDUs for SDUs
                      Pay-TV                  (excl.      Pay-TV   Pay-TV
              for                 (excl.                                   (excl. non- (excl. non-
                     for SDUs                  non-     for MDUs for SDUs
            MDUs                   non-                                       linear      linear
                       (basic)                linear (premium) (premium)
            (basic)               linear                                       OTT)        OTT)
                                              OTT)
                                  OTT)                                     (premium) (premium)
                                             (basic)
                                 (basic)
Canal      [10-20]% [10-20]% [10-20]% [10-20]%           [10-20]%  [5-10]%  [10-20]%    [10-20]%
Digital
Viasat      [0-5]%   [10-20]%    [0-5]%     [10-20]%       [0-5]% [10-20]%    [0-5]%    [20-30]%
JV         [10-20]% [20-30]% [10-20]% [20-30]%           [10-20]% [20-30]%  [10-20]%    [30-40]%
Telenor    [10-20]%   [5-10]%   [10-20]% [10-20]%        [10-20]%   [0-5]%  [10-20]%      [0-5]%
Viaplay     [0-5]%    [5-10]%    [0-5]%      [0-5]%        [0-5]%   [0-5]%    [0-5]%      [0-5]%
Combined   [20-30]% [40-50]% [20-30]% [30-40]%           [20-30]% [30-40]%  [20-30]%    [40-50]%
Tele2/Com
           [30-40]% [30-40]% [30-40]% [40-50]%           [40-50]% [20-30]%  [40-50]%    [30-40]%
Hem
Telia      [10-20]% [10-20]% [10-20]% [10-20]%           [20-30]%  [5-10]%  [20-30]%    [10-20]%
Others     [20-30]%   [5-10]%   [20-30]%     [0-5]%       [5-10]% [30-40]%   [5-10]%     [5-10]%
                                       Source: RFI 16, Annex 1.
   (113) Table 14 reproduced below presents the market shares of the Parties in the market
          for the retail supply of AV services, sub-segmenting the SDUs and MDUs market
          segment by basic and premium market segment by subscribers. The JV will have
          a higher market position of [20-30]% in the market for the retail supply of basic
          AV services for SDUs, excluding non-linear OTT players. The Parties will have a
          higher market position of [30-40]% in the market for the retail supply of basic AV
          services for SDUs, excluding non-linear OTT players.
                                                     31
 ---pagebreak---                                         Table 14: Market shares in 2018
      in the market for the retail supply of AV services for MDUs and SDUs segmented by basic and
                                               premium by subscribers
                                           Pay-TV         Pay-TV                           Pay-TV      Pay-TV
                 Pay-TV                  for MDUs        for SDUs                        for MDUs for SDUs
                            Pay-TV for                                Pay-TV    Pay-TV
                    for                  (excl. non-    (excl. non-                      (excl. non- (excl. non-
                                SDUs                                for MDUs for SDUs
                  MDUs                       linear         linear                           linear      linear
                               (basic)                              (premium) (premium)
                  (basic)                    OTT)           OTT)                             OTT)        OTT)
                                            (basic)        (basic)                       (premium) (premium)
                  [0-5]%      [5-10]%       [0-5]%       [10-20]%      [0-5]%    [0-5]%     [0-5]%     [5-10]%
Canal Digital
Viasat            [0-5]%      [5-10]%       [0-5]%       [10-20]%      [0-5]%   [5-10]%     [0-5]%    [10-20]%
JV                [0-5]%     [10-20]%       [0-5]%       [20-30]%      [0-5]%   [5-10]%     [0-5]%    [20-30]%
Telenor         [10-20]%      [5-10]%     [10-20]%        [5-10]%    [10-20]%    [0-5]%   [10-20]%      [0-5]%
NENT               [0-5]%      [10-20]%       [0-5]%         [0-5]%     [0-5]%    [0-5]%      [0-5]%      [0-5]%
Combined        [10-20]%     [30-40]%     [10-20]%       [30-40]%    [10-20]%  [10-20]%   [10-20]%    [20-30]%
Tele2/Com
                [50-60]%     [30-40]%     [50-60]%       [40-50]%    [60-70]%   [5-10]%   [60-70]%    [20-30]%
Hem
Telia           [10-20]%     [10-20]%     [10-20]%       [20-30]%    [10-20]%   [5-10]%   [10-20]%    [10-20]%
Sappa            [5-10]%       [0-5]%      [5-10]%         [0-5]%     [5-10]%    [0-5]%    [5-10]%      [0-5]%
Others          [10-20]%     [10-20]%     [10-20]%         [0-5]%      [0-5]%  [70-80]%     [0-5]%    [20-30]%
                                                Source: RFI 16, Annex 1.
              (C)         Retail supply of fixed internet access services
          (114) NENT is also active in the market for the retail supply of fixed internet access
                   services in Sweden. In such market, based on 2018 data, Telia is the market
                   leader with a market share of [30-40]% followed by Tele2 and Telenor with
                   market shares of respectively [20-30]% and [10-20]%. Viasat has a limited
                   market share of [0-5]%.
          (115) In the narrower market segment for the supply of fixed internet access services to
                   private customers, based on 2018 data, Telia is the market leader with a market
                   share of [30-40]% followed by Tele2 and Telenor with market shares of
                   respectively [20-30]% and [10-20]%. Viasat has a limited market share of
                   [0-5]%.105
      105  Form CO, Table 28.
                                                                 32
 ---pagebreak--- 6.2.1.3. Finland
        (A)       Wholesale supply of TV channels
   (116) Table 15, reproduced below, shows the market shares of NENT and its main
           competitors in the market for the wholesale supply of TV channels in Finland
           (based on 2018 data) by share of viewing. NENT’s market share (based on 2018
           data) was respectively below [0-5]% for the wholesale supply of combined
           FTA/pay TV channels, and below [30-40]% for the wholesale supply of premium
           pay TV channels as well as for the wholesale supply of premium pay TV sports
           channels.
                                Table 15: Market shares in 2018
           in the market for the wholesale supply of TV channels by share of viewing
                  Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale
                  supply of supply of supply of supply of supply of supply of supply of
                  FTA and    pay-TV     FTA and basic pay- premium premium premium
                   pay-TV   channels basic pay-       TV       pay-TV     sports  non-sports
                   channels                TV      channels channels    pay-TV     pay-TV
                                        channels                        channels channels
      NENT            [0-5]  [10-20]       n/a        n/a      [30-40]   [30-40]     n/a
      Telia         [20-30]  [20-30]       n/a        n/a      [50-60]   [50-60]           -
      Discovery      [5-10]   [0-5]        n/a        n/a         -         -        n/a
      Yle           [40-50]     -          n/a        n/a         -         -        n/a
      Others        [20-30]  [60-70]       n/a        n/a      [10-20]   [10-20]     n/a
                                     Source: Form CO, Annex 68.
   (117) Table 16, reproduced below, shows the market shares of NENT and its main
           competitors in the market for the wholesale supply of TV channels in Finland
           (based on 2018 data) by value. NENT’s market share (based on 2018 data) was
           [30-40]% for the wholesale supply of premium pay TV channels, and [30-40]%
           for the wholesale supply of premium pay TV sports channels, and [30-40]% for
           the wholesale supply of premium pay TV non-sports channels.
                                Table 16: Market shares in 2018
                 in the market for the wholesale supply of TV channels by value
                            Wholesale Wholesale Wholesale Wholesale Wholesale
                            supply of supply of supply of supply of supply of
                             pay-TV basic pay- premium premium premium
                            channels       TV      pay-TV       sports non-sports
                                        channels channels      pay-TV   pay-TV
                                                              channels channels
                  NENT         n/a         n/a      [30-40]    [30-40]   [30-40]
                  Telia        n/a         n/a      [50-60]    [50-60]   [60-70]
                  Discovery    n/a         n/a         -          -         -
                  Others       n/a         n/a      [10-20]    [10-20]      -
                                     Source: Form CO, Annex 68.
                                                    33
 ---pagebreak---                     (B)         Retail supply of AV services
               (118) Table 17, reproduced below, presents the market shares of the Parties in the
                        market for the retail supply of AV services, and any possible sub-segment. The
                        JV will hold a market share of [5-10]% by value in the Finnish market for the
                        retail supply of AV services (based on 2018 data) and below 30% in all market
                        segments except for the market for the supply of pay-TV for SDU, excluding non-
                        linear OTT providers.106 The Parties will hold a market share of [20-30]% by
                        value in the Finnish market for the retail supply of AV services (based on 2018
                        data).
                                               Table 17: Market shares in 2018
                                 in the market for the retail supply of AV services by revenue
                                              Basic pay-                 Premium                              Pay-TV
                         Pay-TV                    TV                     pay-TV                            for MDUs Pay-TV
                       (excluding             (excluding                (excluding                          (excluding for SDUs
                       non-linear             non-linear                non-linear Pay-TV       Pay-TV non-linear (excluding
                           OTT         Basic      OTT       Premium         OTT          for        for        OTT     non-linear
           Pay-TV providers) pay-TV providers) pay-TV providers) MDUs                             SDUs providers)        OTT)
Canal
            [5-10]        [5-10]       [5-10]    [5-10]       [5-10]      [10-20]       [0-5]    [10-20]       [0-5]    [20-30]
Digital
Viasat       [0-5]         [0-5]        [0-5]     [0-5]        [0-5]        [0-5]       [0-5]      [0-5]       [0-5]      [0-5]
JV          [5-10]       [10-20]       [5-10]    [5-10]       [5-10]      [10-20]       [0-5]    [10-20]       [0-5]    [30-40]
Telenor    [10-20]       [10-20]      [20-30]   [20-30]        [0-5]       [5-10]     [10-20]      [0-5]      [20-30]     [0-5]
Viaplay     [5-10]           -         [5-10]        -        [5-10]          -        [5-10]     [5-10]         -          -
Parties    [20-30]       [20-30]      [30-40]   [30-40]      [10-20]      [10-20]     [20-30]   [30-40]       [20-30]   [30-40]
Telia      [10-20]       [20-30]      [20-30]   [20-30]      [10-20]      [20-30]     [20-30]     [5-10]      [30-40]   [10-20]
Elisa      [10-20]       [20-30]      [20-30]   [20-30]       [5-10]      [10-20]     [20-30]     [5-10]      [20-30]    [5-10]
Non-
linear
OTT
(excluding
Viaplay)   [20-30]           -          [0-5]        -       [40-50]          -       [10-20]   [30-40]          -          -
Others     [30-40]       [20-30]       [5-10]    [5-10]      [60-70]      [40-50]     [30-40]   [50-60]       [10-20]   [40-50]
                                                    Source: Form CO, Annex 12.
               (119) Tables 18 and 19 reproduced below, shows the market shares of the JV and its
                        main competitors in the market for the retail supply of AV services and possible
                        sub-segments by subscribers. The JV would have even a more limited market
                        position with a market share of approximately [0-5]%. The Parties would have a
                        combined market share of [10-20]%.
           106  The JV will have market shares above 30% also in the market segments for the retail supply of basic AV
                services for SDUs and for the retail supply of basic AV services for SDUs, excluding non-linear OTT .
                However, Viasat was not active in such market segments before the Transaction. Therefore, there is no
                merger specific change brought by the Transaction.
                                                                     34
 ---pagebreak---                                  Table 18: Market shares in 2018
                in the market for the retail supply of AV services by subscribers
                                 Overall                                            Basic pay-
                                 market                       Pay-TV                     TV
                   Overall     (excluding                   (excluding              (excluding
                   market      non-linear                   non-linear              non-linear
                                   OTT                           OTT     Basic pay-     OTT
                               providers)       Pay-TV      providers)        TV    providers)
Canal Digital        [0-5]         [0-5]           [0-5]         [0-5]       [0-5]      [0-5]
Viasat               [0-5]         [0-5]           [0-5]         [0-5]       [0-5]      [0-5]
JV                   [0-5]         [0-5]           [0-5]         [0-5]       [0-5]      [0-5]
Telenor             [10-20]      [10-20]         [10-20]       [20-30]     [30-40]    [30-40]
Viaplay              [0-5]           -             [0-5]           -        [5-10]        -
Parties            [10-20]       [20-30]         [20-30]       [20-30]    [30-40]     [30-40]
Telia              [10-20]       [20-30]         [20-30]       [30-40]    [20-30]     [30-40]
Elisa              [10-20]       [10-20]         [10-20]       [20-30]    [20-30]     [20-30]
Non-linear
OTT
(excluding
Viaplay)           [20-30]           -           [20-30]           -         [0-5]        -
Others             [50-60]       [30-40]         [30-40]       [10-20]      [5-10]     [5-10]
                                      Source: Form CO, Annex 12.
   (120) The JV’s market position would not significantly differ in a market segment for
           the retail supply of premium pay AV services where it will have a combined
           market share of approximately [0-5]% in the premium pay market segment
           excluding non-linear OTT services, such as Netflix. The Parties’ combined
           market share will also be similar and of approximately [10-20]%.
                                 Table 19: Market shares in 2018
                in the market for the retail supply of AV services by subscribers
                              Premium                                   Pay-TV for
                                pay-TV                                     MDUs     Pay-TV for
                             (excluding                                 (excluding     SDUs
                             non-linear                                 non-linear  (excluding
                 Premium          OTT         Pay-TV for   Pay-TV for       OTT     non-linear
                  pay-TV      providers)         MDUs           SDUs    providers)     OTT)
Canal Digital       [0-5]         [0-5]           [0-5]        [5-10]        [0-5]    [10-20]
Viasat              [0-5]         [0-5]           [0-5]         [0-5]        [0-5]      [0-5]
JV                  [0-5]         [0-5]           [0-5]        [5-10]        [0-5]    [10-20]
Telenor             [0-5]        [5-10]         [20-30]         [0-5]     [30-40]      [5-10]
Viaplay             [0-5]           -             [0-5]        [5-10]          -          -
Parties            [5-10]       [10-20]         [20-30]       [10-20]     [30-40]     [10-20]
Telia             [10-20]       [30-40]         [20-30]       [10-20]     [30-40]     [20-30]
Elisa              [5-10]       [10-20]         [10-20]        [5-10]     [20-30]     [10-20]
Non-linear
OTT
(excluding
Viaplay)          [50-60]           -           [20-30]       [40-50]          -          -
Others            [70-80]       [30-40]         [30-40]       [60-70]     [10-20]     [40-50]
                                      Source: Form CO, Annex 12.
                                                       35
 ---pagebreak---        (121) Table 20 reproduced below presents the market shares of the Parties in the market
              for the retail supply of AV services, sub-segmenting the SDUs and MDUs market
              segment by basic and premium market segment by revenue. The JV will have a
              higher market position of [20-30]% in the market for the retail supply of premium
              AV services for SDUs, excluding non-linear OTT players. The Parties will have a
              higher market position of [20-30]% in the market for the retail supply of premium
              AV services for SDUs, excluding non-linear OTT players.
                                       Table 20: Market shares in 2018
    in the market for the retail supply of AV services for MDUs and SDUs segmented by basic and
                                              premium by revenue
                                          Pay-TV
                                                       Pay-TV
                                              for                                     Pay-TV      Pay-TV
                                                      for SDUs
                                           MDUs                                     for MDUs for SDUs
               Pay-TV for Pay-TV                        (excl.     Pay-TV   Pay-TV
                                            (excl.                                  (excl. non- (excl. non-
                  MDUs       for SDUs                    non-    for MDUs for SDUs
                                             non-                                       linear      linear
                  (basic)      (basic)                  linear (premium) (premium)
                                            linear                                      OTT)        OTT)
                                                        OTT)
                                            OTT)                                    (premium) (premium)
                                                       (basic)
                                           (basic)
                  [0-5]%     [30-40]%      [0-5]%     [40-50]%      [0-5]% [10-20]%   [5-10]%    [10-20]%
Canal Digital
Viasat            [0-5]%       [0-5]%      [0-5]%      [0-5]%       [0-5]%   [0-5]%    [0-5]%      [0-5]%
JV                [0-5]%     [30-40]%      [0-5]%     [40-50]%      [0-5]% [10-20]%   [5-10]%    [20-30]%
Telenor/DNA     [20-30]%      [5-10]%    [20-30]% [10-20]%          [0-5]%   [0-5]%   [5-10]%      [0-5]%
NENT              [0-5]%     [10-20]%      [0-5]%      [0-5]%      [5-10]%  [5-10]%    [0-5]%      [0-5]%
Combined        [30-40]%     [50-60]% [20-30]% [50-60]%           [10-20]% [10-20]%  [10-20]%    [20-30]%
Telia           [20-30]%     [20-30]% [30-40]% [20-30]%           [10-20]%   [0-5]%  [30-40]%     [5-10]%
Elisa           [20-30]%     [10-20]% [30-40]% [10-20]%            [5-10]%   [0-5]%  [10-20]%      [0-5]%
Digita            [0-5]%       [0-5]%      [0-5]%      [0-5]%      [5-10]% [20-30]%  [10-20]%    [40-50]%
others           [5-10]%      [5-10]%     [5-10]%      [0-5]%     [50-60]% [50-60]%  [20-30]%    [20-30]%
                                              Source: RFI 16, Annex 1.
                                                             36
 ---pagebreak---           (122) Table 21 reproduced below presents the market shares of the Parties in the market
                  for the retail supply of AV services, sub-segmenting the SDUs and MDUs market
                  segment by basic and premium market segment by subscribers. The JV will have
                  a higher market position of [10-20]% in the market for the retail supply of
                  premium AV services for SDUs, excluding non-linear OTT players. The Parties,
                  in the markets where Viasat’s and Canal Digital’s overlap, will have a higher
                  market position of [20-30]% in the market for the retail supply of basic AV
                  services for SDUs, excluding non-linear OTT players.
                                        Table 21: Market shares in 2018
       in the market for the retail supply of AV services for MDUs and SDUs segmented by basic and
                                            premium by subscribers
                                             Pay-TV       Pay-TV                             Pay-TV      Pay-TV
                                           for MDUs for SDUs                               for MDUs for SDUs
               Pay-TV for                                               Pay-TV    Pay-TV
                              Pay-TV for   (excl. non- (excl. non-                         (excl. non- (excl. non-
                  MDUs                                                for MDUs for SDUs
                             SDUs (basic)      linear       linear                            linear      linear
                  (basic)                                             (premium) (premium)
                                               OTT)         OTT)                              OTT)        OTT)
                                              (basic)      (basic)                         (premium) (premium)
                  [0-5]%       [10-20]%       [0-5]%     [10-20]%        [0-5]%    [0-5]%    [0-5]%     [10-20]%
Canal Digital
Viasat            [0-5]%         [0-5]%       [0-5]%       [0-5]%        [0-5]%    [0-5]%    [0-5]%      [0-5]%
JV                [0-5]%       [10-20]%       [0-5]%     [10-20]%        [0-5]%    [0-5]%    [0-5]%     [10-20]%
Telenor/DNA     [30-40]%        [5-10]%     [30-40]%     [10-20]%       [5-10]%    [0-5]%   [10-20]%     [0-5]%
NENT               [0-5]%        [20-30]%       [0-5]%       [0-5]%       [0-5]%    [0-5]%     [0-5]%      [0-5]%
Combined        [30-40]%       [40-50]%     [30-40]%     [20-30]%       [5-10]%   [5-10]%   [10-20]%    [10-20]%
Telia           [20-30]%       [30-40]%     [20-30]%     [40-50]%      [10-20]%    [0-5]%   [40-50]%    [10-20]%
Elisa           [20-30]%       [10-20]%     [20-30]%     [20-30]%       [5-10]%    [0-5]%   [10-20]%     [0-5]%
Digita            [0-5]%         [0-5]%       [0-5]%       [0-5]%        [0-5]%   [5-10]%    [0-5]%     [20-30]%
Others           [5-10]%        [5-10]%      [5-10]%       [0-5]%      [60-70]%  [70-80]%   [20-30]%    [40-50]%
                                               Source: RFI 16, Annex 1.
                                                              37
 ---pagebreak--- 6.2.1.4. Denmark
        (A)       Wholesale supply of TV channels
   (123) Table 22, reproduced below, shows the market shares of NENT and its main
           competitors in the market for the wholesale supply of TV channels in Denmark
           (based on 2018 data) by share of viewing. NENT’s market share (based on 2018
           data) was respectively [10-20]% for the wholesale supply of combined FTA/pay
           TV channels, and [10-20]% for the wholesale supply of pay TV channels and
           [10-20]% for the wholesale supply of basic pay TV channels, and [20-30]% for
           the wholesale supply of basic pay TV sports channels.
                                    Table 22: Market shares in 2018
          in the market for the wholesale supply of TV channels by share of viewing
                  Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale
                  supply of supply of supply of supply of supply of supply of supply of
                  FTA and       pay-TV      FTA and basic pay-             basic      premium premium
                   pay-TV      channels basic pay-            TV           sports     pay-TV non-sports
                   channels                      TV        channels      pay-TV       channels     pay-TV
                                             channels                    channels                  channels
      NENT          [10-20]     [10-20]       [10-20]       [10-20]       [20-30]        n/a          n/a
      DR            [30-40]         -         [30-40]           -         [50-60]        n/a          n/a
      TV2                                     [30-40]
      Denmark       [30-40]     [60-70]                     [60-70]         n/a          n/a          n/a
      Discovery [10-20]         [10-20]        [5-10]       [10-20]       [20-30]        n/a          n/a
      Others         [0-5]       [5-10]         [0-5]        [5-10]         n/a          n/a          n/a
                                         Source: Form CO, Annex 68.
   (124) Table 23 reproduced below, shows the market shares of NENT and its main
           competitors in the market for the wholesale supply of TV channels in Denmark
           (based on 2018 data) by value. NENT’s market share (based on 2018 data) was
           respectively [30-40]% for the wholesale supply of pay TV channels and [30-40]%
           for the wholesale supply of basic pay TV channels, and [50-60]% for the
           wholesale supply of basic pay TV sports channels, and [40-50]% for the
           wholesale supply of premium pay TV non-sports channels.
                                    Table 23: Market shares in 2018
                 in the market for the wholesale supply of TV channels by value
                        Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale
                         supply of supply of supply of supply of supply of supply of
                          pay-TV basic pay- premium                 basic       premium premium
                         channels        TV          pay-TV         sports      pay-TV non-sports
                                      channels channels           pay-TV        channels     pay-TV
                                                                  channels                   channels
             NENT         [30-40]      [30-40]        [40-50]      [50-60]       [40-50]      [40-50]
              TV2         [30-40]      [30-40]           -         [10-20]          -            -
            Denmark
            Discovery     [10-20]      [10-20]           -         [20-30]          -            -
             Others       [10-20]       [5-10]        [50-60]        [0-5]       [50-60]      [50-60]
                                         Source: Form CO, Annex 68.
        (B)       Retail supply of AV services
   (125) Table 24 reproduced below, presents the market shares of the Parties in the
           market for the retail supply of AV services, and any possible sub-segment. The
           JV will hold a market share of [5-10]% by value in the Danish market for the
                                                            38
 ---pagebreak---                       retail supply of AV services (based on 2018 data) and below 30% in all market
                      segments. The Parties will hold a market share of [10-20]% by value in the
                      Danish market for the retail supply of AV services (based on 2018 data).
                                               Table 24: Market shares in 2018
                               in the market for the retail supply of AV services by revenue
                                               Basic pay-                    Premium                               Pay-TV
                       Pay-TV                       TV                        pay-TV                             for MDUs Pay-TV
                     (excluding                (excluding                   (excluding                           (excluding for SDUs
                     non-linear                non-linear                   non-linear Pay-TV          Pay-TV non-linear (excluding
                         OTT         Basic         OTT        Premium          OTT            for          for       OTT    non-linear
           Pay-TV providers) pay-TV providers) pay-TV providers) MDUs                                    SDUs providers)      OTT)
Canal
             [0-5]      [5-10]       [5-10]       [5-10]         [0-5]         [0-5]         [0-5]       [5-10]      [0-5]    [5-10]
Digital
Viasat       [0-5]       [0-5]        [0-5]        [0-5]        [5-10]        [10-20]        [0-5]       [5-10]      [0-5]   [10-20]
JV          [5-10]     [10-20]       [5-10]      [10-20]        [5-10]        [10-20]        [0-5]      [10-20]      [0-5]   [10-20]
Telenor        -           -             -            -            -             -             -            -          -         -
Viaplay      [0-5]         -          [0-5]           -         [5-10]           -           [0-5]        [0-5]        -         -
Parties    [10-20]     [10-20]      [10-20]      [10-20]       [10-20]        [10-20]       [5-10]     [10-20]       [0-5]   [10-20]
TDC        [40-50]     [50-60]      [50-60]      [50-60]       [10-20]        [20-30]      [50-60]     [30-40]     [60-70]   [30-40]
Telia       [0-5]        [0-5]        [0-5]        [0-5]        [5-10]        [20-30]        [0-5]        [0-5]      [0-5]     [0-5]
Non-
linear
OTT
(excluding
Viaplay)   [10-20]         -          [0-5]           -        [50-60]           -         [10-20]     [10-20]         -         -
Others     [20-30]     [30-40]      [30-40]      [30-40]       [10-20]        [30-40]      [20-30]     [30-40]     [20-30]   [30-40]
                                                     Source: Form CO, Annex 12.
               (126) Tables 25 and 26 reproduced below, shows the market shares of the JV and its
                      main competitors in the market for the retail supply of AV services and possible
                      sub-segments by subscribers. The JV would have even a more limited market
                      position with a market share of approximately [0-5]%. The Parties would have a
                      combined market share of [5-10]%.
                                               Table 25: Market shares in 2018
                             in the market for the retail supply of AV services by subscribers
                                                      Overall                                                   Basic pay-
                                                      market                         Pay-TV                          TV
                                       Overall      (excluding                     (excluding                   (excluding
                                       market       non-linear                     non-linear                   non-linear
                                                        OTT                            OTT         Basic pay-       OTT
                                                    providers)       Pay-TV        providers)          TV       providers)
           Canal Digital                 [0-5]          [0-5]          [0-5]           [0-5]          [0-5]         [0-5]
           Viasat                        [0-5]          [0-5]          [0-5]           [0-5]          [0-5]         [0-5]
           JV                            [0-5]          [0-5]          [0-5]           [0-5]          [0-5]         [0-5]
           Telenor                         -              -               -              -               -            -
           Viaplay                      [5-10]            -           [5-10]             -           [5-10]           -
           Parties                      [5-10]          [0-5]         [5-10]           [0-5]        [10-20]         [0-5]
           TDC                         [20-30]        [40-50]        [20-30]         [40-50]        [40-50]       [50-60]
           Telia                         [0-5]          [0-5]          [0-5]          [5-10]          [0-5]         [0-5]
           Non-linear        OTT
           (excluding Viaplay)         [30-40]            -          [30-40]             -            [0-5]           -
           Others                      [20-30]        [40-50]        [20-30]         [40-50]        [30-40]       [40-50]
                                                     Source: Form CO, Annex 12.
                                                                       39
 ---pagebreak---         (127) The JV’s market position would not significantly differ in a market segment for
                 the retail supply of premium pay AV services where it will have a combined
                 market share of approximately [10-20]% in the premium pay market segment
                 excluding non-linear OTT services, such as Netflix. The Parties’ combined
                 market share will also be similar and of approximately [10-20]%.
                                        Table 26: Market shares in 2018
                       in the market for the retail supply of AV services by subscribers
                                          Premium                                        Pay-TV for
                                           pay-TV                                            MDUs        Pay-TV for
                                         (excluding                                       (excluding        SDUs
                                         non-linear                                       non-linear (excluding
                             Premium         OTT         Pay-TV for Pay-TV for               OTT         non-linear
                              pay-TV     providers)           MDUs           SDUs         providers)        OTT)
     Canal Digital              [0-5]         [0-5]            [0-5]          [0-5]          [0-5]          [5-10]
     Viasat                     [0-5]      [10-20]             [0-5]          [0-5]          [0-5]          [5-10]
     JV                         [0-5]      [10-20]             [0-5]         [5-10]          [0-5]         [10-20]
     Telenor                      -             -                -              -              -               -
     Viaplay                    [0-5]           -             [5-10]         [5-10]            -               -
     Parties                    [0-5]      [10-20]            [5-10]        [10-20]          [0-5]         [10-20]
     TDC                        [0-5]      [10-20]           [30-40]        [10-20]         [50-60]        [20-30]
     Telia                     [5-10]      [20-30]             [0-5]          [0-5]          [0-5]          [5-10]
     Non-linear       OTT
     (excluding Viaplay)      [70-80]           -            [30-40]        [40-50]            -               -
     Others                   [10-20]      [50-60]           [20-30]        [20-30]         [30-40]        [50-60]
                                             Source: Form CO, Annex 12.
        (128) Table 27 reproduced below presents the market shares of the Parties in the market
                 for the retail supply of AV services, sub-segmenting the SDUs and MDUs market
                 segment by basic and premium market segment by revenue. The JV will have a
                 higher market position of [20-30]% in the market for the retail supply of premium
                 AV services for SDUs, excluding non-linear OTT players. The Parties will have a
                 higher market position of [20-30]% in the market for the retail supply of premium
                 AV services for SDUs, excluding non-linear OTT players.
                                        Table 27: Market shares in 2018
     in the market for the retail supply of AV services for MDUs and SDUs segmented by basic and
                                                premium by revenue
                                           Pay-TV        Pay-TV                                    Pay-TV         Pay-TV
                                         for MDUs for SDUs                                       for MDUs for SDUs
                  Pay-TV       Pay-TV                                  Pay-TV        Pay-TV
                                         (excl. non- (excl. non-                                 (excl. non- (excl. non-
                for MDUs      for SDUs                               for MDUs for SDUs
                                            linear         linear                                   linear         linear
                   (basic)      (basic)                              (premium) (premium)
                                            OTT)           OTT)                                     OTT)           OTT)
                                           (basic)        (basic)                                (premium) (premium)
Canal Digital      [0-5]%      [5-10]%     [0-5]%        [5-10]%        [0-5]%        [0-5]%       [0-5]%         [0-5]%
Viasat             [0-5]%      [5-10]%     [0-5]%        [5-10]%        [0-5]%       [5-10]%       [0-5]%        [20-30]%
JV                 [0-5]%     [10-20]%     [0-5]%       [10-20]%        [0-5]%      [10-20]%       [0-5]%        [20-30]%
NENT               [0-5]%       [0-5]%     [0-5]%         [0-5]%       [5-10]%        [0-5]%       [0-5]%         [0-5]%
Combined          [5-10]%     [10-20]%     [0-5]%       [10-20]%       [5-10]%      [10-20]%       [0-5]%        [20-30]%
TDC              [60-70]%     [40-50]%    [60-70]% [40-50]% [10-20]%                 [5-10]%      [40-50]%       [10-20]%
Telia              [0-5]%       [0-5]%     [0-5]%         [0-5]%       [5-10]%      [10-20]%      [10-20]%       [20-30]%
Others           [20-30]%     [30-40]%    [20-30]% [40-50]% [70-80]%                [60-70]%      [30-40]%       [30-40]%
                                               Source: RFI 16, Annex 1.
                                                                40
 ---pagebreak---           (129) Table 28 reproduced below presents the market shares of the Parties in the market
                    for the retail supply of AV services, sub-segmenting the SDUs and MDUs market
                    segment by basic and premium market segment by subscribers. The JV will have
                    a higher market position of [20-30]% in the market for the retail supply of
                    premium AV services for SDUs, excluding non-linear OTT players. The Parties
                    will have a higher market position of [20-30]% in the market for the retail supply
                    of premium AV services for SDUs, excluding non-linear OTT players.
                                          Table 28: Market shares in 2018
       in the market for the retail supply of AV services for MDUs and SDUs segmented by basic and
                                               premium by subscribers
                                             Pay-TV                                           Pay-TV      Pay-TV
                                                         Pay-TV for
                                           for MDUs                                         for MDUs for SDUs
                 Pay-TV                                  SDUs (excl. Pay-TV        Pay-TV
                              Pay-TV for (excl. non-                                        (excl. non- (excl. non-
               for MDUs                                   non-linear for MDUs for SDUs
                             SDUs (basic)      linear                                          linear      linear
                  (basic)                                     OTT)     (premium) (premium)
                                               OTT)                                             OTT)        OTT)
                                                             (basic)
                                              (basic)                                       (premium) (premium)
                  [0-5]%        [5-10]%       [0-5]%        [5-10]%       [0-5]%    [0-5]%     [0-5]%      [0-5]%
Canal Digital
Viasat            [0-5]%         [0-5]%       [0-5]%         [0-5]%       [0-5]%   [5-10]%     [0-5]%    [20-30]%
JV                [0-5]%        [5-10]%       [0-5]%        [5-10]%       [0-5]%   [5-10]%     [0-5]%    [20-30]%
NENT               [5-10]%       [10-20]%       [0-5]%        [0-5]%       [0-5]%    [0-5]%     [0-5]%      [0-5]%
Combined         [5-10]%       [20-30]%       [0-5]%        [5-10]%       [0-5]%   [5-10]%     [0-5]%    [20-30]%
TDC             [50-60]%       [20-30]%     [60-70]%       [30-40]%      [5-10]%    [0-5]%   [20-30]%     [5-10]%
Stofa           [10-20]%       [20-30]%     [10-20]%       [30-40]%       [0-5]%    [0-5]%   [10-20]%     [5-10]%
Waoo!            [5-10]%       [10-20]%      [5-10]%       [10-20]%       [0-5]%    [0-5]%    [5-10]%     [5-10]%
Others          [10-20]%       [10-20]%     [10-20]%        [5-10]%     [80-90]%  [80-90]%   [50-60]%    [50-60]%
                                                 Source: RFI 16, Annex 1.
                                                                 41
 ---pagebreak--- 6.2.2. Satellite transponder capacity
6.2.2.1. Nordic region
   (130) Table 29 shows TS’ and its main competitors’ market shares in the supply of
           satellite transponder capacity from all orbital positions in the Nordic region in
           2018 by revenue. TS had a market share of [60-70]% while SES had a market
           share of [30-40]%. Their market shares were very similar in a market limited to
           broadcasting (TS: [70-80]%, SES: [20-30]%). TS’ captive sales to Canal Digital
           represented about […]% of its total sales and more than […]% of its sales for
           broadcasting purposes.
                                Table 29: Market shares in 2018
                  in the market for the supply of satellite transponder capacity
                                              EUR (million)                         %
        TS (1°W)                                   […]                          [60-70]
        Broadcasting
                                                   […]                          [50-60]
        (Canal Digital)
        Broadcasting
                                                   […]                           [5-10]
        (other customers)
        Other services                             […]                           [5-10]
        SES (5°E)                                  […]                          [30-40]
        Broadcasting                               […]
                                                                                [20-30]
        (Viasat)
        Broadcasting                               […]
                                                                                  [0-5]
        (other customers)
        Other services                             […]                           [5-10]
        Total                                      […]                             100
                                    Source: Form CO, Table 222.
   (131) If, instead, the market for satellite transponder capacity were to be segmented by
           orbital position, TS and SES would have a market share of [90-100]% at 1°W and
           5°E, respectively.
6.2.2.2. Nordic and CEE region
   (132) Table 30 shows TS’ and its main competitors’ market shares in the supply of
           satellite transponder capacity from all orbital positions in the Nordic and CEE
           region in 2018 by revenue. TS had a market share of [10-20]% while SES had a
           market share of [20-30]% (from several orbital positions). Their market shares
           were slightly higher in a market limited to broadcasting (TS: [10-20]%,
           SES: [20-30]%). TS’ captive sales to Canal Digital represented about […]% of its
           total sales and close to […]% of its sales for broadcasting purposes.
   (133) SES supplies the CEE region also from other orbital positions than 5°E, namely
           from 19.2°E, 23.5°E and 31.5°E. Other satellite operators active in the CEE
           region are Intelsat (1°W, 45.1°E and 85°E), Eutelsat (13°E, 16°E and 36.0°E),
           Hellas Sat (39.0°E) and Amos (4°W).
                                                   42
 ---pagebreak---                                     Table 30: Market shares in 2018
                  in the market for the supply of satellite transponder capacity
                                                   EUR (million)                             %
       TS (1°W)                                          […]                             [10-20]
       Broadcasting Nordics
                                                         […]                             [10-20]
       (Canal Digital)
       Broadcasting Nordics
                                                         […]                               [0-5]
       (other customers)
       Broadcasting CEE
                                                         […]                               [0-5]
       (other customers)
       Other services Nordics                            […]                               [0-5]
       Other services CEE                                […]                               [0-5]
       Intelsat (1°W)                                    […]                               [0-5]
       Broadcasting CEE                                  […]                               [0-5]
       Other services CEE                                […]                               [0-5]
       SES                                               […]                             [20-30]
       Broadcasting Nordics
                                                         […]                               [0-5]
       (Viasat)
       Broadcasting Nordics
                                                         […]                               [0-5]
       (other customers)
       Broadcasting CEE
                                                         […]                               [0-5]
       (5°E)
       Broadcasting CEE
                                                         […]                             [10-20]
       (other orbital positions)
       Other services                                    […]                               [0-5]
       Eutelsat
                                                         […]                             [20-30]
       (broadcasting)
       Intelsat
                                                         […]                               [0-5]
       (broadcasting)
       Hellas Sat
                                                         […]                               [0-5]
       (broadcasting)
       Amos
                                                         […]                               [0-5]
       (broadcasting)
       Competitors Eutelsat,
       Intelsat, HellaSat, Amos                          […]                             [20-30]
       (other services)
       Total                                             […]                                100
Source: Form CO, Table 225 and Notifying Parties’ reply to RFI 15, question 1. Note that the table does not
       include all satellite operators and DTH platforms in CEE, in particular it does not include some local
         operators active in Russia,, as the Notifying Parties do not have a comprehensive view on satellite
                                                   operators active.
  (134) If, instead, the market for satellite transponder capacity were to be segmented by
          orbital position, TS would have an overall market share of about [70-80]% and of
          close to [90-100]% for broadcasting purposes at 1°W, Intelsat being the other
          competitor active at 1°W. SES would have a market share of [90-100]% at 5°E.
                                                         43
 ---pagebreak--- 6.3.     Horizontal assessment
6.3.1. Introduction
    (135) A merger giving rise to significant impediment of effective competition may do
            so as a result of the creation or strengthening of a dominant position in the
            relevant markets. Moreover, mergers in oligopolistic markets involving the
            elimination of important constraints that the parties previously exerted on each
            other, together with a reduction of competitive pressure on the remaining
            competitors, may also result in a significant impediment to effective competition,
            even in the absence of dominance.107
    (136) In fact, the Horizontal Merger Guidelines describe horizontal non-coordinated
            effects as follows: “A merger may significantly impede effective competition in a
            market by removing important competitive constraints on one or more sellers who
            consequently have increased market power. The most direct effect of the merger
            will be the loss of competition between the merging firms. For example, if prior to
            the merger one of the merging firms had raised its price, it would have lost some
            sales to the other merging firm. The merger removes this particular constraint.
            Non-merging firms in the same market can also benefit from the reduction of
            competitive pressure that results from the merger, since the merging firms’ price
            increase may switch some demand to the rival firms, which, in turn, may find it
            profitable to increase their prices. The reduction in these competitive constraints
            could lead to significant price increases in the relevant market.”108
    (137) The Horizontal Merger Guidelines list a number of factors which may influence
            whether or not significant horizontal non-coordinated effects are likely to result
            from a merger, such as the large market shares of the merging firms, the fact that
            the merging firms are close competitors, the limited possibilities for customers to
            switch suppliers, or the fact that the merger would eliminate an important
            competitive force.109 That list of factors applies equally regardless of whether a
            merger would create or strengthen a dominant position, or would otherwise
            significantly impede effective competition due to non-coordinated effects.
            Furthermore, not all of these factors need to be present to make significant non-
            coordinated effects likely and it is not an exhaustive list.110
    (138) In addition, the Horizontal Merger Guidelines describe a number of factors,
            which could counteract the harmful effects of the merger on competition,
            including the likelihood of buyer power, the entry of new competitors on the
            market, and efficiencies.
6.3.2. Horizontal non-coordinated effects in the retail supply of AV services in Norway
    (139) Telenor is active in the retail supply of AV services in Norway via DTH through
            its wholly owned subsidiary, Canal Digital (which will be contributed to the JV),
            and via cable and IPTV through the Telenor brand (which will not be contributed
            to the JV). NENT is active in the retail supply of AV services in Norway via DTH
107  Horizontal Merger Guidelines, paragraph 25.
108  Horizontal Merger Guidelines, paragraph 24.
109  Horizontal Merger Guidelines, paragraphs 27 and following.
110  Horizontal Merger Guidelines, paragraph 26.
                                                         44
 ---pagebreak---              and IPTV through its wholly owned business, Viasat (which will be contributed
             to the JV), and OTT through Viaplay (which will not be contributed to the JV).
    (140) In Section 6.1.1., the Commission considered that the question whether Telenor
             and NRK belong to the same economic unit or whether they make up separate
             economic units with an independent power of decision can be left open as the
             Transaction does not raise serious doubts as to its compatibility with the internal
             market regardless of the answer to this question.111 In particular, as regard to a
             potential horizontal overlap among NRK112, the Parties and the JV, the
             Commission considers that the Transaction does not raise serious doubts as to its
             compatibility with the internal market for the following reasons. First, the
             increment brought by the Transaction would be limited to Viasat’s customer base
             of […] subscribers (approximately [0-5]% of subscribers in the Norwegian
             market for the retail supply of linear AV services). Second, the Transaction would
             lead to a reduction of influence over Canal Digital’s DTH business which will be
             jointly owned with NENT. Third, several respondents to the market investigation
             indicated that Canal Digital and RiksTV were closely competing pre-
             Transaction113 and the Transaction would not change the competitive dynamics
             between Canal Digital and RiksTV. Fourth, RiksTV is jointly owned by TV2,
             part of the Egmont group, which would have a different incentive and may
             oppose strategies that may favour Telenor or the JV. Finally, the Transaction
             would have a limited impact on the trend of switching to fiber-based technology
             happening in the Norwegian market, presented in Section 6.4.2.1.B.b) where
             providers of retail AV services through fiber, such as Altibox and Telia, are
             gaining subscribers vis-à-vis providers of retail AV services through DTH, as the
             JV, and DTT, as RiksTV.114.
6.3.2.1. The Notifying Parties’ view
    (141) The Notifying Parties submit that the Transaction does not raise competition
             concerns on the basis of any plausible definition of the relevant product market in
             Norway for the reasons set out below.
    (142) First, the Notifying Parties claim that the distribution of pay TV services over
             DTH is in irreversible structural decline in Norway and across the Nordic region.
             This would be illustrated by both Telenor's and NENT's DTH platforms losing a
             substantial number of Norwegian subscribers to competitors which distribute
             services over other platforms.
    (143) Second, the Notifying Parties submit that Viasat has a limited presence in TV
             distribution in Norway. It would hold a market share in the overall market for
             retail AV services of less than [0-5]% (by subscribers). In addition, the
             Transaction would result in a MHHI of 1,827 with a merger increment of 12, and
             by subscribers the JV would hold a share in excess of 20% only in the possible
111  The Notifying Parties indicate that, in such hypothetical scenario, the Transaction would not have an
     impact on any markets where NRK would be also active. [Confidential strategic views of Telenor in
     relation to the Norwegian State's ownership stake].
112  NRK has a 50% share in RiksTV, a provider of retail AV services through DTT technology.
113  Responses to questionnaire Q1 to retail suppliers of AV services in Norway, question F.1.
114  From 2016 to 2018, RiksTV customer base decreased from […] to […] subscribers. In the same period,
     the JV’s combined customer base decreased from approximately […] to […]. In the same period,
     Altibox’s customer base increased from […] to […].
                                                           45
 ---pagebreak---              market for the retail supply of pay AV services for SDUs (excluding non-linear
             OTT services).
    (144) Third, the Notifying Parties argue that the JV will face fierce competition from a
             wide range of AV distributors active in Norway across multiple distribution
             platforms, including Telenor, Telia/Get, RiksTV, Lyse/Altibox, and a plethora of
             linear and non-linear OTT services including Netflix, HBO Nordic and TV
             broadcasters' own services, such as TV2 Norge 's Sumo and Discovery's Dplay.
    (145) Fourth, the Notifying Parties stress that, by divesting one-third shareholding
             interest in the Norwegian DTT pay TV operator, RiksTV, to NRK and TV2,
             Telenor reduced its overall presence in the retail market in Norway.
    (146) Fifth, the Notifying Parties note that the roll-out of high-speed fibre networks is
             continuing at pace across Norway, and that all Norwegian households should
             have access to high-speed broadband services in 2023. The Notifying Parties note
             add that traditional TV viewership continues to decrease as video consumption
             shifts to streaming services and online platforms.115
6.3.2.2. The Commission’s assessment
    (147) The Commission considers that the Transaction does not give rise to serious
             doubts as to its compatibility with the internal market as a result of horizontal
             effects on the market for the retail supply of AV content in Norway, or any
             possible narrower affected markets, for the following reasons.
    (148) First, Canal Digital and Viasat, which mainly offer retail AV services through
             DTH distribution, are in continued decline in Norway. Indeed, Canal Digital and
             Viasat’s DTH customer bases have respectively decreased by […]% and […]%
             between January 2016 and July 2019,116 while the number of subscribers of retail
             AV services through fibre has increased by 30% between 2016 and 2018. Over
             the same time period, the number of subscribers receiving AV services via cable,
             DTH and DTT in Norway has decreased by 17%, 11% and 7%, respectively.117
             These trends suggest a shift towards retail AV services over fibre which would
             likely continue post-Transaction, and confirm the structural decline of DTH
             distribution in Norway.
    (149) Second, despite the Parties having a relatively strong market position when
             looking at their 2018 market shares by value, the Commission considers that the
             factors detailed below limit their market position.118
             Based on 2018 figures, the Parties will hold a market share by value of
             (i) [40-50]% in the market for the retail supply of pay AV services (JV: [10-20]%,
             Telenor: [10-20]%, NENT: [0-5]%), and [40-50]% when excluding non-linear
             OTT services (JV: [20-30]%, Telenor: [20-30]%), (ii) [40-50]% in the market for
             the retail supply of basic pay TV services (JV: [10-20]%, Telenor: [20-30]%,
             NENT: [0-5]%), and [40-50]% excluding non-linear OTT providers
115  Form CO, paragraphs 231, 232 and 298, and Table 5.
116  Form CO, paragraph 408.
117  Form CO, paragraph 391.
118  See market shares for all possible market segments in Section 6.2.1.1.(B) where the combined market
     shares of the Parties or the JV is above 20%..
                                                        46
 ---pagebreak---       (JV: [10-20]%, Telenor: [20-30]%), (iii) [30-40]% in the market for the retail
      supply of premium pay TV services (JV: [20-30]%, Telenor: [5-10]%,
      NENT: [0-5]%), and [40-50]% excluding non-linear OTT providers
      (JV: [30-40]%, Telenor: [10-20]%), (iv) [40-50]% in the market for the retail
      supply of pay AV services for MDUs (JV: [10-20]%, Telenor: [20-30]%,
      NENT: [0-5]%), and [40-50]% when excluding non-linear OTT services
      (JV: [10-20]%, Telenor [30-40]%), (v) [40-50]% in the market for the retail
      supply of pay AV services for SDUs (JV: [20-30]%, Telenor: [10-20]%,
      NENT: [0-5]%), and [40-50]% when excluding non-linear OTT services
      (JV: [20-30]%, Telenor [10-20]%), (vi) [50-60]% in the market for the retail
      supply of basic pay AV services to MDUs (JV: [10-20]%, Telenor: [30-40]%,
      NENT: [0-5]%), and [50-60]% when excluding non-linear OTT services
      (JV: [10-20]%, Telenor: [30-40]%), (vii) [40-50]% in the market for the retail
      supply of basic pay AV services to SDUs (JV: [20-30]%, Telenor: [10-20]%,
      NENT: [0-5]%), and [40-50]% when excluding non-linear OTT services
      (JV: [20-30]%, Telenor: [10-20]%), (viii) [20-30]% in the market for the retail
      supply of premium pay AV services to MDUs (JV: [5-10]%, Telenor: [10-20]%,
      NENT: [0-5]%), and [30-40]% when excluding non-linear OTT services
      (JV: [10-20]%, Telenor: [20-30]%), and (ix) [30-40]% in the market for the retail
      supply of premium pay AV services to SDUs (JV: [20-30]%, Telenor: [5-10]%,
      NENT: [0-5]%), and [50-60]% when excluding non-linear OTT services
      (JV: [40-50]%, Telenor: [5-10]%).
(150) By subscribers, the Parties would generally have a more modest market position,
      when looking at 2018 market shares by volume in the following possible affected
      markets: (i) [20-30]% in the overall market for the retail supply of AV services
      (JV: [10-20]%, Telenor, [10-20]%, NENT: [5-10]%), and [30-40]% when
      excluding non-linear OTT services (JV: [10-20]%, Telenor: [10-20]%),
      (ii) [20-30]% in the market for the retail supply of pay AV services
      (JV: [10-20]%, Telenor: [10-20]%, NENT: [5-10]%), and [30-40]% when
      excluding non-linear OTT services (JV: [10-20]%, Telenor: [20-30]%),
      (iii) [40-50]% in the market for the retail supply of basic pay TV services
      (JV: [10-20]%, Telenor: [20-30]%, NENT: [10-20]%), and [40-50]% excluding
      non-linear OTT providers (JV: [10-20]%, Telenor: [20-30]%), (iv) [10-20]% in
      the market for the retail supply of premium pay TV services (JV: [5-10]%,
      Telenor: [0-5]%, NENT: [0-5]%), and [20-30]% excluding non-linear OTT
      providers (JV: [10-20]%, Telenor: [5-10]%), (v) [20-30]% in the market for the
      retail supply of pay AV services for MDUs (JV: [0-5]%, Telenor: [10-20]%,
      NENT: [5-10]%), and [30-40]% when excluding non-linear OTT services
      (JV: [5-10]%, Telenor [30-40]%), (vi) [20-30]% in the market for the retail
      supply of pay AV services for SDUs (JV: [10-20]%, Telenor: [5-10]%,
      NENT: [5-10]%), and [30-40]% when excluding non-linear OTT services
      (JV: [20-30]%, Telenor [10-20]%), (vii) [50-60]% in the market for the retail
      supply of basic pay AV services to MDUs (JV: [5-10]%, Telenor: [30-40]%,
      NENT: [10-20]%), and [40-50]% when excluding non-linear OTT services
      (JV: [5-10]%, Telenor: [40-50]%), (viii) [40-50]% in the market for the retail
      supply of basic pay AV services to SDUs (JV: [20-30]%, Telenor: [10-20]%,
      NENT: [10-20]%), and [40-50]% when excluding non-linear OTT services
      (JV: [20-30]%, Telenor: [10-20]%), (ix) [5-10]% in the market for the retail
      supply of premium pay AV services to MDUs (JV: [0-5]%, Telenor: [0-5]%,
      NENT: [0-5]%), and [10-20]% when excluding non-linear OTT services
                                           47
 ---pagebreak---            (JV: [0-5]%, Telenor: [10-20]%), and (x) [10-20]% in the market for the retail
           supply of premium pay AV services to SDUs (JV: [5-10]%, Telenor: [0-5]%,
           NENT: [0-5]%), and [20-30]% when excluding non-linear OTT services
           (JV: [20-30]%, Telenor: [0-5]%).
    (151) Considering the hypothetical market including non-linear OTT services, OTT
           players would exercise a competitive constraint on the Parties and the JV. In this
           respect, it is notable that in Norway there would remain post-Transaction
           numerous OTT players who would constrain the JV, namely Netflix and HBO
           Nordic as well as new entrants Disney+ whose OTT service is expected to launch
           in the second half of 2020 in the Nordics. Further, the results of the market
           investigation indicated that in Norway SVOD providers exercise a constraint on
           retail suppliers of premium pay films and series AV services via traditional
           platforms. Indeed, one Norwegian market participant noted the decline of linear
           premium pay films and series TV services due to them being substituted by
           SVOD services such as HBO.119
    (152) However, even considering the hypothetical market excluding non-linear OTT
           services, the Transaction would not significantly increase the Parties’ market
           position. The Commission notes that, in the first place, before the Transaction,
           Telenor and Canal Digital were already part of the same economic entity with
           approximately […] subscribers. In the second place, the merger specific
           increment is limited to the […] subscribers brought by Viasat, corresponding to a
           market share of maximum [0-5]% by value and [0-5]% by subscribers.
    (153) Third, the JV would have a limited market position in most of the possible
           affected markets for the retail supply of AV services in Norway. Based on 2018
           figures, the JV will hold a market share by value of (i) [10-20]% in the market for
           the retail supply of pay AV services, and [20-30]% when excluding non-linear
           OTT services, (ii) [10-20]% in the market for the retail supply of basic pay AV
           services, and [10-20]% when excluding non-linear OTT services, (iii) [20-30]%
           in the market for the retail supply of premium pay AV services, (iv) [10-20]% in
           the market for the retail supply of pay AV services for MDUs, and [10-20]%
           when excluding non-linear OTT services, and (v) [20-30]% in the market for the
           retail supply of pay AV services for SDUs, and [20-30]% when excluding non-
           linear OTT services, (vi) [10-20]% in the market for the retail supply of basic pay
           AV services to MDUs, and [10-20]% when excluding non-linear OTT services,
           (vii) [20-30]% in the market for the retail supply of basic pay AV services to
           SDUs, and [20-30]% when excluding non-linear OTT services, (viii) [5-10]% in
           the market for the retail supply of premium pay AV services to MDUs, and
           [10-20]% when excluding non-linear OTT services, and (ix) [20-30]% in the
           market for the retail supply of premium pay AV services to SDUs.
    (154) By subscribers, the JV would generally have more limited 2018 market shares.
           Based on 2018 figures, the JV will hold a market share by volume of (i) [10-20]%
           in the overall market for the retail supply of AV services, and [10-20]% when
           excluding non-linear OTT services, (ii) [10-20]% in the market for the retail
           supply of pay AV services, and [10-20]% when excluding non-linear OTT
           services, (iii) [10-20]% in the market for the retail supply of basic pay AV
           services, and [10-20]% when excluding non-linear OTT services, (iv) [5-10]% in
119  TV2 Norge’s response to questionnaire Q1 to retail suppliers of AV services in Norway, question C.7.1.
                                                          48
 ---pagebreak---             the market for the retail supply of premium pay AV services, and [10-20]% when
            excluding non-linear OTT services, (v) [0-5]% in the market for the retail supply
            of pay AV services for MDUs, and [5-10]% when excluding non-linear OTT
            services, and (vi) [10-20]% in the market for the retail supply of pay AV services
            for SDUs, and [20-30]% when excluding non-linear OTT services, (vii) [0-5]% in
            the market for the retail supply of basic pay AV services to MDUs , and [5-10]%
            when excluding non-linear OTT services, (viii) [20-30]% in the market for the
            retail supply of basic pay AV services to SDUs, and [20-30]% when excluding
            non-linear OTT services, (ix) [0-5]% in the market for the retail supply of
            premium pay AV services to MDUs, and [0-5]% when excluding non-linear OTT
            services, and (x) [5-10]% in the market for the retail supply of premium pay AV
            services to SDUs, and [20-30]% when excluding non-linear OTT services.
    (155) Fourth, several alternative suppliers of retail AV services, in particular Telia,
            RiksTV and Altibox, would remain active in any possible affected markets for the
            retail supply of AV services in Norway. In the market for the retail supply of pay
            AV services, they would have a 2018 market share by value of [10-20]%,
            [10-20]% and [10-20]%, respectively.120 Telia is a well-established
            telecommunications and media company with a strong presence in the Nordic
            region. A majority of respondents to the market investigation in Norway
            considered that sufficient competing providers will continue to exert a constraint
            on the JV post-Transaction.121
    (156) Fifth, the trend towards increased fibre and cable distribution has coincided with
            an observable increase in the coverage of high speed broadband download speeds,
            thereby enabling high quality OTT viewing in Norway. As shown in Figure 4
            below, areas serviced by broadband download speeds of over 10 Mbps have
            increased from 81% in 2018 to 87% in 2019. This improved infrastructural
            framework for the provision of IPTV and OTT services means that IPTV and
            OTT players are likely to exert a growing competitive constraint on the JV in the
            coming years. In that respect, one Norwegian market participant noted that the
            SVOD market is forecasted to grow by 13% annually over the 2019-2023 period
            (Source: PwC Global Entertainment and Media Outlook 2019-2023).122
6.3.3. Horizontal non-coordinated effects in the retail supply of AV services in Sweden
    (157) Telenor is active in the retail supply of AV services in Sweden via DTH through
            its wholly owned subsidiary, Canal Digital (which will be contributed to the JV)
            and via cable and IPTV through the Telenor brand (which will not be contributed
            to the JV). NENT is active in the retail supply of AV services in Sweden via DTH
            and IPTV through its wholly owned business, Viasat (which will be contributed
            to the JV) and OTT through Viaplay (which will not be contributed to the JV).
120  See market shares for alternative providers for all possible market segments in Section 6.2.1.1.(B).
121  Responses to questionnaires Q1 to retail suppliers of AV services in Norway, and Q2 to TV broadcasters
     in Norway, question F.5.
122  TV2 Norge’s response to questionnaire Q1 to retail suppliers of AV services in Norway, question C.7.1.
                                                            49
 ---pagebreak--- 6.3.3.1. The Notifying Parties’ view
    (158) The Notifying Parties submit that the Transaction does not raise competition
           concerns on the basis of any plausible definition of the relevant product market in
           Sweden for the reasons set out below.
    (159) First, the Notifying Parties claim that the distribution of pay TV services over
           DTH is in irreversible structural decline in Sweden and across the Nordic region.
           This would be illustrated by both Telenor's and NENT's DTH platforms losing a
           substantial number of Swedish subscribers to competitors which distribute
           services over other platforms.
    (160) Second, the Notifying Parties submit that both Canal Digital and Viasat have a
           limited presence in TV distribution in Sweden, each with market shares in the
           overall market for retail AV services of less than [5-10]% (by subscribers). In
           addition, the Transaction would result in a MHHI of 2,265 with a merger
           increment of 144, and by subscribers the JV would hold a share in excess of 20%
           only in the possible market for the retail supply of pay AV services for SDUs
           (excluding non-linear OTT services).
    (161) Third, the Notifying Parties argue that the JV will face fierce competition from a
           wide range of AV distributors active in Sweden across multiple distribution
           platforms, including Tele2/Com Hem, Telia, Telenor, Sappa and a plethora of
           linear and non-linear OTT services including Netflix, HBO Nordic and TV
           broadcasters' own services, such as Discovery's Dplay.
    (162) Fourth, the Notifying Parties note that the roll-out of high-speed fibre networks is
           continuing at pace across Sweden, and has reached 77% of Swedish households at
           the end of 2018, up from approximately 60% in 2014. They expect this trend to
           continue for at least two to three years. The Notifying Parties note that traditional
           TV viewership continues to decrease as video consumption shifts to streaming
           services and online platforms, including via mobile networks.123
6.3.3.2. The Commission’s assessment
    (163) The Commission considers that the Transaction does not give rise to serious
           doubts as to its compatibility with the internal market as a result of horizontal
           effects on the market for the retail supply of AV content in Sweden, or any
           possible narrower affected markets, for the following reasons.
    (164) First, Canal Digital and Viasat, which mainly offer retail AV services through
           DTH distribution, are in continued decline in Sweden. Indeed, Canal Digital and
           Viasat’s DTH customer bases have respectively decreased by […]% and […]%
           between January 2016 and July 2019,124 while the number of subscribers of retail
           AV services through fibre has increased by 33% between 2016 and 2018. Over
           the same time period, the number of subscribers receiving AV services via cable,
           DTH and DTT in Sweden has decreased by 10%, 11% and 23%, respectively.125
           These trends suggest a shift towards retail AV services over fibre which would
123  Form CO, paragraphs 550, 551 and 637, and Table 32.
124  Form CO, paragraph 719.
125  Form CO, paragraph 704.
                                                       50
 ---pagebreak---              likely continue post-Transaction, and confirm the structural decline of DTH
             distribution in Sweden.
    (165) Second, the Parties would have a moderate to high market position in most of the
             possible affected markets for the retail supply of AV services in Sweden.126 Based
             on 2018 figures, the Parties will hold a market share by value of (i) [30-40]% in
             the market for the retail supply of pay AV services (JV: [20-30]%,
             Telenor: [5-10]%, Viaplay: [0-5]%) , and [30-40]% when excluding non-linear
             OTT services (JV: [30-40]%, Telenor: [5-10]%) (ii) [30-40]% in the market for
             the retail supply of basic pay AV services (JV: [20-30]%, Telenor: [10-20]%,
             Viaplay: [5-10]%), and [30-40]% when excluding non-linear OTT services
             (JV: [20-30]%, Telenor: [10-20]%), (iii) [20-30]% in the market for the retail
             supply of premium pay AV services (JV: [20-30]%, Telenor [0-5]%,
             Viaplay: [0-5]%), and [30-40]% when excluding non-linear OTT services
             (JV: [30-40]%, Telenor: [5-10]%) (iv) [30-40]% in the market for the retail
             supply of pay AV services for SDUs (JV: [20-30]%; [5-10]%; [5-10]%), and
             [40-50]% when excluding non-linear OTT services (JV: [30-40]%,
             Telenor: [5-10]%). Only in the possible market for the retail supply of pay AV
             services to MDUs are the shares more moderate, at [20-30]% (JV: [10-20]%;
             Telenor: [10-20]%).127 Based on market shares shown in Table 14 by subscribers,
             the Parties would have a combined market position above 20% also in the market
             for (i) the retail supply of AV services for MDUs, irrespective of a segmentation
             in basic and premium, either including or excluding non-linear OTT players; and
             (ii) the retail supply of AV services segmented for SDUs, irrespective of a
             segmentation in basic and premium, either including or excluding non-linear OTT
             players. The JV would have a combined market position above 20% exclusively,
             in the markets of the retail supply of AV services for SDUs, irrespective of a
             segmentation in basic and premium, either including or excluding non-linear OTT
             players.
    (166) However, when looking by subscribers, the Parties would have more limited 2018
             market shares. Based on 2018 figures, the Parties will hold a market share by
             volume of (i) [20-30]% in the overall market for the retail supply of AV services
             excluding non-linear OTT services (JV: [10-20]%, Telenor: [5-10]%),
             (ii) [20-30]% in the market for the retail supply of basic pay AV services
             (JV: [5-10]%, Telenor: [10-20]%, Viaplay: [5-10]%), and [20-30]% when
             excluding non-linear OTT services (JV: [5-10]%, Telenor: [10-20]%),
             (iii) [20-30]% in the market for the retail supply of premium pay AV services
             excluding non-linear OTT services (JV: [10-20]%, Telenor: [0-5]%),
             (iv) [20-30]% in the market for the retail supply of AV services for SDUs
             excluding non-linear OTT services (JV: [20-30]%, Telenor: [5-10]%).128 Based
             on market shares shown in Table 14 by subscribers, the Parties would have a
             combined market position above 20% also in the market segments for (i) the retail
             supply of basic AV services for SDUs ([30-40]%), (ii) the retail supply of basic
126  See market shares for all possible market segments in Section 6.2.1.2.(B) where the combined market
     shares of the Parties or the JV is above 20%..
127  In an alternative scenario presented by the Notifying Parties, where all dual analogue-digital subscribers
     are allocated to the MDU segment, the JV’s market share for the retail supply of pay AV services for
     SDUs would be [30-40]%.
128  In an alternative scenario presented by the Notifying Parties, where all dual analogue-digital subscribers
     are allocated to the MDU segment, the JV’s market share for the retail supply of pay AV services for
     SDUs would be [10-20]%, and [30-40]% when excluding non-linear OTT services.
                                                          51
 ---pagebreak---              AV services for SDUs, excluding non-linear OTT players ([30-40]%), (iii) the
             retail supply of premium AV services for SDUs, excluding non-linear OTT
             players ([20-30]%). The JV would have a combined market position above 20%
             exclusively in the market segments for (i) the retail supply of basic AV services
             for SDUs, excluding non-linear OTT players ([20-30]%), (iii) the retail supply of
             premium AV services for SDUs, excluding non-linear OTT players ([20-30]%).
    (167) Considering the hypothetical market including non-linear OTT services, OTT
             players would exercise a competitive constraint on the Parties and the JV. In this
             respect, it is notable that in Sweden there would remain post-Transaction
             numerous OTT players who would constrain the JV, namely Netflix and HBO
             Nordic as well as new entrants Disney+ whose OTT service is expected to launch
             in the second half of 2020 in the Nordics. In addition, the market investigation
             indicated that the share of OTT, as well as IPTV, is growing rapidly in Sweden,
             as the share of linear TV watching is decreasing and the share of non-linear
             watching is increasing.
    (168) However, even considering the hypothetical market excluding non-linear OTT
             services, the Transaction would not significantly increase the Parties’ market
             position. In the MDU segment, Viasat was scarcely present with approximately
             […] subscribers, corresponding to a market share of [0-5]% under the narrowest
             product market definition of the market for the retail supply of retail AV services
             for MDUs excluding non-linear. In the SDU segment, the Parties will have a
             higher combined market share of [30-40]% in the market for the retail supply of
             AV services for SDUs excluding non-linear OTT services. However, in such
             market segment alternative providers would remain active including Telia, Tele2
             and other providers of retail AV services through fibre. First, similarly to Telenor,
             Telia and Tele2 are also active in the market for the retail supply of fixed internet
             access and mobile telecommunications services. Second, as indicated above at
             paragraph 157, in Sweden there is a trend of switching to fibre-based technology.
             Such trend is partly driven by the “open fibre” model prevalent in Sweden.129
             Open fibre networks reach approximately 1.5 million households in Sweden.
             Telenor estimates that approximately [60-70]% of the open fibre network is
             owned by municipalities, approximately [20-30]% by Telia, approximately
             [10-20]% by IP-Only and approximately [0-5]% of the network by Telenor.
             Therefore, the Commission considers that alternative operators and technologies
             to provide retail AV services would remain under the narrowest product market
             definition.
    (169) Third, several alternative suppliers of retail AV services, in particular Tele2 and
             Telia, would remain active in any possible affected markets for the retail supply
             of AV services in Sweden. In the market for the retail supply of pay AV services,
             they would have a 2018 market share by value of [20-30]% and [10-20]%,
             respectively.130 Telia is a well established telecommunications and media
             company with a strong presence in the Nordic region. A majority of respondents
129  The fibre network in Sweden has a specific characteristic of being either 'open' or ‘closed’. In particular,
     the service levels for the wholesale provision of broadband access services on the open fibre network are
     'open' to different providers and ultimately allow ISPs to provide broadband services to end customers
     without having ownership or control over the respective fibre network. Form CO, paragraph 572.
130  See market shares for alternative providers for all possible market segments in Section 6.2.1.2.(B).
                                                            52
 ---pagebreak---             to the market investigation in Sweden considered that sufficient competing
            providers will continue to exert a constraint on the JV post-Transaction.131
    (170) Fourth, the trend noted above in paragraph 157 of increasing roll-out of fibre is
            providing a growing proportion of Swedish households with access to high-speed
            broadband services that are needed for the quality viewing of OTT services. It is
            notable that the share of Swedish households that had access to broadband with
            download speeds in excess of 100 Mbps was 18% in 2018 with less than 0.1% of
            households with access to download speeds not exceeding 10Mbps.132 There is
            also an observable increase in OTT subscribers in Sweden, growing from around
            3 million in 2015 to around 5 million in 2019.133 This infrastructural framework,
            with growing fibre services that are making high quality OTT consumption
            possible, will likely enhance the competitive pressure exerted by OTT players in
            Sweden in the coming years. Therefore, regardless of the precise product market
            definition, the competitive pressure exerted by OTT players on the JV will be
            enhanced in the coming years, exercising an increased constraint on the JV.
6.3.4. Horizontal non-coordinated effects in the retail supply of AV services in Finland
    (171) Telenor is active in the retail supply of AV services in Finland via DTH through
            its wholly owned subsidiary, Canal Digital (which will be contributed to the JV),
            and via cable, IPTV and OTT through its wholly owned subsidiary, DNA (which
            will not be contributed to the JV). NENT is active in the retail supply of AV
            services in Finland via DTH through its wholly owned business, Viasat (which
            will be contributed to the JV), and OTT through Viaplay (which will not be
            contributed to the JV).
6.3.4.1. The Notifying Parties’ view
    (172) The Notifying Parties submit that the Transaction does not raise competition
            concerns on the basis of any plausible definition of the relevant product market in
            Finland for the reasons set out below.
    (173) First, the Notifying Parties submit that the JV will have a limited presence in TV
            distribution in Finland, with a market share in the overall market of less than
            [0-5]% (by subscribers). The overlap between the Parties' contributions to the JV
            would be de minimis. In addition, the Transaction would result in a MHHI of
            2,398 with a merger increment of negative 31 (-31).
    (174) Second, the Notifying Parties argue that the JV will face fierce competition from
            a wide range of AV distributors active in Finland across multiple distribution
            platforms, including Digita, DNA, Telia, Elisa, and a plethora of linear and non-
            linear OTT services.
    (175) Third, the Notifying Parties submit that (i) the Transaction would not give rise to
            any affected markets in Finland when considering market shares by subscribers,
            and (ii) even taking into account market shares by revenue, the JV’s market share
131  Responses to questionnaires Q3 to retail suppliers of AV services in Sweden, and Q4 to TV broadcasters
     in Sweden, question F.5.
132 Form CO, paragraph 701.
133 Form CO, Figure 20.
                                                          53
 ---pagebreak---              would exceed 20% only in the possible market for the retail supply of pay AV
             services for SDUs (excluding non-linear OTT services).134
6.3.4.2. The Commission’s assessment
    (176) The Commission considers that the Transaction does not give rise to serious
             doubts as to its compatibility with the internal market as a result of horizontal
             effects on the market for the retail supply of AV content in Finland, or any
             possible narrower affected markets, for the following reasons.
    (177) First, the Parties would have a modest market position in the following possible
             affected markets for the retail supply of AV services in Finland.135 Based on 2018
             figures, the Parties will hold a market share by value of (i) [20-30]% in the market
             for the retail supply of pay AV services (JV: [5-10]%, Telenor: [10-20]%,
             NENT: [5-10]%), and [20-30]% when excluding non-linear OTT services
             (JV: [10-20]%, Telenor: [10-20]%), (ii) [20-30]% in the market for the retail
             supply of pay AV services for MDUs (JV: [0-5]%, Telenor: [10-20]%,
             NENT: [5-10]%), and [20-30]% when excluding non-linear OTT services
             (JV: [0-5]%, Telenor [20-30]%), and (iii) [20-30]% in the market for the retail
             supply of premium pay AV services to SDUs excluding non-linear OTT services
             (JV: [20-30]%, Telenor: [0-5]%).
    (178) By subscribers, the Parties would also have a modest market position, when
             looking at 2018 market shares by volume in the following possible affected
             markets: (i) [20-30]% in the overall market for the retail supply of AV services
             excluding non-linear OTT services (JV: [0-5]%, Telenor: [10-20]%),
             (ii) [20-30]% in the market for the retail supply of pay AV services (JV: [0-5]%,
             Telenor: [10-20]%, NENT: [0-5]%), (iii) [20-30]% in the market for the retail
             supply of pay AV services for MDUs (JV: [0-5]%, Telenor: [20-30]%,
             NENT: [0-5]%), (iv) [10-20]% in the market for the retail supply of pay AV
             services for SDUs (JV: [5-10]%, Telenor: [0-5]%, NENT: [5-10]%), and
             [10-20]% when excluding non-linear OTT services (JV: [10-20]%,
             Telenor: [5-10]%), and (v) [10-20]% in the market for the retail supply of
             premium pay AV services to SDUs excluding non-linear OTT services
             (JV: [10-20]%, Telenor: [0-5]%).
    (179) The Parties would have a higher market share by value of (i) [30-40]%, in the
             possible market for the retail supply of pay AV services for SDUs (JV: [10-20]%,
             Telenor: [0-5]%, NENT: [5-10]%), and [30-40]% when excluding non-linear
             OTT services (JV: [30-40]%, Telenor: [0-5]%), (ii) [30-40]% in the market for
             the retail supply of basic pay TV services (JV: [5-10]%, Telenor: [20-30]%,
             NENT: [5-10]%), and [30-40]% excluding non-linear OTT providers
             (JV: [5-10]%, Telenor: [20-30]%), (iii) [30-40]% in the market for the retail
             supply of basic pay AV services to MDUs (JV: [0-5]%, Telenor: [20-30]%,
             NENT: [0-5]%), and [20-30]% when excluding non-linear OTT services
             (JV: [0-5]%, Telenor: [20-30]%), and (iv) [50-60]% in the market for the retail
             supply of basic pay AV services to SDUs (JV: [30-40]%, Telenor: [5-10]%,
             NENT: [10-20]%), and [50-60]% when excluding non-linear OTT services
134 Form CO, paragraphs 894, 895 and 906, and Table 62.
135  See market shares for all possible market segments in Section 6.2.1.3.(B) where the combined market
     shares of the Parties or the JV is above 20%..
                                                       54
 ---pagebreak---             (JV: [40-50]%, Telenor: [10-20]%). The Parties would also have a higher market
            share by volume of (i) [20-30]% in the market for the retail supply of pay AV
            services excluding non-linear OTT (JV: [0-5]%, Telenor: [20-30]%),
            (ii) [30-40]% in the market for the retail supply of basic pay TV services
            (JV: [0-5]%, Telenor: [30-40]%, NENT: [5-10]%), and [30-40]% when excluding
            non-linear OTT services (JV: [0-5]%, Telenor: [30-40]%), (iii) [30-40]% in the
            market for the retail provision of pay TV services for MDUs excluding non-linear
            OTT services (JV: [0-5]%, Telenor: [30-40]%), (iv) [30-40]% in the market for
            the retail supply of basic pay AV services to MDUs (JV: [0-5]%,
            Telenor: [30-40]%, NENT: [0-5]%), and [30-40]% when excluding non-linear
            OTT services (JV: [0-5]%, Telenor: [30-40]%), and (v) [40-50]% in the market
            for the retail supply of basic pay AV services to SDUs (JV: [10-20]%,
            Telenor: [5-10]%, NENT: [20-30]%), and [20-30]% when excluding non-linear
            OTT services (JV: [10-20]%, Telenor: [10-20]%).
    (180) Considering the hypothetical market including non-linear OTT services, OTT
            players would exercise a competitive constraint on the Parties and the JV. In this
            respect, it is notable that in Finland there would remain post-Transaction
            numerous OTT players who would constrain the JV, namely Netflix and HBO
            Nordic as well as new entrants Disney+ whose OTT service is expected to launch
            in the second half of 2020 in the Nordics. In addition, the market investigation
            indicated that the share of OTT, as well as IPTV, is growing rapidly in Finland, as
            the share of linear TV watching is decreasing and the share of non-linear
            watching is increasing.136
    (181) However, even considering the hypothetical market excluding non-linear OTT
            services, the Transaction would not significantly increase the Parties’ market
            position. The Commission notes that Telenor and Canal Digital were already part
            of the same economic entity, before the Transaction, and the merger specific
            increment is limited to the […] subscribers brought by Viasat, corresponding to a
            market share of maximum [0-5]% by revenue and [0-5]% by subscriber under the
            narrowest product market definition.
    (182) Second, the JV would have a limited market position in most of the possible
            affected markets for the retail supply of AV services in Finland. Based on 2018
            figures, the JV will hold a market share by value of (i) [5-10]% in the market for
            the retail supply of pay AV services, and [10-20]% when excluding non-linear
            OTT services, (ii) [5-10]% in the market for the retail supply of basic pay AV
            services, and [5-10]% when excluding non-linear OTT services, (iii) [0-5]% in
            the market for the retail supply of pay AV services for MDUs, and [0-5]% when
            excluding non-linear OTT services, (iv) [10-20]% in the market for the retail
            supply of pay AV services for SDUs, (v) [0-5]% in the market for the retail
            supply of basic pay AV services to MDUs, and [0-5]% when excluding non-linear
            OTT services, and (vi) [20-30]% in the retail supply of premium pay AV services
            to SDUs excluding non-linear OTT services.
    (183) By subscribers, the JV would have even more limited 2018 market shares. Based
            on 2018 figures, the JV will hold a market share by volume of (i) [0-5]% in the
            overall market for the retail supply of AV services excluding non-linear OTT
            services, (ii) [0-5]% in the market for the retail supply of pay AV services, and
136  See Digita’s response to questionnaire Q5 to retail suppliers of AV services in Finland, question C.10.1.
                                                           55
 ---pagebreak---             [0-5]% when excluding non-linear OTT services, (iii) [0-5]% in the market for
            the retail supply of basic pay AV services, and [0-5]% when excluding non-linear
            OTT services, (iv) [0-5]% in the market for the retail supply of pay AV services
            for MDUs, and [0-5]% when excluding non-linear OTT services, (iv) [5-10]% in
            the market for the retail supply of pay AV services for SDUs, and [10-20]% when
            excluding non-linear OTT services, (vii) [0-5]% in the market for the retail supply
            of basic pay AV services to MDUs (including or excluding non-linear OTT
            services), (vii) [10-20]% in the market for the retail supply of basic pay AV
            services to SDUs, and [10-20]% when excluding non-linear OTT services, and
            (viii) [10-20]% in the market for the retail supply of premium pay AV services to
            SDUs excluding non-linear OTT services.
    (184) The JV would have a higher market share by value, of (i) [30-40]%, in the
            possible market for the retail supply of pay AV services for SDUs excluding non-
            linear OTT services, and (ii) [30-40]% in the retail supply of basic pay AV
            services to SDUs, and [40-50]% when excluding non-linear OTT services.
            Nevertheless, for the reasons set out above in paragraph 180, the Commission
            considers that regardless of the precise product market definition, the competitive
            pressure exerted by OTT players on the JV will be enhanced in the coming years,
            thereby exercising an increased constraint on the JV.
    (185) Third, several alternative suppliers of retail AV services, in particular Telia and
            Elisa would remain active in any possible affected markets for the retail supply of
            AV services in Finland. In the market for the retail supply of pay AV services,
            they would have a 2018 market share by value of [10-20]% and [10-20],
            respectively.137 Telia is a well established telecommunications and media
            company with a strong presence in the Nordic region. Elisa is also a strong
            vertically integrated Finnish player.
6.3.5. Horizontal non-coordinated effects in the retail supply of AV services in Denmark
    (186) In Denmark, Telenor is active in the retail supply of AV services in Denmark via
            DTH through its wholly owned subsidiary, Canal Digital (which will be
            contributed to the JV). NENT is active in the retail supply of AV services in
            Denmark via DTH through its wholly owned business, Viasat (which will be
            contributed to the JV), and OTT through Viaplay (which will not be contributed
            to the JV).
    (187) The combined market position of the JV will be below 20% under any possible
            market segmentation of the market for the retail supply of AV services except for
            the market for the retail supply of premium AV services for SDUs excluding non-
            linear OTT services, where the Parties will have a combined market shares of
            [20-30]% by subscribers and [20-30]% by revenue, and the market for the retail
            supply of basic AV services for SDUs, where the Parties would have a combined
            market shares by subscribers of [20-30]%, of which the JV, [5-10]% and NENT
            [10-20]% (based on 2018).
137  See market shares for alternative providers for all possible market segments in Section 6.2.1.3.(B).
                                                            56
 ---pagebreak--- 6.3.5.1. The Notifying Parties’ view
    (188) The Notifying Parties submit that the Transaction does not raise competition
             concerns on the basis of any plausible definition of the relevant product market in
             Denmark for the reasons set out below.
    (189) First, the Notifying Parties submit that the JV will have a limited presence in TV
             distribution in Denmark.
    (190) Second, the Notifying Parties argue that the JV will face fierce competition from
             a wide range of AV distributors active in Denmark across multiple distribution
             platforms, including TDC and Stofa, and a plethora of linear and non-linear OTT
             services.
6.3.5.2. The Commission’s assessment
    (191) The Commission considers that the Transaction does not give rise to serious
             doubts as to its compatibility with the internal market as a result of horizontal
             effects on the market for the retail supply of AV content Denmark, or any
             possible narrower affected markets, for the following reasons.
    (192) First, in the market for the retail supply of basic AV services for SDUs, the
             Parties would have a combined market shares by subscribers of [20-30]%, of
             which the JV, [5-10]% and NENT [10-20]% (based on 2018). The Commission
             considers that the increment brought by the Transaction is limited to Canal
             Digital’s market share of [5-10]% by subscribers, and several alternatives would
             remain including TDC, Stofa and Waoo! with market shares of respectively
             [20-30]%, [10-20]% and [10-20]%.
    (193) Second, the Parties would have a modest market position in the possible affected
             market for the retail supply of premium AV services for SDUs excluding non-
             linear OTT services in Denmark. Based on 2018 figures, the Parties will hold a
             market share by value of [20-30]% by subscribers and [20-30]% by revenue in
             this market.138 As neither Telenor nor NENT would be active in this possible
             affected market, the JV would hold a similar market share by value of [20-30]%
             by subscribers and [20-30]% by revenue.
    (194) Third, the increment brought by the transaction is limited to the […] subscribers
             brought by Canal Digital, corresponding to a market share of [0-5]% by revenue
             and [0-5]% by subscribers in the market for the retail supply of premium AV
             services for SDUs, excluding non-linear OTT players.
    (195) Fourth, several alternative providers would remain available including but not
             limited to Telia, TDC, Stofa and Waoo! with market shares by subscribers of
             respectively [20-30]%, [5-10]%, [5-10]% and [5-10]%.139
138  See market shares for all possible market segments in Section 6.2.1.4.(B) where the combined market
     shares of the Parties or the JV is above 20%..
139  RFI 16, Annex 1.
                                                       57
 ---pagebreak--- 6.3.6. Conclusion
    (196) In light of the foregoing, the Commission considers that the Transaction does not
           give rise to serious doubts as to its compatibility with the internal market as a
           result of horizontal effects on the markets for the retail supply of AV content in
           Norway, Sweden, Finland and Denmark.
6.4.    Non-horizontal assessment
6.4.1. Introduction
    (197) A merger between companies which operate at different levels of the supply chain
           may significantly impede effective competition if such merger gives rise to
           foreclosure.140 Foreclosure occurs where actual or potential competitors' access to
           supplies or markets is hampered or eliminated as a result of the merger, thereby
           reducing those companies' ability and/or incentive to compete.141 Such
           foreclosure may discourage entry or expansion of competitors or encourage their
           exit.142
    (198) The Non-Horizontal Merger Guidelines distinguishes between two forms of
           vertical foreclosure. Input foreclosure occurs where the merger is likely to raise
           the costs of downstream competitors by restricting their access to an important
           input. Customer foreclosure occurs where the merger is likely to foreclose
           upstream competitors by restricting their access to a sufficient customer base.143
    (199) In addition, conglomerate mergers are mergers between firms that are in a
           relationship which is neither purely horizontal (as competitors in the same
           relevant market) nor vertical (as supplier and customer). In practice, the focus is
           on mergers between companies that are active in closely related markets
           (e.g. mergers involving suppliers of complementary products or of products
           which belong to a range of products that is generally purchased by the same set of
           customers for the same end use).144
6.4.1.1. Input foreclosure
    (200) Pursuant to the Non-Horizontal Merger Guidelines, input foreclosure arises
           where, post-merger, the new entity would be likely to restrict access to the
           products or services that it would have otherwise supplied absent the merger,
           thereby raising its downstream rivals' costs by making it harder for them to obtain
           supplies of the input under similar prices and conditions as absent the merger.145
    (201) For input foreclosure to be a concern, the vertically integrated firm should have a
           significant degree of market power in the upstream market. Only when the
           merged firm has such a significant degree of market power, can it be expected
           that it will significantly influence the conditions of competition in the upstream
140  Non-Horizontal Merger Guidelines, paragraphs 17-18.
141  Non-Horizontal Merger Guidelines, paragraph 18.
142  Non-Horizontal Merger Guidelines, paragraph 29.
143  Non-Horizontal Merger Guidelines, paragraph 30.
144  Non-Horizontal Merger Guidelines, paragraph 91.
145  Non-Horizontal Merger Guidelines, paragraph 31.
                                                       58
 ---pagebreak---            market and thus, possibly, the prices and supply conditions in the downstream
           market.146
    (202) In assessing the likelihood of an anticompetitive input foreclosure scenario, the
           Commission examines, first, whether the merged entity would have, post-merger,
           the ability to substantially foreclose access to inputs, second, whether it would
           have the incentive to do so, and third, whether a foreclosure strategy would have a
           significant detrimental effect on competition downstream.147
6.4.1.2. Customer foreclosure
    (203) Pursuant to the Non-Horizontal Merger Guidelines, customer foreclosure may
           occur when a supplier integrates with an important customer in the downstream
           market and because of this downstream presence, the merged entity may foreclose
           access to a sufficient customer base to its actual or potential rivals in the upstream
           market (the input market) and reduce their ability or incentive to compete, which
           in turn, may raise downstream rivals' costs by making it harder for them to obtain
           supplies of the input under similar prices and conditions as absent the merger.
           This may allow the merged entity profitably to establish higher prices on the
           downstream market.148
    (204) For customer foreclosure to be a concern, a vertical merger must involve a
           company which is an important customer with a significant degree of market
           power in the downstream market. If, on the contrary, there is a sufficiently large
           customer base, at present or in the future, that is likely to turn to independent
           suppliers, the Commission is unlikely to raise competition concerns on that
           ground.149
    (205) In assessing the likelihood of an anticompetitive customer foreclosure scenario,
           the Commission examines, first, whether the merged entity would have the ability
           to foreclose access to downstream markets by reducing its purchases from its
           upstream rivals, second, whether it would have the incentive to reduce its
           purchases upstream, and third, whether a foreclosure strategy would have a
           significant detrimental effect on consumers in the downstream market.150
6.4.1.3. Conglomerate effects
    (206) According to the Non-Horizontal Merger Guidelines, in most circumstances,
           conglomerate mergers do not lead to competition problems.151
    (207) However, foreclosure effects may arise when the combination of products in
           related markets may confer on the merged entity the ability and incentive to
           leverage a strong market position from one market to another closely related
           market by means of tying or bundling or other exclusionary practices. The Non-
           Horizontal Merger Guidelines distinguish between bundling, which usually refers
146  Non-Horizontal Merger Guidelines, paragraph 35.
147  Non-Horizontal Merger Guidelines, paragraph 32.
148  Non-Horizontal Merger Guidelines, paragraph 58.
149  Non-Horizontal Merger Guidelines, paragraph 61.
150  Non-Horizontal Merger Guidelines, paragraph 59.
151  Non-Horizontal Merger Guidelines, paragraph 92.
                                                     59
 ---pagebreak---              to the way products are offered and priced by the merged entity152 and tying,
             usually referring to situations where customers that purchase one good (the tying
             good) are required to also purchase another good from the producer (the tied
             good).
    (208) Tying and bundling as such are common practices that often have no
             anticompetitive consequences. Nevertheless, in certain circumstances, these
             practices may lead to a reduction in actual or potential rivals’ ability or incentive
             to compete. Foreclosure may also take more subtle forms, such as the degradation
             of the quality of the standalone product.153 This may reduce the competitive
             pressure on the merged entity allowing it to increase prices.154
    (209) In assessing the likelihood of such a scenario, the Commission examines, first,
             whether the merged firm would have the ability to foreclose its rivals,155 second,
             whether it would have the economic incentive to do so156 and, third, whether a
             foreclosure strategy would have a significant detrimental effect on competition,
             thus causing harm to consumers.157 In practice, these factors are often examined
             together as they are closely intertwined.
    (210) In order to be able to foreclose competitors, the merged entity must have a
             significant degree of market power, which does not necessarily amount to
             dominance, in one of the markets concerned. The effects of bundling or tying can
             only be expected to be substantial when at least one of the merging parties’
             products is viewed by many customers as particularly important and there are few
             relevant alternatives for that product.158 Further, for foreclosure to be a potential
             concern, it must be the case that there is a large common pool of customers,
             which is more likely to be the case when the products are complementary.159
             Finally, bundling is less likely to lead to foreclosure if rival firms are able to
             deploy effective and timely counter-strategies, such as single-product companies
             combining their offers.160
    (211) The incentive to foreclose rivals through bundling or tying depends on the degree
             to which this strategy is profitable.161 Bundling and tying may entail losses or
             foregone revenues for the merged entity.162 However, they may also allow the
             merged entity to increase profits by gaining market power in the tied goods
152  Within bundling practices, the distinction is also made between pure bundling and mixed bundling. In the
     case of pure bundling the products are only sold jointly in fixed proportions. With mixed bundling the
     products are also available separately, but the sum of the stand-alone prices is higher than the bundled
     price.
153  Non-Horizontal Merger Guidelines, paragraph 33.
154  Non-Horizontal Merger Guidelines, paragraph 93.
155  Non-Horizontal Merger Guidelines, paragraphs 95 to 104.
156  Non-Horizontal Merger Guidelines, paragraphs 105 to 110.
157  Non-Horizontal Merger Guidelines, paragraphs 111 to 118.
158  Non-Horizontal Merger Guidelines, paragraph 99.
159  Non-Horizontal Merger Guidelines, paragraph 100.
160  Non-Horizontal Merger Guidelines, paragraph 103.
161  Non-Horizontal Merger Guidelines, paragraph 105.
162  Non-Horizontal Merger Guidelines, paragraph 106.
                                                           60
 ---pagebreak---              market, protecting market power in the tying good market, or a combination of
             the two.163
    (212) It is only when a sufficiently large fraction of market output is affected by
             foreclosure resulting from the concentration that the concentration may
             significantly impede effective competition. If there remain effective single-
             product players in either market, competition is unlikely to deteriorate following a
             conglomerate concentration.164 The effect on competition needs to be assessed in
             light of countervailing factors such as the presence of countervailing buyer power
             or the likelihood that entry would maintain effective competition in the upstream
             or downstream markets.165
6.4.2. Possible foreclosure of competing suppliers of retail AV services from accessing
          NENT’s TV channels (input foreclosure)
6.4.2.1. Norway
    (213) In Norway, the JV will be active in the retail supply of AV services by combining
             Canal Digital’s DTH business and Viasat’s DTH and IPTV activities. NENT will
             remain active in the wholesale supply of FTA and basic pay TV channels,
             premium pay TV sports channels and premium pay TV non-sports channels.
             NENT would also remain active as retail supplier of AV services through its OTT
             applications, Viaplay. Telenor would also remain active in the retail supply of AV
             services via cable and IPTV through the Telenor brand (which will not be
             contributed to the JV).166 The merger specific change is the addition of Canal
             Digital’s downstream activities to NENT’s DTH and IPTV service, Viasat.
    (214) The Commission has assessed the risk that NENT would post-Transaction engage
             in input foreclosure strategies in Norway by either: (i) total input foreclosure of
             rival providers of retail AV services through the denial of access to NENT’s
             channels; and (ii) partial input foreclosure of rival providers of retail AV services
             through an increase of carriage fees paid by rival providers to NENT or by
             significantly degrading the quality of channels licensed to rival providers of AV
             services (for example, by removing significant content or ancillary rights).
    (215) The Commission has assessed the two abovementioned types of input foreclosure
             strategies for all the types of TV channels, which NENT licenses to retail
             providers of AV services in Norway, namely: (i) basic pay-TV channels167, (ii)
             premium pay TV sports channels, and (iii) premium pay TV non-sports channels.
163  Non-Horizontal Merger Guidelines, paragraph 108.
164  Non-Horizontal Merger Guidelines, paragraph 113.
165  Non-Horizontal Merger Guidelines, paragraph 114.
166  Telenor does not offer a standalone OTT service in Norway, but Telenor subscribers have access to a TVE
     service ("T-We"). Paragraph 250, Form CO.
167  NENT supplies its basic pay TV channels as a package. This conclusion is based on demand and supply
     side factors, which support the view that NENT basic pay TV channels should be treated as a package
     product. On the demand side, TV distributors purchase a package of NENT’s basic pay TV channels in
     Norway. [Confidential strategic views of NENTs sales policy and strategy] See Annex 55, Form CO. On
     the supply side, NENT’s basic pay TV channels are sold by TV distributors to end-customers as packages
     including, not only TV3 but also other basic pay TV channels. Accordingly, the demand and supply side
     analysis of the purchase and supply of NENT’s basic pay TV channels shows that NENT’s channels
     constitute a package product. The Commission has therefore made its assessment of anticompetitive input
                                                         61
 ---pagebreak---     (216) For the purpose of its assessment, the Commission has considered, as the more
              likely potential targets of an input foreclosure strategy, the JV’s largest
              competitors in the retail supply of AV services, irrespective of any potential
              market segmentation. On the basis of the market shares presented in Section
              6.2.1.1.(B), in relation to the market for the retail supply of AV services, the main
              targets of a potential foreclosure strategy are the other main TV distributors,
              namely Altibox, RiksTV and Telia.
    (217) The Commission has conducted its assessment on the basis of all possible
              downstream market definitions. The question as to whether NENT would have
              the ability to undertake a total or partial input foreclosure strategy has therefore
              been undertaken in light of the importance of those channels to TV distributors
              active in the potential markets for which basic pay TV channels and premium pay
              TV channels are acquired.168 The Commission’s assessment of the impact of a
              total or partial foreclosure strategy also applies in respect of the above mentioned
              possible markets for which TV channels are an important input. Since the
              importance of NENT’s TV channels and the likely impact of foreclosure to those
              channels as inputs, is at least as significant on the narrower relevant markets as it
              is on the broader market for the retail provision of AV services, the Commission
              hereafter, in this section, refers to the ‘retail supply of AV services’ or ‘retail AV
              services’ as shorthand for all possible markets comprising the retail supply of
              (i) AV services (ii) linear pay AV services, (iii) linear basic pay AV services
              (iv) linear premium pay AV services, (v) all possible markets (i) to
              (iv) segmented into MDU and SDU.
    (218) In Section 6.1.1, the Commission considered that the question whether Telenor
              and NRK belong to the same economic unit or whether they make up separate
              economic units with an independent power of decision can be left open as the
              Transaction does not raise serious doubts as to its compatibility with the internal
              market regardless of the answer to this question.169 In particular, as regard to a
              potential vertical relationship between NRK and the JV, the Commission
              considers that the Transaction does not raise serious doubts as to its compatibility
              with the internal market for the following reasons.
    (219) First, for the purpose of the assessment of this Decision, the Commission does not
              consider NRK as a commercial broadcaster like NENT. NRK supplies
              exclusively FTA channels and, differently from NENT, it does not supply pay TV
              channels to providers of retail AV services. NRK is Norway’s national public
     foreclosure considering NENT’s basic pay TV channels as a package therefore including all different
     genres of basic pay TV channels supplied by NENT in the market.
168  Basic pay TV channels are acquired as an input for the markets for the retail supply of (i) AV services
     (ii) linear pay AV services, (iii) linear basic pay AV services (iv) all possible markets (i) to (iii) segmented
     into MDU and SDU. Premium pay TV channels are acquired as an input for the markets for the retail
     supply of (i) AV services (ii) linear pay AV services, (iii) linear premium pay AV services (iv) all possible
     markets (i) to (iii) segmented into MDU and SDU.
169  The Notifying Parties indicate that, in such hypothetical scenario, the Transaction would not have an
     impact on any markets where NRK would be also active. In the market for the wholesale supply of TV
     channels, the Notifying Parties consider any input foreclosure concern, whereby NRK would refuse to
     supply or supply its channels at worse terms, as unwarranted. First, NRK’s channels are subject to certain
     “must-carry” obligations. Second, pre-Transaction, NRK was already distributing its channels broadly.
     Third, Norwegians are obliged to pay for public service broadcasting via a mandatory additional income
     tax, meaning that it would be politically unacceptable (in fact, inconceivable) for the Norwegian State to
     limit access to NRK's channels or otherwise degrade the quality of NRK channels to certain distributors.
                                                             62
 ---pagebreak---            broadcaster. NRK’s FTA TV channels are subject to a “must-carry” obligation170
           and, differently from other TV broadcasters, including NENT, NRK is not
           dependent on advertising revenues and carriage fees from TV distributors,
           because it is funded by governmental taxation. NRK’s FTA TV channels are
           available to all retail suppliers of AV services via all type of distribution,
           including OTT.171
    (220) Second, Norwegians are obliged to pay for NRK’s public service broadcasting via
           a mandatory additional tax. The Commission does not consider likely that
           distribution of NRK’s TV channels would be limited for customers of competing
           providers of retail AV services, for example by limiting FTA distribution, while
           they would still be obliged to pay a tax to receive such channels.
    (221) Third, the Commission considers that end customers might still access NRK’s
           content and channels through NRK’s retail OTT AV service, NRKTV.
    (222) Moreover, the Transaction does not materially change the incentive to implement
           a foreclosing strategy. Pre-Transaction, NRK was active as FTA supplier with a
           market share by volume of approximately [40-50]% in the market for the
           wholesale supply of FTA and Basic pay TV channels. In the downstream market,
           in 2018 Telenor and Canal Digital have a combined market share of [40-50]%
           (Telenor: [20-30]%, Canal Digital: [10-20]%) in the market for the retail supply
           of AV services, excluding non-linear where NRK’s channels could be used as an
           input. Post-Transaction, Telenor will exclusively have a market share of [20-30]%
           combined with a joint (50%) ownership in the JV with a market share of
           [20-30]%.
    (223) Finally, the Commission considers that NRK was already vertically integrated
           pre-Transaction172, and it did not engage into any type of foreclosure strategy vis-
           à-vis competing providers of retail AV services, such as Telia and Altibox.
        (A)        The Notifying Parties’ view
    (224) The Notifying Parties argue that the Transaction will not give NENT the ability
           and incentive to engage in input foreclosure in Norway. Pre-Transaction, NENT
           is already vertically integrated as a supplier and distributor of TV channels. Post-
           Transaction, NENT will remain active as a supplier of TV channels but NENT’s
           vertical integration will be reduced with the transfer of its 100% owned entity,
           Viasat Consumer, into a joint venture 50% co-owned with Telenor.
    (225) With respect to NENT’s ability to undertake an input foreclosure strategy, the
           Notifying Parties consider that NENT [Confidential strategic views of NENTs
           sales policy and strategy].
    (226) Even if NENT had the ability to engage in an input foreclosure strategy by
           preventing rival TV distributors from offering its TV channels to their customers,
           the Notifying Parties submit the Transaction does not increase incentives for input
           foreclosure of NENT’s channels from rival distributors. […].
170  Form CO, paragraph 345.
171  NRK offers its own retail AV OTT service, NRKTV.
172  NRK has a 50% share in RiksTV, a provider of retail AV services through DTT technology.
                                                         63
 ---pagebreak---     (227) Even if NENT would have the ability and incentive to engage in an input
              foreclosure strategy, the Notifying Parties submit that such strategy would not
              have any significant detrimental effect on effective competition. […].173 […]
          (B)        The Commission’s assessment
    (228) The Commission’s assessment of anticompetitive input foreclosure, in light of the
              results of the market investigation, is set out in the following paragraphs. For this
              purpose, consistent with paragraph 32 of the Non-Horizontal Merger Guidelines,
              in relation to each of these practices, the Commission examines, (i) whether the
              NENT would have, post-merger, the ability to foreclose access to inputs, (ii)
              whether it would have the incentive to do so, and (iii) whether a foreclosure
              strategy would have a significant detrimental effect on competition in the
              downstream markets.
a.          Ability to engage in input foreclosure
    (229) For the reasons set out below, first, the Commission cannot exclude that NENT
              may have the ability to engage in total or partial input foreclosure of its basic pay
              TV channels in Norway; second, the Commission considers that NENT will likely
              have the ability to engage in total or partial input foreclosure of its premium pay
              TV sports channels in Norway; third, the Commission considers that NENT will
              not have the ability to engage in total or partial input foreclosure of its premium
              non-sports pay TV channels in Norway
    (230) First, the Commission assesses whether NENT would have a significant degree of
              market power in the upstream market for the wholesale supply of TV channels,
              including all possible sub-segments and whether NENT’s TV channels can be
              considered an important input within the meaning of the Non-Horizontal Merger
              Guidelines.174
    (231) Table 31, reproduced below, shows the market shares of NENT and its main
              competitors in the market for the wholesale supply of TV channels in Norway in
              2018 by share of viewing. NENT’s market share in 2018 was respectively
              [5-10]% for the wholesale supply of combined FTA/pay TV channels, and
              [10-20]% for the wholesale supply of pay TV channels and [10-20]% for the
              wholesale supply of basic pay TV channels, and [20-30]% for the wholesale
              supply of premium pay TV channels, and [20-30]% for the wholesale supply of
              premium pay TV sports channels, and [30-40]% for the wholesale supply of
              premium pay TV non-sports channels.
173   M.9064 – Telia / Bonnier Broadcasting Holding, interim text of the non-confidential version of the
     commitments, available at:
     https://ec.europa.eu/competition/mergers/cases/additional_data/m9064_3342_3.pdf
174  Non-Horizontal Merger Guidelines, paragraph 35. For input foreclosure to be a concern, a vertically
     integrated entity must have a significant degree of market power in the upstream market. It is only in those
     circumstances that the entity can be expected to have significant influence on the conditions of
     competition in the upstream market and thus, possibly, on prices and supply conditions in the downstream
     market.
                                                           64
 ---pagebreak---                               Table 31: Market shares in 2018
     in the market for the wholesale supply of pay TV channels by share of viewing
              Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale
              supply of supply of supply of supply of supply of supply of supply of
              FTA and     pay-TV     FTA and basic pay- premium premium premium
               pay-TV    channels basic pay-       TV       pay-TV     sports  non-sports
               channels                 TV      channels channels    pay-TV     pay-TV
                                     channels                        channels channels
   NENT          [5-10]   [10-20]      [5-10]    [10-20]    [20-30]   [20-30]   [30-40]
   TV2                                [20-30]
   Norge        [20-30]   [30-40]                [40-50]    [70-80]   [70-80]   [50-60]
   Discovery [10-20]      [30-40]     [10-20]    [30-40]        -        -         -
   Others       [40-50]   [10-20]     [40-50]    [10-20]        -        -         -
                                  Source: Form CO, Annex 68.
(232) Table 32, reproduced below, shows the market shares of NENT and its main
       competitors in the market for the wholesale supply of TV channels in Norway in
       2018 by value. NENT’s market share in 2018 was respectively [10-20]% for the
       wholesale supply of pay TV channels and [5-10]% for the wholesale supply of
       basic pay TV channels, and [30-40]% for the wholesale supply of premium pay
       TV channels, and [40-50]% for the wholesale supply of premium pay TV sports
       channels, and [20-30]% for the wholesale supply of premium pay TV non-sports
       channels.
                              Table 32: Market shares in 2018
             in the market for the wholesale supply of TV channels by value
                        Wholesale Wholesale Wholesale Wholesale Wholesale
                         supply of supply of supply of supply of supply of
                          pay-TV basic pay- premium premium premium
                         channels       TV      pay-TV       sports non-sports
                                     channels channels      pay-TV   pay-TV
                                                           channels channels
              NENT        [10-20]      [5-10]    [30-40]    [40-50]   [20-30]
              TV2         [50-60]     [50-60]    [50-60]    [50-60]   [70-80]
              Norge
              Discovery   [20-30]     [30-40]       -           -        -
              Others       [5-10]      [5-10]     [0-5]       [0-5]      -
                                  Source: Form CO, Annex 68.
(233) With reference to NENT’s FTA/basic pay TV channels, the Commission notes
       that NENT is the third largest broadcaster in the market for the wholesale supply
       of basic pay TV channels with a market share of [10-20]% by volume and
       [5-10]% by value. The clear market leader is TV2 Norge with market share by
       value and volume of respectively [30-40]% and [50-60]%, followed by Discovery
       with shares of respectively [30-40]% and [30-40]%.
(234) With reference to NENT’s premium pay TV sports channels, the Commission
       considers that, based on the above market shares, there is an indication that
       NENT has a significant market position in market for the wholesale supply of
       premium pay TV sports channels in Norway. The only other broadcaster that
       comes anywhere close to the position of NENT is TV2 Norge.
(235) With reference to NENT’s premium pay TV non-sports channels, the
       Commission considers that, based on the above market shares, there is an
       indication that NENT has a significant market position in market for the
                                                 65
 ---pagebreak---             wholesale supply of premium pay TV non-sports channels in Norway. The only
            other broadcaster that comes anywhere close to the position of NENT is TV2
            Norge.
    (236) Second, in order to determine the importance of NENT’s pay TV channels for TV
            distributors, the Commission, in line with past cases175, analyses in addition to the
            relevant market shares (i) the proportion of end users who watch the NENT’s TV
            channel (i.e., audience reach) and (ii) the views of market participants on the
            importance of the NENT’s TV channels for AV distribution businesses.
    (237) With reference to NENT’s basic pay TV channels, NENT is supplying the third
            most important basic pay TV channel in Norway, TV3 with a reach of
            [50-60]%.176 The other most important channels by reach are TV2 Norge supplied
            by TV2 Norge with a reach of [80-90]% and TVN supplied by Discovery with a
            reach of [60-70]%. In addition, NENT distributes two other basic pay TV
            channels, TV6 and Viasat4. [Confidential information about NENT’s distributors
            and sales strategy].
    (238) With reference to NENT’s premium pay TV sports channels, NENT is supplying
            the fourth most important premium pay TV channel in Norway, Viasport1 with a
            reach of [0-5]%.177 The other most important channels by reach are all supplied
            by TV2 Norge with a reach of [10-20]%.
    (239) With reference to NENT’s premium pay TV non-sports channels, none of
            NENT’s channels is among the top five providers of premium pay TV channel in
            Norway.178
    (240) Third, the Commission has analysed the views of market participants on the
            importance of NENT’s pay TV channels for retail suppliers of AV services since
            all competing providers of linear retail AV services are acquiring channels from
            NENT.179 [Confidential information about NENT’s distributors and sales
            strategy].180
    (241) With reference to NENT’s basic pay TV channels, respondents consider the
            channels TV3, TV6 and Viasat 4 as important to compete in the retail market. The
            three channels are important for the number of viewership, reach or availability of
            sport content.181
    (242) With reference to NENT’s premium pay TV sports channels, respondents
            consider the channels Viasport+, Viasport 1, EsportsTV as important to compete
            in the retail market. Those channels carry unique sport content, such as
            Champions League which respondents consider as relevant from a viewer’s
            perspective. Respondents did not consider any premium pay TV non-sports
            channels as important due to the availability of substitutes or since they are based
175  M.9064 – Telia / Bonnier Broadcasting Holding, recital 500.
176  Form CO, Annex 38.
177  Form CO, Annex 38.
178  Form CO, Annex 38.
179  Responses to questionnaire Q1 to retail suppliers of AV services in Norway, question E.1.
180  Form CO, Annex 55
181  Responses to questionnaires Q1 to retail suppliers of AV services in Norway and Q2 to TV broadcasters
     in Norway, question E.4.
                                                           66
 ---pagebreak---              on irrelevant content. One respondent also noted the availability of several
             subscription video on demand services such as Prime Video, Netflix, Viaplay,
             Apple TV+ and Disney+ (not yet launched in Norway but expected to launch this
             year) and others which offer high quality premium non-sports content. 182
    (243) Fourth, with reference to the technical ability to implement any foreclosure
             strategy, most respondents to the market investigation indicate that NENT post-
             Transaction could either stop licensing certain of its TV channels or degrade the
             terms and conditions at which it licenses its TV channels.183 One respondent
             considers that NENT could decide to limit the offering of certain channels (for
             example premium sport pay TV channels) or certain distribution rights. Another
             respondent notes that NENT would pursue a strategy to bypass distributors and
             have direct relationship with the customers.
    (244) In addition, with reference to the Notifying Parties’ view that possible contractual
             limitations may reduce NENT’s ability to engage in total or partial input
             foreclosure, the Commission notes that NENT’s agreements with the JV’s
             competing TV distributors, Telenor, Telia, Altibox and RiksTV, are expiring
             respectively [Confidential views of NENTs strategic decisions].184
    (245) With reference to potential counter-strategies that could be implemented by the
             JV’s downstream competitor, the market investigation provided mixed replies on
             whether alternative broadcasters from which it would be possible to license TV
             channels would remain available. Most respondents noted that alternative
             broadcasters or content providers would be available for content on which basic
             pay and premium pay TV non-sports channels are based on but it would not be
             possible to fully replicate the premium sport content supplied by NENT.185 The
             Commission however notes that, TV2 Norge, is both the other major supplier of
             basic and premium pay sports TV channels and indirectly active in the retail
             supply of AV services.186 If RiksTV would be denied access to certain channels
             or right from NENT , TV2 Norge could also deny certain channels or rights to its
             basic and premium pay sports TV channels to the JV as counter strategy. In light
             of the above, the Commission considers that, first, there would not likely be
             effective and timely counter-strategies for rivals to overcome the effects of total
             or partial input foreclosure of premium pay TV sports channels by NENT post-
             Transaction. Second, the Commission considers that there would be effective and
             timely counter-strategies for rivals to overcome the effects of total or partial input
             foreclosure of premium pay TV non-sports channels by NENT post-Transaction.
    (246) In light of the above, first, the Commission cannot exclude that NENT may have
             the ability to engage in total or partial input foreclosure of its basic pay TV
             channels in Norway; second, the Commission considers that NENT will likely
             have the ability to engage in total or partial input foreclosure of its premium pay
             TV sports channels in Norway; third, the Commission considers that NENT will
182  Responses to questionnaires Q1 to retail suppliers of AV services in Norway and Q2 to TV broadcasters
     in Norway, question E.4.
183  Responses to questionnaire Q1 to retail suppliers of AV services in Norway, questions E.6 and E.7
     and F.5.
184  Annex 55, Form CO. [Confidential information about NENT’s distributors and sales strategy].
185  Responses to questionnaire Q1 to retail suppliers of AV services in Norway, question E.9.
186  TV2 Norge has a 50% share in RiksTV, a provider of retail AV services through DTT technology.
                                                           67
 ---pagebreak---               not have the ability to engage in total or partial input foreclosure of its premium
              non-sports pay TV channels in Norway
b.          Incentive to engage in input foreclosure
    (247) Most of the respondents to the market investigation have indicated that they
              consider it likely that NENT would either stop licensing all of its channels or
              certain of its channels to competing TV distributors or reduce the terms and
              conditions at which it licenses such channels.187 In particular, respondents notes
              that the JV will have a much stronger distribution power and, therefore, NENT
              may have a higher incentive to rely on the JV as distribution platform and that
              NENT may limit the supply of its channels for certain distribution channels, such
              as OTT rights. Finally, RiksTV considers that the Transaction increases NENT’s
              incentive to deny access to its channels in certain areas (namely area where
              customers could subscribe exclusively through DTH or DTT). In such areas,
              RiksTV would be the only alternative to the JV since broadband speed is more
              limited and there could be more difficulties in offering retail AV services via
              OTT.
    (248) For the reasons set out below the Commission considers that NENT will not
              likely have the incentive to engage in total or partial input foreclosure of its TV
              channels in Norway, irrespective of any plausible segmentation of the product
              market in basic pay or premium pay sports or premium pay TV non-sports
              channels.
    (249) An input foreclosure strategy would not likely be profitable for NENT if the lost
              profit in the upstream market from such a strategy, that is to say carriage fees and
              advertising revenues188 of the NENT’s TV channels, is smaller than the profit
              gain from being able to expand sales or raise prices in the downstream market for
              the retail supply of AV services through the JV.
    (250) First, the Commission notes that before the Transaction NENT was already a
              vertically integrated operator active on the one side on the wholesale supply of
              TV channels and, on the other side, on the retail supply of AV services through its
              OTT service, Viaplay with approximately […] subscribers in 2018, and its
              IPTV/DTH service, Viasat with approximately […] subscribers in 2018. Before
              the Transaction, even though NENT was vertically integrated, NENT distributed
              its channels widely in the market. This was confirmed by respondents to the
              market investigation.189 Moreover, [Confidential information about NENT’s
              distributors and sales strategy].190
    (251) Second, the merger specific change of the Transaction relates to the increase of
              NENT’s position in the downstream market by acquiring a 50% stake in the JV
              where Viasat’s DTH activities are combined with the Canal Digital’s one, and its
              approximately […] subscribers and by losing 50% control on Viasat’s business
187  Responses to questionnaire Q1 to retail suppliers of AV services in Norway, questions E.6.1.3, E.7.3 and
     E.8.1.
188  TV broadcasters generate revenues from the wholesale supply of TV channels mainly from (i) carriage
     fees obtained from retail AV distributors and, (ii) advertising revenues generated from the sale of
     advertising space on those channels.
189  Responses to questionnaire Q1 to retail suppliers of AV services in Norway, question E.1.
190  Annex 55, Form CO.
                                                           68
 ---pagebreak---       and its approximately […] subscribers. As indicated in Section 6.3.2, the
      Commission considers that the combination of Viasat and Canal Digital’s DTH
      businesses in the retail AV market, or any plausible segmentation, does not raise
      serious doubts as its compatibility with the internal market. In particular, both
      Viasat and Canal Digital are experiencing a decline in their customer basis
      showing the difficulties they have in attracting new customers compared to
      competing providers of retail AV services relying on fibre for distribution.
(252) As shown in Figure 1 below, Canal Digital lost around […] subscribers – a
      decrease of approximately […] – in Norway between January 2016 and July 2019
      (see Figure 1 below). Over the same time period, Viasat's DTH subscriber base in
      Norway decreased by almost […]%, or around […] subscribers.
                 Figure 1: Canal Digital and Viasat DTH subscribers
         [Subscriber numbers and reductions in parties' subscriber numbers]
                               Source: Form CO, Figure 12
(253) As shown in Figure 2, the loss of DTH subscribers seems driven by customers
      switching to TV services distributed over fibre networks. The number of
      subscribers receiving TV via fibre in Norway increased by approximately
      171 000 between 2016 and 2018 – an increase of 30%. Over the same time
      period, the number of subscribers receiving TV via cable, DTH and DTT in
      Norway decreased by 17%, 11% and 7%, respectively.
              Figure 2: Subscribers of retail AV services by technology
                               Source: Form CO, Figure 12
(254) The trend of switching to fiber-based technology seems also driven by the ability
      of providers of retail AV services through fiber to combine their service with
      fixed internet access services. In Norway, as shown in Figure 3, Canal Digital,
      Viasat and RiksTV are the only suppliers which offer exclusively retail AV
      services. The main providers of retail AV services, such as Telenor, Telia (Get)
      and Altibox are all offering also fixed internet access service.
                                              69
 ---pagebreak---                    Figure 3: Offering of retail providers of AV services in Norway
                                  [Non-confidential version of Figure 3]
                                      Source: Form CO, Annex 21, Slide 7
    (255) Third, the Commission considers that the number of consumers switching to the
             JV in case NENT would no longer provide access to its channels would not be
             significant. NENT’s incentive to foreclose depends on the number of new
             customers and those cancelling their subscription with their current provider of
             retail AV services (“cord-cutting”) and switching to the JV’s offering. However,
             as shown in Figure 2 above, consumers tend to more likely choose fibre as
             distribution technology for retail AV services over DTH. Moreover, […]% of
             Telenor's cable TV subscribers (i.e., subscribers of Telenor’s retail AV services
             not contributed to the JV) are also customers of Telenor fixed internet access
             services.191
    (256) In case of a blackout of exclusively NENT’s TV channels through fiber
             distribution, customers would have the possibility to keep their current fixed
             internet access service and retail AV service subscription and continue watching
             NENT’s TV channels, either basic or premium pay, on NENT’s OTT service,
             Viaplay, which would be supplied independently in the market (‘cord-shaving”).
             Based on the above, the Commission notes that switching to the JV’s retail AV
             service would be further constrained by the current market trend in Norway of
             customers subscribing to fibre based retail AV services and fixed internet access
             services.
    (257) Fourth, the Commission considers that the refusal to supply NENT’s TV
             channels, irrespective of any plausible segmentation, to third-party distributors
             would greatly reduce NENT’s revenue from the sale of advertising airtime on its
             channels and carriage fees charged to third party distributors. To this end, the
             Notifying Parties have provided an analysis prepared by an external economic
             consultant [Confidential information about NENT’s distributors and sales
             strategy].192 [Confidential information about NENT’s distributors and sales
             strategy].193 [Confidential information about NENT’s distributors and sales
191  Telenor’s reply to RFI 14, question 2.
192  Form CO, Annex 39.
193  Notifying Parties’ reply to RFI 8, Annex 1 and 3.
                                                        70
 ---pagebreak---               strategy]194, [Confidential information about NENT’s distributors and sales
              strategy].
    (258) The Commission further notes that it may be unlikely for NENT to recoup any
              losses from advertising and distribution revenue by expanding revenues from the
              downstream activities of the JV. In 2018, NENT generated approximately NOK
              […] as advertising revenue and NOK […] as revenue from carriage fee. The JV’s
              profit margin per user per month is approximately NOK […]. In order to recoup
              NENT’s losses, the JV would need to acquire […] subscribers in one year.
              However, since NENT will be entitled only to half of the JV’s profit, the amount
              of subscribers should be double for the strategy to be profitable which means
              almost […] subscribers corresponding to approximately […]% of subscribers of
              competing providers of retail AV services. This number of additional subscribers
              to the JV seems unrealistic in light of the structural decline of the JV’s main
              distribution technology DTH.
    (259) Fifth, the Commission considers that it would not be relevant to assess whether
              NENT would have the incentive to refuse to supply OTT rights to NENT’s TV
              channels. NENT would remain active independently in the market for the retail
              supply of AV services through its OTT service, Viaplay. The JV would combine
              the Canal Digital’s DTH business and Viasat’s DTH and IPTV activities.
              Therefore, the Commission considers that the Transaction does not significantly
              change NENT’s incentive to licence OTT rights to competing providers of retail
              AV services. The Commission has assessed whether the Transaction would
              change NENT’s incentive to engage into partnership related to its OTT services
              with the JV’s competing providers of retail AV services in Section 6.4.4.1.
    (260) Moreover, the Commission considers that the Transaction does not significantly
              change NENT’s incentive to engage into partial foreclosure. While any TV
              broadcaster would have the incentive to obtain a higher remuneration for the TV
              channels it is supplying to TV distributors, the increase in the JV’s downstream
              market position does not significantly increase NENT’s bargaining position. In
              particular, NENT would still need to get access to the customer base of competing
              providers of retail AV services to preserve the advertising revenue from the
              supply of its channels which accounts for more than […]% of its revenues.
    (261) Finally, the Commission has assessed whether NENT would have the incentive to
              engage in a selective input foreclosure vis-à-vis RiksTV in certain areas where
              DTT and DTH are the main distribution technology available.195 First, the
              Commission notes that NENT has a distribution agreement with RiksTV expiring
              in […].196 […] Second, RiksTV is active nationwide and not only in the areas
              where DTT and DTH are the main distribution technology197. Therefore, in case
              of foreclosure, only a part of RiksTV’s customers in the DTT/DTH areas could
194  As indicated in Section 6.3.2, Telenor is active in the retail supply of AV services in Norway via DTH
     through its wholly owned subsidiary, Canal Digital (which will be contributed to the JV), and via cable
     and IPTV through the Telenor brand (which will not be contributed to the JV). Reference to Telenor
     relates to Telenor’s activities excluding Canal Digital.
195  In particular, in such areas, the retail provision of AV services through cable and IPTV would not be
     available. Moreover, broadband speed would be limited and it would not enable the provision of retail AV
     services through OTT distribution.
196  […].
197  [Confidential views of NENTs strategic decisions].
                                                            71
 ---pagebreak---               switch to the JV. The great part which is available in other areas could switch also
              to other competing providers of retail AV services.
    (262) Third, the Commission notes that fibre and cable coverage is rapidly increasing in
              Norway and, therefore, in the next two to three years a reduction of areas
              reachable exclusively by DTT and DTH is expected. As shown in Figure 4 below,
              areas with a broadband download speed of over 10 Mbps which enables viewing
              of high quality OTT service increased from 81% in 2017 to 87% in 2019.
                          Figure 4: Estimated broadband coverage in Norway
                  Source: NKOM/Analysys Mason, Bredbåndsdekning 2019 (September 2019).
    (263) Moreover, fibre coverage is also significantly increasing reaching a population
              coverage of 71% in September 2019, a significant increase from a coverage of
              59% in 2018, and from 41% in 2015. The increase of fibre coverage is not limited
              to urban areas. The Norwegian Telecommunication Authority, NKOM, indicated
              in its report how fibre and high broadband coverage is increasing not only in
              urban but also rural areas. In particular, NKOM notes that “the pace of
              Norwegian fibre development has never been higher. Particularly noteworthy is
              the strong growth in fibre-based broadband outside of densely populated areas,
              where about 60,000 new households have been offered fibre over the past year.
              45% of households outside urban areas now have fibre coverage, up from 32% in
              2018”.198
    (264) Finally, RiksTV is jointly owned by TV2 Norge and NRK. TV2 Norge is one of
              the major broadcaster in Norway with market shares over 50% in the wholesale
              supply of pay TV channels, and any possible sub-segments. [Confidential
              information about Canal Digital and NENT’s distributors and sales strategy].
              NENT may have limited incentive to limit the supply of its channels to RiksTV
              since it may fear that TV2 Norge would engage in similar strategies depriving the
              JV of a significant input.
198  NKOM/Analysys         Mason,    Bredbåndsdekning     2019   (September  2019),    available at
     https://www nkom no/aktuelt/nyheter/_attachment/43103?_ts=16d6cdbb4e1.
                                                       72
 ---pagebreak---     (265) In light of the above, the Commission considers that NENT will not likely have
             the incentive to engage in total or partial input foreclosure of its TV channels in
             Norway, irrespective of any plausible segmentation of the product market in basic
             pay or premium pay sports or premium pay TV non-sports channels.
c.          Impact on effective competition and conclusion
    (266) The Commission considers that due to the lack of ability for premium pay TV
             non-sports channels and a lack of incentive for all these types of channels, it is not
             needed to assess whether any foreclosure strategy would have a negative impact
             on effective competition.
    (267) In light of the foregoing, the Commission concludes that the Transaction would
             not raise serious doubts as to its compatibility with the internal market resulting
             from total or partial input foreclosure of NENT’s TV channels, irrespective of any
             plausible segmentation199, in Norway.
6.4.2.2. Sweden
    (268) In Sweden, the JV will be active in the retail supply of AV services by combining
             Canal Digital’s DTH business and Viasat’s DTH and IPTV activities. NENT will
             remain active in the wholesale supply of FTA and basic pay TV channels,
             premium pay TV sports channels and premium pay TV non-sports channels.
             NENT would also remain active as retail supplier of AV services through its OTT
             applications, Viaplay. Telenor would remain active in the retail supply of AV
             services via cable and IPTV through the Telenor brand (which will not be
             contributed to the JV).200 The merger specific change is the addition of Canal
             Digital’s downstream activities to NENT’s DTH and IPTV service, Viasat.
    (269) The Commission has assessed the risk that NENT would post-Transaction engage
             in input foreclosure strategies in Sweden by either: (i) total input foreclosure of
             rival providers of retail AV services through the denial of access to NENT’s
             channels; and (ii) partial input foreclosure of rival providers of retail AV services
             through an increase of carriage fees paid by rival providers to NENT or by
             significantly degrading the quality of channels licensed to rival providers of AV
             services (for example, by removing significant content or ancillary rights).
    (270) The Commission has assessed the two abovementioned types of input foreclosure
             strategies for all the types of TV channels, which NENT licenses to retail
             providers of AV services in Sweden, namely: (i) basic pay-TV channels201,
199  NENT’s basic pay TV channels include all different genres of basic pay TV channels supplied by NENT
     in the market. NENT’s premium pay sports TV channels include all sports channels supplied by NENT in
     the market. NENT’s premium pay non-sports TV channels include film & series channels supplied by
     NENT in the market.
200  Telenor does not offer a standalone OTT service in Norway, but Telenor subscribers have access to a TVE
     service ("Telenor Stream"). Form CO, paragraph 593.
201  NENT supplies its FTA and basic pay TV channels as a package. This conclusion is based on demand and
     supply side factors, which support the view that NENT FTA and basic pay TV channels should be treated
     as a package product. On the demand side, TV distributors purchase a package of NENT’s FTA and basic
     pay TV channels in Sweden. [Confidential strategic views of NENTs sales policy and strategy]. See
     Annex 55, Form CO. On the supply side, NENT’s FTA and basic pay TV channels are sold by TV
     distributors to end-customers as packages including, not only TV3 but also other basic pay TV channels.
     Accordingly, the demand and supply side analysis of the purchase and supply of NENT’s FTA and basic
                                                          73
 ---pagebreak---               (ii) premium pay TV sports channels, and (iii) premium pay TV non-sports
              channels.
    (271) For the purpose of its assessment, the Commission has considered, as the more
              likely potential targets of an input foreclosure strategy, the JV’s largest
              competitors in the retail supply of AV services, irrespective of any potential
              market segmentation. On the basis of the market shares presented in
              Section 6.2.1.2.(B), in relation to the market for the retail supply of AV services,
              the main targets of a potential foreclosure strategy are the other main TV
              distributors, namely Tele2, Sappa and Telia.
    (272) The Commission has conducted its assessment on the basis of all possible
              downstream market definitions. The question as to whether NENT would have
              the ability to undertake a total or partial input foreclosure strategy has therefore
              been undertaken in light of the importance of those channels to TV distributors
              active in the potential markets for which FTA and basic pay TV channels and
              premium pay TV channels are acquired.202 The Commission’s assessment of the
              impact of a total or partial foreclosure strategy also applies in respect of the above
              mentioned possible markets for which TV channels are an important input. Since
              the importance of NENT’s TV channels and the likely impact of foreclosure to
              those channels as inputs, is at least as significant on the narrower relevant markets
              as it is on the broader market for the retail provision of AV services, the
              Commission hereafter, in this section, refers to the ‘retail supply of AV services’
              or ‘retail AV services’ as shorthand for all possible markets comprising the retail
              supply of (i) AV services (ii) linear pay AV services, (iii) linear basic pay AV
              services (iv) linear premium pay AV services, (v) all possible markets (i) to (iv)
              segmented into MDU and SDU.
          (A)         The Notifying Parties’ view
    (273) The Notifying Parties argue that the Transaction will not give NENT the ability
              and incentive to engage in input foreclosure in Sweden. Pre-Transaction, NENT
              is already vertically integrated as a supplier and distributor of TV channels. Post-
              Transaction, NENT will remain active as a supplier of TV channels but NENT’s
              vertical integration will be reduced with the transfer of its 100% owned entity,
              Viasat Consumer, into a joint venture 50% co-owned with Telenor.
    (274) With respect to NENT’s ability to undertake an input foreclosure strategy, the
              Notifying Parties consider that [confidential information about NENT’s
              distributors and sales strategy].
    (275) Even if NENT had the ability to engage in an input foreclosure strategy by
              preventing rival TV distributors from offering its TV channels to their customers,
     pay TV channels shows that NENT’s channels constitute a package product. The Commission has
     therefore made its assessment of anticompetitive input foreclosure considering NENT’s FTA and basic
     pay TV channels as a package therefore including all different genres of FTA and basic pay TV channels
     supplied by NENT in the market.
202  FTA and basic pay TV channels are acquired as an input for the markets for the retail supply of (i) AV
     services (ii) linear pay AV services, (iii) linear basic pay AV services (iv) all possible markets (i) to (iii)
     segmented into MDU and SDU. Premium pay TV channels are acquired as an input for the markets for
     the retail supply of (i) AV services (ii) linear pay AV services, (iii) linear premium pay AV services
     (iv) all possible markets (i) to (iii) segmented into MDU and SDU.
                                                             74
 ---pagebreak---               the Notifying Parties submit the Transaction does not increase incentives for input
              foreclosure of NENT’s channels from rival distributors. [Confidential information
              about NENT’s distributors and sales strategy].
    (276) Even if NENT would have the ability and incentive to engage in an input
              foreclosure strategy, the Notifying Parties submit that such strategy would not
              have any significant detrimental effect on effective competition. [Confidential
              information about NENT’s distributors and sales strategy].203 [Confidential
              information about NENT’s distributors and sales strategy].
          (B)        The Commission’s assessment
    (277) The Commission’s assessment of anticompetitive input foreclosure, in light of the
              results of the market investigation, is set out in the following paragraphs. For this
              purpose, consistent with paragraph 32 of the Non-Horizontal Merger Guidelines,
              in relation to each of these practices, the Commission examines, (i) whether
              NENT would have, post-merger, the ability to foreclose access to inputs,
              (ii) whether it would have the incentive to do so, and (iii) whether a foreclosure
              strategy would have a significant detrimental effect on competition in the
              downstream markets.
a.          Ability to engage in input foreclosure
    (278) For the reasons set out below, first, the Commission cannot exclude that NENT
              may have the ability to engage in total or partial input foreclosure of its basic pay
              TV channels in Sweden; second, the Commission considers that NENT will likely
              have the ability to engage in total or partial input foreclosure of its premium pay
              TV sports channels in Sweden; third, the Commission considers that NENT will
              not have the ability to engage in total or partial input foreclosure of its premium
              non-sports pay TV channels in Sweden.
    (279) First, the Commission assesses whether NENT would have a significant degree of
              market power in the upstream market for the wholesale supply of TV channels,
              including all possible sub-segments and whether NENT’s TV channels can be
              considered an important input within the meaning of the Non-Horizontal Merger
              Guidelines.204
    (280) Table 33 reproduced below, shows the market shares of NENT and its main
              competitors in the market for the wholesale supply of TV channels in Sweden in
              2018 by share of viewing. NENT’s market share in 2018 was respectively
              [10-20]% for the wholesale supply of combined FTA/pay TV channels, and
              [20-30]% for the wholesale supply of pay TV channels and [10-20]% for the
              wholesale supply of basic pay TV channels, and [50-60]% for the wholesale
              supply of premium pay TV channels, and [50-60]% for the wholesale supply of
              premium pay TV sports channels, and [50-60]% for the wholesale supply of
              premium pay TV non-sports channels.
203  M.9064 – Telia / Bonnier Broadcasting Holding, interim text of the non-confidential version of the
     commitments, available at:
     https://ec.europa.eu/competition/mergers/cases/additional_data/m9064_3342_3.pdf
204  See footnote 176.
                                                          75
 ---pagebreak---                                   Table 33: Market shares in 2018
         in the market for the wholesale supply of pay TV channels by share of viewing
                  Wholesale Wholesale Wholesale Wholesale Wholesale           Wholesale    Wholesale
                  supply of supply of supply of supply of supply of            supply of    supply of
                  FTA and     pay-TV      FTA and basic pay- premium           premium      premium
                   pay-TV     channels basic pay-       TV         pay-TV        sports    non-sports
                   channels                  TV      channels channels          pay-TV       pay-TV
                                          channels                              channels     channels
       NENT         [10-20]    [20-30]     [20-20]    [10-20] [50-60]         [50-60]      [50-60]
       SVT  205     [30-40]     [0-5]      [30-40]    [50-60] [40-50]         [40-50]      [40-50]
       Telia        [30-40]    [40-50]     [30-40]    [50-60] -               -            -
       Discovery [10-20]       [20-30]     [10-20]    [20-30] -                                -
       Others        [5-10]    [10-20]      [5-10]     [5-10]    [0-5]           [0-5]         -
                                       Source: Form CO, Annex 68.
    (281) Table 34 reproduced below, shows the market shares of NENT and its main
            competitors in the market for the wholesale supply of TV channels in Sweden in
            2018 by value. NENT’s market share in 2018 was respectively [20-30]% for the
            wholesale supply of pay TV channels and [10-20]% for the wholesale supply of
            basic pay TV channels, and [50-60]% for the wholesale supply of premium pay
            TV channels, and [50-60]% for the wholesale supply of premium pay TV sports
            channels, and [40-50]% for the wholesale supply of premium pay TV non-sports
            channels.
                                  Table 34: Market shares in 2018
                 in the market for the wholesale supply of TV channels by value
                             Wholesale Wholesale Wholesale Wholesale Wholesale
                             supply of supply of supply of supply of supply of
                              pay-TV basic pay- premium premium premium
                              channels       TV      pay-TV         sports    non-sports
                                          channels channels        pay-TV       pay-TV
                                                                  channels channels
                  NENT         [20-30]     [10-20] [50-60]        [50-60]      [40-50]
                  Telia        [40-50]     [40-50] [40-50]        [40-50]      [40-50]
                  Discovery [10-20]        [20-30] -              -            -
                  Others        [5-10]     [10-20] [0-5]          [0-5]        [0-5]
                                       Source: Form CO, Annex 68.
    (282) With reference to NENT’s FTA/basic pay TV channels, the Commission notes
            that NENT is the third largest broadcaster in the market for the wholesale supply
            of basic pay TV channels with a market share of [10-20]% by volume and
            [10-20]% by value. The clear market leader is Telia with market share by value
            and volume of respectively [40-50]% and [30-40]%, followed by Discovery with
            shares of respectively [20-30]% and [10-20]%.
    (283) With reference to NENT’s premium pay TV sports channels, the Commission
            considers that, based on the above market shares, there is an indication that
            NENT has a significant market position in market for the wholesale supply of
            premium pay TV sports channels in Sweden. The only other broadcaster that
            comes anywhere close to the position of NENT is Telia.
205  SVT is the Swedish national public TV broadcaster. SVT broadcasts four FTA TV channels (SVT1,
     SVT2, SVT24/SVT Barn, Kunskapskanalen) on digital terrestrial television and via third party pay-TV.
                                                      76
 ---pagebreak---     (284) With reference to NENT’s premium pay TV non-sports channels, the
           Commission considers that, based on the above market shares, there is an
           indication that NENT has a significant market position in market for the
           wholesale supply of premium pay TV non-sports channels in Sweden. The only
           other broadcaster that comes anywhere close to the position of NENT is Telia.
    (285) Second, in order to determine the importance of NENT’s pay TV channels for TV
           distributors, the Commission, in line with past cases206, analyses in addition to the
           relevant market shares (i) the proportion of end users who watch the NENT’s TV
           channel (i.e., audience reach) and (ii) the views of market participants on the
           importance of the NENT’s TV channels for AV distribution businesses.
    (286) With reference to NENT’s basic pay TV channels, NENT is supplying the third
           most important basic pay TV channel in Sweden, TV3 with a reach of
           [50-60]%.207 The other most important channels by reach are TV4 supplied by
           Telia with a reach of [70-80]% and Kanal 5 supplied by Discovery with a reach of
           [50-60]%. In addition, NENT distributes other basic pay TV channels. These
           channels are not as popular as the TV3 channel but are sold by NENT together in
           basic pay packages.
    (287) With reference to NENT’s premium pay TV sports channels, NENT is supplying
           the most important premium pay sport TV channel in Sweden, Viasat sport
           Premium with a reach of [5-10]%.208
    (288) With reference to NENT’s premium pay non-sports TV channels, NENT is
           supplying the most important premium pay sport TV channel in Sweden, Viasat
           Film Premiere Premium with a reach of [5-10]%.209
    (289) Third, the Commission has analysed the views of market participants on the
           importance of NENT’s pay TV channels for retail suppliers of AV services since
           all competing providers of linear retail AV services are acquiring channels from
           NENT.210 [Confidential information about NENT’s customers].
    (290) With reference to NENT’s basic pay TV channels, respondents consider almost
           all FTA and Basic pay TV channels as important to compete in the retail market.
           The three channels are important for the number of viewership, reach or
           availability of sport content.211
    (291) With reference to NENT’s premium pay TV sports channels, respondents
           consider the NENT’s channels as important to compete in the retail market. Those
           channels carry unique sport content, such as hockey and football events which
           respondents consider as relevant from a viewer’s perspective. Respondents did
           not consider any premium pay TV non-sports channels as important due to the
           availability of substitutes or since they are based on irrelevant content. One
           respondent also noted the availability of several subscription video on demand
206  M.9064 – Telia / Bonnier Broadcasting Holding, recital 500.
207  Form CO, Annex 38.
208  Form CO, Annex 38.
209  Form CO, Annex 38.
210  Responses to questionnaire Q3 to retail suppliers of AV services in Sweden, question E.1.
211  Responses to questionnaires Q3 to retail suppliers of AV services in Sweden and Q4 to TV broadcasters in
     Sweden, question E.4.
                                                           77
 ---pagebreak---             services such as Prime Video, Netflix, Viaplay, Apple TV+ and Disney+ (not yet
            launched in Sweden but expected to launch this year) and others which offer high
            quality premium non-sports content. 212
    (292) Fourth, with reference to the technical ability to implement any foreclosure
            strategy, respondents to the market investigation had a mixed view on whether
            NENT post-Transaction could either stop licensing certain of its TV channels or
            degrade the terms and conditions at which it licenses its TV channels.213 Tele2
            considers that NENT would not engage in such foreclosure strategies.214 Another
            respondent indicated that NENT could engage in such practice and that it could
            decide to distribute its premium channels exclusively through the JV.
    (293) In addition, with reference to the Notifying Parties’ view that possible contractual
            limitations may reduce NENT’s ability to engage in total or partial input
            foreclosure, the Commission notes that NENT’s agreements with the JV’s
            competing TV distributors, Telenor (excluding Canal Digital), Telia, Tele2 and
            Sappa, are expiring respectively in […], […], […] and […].215 [Confidential
            information about NENTs strategic decisions].
    (294) With reference to potential counter-strategies that could be implemented by the
            JV’s downstream competitor, the market investigation provided mixed replies on
            whether alternative broadcasters from which it would be possible to license TV
            channels would remain available. Most respondents noted that alternative
            broadcasters or content providers would be available for content on which basic
            pay and premium pay TV non-sports channels are based on but it would not be
            possible to fully replicate the premium sport content or TV3 and TV6, basic pay
            TV channels, supplied by NENT.216 The Commission however notes that, Telia,
            is both the other major supplier of basic and premium pay sports TV channels and
            retail supplier of AV services. If Telia would be denied certain channels or rights
            (for example OTT rights) from NENT, it could also deny OTT rights to its basic
            and premium pay sports TV channels to NENT as counter strategy. In light of the
            above, the Commission considers that, first, there would not likely be effective
            and timely counter-strategies for certain rivals to overcome the effects of total or
            partial input foreclosure of premium pay TV sports channels by NENT post-
            Transaction. Second, the Commission considers that there would be effective and
            timely counter-strategies for rivals to overcome the effects of total or partial input
            foreclosure of premium pay TV non-sports channels by NENT post-Transaction.
    (295) In light of the above, first, the Commission cannot exclude that NENT may have
            the ability to engage in total or partial input foreclosure of its FTA and basic pay
            TV channels in Sweden; second, the Commission considers that NENT will likely
            have the ability to engage in total or partial input foreclosure of its premium pay
            TV sports channels in Sweden; third, the Commission considers that NENT will
            not have the ability to engage in total or partial input foreclosure of its premium
            non-sports pay TV channels in Sweden
212  Responses to questionnaires Q3 to retail suppliers of AV services in Sweden and Q4 to TV broadcasters in
     Sweden, questions E.4 and F.3.
213  Responses to questionnaire Q3 to retail suppliers of AV services in Sweden, questions E.6 and E.7.
214  [Confidential information about NENTs strategic decisions].
215  Form CO, Annex 55.
216  Responses to questionnaire Q3 to retail suppliers of AV services in Sweden, question E.9.
                                                           78
 ---pagebreak--- b.         Incentive to engage in input foreclosure
    (296) Respondents to the market investigation provided mixed replies on whether they
             consider it likely that NENT would either stop licensing all of its channels or
             certain of its channels to competing TV distributors or reduce the terms and
             conditions at which it licenses such channels.217 One respondent notes that by
             combining Viasat and Canal Digital’s activities, the JV would become a stronger
             distribution platform in the market for the retail supply of AV service which may
             incentivize NENT to withhold content to other distributors. However, another
             respondent considers that it is not obvious that NENT would have such incentive
             since NENT relies on revenues from carriage fees and advertising generated
             through partnerships with competing distributors.
    (297) For the reasons set out below the Commission considers that NENT will not
             likely have the incentive to engage in total or partial input foreclosure of its TV
             channels in Sweden, irrespective of any plausible segmentation of the product
             market in basic pay or premium pay sports or premium pay TV non-sports
             channels.
    (298) An input foreclosure strategy would not likely be profitable for NENT if the lost
             profit in the upstream market from such a strategy, that is to say carriage fees and
             advertising revenues218 of the NENT’s TV channels, is smaller than the profit
             gain from being able to expand sales or raise prices in the downstream market for
             the retail supply of AV services through the JV.
    (299) First, the Commission notes that before the Transaction NENT was already a
             vertically integrated operator active on the one side on the wholesale supply of
             TV channels and, on the other side, on the retail supply of AV services through its
             OTT service, Viaplay with approximately […] subscribers in 2018, and its
             IPTV/DTH service, Viasat with approximately […] subscribers in 2018. Before
             the Transaction, even though NENT was vertically integrated, NENT distributed
             its channels widely in the market. This was confirmed by respondents to the
             market investigation.219 Moreover, NENT was supplying its channels for DTH
             distribution to Canal Digital.220
    (300) Second, the merger specific change of the Transaction relates to the increase of
             NENT’s position in the downstream market by acquiring a 50% stake in the JV
             where Viasat’s DTH activities are combined with the Canal Digital’s one, and its
             approximately […] subscribers and by losing 50% control on Viasat’s business
             and its approximately […] subscribers. As indicated in Section 6.3.3, the
             Commission considers that the combination of Viasat and Canal Digital’s DTH
             businesses in the retail AV market, or any plausible segmentation, does not raise
             serious doubts as its compatibility with the internal market. In particular, both
             Viasat and Canal Digital are experiencing a decline in their customer basis
217  Responses to questionnaire Q3 to retail suppliers of AV services in Sweden, questions E.6, E.7, E.6.1.1-3,
     and E.7.1-3.
218  TV broadcasters generate revenues from the wholesale supply of TV channels mainly from (i) carriage
     fees obtained from retail AV distributors and, (ii) advertising revenues generated from the sale of
     advertising space on those channels.
219  Responses to questionnaire Q3 to retail suppliers of AV services in Sweden, question E.1.
220  Form CO, Annex 55.
                                                           79
 ---pagebreak---            showing the difficulties they have in attracting new customers compared to
           competing providers of retail AV services relying on fibre for distribution.
    (301) As shown in Figure 5 below, Canal Digital lost around […] subscribers – a
           decrease of approximately […]% – in Sweden between January 2016 and
           April 2019. Over the same time period, Viasat's DTH subscriber base in Sweden
           decreased by almost […]%, or around […] subscribers.
                       Figure 5: Canal Digital and Viasat DTH subscribers
                    [Subscriber numbers and reductions in parties' subscriber numbers]
                                      Source: Form CO, Figure 24
    (302) As shown in Figure 6, the loss of DTH subscribers seems driven by customers
           switching to TV services distributed over fibre networks. The number of
           subscribers receiving TV via fibre in Sweden increased by approximately 300 000
           between 2016 and 2018 – an increase of 33%. Over the same time period, the
           number of subscribers receiving TV via cable, DTH and DTT in Sweden
           decreased by 10%, 11% and 23%, respectively. Moreover, the switch to fibre and
           IPTV is also a trend within Viasat’s customer base. In 2016, […]% of Viasat’s
           […] customers were using DTH technology while in beginning of 2019, only
           […]% of its […] customers access the service through DTH.
              Figure 6: Subscribers to TV services via fibre, cable, DTH and DTT
                                      Source: Form CO, Figure 19
    (303) The trend of switching to fiber-based technology seems also driven by the ability
           of providers of retail AV services through fiber to combine their service with
           telecommunications services. In Sweden, all main providers of retail AV services,
           namely Telia, Tele2, Telenor are also providers of retail mobile
           telecommunications and fixed internet access services.221 Moreover, […]% of
           Telenor's cable and IPTV TV subscribers (i.e., subscribers of Telenor’s retail AV
           services not contributed to the JV) are also customers of Telenor fixed internet
221  Form CO, paragraphs from 592 to 614.
                                                      80
 ---pagebreak---               access services.222 While Viasat is also providing fixed internet access services,
              Canal Digital is exclusively active in the retail supply of AV services.
    (304) Third, the Commission considers that the number of consumers switching to the
              JV in case NENT would no longer provide access to its channels would not be
              significant. NENT’s incentive to foreclose depends on the number of customers
              and cancelling their subscription with their current provider of retail AV services
              (“cord-cutting”) and switching to the JV’s offering. In Sweden in 2019,
              approximately 25% subscribers of linear retail AV services bundle their service
              with fixed internet access services.223 In case of a blackout of exclusively
              NENT’s TV channels through fiber distribution, customers would have the
              possibility to keep their current fixed internet access service and retail AV service
              subscription and continue watching NENT’s TV channels, either basic or
              premium pay, on NENT’s OTT service, Viaplay, which would be supplied
              independently in the market (‘cord-shaving”). Based on the above, the
              Commission notes that switching to the JV’s retail AV service would be further
              constrained by the current market trend in Sweden of customers subscribing to
              fibre based retail AV services and fixed internet access services.
    (305) Fourth, the Commission considers that the refusal to supply NENT’s TV
              channels, irrespective of any plausible segmentation, to third-party distributors
              would greatly reduce NENT’s revenue from the sale of advertising airtime on its
              channels and carriage fees charged to third party distributors. To this end, the
              Notifying Parties have provided an analysis prepared by an external economic
              consultant [confidential information about NENT’s distributors and sales
              strategy].224 [Confidential information about NENT’s distributors and sales
              strategy].225 [Confidential information about NENT’s distributors and sales
              strategy]226 [confidential information about NENT’s distributors and sales
              strategy].
    (306) The Commission further notes that it may be unlikely for NENT to recoup any
              losses from advertising and distribution revenue by expanding revenues from the
              downstream activities of the JV. In 2018, NENT generated approximately SEK
              […] as advertising revenue and SEK […] as revenue from carriage fee. The JV’s
              profit margin per user per month is approximately SEK […]. In order to recoup
              NENT’s losses, the JV would need to acquire [] subscribers in one year.
              However, since NENT will be entitled only to half of the JV’s profit, the amount
              of subscribers should be double for the strategy to be profitable which means
              almost […] subscribers corresponding to approximately […]% of subscribers of
              competing providers of retail AV services. This number of additional subscribers
              to the JV seems unrealistic in light of the structural decline of the JV’s main
              distribution technology DTH.
    (307) Finally, the Commission has assessed whether NENT would have the incentive to
              engage in a selective input foreclosure vis-à-vis Tele2 in certain areas where DTT
222  Telenor’s reply to RFI 14, question 2.
223  Statistik.pts.se, Table 31.
224  Form CO, Annex 40.
225  RFI 8, Annex 2 and 4.
226  As indicated in Section 6.3.3, Telenor is active in the retail supply of AV services in Sweden via DTH
     through its wholly owned subsidiary, Canal Digital (which will be contributed to the JV) and via cable and
     IPTV through the Telenor brand (which will not be contributed to the JV).
                                                           81
 ---pagebreak---              and DTH are the main distribution technology available (approximately 15% of
             the households in Sweden) and, therefore Tele2 and the JV would be the only
             alternative.227 First, the Commission notes that [confidential information about
             NENT’s distributors and sales strategy].228 Therefore, NENT could in any event
             not engage in a potential foreclosure strategy before the expiry of the agreement.
             Second, Tele2 is active nationwide and not only in the areas where DTT and DTH
             are the main distribution technology. Tele2 is also the leading providers of retail
             AV services in Sweden with approximately […] subscribers, of which
             approximately [subscriber number] through DTT, and a market share of [40-50]%
             in the market for the retail supply of linear AV services. Therefore, NENT would
             not likely have the incentive to lose carriage fees and advertising revenues
             [confidential information about NENT’s distributors and sales strategy]. In
             addition, in other areas of Sweden, customers switching from Tele2 could not
             only move to the JV but also to other competing providers of retail AV services,
             further reducing any incentive to engage in such practice.
    (308) Third, the Commission notes that fibre and cable coverage is rapidly increasing in
             Sweden and, therefore, in the next two to three years a reduction of areas
             reachable exclusively by DTT and DTH is expected. Fibre coverage is
             significantly increasing reaching a household coverage of 77% in the end of 2018,
             a significant increase from a coverage from 60% in 2014. The Swedish Post and
             Telecom Authority, PTS, indicated in its report how fibre and high broadband
             coverage is responsible for growth in fixed broadband subscriptions. In particular,
             PTS notes that “Fibre is responsible for all growth in fixed broadband
             subscriptions. In total, this market increased by three percent in 2018, while the
             number of fibre subscriptions increased by 11 percent and amounted to 2.7
             million subscriptions. Broadband subscriptions via the copper network (xDSL)
             were, for the first time, lower than the subscriptions for broadband via cable TV
             networks, 0.6 and 0.7 million subscriptions, respectively”.229 The increase of fibre
             coverage is not limited to urban areas. As shown in Figure 7 below, 81% of
             households in urban areas and 41% of households in urban areas had access to
             fibre in the end of 2018. This constitutes an increase of more than 20 percentage
             points and 27 percentage points, respectively, since 2014.
227  In particular, in such areas, the retail provision of AV services through cable and IPTV would not be
     available. Moreover, broadband speed would be limited and it would not enable the provision of retail AV
     services through OTT distribution.
228  [Confidential information regarding NENTs business plans].
229  See https://pts.se/sv/nyheter/pressmeddelanden/2019/tre-av-fyra-fasta-bredbandsabonnemang-har-over-
     100-mbits/.Translated from the Swedish: "Fiber står för all tillväxt inom fasta bredbandsabonnemang.
     Totalt ökade denna marknad med tre procent under 2018, medan antalet fiberabonnemang ökade med 11
     procent och uppgick till 2,7 miljoner abonnemang.Bredbandsabonnemangen via kopparnätet (xDSL) var
     för första gången färre än abonnemangen på bredband via kabel-tv-nät 0,6 respektive 0,7 miljoner
     abonnemang."
                                                           82
 ---pagebreak---              Figure 7: Estimated fibre coverage in urban and rural areas, Sweden
            Source: PTS, PTS mobiltäcknings- och bredbandskartläggning 2018 (March 2019).
    (309) Moreover, the Commission considers that the Transaction does not significantly
          change NENT’s incentive to engage into partial foreclosure. While any TV
          broadcaster would have the incentive to obtain a higher remuneration for the TV
          channels it is supplying to TV distributors, the increase in the JV’s downstream
          market position does not significantly increase NENT’s bargaining position. In
          particular, NENT would still need to get access to the customer base of competing
          providers of retail AV services to preserve the advertising revenue from the
          supply of its channels which accounts for more than […]% of its revenues.230
    (310) Finally, the Commission considers that it would not be relevant to assess whether
          NENT would have the incentive to refuse to supply OTT rights to NENT’s TV
          channels. NENT would remain active independently in the market for the retail
          supply of AV services through its OTT service, Viaplay. The JV would combine
          the Canal Digital’s DTH business and Viasat’s DTH and IPTV activities.
          Therefore, the Commission considers that the Transaction does not significantly
          change NENT’s incentive to licence OTT rights to competing providers of retail
          AV services. The Commission has assessed whether the Transaction would
          change NENT’s incentive to engage into partnership related to its OTT services
          with the JV’s competing providers of retail AV services in Section 6.4.4.2.
    (311) In light of the above, the Commission considers that NENT will not likely have
          the incentive to engage in total or partial input foreclosure of its TV channels in
          Sweden, irrespective of any plausible segmentation of the product market in basic
          pay or premium pay sports or premium pay TV non-sports channels.
230  Commission’s calculation based on Annex 44, Form CO.
                                                      83
 ---pagebreak--- c.          Impact on effective competition and conclusion
    (312) The Commission considers that due to the lack of ability for premium pay TV
             non-sports channels and a lack of incentive for all these types of channels, it is not
             needed to assess whether any foreclosure strategy would have a negative impact
             on effective competition.
    (313) In light of the foregoing, the Commission concludes that the Transaction would
             not raise serious doubts as to its compatibility with the internal market resulting
             from total or partial input foreclosure of NENT’s TV channels, irrespective of any
             plausible segmentation231, in Sweden
6.4.2.3. Finland
    (314) In Finland, the JV will be active in the retail supply of AV services by combining
             Canal Digital’s DTH business and Viasat’s DTH activities. NENT will remain
             active in the wholesale supply of premium pay TV sports channels and premium
             pay TV non-sports channels.232 NENT would also remain active as retail supplier
             of AV services through its OTT applications, Viaplay. Telenor would remain
             active in the retail supply of AV services via cable, IPTV and OTT through its
             wholly owned subsidiary, DNA (which will not be contributed to the JV).
    (315) The merger specific change is the addition of Canal Digital’s downstream
             activities to NENT’s DTH and IPTV service, Viasat.
    (316) The Commission has assessed the risk that NENT would post-Transaction engage
             in input foreclosure strategies in Finland by either: (i) total input foreclosure of
             rival providers of retail AV services through the denial of access to NENT’s
             channels; and (ii) partial input foreclosure of rival providers of retail AV services
             through an increase of carriage fees paid by rival providers to NENT or by
             significantly degrading the quality of channels licensed to rival providers of AV
             services (for example, by removing significant content or ancillary rights).
    (317) The Commission has assessed the two abovementioned types of input foreclosure
             strategies for all the types of TV channels, which NENT licenses to retail
             providers of AV services in Finland, namely: (i) premium pay TV sports
             channels, and (ii) premium pay TV non-sports channels.
    (318) For the purpose of its assessment, the Commission has considered, as the more
             likely potential targets of an input foreclosure strategy, the JV’s largest
             competitors in the retail supply of AV services, irrespective of any potential
             market segmentation. On the basis of the market shares presented in
             Section 6.2.1.3.(B), in relation to the market for the retail supply of AV services,
             the main targets of a potential foreclosure strategy are the other main TV
             distributors, namely Elisa and Telia.
    (319) The Commission has conducted its assessment on the basis of all possible
             downstream market definitions. The question as to whether NENT would have
231  NENT’s basic pay TV channels include all different genres of basic pay TV channels supplied by NENT
     in the market. NENT’s premium pay sports TV channels include all sports channels supplied by NENT in
     the market. NENT’s premium pay non-sports TV channels include film & series channels supplied by
     NENT in the market.
232  NENT does not supply FTA and Basic pay TV channels in Finland.
                                                        84
 ---pagebreak---               the ability to undertake a total or partial input foreclosure strategy has therefore
              been undertaken in light of the importance of those channels to TV distributors
              active in the potential markets for which basic pay TV channels and premium pay
              TV channels are acquired.233 The Commission’s assessment of the impact of a
              total or partial foreclosure strategy also applies in respect of the above mentioned
              possible markets for which TV channels are an important input. Since the
              importance of NENT’s TV channels and the likely impact of foreclosure to those
              channels as inputs, is at least as significant on the narrower relevant markets as it
              is on the broader market for the retail provision of AV services, the Commission
              hereafter, in this section, refers to the ‘retail supply of AV services’ or ‘retail AV
              services’ as shorthand for all possible markets comprising the retail supply of
              (i) AV services (ii) linear pay AV services, (iii) linear premium pay AV services,
              (iv) all possible markets (i) to (iii) segmented into MDU and SDU.
          (A)        The Notifying Parties’ view
    (320) The Notifying Parties argue that the Transaction will not give NENT the ability
              and incentive to engage in input foreclosure in Finland. Pre-Transaction, NENT is
              already vertically integrated as a supplier and distributor of TV channels. Post-
              Transaction, NENT will remain active as a supplier of TV channels but NENT’s
              vertical integration will be reduced with the transfer of its 100% owned entity,
              Viasat Consumer, into a joint venture 50% co-owned with Telenor.
    (321) With respect to NENT’s ability to undertake an input foreclosure strategy, the
              Notifying Parties consider that NENT [confidential information about NENT’s
              distributors and sales strategy].
    (322) Even if NENT would have the ability and incentive to engage in an input
              foreclosure strategy, the Notifying Parties submit that such strategy would not
              have any significant detrimental effect on effective competition. […].234 […].
          (B)        The Commission’s assessment
    (323) The Commission’s assessment of anticompetitive input foreclosure, in light of the
              results of the market investigation, is set out in the following paragraphs. For this
              purpose, consistent with paragraph 32 of the Non-Horizontal Merger Guidelines,
              in relation to each of these practices, the Commission examines, (i) whether the
              merged entity would have, post-merger, the ability to foreclose access to inputs,
              (ii) whether it would have the incentive to do so, and (iii) whether a foreclosure
              strategy would have a significant detrimental effect on competition in the
              downstream markets.
a.           Ability to engage in input foreclosure
    (324) For the reasons set out below, first, the Commission cannot exclude that NENT
              may have the ability to engage in total or partial input foreclosure of its premium
233  Premium pay TV channels are acquired as an input for the markets for the retail supply of (i) AV services
     (ii) linear pay AV services, (iii) linear premium pay AV services (iv) all possible markets (i) to (iii)
     segmented into MDU and SDU.
234  M.9064 – Telia / Bonnier Broadcasting Holding, interim text of the non-confidential version of the
     commitments, available at:
     https://ec.europa.eu/competition/mergers/cases/additional data/m9064 3342 3.pdf.
                                                          85
 ---pagebreak---              pay TV sports channels in Finland; second, the Commission considers that NENT
             will not have the ability to engage in total or partial input foreclosure of its
             premium non-sports pay TV channels in Finland.
    (325) First, the Commission assesses whether NENT would have a significant degree of
             market power in the upstream market for the wholesale supply of TV channels,
             including all possible sub-segments and whether NENT’s TV channels can be
             considered an important input within the meaning of the Non-Horizontal Merger
             Guidelines.235
    (326) Table 35 reproduced below, shows the market shares of NENT and its main
             competitors in the market for the wholesale supply of TV channels in Finland in
             2018 by share of viewing. NENT’s market share in 2018 was respectively lower
             than [0-5]% for the wholesale supply of combined FTA/pay TV channels, and
             lower than ]10-20]% for the wholesale supply of pay TV channels , and lower
             than [30-40]% for the wholesale supply of premium pay TV channels, and lower
             than [30-40]% for the wholesale supply of premium pay TV sports channels.
                                  Table 35: Market shares in 2018
          in the market for the wholesale supply of pay TV channels by share of viewing
                    Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale
                    supply of supply of supply of supply of supply of supply of supply of
                    FTA and    pay-TV     FTA and basic pay- premium premium premium
                     pay-TV   channels basic pay-       TV       pay-TV     sports  non-sports
                     channels                TV      channels channels    pay-TV     pay-TV
                                          channels                        channels channels
       NENT             [0-5]  [10-20]        -         n/a      [30-40]   [30-40]     n/a
       Yle            [40-50]     -           -         n/a         -         -        n/a
       Telia          [20-30]  [20-30]        -         n/a      [50-60]   [50-60]     n/a
       Discovery       [5-10]   [0-5]         -         n/a         -         -        n/a
       Others         [20-30]  [60-70]        -         n/a      [10-20]   [10-20]     n/a
                                       Source: Form CO, Annex 68.
    (327) Table 36 reproduced below, shows the market shares of NENT and its main
             competitors in the market for the wholesale supply of TV channels in Finland in
             2018 by value. NENT’s market share in 2018 was respectively [30-40]% for the
             wholesale supply of premium pay TV channels, and [30-40]% for the wholesale
             supply of premium pay TV sports channels, and [30-40]% for the wholesale
             supply of premium pay TV non-sports channels.
                                  Table 36: Market shares in 2018
                   in the market for the wholesale supply of TV channels by value
                              Wholesale Wholesale Wholesale Wholesale Wholesale
                              supply of supply of supply of supply of supply of
                               pay-TV basic pay- premium premium premium
                              channels       TV      pay-TV       sports non-sports
                                          channels channels      pay-TV   pay-TV
                                                                channels channels
                    NENT         n/a         n/a      [30-40]    [30-40]   [30-40]
                    Telia        n/a         n/a      [50-60]    [50-60]   [60-70]
                    Discovery    n/a         n/a         -          -         -
                    Others       n/a         n/a      [10-20]    [10-20]      -
                                       Source: Form CO, Annex 68.
235  See footnote 176.
                                                      86
 ---pagebreak---     (328) With reference to NENT’s premium pay TV sports channels, the Commission
            considers that, based on the above market shares, there is an indication that
            NENT has a significant market position in market for the wholesale supply of
            premium pay TV sports channels in Finland. The only other broadcaster that
            comes anywhere close to the position of the merged entity is Telia.
    (329) With reference to NENT’s premium pay TV non-sports channels, the
            Commission considers that, based on the above market shares, there is an
            indication that NENT has a significant market position in market for the
            wholesale supply of premium pay TV non-sports channels in Finland. The only
            other broadcaster that comes anywhere close to the position of the merged entity
            is Telia.
    (330) Second, the Commission has analysed the views of market participants on the
            importance of NENT’s pay TV channels for retail suppliers of AV services since
            all competing providers of linear retail AV services are acquiring channels from
            NENT.236
    (331) With reference to NENT’s premium pay TV sports channels, respondents
            consider the channels NENT’s TV channels as important to compete in the retail
            market.237 Those channels carry unique sport content, such as football content as
            the English Premier League and hockey content as NHL , which respondents
            consider as relevant from a viewer’s perspective. With reference to NENT’s
            premium pay TV non-sports channels, while respondents consider such channels
            as important, they also consider that OTT players such as Netflix, are a
            competitive constraint on NENT.238 Respondents’ indicated that Telia’s channels
            and Netflix’s non-linear premium films&series are closely competing with
            NENT’s premium pay non-sports TV channels.239
    (332) Third, with reference to the technical ability to implement any foreclosure
            strategy, respondents to the market investigation provided a mixed reply on
            whether NENT would stop licensing its channels or license them at worst terms
            and conditions.240 One respondent considers that NENT could limit the
            distribution of certain channels (for example, premium channels) or certain rights
            (for example, OTT rights) in future negotiations. Another considers that it is
            unlikely that NENT would engage in foreclosing strategies due to the focus of the
            JV in the provision of DTH services.
    (333) In addition, with reference to the Notifying Parties’ view that possible contractual
            limitations may reduce NENT’s ability to engage in total or partial input
            foreclosure, the Commission notes that NENT’s agreements with the JV’s
            competing TV distributors, Telenor, Telia, and Elisa, are expiring respectively in
236  Responses to questionnaire Q5 to retail suppliers of AV services in Finland, question E.1.
237  Responses to questionnaire Q5 to retail suppliers of AV services in Finland, question E.4.
238  Responses to questionnaire Q5 to retail suppliers of AV services in Finland, questions E.4 and E.5.
239  Responses to questionnaires Q5 to retail suppliers of AV services in Finland and Q6 to TV broadcasters in
     Finland, question E.5.
240  Responses to questionnaire Q5 to retail suppliers of AV services in Finland, questions E.6 and E.7
     and H.2.
                                                           87
 ---pagebreak---             […], […] and […].241 [Confidential information about NENTs business plans and
            strategic decisions].
    (334) With reference to potential counter-strategies that could be implemented by the
            JV’s downstream competitor, the market investigation provided mixed replies on
            whether alternative broadcasters from which it would be possible to license TV
            channels would remain available. Most respondents noted that alternative
            broadcasters or content providers would be available for content on which
            premium pay TV non-sports channels are based on but it would not be possible to
            fully replicate the premium sport content supplied by NENT.242 The Commission
            however notes that, Telia, is the both other major supplier of premium pay sports
            TV channels and retail supplier of AV services. If Telia would be denied OTT
            rights from NENT, it could also deny OTT rights to its premium pay TV sports
            channels to NENT as counter strategy. In light of the above, the Commission
            considers that there would not likely be effective and timely counter-strategies for
            certain rivals to overcome the effects of total or partial input foreclosure of
            premium pay TV sports channels by NENT post-Transaction. The Commission
            considers that there would be effective and timely counter-strategies for rivals to
            overcome the effects of total or partial input foreclosure of premium pay TV non-
            sports channels by NENT post-Transaction.
    (335) In light of the above, first, the Commission cannot exclude that NENT may have
            the ability to engage in total or partial input foreclosure of its premium pay TV
            sports channels in Finland; second, the Commission considers that NENT will not
            have the ability to engage in total or partial input foreclosure of its premium non-
            sports pay TV channels in Finland
b.        Incentive to engage in input foreclosure
    (336) Respondents to the market investigation provided a mixed reply on whether
            NENT NENT would either stop licensing all of its channels or certain of its
            channels to competing TV distributors or reduce the terms and conditions at
            which it licenses such channels.243 One respondent considers that NENT could
            limit the distribution of certain channels (for example, premium channels) or
            certain rights (for example, OTT rights) in future negotiations. Another considers
            that it is unlikely that NENT would engage in foreclosing strategies due to the
            focus of the JV in the provision of DTH services.
    (337) For the reasons set out below the Commission considers that NENT will not
            likely have the incentive to engage in total or partial input foreclosure of its TV
            channels in Finland, irrespective of any plausible segmentation of the product
            market in basic pay or premium pay sports or premium pay TV non-sports
            channels.
    (338) An input foreclosure strategy would not likely be profitable for NENT if the lost
            profit in the upstream market from such a strategy, that is to say carriage fees and
241  Form CO, Annex 55.
242  Responses to questionnaire Q5 to retail suppliers of AV services in Finland, question E.9.
243  Responses to questionnaire Q5 to retail suppliers of AV services in Finland, questions E.6, E.7 and H.2.
                                                           88
 ---pagebreak---              advertising revenues244 of the NENT’s TV channels, is smaller than the profit
             gain from being able to expand sales or raise prices in the downstream market for
             the retail supply of AV services through the JV.
    (339) First, the Commission notes that before the Transaction NENT was already a
             vertically integrated operator active on the one side on the wholesale supply of
             TV channels and, on the other side, on the retail supply of AV services through its
             OTT service, Viaplay with approximately […] subscribers in 2018, and its
             IPTV/DTH service, Viasat with approximately […] subscribers in 2018. Before
             the Transaction, even though NENT was vertically integrated, NENT distributed
             its channels widely in the market. This was confirmed by respondents to the
             market investigation.245 Moreover, NENT was supplying its channels for DTH
             distribution to Canal Digital.246
    (340) Second, the merger specific change of the Transaction relates to the increase of
             NENT’s position in the downstream market by acquiring a 50% stake in the JV
             where Viasat’s DTH activities are combined with the Canal Digital’s one, and its
             approximately […] subscribers and by losing 50% control on Viasat’s business
             and its approximately […] subscribers. As indicated in Section 6.3.4, the
             Commission considers that the combination of Viasat and Canal Digital’s DTH
             businesses in the retail AV market, or any plausible segmentation, does not raise
             serious doubts as its compatibility with the internal market. In particular, both
             Viasat and Canal Digital are experiencing a decline in their customer basis
             showing the difficulties they have in attracting new customers compared to
             competing providers of retail AV services relying on fibre for distribution. The
             JV will have a combined customer base of […] subscribers in 2018. This is
             significantly more limited compared to Telia, Telenor and Elisa with customers
             bases if respectively […], […] and […].
    (341) Third, the Commission considers that the number of consumers switching to the
             JV in case NENT would no longer provide access to its channels would not be
             significant. NENT’s incentive to foreclose depends on the number of customers
             and cancelling their subscription with their current provider of retail AV services
             (“cord-cutting”) and switching to the JV’s offering. In Finland, the main
             providers of retail AV services, such as Telenor, Telia and Elisa are all offering
             also fixed internet access service and mobile telecommunications services. In case
             of a blackout of exclusively NENT’s TV channels, customers would have the
             possibility to keep their current fixed internet access service and retail AV service
             subscription and continue watching NENT’s TV channels, either basic or
             premium pay, on NENT’s OTT service, Viaplay, which would be supplied
             independently in the market (‘cord-shaving”). Based on the above, the
             Commission notes that switching to the JV’s retail AV service would be further
             constrained by the current market trend in Finland of customers subscribing to
             fibre based retail AV services and fixed internet access services.
244  TV broadcasters generate revenues from the wholesale supply of TV channels mainly from (i) carriage
     fees obtained from retail AV distributors and, (ii) advertising revenues generated from the sale of
     advertising space on those channels.
245  Responses to questionnaire Q5 to retail suppliers of AV services in Finland, question E.1.
246  Form CO, Annex 55.
                                                           89
 ---pagebreak---     (342) Moreover, the Commission considers that the Transaction does not significantly
             change NENT’s incentive to engage into partial foreclosure. While any TV
             broadcaster would have the incentive to obtain a higher remuneration for the TV
             channels it is supplying to TV distributors, the increase in the JV’s downstream
             market position does not significantly increase NENT’s bargaining position. In
             particular, NENT would still need to get access to the customer base of competing
             providers of retail AV services to preserve the advertising revenue from the
             supply of its channels.
    (343) Finally, the Commission considers that it would not be relevant to assess whether
             NENT would have the incentive to refuse to supply OTT rights to NENT’s TV
             channels. NENT would remain active independently in the market for the retail
             supply of AV services through its OTT service, Viaplay. The JV would combine
             the Parties’ DTH businesses. Therefore, the Commission considers that the
             Transaction does not significantly change NENT’s incentive to licence OTT
             rights to competing providers of retail AV services. The Commission has assessed
             whether the Transaction would change NENT’s incentive to engage into
             partnership related to its OTT services with the JV’s competing providers of retail
             AV services in Section 6.4.4.3.
    (344) In light of the above, the Commission considers that NENT will not likely have
             the incentive to engage in total or partial input foreclosure of its TV channels in
             Finland, irrespective of any plausible segmentation of the product market in basic
             pay or premium pay sports or premium pay TV non-sports channels.
c.          Impact on effective competition and conclusion
    (345) The Commission considers that due to the lack of incentive for all these types of
             channels, it is not needed to assess whether any foreclosure strategy would have a
             negative impact on effective competition.
    (346) In light of the foregoing, the Commission concludes that the Transaction would
             not raise serious doubts as to its compatibility with the internal market resulting
             from total or partial input foreclosure of NENT’s TV channels, irrespective of any
             plausible segmentation247, in Finland.
6.4.2.4. Denmark
    (347) In Denmark, the JV will be active in the retail supply of AV services by
             combining Canal Digital’s DTH business and Viasat’s DTH activities. NENT will
             remain active in the wholesale supply of basic pay TV channels, baisc pay TV
             sports channels and premium pay TV non-sports channels. NENT would also
             remain active as retail supplier of AV services through its OTT applications,
             Viaplay. The merger specific change is the addition of Canal Digital’s
             downstream activities to NENT’s DTH service, Viasat.
    (348) The Commission has assessed the risk that NENT would post-Transaction engage
             in input foreclosure strategies in Denmark by either: (i) total input foreclosure of
247  NENT’s basic pay TV channels include all different genres of basic pay TV channels supplied by NENT
     in the market. NENT’s premium pay sports TV channels include all sports channels supplied by NENT in
     the market. NENT’s premium pay non-sports TV channels include film & series channels supplied by
     NENT in the market.
                                                        90
 ---pagebreak---               rival providers of retail AV services through the denial of access to NENT’s
              channels; and (ii) partial input foreclosure of rival providers of retail AV services
              through an increase of carriage fees paid by rival providers to NENT or by
              significantly degrading the quality of channels licensed to rival providers of AV
              services (for example, by removing significant content or ancillary rights).
    (349) The Commission has assessed the two abovementioned types of input foreclosure
              strategies for all the types of TV channels, which NENT licenses to retail
              providers of AV services in Denmark, namely: (i) basic pay-TV channels248, (ii)
              baisc pay TV sports channels, and (iii) premium pay TV non-sports channels.
    (350) For the purpose of its assessment, the Commission has considered, as the more
              likely potential targets of an input foreclosure strategy, the JV’s largest
              competitors in the retail supply of AV services, irrespective of any potential
              market segmentation. On the basis of the market shares presented in Section
              6.2.1.4.(B), in relation to the market for the retail supply of AV services, the main
              targets of a potential foreclosure strategy are the other main TV distributors,
              namely TDC, Stofa, Waoo! and Telia.
    (351) The Commission has conducted its assessment on the basis of all possible
              downstream market definitions. The question as to whether NENT would have
              the ability to undertake a total or partial input foreclosure strategy has therefore
              been undertaken in light of the importance of those channels to TV distributors
              active in the potential markets for which basic pay TV channels and premium pay
              TV channels are acquired.249 The Commission’s assessment of the impact of a
              total or partial foreclosure strategy also applies in respect of the above mentioned
              possible markets for which TV channels are an important input. Since the
              importance of NENT’s FTA and basic TV channels and the likely impact of
              foreclosure to those channels as inputs, is at least as significant on the narrower
              relevant markets as it is on the broader market for the retail provision of AV
              services, the Commission hereafter, in this section, refers to the ‘retail supply of
              AV services’ or ‘retail AV services’ as shorthand for all possible markets
              comprising the retail supply of (i) AV services (ii) linear pay AV services,
              (iii) linear basic pay AV services (iv) linear premium pay AV services, (v) all
              possible markets (i) to (iv) segmented into MDU and SDU.
248  NENT supplies its basic pay TV channels as a package. This conclusion is based on demand and supply
     side factors, which support the view that NENT basic pay TV channels should be treated as a package
     product. On the demand side, TV distributors purchase a package of NENT’s basic pay TV channels in
     Denmark. [Confidential information regarding NENTs sales policy and strategy]. See Annex 55, Form
     CO. On the supply side, NENT’s basic pay TV channels are sold by TV distributors to end-customers as
     packages including, not only TV3 but also other basic pay TV channels. Accordingly, the demand and
     supply side analysis of the purchase and supply of NENT’s basic pay TV channels shows that NENT’s
     channels constitute a package product. The Commission has therefore made its assessment of
     anticompetitive input foreclosure considering NENT’s basic pay TV channels as a package therefore
     including all different genres of basic pay TV channels, excluding sport, supplied by NENT in the market.
249  Basic pay TV channels are acquired as an input for the markets for the retail supply of (i) AV services
     (ii) linear pay AV services, (iii) linear basic pay AV services (iv) all possible markets (i) to (iii) segmented
     into MDU and SDU. Premium pay TV channels are acquired as an input for the markets for the retail
     supply of (i) AV services (ii) linear pay AV services, (iii) linear premium pay AV services (iv) all possible
     markets (i) to (iii) segmented into MDU and SDU.
                                                             91
 ---pagebreak---          (A)        The Notifying Parties’ view
    (352) The Notifying Parties argue that the Transaction will not give NENT the ability
             and incentive to engage in input foreclosure in Denmark. Pre-Transaction, NENT
             is already vertically integrated as a supplier and distributor of TV channels. Post-
             Transaction, NENT will remain active as a supplier of TV channels but NENT’s
             vertical integration will be reduced with the transfer of its 100% owned entity,
             Viasat Consumer, into a joint venture 50% co-owned with Telenor.
    (353) With respect to NENT’s ability to undertake an input foreclosure strategy, the
             Notifying Parties consider that NENT [confidential information about NENT’s
             distributors and sales strategy].
    (354) Even if NENT would have the ability and incentive to engage in an input
             foreclosure strategy, the Notifying Parties submit that such strategy would not
             have any significant detrimental effect on effective competition. […].
         (B)        The Commission’s assessment
    (355) The Commission’s assessment of anticompetitive input foreclosure, in light of the
             results of the market investigation, is set out in the following paragraphs. For this
             purpose, consistent with paragraph 32 of the Non-Horizontal Merger Guidelines,
             in relation to each of these practices, the Commission examines, (i) whether the
             merged entity would have, post-merger, the ability to foreclose access to inputs,
             (ii) whether it would have the incentive to do so, and (iii) whether a foreclosure
             strategy would have a significant detrimental effect on competition in the
             downstream markets.
a.         Ability to engage in input foreclosure
    (356) For the reasons set out below, first, the Commission cannot exclude that NENT
             may have the ability to engage in total or partial input foreclosure of its basic pay
             TV channels in Denmark; second, the Commission cannot exclude that NENT
             may have the ability to engage in total or partial input foreclosure of its basic pay
             TV sports channels in Denmark; third, the Commission considers that NENT will
             not have the ability to engage in total or partial input foreclosure of its premium
             non-sports pay TV channels in Denmark.
    (357) First, the Commission assesses whether NENT would have a significant degree of
             market power in the upstream market for the wholesale supply of TV channels,
             including all possible sub-segments and whether NENT’s TV channels can be
             considered an important input within the meaning of the Non-Horizontal Merger
             Guidelines.250
    (358) Table 37 reproduced below, shows the market shares of NENT and its main
             competitors in the market for the wholesale supply of TV channels in Denmark in
             2018 by share of viewing. NENT’s market share in 2018 was respectively
             [10-20]% for the wholesale supply of combined FTA/pay TV channels, and
             [10-20]% for the wholesale supply of pay TV channels and [10-20]% for the
             wholesale supply of basic pay TV channels, and [20-30]% for the wholesale
             supply of basic pay TV sports channels.
250  See footnote 172.
                                                     92
 ---pagebreak---                                          Table 37: Market shares in 2018
          in the market for the wholesale supply of pay TV channels by share of viewing
                     Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale
                     supply of supply of supply of supply of supply of supply of supply of
                     FTA and        pay-TV        FTA and basic pay-            basic      premium premium
                      pay-TV       channels basic pay-             TV           sports     pay-TV non-sports
                      channels                        TV        channels      pay-TV       channels     pay-TV
                                                  channels                    channels                  channels
        NENT           [10-20]       [10-20]       [10-20]       [10-20]       [20-30]        n/a          n/a
        DR  251        [30-40]           -         [30-40]           -         [50-60]        n/a          n/a
        TV2                                        [30-40]
        Denmark        [30-40]       [60-70]                     [60-70]         n/a          n/a          n/a
        Discovery [10-20]            [10-20]        [5-10]       [10-20]       [20-30]        n/a          n/a
        Others          [0-5]         [5-10]         [0-5]        [5-10]         n/a          n/a          n/a
                                              Source: Form CO, Annex 68.
    (359) Table 38 reproduced below, shows the market shares of NENT and its main
              competitors in the market for the wholesale supply of TV channels in Denmark in
              2018 by value. NENT’s market share in 2018 was respectively [30-40]% for the
              wholesale supply of pay TV channels and [30-40]% for the wholesale supply of
              basic pay TV channels, and [50-60]% for the wholesale supply of basic pay TV
              sports channels, and [40-50]% for the wholesale supply of premium pay TV non-
              sports channels.
                                         Table 38: Market shares in 2018
                    in the market for the wholesale supply of TV channels by value
                           Wholesale Wholesale Wholesale Wholesale Wholesale Wholesale
                            supply of supply of supply of supply of supply of supply of
                             pay-TV basic pay- premium                   basic       premium premium
                            channels          TV          pay-TV         sports      pay-TV non-sports
                                           channels channels           pay-TV        channels     pay-TV
                                                                       channels                   channels
                NENT         [30-40]        [30-40]        [40-50]      [50-60]       [40-50]      [40-50]
                 TV2         [30-40]        [30-40]           -         [10-20]          -            -
               Denmark
               Discovery     [10-20]        [10-20]           -         [20-30]          -            -
                 Telia         [0-5]            -          [50-60]          -         [50-60]      [50-60]
                Others        [5-10]         [5-10]           -           [0-5]          -            -
                                              Source: Form CO, Annex 68.
    (360) With reference to NENT’s basic pay TV channels, the Commission notes that
              NENT is the largest broadcaster by revenue and the second by volume in the
              market for the wholesale supply of basic pay TV channels with a market share of
              [10-20]% by volume and [30-40]% by value in 2018. The main other providers
              are TV2 Denmark and Discovery with market shares by value of [30-40]% and
              [10-20]% and by volume of [60-70]% and [10-20]%.
    (361) With reference to NENT’s basic pay TV sports channels, the Commission
              considers that, based on the above market shares, there is an indication that
              NENT has a significant market position in market for the wholesale supply of
              premium pay TV sports channels in Denmark. The only other broadcaster that
251  DR is the national public provider of TV channels in Denmark, broadcasting both TV services, radio and
     other online services, and DR is the biggest provider of public service in the Danish media market.
                                                                 93
 ---pagebreak---             comes anywhere close to the position of the merged entity is Discovery with a
            market share of [20-30]% in 2018.
    (362) With reference to NENT’s premium pay TV non-sports channels, the
            Commission considers that, based on the above market shares, there is an
            indication that NENT has a significant market position in market for the
            wholesale supply of premium pay TV non-sports channels in Denmark. The only
            other broadcaster that comes anywhere close to the position of the merged entity
            is Telia with a market share by value of [50-60]% in 2018.
    (363) Second, the Commission has analysed the views of market participants and the
            Notifying Parties’ internal documents on the importance of NENT’s pay TV
            channels for retail suppliers of AV services since all the main competing
            providers of linear retail AV services, TDC, Stofa, Waoo! And Boxer are
            acquiring channels from NENT.252
    (364) With reference to NENT’s basic pay TV channels, respondents to the market
            investigation consider the channels TV3, TV3+, TV3 Max and TV3 Sport as
            important to compete in the retail market.253 In particular, NENT’s basic pay
            sports TV channels carry unique sport content such as Champions League,
            English Premier League and Formula1, which respondents consider as relevant
            from a viewer’s perspective. With reference to NENT’s premium pay TV non-
            sports channels, respondents consider that also non-linear AV services, such as
            Netflix and Amazon Prime, are a competitive constraint to NENT’s offering.254
            Respondents’ indicated that TV2 Denmark’s channels for basic TV channels and
            Netflix’s non-linear premium films&series and Dplay’s from Discovery for sports
            pay TV channels are NENT’s closest competitors.255 In particular, TV2 Denmark
            is the most viewed TV channel followed by DR. Among OTT services, the
            leading services are Netflix and HBO.
    (365) Third, with reference to the technical ability to implement any foreclosure
            strategy, most respondents to the market investigation indicate that NENT post-
            Transaction would not stop licensing certain of its TV channels or degrade the
            terms and conditions at which it licenses its TV channels.256 Only two
            respondents have indicated that NENT may limit and/or reduce the terms and
            conditions at which it licenses such channels. One respondent stated that NENT
            may leverage its "must have" exclusive basic sports rights to extract higher prices
            from competing distributors. Such alleged foreclosure practice would impact
            current retail practice only for TV distributors that were already licensing
            NENT’s TV channels before the Transaction.257 Another respondent indicates that
            NENT may limit distribution of its OTT rights in future negotiations.
    (366) In addition, with reference to the Notifying Parties’ view that possible contractual
            limitations may reduce NENT’s ability to engage in total or partial input
252  Form CO, Annex 55
253  Responses to questionnaires Q7 to retail suppliers of AV services in Denmark and Q8 to TV broadcasters
     in Denmark, question E.4.
254  Responses to questionnaire Q7 to retail suppliers of AV services in Denmark, questions E.4 and E.5.
255  Responses to questionnaires Q7 to retail suppliers of AV services in Denmark and Q8 to TV broadcasters
     in Denmark, question E.5.
256  Responses to questionnaire Q7 to retail suppliers of AV services in Denmark, questions E.6 and E.7.
257  Responses to questionnaire Q7 to retail suppliers of AV services in Denmark, question E.1.
                                                           94
 ---pagebreak---              foreclosure, the Commission notes that NENT’s agreements with the JV’s
             competing TV distributors, TDC, Stofa, Waoo! and Boxer, are expiring
             respectively in [confidential information regarding NENTs business plans and
             strategic decisions].258
    (367) In light of the above, first, the Commission cannot exclude that NENT may have
             the ability to engage in total or partial input foreclosure of its basic pay TV
             channels in Denmark; second, the Commission cannot exclude that NENT may
             have the ability to engage in total or partial input foreclosure of its basic pay TV
             sports channels in Denmark; third, the Commission considers that NENT will not
             have the ability to engage in total or partial input foreclosure of its premium non-
             sports pay TV channels in Denmark.
b.         Incentive to engage in input foreclosure
    (368) Most of the respondents to the market investigation have indicated that they
             consider it unlikely that NENT would either stop licensing all of its channels or
             certain of its channels to competing TV distributors or reduce the terms and
             conditions at which it licenses such channels.259 Only two respondents have
             indicated that NENT may limit and/or reduce the terms and conditions at which it
             licenses such channelsOne respondent stated that NENT may leverage its "must
             have" exclusive basic sports rights to extract higher prices from competing
             distributors. Such alleged foreclosure practice would impact current retail
             practice only for TV distributors that were already licensing NENT’s TV
             channels before the Transaction.260 Another respondent indicates that NENT may
             limit distribution of its OTT rights in future negotiations.
    (369) For the reasons set out below the Commission considers that NENT will not
             likely have the incentive to engage in total or partial input foreclosure of its TV
             channels in Denmark, irrespective of any plausible segmentation of the product
             market in basic pay or premium pay sports or premium pay TV non-sports
             channels.
    (370) An input foreclosure strategy would not likely be profitable for NENT if the lost
             profit in the upstream market from such a strategy, that is to say carriage fees and
             advertising revenues261 of the NENT’s TV channels, is smaller than the profit
             gain from being able to expand sales or raise prices in the downstream market for
             the retail supply of AV services through the JV.
    (371) First, the Commission notes that before the Transaction NENT was already a
             vertically integrated operator active on the one side on the wholesale supply of
             TV channels and, on the other side, on the retail supply of AV services through its
             OTT service, Viaplay with approximately […] subscribers in 2018, and its
             IPTV/DTH service, Viasat with approximately […] subscribers in 2018. Before
             the Transaction, even though NENT was vertically integrated, NENT distributed
             its channels widely in the market. This was confirmed by respondents to the
258  Form CO, Annex 55.
259  Responses to questionnaire Q7 to retail suppliers of AV services in Denmark, questions E.6 and E.7.
260  Responses to questionnaire Q7 to retail suppliers of AV services in Denmark, question E.1.
261  TV broadcasters generate revenues from the wholesale supply of TV channels mainly from (i) carriage
     fees obtained from retail AV distributors and, (ii) advertising revenues generated from the sale of
     advertising space on those channels.
                                                           95
 ---pagebreak---              market investigation.262 Moreover, NENT was supplying its channels for DTH
             distribution to Canal Digital.263
    (372) Second, the merger specific change of the Transaction relates to the increase of
             NENT’s position in the downstream market by acquiring a 50% stake in the JV
             where Viasat’s DTH activities are combined with the Canal Digital’s one, and its
             approximately […] subscribers and by losing 50% control on Viasat’s business
             and its approximately […] subscribers. Based on market shares presented in
             Section 6.2.1.4.(B), the Commission considers that the combined market shares of
             Viasat and Canal Digital’s DTH businesses in the retail AV market, or any
             plausible segmentation, would be limited and alternatives would remain available.
             In particular, both Viasat and Canal Digital are experiencing a decline in their
             customer basis showing the difficulties they have in attracting new customers
             compared to competing providers of retail AV services relying on fibre for
             distribution.264 The JV will have a combined customer base of […] subscribers in
             2018. This is significantly more limited compared to TDC, Stofa and Waoo! with
             customers bases if respectively […], […] and […]. This is significantly more
             limited even compared to NENT’s Viaplay customer base of […] subscribers.
    (373) Fourth, the Commission considers that the number of consumers switching to the
             JV in case NENT would no longer provide access to its channels would not be
             significant. NENT’s incentive to foreclose depends on the number of customers
             and cancelling their subscription with their current provider of retail AV services
             (“cord-cutting”) and switching to the JV’s offering. In Denmark, the main
             providers of retail AV services, TDC is offering also fixed internet access service
             and mobile telecommunications services. Telia is also active in such markets.
             Moreover, respondents to the market investigation indicate that the almost 97% of
             households in Denmark receive broadband signal of over 100 Mbps and therefore
             are capable of transmitting AV services.265 In case of a blackout of exclusively
             NENT’s TV channels, customers would have the possibility to keep their current
             fixed internet access service and retail AV service subscription and continue
             watching NENT’s TV channels, either basic or premium pay, on NENT’s OTT
             service, Viaplay, which would be supplied independently in the market (‘cord-
             shaving”). Based on the above, the Commission notes that switching to the JV’s
             retail AV service would be further constrained by the current market trend in
             Denmark of customers subscribing to fibre based retail AV services and fixed
             internet access services.
    (374) Moreover, the Commission considers that the Transaction does not significantly
             change NENT’s incentive to engage into partial foreclosure. While any TV
             broadcaster would have the incentive to obtain a higher remuneration for the TV
             channels it is supplying to TV distributors, the increase in the JV’s downstream
             market position does not significantly increase NENT’s bargaining position. In
             particular, NENT would still need to get access to the customer base of competing
262  Responses to questionnaire Q7 to retail suppliers of AV services in Denmark, question E.1.
263  Form CO, Annex 55.
264  In 2016, Canal Digital had approximately […] subscribers and Viasat […] subscribers. Their combined
     customer base decreased from […] to […] in only two years.
265  Responses to questionnaire Q7 to retail suppliers of AV services in Denmark, question F.1.
     Responses to questionnaire Q7 to retail suppliers of AV services in Denmark, question F.1 and
     questionnaire Q8 to TV broadcasters in Denmark, question F.4.
                                                           96
 ---pagebreak---              providers of retail AV services to preserve the advertising revenue from the
             supply of its channels.
    (375) Finally, the Commission considers that it would not be relevant to assess whether
             NENT would have the incentive to refuse to supply OTT rights to NENT’s TV
             channels. NENT would remain active independently in the market for the retail
             supply of AV services through its OTT service, Viaplay. The JV would combine
             the Parties’ DTH businesses. Therefore, the Commission considers that the
             Transaction does not significantly change NENT’s incentive to licence OTT
             rights to competing providers of retail AV services. The Commission has assessed
             whether the Transaction would change NENT’s incentive to engage into
             partnership related to its OTT services with the JV’s competing providers of retail
             AV services in Section 6.4.4.4.
    (376) In light of the above, the Commission considers that NENT will not likely have
             the incentive to engage in total or partial input foreclosure of its TV channels in
             Denmark, irrespective of any plausible segmentation of the product market in
             basic pay or premium pay sports or premium pay TV non-sports channels.
c.          Impact on effective competition and conclusion
    (377) The Commission considers that due to the lack of incentive for all these types of
             channels, it is not needed to assess whether any foreclosure strategy would have a
             negative impact on effective competition.
    (378) In light of the foregoing, the Commission concludes that the Transaction would
             not raise serious doubts as to its compatibility with the internal market resulting
             from total or partial input foreclosure of NENT’s TV channels, irrespective of any
             plausible segmentation266, in Denmark.
6.4.3. Possible foreclosure of competing wholesale suppliers of TV channels from
          distributing to the JV’s retail AV services (customer foreclosure)
    (379) In this Section, the Commission has assessed potential concerns regarding the
             foreclosure of competing wholesale suppliers of pay TV channels in Norway,
             Sweden and Finland where the JV will be active in the downstream market for the
             retail supply of AV services, and any plausible sub-segment, with a combined
             market share above 30%.
    (380) While, the JV will be also active in the market for the retail supply of AV services
             in Denmark, the Commission notes that the JV’s market share in the Danish
             market for the retail supply of AV services is below 30%267, under any narrower
             possible market segmentation, and that the downstream market is therefore not a
             vertically affected market.
266  NENT’s basic pay TV channels include all different genres of basic pay TV channels supplied by NENT
     in the market. NENT’s premium pay sports TV channels include all sports channels supplied by NENT in
     the market. NENT’s premium pay non-sports TV channels include film & series channels supplied by
     NENT in the market.
267  See market shares Section 6.2.1.4.(B).
                                                        97
 ---pagebreak--- 6.4.3.1. Norway
    (381) In Norway, the JV will be active in the retail supply of AV services by combining
             Canal Digital’s DTH business and Viasat’s DTH and IPTV activities. NENT will
             remain active in the wholesale supply of FTA and basic pay TV channels,
             premium pay TV sports channels and premium pay TV non-sports channels.
             NENT would also remain active as retail supplier of AV services through its OTT
             applications268, Viaplay. Telenor would also remain active in the retail supply of
             AV services via cable and IPTV through the Telenor brand (which will not be
             contributed to the JV).269 The merger specific change is the addition of Canal
             Digital’s downstream activities to NENT’s DTH and IPTV service, Viasat.270
    (382) The Commission notes that the JV’s market share in the Norwegian market for
             the retail supply of AV services is below 30%. Nevertheless, given the JV’s
             higher market share in the narrow market segment for the supply of premium pay-
             TV retail AV services, excluding non-linear OTT providers ([30-40]% in 2018)
             and the market for the retail supply of premium AV services for SDUs, excluding
             non-linear OTT players([40-50]% in 2018), the Commission has assessed the risk
             of customer foreclosure strategies in Norway.
    (383) In particular, the Commission has assessed the risk of the following two types of
             customer foreclosure strategies: (i) total foreclosure of rival TV broadcasters
             through the JV’s refusal to carry competing TV channels on its downstream
             distribution platform; and (ii) partial foreclosure of rival TV broadcasters through,
             for instance, a degradation of the quality of the viewers’ experience for competing
             TV channels on the JV’s distribution platform, or through a reduction in carriage
             fees.
    (384) The Commission has assessed the two abovementioned types of customer
             foreclosure strategies for all the types of TV channels, which Viasat and Canal
             Digital were purchasing in Norway, namely: (i) basic pay-TV channels271,
268  [Confidential information regarding NENTs sales strategy and policy]. Form CO, paragraph 1294.
     Therefore, its market share in the market for the retail supply of AV services is not taken into account for
     the purpose of the assessment of customer foreclosure.
269  Telenor does not offer a standalone OTT service in Norway, but Telenor subscribers have access to a TVE
     service ("T-We"). Paragraph 250, Form CO.
270  Since NENT and Telenor would remain independently active in the relevant markets post-Transaction, the
     relationship between them is not assessed in the current Section but in Section 6.5. Furthermore, the
     Commission notes that the Transaction does not change Telenor’s incentive to distribute channels via its
     own retail AV service platform (not contributed to the JV). In particular, a strategy of foreclosing third-
     party channels from Telenor’s retail AV service platform (not contributed to the JV) platforms in order to
     divert viewers and advertising revenues to NENT’s channels would harm Telenor’s ability to attract
     subscribers who expect to have access to a wider range of content. For this reason, a customer foreclosure
     strategy, although potentially beneficial to NENT’s channels, would be detrimental to Telenor. Since
     NENT has no influence over Telenor’s decision making in relation to Telenor’s retail AV service platform
     (not contributed to the JV), the Commission considers the foreclosure of third party TV channels from
     Telenor’s retail AV service platform (not contributed to the JV) as unlikely.
271  NENT supplies its basic pay TV channels as a package. This conclusion is based on demand and supply
     side factors, which support the view that NENT basic pay TV channels should be treated as a package
     product. On the demand side, TV distributors purchase a package of NENT’s basic pay TV channels in
     Norway. [Confidential information regarding NENTs sales strategy and policy.]. See Annex 55, Form CO.
     On the supply side, NENT’s basic pay TV channels are sold by TV distributors to end-customers as
     packages including, not only TV3 but also other basic pay TV channels. Accordingly, the demand and
     supply side analysis of the purchase and supply of NENT’s basic pay TV channels shows that NENT’s
     channels constitute a package product. The Commission has therefore made its assessment of
                                                            98
 ---pagebreak---               (ii) premium pay TV sports channels, and (iii) premium pay TV non-sports
              channels.
    (385) For the purposes of its assessment, the Commission has considered, in particular,
              as the more likely potential targets of a customer foreclosure strategy, the
              channels with the highest market shares. On the basis of the market shares
              presented in Section 6.2.1.1.(A), the main targets of potential foreclosure in
              Norway are likely to be the other two main commercial broadcasters, TV2 Norge
              and Discovery.272
    (386) The question as to whether the JV would have the ability or the incentive to
              undertake a partial or total customer foreclosure strategy has been assessed in all
              possible market segments where basic pay TV channels and premium pay TV
              channels are acquired. The Commission has conducted its assessment of the
              impact of a total or partial foreclosure strategy in respect of the possible markets
              for which TV channels are an important input.273
    (387) In Section 6.1.1., the Commission considered that the question whether Telenor
              and NRK belong to the same economic unit or whether they make up separate
              economic units with an independent power of decision can be left open as the
              Transaction does not raise serious doubts as to its compatibility with the internal
              market regardless of the answer to this question. In particular, as regard to a
              potential vertical relationship between NRK and the JV, the Commission
              considers that the Transaction does not raise serious doubts as to its compatibility
              with the internal market from total or partial customer foreclosure to the detriment
              of third parties’ TV channels, irrespective of any plausible segmentation, for the
              following reason. In order to benefit NRK, a hypothetical customer foreclosure
              strategy would be aimed at limiting the JV’s acquisition of TV channels from
              third parties in order to increase NRK’s viewership and strengthen the market
              position of NRK. As indicated in Section 6.4.2.1, NRK, however, is not a
              commercial broadcaster and it is not funded through advertising revenues.
              Therefore, any customer foreclosure strategy to increase NRK’s viewership
              would not bring any economic benefit to any of NRK, the JV or the Parties.
           (A)       The Notifying Parties’ view
    (388) The Notifying Parties argue that the Transaction will not give to the JV the ability
              and incentive to engage in customer foreclosure in Norway. Pre-Transaction,
              NENT is vertically integrated as a supplier and distributor of TV channels. Post-
              Transaction, NENT will remain active as a supplier of TV channels but NENT’s
     anticompetitive input foreclosure considering NENT’s basic pay TV channels as a package therefore
     including all different genres of basic pay TV channels supplied by NENT in the market.
272  The Commission has not considered NRK as a potential target of foreclosure strategy since NRK is a FTA
     subject to “must-carry” obligations. NENT is not offering any FTA channel on the market.
273  Basic pay TV channels are acquired as an input for the markets for the retail supply of (i) AV services
     (ii) linear pay AV services, (iii) linear basic pay AV services (iv) all possible markets (i) to (iii) segmented
     into MDU and SDU. Premium pay TV channels are acquired as an input for the markets for the retail
     supply of (i) AV services (ii) linear pay AV services, (iii) linear premium pay AV services (iv) all possible
     markets (i) to (iii) segmented into MDU and SDU. The Commission hereafter, in this section, refers to the
     ‘retail supply of AV services’ or ‘retail AV services’ as shorthand for all possible markets comprising the
     retail supply of (i) AV services (ii) linear pay AV services, (iii) linear basic pay AV services (iv) linear
     premium pay AV services, (v) all possible markets (i) to (iv) segmented into MDU and SDU.
                                                             99
 ---pagebreak---           vertical integration will be reduced with the transfer of its 100% owned entity,
          Viasat Consumer, into a joint venture 50% co-owned with Telenor.
   (389) With respect to the JV’s ability to undertake a customer foreclosure strategy, the
          Notifying Parties consider that, first, the contractual agreement currently in place
          between TV broadcasters and each of Viasat and Canal Digital would limit the
          JV’s ability to engage in such practices. Second, the JV does not have the
          required market power, in particular due to the structural decline of Viasat and
          Canal Digital’s DTH offering.
   (390) Even if the JV had the ability to engage in a customer foreclosure strategy by
          preventing rival TV broadcasters from distributing its TV channels to their
          customers, the Notifying Parties submit that the Transaction does not increase
          incentives to engage into customer foreclosure strategies. First, the Notifying
          Parties consider that NENT’s and Telenor’s incentives are not aligned. In
          particular, a customer foreclosure strategy would be beneficial exclusively to
          NENT which would expand its advertising revenue. Therefore, Telenor would try
          to oppose such strategy. Second, NENT has a limited market position in the
          market for the wholesale supply of TV channels. Therefore, any selective
          customer foreclosure strategy would firstly benefit other broadcasters, such as
          TV2 Norge and Discovery, with a higher market position. [Confidential
          information regarding NENTs sales strategy and policy].
   (391) Even if the JV would have the ability and incentive to engage in a customer
          foreclosure strategy, the Notifying Parties, particularly in light of the JV’s limited
          importance as a customer due to its limited position in the downstream market,
          consider it unlikely that any such conduct would result in the foreclosure or
          marginalisation of channels competing with NENT’s TV channels to such an
          extent that competition would be negatively affected.
       (B)      The Commission’s assessment
   (392) The Commission's assessment of potential concerns regarding the foreclosure of
          competing wholesale suppliers of pay TV channels, in light of the results of the
          market investigation, is set out in the following paragraphs. For this purpose, in
          line with paragraph 59 of the Non-Horizontal Merger Guidelines, the
          Commission examines: (i) whether the JV would have the ability to foreclose
          competing wholesale supplier of TV channels; (ii) whether it would have the
          economic incentive to do so; and (iii) whether a foreclosure strategy would have a
          significant detrimental effect on competition downstream.
a.      Ability to engage in customer foreclosure
   (393) When considering whether the JV would have the ability to foreclose access to
          downstream markets, the Commission examines whether there are sufficient
          economic alternatives in the downstream market for upstream rivals to sell their
          output.
   (394) The Commission considers that the JV would lack the ability to engage in either
          total or partial customer foreclosure strategies of third parties’ pay TV channels
          since it does not have a sufficient degree of market power in the market for the
                                                  100
 ---pagebreak---                        retail supply of AV services, irrespective of any possible segmentation, for the
                       following reasons.
               (395) First, most of the respondents to the market investigation do not expect that the
                       JV post-Transaction will implement a customer foreclosure strategy by either
                       stopping to source TV channels or degrade the terms and conditions at which it
                       does so.274 Only one respondent indicated that the JV may engage in partial
                       customer foreclosure strategies by worsening the terms and conditions at which it
                       purchases channels from third parties. The respondent specified that its concern is
                       more generic and it relates to the general retail consolidation trend in the market
                       and it does not have a view on whether this specific Transaction is likely to raise
                       concerns.
               (396) Second, the JV will have a limited market position in the market for the retail
                       supply of AV services, and any possible sub-segment. The JV will hold a market
                       share of [10-20]% by value in the Norwegian market for the retail supply of AV
                       services (based on 2018 data) and below 30% in all market segments except for
                       the market for the supply of premium pay-TV retail AV services, excluding non-
                       linear OTT providers and the market for the retail supply of premium AV services
                       for SDUs, excluding non-linear OTT players.275
                                                Table 39: Market shares in 2018
                               in the market for the retail supply of AV services by revenue
                                                Basic pay-                 Premium                        Pay-TV
                       Pay-TV                       TV                      pay-TV                      for MDUs Pay-TV
                     (excluding                 (excluding                (excluding                    (excluding for SDUs
                     non-linear                 non-linear                non-linear Pay-TV     Pay-TV non-linear (excluding
                         OTT         Basic         OTT        Premium         OTT       for        for      OTT    non-linear
           Pay-TV providers) pay-TV providers) pay-TV providers) MDUs                            SDUs providers)     OTT)
Canal
           [10-20]      [10-20]     [10-20]       [10-20]      [10-20]      [20-30]  [10-20]    [10-20]   [10-20]   [20-30]
Digital
Viasat       [0-5]       [0-5]       [0-5]         [0-5]        [5-10]      [10-20]    [0-5]      [0-5]     [0-5]    [5-10]
JV         [10-20]      [20-30]     [10-20]       [10-20]      [20-30]      [30-40]  [10-20]    [20-30]   [10-20]   [20-30]
Telenor    [10-20]      [20-30]     [20-30]       [20-30]       [5-10]      [10-20]  [20-30]    [10-20]   [30-40]   [10-20]
Viaplay      [0-5]         -         [0-5]           -           [0-5]          -      [0-5]      [0-5]       -         -
Parties    [40-50]     [40-50]      [40-50]       [40-50]      [30-40]      [40-50]  [40-50]    [40-50]   [40-50]   [40-50]
Telia      [10-20]     [10-20]      [10-20]       [10-20]       [5-10]       [5-10]  [10-20]    [10-20]   [20-30]   [10-20]
RiksTV     [10-20]     [10-20]      [10-20]       [10-20]        [0-5]       [5-10]   [5-10]    [10-20]    [5-10]   [10-20]
Non-
linear
OTT
(excluding
Viaplay)   [10-20]         -         [0-5]           -         [30-40]          -    [10-20]    [10-20]       -         -
Others     [20-30]     [20-30]      [20-30]       [20-30]      [20-30]      [30-40]  [10-20]    [20-30]   [20-30]   [20-30]
                                                    Source: Form CO, Annex 12.
               (397) Table 40, reproduced below, shows the market shares of the JV and its main
                       competitors in the market for the retail supply of AV services and possible sub-
                       segments by subscribers. The JV would have an even more limited market
                       position in the overall market for the retail supply of AV services with a market
                       share of approximately [10-20]%.
           274  Responses to questionnaire Q2 to TV broadcasters in Norway, questions G.1 and G.2.
           275  See market shares available in Section 6.2.1.1.(B).
                                                                      101
 ---pagebreak---                                 Table 40: Market shares in 2018
                in the market for the retail supply of AV services by subscribers
                                Overall
                                 market                        Pay-TV                Basic pay-TV
                  Overall     (excluding                     (excluding               (excluding
                  market      non-linear                     non-linear               non-linear
                                   OTT                            OTT         Basic      OTT
                              providers)         Pay-TV      providers)     pay-TV    providers)
Canal Digital      [5-10]        [10-20]          [5-10]        [10-20]      [10-20]    [10-20]
Viasat              [0-5]          [0-5]           [0-5]          [0-5]       [0-5]      [0-5]
JV                [10-20]        [10-20]         [10-20]        [10-20]      [10-20]    [10-20]
Telenor           [10-20]        [10-20]         [10-20]        [20-30]      [20-30]    [20-30]
Viaplay            [5-10]             -           [5-10]            -       [10-20]         -
Parties           [20-30]       [30-40]          [20-30]        [30-40]     [40-50]     [40-50]
Telia             [10-20]       [10-20]          [10-20]        [10-20]     [10-20]     [10-20]
RiksTV             [5-10]         [5-10]          [5-10]         [5-10]     [10-20]     [10-20]
Non-linear
OTT
(excluding
Viaplay)          [30-40]             -          [30-40]            -         [0-5]         -
Others            [20-30]       [40-50]          [20-30]        [30-40]     [20-30]     [20-30]
                                       Source: Form CO, Annex 12.
   (398) The JV’s market position would not significantly differ in a market segment for
           the retail supply of premium pay AV services where it will have a combined
           market share of approximately [10-20]% in the premium pay market segment
           excluding non-linear OTT services, such as Netflix.
                                Table 41: Market shares in 2018
                in the market for the retail supply of AV services by subscribers
                                Premium                                 Pay-TV for
                                 pay-TV                                    MDUs       Pay-TV for
                               (excluding                               (excluding       SDUs
                               non-linear                               non-linear    (excluding
                 Premium            OTT          Pay-TV      Pay-TV         OTT       non-linear
                  pay-TV       providers)       for MDUs    for SDUs    providers)       OTT)
Canal Digital       [0-5]        [10-20]            [0-5]     [10-20]      [5-10]       [20-30]
Viasat              [0-5]           [0-5]           [0-5]       [0-5]       [0-5]         [0-5]
JV                 [5-10]        [10-20]            [0-5]     [10-20]      [5-10]       [20-30]
Telenor             [0-5]          [5-10]         [10-20]      [5-10]     [30-40]       [10-20]
Viaplay             [0-5]             -            [5-10]      [5-10]          -            -
Parties           [10-20]        [20-30]          [20-30]    [20-30]      [30-40]       [30-40]
Telia              [5-10]         [5-10]          [10-20]      [5-10]     [20-30]       [10-20]
RiksTV              [0-5]           [0-5]           [0-5]      [5-10]       [0-5]       [10-20]
Non-linear
OTT
(excluding
Viaplay)          [50-60]             -           [30-40]    [30-40]           -            -
Others            [20-30]        [60-70]          [20-30]    [20-30]      [30-40]       [30-40]
                                       Source: Form CO, Annex 12.
   (399) Third, several alternative providers of linear retail AV services would remain
           available in the market for the retail supply of AV services, excluding non-linear,
           where TV channels are used as an input. In particular, Telenor, Telia, Altibox and
           RiksTV will remain active with market shares by revenue of respectively
                                                       102
 ---pagebreak---             [10-20]%, [10-20]%, [10-20]% and [10-20]% and market shares by subscribers of
            respectively [10-20]%, [10-20]%, [5-10]% and [5-10]%.
    (400) Moreover, as shown in Figure 2, in Norway there is a trend of customers
            switching to TV services distributed over fibre networks which would likely
            continue post-Transaction. NENT’s competing broadcasters would continue to
            have the ability to distribute their channels through fiber based providers of retail
            AV services.
    (401) Finally, with reference to possible contractual limitations that may reduce the
            JV’s ability to perform such conduct, the Commission notes that Canal Digital’s
            agreements with the competing TV broadcasters TV2 Norge, Disney and
            Discovery, expire respectively on […], […] and […]276 and that Viasat’s
            agreements with the competing TV broadcasters TV2 Norge, Disney, Viacom and
            Discovery, expire respectively on […], […], […] and […]277. Therefore, an
            ability on the part of the JV to totally or partially foreclose competing
            broadcasters cannot be held to arise in the near future in light of the applicable
            contractual provisions.
    (402) In light of the above, the Commission considers that the JV will not have the
            ability to engage in total or partial customer foreclosure of its strategies of third
            parties’ pay TV channels in Norway since it does not have a sufficient degree of
            market power in the market for the retail supply of AV services, irrespective of
            any possible segmentation.
b.        Incentive to engage in customer foreclosure
    (403) Given the lack of ability to foreclose, it is not necessary to conclude as to whether
            the JV will have the incentive to engage in total or partial customer foreclosure
            strategies of third parties’ pay TV channels.
    (404) Nevertheless, the Commission has assessed the JV’s incentives, and considers
            that the JV would lack the incentive to engage in total or partial customer
            foreclosure strategies of third parties’ pay TV channels for the following reasons.
    (405) First, most of the respondents to the market investigation do not expect that the
            JV post-Transaction will implement a customer foreclosure strategy by either
            stopping to source TV channels or degrading the terms and conditions at which it
            does so.278 Only one respondent indicated that the JV may engage in partial
            customer foreclosure strategies by worsening the terms and conditions at which it
            purchases channels from third parties. The respondent specified that its concern is
            more generic and it relates to the general retail consolidation trend in the market
            and it does not have a view on whether this specific Transaction is likely to raise
            concerns.
276  Telenor’s reply to RFI 14, Annex 3.
277  NENT’s reply to RFI 14, Annex 4.
278  Responses to questionnaire Q2 to TV broadcasters in Norway, questions G.1 and G.2.
                                                        103
 ---pagebreak---     (406) Second, the Commission notes that a customer foreclosure strategy whereby the
           JV would not broadcast channels of competing TV broadcasters could have a
           detrimental impact on the retail AV offering of the JV. One document submitted
           by Telenor, for examples, shows that [confidential strategic views of Telenor in
           the market for the wholesale acquisition of TV channels].279 In the same
           document, Telenor describes [confidential strategic views of Telenor in the
           market for the wholesale acquisition of TV channels] Moreover, the Notifying
           Parties have provided an analysis prepared by an external economic consultant
           showing that the JV would not have an incentive to engage in such foreclosing
           strategy.280
    (407) Third, the Commission considers that linear retail suppliers of AV services need a
           large and diverse portfolio of attractive TV channels of different genres for their
           retail packages. In particular, the main competing providers of retail AV services,
           namely Telia, Altibox and RiksTV are all offering channels offered by TV2
           Norge and Discovery.281 Therefore, a foreclosure of competing TV broadcasters
           would be detrimental to the retail provider of AV services which would offer a
           product of inferior quality vis-à-vis its competitors.
    (408) Fourth, the Commission notes that there is already another similar vertically
           integrated player, RiksTV, active in Norway. RiksTV is jointly owned by NRK
           and TV2 Norge, the leading wholesale supplier of pay TV channels in Norway.
           Even if owned at 50% by TV2 Norge, RiksTV is sourcing TV channels broadly in
           the market and its offering to its […] subscribers include also NENT and
           Discovery’s channels. The Commission considers that, similarly to RiksTV, the
           JV would have limited incentives to engage in total customer foreclosure
           strategies.
    (409) Moreover, the, Commission notes that a strategy of foreclosing third-party
           channels from the JV’s platforms in order to divert viewers and advertising
           revenues to NENT’s channels would harm the JV’s ability to attract subscribers
           who expect to have access to a wider range of content. For this reason, a customer
           foreclosure strategy, although potentially beneficial to NENT’s channels, would
           be detrimental to Telenor, which could therefore be expected to use its influence
           over the JV to block it. Thus, the divergence between NENT’s and Telenor’s
           commercial interests is likely to prevent the JV from engaging in customer
           foreclosure to the benefit of NENT’s channels business.
    (410) Finally, the Commission considers that the Transaction does not significantly
           change the JV’s incentive to engage into partial foreclosure. While any TV
           distributor could be considered to have the incentive, if possible, to reduce the
           cost for licensing TV channels from third parties TV broadcasters, the increase in
           the JV’s downstream market position does not significantly increase the JV’s
           bargaining position towards wholesale suppliers of TV channels (compared to
           NENT’s or Canal Digital’s pre-Transaction positions). First, the JV would still
           need to get access to a broad range of content from competing TV channels in
           order to offer an attractive package to its customers. Second, the JV will not be on
279  Form CO, Annex 51(d)(i).
280  Form CO, Annex 39.
281  Form CO, paragraphs 479-502.
                                                   104
 ---pagebreak---              a preferential position compared to competing providers of retail AV services,
             such as Telia and Altibox.
    (411) In light of the above, the Commission concludes that the JV would not have the
             incentive to engage in total or partial customer foreclosure of third parties’ pay
             TV channels.
c.         Impact on effective competition and conclusion
    (412) Given the lack of ability and incentive to foreclose, it is not necessary to conclude
             as to whether total or partial customer foreclosure strategies of third parties’ pay
             TV channels would have a negative impact on effective competition.
    (413) Nevertheless, the Commission has assessed the potential impact of such strategies
             and considers that it is unlikely that any customer foreclosure strategies of third
             parties’ TV channels considered above would have a significant negative impact
             on consumers and effective competition in Norway, for the following reasons.
    (414) First, as noted in section 6.3.2, the JV would not hold a significant market
             position as a customer in the downstream market for the retail supply of AV
             services, irrespective of any possible segmentation of the market for the retail
             supply of AV services. The JV will have a limited market share of [10-20]% by
             revenue in the national market for the retail supply of AV services.282
    (415) Second, while the results of the market investigation indicated that such
             foreclosure strategy may have a negative impact on their ability to compete,283 the
             Commission considers that rival TV broadcasters are also able to develop new
             strategies to reach viewers. In the first place, the Commission notes that both
             Discovery and TV2 Norge have launched their own OTT services in order to
             reach viewers directly. As of December 2018, TV2 Norge’s OTT service, TV2
             Norge Sumo had approximately […] subscribers while Discovery’s OTT services,
             Dplay and Eurosport player, had respectively […] and […] subscribers.
    (416) Moreover, in the event that the JV sought to cease carrying third party TV
             channels on its platform competing broadcasters would still be able to expand
             their activities with other retail suppliers of AV services. In particular, Telenor,
             Telia, Altibox and RiksTV will remain active with market shares by revenue of
             respectively [10-20]%, [10-20]%, [10-20]% and [10-20]% and market shares by
             subscribers of respectively [10-20]%, [10-20]%, [5-10]% and [5-10]%.
282  The JV and the Parties’ market shares have been presented in Section 6.4.3.2.(B).a above. The JV will
     hold a market share below 30% in all market segments except for the market for the supply of premium
     pay-TV retail AV services, excluding non-linear OTT providers and the market for the retail supply of
     premium AV services for SDUs, excluding non-linear OTT players. Moreover, the Commission notes that
     [confidential information regarding NENTs sales strategy and policy]. Form CO, paragraph 1294.
     Therefore, its market share in the market for the retail supply of AV services is not taken into account for
     the purpose of the assessment of customer foreclosure.
283  Responses to questionnaire Q2 to TV broadcasters in Norway, question G.4.
                                                           105
 ---pagebreak---     (417) Finally, as also indicated above, the agreements in place between the JV and
             wholesale suppliers of TV channels afford protection in relation to carriage fees
             and potential partial foreclosure strategy. In particular,                      Canal Digital’s
             agreements with the competing TV broadcasters TV2 Norge, Disney and
             Discovery, expire respectively on […], […] and […]284 and that Viasat’s
             agreements with the competing TV broadcasters TV2 Norge, Disney, Viacom and
             Discovery, expire respectively on […], […], […] and […]285.
    (418) In light of the foregoing, the Commission concludes that the Transaction would
             not raise serious doubts as to its compatibility with the internal market resulting
             from total or partial customer foreclosure of third parties’ TV channels,
             irrespective of any plausible segmentation286, in Norway.
6.4.3.2. Sweden
    (419) In Sweden, the JV will be active in the retail supply of AV services by combining
             Canal Digital’s DTH business and Viasat’s DTH and IPTV activities. NENT will
             remain active in the wholesale supply of FTA and basic pay TV channels,
             premium pay TV sports channels and premium pay TV non-sports channels.
             NENT would also remain active as retail supplier of AV services through its OTT
             applications287, Viaplay. Telenor would remain active in the retail supply of AV
             services via cable and IPTV through the Telenor brand (which will not be
             contributed to the JV).288 The merger specific change is the addition of Canal
             Digital’s downstream activities to NENT’s DTH and IPTV service, Viasat.289
    (420) The Commission notes that the JV’s market share in the Swedish market for the
             retail supply of AV services is below 30%. Nevertheless, given the JV’s higher
             market share in the narrow market segments for the supply of pay-TV retail AV
             services, excluding non-linear OTT providers, ([30-40]% in 2018), the supply of
             premium pay-TV retail AV services, excluding non-linear OTT providers,
             ([30-40]% in 2018), the supply of pay-TV retail AV services for SDUs, excluding
             non-linear OTT providers, ([30-40]% in 2018), the supply of pay-TV retail
284  Telenor’s reply to RFI 14, Annex 3.
285  NENT’s reply to RFI 14, Annex 4.
286  NENT’s basic pay TV channels include all different genres of basic pay TV channels supplied by NENT
     in the market. NENT’s premium pay sports TV channels include all sports channels supplied by NENT in
     the market. NENT’s premium pay non-sports TV channels include film & series channels supplied by
     NENT in the market.
287  [Confidential information regarding NENTs sales strategy and policy]. Form CO, paragraph 1294.
     Therefore, its market share in the market for the retail supply of AV services is not taken into account for
     the purpose of the assessment of customer foreclosure.
288  Telenor does not offer a standalone OTT service in Sweden, but Telenor subscribers have access to a TVE
     service ("Telenor Stream"). Paragraph 593, Form CO.
289  Since NENT and Telenor would remain independently active in the relevant markets post-Transaction, the
     relationship between them is not assessed in the current Section but in Section 6.5. Furthermore, the
     Commission notes that the Transaction does not change Telenor’s incentive to distribute channels via its
     own retail AV service platform (not contributed to the JV). In particular, a strategy of foreclosing third-
     party channels from the Telenor’s retail AV service platform (not contributed to the JV) platforms in order
     to divert viewers and advertising revenues to NENT’s channels would harm Telenor’s ability to attract
     subscribers who expect to have access to a wider range of content. For this reason, a customer foreclosure
     strategy, although potentially beneficial to NENT’s channels, would be detrimental to Telenor. Since
     NENT has no influence over Telenor’s decision making in relation to Telenor’s retail AV service platform
     (not contributed to the JV), the Commission considers the foreclosure of third party TV channels from
     Telenor’s retail AV service platform (not contributed to the JV) as unlikely.
                                                           106
 ---pagebreak---               premium AV services for SDUs, excluding non-linear OTT providers, ([30-40]%
              in 2018), the Commission has assessed the risk of customer foreclosure strategies
              in Sweden.
    (421) In particular, the Commission has assessed the risk of the following two types of
              customer foreclosure strategies: (i) total foreclosure of rival TV broadcasters
              through the JV’s refusal to carry competing TV channels on its downstream
              distribution platform; and (ii) partial foreclosure of rival TV broadcasters through,
              for instance, a degradation of the quality of the viewers’ experience for competing
              TV channels on the JV’s distribution platform, or through a reduction in carriage
              fees.
    (422) The Commission has assessed the two abovementioned types of customer
              foreclosure strategies for all the types of TV channels, which Viasat and Canal
              Digital were purchasing in Sweden, namely: (i) FTA and basic pay-TV
              channels290, (ii) premium pay TV sports channels, and (iii) premium pay TV non-
              sports channels.
    (423) For the purposes of its assessment, the Commission has considered, in particular,
              as the more likely potential targets of a customer foreclosure strategy, the
              channels with the highest market shares. On the basis of the market shares
              presented in Section 6.2.1.2.(A), the main targets of potential foreclosure in
              Sweden are likely to be the other two main commercial broadcasters, Telia and
              Discovery.
    (424) The question as to whether the JV would have the ability or the incentive to
              undertake a partial or total customer foreclosure strategy has been assessed in all
              possible market segments where basic pay TV channels and premium pay TV
              channels are acquired. The Commission has conducted its assessment of the
              impact of a total or partial foreclosure strategy in respect of the possible markets
              for which TV channels are an important input.291
290  NENT supplies its FTA and basic pay TV channels as a package. This conclusion is based on demand and
     supply side factors, which support the view that NENT FTA and basic pay TV channels should be treated
     as a package product. On the demand side, TV distributors purchase a package of NENT’s FTA and basic
     pay TV channels in Sweden. [Confidential information regarding NENTs sales strategy and policy]. See
     Annex 55, Form CO. On the supply side, NENT’s FTA and basic pay TV channels are sold by TV
     distributors to end-customers as packages including, not only TV3 but also other basic pay TV channels.
     Accordingly, the demand and supply side analysis of the purchase and supply of NENT’s FTA and basic
     pay TV channels shows that NENT’s channels constitute a package product. The Commission has
     therefore made its assessment of anticompetitive input foreclosure considering NENT’s FTA and basic
     pay TV channels as a package therefore including all different genres of FTA and basic pay TV channels
     supplied by NENT in the market.
291  Basic pay TV channels are acquired as an input for the markets for the retail supply of (i) AV services (ii)
     linear pay AV services, (iii) linear basic pay AV services (iv) all possible markets (i) to (iii) segmented
     into MDU and SDU. Premium pay TV channels are acquired as an input for the markets for the retail
     supply of (i) AV services (ii) linear pay AV services, (iii) linear premium pay AV services (iv) all possible
     markets (i) to (iii) segmented into MDU and SDU. The Commission hereafter, in this section, refers to the
     ‘retail supply of AV services’ or ‘retail AV services’ as shorthand for all possible markets comprising the
     retail supply of (i) AV services (ii) linear pay AV services, (iii) linear basic pay AV services (iv) linear
     premium pay AV services, (v) all possible markets (i) to (iv) segmented into MDU and SDU.
                                                           107
 ---pagebreak---        (A)       The Notifying Parties’ view
   (425) The Notifying Parties argue that the Transaction will not give to the JV the ability
          and incentive to engage in customer foreclosure in Sweden. Pre-Transaction,
          NENT is vertically integrated as a supplier and distributor of TV channels. Post-
          Transaction, NENT will remain active as a supplier of TV channels but NENT’s
          vertical integration will be reduced with the transfer of its 100% owned entity,
          Viasat Consumer, into a joint venture 50% co-owned with Telenor.
   (426) With respect to the JV’s ability to undertake a customer foreclosure strategy, the
          Notifying Parties consider that, first, the contractual agreement currently in place
          would limit the JV’s ability to engage in such practices. Second, the JV does not
          have the required market power, in particular due to the structural decline of
          Viasat and Canal Digital’s DTH offering.
   (427) Even if the JV had the ability to engage in a customer foreclosure strategy by
          preventing rival TV broadcasters from distributing its TV channels to their
          customers, the Notifying Parties submit that the Transaction does not increase
          incentives to engage into customer foreclosure strategies. First, the Notifying
          Parties consider that NENT’s and Telenor’s incentives are not aligned. In
          particular, a customer foreclosure strategy would be beneficial exclusively to
          NENT which would expand its advertising revenue. Therefore, Telenor would try
          to oppose such strategy. Second, NENT has a limited market position in the
          market for the wholesale supply of TV channels. Therefore, any selective
          customer foreclosure strategy would firstly benefit other broadcasters, such as
          Telia and Discovery, with a higher market position. Third, any profit of NENT
          from additional advertising revenue would not compensate for the loss from the
          number of subscribers switching away from the JV’s retail AV service.
   (428) Even if the JV would have the ability and incentive to engage in an customer
          foreclosure strategy, the Notifying Parties, particularly in light of the JV’s limited
          importance as a customer due to its limited position in the downstream market,
          consider it unlikely that any such conduct would result in the foreclosure or
          marginalisation of channels competing with NENT’s TV channels to such an
          extent that competition would be negatively affected.
       (B)      The Commission’s assessment
   (429) The Commission's assessment of potential concerns regarding the foreclosure of
          competing wholesale suppliers of pay TV channels, in light of the results of the
          market investigation, is set out in the following paragraphs. For this purpose, in
          line with paragraph 59 of the Non-Horizontal Merger Guidelines, the
          Commission examines: (i) whether the JV would have the ability to foreclose
          competing wholesale supplier of TV channels; (ii) whether it would have the
          economic incentive to do so; and (iii) whether a foreclosure strategy would have a
          significant detrimental effect on competition downstream.
a.      Ability to engage in customer foreclosure
   (430) When considering whether the JV would have the ability to foreclose access to
          downstream markets, the Commission examines whether there are sufficient
          economic alternatives in the downstream market for upstream rivals to sell their
          output.
                                                  108
 ---pagebreak---     (431) The Commission considers that the JV would lack the ability to engage in either
            total or partial customer foreclosure strategies of third parties’ pay TV channels
            since it does not have a sufficient degree of market power in the market for the
            retail supply of AV services, irrespective of any possible segmentation, for the
            following reasons.
    (432) First, none of the respondents to the market investigation consider that the JV
            would stop sourcing channels from NENT’s competitors292 but, some believe that
            it could engage in partial foreclosure strategies degrading terms and conditions
            for the acquisition of certain channels or stop carrying only certain channels.293
            One respondent notes that the JV may have the incentive not to carry third party
            channels for which the customers’ willingness to pay is very limited and that
            these channels could be removed to reduce costs. Another respondent considers
            that a service relying exclusively on NENT’s channels would not be competitive.
            However, the same respondent indicated that the JV may engage in partial
            customer foreclosure strategies by worsening the terms and conditions at which it
            purchases channels from third parties. The respondent specified that its concern is
            more generic and relates to the general retail consolidation trend in the market
            and it does not have a view on whether this specific Transaction is likely to raise
            concerns.
    (433) Second, as represented in Table 42 below, the JV will hold a market share of
            [20-30]% by value in the Swedish market for the retail supply of AV services
            (based on 2018 data) and below 30% in all market segments except for the
            market for the supply of premium pay-TV retail AV services, excluding non-
            linear OTT providers as well as market for the supply of pay-TV retail AV
            service, excluding non-linear OTT providers, as well as the market for the supply
            of pay-TV retail AV service for SDUs, excluding non-linear OTT providers as
            well as the supply of pay-TV retail premium AV services for SDUs, excluding
            non-linear OTT providers.294
292  Responses to questionnaires Q3 to retail suppliers of AV services in Sweden and Q4 to TV broadcasters in
     Sweden, question G.1.
293  Responses to questionnaires Q3 to retail suppliers of AV services in Sweden and Q4 to TV broadcasters in
     Sweden, question G.2.
294  See market shares available in Section 6.2.1.1.(B).
                                                           109
 ---pagebreak---                                                 Table 42: Market shares in 2018
                               in the market for the retail supply of AV services by revenue
                                                                                                                               Pay-TV
                                                                                                                               for
                                                Basic pay-                 Premium                                  Pay-TV     SDUs
                      Pay-TV                    TV                         pay-TV                                   for MDUs   (exclud
                      (excluding                (excluding      Premiu     (excluding                               (excluding ing
                      non-linear                non-linear      m pay-     non-linear    Pay-TV        Pay-TV       non-linear non-
            Pay-      OTT            Basic      OTT             TV         OTT           for           for          OTT        linear
            TV        providers)     pay-TV     providers)      sector     providers)    MDUs          SDUs         providers) OTT)
Canal       [10-20]     [10-20]       [10-20]      [10-20]        [5-10]     [10-20]      [10-20]        [5-10]        [10-20] [10-20]
Digital
Viasat      [10-20]     [10-20]        [5-10]      [10-20]       [10-20]     [20-30]       [0-5]        [10-20]         [0-5]  [10-20]
JV          [20-30]     [30-40]       [20-30]      [20-30]       [20-30]     [30-40]      [10-20]       [20-30]        [10-20] [30-40]
Telenor      [5-10]      [5-10]       [10-20]      [10-20]         [0-5]      [5-10]      [10-20]        [5-10]        [10-20]  [5-10]
Viaplay       [0-5]         -          [5-10]          -           [0-5]         -           -           [5-10]           -        -
Parties     [30-40]     [30-40]       [30-40]     [30-40]       [20-30]      [30-40]      [20-30]       [30-40]       [20-30]  [40-50]
Tele2/
ComHem      [20-30]     [30-40]       [30-40]     [40-50]       [20-30]      [30-40]      [40-50]       [20-30]       [40-50]  [30-40]
Telia       [10-20]     [10-20]       [10-20]     [10-20]       [10-20]      [10-20]      [10-20]       [10-20]       [10-20]  [10-20]
Non-linear
OTT
(excluding
Viaplay)    [20-30]         -           [0-5]          -        [20-30]          -           -          [20-30]           -        -
Others       [5-10]      [5-10]         [0-5]       [5-10]        [5-10]      [5-10]      [10-20]         [0-5]       [10-20]   [5-10]
                                                          Source: Form CO, Annex 12.
               (434) Table 43, reproduced below, shows the market shares of the JV and its main
                      competitors in the market for the retail supply of AV services and possible sub-
                      segments by subscribers. The JV would have an even more limited market
                      position with a market share of approximately [5-10]% in the overall market for
                      the retail supply of AV services.
                                                Table 43: Market shares in 2018
                             in the market for the retail supply of AV services by subscribers
                                                Overall
                                                market                          Pay-TV                       Basic pay-TV
                               Overall        (excluding                      (excluding                       (excluding
                               market         non-linear                      non-linear                       non-linear
                                                 OTT                             OTT            Basic             OTT
                                              providers)        Pay-TV        providers)       pay-TV          providers)
           Canal Digital         [0-5]           [5-10]            [0-5]         [5-10]          [0-5]            [5-10]
           Viasat                [0-5]           [5-10]            [0-5]         [5-10]          [0-5]             [0-5]
           JV                   [5-10]          [10-20]           [5-10]        [10-20]         [5-10]            [5-10]
           Telenor              [5-10]           [5-10]           [5-10]         [5-10]        [10-20]           [10-20]
           Viaplay               [0-5]               -             [0-5]            -           [5-10]               -
           Parties             [10-20]          [20-30]          [10-20]        [20-30]        [20-30]           [20-30]
           Tele2/
           ComHem              [20-30]          [40-50]          [20-30]        [40-50]        [40-50]           [40-50]
           Telia               [10-20]          [20-30]          [10-20]        [20-30]        [10-20]           [10-20]
           Non-linear
           OTT
           (excluding
           Viaplay)            [30-40]               -           [30-40]            -           [5-10]               -
           Others              [10-20]          [10-20]           [5-10]        [10-20]         [5-10]           [10-20]
                                                      Source: Form CO, Annex 12.
                                                                       110
 ---pagebreak---     (435) The JV’s market position would not significantly differ in a market segment for
            the retail supply of premium pay AV services where it will have a combined
            market share of approximately [10-20]% in the premium pay market segment
            excluding non-linear OTT services, such as Netflix.
                                    Table 44: Market shares in 2018
                  in the market for the retail supply of AV services by subscribers
                                    Premium                             Pay-TV for
                                     pay-TV                               MDUs        Pay-TV for
                                   (excluding                           (excluding       SDUs
                                   non-linear                           non-linear    (excluding
                   Premium            OTT           Pay-TV    Pay-TV       OTT        non-linear
                    pay-TV         providers)     for MDUs for SDUs     providers)      OTT)
Canal Digital    [0-5]           [5-10]           [0-5]      [0-5]    [0-5]         [5-10]
Viasat           [0-5]           [10-20]          [0-5]      [5-10]   [0-5]         [10-20]
JV               [5-10]          [10-20]          [0-5]      [10-20]  [0-5]         [20-30]
Telenor          [0-5]           [0-5]            [10-20]    [0-5]    [10-20]       [5-10]
Viaplay          [0-5]           -                -          [5-10]   -             -
Parties          [10-20]         [20-30]          [10-20]    [10-20]  [10-20]       [20-30]
Telia            [10-20]         [30-40]          [50-60]    [10-20]  [50-60]       [30-40]
RiksTV           [10-20]         [20-30]          [10-20]    [5-10]   [10-20]       [20-30]
Non-linear
OTT
(excluding
Viaplay)         [50-60]         -                -          [40-50]  -             -
Others           [10-20]         [20-30]          [10-20]    [5-10]   [10-20]       [10-20]
                                         Source: Form CO, Annex 12.
    (436) Third, several alternative providers of linear retail AV services would remain
            available in the market for the retail supply of AV services, excluding non-linear,
            where TV channels are used as an input. In particular, Telenor, Telia and Tele2
            will remain active with market shares by revenue of respectively [5-10]%,
            [20-30]%, [40-50]% and [0-5]% and market shares by subscribers of respectively
            [5-10]%, [10-20]% and [40-50]%.
    (437) Moreover, as shown in Figure 4, in Sweden there is a trend of customers
            switching to TV services distributed over fibre networks which would likely
            continue post-Transaction. NENT’s competing broadcasters would continue to
            have the ability to distribute their channels through fiber based providers of retail
            AV services.
    (438) Finally, with reference to possible contractual limitations that may reduce the
            JV’s ability to perform such conduct, the Commission notes that Canal Digital’s
            agreements with the competing TV broadcaster Telia, Disney and Discovery,
            expire respectively on […], […] and […]295 and that Viasat’s agreements with the
            competing TV broadcasters Telia, Disney, NGC and Discovery, expire
            respectively on […], […], […] and […]296. Therefore, an ability on the part of the
            JV to totally or partially foreclose competing broadcasters cannot be held to arise
            in the near future in light of the applicable contractual provisions.
295  Telenor’s reply to RFI 14, Annex 3.
296  NENT’s reply to RFI 14, Annex 4.
                                                        111
 ---pagebreak---     (439) In light of the above, the Commission considers that the JV will not have the
            ability to engage in total or partial customer foreclosure of its strategies of third
            parties’ pay TV channels in Sweden since it does not have a sufficient degree of
            market power in the market for the retail supply of AV services, irrespective of
            any possible segmentation.
b.        Incentive to engage in customer foreclosure
    (440) Given the lack of ability to foreclose, it is not necessary to conclude as to whether
            the JV will have the incentive to engage in total or partial customer foreclosure
            strategies of third parties’ pay TV channels.
    (441) Nevertheless, the Commission has assessed the JV’s incentives, and considers
            that the JV would lack the incentive to engage in total or partial customer
            foreclosure strategies of third parties’ pay TV channels for the following reasons.
    (442) First, none of the respondents to the market investigation consider that the JV
            would stop sourcing channels from NENT’s competitors297 but, some believe that
            it could engage in partial foreclosure strategies degrading terms and conditions
            for the acquisition of certain channels or stop carrying only certain channels.298
            One respondent notes that the JV may have the incentive not to carry third party
            channels for which the customers’ willingness to pay is very limited and they
            could be removed to reduce costs. Another respondent considers that a service
            relying exclusively on NENT’s channels would not be competitive. However, the
            same respondent indicated that the JV may engage in partial customer foreclosure
            strategies by worsening the terms and conditions at which it purchases channels
            from third parties. The respondent specified that its concern is more generic and it
            relates to the general retail consolidation trend in the market and it does not have
            a view on whether this specific Transaction is likely to raise concerns.
    (443) Second, the Commission notes that a customer foreclosure strategy whereby the
            JV would not broadcast channels of competing TV broadcasters could have a
            detrimental impact on the retail AV offering of the JV. One document submitted
            by Telenor, for examples, shows that [confidential strategic views of Telenor in
            the market for the wholesale acquisition of TV channels].299 The Notifying Parties
            have also provided an analysis prepared by an external economic consultant
            showing that the JV would not have an incentive to engage in such foreclosing
            strategy.300
    (444) Third, the Commission considers that linear retail suppliers of AV services need a
            large and diverse portfolio of attractive TV channels of different genres for their
            retail packages. In particular, the main competing providers of retail AV services,
            namely Telia, Altibox and RiksTV are all offering channels offered by TV2
            Norge and Discovery.301 Therefore, a foreclosure of competing TV broadcasters
297  Responses to questionnaires Q3 to retail suppliers of AV services in Sweden and Q4 to TV broadcasters in
     Sweden, question G.1.
298  Responses to questionnaires Q3 to retail suppliers of AV services in Sweden and Q4 to TV broadcasters in
     Sweden, question G.2.
299  Form CO, Annex 51(c)(ii).
300  Form CO, Annex 40.
301  Form CO, from paragraphs 479 to 502.
                                                           112
 ---pagebreak---          would be detrimental to the retail provider of AV services which would offer a
         product of inferior quality vis-à-vis its competitors.
   (445) Fourth, the Commission notes that there is already another similar vertically
         integrated player, Telia, active in Sweden. Telia is active both in the market for
         the wholesale supply of TV channels and in the market for the retail supply of AV
         services. Telia is sourcing TV channels broadly in the market and its offering to
         its subscribers include also NENT and Discovery’s channels. The Commission
         considers that, similarly to Telia, the JV would have limited incentives to engage
         in total customer foreclosure strategies.
   (446) Moreover, the Commission notes that a strategy of foreclosing third-party
         channels from the JV’s platforms in order to divert viewers and advertising
         revenues to NENT’s channels would harm the JV’s ability to attract subscribers
         who expect to have access to a wider range of content. For this reason, a customer
         foreclosure strategy, although potentially beneficial to NENT’s channels, would
         be detrimental to Telenor, which could therefore be expected to use its influence
         over the JV to block it. Thus, the divergence between NENT’s and Telenor’s
         commercial interests is likely to prevent the JV from engaging in customer
         foreclosure to the benefit of NENT’s channels business.
   (447) Finally, the Commission considers that the Transaction does not significantly
         change the JV’s incentive to engage into partial foreclosure. While any TV
         distributor could be considered to have the incentive, if possible, to reduce the
         cost for licensing TV channels from third parties TV broadcasters, the increase in
         the JV’s downstream market position does not significantly increase the JV’s
         bargaining position towards wholesale suppliers of TV channels (compared to
         NENT’s or Canal Digital’s pre-Transaction positions). First, the JV would still
         need to get access to a broad range of content from competing TV channels in
         order to offer an attractive package to its customers. Second, the JV will not be on
         a preferential position compared to competing providers of retail AV services,
         such as Telia and Tele2.
   (448) In light of the above, the Commission concludes that the JV would not have the
         incentive to engage in total or partial customer foreclosure of third parties’ pay
         TV channels.
c.      Impact on effective competition and conclusion
   (449) Given the lack of ability and incentive to foreclose, it is not necessary to conclude
         as to whether total or partial customer foreclosure strategies of third parties’ pay
         TV channels would have a negative impact on effective competition.
   (450) Nevertheless, the Commission has assessed the potential impact of such strategies
         and considers that it is unlikely that any customer foreclosure strategies of third
         parties’ TV channels considered above would have a significant negative impact
         on consumers and effective competition in Sweden, for the following reasons.
   (451) First, as noted in section 6.3.3, the JV would not hold a significant market
         position as a customer in the downstream market for the retail supply of AV
         services, irrespective of any possible segmentation of the market for the retail
         supply of AV services. The JV will have a market share of approximately
                                                 113
 ---pagebreak---              [30-40]% by revenue and [10-20]% by volume in the national market for the
             retail supply of AV services, excluding non-linear, where TV channels are
             supplied as an input.302
    (452) Second, while the results of the market investigation indicated that such
             foreclosure strategy may have a negative impact on their ability to compete,303 the
             Commission considers that rival TV broadcasters are also able to develop new
             strategies to reach viewers. In the first place, the Commission notes that both
             Discovery and Telia have launched their own OTT services in order to reach
             viewers directly. As of December 2018, Discovery’s OTT services, Dplay and
             Eurosport player, had respectively […] and […] subscribers.
    (453) Moreover, in the event that the JV sought to cease carrying third party TV
             channels on its platform competing broadcasters would still be able to expand
             their activities with other retail suppliers of AV services. In particular, Telenor,
             Telia and Tele2 will remain active with market shares by revenue of respectively
             [5-10]%, [20-30]%, [40-50]% and [0-5]% and market shares by subscribers of
             respectively [5-10]%, [10-20]% and [40-50]%.
    (454) Finally, as also indicated above, the agreements in place between the JV and
             wholesale suppliers of TV channels afford protection in relation to carriage fees
             and potential partial foreclosure strategy. In particular, Canal Digital’s
             agreements with the competing TV broadcasters Telia, Disney and Discovery,
             expire respectively on […], […] and […]304 and that Viasat’s agreements with the
             competing TV broadcasters Telia, Disney, NGC and Discovery, expire
             respectively on […], […], […] and […]305.
    (455) In light of the foregoing, the Commission concludes that the Transaction would
             not raise serious doubts as to its compatibility with the internal market resulting
             from total or partial customer foreclosure of third parties’ TV channels,
             irrespective of any plausible segmentation306, in Sweden.
6.4.3.3. Finland
    (456) In Finland, the JV will be active in the retail supply of AV services by combining
             Canal Digital’s DTH business and Viasat’s DTH activities. NENT will remain
             active in the wholesale supply of TV channels. NENT would also remain active
302  The JV and the Parties’ market shares have been presented in Section 6.4.3.2.(B).a above. The JV will
     hold a market share below 30% in all market segments except for the market for the supply of premium
     pay-TV retail AV services, excluding non-linear OTT providers as well as market for the supply of pay-
     TV retail AV service, excluding non-linear OTT providers, as well as the market for the supply of pay-TV
     retail AV service for SDUs, excluding non-linear OTT providers as well as the supply of pay-TV retail
     premium AV services for SDUs, excluding non-linear OTT providers. Moreover, the Commission notes
     that [confidential information regarding NENTs sales strategy and policy]. Form CO, paragraph 1294.
     Therefore, its market share in the market for the retail supply of AV services is not taken into account for
     the purpose of the assessment of customer foreclosure.
303  Responses to questionnaire Q4 to TV broadcasters in Sweden, question G.4.
304  Telenor’s reply to RFI 14, Annex 3.
305  NENT’s reply to RFI 14, Annex 4.
306  NENT’s basic pay TV channels include all different genres of basic pay TV channels supplied by NENT
     in the market. NENT’s premium pay sports TV channels include all sports channels supplied by NENT in
     the market. NENT’s premium pay non-sports TV channels include film & series channels supplied by
     NENT in the market.
                                                           114
 ---pagebreak---              as retail supplier of AV services through its OTT applications, Viaplay. The
             merger specific change is the addition of Canal Digital’s downstream activities to
             NENT’s DTH service, Viasat.307
    (457) The Commission notes that the JV’s market share in the Finnish market for the
             retail supply of AV services is below 30%. Nevertheless, given the JV’s higher
             market share in the narrow market segment for the supply of pay-TV retail AV
             services for SDUs, excluding non-linear OTT providers, ([30-40]% in 2018), for
             the retail supply of basic AV services for SDUs ([30-40]% in 2018) and for the
             retail supply of basic AV services for SDUs, excluding non-linear OTT
             ([40-50]% in 2018).308, the Commission has assessed the risk of customer
             foreclosure strategies in Finland.
    (458) In particular, the Commission has assessed the risk of the following two types of
             customer foreclosure strategies: (i) total foreclosure of rival TV broadcasters
             through the JV’s refusal to carry competing TV channels on its downstream
             distribution platform; and (ii) partial foreclosure of rival TV broadcasters through,
             for instance, a degradation of the quality of the viewers’ experience for competing
             TV channels on the JV’s distribution platform, or through a reduction in carriage
             fees.
    (459) The Commission has assessed the two abovementioned types of customer
             foreclosure strategies for all the types of TV channels, which Viasat and Canal
             Digital were purchasing in Finland, namely: (i) premium pay TV sports channels,
             and (ii) premium pay TV non-sports channels.
    (460) For the purposes of its assessment, the Commission has considered, in particular,
             as the more likely potential targets of a customer foreclosure strategy, the
             channels with the highest market shares. On the basis of the market shares
             presented in Section 6.2.1.3.(A), the main targets of potential foreclosure in
             Finland is likely to be the other main commercial broadcaster, Telia.309
    (461) The question as to whether the JV would have the ability or the incentive to
             undertake a partial or total customer foreclosure strategy has been assessed in all
             possible market segments where basic pay TV channels and premium pay TV
             channels are acquired. The Commission has conducted its assessment of the
307  Since NENT and Telenor would remain independently active in the relevant markets post-Transaction, the
     relationship between them is not assessed in the current Section but in Section 6.5. Furthermore, the
     Commission notes that the Transaction does not change Telenor’s incentive to distribute channels via its
     own retail AV service platform (not contributed to the JV). In particular, a strategy of foreclosing third-
     party channels from the Telenor’s retail AV service platform (not contributed to the JV) platforms in order
     to divert viewers and advertising revenues to NENT’s channels would harm Telenor’s ability to attract
     subscribers who expect to have access to a wider range of content. For this reason, a customer foreclosure
     strategy, although potentially beneficial to NENT’s channels, would be detrimental to Telenor. Since
     NENT has no influence over Telenor’s decision making in relation to Telenor’s retail AV service platform
     (not contributed to the JV), the Commission considers the foreclosure of third party TV channels from
     Telenor’s retail AV service platform (not contributed to the JV) as unlikely.
308   Based on the market shares available in Section 6.2.1.1.(B).
309  The Commission has not considered NRK as a potential target of foreclosure strategy since NRK is a FTA
     subject to “must-carry” obligations. NENT is not offering any FTA channel on the market.
                                                          115
 ---pagebreak---               impact of a total or partial foreclosure strategy in respect of the possible markets
              for which TV channels are an important input.310
           (A)       The Notifying Parties’ view
    (462) The Notifying Parties argue that the Transaction will not give to the JV the ability
              and incentive to engage in customer foreclosure in Finland. Pre-Transaction,
              NENT is vertically integrated as a supplier and distributor of TV channels. Post-
              Transaction, NENT will remain active as a supplier of TV channels but NENT’s
              vertical integration will be reduced with the transfer of its 100% owned entity,
              Viasat Consumer, into a joint venture 50% co-owned with Telenor.
    (463) With respect to the JV’s ability to undertake a customer foreclosure strategy, the
              Notifying Parties consider that, first, the contractual agreement currently in place
              would limit the JV’s ability to engage in such practices. Second, the JV does not
              have the required market power, in particular due to the structural decline of
              Viasat and Canal Digital’s DTH offering.
    (464) Even if the JV had the ability to engage in a customer foreclosure strategy by
              preventing rival TV broadcasters from distributing its TV channels to their
              customers, the Notifying Parties submit that the Transaction does not increase
              incentives to engage into customer foreclosure strategies. First, the Notifying
              Parties consider that NENT’s and Telenor’s incentives are not aligned. In
              particular, a customer foreclosure strategy would be beneficial exclusively to
              NENT which would expand its advertising revenue. Therefore, Telenor would try
              to oppose such strategy. Second, NENT has a limited market position in the
              market for the wholesale supply of TV channels. Therefore, any selective
              customer foreclosure strategy would firstly benefit other broadcasters, such as
              Telia, with a higher market position. Third, any profit of NENT from additional
              advertising revenue would not compensate for the loss from the number of
              subscribers switching away from the JV’s retail AV service.
    (465) Even if the JV would have the ability and incentive to engage in an customer
              foreclosure strategy, the Notifying Parties, particularly in light of the JV’s limited
              importance as a customer due to its limited position in the downstream market,
              consider it unlikely that any such conduct would result in the foreclosure or
              marginalisation of channels competing with NENT’s TV channels to such an
              extent that competition would be negatively affected.
310  Basic pay TV channels are acquired as an input for the markets for the retail supply of (i) AV services
     (ii) linear pay AV services, (iii) linear basic pay AV services (iv) all possible markets (i) to (iii) segmented
     into MDU and SDU. Premium pay TV channels are acquired as an input for the markets for the retail
     supply of (i) AV services (ii) linear pay AV services, (iii) linear premium pay AV services (iv) all possible
     markets (i) to (iii) segmented into MDU and SDU. The Commission hereafter, in this section, refers to the
     ‘retail supply of AV services’ or ‘retail AV services’ as shorthand for all possible markets comprising the
     retail supply of (i) AV services (ii) linear pay AV services, (iii) linear basic pay AV services (iv) linear
     premium pay AV services, (v) all possible markets (i) to (iv) segmented into MDU and SDU.
                                                            116
 ---pagebreak---          (B)       The Commission’s assessment
    (466) The Commission's assessment of potential concerns regarding the foreclosure of
            competing wholesale suppliers of pay TV channels, in light of the results of the
            market investigation, is set out in the following paragraphs. For this purpose, in
            line with paragraph 59 of the Non-Horizontal Merger Guidelines, the
            Commission examines: (i) whether the JV would have the ability to foreclose
            competing wholesale supplier of TV channels; (ii) whether it would have the
            economic incentive to do so; and (iii) whether a foreclosure strategy would have a
            significant detrimental effect on competition downstream.
a.        Ability to engage in customer foreclosure
    (467) When considering whether the JV would have the ability to foreclose access to
            downstream markets, the Commission examines whether there are sufficient
            economic alternatives in the downstream market for upstream rivals to sell their
            output.
    (468) The Commission considers that the JV would lack the ability to engage in either
            total or partial customer foreclosure strategies of third parties’ pay TV channels
            since it does not have a sufficient degree of market power in the market for the
            retail supply of AV services, irrespective of any possible segmentation, for the
            following reasons.
    (469) First, some respondents to the market investigation consider that the JV would
            stop sourcing channels from NENT’s competitors311 and that it could engage in
            partial foreclosure strategies degrading terms and conditions for the acquisition of
            certain channels or stop carrying only certain channels.312 For example, the JV
            could use the increased bargaining power to degrade the terms and conditions at
            which it sources its channels. Another respondent considers that the general retail
            consolidation trend in the market between TV distributors and TV broadcasters
            may be detrimental. However, it does not have a view on whether this specific
            Transaction is likely to raise concerns.
    (470) Second, as represented in Table 45 below, the JV will hold a market share of
            [5-10]% by value in the Finnish market for the retail supply of AV services
            (based on 2018 data) and below 30% in all market segments except for the market
            for the supply of pay-TV for SDU, excluding non-linear OTT providers. .313
311 Responses to questionnaires Q6 to TV broadcasters in Finland, question G.1.
312  Responses to questionnaires Q6 to TV broadcasters in Finland, question G.2.
313 See market shares available in Section 6.2.1.3.(B). Even considering NENT’s market shares, the
     combined position of NENT and the JV will not be above 30% under any other possible market segments.
                                                        117
 ---pagebreak---                                                Table 45: Market shares in 2018
                               in the market for the retail supply of AV services by revenue
                                              Basic pay-                 Premium                                Pay-TV
                       Pay-TV                      TV                     pay-TV                              for MDUs Pay-TV
                     (excluding               (excluding                (excluding                            (excluding for SDUs
                     non-linear               non-linear                non-linear Pay-TV          Pay-TV non-linear (excluding
                         OTT          Basic       OTT       Premium         OTT          for          for        OTT     non-linear
           Pay-TV providers) pay-TV providers) pay-TV providers) MDUs                               SDUs providers)        OTT)
Canal
            [5-10]      [5-10]        [5-10]     [5-10]       [5-10]      [10-20]       [0-5]      [10-20]       [0-5]    [20-30]
Digital
Viasat       [0-5]       [0-5]         [0-5]      [0-5]        [0-5]        [0-5]       [0-5]        [0-5]       [0-5]      [0-5]
JV          [5-10]     [10-20]        [5-10]     [5-10]       [5-10]      [10-20]       [0-5]      [10-20]       [0-5]    [30-40]
Telenor    [10-20]     [10-20]       [20-30]    [20-30]        [0-5]       [5-10]     [10-20]        [0-5]      [20-30]     [0-5]
Viaplay     [5-10]         -          [5-10]         -        [5-10]          -        [5-10]       [5-10]         -          -
Parties    [20-30]     [20-30]       [30-40]    [30-40]      [10-20]      [10-20]     [20-30]      [30-40]      [20-30]   [30-40]
Telia      [10-20]     [20-30]       [20-30]    [20-30]      [10-20]      [20-30]     [20-30]       [5-10]      [30-40]   [10-20]
Elisa      [10-20]     [20-30]       [20-30]    [20-30]       [5-10]      [10-20]     [20-30]       [5-10]      [20-30]    [5-10]
Non-
linear
OTT
(excluding
Viaplay)   [20-30]         -           [0-5]         -       [40-50]          -       [10-20]      [30-40]         -          -
Others     [30-40]     [20-30]        [5-10]     [5-10]      [60-70]      [40-50]     [30-40]      [50-60]      [10-20]   [40-50]
                                                    Source: Form CO, Annex 12.
               (471) Table 46, reproduced below, shows the market shares of the JV and its main
                      competitors in the market for the retail supply of AV services and possible sub-
                      segments by subscribers. The JV would have even a more limited market position
                      with a market share of approximately [0-5]%.
                                               Table 46: Market shares in 2018
                             in the market for the retail supply of AV services by subscribers
                                               Overall
                                               market                         Pay-TV                      Basic pay-TV
                               Overall       (excluding                     (excluding                     (excluding
                               market        non-linear                     non-linear                     non-linear
                                                OTT                             OTT           Basic            OTT
                                             providers)       Pay-TV        providers)       pay-TV        providers)
           Canal Digital         [0-5]          [0-5]           [0-5]           [0-5]          [0-5]           [0-5]
           Viasat                [0-5]          [0-5]           [0-5]           [0-5]          [0-5]           [0-5]
           JV                    [0-5]          [0-5]           [0-5]           [0-5]          [0-5]           [0-5]
           Telenor             [10-20]         [10-20]         [10-20]        [20-30]        [30-40]         [30-40]
           Viaplay              [0-5]              -            [0-5]             -           [5-10]             -
           Parties             [10-20]         [20-30]        [20-30]         [20-30]        [30-40]         [30-40]
           Telia               [10-20]         [20-30]        [20-30]         [30-40]        [20-30]         [30-40]
           Elisa               [10-20]         [10-20]        [10-20]         [20-30]        [20-30]         [20-30]
           Non-linear
           OTT
           (excluding
           Viaplay)            [20-30]             -          [20-30]             -            [0-5]             -
           Others              [50-60]         [30-40]        [30-40]         [10-20]         [5-10]          [5-10]
                                                    Source: Form CO, Annex 12.
                                                                    118
 ---pagebreak---    (472) The JV’s market position would not significantly differ in a market segment for
           the retail supply of premium pay AV services where it will have a combined
           market share of approximately [0-5]% in the premium pay market segment
           excluding non-linear OTT services, such as Netflix.
                                Table 47: Market shares in 2018
                in the market for the retail supply of AV services by subscribers
                                Premium                              Pay-TV for
                                 pay-TV                                  MDUs      Pay-TV for
                               (excluding                             (excluding       SDUs
                               non-linear                             non-linear    (excluding
                 Premium           OTT         Pay-TV      Pay-TV        OTT        non-linear
                  pay-TV       providers)     for MDUs    for SDUs    providers)       OTT)
Canal Digital       [0-5]          [0-5]         [0-5]      [5-10]       [0-5]        [10-20]
Viasat              [0-5]          [0-5]         [0-5]       [0-5]       [0-5]          [0-5]
JV                  [0-5]          [0-5]         [0-5]      [5-10]       [0-5]        [10-20]
Telenor             [0-5]         [5-10]        [20-30]      [0-5]      [30-40]        [5-10]
Viaplay             [0-5]            -           [0-5]      [5-10]         -              -
Parties            [5-10]        [10-20]        [20-30]    [10-20]      [30-40]       [10-20]
Telia             [10-20]        [30-40]        [20-30]    [10-20]      [30-40]       [20-30]
Elisa              [5-10]        [10-20]        [10-20]     [5-10]      [20-30]       [10-20]
Non-linear
OTT
(excluding
Viaplay)          [50-60]            -          [20-30]    [40-50]         -              -
Others            [70-80]        [30-40]        [30-40]    [60-70]      [10-20]       [40-50]
                                     Source: Form CO, Annex 12.
   (473) Third, several alternative providers of linear retail AV services would remain
           available in the market for the retail supply of AV services, excluding non-linear,
           where TV channels are used as an input. In particular, Telenor, Telia and Elisa
           will remain active with market shares by revenue of respectively [10-20]%,
           [20-30]%, and [20-30]% and market shares by subscribers of respectively
           [10-20]%, [20-30]% and [10-20]% in the overall market for the retail supply of
           AV services, excluding non-linear providers.
   (474) Fourth, the merger specific change brought by the Transaction corresponds to an
           increase of market shares of maximum [0-5]% by revenue and [0-5]% by
           subscribers. Therefore, the merger specific change in the ability to engage in
           customer foreclosure is limited.
   (475) In light of the above, the Commission considers that the JV will not have the
           ability to engage in total or partial customer foreclosure of its strategies of third
           parties’ pay TV channels in Finland since it does not have a sufficient degree of
           market power in the market for the retail supply of AV services, irrespective of
           any possible segmentation.
                                                    119
 ---pagebreak--- b.          Incentive to engage in customer foreclosure
    (476) Given the lack of ability to foreclose, it is not necessary to conclude as to whether
              the JV will have the incentive to engage in total or partial customer foreclosure
              strategies of third parties’ pay TV channels.
    (477) Nevertheless, the Commission has assessed the JV’s incentives, and considers
              that the JV would lack the incentive to engage in total or partial customer
              foreclosure strategies of third parties’ pay TV channels for the following reasons.
    (478) First, the Commission notes that a customer foreclosure strategy whereby the JV
              would not broadcast channels of competing TV broadcasters could have a
              detrimental impact on the retail AV offering of the JV. The Commission
              considers that the JV’s incentives in Finland would be similar to the ones in
              Norway and Sweden discussed in sections 6.4.3.1 and 6.4.3.2.
    (479) Second, the Commission considers that linear retail suppliers of AV services need
              a large and diverse portfolio of attractive TV channels of different genres for their
              retail packages. In particular, the main competing providers of retail AV services,
              namely Telia, Elisa and Telenor are all offering channels offered by NENT314 and
              Telia.315 Therefore, a foreclosure of competing TV broadcasters would be
              detrimental to the retail provider of AV services which would offer a product of
              inferior quality vis-à-vis its competitors.
    (480) Third, the Commission notes that there is already another similar vertically
              integrated player, Telia, active in Finland. Telia is active both in the market for
              the wholesale supply of TV channels and in the market for the retail supply of AV
              services. Telia is sourcing TV channels broadly in the market and its offering to
              its subscribers include also NENT and Discovery’s channels. The Commission
              considers that, similarly to Telia, the JV would have limited incentives to engage
              in total customer foreclosure strategies.
    (481) Fourth, the Commission notes that, before the Transaction, Canal Digital was not
              engaging in either total or partial foreclosure strategy. The Commission considers
              that the […] subscribers brought by Viasat to the JV would not materially change
              the incentive to engage in such strategy.
    (482) Moreover, the Commission notes that a strategy of foreclosing third-party
              channels from the JV’s platforms in order to divert viewers and advertising
              revenues to NENT’s channels would harm the JV’s ability to attract subscribers
              who expect to have access to a wider range of content. For this reason, a customer
              foreclosure strategy, although potentially beneficial to NENT’s channels, would
              be detrimental to Telenor, which could therefore be expected to use its influence
              over the JV to block it. Thus, the divergence between NENT’s and Telenor’s
              commercial interests is likely to prevent the JV from engaging in customer
              foreclosure to the benefit of NENT’s channels business.
314  NENT’s reply to RFI 14, Annex 1.
315  Telia has committed to offer its premium sports pay TV channels to third parties distributors in Finland.
     See M.9064 – Telia / Bonnier Broadcasting Holding, interim text of the non-confidential version of the
     commitments, available at:
     https://ec.europa.eu/competition/mergers/cases/additional_data/m9064_3342_3.pdf.
                                                          120
 ---pagebreak---     (483) Finally, the Commission considers that the Transaction does not significantly
            change the JV’s incentive to engage into partial foreclosure. While any TV
            distributor could be considered to have the incentive, if possible, to reduce the
            cost for licensing TV channels from third parties TV broadcasters, the increase in
            the JV’s downstream market position does not significantly increase the JV’s
            bargaining position towards wholesale suppliers of TV channels (compared to
            NENT’s or Canal Digital’s pre-Transaction positions). First, the JV would still
            need to get access to a broad range of content from competing TV channels in
            order to offer an attractive package to its customers. Second, the JV will not be
            on a preferential position compared to competing providers of retail AV services,
            such as Telia and Elisa.
    (484) In light of the above, the Commission concludes that the JV would not have the
            incentive to engage in total or partial customer foreclosure of third parties’ pay
            TV channels.
c.        Impact on effective competition and conclusion
    (485) Given the lack of ability and incentive to foreclose, it is not necessary to conclude
            as to whether total or partial customer foreclosure strategies of third parties’ pay
            TV channels would have a negative impact on effective competition.
    (486) Nevertheless, the Commission has assessed the potential impact of such strategies
            and considers that it is unlikely that any customer foreclosure strategies of third
            parties’ TV channels considered above would have a significant negative impact
            on consumers and effective competition in Finland, for the following reasons.
    (487) First, as noted in section 6.3.4, the JV would not hold a significant market
            position as a customer in the downstream market for the retail supply of AV
            services, irrespective of any possible segmentation of the market for the retail
            supply of AV services. The JV will hold a market share of [5-10]% by value in
            the Finnish market for the retail supply of AV services (based on 2018 data) and
            below 30% in all market segments except for the market for the supply of pay-TV
            for SDU, excluding non-linear OTT providers.316 In particular, the JV would
            provide access to a limited customer base of approximately […] subscribers,
            [0-5]% of the overall market for the retail supply of linear pay AV services.
    (488) Second, while the results of the market investigation indicated that such
            foreclosure strategy may have a negative impact on their ability to compete,317 the
            Commission considers that rival TV broadcaster is also able to develop new
            strategies to reach viewers. In the first place, the Commission notes that Telia has
            launched its own OTT services in order to reach viewers directly. In the second
            place, in the event that the JV sought to cease carrying third party TV channels on
            its platform competing broadcasters would still be able to expand their activities
            with other retail suppliers of AV services. In particular, Telenor, Telia and Elisa
            will remain active with market shares by revenue of respectively [10-20]%,
            [20-30]% and [20-30]% and market shares by subscribers of respectively
            [10-20]%, [20-30]% and [10-20]% in the overall market for the retail supply of
            AV services, excluding non-linear providers.
316  The JV and the Parties’ market shares have been presented in Section 6.4.3.3.(B).a above.
317  Responses to questionnaire Q6 to TV broadcasters in Finland, question G.4.
                                                         121
 ---pagebreak---     (489) In light of the foregoing, the Commission concludes that the Transaction would
             not raise serious doubts as to its compatibility with the internal market resulting
             from total or partial customer foreclosure of third parties’ TV channels,
             irrespective of any plausible segmentation318, in Finland.
6.4.4. Conglomerate non-coordinated effects relating to the JV’s activities in the retail
          supply of linear AV services and NENT’s activities in the retail supply of non-linear
          AV services
    (490) The Non-Horizontal Guidelines319 indicate that competition concerns can arise in
             circumstances where a merger involves companies that are active in closely
             related markets. While in the majority of circumstances conglomerate mergers
             will not lead to any competition problems, in certain circumstances they can lead
             to anticompetitive effects. One such example is when the combination of products
             in related markets would give the merged entity or the Parties the ability and
             incentive to leverage a strong market position in one of the markets to the other
             market by means of tying or bundling. Where tying or bundling is likely to lead to
             a reduction in actual or potential rivals’ ability or incentive to compete it may
             reduce competitive pressure on the merged entity, allowing it to increase prices.
6.4.4.1. Norway
    (491) In Norway, Viasat and Canal Digital are active on the market for the retail supply
             of AV services. Post-Transaction, the JV will therefore be active in the market for
             the retail supply of AV services.
    (492) NENT is active in the market for the retail supply of AV services, non-linearly
             through its OTT services, Viaplay. Telenor is active in the retail supply of AV
             services320 and telecommunications services, such as retail mobile and fixed
             internet access services.321
    (493) Multiple play services can comprise a mixture of two or more of AV services (in
             particular OTT services such as AVOD and SVOD), fixed telephony, mobile
             telecommunications and fixed internet services.
    (494) Some providers of linear retail AV services indicated that, if post-Transaction
             NENT were to offer its OTT premium retail services (e.g. Viaplay) exclusively in
             conjunction with the JV's other retail AV services, or vice-versa, they would not
             be able to replicate as attractive multiple play packages as the one of the JV.322
318  NENT’s basic pay TV channels include all different genres of basic pay TV channels supplied by NENT
     in the market. NENT’s premium pay sports TV channels include all sports channels supplied by NENT in
     the market. NENT’s premium pay non-sports TV channels include film & series channels supplied by
     NENT in the market.
319  Non-Horizontal Merger Guidelines, Section V.A.
320  Telenor does not offer a standalone OTT service in Norway, but Telenor subscribers have access to a TVE
     service ("T-We"). Paragraph 250, Form CO.
321  Since NENT and Telenor would remain independently active in the relevant markets post-Transaction.
     The relationship between NENT and Telenor would not be assessed in the current Section.
322  Responses to questionnaire Q1 to retail suppliers of AV services in Norway, question H.3. Respondents to
     the market investigation have not expressed any concerns related to conglomerate relations between
     Telenor’s and the JV’s activities. Furthermore, the Commission notes that, in relation to potential relations
     between Telenor as provider of retail fixed and mobile telecommunications services and the JV’s activities
                                                          122
 ---pagebreak---     (495) The Commission has therefore assessed the risk of the following types of
              foreclosure strategies in Norway: (i) foreclosure of the JV’s rival providers of
              linear retail AV services, under any possible market segmentation by tying or
              bundling NENT’s OTT AV service with the JV’s linear retail AV service323, and
              (ii) foreclosure of rival retail suppliers of OTT AV services by tying or bundling
              NENT’s OTT AV service with the JV’s linear retail AV services.324
    (496) Therefore, in the present case, the Commission analyses whether the JV would
              have the ability and incentive to foreclose rival suppliers of OTT AV services and
              whether NENT would have the ability and incentive to foreclose rival suppliers of
              non-linear and linear retail AV services.
    (497) The Commission then assesses whether each of these foreclosure strategies would
              likely result in a significant detriment to effective competition in the markets for
              the retail supply of retail AV services (and its relevant plausible segments).
          (A)        The Notifying Parties’ view
    (498) The Notifying Parties consider that the Transaction does not give rise to any
              negative competitive effect on the market for the retail supply of AV services,
              where the JV and NENT are active. First, the JV has no market power in for the
              retail supply of linear AV services, and any possible segmentations. Second,
              NENT has no market power in the market for the retail supply of non-linear AV
              services, and any possible segmentations. Third, several alternative providers of
              linear retail AV services and non-linear retail AV services will continue to remain
              active.
          (B)        The Commission’s assessment
a. Foreclosure of rival providers of OTT services
    (499) The Commission considers that the JV would lack the ability and the incentive to
              foreclose competing providers of OTT AV services by tying or bundling NENT’s
              OTT AV service with the JV’s retail linear AV services.
     as provider of retail AV services, the Transaction does not materially change Telenor and NENT’s
     incentive to engage in a potential tying strategy. The Commission notes that a strategy of preventing
     customers of third-party linear retail AV services from subscribing to Telenor’s fixed and mobile
     telecommunications services unless they also subscribe to the JV’s linear retail AV service would likely
     affect Telenor’s ability to attract subscribers of fixed and mobile telecommunications services who are not
     interested in buying telecommunications and linear retail AV services jointly. Similarly, a strategy of
     preventing customers of third-party providers of retail fixed and mobile telecommunications services from
     subscribing to the JV’s retail AV services unless they also subscribe to Telenor’s fixed and mobile
     telecommunications services would likely affect the JV’s ability to attract subscribers of retail AV
     services who are not interested to buy telecommunications and linear retail AV services jointly.
     Moreover, other providers would remain available to offer similar services . For example, Telia offers
     both fixed and mobile telecommunications services and linear retail AV services and Altibox offers both
     fixed telecommunications services and linear retail AV services. Moreover, Ice offers mobile
     telecommunications services.
323  Before the Transaction, customers of competing providers of linear retail AV services can subscribe also
     to NENT’s retail non-linear AV services.
324  Before the Transaction, customers of competing providers of OTT AV services can provide their services
     to customers of the JV’s linear retail AV service.
                                                             123
 ---pagebreak---     (500) First, as shown in Section 6.2.1.1.B the JV will have a limited market position in
          the market for the retail supply of AV services, and any possible sub-segment.
          The JV will hold a market share of [20-30]% by value and [10-20]% by volume
          in the overall market for the retail supply of AV services (excluding non-linear
          OTT providers).
    (501) Second, several alternative providers would remain active in such market and any
          possible sub-segments. In particular, Telenor, Telia, Altibox and RiksTV will
          remain active with market shares by revenue of respectively [20-30]%, [10-20]%,
          [10-20]% and [10-20]% and market shares by subscribers of respectively
          [10-20]%, [10-20]%, [5-10]% and [5-10]% in the market for the retail supply of
          AV services, excluding non-linear.
    (502) Third, the Commission notes that NENT, through Viasat, did not engage in such
          foreclosing practice pre-Transaction and it considers that the Transaction does not
          significantly change the JV’s incentive, compared to NENT’s incentive pre-
          Transaction. In particular, the Commission notes that a strategy of foreclosing
          third-party OTT service from the JV’s platforms in order to divert viewers to
          NENT’s OTT service would harm the JV’s ability to attract subscribers who
          expect to have access to a wider range of content. For this reason, a foreclosure
          strategy, although potentially beneficial to NENT’s channels, would be
          detrimental to Telenor, which could therefore be expected to use its influence
          over the JV to block it. Thus, the divergence between NENT’s and Telenor’s
          commercial interests is likely to prevent the JV from engaging in customer
          foreclosure to the benefit of NENT’s channels business.
    (503) Finally, several single-component rivals would remain available in the relevant
          markets, namely Telenor, Telia, Altibox and RiksTV in the market for the retail
          supply of linear AV services. NENT’s competing providers of retail AV OTT
          services, such as Telia and Netflix, could partner with such providers in order to
          expand their sales, if needed.
b. Foreclosure of rival providers of linear retail AV services
    (504) The Commission considers that the NENT would lack the ability and the
          incentive to foreclose competing providers of retail linear AV services by tying or
          bundling NENT’s OTT AV service with the JV’s retail linear AV services.
    (505) First, the Commission notes that NENT has a market share below 30%, i.e., of
          approximately [10-20]% by volume and [20-30]% by value in the market for the
          retail supply of non-linear AV services (based on 2018 data).325
    (506) Second, alternative providers of non-linear AV services would remain available
          in the market. In particular, these providers include Netflix with almost […]
          subscribers and HBO Nordic with approximately […] subscribers in Norway
          (based on 2018 data).
325  Commission’s calculations based on Form CO, Annex 12.
                                                     124
 ---pagebreak---     (507) Third, respondents to the market investigation further support the view that
             several subscription non-linear retail AV services would remain available or will
             be soon available in Norway such as Amazon Prime Video, Apple TV+ and
             Disney+ (not yet launched in Norway but expected to launch this year).326
    (508) Fourth, [confidential information regarding NENT’s business plans and strategic
             decisions].
    (509) In the first place, as shown in Figure 8 below, NENT considers [confidential
             information regarding NENT’s business plans and strategic decisions]. 327
                               Figure 8: NENT’s core strategy on Viaplay
      [Confidential information regarding NENT’s business plans and strategic decisions]
                                          Source: Form CO, Annex 46.
    (510) In the second place, pre-Transaction, [confidential information regarding NENTs
             sales strategy and policy].328 [Confidential information regarding NENTs sales
             strategy and policy].329
    (511) In the third place, the Commission notes that, before the Transaction330, NENT
             did not engage in any type of foreclosure strategy in order to limit access to
             Viaplay to Viasat’s competing providers of linear retail AV service.
    (512) Finally, NENT’s ability to undertake a foreclosure strategy, would be limited by
             contractual agreements currently in place. NENT’s agreements with the JV’s
             competing TV distributors, Telenor, Telia, Altibox and RiksTV, are expiring
             respectively in […], […], […] and […].331
c.          Conclusion
    (513) In light of the foregoing, the Commission concludes that the Transaction would
             not raise serious doubts as to its compatibility with the internal market as a result
             of the conglomerate relationships between the JV’s activities as provider of linear
             retail AV services and NENT’s activities as retail supplier of OTT AV services.
6.4.4.2. Sweden
    (514) In Sweden, Viasat and Canal Digital are active on the market for the retail supply
             of AV services. Viasat is also active on the market for the retail supply of fixed
             internet access. Post-Transaction, the JV will therefore be active both in the
             market for the retail supply of AV services332 and supply of fixed internet access
             services. NENT is active in the market for the retail supply of AV services, non-
326  Responses to questionnaires Q1 to retail suppliers of AV services in Norway and Q2 to TV broadcasters
     in Norway, question E.4.
327  Form CO, Annex 46.
328  Form CO, Annex 55.
329  [Confidential information regarding NENTs sales strategy and policy].
330  Before the Transaction, NENT fully owned both Viasat, providing fixed internet access service and linear
     retail AV service, and, Viaplay, providing non-linear retail AV services,
331  Form CO, Annex 55. [Confidential information regarding NENTs sales strategy and policy].
332  Telenor does not offer a standalone OTT service in Sweden, but Telenor subscribers have access to a TVE
     service ("Telenor Stream"). Paragraph 593, Form CO.
                                                          125
 ---pagebreak---               linearly through its OTT services, Viaplay and Viafree. Telenor is active in the
              retail supply of AV services and telecommunications services, such as retail
              mobile and fixed internet access services.333 Viasat is only active in the retail
              supply of fixed internet access services and the retail supply of AV services.
    (515) Multiple play services can comprise a mixture of two or more of AV services (in
              particular OTT services such as AVOD and SVOD), fixed telephony, mobile
              telecommunications and fixed internet services.
    (516) Some providers of linear retail AV services indicated that, if post-Transaction
              NENT were to offer its OTT premium retail services (e.g. Viaplay) exclusively in
              conjunction with the JV's other retail AV services, or vice-versa, they would not
              be able to replicate as attractive multiple play packages as the one of the JV.334
    (517) The Commission has therefore assessed the risk of the following types of
              foreclosure strategies in Sweden: (i) foreclosure of the JV’s rival providers of
              fixed internet access or linear retail AV services, under any possible market
              segmentation by tying or bundling NENT’s OTT AV service with the JV’s retail
              AV service or fixed internet access services335, and (ii) foreclosure of rival retail
              suppliers of OTT AV services by tying or bundling NENT’s OTT AV service
              with the JV’s fixed internet access or linear retail AV services.336
    (518) Therefore, in the present case, the Commission analyses whether the JV would
              have the ability and incentive to foreclose rival suppliers of OTT AV services and
              whether NENT would have the ability and incentive to foreclose rival suppliers of
              fixed internet access services, non-linear and linear retail AV services.
333  Since NENT and Telenor would remain independently active in the relevant markets post-Transaction.
     The relationship between NENT and Telenor would not be assessed in the current Section.
334  Responses to questionnaire Q3 to retail suppliers of AV services in Sweden, question H.3. Respondents to
     the market investigation have not expressed any concerns related to conglomerate relations between
     Telenor’s and the JV’s activities. Furthermore, the Commission notes that, in relation to potential relations
     between Telenor as provider of retail fixed and mobile telecommunications services and the JV’s activities
     as provider of retail AV services, the Transaction does not materially change Telenor and NENT’s
     incentive to engage in a potential tying strategy. The Commission notes that a strategy of preventing
     customers of third-party linear retail AV services from subscribing to Telenor’s fixed and mobile
     telecommunications services unless they also subscribe to the JV’s linear retail AV service would likely
     affect Telenor’s ability to attract subscribers of fixed and mobile telecommunications services who are not
     interested in buying telecommunications and linear retail AV services jointly. Similarly, a strategy of
     preventing customers of third-party providers of retail fixed and mobile telecommunications services from
     subscribing to the JV’s retail AV services unless they also subscribe to Telenor’s fixed and mobile
     telecommunications services would likely affect the JV’s ability to attract subscribers of retail AV
     services who are not interested to buy telecommunications and linear retail AV services jointly.
     Moreover, other providers would remain available to offer similar services. For example, Telia and Tele2
     offer both fixed and mobile telecommunications services and linear retail AV services and Sappa offers
     both fixed telecommunications services and linear retail AV services. Moreover, Tre offers mobile
     telecommunications services.
335  Before the Transaction, customers of competing providers of fixed internet access services can access
     NENT’s OTT AV service and customers of competing providers of linear retail AV services can subscribe
     also to NENT’s retail non-linear AV services.
336  Before the Transaction, customers of competing providers of OTT AV services can access the JV’s fixed
     internet access services and provide their services to customers of the JV’s fixed internet access or linear
     retail AV services.
                                                             126
 ---pagebreak---    (519) The Commission then assesses whether each of these foreclosure strategies would
          likely result in a significant detriment to effective competition in the markets for
          the retail supply of fixed internet access services, retail AV services (and its
          relevant plausible segments) and mixed multiple play packages.
       (A)       The Notifying Parties’ view
   (520) The Notifying Parties consider that the Transaction does not give rise to any
          negative competitive effect on either the market for the retail supply of AV
          services, where the JV and NENT are active, nor the market for the supply of
          fixed internet access services, where the JV is active due to the non-horizontal
          relationship between the activities of the JV and NENT. First, the JV has no
          market power in the market for the retail supply of fixed internet access service or
          the market for the retail supply of linear AV services, and any possible
          segmentations. Second, NENT has no market power in the market for the retail
          supply of non-linear AV services, and any possible segmentations. Second,
          several alternative providers of linear retail AV services, non-linear retail AV
          services and retail fixed internet access services will continue to remain active.
       (B)       The Commission’s assessment
a .Foreclosure of rival providers of OTT services
   (521) The Commission considers that the JV would lack the ability and the incentive to
          foreclose competing providers of OTT AV services by tying or bundling NENT’s
          OTT AV service with the JV’s retail linear AV services or fixed internet access
          services or by significantly degrading their service offerings on the JV’s fixed
          networks.
   (522) First, the JV will have a limited position in the market for the retail supply of
          fixed internet access services with a market share of approximately [0-5]% (based
          on 2018 data) corresponding to […] customers in a market of approximately
          4 million subscribers.
   (523) Second, several alternative providers would remain active such as Telia, Tele2,
          Telenor with market shares of respectively [30-40]%, [20-30]% and [10-20]%
          (based on 2018 data) in the market for the retail supply of fixed internet access.
   (524) Third, as shown in Section 6.2.1.2.B the JV will have a limited market position in
          the market for the retail supply of AV services, and any possible sub-segment.
          Based on 2018 data, the JV will hold a market share of [30-40]% by value and
          [10-20]% by volume in the overall market for the retail supply of AV services
          (excluding non-linear OTT providers). Several alternative providers would
          remain active in such market and any possible sub-segments. In particular,
          Telenor, Telia and Tele2 will remain active with market shares by revenue of
          respectively [5-10]%, [10-20]% and [30-40]% and market shares by subscribers
          of respectively [5-10]%, [20-30]% and [40-50]% .
   (525) Moreover, the Commission notes that NENT, through Viasat, did not engage in
          such foreclosing practice pre-Transaction and it considers that the Transaction
          does not significantly change the JV’s incentive, compared to NENT’s incentive
          pre-Transaction. In particular, the Commission notes that a strategy of
                                                 127
 ---pagebreak---            foreclosing third-party OTT service from the JV’s platforms in order to divert
           viewers to NENT’s OTT service would harm the JV’s ability to attract
           subscribers who expect to have access to a wider range of content. For this
           reason, a foreclosure strategy, although potentially beneficial to NENT’s
           channels, would be detrimental to Telenor, which could therefore be expected to
           use its influence over the JV to block it. Thus, the divergence between NENT’s
           and Telenor’s commercial interests is likely to prevent the JV from engaging in
           customer foreclosure to the benefit of NENT’s channels business.
    (526) Finally, several single-component rivals would remain available in the relevant
           markets, namely Telia, Tele2, Telenor, Sappa in the market for the retail supply
           of linear AV services. NENT’s competing providers of retail AV OTT services,
           such as Telia and Netflix, could partner with such providers in order to expand
           their sales, if needed.
b. Foreclosure of rival providers of fixed internet access services and linear retail AV
          services
    (527) The Commission considers that NENT would lack the ability and the incentive to
           foreclose competing providers of retail linear AV services or fixed internet access
           services by tying or bundling NENT’s OTT AV service with the JV’s retail linear
           AV services or fixed internet access services or by significantly degrading their
           service offerings on the JV’s fixed networks.
    (528) First, the Commission notes that NENT has a market share below 30% of
           approximately [10-20]% by volume and [10-20]% by value in the market for the
           retail supply of non-linear AV services (based on 2018 data).337
    (529) Second, alternative providers of non-linear AV services would remain available
           in the market. In particular, these providers include Netflix with almost […]
           subscribers and HBO Nordic with approximately […] subscribers in Sweden
           (based on 2018 data).
    (530) Third, respondents to the market investigation further support the view that
           several subscription non-linear retail AV services would remain available or will
           be soon available in Sweden such as Amazon Prime Video, Apple TV+ and
           Disney+ (not yet launched in Sweden but expected to launch this year).338
    (531) Fourth, NENT’s strategy is based on [confidential information regarding NENT’s
           business plans and strategic decisions to increase numbers of subscribers].
    (532) In the first place, as shown in Figure 8 above in Section 6.4.4.1, NENT considers
           [confidential information regarding NENT’s business plans and strategic
           decisions to increase numbers of subscribers].339
337  Commission’s calculations based on Form CO, Annex 12.
338  Responses to questionnaires Q2 and Q4 to TV broadcasters in Norway and Sweden, question E.4.
339  Form CO, Annex 46.
                                                      128
 ---pagebreak---     (533) In the second place, pre-Transaction, NENT had SVOD partnerships for the
             distribution of its OTT service with all the major providers of fixed internet
             access services and linear retail AV services, namely Telia, Tele2 and Telenor.340
             [Confidential information regarding NENT’s business plans and strategic
             decisions to increase numbers of subscribers].341
    (534) In the third place, the Commission notes that, before the Transaction342, NENT
             did not engage in any type of foreclosure strategy in order to limit access to
             Viaplay by providers of fixed internet access service and linear retail AV service
             competing with Viasat.
    (535) Finally, NENT’s ability to undertake a foreclosure strategy, would be limited by
             contractual agreements currently in place. NENT’s agreements with Telia and
             Telenor are expiring in […]. Moreover, [confidential information regarding
             NENT’s business plans and strategic decisions].343
c.          Conclusion
    (536) In light of the foregoing, the Commission concludes that the Transaction would
             not raise serious doubts as to its compatibility with the internal market as a result
             of the conglomerate relationships between the JV’s activities as provider of linear
             retail AV or fixed internet access services and NENT’s activities as retail supplier
             of OTT AV services.
6.4.4.3. Finland
    (537) In Finland, Viasat and Canal Digital are active on the market for the retail supply
             of AV services. Post-Transaction, the JV will therefore be active in the market for
             the retail supply of AV services. NENT is active in the market for the retail
             supply of AV services, non-linearly through its OTT services, Viaplay. Telenor is
             active in the retail supply of AV services and telecommunications services, such
             as retail mobile and fixed internet access services.344
    (538) Multiple play services can comprise a mixture of two or more of AV services (in
             particular OTT services such as AVOD and SVOD), fixed telephony, mobile
             telecommunications and fixed internet services.
    (539) Some providers of linear retail AV services indicated that, if post-Transaction
             NENT were to offer its OTT premium retail services (e.g. Viaplay) exclusively in
             conjunction with the JV's other retail AV services, or vice-versa, they would not
             be able to replicate as attractive multiple play packages as the one of the JV.345
340  Form CO, Annex 55.
341  [Confidential information regarding NENTs sales strategy and policy].
342  Before the Transaction, NENT fully owned both Viasat, providing fixed internet access service and linear
     retail AV service, and, Viaplay, providing non-linear retail AV services,
343  Form CO, Annex 55.
344  Since NENT and Telenor would remain independently active in the relevant markets post-Transaction.
     The relationship between NENT and Telenor would not be assessed in the current Section.
345  Responses to questionnaire Q5 to retail suppliers of AV services in Finland, question H.3. Respondents to
     the market investigation have not expressed any concerns related to conglomerate relations between
     Telenor’s and the JV’s activities. Furthermore, the Commission notes that, in relation to potential relations
     between Telenor as provider of retail fixed and mobile telecommunications services and the JV’s activities
                                                          129
 ---pagebreak---     (540) The Commission has therefore assessed the risk of the following types of
              foreclosure strategies in Finland: (i) foreclosure of the JV’s rival providers of
              linear retail AV services, under any possible market segmentation by tying or
              bundling NENT’s OTT AV service with the JV’s linear retail AV service346, and
              (ii) foreclosure of rival retail suppliers of OTT AV services by tying or bundling
              NENT’s OTT AV service with the JV’s linear retail AV services.347
    (541) Therefore, in the present case, the Commission analyses whether the JV would
              have the ability and incentive to foreclose rival suppliers of OTT AV services and
              whether NENT would have the ability and incentive to foreclose rival suppliers of
              non-linear and linear retail AV services.
    (542) The Commission then assesses whether each of these foreclosure strategies would
              likely result in a significant detriment to effective competition in the markets for
              the retail supply of retail AV services (and its relevant plausible segments).
          (A)        The Notifying Parties’ view
    (543) The Notifying Parties consider that the Transaction does not give rise to any
              negative competitive effect on either the market for the retail supply of AV
              services, where the JV and NENT are active. First, the JV has no market power in
              for the retail supply of linear AV services, and any possible segmentations.
              Second, NENT has no market power in the market for the retail supply of non-
              linear AV services, and any possible segmentations. Second, several alternative
              providers of linear retail AV services and non-linear retail AV services will
              continue to remain active.
          (B)        The Commission’s assessment
a. Foreclosure of rival providers of OTT services
    (544) The Commission considers that the JV would lack the ability and the incentive to
              foreclose competing providers of OTT AV services by tying or bundling NENT’s
              OTT AV service with the JV’s retail linear AV services.
     as provider of retail AV services, the Transaction does not materially change Telenor and NENT’s
     incentive to engage in a potential tying strategy. The Commission notes that a strategy of preventing
     customers of third-party linear retail AV services from subscribing to Telenor’s fixed and mobile
     telecommunications services unless they also subscribe to the JV’s linear retail AV service would likely
     affect Telenor’s ability to attract subscribers of fixed and mobile telecommunications services who are not
     interested in buying telecommunications and linear retail AV services jointly. Similarly, a strategy of
     preventing customers of third-party providers of retail fixed and mobile telecommunications services from
     subscribing to the JV’s retail AV services unless they also subscribe to Telenor’s fixed and mobile
     telecommunications services would likely affect the JV’s ability to attract subscribers of retail AV
     services who are not interested to buy telecommunications and linear retail AV services jointly.
     Moreover, other providers would remain available to offer similar services. For example, Telia and Elisa
     offer both fixed and mobile telecommunications services and linear retail AV services.
346  Before the Transaction, customers of competing providers of linear retail AV services can subscribe also
     to NENT’s retail non-linear AV services.
347  Before the Transaction, customers of competing providers of OTT AV services can provide their services
     to customers of the JV’s linear retail AV service.
                                                             130
 ---pagebreak---     (545) First, as shown in Section 6.2.1.3.B the JV will have a limited market position in
          the market for the retail supply of AV services, and any possible sub-segment.
          The JV will hold a market share of [10-20]% by value and [0-5]% by volume in
          the overall market for the retail supply of AV services (excluding non-linear OTT
          providers).
    (546) Second, several alternative providers would remain active in such market and any
          possible sub-segments. In particular, Telenor, Telia, and Elisa will remain active
          with market shares by revenue of respectively [10-20]%, [20-30]%, and [20-30]%
          and market shares by subscribers of respectively [10-20]%, [20-30]%, and [10-
          20]% in the market for the retail supply of AV services, excluding non-linear.
    (547) Third, the Commission notes that NENT, through Viasat, did not engage in such
          foreclosing practice pre-Transaction and it considers that the Transaction does not
          significantly change the JV’s incentive, compared to NENT’s incentive pre-
          Transaction. In particular, the Commission notes that a strategy of foreclosing
          third-party OTT service from the JV’s platforms in order to divert viewers to
          NENT’s OTT service would harm the JV’s ability to attract subscribers who
          expect to have access to a wider range of content. For this reason, a foreclosure
          strategy, although potentially beneficial to NENT’s channels, would be
          detrimental to Telenor, which could therefore be expected to use its influence
          over the JV to block it. Thus, the divergence between NENT’s and Telenor’s
          commercial interests is likely to prevent the JV from engaging in customer
          foreclosure to the benefit of NENT’s channels business.
    (548) Finally, several single-component rivals would remain available in the relevant
          markets, namely Telenor, Telia and Elisa in the market for the retail supply of
          linear AV services. NENT’s competing providers of retail AV OTT services, such
          as Telia and Netflix, could partner with such providers in order to expand their
          sales, if needed.
b. Foreclosure of rival providers of linear retail AV services
    (549) The Commission considers that NENT would lack the ability and the incentive to
          foreclose competing providers of retail linear AV services by tying or bundling
          NENT’s OTT AV service with the JV’s retail linear AV services.
    (550) First, the Commission notes that NENT has a market share below 30% of
          approximately [10-20]% by volume and [20-30]% by value in the market for the
          retail supply of non-linear AV services (based on 2018 data).348
    (551) Second, alternative providers of non-linear AV services would remain available
          in the market. In particular, these providers include Netflix with almost […]
          subscribers and HBO Nordic with approximately […] subscribers in Finland
          (based on 2018 data).
    (552) Third, NENT’s strategy is based on further [confidential information regarding
          NENTs sales strategy and policy]. In the first place, as shown in Figure 8 above
          in Section 6.4.4.1, NENT considers [confidential information regarding NENTs
          sales strategy and policy] one of [confidential information regarding NENTs sales
348  Commission’s calculations based on Form CO, Annex 12.
                                                     131
 ---pagebreak---               strategy and policy] themes for Viaplay’s grow.349 In the second place, pre-
              Transaction, NENT [confidential information regarding NENTs sales strategy and
              policy].350 In the third place, the Commission notes that, before the
              Transaction351, NENT did not engage in any type of foreclosure strategy in order
              to limit access to Viaplay to Viasat’s competing providers of linear retail AV
              service.
    (553) Finally, NENT’s ability to undertake a foreclosure strategy, would be limited by
              contractual agreements currently in place. NENT’s agreements with the JV’s
              competing TV distributors, Telenor, Telia, and Elisa, are expiring respectively in
              […], […] and […].352
c.          Conclusion
    (554) In light of the foregoing, the Commission concludes that the Transaction would
              not raise serious doubts as to its compatibility with the internal market as a result
              of the conglomerate relationships between the JV’s activities as provider of linear
              retail AV services and NENT’s activities as retail supplier of OTT AV services.
6.4.4.4. Denmark
    (555) In Denmark, Viasat and Canal Digital are active on the market for the retail
              supply of AV services. Post-Transaction, the JV will therefore be active in the
              market for the retail supply of AV services. NENT is active in the market for the
              retail supply of AV services, non-linearly through its OTT services, Viaplay.
    (556) Multiple play services can comprise a mixture of two or more of AV services (in
              particular OTT services such as AVOD and SVOD), fixed telephony, mobile
              telecommunications and fixed internet services.
    (557) Some providers of linear retail AV services indicated that, if post-Transaction
              NENT were to offer its OTT premium retail services (e.g. Viaplay) exclusively in
              conjunction with the JV's other retail AV services, or vice-versa, they would not
              be able to replicate as attractive multiple play packages as the one of the JV.353
349  Form CO, Annex 46.
350  Form CO, Annex 55.
351  Before the Transaction, NENT fully owned both Viasat, providing fixed internet access service and linear
     retail AV service, and, Viaplay, providing non-linear retail AV services,
352  Form CO, Annex 55.
353  Responses to questionnaire Q7 to retail suppliers of AV services in Denmark, question H.3. Respondents
     to the market investigation have not expressed any concerns related to conglomerate relations between
     Telenor’s and the JV’s activities. Furthermore, the Commission notes that, in relation to potential relations
     between Telenor as provider of retail fixed and mobile telecommunications services and the JV’s activities
     as provider of retail AV services, the Transaction does not materially change Telenor and NENT’s
     incentive to engage in a potential tying strategy. The Commission notes that a strategy of preventing
     customers of third-party linear retail AV services from subscribing to Telenor’s fixed and mobile
     telecommunications services unless they also subscribe to the JV’s linear retail AV service would likely
     affect Telenor’s ability to attract subscribers of fixed and mobile telecommunications services who are not
     interested in buying telecommunications and linear retail AV services jointly. Similarly, a strategy of
     preventing customers of third-party providers of retail fixed and mobile telecommunications services from
     subscribing to the JV’s retail AV services unless they also subscribe to Telenor’s fixed and mobile
     telecommunications services would likely affect the JV’s ability to attract subscribers of retail AV
     services who are not interested to buy telecommunications and linear retail AV services jointly.
                                                             132
 ---pagebreak---     (558) The Commission has therefore assessed the risk of the following types of
             foreclosure strategies in Denmark: (i) foreclosure of the JV’s rival providers of
             linear retail AV services, under any possible market segmentation by tying or
             bundling NENT’s OTT AV service with the JV’s linear retail AV service354, and
             (ii) foreclosure of rival retail suppliers of OTT AV services by tying or bundling
             NENT’s OTT AV service with the JV’s linear retail AV services.355
    (559) Therefore, in the present case, the Commission analyses whether the JV would
             have the ability and incentive to foreclose rival suppliers of OTT AV services and
             whether NENT would have the ability and incentive to foreclose rival suppliers of
             non-linear and linear retail AV services.
    (560) The Commission then assesses whether each of these foreclosure strategies would
             likely result in a significant detriment to effective competition in the markets for
             the retail supply of retail AV services (and its relevant plausible segments).
          (A)       The Notifying Parties’ view
    (561) The Notifying Parties consider that the Transaction does not give rise to any
             negative competitive effect on either the market for the retail supply of AV
             services, where the JV and NENT are active. First, the JV has no market power in
             for the retail supply of linear AV services, and any possible segmentations.
             Second, NENT has no market power in the market for the retail supply of non-
             linear AV services, and any possible segmentations. Second, several alternative
             providers of linear retail AV services and non-linear retail AV services will
             continue to remain active.
          (B)       The Commission’s assessment
a. Foreclosure of rival providers of OTT services
    (562) The Commission considers that the JV would lack the ability and the incentive to
             foreclose competing providers of OTT AV services by tying or bundling NENT’s
             OTT AV service with the JV’s retail linear AV services.
    (563) First, as shown in Section 6.2.1.4.B the JV will have a limited market position in
             the market for the retail supply of AV services, and any possible sub-segment.
             The JV will hold a market share of [10-20]% by value and [0-5]% by volume in
             the overall market for the retail supply of AV services (excluding non-linear OTT
             providers).
    (564) Second, several alternative providers would remain active in such market and any
             possible sub-segments. In particular, TDC, Stofa and Waoo! will remain active
             with market shares by subscribers of respectively [40-50]%, [10-20]%, and
             [5-10]% in the market for the retail supply of AV services, excluding non-linear.
     Moreover, other providers would remain available to offer similar services. For example, TDC offers both
     fixed and mobile telecommunications services and linear retail AV services. Moreover, Telia and Tre
     offer mobile telecommunications services. SE Kommunikation and Dansk Kabel offer fixed internet
     access services.
354  Before the Transaction, customers of competing providers of linear retail AV services can subscribe also
     to NENT’s retail non-linear AV services.
355  Before the Transaction, customers of competing providers of OTT AV services can provide their services
     to customers of the JV’s linear retail AV service.
                                                        133
 ---pagebreak---     (565) Third, the Commission notes that NENT, through Viasat, did not engage in such
           foreclosing practice pre-Transaction and it considers that the Transaction does not
           significantly change the JV’s incentive, compared to NENT’s incentive pre-
           Transaction. In particular, the Commission notes that a strategy of foreclosing
           third-party OTT service from the JV’s platforms in order to divert viewers to
           NENT’s OTT service would harm the JV’s ability to attract subscribers who
           expect to have access to a wider range of content. For this reason, a foreclosure
           strategy, although potentially beneficial to NENT’s channels, would be
           detrimental to Telenor, which could therefore be expected to use its influence
           over the JV to block it. Thus, the divergence between NENT’s and Telenor’s
           commercial interests is likely to prevent the JV from engaging in customer
           foreclosure to the benefit of NENT’s channels business.
    (566) Finally, several single-component rivals would remain available in the relevant
           markets, namely TDC, Telia, Stofa and Waoo! in the market for the retail supply
           of linear AV services. NENT’s competing providers of retail AV OTT services,
           such as Telia and Netflix, could partner with such providers in order to expand
           their sales, if needed.
b. Foreclosure of rival providers of linear retail AV services
    (567) The Commission considers that NENT would lack the ability and the incentive to
           foreclose competing providers of retail linear AV services by tying or bundling
           NENT’s OTT AV service with the JV’s retail linear AV services.
    (568) First, the Commission notes that NENT has a market share below 30% of
           approximately [10-20]% by volume and [20-30]% by value in the market for the
           retail supply of non-linear AV services (based on 2018 data).356
    (569) Second, alternative providers of non-linear AV services would remain available
           in the market. In particular, these providers include Netflix with almost […]
           subscribers and HBO Nordic with approximately […] subscribers in Denmark
           (based on 2018 data).
    (570) Third, NENT’s strategy is based on further [confidential information regarding
           NENT’s business plans and strategic decisions]. In the first place, as shown in
           Figure 8 above in Section 6.4.4.1, NENT considers [confidential information
           regarding NENT’s business plans and strategic decisions] as one of [confidential
           information regarding NENT’s business plans and strategic decisions] themes for
           Viaplay’s grow.357 In the second place, pre-Transaction, [confidential information
           regarding NENT’s business plans and strategic decisions].358 [Confidential
           information regarding NENT’s business plans and strategic decisions].
    (571) Finally, NENT’s ability to undertake a foreclosure strategy, would be limited by
           contractual agreements currently in place. NENT’s agreements with the JV’s
           competing TV distributors, TDC, Stofa, Waoo! and Boxer, are expiring
           respectively in […], […], […], […].359
356  Commission’s calculations based on Form CO, Annex 12.
357  Form CO, Annex 46.
358  Form CO, Annex 55.
359  Form CO, Annex 55.
                                                     134
 ---pagebreak--- c.          Conclusion
    (572) In light of the foregoing, the Commission concludes that the Transaction would
             not raise serious doubts as to its compatibility with the internal market as a result
             of the conglomerate relationships between the JV’s activities as provider of linear
             retail AV services and NENT’s activities as retail supplier of OTT AV services.
6.4.5. Possible foreclosure of competing providers of satellite transponder capacity
          (customer foreclosure)
    (573) TS and SES are the only two competing providers of satellite transponder
             capacity in the Nordic region. Pre-Transaction, Viasat has been sourcing satellite
             transponder capacity services from SES, while post-Transaction it will switch to
             TS, which is a subsidiary of Telenor and the current supplier of Canal Digital. By
             doing so, the JV eliminates the cost duplication from sourcing satellite capacity
             from two suppliers.
    (574) This section assesses the risk that the loss of Viasat as a customer creates any
             customer foreclosure concerns with regard to SES.
6.4.5.1. The Notifying Parties’ view
    (575) The Notifying Parties submit that there is no risk of customer foreclosure with
             regard to SES.
    (576) First, the Notifying Parties consider that the relevant product market can be
             defined as being the provision of satellite transponder capacity for broadcasting
             on 1°W. TS would be the only competitor active in such a market. Accordingly,
             customer foreclosure with regard to SES would not be a relevant theory of harm.
             Nonetheless, the Notifying Parties also provide arguments on the basis of a
             broader market definition.
    (577) Second, as regards the Notifying Parties’ ability to foreclose SES in an overall
             market for satellite transponder capacity from both 1°W and 5°E, the loss of
             Viasat as a customer would not fundamentally affect the viability of SES’ satellite
             business at the 5°E orbital position. In particular, SES could continue to develop
             its business in the CEE region, the Middle East and Sub-Saharan Africa with
             regard to both broadcasting and telecommunication services. The Notifying
             Parties point out that SES itself stated in an investors’ call that it would further
             develop the 5°E neighbourhood.
    (578) Third, the Notifying Parties explain that SES will in any case continue its
             operations until, at least, the end of the service life of its satellites at the 5°E
             orbital position. As the launch of satellites would involve large sunk costs,
             operators are unlikely to decommission a satellite before the end of its lifetime.
             SES’ two satellites at the 5°E would significantly exceed their service life expiry
             based on the latest health reports.360 The end of Astra 4A and SES-5’s end of
360  The service life expiry date is the designed lifetime of a satellite. It is driven by reliability specifications of
     the various satellite manufacturers for their geostationary satellites, with 15 years of expected operation as
     the industry standard. The service life is not an absolute life expectancy; rather, it means that there is a
     high probability that the satellite will be fully functional after 15 years.
                                                              135
 ---pagebreak---              propellant life would be estimated to be no earlier than end of […],
             respectively.361
    (579) Fourth, the revenue loss in the Nordic countries would not affect SES Group. SES
             Group is the world's largest satellite operator with over 70 satellites362, generating
             about EUR 2 billion of annual turnover.
    (580) Finally, the Notifying Parties submit that any hypothetical weakening of SES’
             position at the 5°E orbital position would not have a significant detrimental effect
             on competition in the downstream market for the retail supply of AV services in
             each of the Nordic countries. On the one hand, none of the competing TV
             distributors, besides the JV itself, would supply its services via satellite. On the
             other hand, TS would continue to provide satellite capacity to (the few)
             broadcasters that wish to purchase capacity directly from TS (instead of via
             wholesale carriage agreements, see section 6.4.3). In particular, TS would have no
             incentive to foreclose access as its satellite transponder capacity is not fully
             utilised. In any event, broadcasters would have ample alternative ways to
             distribute their channels in the Nordic region including through other TV
             distributors and their own OTT service.
6.4.5.2. The Commission’s assessment
    (581) As explained in paragraph (573), the JV has concrete plans to migrate Viasat’s
             customers from SES’ to TS’ orbital position because of the substantial cost
             savings resulting from eliminating duplication of the supply of satellite
             transponder capacity. According to the Notifying Parties, these cost savings are
             one major element of the rationale for the Transaction.363 While Viasat currently
             contracts [confidential strategic information relating to parties' satellite business]
             transponders from SES, TS will only have to deploy [confidential strategic
             information relating to parties' satellite business] additional transponders to
             accommodate Viasat’s customers given the large share of common TV content.364
    (582) Based on [confidential information regarding business plans and strategic
             decisions] agreement with SES, NENT can terminate the agreement, which would
             otherwise run until […]365 [confidential information regarding business plans and
             strategic decisions].366 Hence, as [confidential information regarding business
             plans and strategic decisions] and [confidential information regarding business
             plans and strategic decisions] such as the proposed Transaction, happening.
    (583) The Notifying Parties expect that the migration of Viasat’s customers will take up
             to […] from […].367 For the migration, the JV will have to update the software on
             Viasat’s customers’ set-top boxes and, most importantly, send technicians to
             customers’ premises to carry out the satellite dish turn from the 5°E (SES) to the
             1°W (TS) orbital position.
361  Form CO, footnote 532 and Annex 84.
362  Of the 70 satellites, 50 satellites are GEO satellites in geostationary orbit, comparable to those at 5°E, and
     20 satellites are MEO satellites in medium earth orbit.
363  Form CO, paragraph 1950.
364  Form CO, paragraph 1913.
365  [Confidential information regarding business plans and strategic decisions].
366  Form CO, footnote 532 and Annex 84.
367  Form CO, footnote 547.
                                                             136
 ---pagebreak---     (584) Given this background, the Commission will not assess whether the JV would
             have the economic incentive to engage in a customer foreclosure strategy. While
             the JV’s planned migration of Viasat’s customers from SES to TS is economically
             sound368, motivated by the elimination of a duplication of costs and does not lead
             to any “costs associated with the not procuring products from upstream rivals”369,
             it corresponds to the kind of conduct which the JV would undertake in a customer
             foreclosure strategy. Therefore, for the sake of the assessment, the Commission
             assumes that the JV will have the incentive to engage in a customer foreclosure
             strategy. The Commission’s assessment focusses on (i) whether the JV, by
             migrating Viasat’s customers from SES to TS, would have the ability to foreclose
             SES; and (ii) whether a foreclosure strategy would have a significant detrimental
             effect on competition.
    (585) In the present case, SES submitted that the loss of Viasat as a customer would
             harm SES’ ability to effectively compete in the market for the provision of
             satellite transponder capacity via its 5°E orbital position. First, Viasat would
             currently represent a significant share of SES’ total annual 5°E revenues. Second,
             the planned satellite dish turn would deprive the 5°E orbital position of any user
             reach in the Nordics. Consequently, SES would also lose its other Nordic
             broadcasting customers. i.e. a few, small Nordic broadcasters, which would no
             longer have an incentive to be transmitted via SES once Viasat’s customers have
             redirected their dishes towards 1°W. Third, the loss of Viasat as a customer could
             render the replacement of Astra 4A (one of SES’ two satellites located at 5°E),
             which is planned for the medium term at the end of this satellite's lifetime370, […].
             This would affect customers in the Nordic countries as well as in Estonia, Latvia,
             Lithuania and Ukraine, to which SES also currently distributes TV content from
             5°E. Post-Transaction, the affected customers would either face higher prices, if
             SES tried to sustain the business, or lose the option of using the Astra 4A satellite
             should SES decide against a replacement.371
368  In comparable transactions, the same approach was followed. For instance, Slovak Telekom moved its
     customers from 4°W to 1°W after it acquired Digi TV in Slovakia in 2013, which had been operating its
     business using capacity from 1°W. Or, following the merger between Canal+ and Movistar TV, owned by
     Telefónica, in 2014 (approved in 2015), Telefónica, decided to migrate the Movistar TV customer base
     from a Hispasat position to 19°E (SES’ position). The migration was completed at the end of 2017.
     Notifying Parties’ reply to RFI 9, questions 1-2.
369  Non-Horizontal Merger Guidelines, paragraph 68.
370  According to SES, the end of a satellite’s life time is not only linked to the propellant life time, but is also
     based on the contractual design life, the overall health of the satellite and other preliminary assumptions
     on when replacement is required for continuation of service (SES’ non-confidential reply to RFI 2,
     question 6(b)). The Notifying Parties also confirmed that the life-limiting factor of a satellite is often
     propellant life (fuel), but can also relate to failures of components (Notifying Parties’ reply to RFI 12,
     question 5(c)). SES did not provide any clear evidence suggesting that, based on current information, a
     replacement of Astra 4A or SES-5 would be technically required before the end of their propellant life in
     […], respectively. However, it cannot be excluded that a replacement would be required several years
     before the end of their propellant life. In any case, any investment decision and replacement would take
     place beyond the time period normally taken into account in merger investigations.
371  SES’ responses to questionnaire Q9 to satellite customers and competitors, question E.1; non-confidential
     version of the meeting slides and minutes of 11 February 2020; non-confidential version of SES’
     submission of 17 March 2020; SES’ non-confidential reply to RFI 1, question 7.
                                                            137
 ---pagebreak---     (586) For the reasons set out below, and after careful consideration of SES’ arguments,
            the Commission considers that the Transaction is not likely to lead to the risk of
            customer foreclosure with regard to SES’ operations at the 5°E orbital position as
            Viasat and the other Nordic TV broadcaster customers do not represent a
            sufficiently large share of SES’ current and potential customer base. First, the
            Commission considers that SES is likely to continue to effectively compete at the
            5°E orbital position in the short and medium term until at least the end of the
            lifetime of its current satellites (see section (A)). Second, even assuming that SES
            would not continue its operations from the 5°E orbital position, there would be no
            significant detrimental effect on competition (see section (B)).
         (A)        Ability to engage in customer foreclosure
    (587) When considering whether the JV would have the ability to foreclose access to
            downstream markets, the Commission examines whether there are sufficient
            economic alternatives in the downstream market for upstream rivals to sell their
            output. In its assessment, the Commission may take into account the existence of
            different markets corresponding to different uses for the input.372 The latter point
            is particularly relevant for the assessment in the present case as the scope of the
            affected upstream and downstream markets differ significantly. In terms of the
            product market definition, the supply of satellite transponder capacity at the 1°W
            and 5°E orbital positions373 is used for the provision of broadcasting and
            telecommunication services. While broadcasting and telecommunication services
            may constitute distinct product markets, both end uses contribute to satellite
            operators’ revenue streams from the 1°W and 5°E orbital positions given that TS’
            and SES’ satellites carry both Ku-bands for broadcasting and telecommunication
            services as well as dedicated Ka- and C-bands for telecommunication services. In
            contrast, the relevant downstream market is the retail supply of AV services
            including all distribution technologies (i.e. satellite, terrestrial, cable, IPTV and
            OTT). In terms of the geographic market definition, the market for the supply of
            satellite transponder capacity and its possible sub-segments is regional in scope,
            while the market for the retail supply of AV services is national in scope.
    (588) The Commission considers that the JV will not have the ability to engage in
            customer foreclosure for the following reasons.
    (589) First, Viasat’s demand does not represent a significant share of SES’ current
            satellite transponder capacity. While SES has a total number of 120 transponders
            at 5°E, Viasat currently uses […] transponders.374 Indeed, SES is also likely to
            lose its few other Nordic TV broadcaster customers as, post-Transaction, there
            will not be a significant number of satellite dishes pointing to 5°E in the Nordics
            and as such there is no target audience at 5°E for TV broadcasters. SES has direct
            agreements375 with a few small, niche broadcasters offering religious oriented
            channels (Kanal 10, Vision Norway/Sweden, TBN Nordic and God TV).376 The
372  Non-Horizontal Merger Guidelines, paragraph 66.
373  The Commission focusses on the overall market for satellite transponder capacity from both the 1°W and
     5° E orbital positions. Indeed, if the two orbital positions were distinct markets, no vertical relationship
     would arise with regard to SES’ activities.
374  Form CO, paragraph 1941.
375  These channels are distributed as unencrypted feeds and are available to Viasat’s customers as free
     channels.
376  Form CO, paragraph 1885.
                                                           138
 ---pagebreak---              Notifying Parties estimate that these Nordic TV broadcasters together require
             […].377 Hence, all of SES’ Nordic broadcasting customers taken together
             currently contract […] transponders from SES, i.e. about [10-20]% of SES’ total
             number of transponders at the 5°E orbital position. In terms of revenues, it can be
             expected that SES’ Nordic broadcasting customers represent a slightly higher
             share as satellite transponder capacity for broadcasting is priced higher than for
             telecommunication services and SES’ satellites at the 5°E orbital position have a
             capacity utilisation below 100%.378 The Notifying Parties estimate that the Nordic
             broadcasting customers represent about [20-30]% of SES’ 5°E revenues.379
    (590) SES’ other revenues streams at 5°E are the following: SES supplies TV
             distributors in Estonia, Latvia, Lithuania (TVPlay Home3380) and Ukraine
             (Viasat381) in the CEE region and in Sub-Saharan Africa (e.g. StarTimes382, Zuku
             TV383). In addition, SES has agreements with individual TV broadcasters for
             distribution outside the Nordics, such as with Discovery.384 Finally, SES provides
             telecommunication services in a large number of countries to both end customers
             and resellers.385
    (591) Second, the frequencies licensed to SES at 5°E are highly attractive and valuable
             because of the vast geographic area covered by satellites stationed at that orbital
             position and hence there is a large base of potential customers which SES could
             compete for in order to replace its Nordic broadcasting customers. To illustrate
             that the loss of its Nordic broadcasting customers does not fundamentally affect
             the viability of SES’ satellite position at 5°E, Figure 9 provides a coverage map
             for both of SES’ satellites at the 5°E orbital position. Post-Transaction, SES will
             retain the ability to further develop its business from the 5°E orbital position in
             Europe (CEE region), Middle East and Sub-Saharan Africa with regard to both
             broadcasting (Ku-band) and telecommunication services (Ku-, Ka- and C-bands).
377  Form CO, Table 214.
378  Form CO, Table 227; Notifying Parties’ reply to RFI 15, question 5.
379  Notifying Parties’ reply to RFI 15, question 2.
380  Owned by All Media Baltics, now rebranded to TV3 Group, formerly owned by NENT’s predecessor and
     branded as Viasat.
381  Owned by 1+1 Media Group (a third party unrelated to NENT), formerly owned by NENT’s predecessor.
382  See e.g. https://www.broadbandtvnews.com/2015/06/02/startimes-adds-capacity-on-ses-5-for-africa/.
383  See e.g. https://www.broadbandtvnews.com/2013/07/23/zuku-tv-migrates-to-ses-5/.
384  Notifying Parties’ reply to RFI 15, question 2.
385  Form CO, paragraphs 1900 and 1945.
                                                        139
 ---pagebreak---                              Figure 9: Astra 4A and SES-5 coverage maps
                                       Source: Form CO, Figure 34.
    (592) The coverage of Sub-Saharan Africa is particularly relevant in this context. While
             DTH distribution is in decline in the Nordics (as explained in Section 6.3), it is a
             growth area elsewhere such as in Africa.386 For instance, StarTimes, an African
             TV distributor served by SES, is expected to grow significantly until 2025,
             including with respect to its satellite operations. In addition, the provision of
386  See e.g. https://www.broadbandtvnews.com/2020/01/06/africa-to-witness-subscriber-growth-of-17m/.
                                                     140
 ---pagebreak---              internet connectivity and mobile backhaul via satellite may play a role in remote
             areas of Africa going forward.387
    (593) It is also worth noting that the provision of telecommunication services via
             satellite does not have the “lock-in” effect of DTH TV distribution with many
             residential fixed antenna installations pointing at one specific orbital position.
             Many purchasers of satellite capacity for telecommunication services, e.g.
             aeronautical and maritime customers, have movable antennas which steer
             themselves to point towards a satellite at all times during the movement of a
             vessel or airplane. They can move on short notice from one satellite position to
             another and hence such customers can enter into short-term agreements with any
             satellite operator covering the desired geographic area.388 Figure 10 illustrates that
             5°E has visibility over very attractive areas for these so-called mobility services
             supplied to vessels or airplanes. The Notifying Parties estimate that more than a
             third of the world’s maritime services demand in terms of revenue are in view
             from 5°E in addition to the dense European air traffic.389
                                 Figure 10: Visibility of the earth from 5°E
                               Source: Notifying Parties’ reply to RFI 9, question 13.
    (594) Third, according to SES’ own statements made during the presentation of Q3
             2019 results on 25 October 2019, SES had been expecting the Transaction and
             announced that it would nevertheless continue to work with its existing customer
             base at 5°E and would further develop its business at 5°E:390
         (a)       “[On] the announced or the intended merger between NENT and Canal
                   Digital in the Nordics, first of all, my comment is this: it’s the only market
                   where consolidation between pay TV operators has not yet taken place. So,
                   it was a matter of time, and sooner or later this was to happen. We… for the
387  See     e.g.     https://www.worldbank.org/en/topic/digitaldevelopment/publication/connecting-africa-to-
     broadband-a-roadmap-for-inclusive-growth,                               https://www.gsma.com/spectrum/wp-
     content/uploads/2019/02/Mobile-Backhaul-Options-InfoG.pdf,                  http://satellitemarkets.com/news-
     analysis/african-satellite-market.
388  Notifying Party’ reply to RFI 9, questions 4 and 9 and to RFI 12, question 9(c).
389  Notifying Party’s reply to RFI 9, question 13.
390  Form      CO,     paragraph     1943      (Recording     at:    https://www.ses.com/sites/default/files/2019-
     10/6652274MP3 mp3).
                                                            141
 ---pagebreak---                     time being, our understanding is that – and we are of course in discussions
                    with the colleagues from NENT – there will be no impact on our revenues
                    during the next two and three years. And then depending on how the
                    migration will be executed, of course, there will be an impact, a negative
                    impact, after this period.” (emphasis added)
          (b)       “On the merger between NENT and Canal Digital, yes, the pay TV operator
                    is an important player on the 5 East neighbourhood, but what I should
                    mention is that, NENT being the successor of MTG, which has been
                    historically our customer on this orbital position, MTG reorganised part of
                    the activities already many years ago by selling the Ukrainian activities to
                    Ukrainian operator (and these continue to be on 5 East), by selling the
                    Baltic operations to a Baltic operator (and these continue to be on 5 East).
                    And of course now, with the consolidation, very probably, to 1 West, because
                    the shareholder of Canal Digital is operating its own satellites, we of course
                    have to further develop the 5 East neighbourhood. And of course, we are
                    doing this with the remaining customers we have, and we will continue to
                    have, on this orbital position.” (emphasis added)
    (595) Fourth, as explained by the Notifying Parties, if SES were to cease offering
              satellite capacity at 5°E, it risks to lose its rights to the frequencies at 5°E after
              three years.391 Given that 5°E has a satellite footprint which covers densely
              populated areas in Europe and Africa and offers ample revenues opportunities (as
              described in paragraphs (591) to (593)), it is highly unlikely that SES would give
              up these rights.
    (596) Fifth, the launch of a satellite involves large sunk costs, which means that
              operators are unlikely to decommission a satellite which continues to generate
              substantial revenue.392 For instance, for Thor 7, TS’ newest satellite launched in
              2015, total capital expenditures until launch (for satellite equipment, launch,
              insurance and ground system) amounted to roughly EUR […]. Since the launch,
              annual capital expenditures have amounted to about EUR […] and annual
              operating expenditures (personnel and platform support) to below EUR […].393
              The Notifying Parties estimate that SES’ annual expenditures would be even
              lower compared to TS, as SES belongs to global leading satellite operator SES
              Group.394 It is economically rational to continue the operation of satellites until
391  Satellite operators submit frequency filings via their national regulators. Filings have to be brought into
     use with a real satellite system no later than seven or eight years after their initial submission, otherwise
     they will expire. Operators are free to submit as many filings as they wish (each filing being a ticket in the
     queue), and whoever holds the most senior filing at a given orbital location has the right to use the
     frequency (“first come, first served”). When an operator manages to bring a filing into use, it will be
     recorded in the Master International Frequency Register ("MIFR") supervised by the International
     Telecommunications Union. When this happens, the filing will not expire and the operator gains the right
     to use the frequency band at the filed orbital location as long as they have a satellite asset in place using
     the filed frequencies. Should the satellite asset be removed or stop working, the operator has the option to
     suspend the filing, then the operator maintains the most senior rights at the orbital location for three years.
     Failing to bring a satellite asset to the orbital location within three years after suspension implies that the
     frequency rights will be removed from the MIFR and will be available to another operator that has a filing
     covering the frequency band at that orbital location and are able to bring the frequencies into use (“use it
     or lose it”). Form CO, paragraph 1948; Notifying Parties’ reply to RFI 16, question 5.
392  Form CO, paragraph 1946.
393  Notifying Parties’ reply to RFI 12, question 1.
394  Notifying Parties’ reply to RFI 19, question 13.
                                                              142
 ---pagebreak---               the end of their lifetime as long as they continue to generate revenues
              [confidential strategic information relating to parties' satellite business] annual
              expenses, which is the case for SES’ satellites at the 5°E orbital position. In fact,
              SES submitted that its net worldwide turnover related to the two satellites at the
              5ºE orbital position was EUR […] in 2018.395 Without the estimated EUR […]
              from Nordic broadcasting customers396, SES will still earn about EUR […] per
              satellite at the 5°E orbital position. Therefore, from a margin perspective, SES is
              likely to continue to operate from its 5°E orbital position.
    (597) Sixth, it is worth noting that the mentioned operating expenses are largely fixed
              costs due to the high degree of digitisation and automation. […].397 […].398 This is
              also confirmed by SES’ description of its own pricing policy, […]: […]399
    (598) Seventh, the results of the market investigation confirmed that satellite customers
              and competitors do not expect that SES’ ability to effectively compete from the
              5°E orbital position outside the Nordics would be affected in the two to three
              years following the Transaction.400
    (599) In line with arguments presented in paragraphs (589) to (597), SES’ submissions
              do not focus on its current operations.401 Instead, SES emphasises that the loss of
              its Nordic broadcasting customers may render the replacement of Astra 4A, the
              elder of SES’ two satellites, […].402 SES has not submitted sufficient evidence in
              order for the Commission to carry out a comprehensive assessment of SES’
              business cases for the Astra 4A replacement absent the Transaction and post-
              Transaction.403 Nevertheless, the Commission has four specific remarks in
              relation to SES’ investment decision.
    (600) As a first remark, the number of transponders used by Viasat [confidential
              strategic information relating to NENT's satellite business].404 Viasat has reduced
395  SES’ responses to questionnaire Q9 to satellite customers and competitors, question A.2.
396  Notifying Parties’ reply to RFI 12, question 12 (The EUR […] estimate consists of the actual value for
     Viasat and a mark-up for the other Nordic broadcasting customers).
397  Notifying Parties’ reply to RFI 12, question 1.
398  Form CO, paragraph 1968.
399  SES’ non-confidential reply to RFI 2, question 2(e).
400  Responses to questionnaire Q9 to satellite customers and competitors, question D.3; Responses to
     questionnaires Q2, Q4, Q6 and Q8 to TV broadcasters in Norway, Sweden, Finland and Denmark,
     question J.3.
401  SES’ argument which concerns its current operations relates to a possible alteration of its agreement with
     Teracom for the provision of ground services (in particular uplink services) from a site in Sweden (SES’
     non-confidential reply to RFI 3 and RFI 4). As a large part of the services provided by Teracom currently
     relate to Viasat, SES fears that Teracom would possibly want to alter the agreement which could increase
     SES’ costs or hinder SES from reaching the 5°E orbital position. The Commission does not consider that a
     possible alteration of SES’ agreement with Teracom would harm SES’ ability and incentive to effectively
     compete from the 5°E orbital position. If an alteration of the agreement would increase SES’ costs, this
     would not have a significant impact as ground services account for a small proportion of the cost of supply
     of satellite transponder capacity only. SES could also evaluate alternative independent teleport companies
     active in Europe and alternative sites in Sweden in order to switch to a different provider and/or site for
     the provision of ground services (Notifying Parties’ replies to RFI 11 and RFI 13). In any case, the
     assessment of effects in section (B) also covers the scenario that SES would immediately stop its
     operation from the 5°E orbital position.
402  SES’ responses to questionnaire Q9 to satellite customers and competitors, question D.3.
403  See e.g. SES’ reply to RFI 1, question 6, which does not go into sufficient detail.
404  Notifying Parties‘ reply to RFI 9, question 12.
                                                          143
 ---pagebreak---              its transponder use from […] transponders in 2015 to […] in Q1 2020. Besides
             the divestment of All Media Baltics (accounting for a reduction by approximately
             […] transponders405), such reduction is a result of usual course of business
             changes in the operation of Viasat. On the one hand, the reduction is due to
             Viasat’s commercial decision to [confidential strategic information relating to
             NENT's satellite business]. On the other hand, the reduction was possible due to a
             number of technical developments, such as [confidential strategic information
             relating to NENT's satellite business].
    (601) In […], SES and Viasat concluded a new transmission agreement that provides
             for an option for Viasat [confidential strategic information relating to NENT's
             satellite business], the end of the contract. Post […], NENT assumes that the
             transition from distribution via satellite to distribution via the internet will
             [confidential strategic information relating to NENT's satellite business]. In fact,
             NENT estimates that Viasat would most likely [confidential strategic information
             relating to NENT's satellite business]. It follows that while Viasat's demand for
             capacity is one of several factors, it is a factor of [confidential strategic
             information relating to NENT's satellite business] when SES decides on the
             replacement of Astra 4A.
    (602) As a second remark, SES's decision to replace Astra 4A depends on several
             factors making it difficult to establish a direct causal link between the Transaction
             and the investment decision. In particular, such decision would also depend on the
             future viability of the DTH industry in the CEE region, the Middle East and
             Africa, consumer uptake of IPTV and online services, the growth of data
             communications over satellite, and SES' overall satellite asset and orbital position
             strategy. SES derives revenue from non-broadcasting services at 5°E and the
             demand for satellite capacity in Africa is projected to increase significantly.
             Viasat's demand for capacity is only one of many factors which SES would take
             into account.
    (603) As a third remark, SES Group, as the leading global satellite operator, will have a
             number of ways of optimising the use of its assets at 5°E and satisfying the needs
             of its current and future customers, while keeping the ratio between investment
             and expected future income at a relatively low level. As explained by the
             Notifying Parties, SES could consider any of the following options:406
         (a)       Co-investment with another satellite operator for a replacement. Each co-
                   investor can configure the satellite based on its requirement for broadcasting,
                   data and other capacity, use of frequency bands (Ku-, Ka-, C-band) and
                   fixed/adjustable transponders. This provides considerable flexibility and
                   lower investment costs and is practically feasible as shown by TS’ and
                   Intelsat’s co-investment at 1°W.
         (b)       SES could move SES satellites from other orbital positions to 5°E. The cost
                   of such a move would relate to: (i) the use of fuel on the satellite to move it
                   (which depends on the current position of the satellite, i.e. the distance to new
                   position), and whether the commercial value of the satellite would be reduced
                   by the move (remaining fuel vs. lifespan of the on-board technology)) and
405  Notifying Parties’ reply to RFI 12, question 7(a).
406  Notifying Parties’ reply to RFI 9, question 14.
                                                        144
 ---pagebreak---                   (ii) the commercial value of the satellite on current location vs. commercial
                  value on new position. The cost of moving a satellite would not be
                  prohibitive for SES and could be done in a timely way.
         (c)      Launch of a micro satellite at favourable investment costs of about EUR […],
                  but with a more limited payload.
         (d)      Combination with a public sector payload, i.e. reserving parts of a satellite
                  for specific use defined by a governmental body.
    (604) Each of these options would result in substantially lower investment cost, than the
             cost of approximately EUR […] to replace Astra 4A with a similar satellite. In
             addition, SES could adjust the carried transponders to the estimated future
             demand, e.g. it could launch a large data services satellite with a small
             broadcasting payload as a co-passenger.
    (605) As a fourth remark, the Commission notes that SES' decision to replace Astra 4A
             is too far away from the Transaction for the Commission to consider it as part of
             the investigation and establish a causal link. Importantly, the Notifying Parties
             provided evidence that Astra 4A could technically operate until [confidential
             strategic information relating to parties' satellite businesses].407 Even assuming
             that SES would decide to replace Astra 4A with a more modern satellite slightly
             earlier and would take such investment decision three to four years before the
             expected launch, such investment decision would still take place beyond the time
             period normally taken into account in merger investigations.
         (B)        Effects on competition
    (606) The Commission does not need to come to a final view on the question whether
             the Transaction would affect SES’ investment decision. Even assuming that SES
             would stop its operations at the 5°E orbital position immediately post-
             Transaction (or would later decide not to replace its Astra 4A satellite408), there
             would be no significant detrimental effect on competition in any of the
             downstream markets concerned by SES’ potential exit from the market for the
             supply of satellite transponder capacity at the 5°E orbital position.
    (607) With regard to TV distributors in the Nordics, the Commission notes that, besides
             the JV, no TV distributor uses satellite capacity as an input in the retail provision
             of AV services in the Nordics. Canal Digital and Viasat are the only TV
             distributors which rely on this input. SES’ potential exit from 5°E would therefore
             have no impact on the ability of downstream competitors to compete. Given that
             downstream competitors do not rely on DTH, TS does not have the ability to
             refuse to supply satellite transponder capacity for broadcasting, restrict the supply
             of such capacity, or offer it at worse conditions.
407  Form CO, footnote 532 and Annex 84.
408  Under this scenario, SES’ existing customers on SES-5 would continue to be served. In addition, the loss
     of Viasat will have freed up capacity on SES-5, which could be used to move existing customers from
     Astra 4A to SES-5.
                                                       145
 ---pagebreak---     (608) It is worth noting that there is a large number of downstream competitors which
            have their own infrastructure:
        (a)      Norway: Altibox (fibre); Telia (fibre, cable, mobile); RiksTV (DTT);
        (b)      Sweden: Tele2/Com Hem (fibre, cable, mobile, DTT); Telia (fibre, cable,
                 mobile); Sappa (fibre, cable);
        (c)      Denmark: TDC (fibre, cable, mobile); Telia (mobile); Stofa/Boxer (fibre,
                 cable, DTT); Waoo! (fibre, cable);
        (d)      Finland: Digita (DTT); Elisa (fibre, cable, mobile); Telia/Bonnier (fibre,
                 cable, mobile).409
    (609) Entry of any competitors on the downstream retail market that would rely on
            satellite transponder capacity for broadcasting is highly unlikely going forward in
            the Nordics. TV distribution over DTH is in significant structural decline. Entry
            has not taken place over the past 20 years. The Notifying Parties have
            [confidential strategic information relating to parties' TV businesses].410
    (610) With regard to TV broadcasters (with direct agreements for satellite capacity) in
            the Nordics, the Commission notes that the Transaction and SES’ potential exit
            from 5°E would neither harm this customer group nor end customers, i.e. TV
            viewers. In particular, it would not give TS the ability or the incentive to foreclose
            TV broadcasters that wish to purchase satellite transponder capacity directly from
            satellite operators.
    (611) As preliminary remark, Nordic broadcasters do not to any significant extent
            purchase satellite capacity directly from satellite operators. Nordic TV
            broadcasters normally enter into wholesale carriage agreements pursuant to which
            DTH TV distributors (pre-Transaction, Canal Digital and Viasat; post-
            Transaction, the JV) undertake to transmit and distribute the broadcasters’ TV
            signals to their subscribers (this relationship is discussed in Section 6.4.3). By
            way of illustration, TS transmits […] TV channels to the Nordics, of which […]
            are transmitted for Canal Digital and only […] are transmitted based on direct
            agreements with TV broadcasters.411 The trend over recent years goes towards
            including satellite transmission for even more channels in the wholesale carriage
            agreements. TS lost almost [confidential strategic information relating to
            Telenor's satellite business] of its revenues from 2016 to 2020 from TV
            broadcasters that purchase satellite capacity. Therefore, it is not expected that
            demand from channel providers for direct agreements will increase going
            forward. In other words, there is and will be no significant demand other than
            from DTH TV distributors for satellite capacity for broadcasting in the Nordics.
    (612) Post-Transaction, there will not be a significant number of satellite dishes
            pointing to 5°E in the Nordics and as such there is no target audience at 5°E for
            TV broadcasters. It is therefore irrelevant to TV broadcasters currently present in
            or seeking to enter the Nordics whether SES offers satellite capacity at 5°E. While
            some broadcasters will no longer be able to choose between the 1°W and 5°E
409  Form CO, paragraph 1954.
410  Form CO, paragraph 1880.
411  Form CO, paragraph 1882.
                                                   146
 ---pagebreak---               orbital positions, the dish turn from 5°E to 1°W may have a positive effect on TV
              broadcasters who currently purchase satellite capacity from both TS at 1°W and
              SES at 5°E. Post-Transaction, these TV broadcasters will reach all Nordic DTH
              households based on one supply agreement, which will reduce their costs while
              keeping the same advertising income (for news channels) or donor income (for
              religious channels).412 This is the case for three out of the five channels with
              direct agreements with SES as [confidential strategic information relating to
              parties' satellite business] and [confidential strategic information relating to
              parties' satellite business] currently purchase capacity from both SES and TS.413
    (613) The Transaction will also not harm TV broadcasters that currently purchase
              satellite capacity from either TS or SES.414
    (614) In the first place, TV broadcasters and end customers, i.e. TV viewers, would not
              be affected by SES’ potential exit as in addition to retail AV services from the JV
              they have several different platforms on which to, respectively, distribute and
              receive AV services (i.e terrestrial, cable, IPTV and OTT). This was confirmed by
              respondents to the market investigation, including TS’ TV broadcaster customers
              who stated that they could rely on other means of distribution than satellite.415
    (615) In the second place, TS will have a strong incentive to supply capacity to any TV
              broadcaster customers post-Transaction because TS has a significant amount of
              available capacity. In the […] years416 following the Transaction, TS will have at
              least […] free transponders, which could be used by new broadcasting customers
              in the Nordic and CEE region. If the expected volume reduction by the JV
              materialises, the number of free transponders will increase to up to […].
              Moreover, [confidential strategic information relating to Telenor's satellite
              business].417
    (616) In the third place, it is also worth noting that satellite operator Intelsat owns […]
              transponders on Thor 6 and leases capacity on […] transponders on Thor 5 and
              Thor 7 from TS. […] transponders on Thor 5 and […] transponders on Thor 7 can
              be used for broadcasting in the Nordics. Intelsat could offer satellite capacity to
              some individual TV broadcasters, if they were unable to come to an agreement
              with TS.418
    (617) With regard to TV distributors and TV broadcasters in the CEE region419, the
              Commission notes that there are a number of satellite operators which cover this
412  Notifying Parties‘ reply to RFI 9, question 15.
413  Form CO, Table 209.
414  TS has direct agreements for the distribution in the Nordics (or wider) with [confidential strategic
     information relating to Telenor's satellite business]. These channels may still be distributed on the other
     orbital position based on wholesale carriage agreements with Viasat and Canal Digital, respectively.
415  Responses to questionnaire Q9 to satellite customers and competitors, question D.5; Responses to
     questionnaires Q2, Q4, Q6 and Q8 to TV broadcasters in Norway, Sweden, Finland and Denmark,
     question J.5.
416  After […], free capacity will depend on TS’ decision on a replacement of satellite Thor 5 during […] and
     of satellite Thor 6 during […].
417  Notifying Parties‘ reply to RFI 9, questions 8 and 15.
418  Notifying Parties’ reply to RFI 9, question 7.
419  The Notifying Parties confirm that any other regions covered by SES’ 5°E orbital position, in particular
     the Middle East and Africa, are also served by a number of other satellite operators and other satellite
     positions operated by SES Group (Notifying Parties’ reply to RFI 9, question 11).
                                                            147
 ---pagebreak---              region for broadcasting, as presented in Table 48. Besides SES’ multiple orbital
             positions, other satellite operators covering the CEE region (or parts of this
             region) include TS, Eutelsat, Intelsat, Hellas Sat and Amos.420
                   Table 48: Satellite capacity for broadcasting in the CEE region
         2018                                        EUR (million)                    %
         1°W                                            […]                       [10-20]
         TS                                             […]                         [0-5]
         Intelsat                                       […]                        [5-10]
         SES (5°E)                                      […]                         [0-5]
         SES (19.2°E)                                   […]                       [10-20]
         SES (23.5°)                                    […]                        [5-10]
         SES (31.5°)                                    […]                         [0-5]
         Eutelsat (13°)                                 […]                       [10-20]
         Eutelsat (16°E)                                […]                       [10-20]
         Eutelsat (36.0°)                               […]                       [10-20]
         Intelsat (45.1°E)                              […]                         [0-5]
         Intelsat (85°E)                                […]                        [5-10]
         Hellas Sat (39.0°E)                            […]                        [5-10]
         Amos (4°W)                                     […]                         [0-5]
         Total                                          […]                          100
                          Source: Notifying Parties’ reply to RFI 9, question 11.
    (618) TS currently supplies customers in Czechia, Slovakia, Romania and Hungary.
             From its other orbital positions, SES currently supplies customers in Austria,
             Germany and Switzerland (19.2°E), Czechia and Slovakia (23.5°E) and Romania
             (31.5°E). Eutelsat currently supplies customers in Poland (13°E), various Balkan
             states (16.0°E) and Russia (36.0°E). Intelsat currently supplies customers in
             Czechia, Slovakia, Romania and Hungary from 1°W, in Bulgaria from 45.1°E and
             in Russia from 85°E. Hellas Sat’s current customers are situated in Bulgaria and
             Romania and Amos’ current customers are located in Hungary and Ukraine.421
             All listed orbital positions cover the Baltic states and Ukraine, where SES’
             current 5°E customers are located, besides Hellas Sat’s orbital position (covering
             neither Baltic states nor Ukraine) and SES’ 23.5°E, Intelsat’s 45.1°E and
             Eutelsat’s 16°E orbital positions (not covering Ukraine). The Notifying Parties
             estimate that several of the listed satellite operators would likely have free
             capacity available for additional broadcasting customers.422
    (619) Therefore, in case SES terminated its operations via the 5°E orbital position, TV
             distributors and TV broadcasters in the CEE region would continue to be able to
             choose from and switch between different satellite operators. This also includes
             the possibility that SES’ current customers could stay with SES and switch to one
             of SES’ other orbital positions covering the CEE region.
    (620) As explained in paragraph (74), while switching of the orbital position does create
             switching costs, switching is possible as shown by several past switching
             examples. Moreover, the new satellite operator may offer migration cost support.
420  Notifying Parties‘ reply to RFI 9, question 10(e).
421  Notifying Parties‘ reply to RFI 9, question 10(a).
422  Notifying Parties‘ reply to RFI 16, question 6.
                                                        148
 ---pagebreak---     (621) With regard to customers of satellite telecommunication services, the
             Commission notes that, as explained in paragraph (593), the majority of these
             customers are business customers with movable satellite antennas. Such
             customers do not depend on a specific orbital position and can easily move
             antennas to any of the many other orbital positions which offer the same type of
             services.
    (622) The Notifying Parties explain that the provision of satellite capacity for data
             services is highly competitive, with a large number of resellers (Marlink,
             Speedcast, Maritime, Navarino and many small local resellers) competing for
             contracts with ship owners, airlines and offshore installations etc. These resellers
             run competitive processes among the various satellite operators to supply required
             satellite capacity. There is a constant deal flow to and from TS and contract
             periods for data services typically vary from […] to […] years. As an example,
             [confidential strategic information relating to Telenor's satellite business]. Telenor
             Satellite has [confidential strategic information relating to Telenor's satellite
             business] in respect of [confidential strategic information relating to Telenor's
             satellite business] as its coverage area is limited to one orbital position, which
             [confidential strategic information relating to Telenor's satellite business].423
6.4.5.3. Conclusion
    (623) In light of the above considerations and based on the results of the market
             investigation, the Commission considers that the Transaction does not give rise to
             serious doubts as to its compatibility with the internal market as a result of
             customer foreclosure in the market for satellite transponder capacity.
6.4.6. Possible foreclosure of competing acquirers of satellite transponder capacity from
         accessing Telenor Satellite’s transponder capacity (input foreclosure)
    (624) The Transaction gives rise to vertically affected markets as a result of TS’
             activities in the upstream market for the provision of satellite transponder
             capacity and the JV’s activities in the downstream markets for the retail supply of
             AV services in the Nordic countries.
    (625) There are two customer groups which purchase satellite transponder capacity
             directly from satellite operators in order to compete in the retail supply of AV
             services in the Nordic countries: DTH TV distributors and some individual TV
             broadcasters. As already explained in detail in Section 6.4.5.2(B) on the effects of
             potential customer foreclosure to the detriment of TS’ competitor SES, TS would
             not have the ability and incentive to foreclose downstream competitors of the JV.
    (626) TV distributors: Besides the JV, no TV distributor uses satellite capacity as an
             input in the retail provision of AV services in the Nordics. In addition, it is highly
             unlikely that there would be entry in light of the decline of DTH TV distribution
             in the Nordics. Therefore, given that none of the JV’s downstream competitors
             relies on DTH distribution, TS does not have the ability to refuse to supply
             satellite transponder capacity for broadcasting, restrict the supply of such
             capacity, or offer it at worse conditions.
423  Notifying Parties‘ reply to RFI 9, question 15.
                                                     149
 ---pagebreak---     (627) TV broadcasters: Nordic broadcasters do not to any significant extent purchase
             satellite capacity directly from satellite operators. Nordic TV broadcasters
             normally enter into wholesale carriage agreements pursuant to which DTH TV
             distributors (pre-Transaction, Canal Digital and Viasat; post-Transaction, the JV)
             undertake to transmit and distribute the broadcasters’ TV signals to their
             subscribers (this relationship is discussed in Section 6.4.3). The Transaction will
             also not harm TV broadcasters which purchase satellite capacity directly from a
             satellite operator in the Nordics.424 First, TV broadcasters and end customers, i.e.
             TV viewers, have several different platforms on which to, respectively, distribute
             and receive AV services (i.e terrestrial, cable, IPTV and OTT). Second, TS will
             have a strong incentive to supply capacity to any TV broadcaster customers post-
             Transaction, in particular, because TS has a significant amount of available
             capacity (see paragraph (615)).
    (628) Therefore, in light of the above considerations and based on the results of the
             market investigation, the Commission considers that the Transaction does not
             give rise to serious doubts as to its compatibility with the internal market as a
             result of input foreclosure in relation to the market for satellite transponder
             capacity.
6.5.      Cooperative effects
6.5.1. Introduction
    (629) Under Article 2(4) of the Merger Regulation, to the extent that the creation of a
             joint venture constituting a concentration pursuant to Article 3 has as its object or
             effect the coordination of the competitive behaviour of undertakings that remain
             independent, such coordination shall be appraised in accordance with the criteria
             of Article 101(1) and (3) of the Treaty, with a view to establishing whether or not
             the operation is compatible with the common market.
    (630) Under Article 2(5) of the Merger Regulation, in making this appraisal, the
             Commission shall take into account in particular: (i) whether two or more parent
             companies retain, to a significant extent, activities in the same market as the joint
             venture or in a market which is downstream or upstream from that of the joint
             venture or in a neighbouring market closely related to this market; and
             (ii) whether the coordination which is the direct consequence of the creation of
             the joint venture affords the undertakings concerned the possibility of eliminating
             competition in respect of a substantial part of the products or services in question.
    (631) A restriction of competition under Article 101(1) TFEU is established when the
             coordination of the parent companies’ competitive behaviour is likely and
             appreciable and results from the creation of the joint venture, be it as its object or
             its effect.
    (632) Telenor and NENT will both remain independently active in a number of the
             same markets as the JV, namely the retail supply of AV services in Norway,
424  TS has direct agreements for the distribution in the Nordics (or wider) with [confidential strategic
     information relating to Telenor's satellite business]. SES distributes [confidential strategic information
     relating to Telenor's satellite business]. These channels may still be distributed on the other orbital
     position based on wholesale carriage agreements with Viasat and Canal Digital, respectively.
                                                          150
 ---pagebreak---              Sweden and Finland.425 The Notifying Parties and the JV will also be active post-
             Transaction in the acquisition of TV channels in Finland, which is an input to the
             retail supply of AV services. In the scenario where Telenor and the Norwegian
             State are considered part of the same economic unit, the Norwegian State and
             NENT would be active post-Transaction in the retail supply of AV services and in
             the wholesale supply of TV channels in Norway.
6.5.2. The Notifying Parties’ view
    (633) The Notifying Parties argue that the creation of the JV does not have the object or
             effect of – and will not lead to – coordination between the Notifying Parties in the
             markets for the retail supply of AV services in Norway, Sweden or Finland, or the
             market for wholesale acquisition of TV channels in Finland because the market
             conditions are not conducive to tacit coordination, the Notifying Parties will
             continue to have different commercial interests and the JV will form a small part
             of the Notifying Parties’ overall businesses.
6.5.3. The Commission’s assessment
    (634) The Commission considers that the Transaction does not give rise to serious
             doubts as to its compatibility with the internal market as a result of cooperative
             effects in the markets for the retail supply of AV services in Norway, Sweden and
             Finland (or on the market for the wholesale supply of TV channels in Norway, in
             the case that Telenor and the Norwegian State are considered part of the same
             economic unit) for the reasons set out below. Moreover, the Transaction will not
             lead to cooperative effects with respect to channel acquisition in Finland for the
             same reason as discussed below for their overall role on the market for the retail
             supply of AV services.
    (635) First, the Commission observes that the markets for the supply of retail AV
             services in Norway, Sweden and Finland are not conducive to coordinated effects.
             The markets are characterised by asymmetric shares and several competitors
             would remain post-Transaction, which would be likely to disrupt any attempts of
             the Notifying Parties to coordinate their activities on the relevant markets.
    (636) In Norway, post-Transaction, the Parties will continue to face competitive
             constraints from a number of strong market players and suppliers of traditional
             and OTT AV services. Telenor will have a share of [10-20]% and NENT (via
             Viaplay) a share of [5-10]% in the overall market for the retail supply of AV
             services. Other established non-linear OTT providers such as Netflix ([20-30]%),
             HBO Nordic ([5-10]%) and linear OTT provider TV2 Sumo ([5-10]%) will
             continue to compete with the Notifying Parties, and in particular constrain
             NENT’s OTT service Viaplay. Competition from other cable/IPTV service
425 In the above sections assessing the horizontal overlaps, the combined market shares of the Parties and a list
     of each affected market segment have been presented. In the overall market for the retail supply of AV
     services, the market shares including NENT’s OTT service and Telenor’s retail AV services in 2018 are:
     (i) in Norway, [20-30]% by subscribers (JV: [10-20]%, Telenor: [10-20]%, NENT: [5-10]%) and [40-
     50]% by revenue (JV: [10-20]%, Telenor: [10-20]%, NENT: [0-5]%); (ii) in Sweden, by subscribers (JV:
     [5-10]%, Telenor: [5-10]%, NENT: [0-5]%) and [30-40]% by revenue (JV: [20-30]%, Telenor: [5-10]%,
     NENT: [0-5]%); (iii) in Finland, [10-20]% by subscribers (JV: [0-5]%, Telenor: [10-20]%, NENT: [0-
     5]%) and [20-30]% by revenue (JV: [5-10]%, Telenor: [10-20]%, NENT: [5-10]%); and (iv) in Denmark,
     by subscribers (JV: [0-5]%, NENT: [0-5]%) and [10-20]% by revenue (JV: [5-10]%, NENT: [0-5]%).
                                                          151
 ---pagebreak---               operators such as Telia/GET ([10-20]%) and RiksTV ([5-10]%)426 will likely
              make any efforts at coordination difficult to sustain. Riks TV has already
              approximately […] subscribers and is considered by the Notifying Parties,
              [confidential information regarding business plans and strategic decisions.].427
              Any attempts to coordinate behaviour on the retail market would likely be
              undermined by any number of competitors.428
    (637) In Sweden, the Parties’ activities are relatively small (Telenor [5-10]%, Viaplay
              [0-5]% and JV [5-10]%) and will face constraints by large integrated players such
              as Tele2/Com Hem ([20-30]%) and Telia ([10-20]%) in addition to smaller
              traditional distributors such as Sappa. Again, OTT providers will also exercise a
              constraint including Netflix ([20-30]%) and HBO ([5-10]%). Even excluding non-
              linear OTT providers, the Notifying Parties will face a strong constraint in
              particular from large players Tele2/Com Hem ([40-50]%) and Telia ([20-
              30]%).429 Moreover, given the small combined presence of the Notifying Parties
              and the larger presence of competitors, in particular Tele2/Com Hem and Telia, it
              is unlikely that these rivals’ incentives would align with those of the Notifying
              Parties, required to sustain any coordination.
    (638) In Finland, together the Notifying Parties’ retained activities will represent
              below 20% of the market for the retail supply of AV services, with Telenor’s
              share of [10-20]% five times larger than NENT’s share of [0-5]%. Post-
              Transaction, the Notifying Parties will continue to face constraints from
              numerous TV distributors across all market segmentations: including,
              Digita ([20-30]%), Telia ([10-20]%), Elisa ([10-20]%) as well as OTT providers,
              Netflix ([10-20]%) and linear OTT service Ruutu+ ([0-5]%).430
    (639) Second, information barriers in place post-Transaction will make it difficult for
              the Notifying Parties to coordinate their behaviour. Information barriers will be in
              place between NENT and Telenor on the one hand and the JV on the other hand,
              and between NENT and Telenor. These information barriers will prevent
              information flows that could otherwise help to coordinate the retained activities of
              the Notifying Parties. More specifically, the information barriers will ensure that
              confidential information will not be available to any representative from Telenor
              and/or NENT directly involved in competing market-facing activities. They will
              also ensure that personnel is kept separate by preventing an overlap of directors of
              the board, management and employees of the JV with board members,
              management and employees in Telenor and NENT who have direct operational
              responsibility for day-to-day marketing of products and services relating to the
              retail supply of AV services in Norway, Sweden and Finland. In short, the
              information barriers will ensure that confidential information relating to the retail
              supply of AV services, including the terms of distribution agreements, will not be
426  Form CO, Table 5.
427  Form CO, paragraph 518-520, Annex 22.
428 The Commission notes the transmission agreement in place between Norges Televisjjion AS (“NTV”) and
     Norking, a wholly owned subsidiary of Telenor, under which Norking provides access to high quality
     DTT infrastructure to NRK. The term of the agreement is […] to […]. The agreement is unrelated to the
     activities of the JV in the retail supply of TV services in Norway and as such the Transaction does not
     change the incentives of the JV vis-à-vis access to DTT infrastructure for NTV. In any case, the term of
     the transmission agreement runs until […].
429 Form CO, Tables 32 and 33.
430 Form CO, Table 62.
                                                          152
 ---pagebreak---              shared by the JV with either of its parents (and vice versa) and will not be shared
             between the JV’s parents.
    (640) Third, the growth in OTT viewing and the increasing competitiveness of OTT
             players will likely undermine attempts at coordination. The Commission
             considers that the trend towards an increasing importance in OTT viewing is
             likely to result in increased competitive pressure from rival OTT providers in the
             future. In Norway, this would mean from players like TV2 (through its OTT
             offering “TV2 Sumo”), Discovery (“DPlay” and “Eurosport Player”), Telia (“C
             More”); in Sweden, Telia (“C More”) and Discovery (“Dplay and Eurosport
             Player”) and in Finland Sanoma/Nelonen’s “Ruutu+”; in addition, there will be
             competitive pressure from international players like Netflix and HBO.
    (641) Fourth, the barriers to entry in particular as regards the OTT provision of retail
             AV services are not so high so to make entry impracticable. Evidence of entry
             suggests that any efforts to coordinate behaviour could, in future, be disrupted by
             further entry into the OTT space. Several new players have entered with new
             OTT services in the recent past. For example, in Norway and Sweden, Amazon
             launched “Amazon Prime Video” (2016)431, Apple launched “Apple TV+” (2019)
             and Disney is expected to launch Disney+ in Norway and Sweden later this year.
             In addition, existing AV retailers have expanded their offering to include OTT
             services, with RiksTV launching “Strim” (2018) and sports agency IMG
             launching “Strive” (2019) in Norway.
    (642) Fifth, in light of differences in the Notifying Parties’ retained businesses, it is
             unlikely that their incentives would be aligned. NENT will be solely active in the
             retail provision of AV services outside the JV through its OTT offering Viaplay,
             whereas Telenor will continue to service customers via its cable/IPTV service.
             The different focus of the Notifying Parties’ retained activities makes it less likely
             that they would coordinate their behaviour and the existence of strong
             competitors, both in the traditional and OTT spheres, makes it unlikely that any
             attempts to coordinate their behaviour would be sustainable. Moreover, while the
             JV represents a large proportion of the activities of one parent (NENT) the
             significantly larger size of Telenor and the small size of the JV relative to Telenor
             group’s activities432makes it unlikely that Telenor would have any incentive to
             coordinate its competitive behaviour.433
    (643) Sixth, structural differences in the Notifying Parties’ businesses also makes it
             difficult to foresee how they would align incentives to cooperate in the retail
             supply of AV services. Whereas Telenor owns mobile and fixed
             telecommunications assets and infrastructure in Norway, Sweden and Finland,
             NENT owns no mobile or fixed telecommunications assets or infrastructure.
             Telenor will continue to provide fixed and mobile telecommunications services in
             the Nordics as well as Asia and NENT will remain active at the retail level
             through Viaplay and at the wholesale level through the sale of its TV channels
431 Though not currently actively marketing itself in Norway and Sweden, it is expected to expand in the near
     future as the roll out of fibre networks continues Form CO, paragraph 530, 868, 875,
432 Based on figures provided by the parties the JV’s activities represent approx. EUR […] (NOK […] for
     Canal Digital plus SEK […] for Viasat); NENT’s group revenue is approx. EUR 1,420 million (SEK
     14,568 million); and Telenor’s group revenue is approx. EUR 11,437 million (NOK 109,771). Therefore,
     the JV represents […]% of NENT group’s revenue and […]% of Telenor group’s revenue.
433 See also Case COMP/M.2851 Intracom/Siemens/STI.
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 ---pagebreak---               and advertising, as well as content produced by NENT. Accordingly, their costs
              base are likely to differ making coordination on price difficult.
    (644) Seventh, considering the modest combined share of the Notifying Parties’
              activities in the market for the retail supply of AV services in Norway
              ([10-20]%), Sweden ([5-10]%) and Finland ([10-20]%) even if the parents of the
              JV were to coordinate their activities it would likely not lead to an appreciable
              restriction on the relevant markets.
    (645) Eighth, the market investigation shows that the majority of respondents do not
              consider that the Transaction will likely give rise to cooperative effects or have no
              specific view in that regard. Those respondents who did consider that cooperative
              effects were likely, did not substantiate their claim.434
    (646) Moreover, in relation to a potential input foreclosure strategy to the detriment of
              suppliers of retail AV services competing with Telenor (whereby NENT would
              only license its channels to the JV and Telenor or, alternatively, do it on more
              beneficial terms), the Commission notes that the Transaction does not change
              NENT’s incentive and that NENT will continue to have the incentive to license
              its channels to competing providers of retail AV services, as discussed in
              Section 6.4.2. In particular, first, NENT’s agreements with Telenor have similar
              termination compared to other agreements NENT has with other suppliers in the
              market.435 Second, in an input foreclosure strategy, a company may have the
              incentive to engage in such strategy reducing its revenue in the upstream market
              in order to expand revenues in the downstream market. In such a scenario, a
              foreclosing strategy would be beneficial exclusively to Telenor’s downstream
              retail activities and it would likely be detrimental to NENT, with a reduction of
              carriage fee and advertising revenue. Since Telenor has no influence over
              NENT’s decision making in relation to NENT’s wholesale supply of its TV
              channels, the Commission considers the foreclosure of third party suppliers of
              retail AV services from accessing NENT’s TV channels (not contributed to the
              JV) as unlikely to take place as a result of the Transaction.
    (647) Finally, in relation to a potential customer foreclosure strategy to the detriment of
              wholesale suppliers of TV channels competing with NENT (whereby Telenor
              would only license NENT’s channels, or alternatively, offer NENT more
434 In Sweden, a broadcaster referred to an increased risk of coordination due to consolidation in the market
     for the retail supply of AV services, without further elaborating on the characteristics of the market that
     would make coordination likely: Q4 – TV broadcaster in Sweden, question I.1.2.1. A TV retailer
     considers that cooperative effects are likely but in explaining why referred to input foreclosure effects that
     would likely result from the Transaction: Q1 – Retail suppliers of AV services in Norway,
     question I.1.2.1; Q3 – Retail suppliers of AV services in Sweden, question I.1.2.1; Q5 – Retail suppliers
     of AV services in Finland, question G.1.2.1; Q6 – TV broadcasters in Finland, question I.1.1.1. In
     Norway, two TV retailers consider that the Notifying Parties could align their interests given NENT’s
     position in content and Telenor’s position in distribution but did not elaborate how this vertical
     relationship would lead to coordination on the market for the retail supply of AV services: Q1 – Retail
     suppliers of AV services in Norway, question I.1.2.1. In Finland, a TV distributors considers that as a
     result of the Transaction Telenor’s other platforms will enjoy more favourable wholesale terms and lower
     retail prices without elaborating on whether such terms would be the result of tacit coordination between
     the Notifying Parties: Q5 – Retail suppliers of AV services in Finland, question G.1.2.1.
435  See Annex 1, RFI 14. In Norway and Sweden. [Confidential terms of commercial agreements between
     NENT and Telenor]. In Denmark, [confidential terms of commercial agreements between NENT and
     Telenor].
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 ---pagebreak---            beneficial terms), the Commission notes that the Transaction does not change
           Telenor’s incentive to distribute channels via its own retail AV service platform
           (which will not be contributed to the JV). In particular, a strategy of foreclosing
           third-party channels from Telenor’s retail AV service platform (not contributed to
           the JV) platforms in order to divert viewers and advertising revenues to NENT’s
           channels would harm Telenor’s ability to attract subscribers of retail AV services,
           who expect to have access to a wider range of content. For this reason, a customer
           foreclosure strategy, although potentially beneficial to NENT’s channels, would
           be likely to be detrimental to Telenor. Since NENT has no influence over
           Telenor’s decision making in relation to Telenor’s retail AV service platform (not
           contributed to the JV), the Commission considers the foreclosure of third party
           TV channels from Telenor’s retail AV service platform (not contributed to the
           JV) as unlikely to take place as a result of the Transaction.
    (648) In the alternative scenario that Telenor and NRK are considered to be controlled
           by the Norwegian State (see Section 6.1.1.), the Transaction would still not give
           rise to cooperative effects in the market for retail supply of AV services or any
           market vertically related in Norway (i.e., the markets for the wholesale supply of
           TV channels in which both the Norwegian State and NENT would be active post-
           Transaction).
    (649) The ability for the Norwegian State and NENT to coordinate their behaviour is
           low in light of the market characteristics for the retail supply of AV services
           described above at paragraphs 635-636 and 640-641. As regards the markets for
           the wholesale supply of TV channels, conditions are also not conducive to
           coordination. Negotiations are [confidential information regarding NENTs sales
           strategy and policy], can take [confidential information regarding NENTs sales
           strategy and policy] to be finalised, and are of [confidential information regarding
           NENTs sales strategy and policy] lengths of duration ([…] to […] years), so that
           it is unlikely that [confidential information regarding NENTs sales strategy and
           policy.]. These characteristics contribute to the lack of transparency in the market
           and make it unlikely that coordination between the Norwegian State and NENT
           would be plausible in the case that the former is considered to be part of the same
           economic unit as Telenor.
    (650) It is also notable that the market position of the Norwegian State and NENT is
           largely asymmetric – NENT will have a share in the retail supply of AV services
           of [5-10]%436 and the Norwegian State will have a share of approximately
           [20-30]%437 – and in the market for the wholesale supply of TV channels NENT’s
           share will be [5-10]% whereas the Norwegian State’s share will be [30-40]%.438
           These asymmetric market positions further limit the ability of NENT and the
           Norwegian State to coordinate their behaviour.
    (651) The information barriers that will be in place post-Transaction, described above at
           paragraph 639, will mean that there will be a lack of necessary transparency on
           the relevant markets, making it more difficult for NENT and the Norwegian State
           to coordinate their behaviour. The information barriers would prevent the flow of
           commercially sensitive information between Telenor and NENT and the JV. The
436  Form CO, Table 5.
437  Form CO, Annex 91.
438  Form CO, Table 111.
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 ---pagebreak---             prospect that such sensitive information would fall within the reach of the
            Norwegian State is unlikely given that it is active in the JV via Telenor who will
            itself be subject to confidentiality obligations under the information barriers.
    (652) The Norwegian State and NENT would have no incentive to coordinate their
            behaviour on the markets for the retail supply of AV services and the wholesale
            supply of TV channels in Norway. The Norwegian State’s overall commercial
            interests and strategies vary greatly from those of NENT, which is singularly a
            media and entertainment company. Moreover, unlike the Norwegian State, NENT
            does not own any mobile or fixed telecommunications assets in Norway. In
            addition, the JV constitutes an insignificant, proportion of the Norwegian State’s
            activities making it even less likely that the Norwegian State would have an
            incentive to coordinate their activity on the market for the retail supply of AV
            services or the market for the wholesale supply of TV channels.
    (653) The existence of a transmission agreement between Norges Televisjon AS
            (“NTV”) and Norking, a wholly owned subsidiary of Telenor, under which
            Norking provides access to high quality DTT infrastructure to NRK,439 does not
            change the assessment that the Norwegian State will not have the ability or
            incentive to coordinate its behaviour with NENT on the markets for the retail or
            wholesale distribution of AV services. The transmission agreement is unrelated to
            the JV’s retail supply of TV services, which prevents the Norwegian State and
            NENT from using the transmission agreement to coordinate their behaviour.
            Moreover, NTV is jointly controlled by TV2 and NRK and there is no indication
            that TV2’s incentives would be aligned with that of NRK if it were to pursue a
            strategy to coordinate its behaviour with Telenor/Norking in a way that would
            disadvantage either NRK or RiksTV. As the joint owners of RiksTV, it is unlikely
            that the NRK or TV2 would do anything to disadvantage RiksTV.
6.5.4. Conclusion
    (654) In conclusion, in light of the above considerations and based on the results of the
            market investigation, the Commission considers that the Transaction does not
            give rise to serious doubts as to the compatibility with the internal market as a
            result of cooperative effects on the markets for the retail supply of AV services in
            Norway, Sweden and Finland (or on the markets for the retail supply of AV
            services and wholesale supply of TV channels in Norway, in the case that Telenor
            and the Norwegian State are considered part of the same economic unit).
439 NTV in turn leases broadcast capacity to its two customers: NRK and Riks TV.
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 ---pagebreak--- 7.     CONCLUSION
   (655) For the above reasons, the European Commission has decided not to oppose the
         notified operation and to declare it compatible with the internal market and with
         the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of
         the Merger Regulation and Article 57 of the EEA Agreement.
                                                   For the Commission
                                                   (Signed)
                                                   Margrethe VESTAGER
                                                   Executive Vice-President
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