CELEX: 32021M10456
Language: en
Date: 2021-12-01 00:00:00
Title: Commission Decision of 01/12/2021 declaring a concentration to be compatible with the common market (Case No COMP/M.10456 - SKY / VIACOMCBS / JV) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                Brussels, 01.12.2021
                                                                C(2021) 8881 final
                                                                                 PUBLIC VERSION
                                                                 In the published version of this decision,
                                                                 some information has been omitted
                                                                 pursuant to Article 17(2) of Council
                                                                 Regulation (EC) No 139/2004 concerning
                                                                 non-disclosure of business secrets and other
                                                                 confidential information. The omissions are
                                                                 shown thus […]. Where possible the
                                                                 information omitted has been replaced by
                                                                 ranges of figures or a general description.
                                                                ViacomCBS Inc.
                                                                1515 Broadway
                                                                10036 New York
                                                                United States of America
                                                                Sky Limited
                                                                Grant Way, Isleworth
                                                                Middlesex TW7 5QD
                                                                United Kingdom
Subject:             Case M.10456 – SKY/ViacomCBS/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 25 October 2021, the European Commission received notification of a proposed
          concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 3 by
          which Sky Limited (“Sky”), part of Comcast Corporation ("Comcast") (together,
          "Comcast/Sky"), and Paramount Pictures International Limited (“Paramount”),
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’).
3     OJ L 24, 29.1.2004, p. 1 (the ‘Merger Regulation’).
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---            part of the group headed by ViacomCBS Inc. (together, "ViacomCBS") will acquire
           joint control of a newly created JV (the “JV”) within the meaning of Article 3(1)(b)
           and 3(4) of the Merger Regulation (the “Transaction”). Sky and ViacomCBS are
           together referred to as the “Notifying Parties” (together with the JV, the “Parties”).
1.         THE PARTIES
(2)        Sky is the (indirect) holding company (UK) of a number of subsidiaries carrying on
           business across the audio-visual (“AV”) value chain, predominantly in the UK,
           Ireland, Germany, Austria and Italy. Sky is ultimately owned by Comcast, a global
           media, technology and entertainment company (US). Comcast is present in Europe
           almost entirely through Sky and NBCUniversal (“NBCU”). NBCU is a media and
           entertainment company active in the AV sector as well as in the home entertainment
           sector through the direct to consumer (“DTC”) distribution of DVDs, Blu-rays and
           music discs.
(3)        ViacomCBS is a global media and entertainment company (US) that creates AV
           content and experiences for audiences worldwide. ViacomCBS's portfolio currently
           consists of three segments: TV Entertainment, Cable Networks, and Filmed
           Entertainment. ViacomCBS is controlled by National Amusements Inc (US).
(4)        The JV will establish and operate a subscription video on demand (“SVOD”)
           streaming service that comprises AV content and is distributed DTC on an over the
           top (“OTT”)4 basis as well as via third party platforms and connected devices. The
           JV will also wholesale some of ViacomCBS' and NBCU's linear pay TV channels
           via third party multichannel video programming distributors in 22 European
           countries, including the following 15 countries within the EEA (the “JV EEA
           Territories”): Bulgaria, Croatia, Czech Republic, Denmark, Finland, Hungary, the
           Netherlands, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain and
           Sweden.
2.         THE CONCENTRATION
(5)        The Transaction will be implemented by means of an agreement, entered into by Sky
           and Paramount on 16 August 2021 (the “Investment Agreement”). Subject to
           satisfaction of all the conditions precedent in the Investment Agreement, including
           receipt of regulatory approvals, Sky and Paramount will each purchase 50% of the
           shares in the newly created JV. 5
2.1.       Joint control
(6)        Sky and ViacomCBS will each own 50% of the shares of the JV and have the ability
           to exercise decisive influence over the JV. In particular, the Notifying Parties will
           each appoint an equal number of directors in the JV’s board of directors, and will
4    I.e. the content is delivered via the internet.
5    Form CO, paragraphs 91 – 93 and 96.
                                                     2
 ---pagebreak---           also jointly appoint the JV’s Chief Executive Officer, Chief Financial Officer and
          Chief Operating Officer.6
(7)       The executive officers will have executive and day-to-day responsibility for the
          operation of the JV, except for the matters that must be referred to the JV’s board of
          directors and to the JV’s shareholders pursuant to the joint venture agreement that
          will be entered into upon completion of the Transaction. 7 [Reference to the JV's
          corporate governance]. The approval of these matters requires a favourable vote by
          at least two appointed directors of each of the Notifying Parties or written consent of
          both shareholders.8
(8)       Therefore, as a result of the Transaction, Sky and ViacomCBS will jointly control
          the JV within the meaning of Article 3(1)(b) of the Merger Regulation.
2.2.      Full-functionality
(9)       The JV will be fully functional. First, the JV will employ its own management
          dedicated to its day-to-day operations, and have access to sufficient resources,
          including finance, staff and assets that will enable it to operate independently on the
          market for the retail supply of AV services. 9 10 [Reference to strategic decisions
          regarding the JV]. This will allow the JV to become (both financially and
          operationally) independent and self-financing.
(10)      Second, the JV is intended to operate as an autonomous entity with independent
          access to the market. Its activities will not be limited to the distribution or sale of its
          parent companies' products, as the JV will supply its own SVOD offering as a fully
          independent company with its own personnel and dedicated management. Therefore,
          the JV will not rely on sales to its parents. 11 In addition, the JV has negotiated
          agreements with its parents on an arm’s length basis, reflecting normal market
          conditions.12
(11)      Third, the JV will not only purchase from its own parents. It will also source SVOD
          licenses to content from third party content providers and may also commission new
          content.13
(12)      Finally, the JV is intended to operate on a lasting basis. [Reference to the JV's
          corporate strategy].14
6    Form CO, paragraphs 97 – 98.
7    The Notifying Parties have already agreed on the terms of such joint venture agreements (the “Agreed
     Form Joint Venture Agreement”). Other agreements that the Notifying Parties will enter into upon
     completion of the Transaction include the Initial Annual Business Plan and the Initial Annual Budget. See
     Form CO, paragraph 94.
8    Form CO, paragraphs 99 – 103.
9    Form CO, paragraph 111.
10   Form CO, paragraphs 114, 118 and 120 – 125.
11   Form CO, paragraph 126 – 127.
12   Form CO, paragraphs 117, 119, 121, 123 and 125.
13   Form CO, paras. 73 and 178. The Notifying Parties estimate that spend on third party content will
     represent up to [proportion] of all spend on content whereas content acquired from the parents would
     account for between approximately [proportion] and [proportion] of the overall spend value. These
     percentages will be reviewed periodically as part of the budget review and may vary year on year based on
     the specific content output of each of the parents.
                                                            3
 ---pagebreak--- (13)      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.
3.        UNION DIMENSION
(14)      In the last financial year, Comcast/Sky and ViacomCBS achieved a combined
          aggregate worldwide turnover of more than EUR 5 000 million.15 Each of the
          undertakings concerned achieved an EU-wide turnover in excess of EUR 250
          million, but they did not achieve more than two-thirds of their aggregate EU-wide
          turnover within one and the same Member State. The Transaction therefore has an
          EU dimension within the meaning of Article 1(2) of the Merger Regulation.
4.        RELEVANT M ARKETS
(15)      This Transaction concerns all three levels of the AV value chain (from upstream to
          downstream):
          a) The production and supply of AV content (including the supply of pre-produced
               AV content and commissioned AV content), where Comcast/Sky and
               ViacomCBS are active on the demand- and supply-side of the market, and the JV
               will be active on the demand-side of the market only;
          b) The wholesale supply of TV channels, where Comcast/Sky, ViacomCBS and the
               JV16 will be active mainly on the supply-side of the market; and
          c) The retail supply of AV services to end customers, where the JV will be active
               both (i) DTC, and (ii) via third-party multichannel video programming
               distribution (“MVPD”) platforms, and Sky and ViacomCBS will also remain
               independently active (mostly) outside the territories where the JV will operate.
(16)      In addition, the Transaction concerns the sale of advertising on TV channels, where
          both Comcast/Sky and ViacomCBS will remain independently active from the JV,
          while the JV will not be active in the supply of advertising space.
4.1.      Production and supply of AV content
4.1.1. Relevant product market
4.1.1.1. The Commission’s previous practice
(17)      In previous decisions, the Commission has concluded that there are separate markets
          for: (i) the production and supply of commissioned AV content (also referred to as
14   Form CO, paragraphs 136 – 137.
15   Turnover calculated in accordance with Article 5 of the Merger Regulation.
16   Form CO, paras. 213-215. The JV will distribute ViacomCBS's and NBCU's linear pay TV channels to
     third party multichannel video programming distribution platforms. In the Nordics, the JV will
     complement its on-demand offer with two linear TV channels on its own retail service to promote movies
     and series with the potential for further TV channels to be added to the service and made available in other
     JV Territories in future. The JV will also wholesale its SVOD offering to other retailers.
                                                             4
 ---pagebreak---         ad hoc or new content); and (ii) the licensing of broadcasting rights for pre-produced
        AV content (available off-the-shelf).17
(18)    With regard to the market for the production of commissioned AV content, the
        Commission has found the product market to be limited to non-captive AV
        production, thereby excluding captive AV production (i.e., AV content produced by
        broadcasters for use on their own TV channels), as this AV content is not offered on
        the market.18
(19)    With regard to the market for the licensing of pre-produced AV content, the
        Commission has considered that it may be subdivided by content type, in particular:
        (i) films, (ii) sports, and (iii) other AV content (i.e., all non-sport, non-film content),
        but ultimately left the market definition open.19 In addition, the Commission had
        assessed whether AV content could be further sub-divided by distinguishing
        between: (i) US and non-US films; (ii) premium and non-premium content; or (iii)
        scripted and non-scripted content. This sub-segmentation has been left open in
        previous decisions.20
(20)    The Commission has also considered further sub-dividing the market for the
        licensing of pre-produced AV content by exhibition window:21 (i) SVOD; (ii)
        transactional video on demand (“TVOD“);22 (iii) pay-per-view (“PPV”);23 (iv) first
        pay TV window; (v) second pay TV window; and (vi) free-to-air (“FTA”), but has
        ultimately left this question open.24
4.1.1.2. The Notifying Parties’ view
(21)    The Notifying Parties agree with the Commission’s previous practice that the market
        for the production and supply of AV content should be segmented between (i) the
        production and supply of commissioned AV content, and (ii) the licensing of
        exploitation rights for pre-produced AV content.25
(22)    However, the Notifying Parties do not consider it appropriate to further segment
        these relevant markets, in particular by: (i) content type, (ii) scripted vs non-scripted
17  Commission decision of 7 April 2017 in Case M.8354 – Fox / Sky, para. 54; Commission decision of 24
    February 2015 in Case M.7194 – Liberty Global/Corelio / W&W / De Vijver Media, para. 69; Commission
    decision of 6 November 2018 in Case M.8785 - The Walt Disney Company / Twenty-First Century Fox,
    para. 67; Commission decision of 26 August 2020 in Case M.9299 – Discovery / Polsat / JV, para. 50.
18  Commission decision of 22 September 2006 in Case M.4353 – Permira / All3Media Group, paras. 11-12;
    Commission decision of 9 October 2014 in Case M.7360 - 21st Century Fox/Apollo / JV, para. 36;
    Commission decision of 20 June 2016 in Case M.7865 – Lov Group / De Agostini / JV, para. 18; M.9299
    – Discovery / Polsat / JV, para. 50.
19  Commission decision of 21 December 2011 in Case M.6369 HBO / Ziggo / HBO Nederland.
20  M.8354 – Fox / Sky, para. 55; M.6369 – HBO / Ziggo / HBO Nederland, para. 18; M.7194 – Liberty
    Global / Corelio / W&W / De Vijver Media, para. 52; M.8785 - The Walt Disney Company / Twenty-First
    Century Fox, para. 68.
21  The use of the term exhibition windows is not applicable to non -film AV content. Non-film AV content
    may be broadcast through different exploitation fields (e.g. pay TV, FTA) but the rights do not pass
    through each method in the same way a newly released film does.
22  TVOD designates a product where a consumer obtains the right to watch a single title within a designated
    time frame (for example 48 hours) through a single payment.
23  PPV designates a product where a consumer obtains the right to watch a single title during a specific time
    frame (for example Sunday between 2.00 pm and 3.45 pm) through a single payment.
24  M.8354 – Fox / Sky, para. 56; M.8785 - The Walt Disney Company / Twenty-First Century Fox, para. 68.
25  Form CO, paragraph 194.
                                                         5
 ---pagebreak---         content, (iii) premium vs non-premium content, or (iv) exhibition window. In this
        regard, the Notifying Parties submit that the above distinctions do not reflect the
        economic reality of competition in the AV sector. 26
(23)    More specifically, with reference to content type, the Notifying Parties argue that
        production companies are active in the production of content across different types
        and genres. Furthermore, a producer that supplies only one type of content could
        start supplying content of a different type swiftly and at no significant costs. The
        Notifying Parties also argue that, from a demand-side perspective, there is no
        material difference between content of different types and genres, as they all
        compete to attract the same audience. 27
(24)    With reference to scripted and non-scripted content, the Notifying Parties submit
        that, from a supply-side perspective, production companies produce both scripted
        and non-scripted content based on demand and, if they are specialised in the supply
        of either of the two, they could in any case start producing the other type of content
        timely and at no significant costs. Moreover, from a demand side, content acquirers
        do not target scripted or non-scripted content in particular, but source content based
        on its attractiveness to their audience, regardless of the type. 28
(25)    Moreover, the Notifying Parties argue that a segmentation between premium and
        non-premium content would be artificial, as it is not clear what constitutes premium
        and non-premium content, and the success and commercial value of any specific
        content is not dependent on the production budget, nor can it be predicted. 29
(26)    Finally, with reference to the different exhibition windows, the Notifying Parties
        note that suppliers of AV content do not produce different types of AV content
        designed for different exhibition windows. Moreover, the Notifying Parties argue
        that the distinction between exhibition windows has become increasingly blurred due
        to the uptake of OTT VOD platforms and non-linear services.30
(27)    In any event, the Notifying Parties consider that, for the purpose of this decision, it is
        not necessary to reach a conclusion as to the exact product market definition of the
        market for the production and supply of AV content, as the Transaction does not
        raise competition concerns regardless of how such market is defined.31
4.1.1.3. The Commission’s assessment
(28)    The Commission focused its investigation in relation to this market on Spain, given
        that only the Spanish production and supply of AV content market is affected (see
        below Section 5.2). Respondents to the market investigation agree that there is a
        relevant product market for the production and supply of AV content. 32
26  Form CO, paragraph 195.
27  Form CO, paragraph 196.
28  Form CO, paragraph 197.
29  Form CO, paragraphs 199 – 200.
30  Form CO, paragraph 201.
31  Form CO, paragraph 202.
32  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 6.
                                                         6
 ---pagebreak--- (29)   However, the results of the market investigation are inconclusive as to the
       identification of two separate relevant product markets for (i) the production and
       supply of commissioned AV content and (ii) the licensing of broadcasting rights
       for pre-produced AV content, with only a slight majority of respondents
       considering that such separation is accurate.33 In this regard, some respondents
       pointed out that these activities are not always clearly distinguishable, as production
       costs are similar and they represent alternative options for customers to source
       content.
(30)   With reference to a distinction of pre-produced AV content by content type, in
       particular (i) films; (ii) sports; and (iii) other AV content, the majority of respondents
       to the market investigation consider such differentiation not accurate, as different
       content types compete with each other for viewers’ attention. A few respondents also
       suggested alternative separations, taking into account, for example, TV series or
       general entertainment.34
(31)   As regards pre-produced film content, the results of the market investigation are
       overall inconclusive as to whether separate relevant product markets exist for (i) US
       and (ii) non-US film content. A small majority of respondents consider that this
       distinction is not accurate because different types of AV content, including US and
       non-US films, compete for viewership, and because the geographic origin of a
       production does not determine per se the quality or the success of a film. However,
       other respondents stress that US films have an important value for attracting viewers,
       and should be distinguished from other films on grounds of volume and general
       quality.35
(32)   With reference to other AV content (i.e. excluding films and sports), the market
       investigation is inconclusive as to whether a separation between (i) scripted and (ii)
       unscripted AV content is appropriate. According to a number of respondents, the
       argument that different types of AV content all compete for viewership applies to
       scripted and unscripted content as well. However, on the other hand, a similar
       number of respondents believes that scripted and unscripted content should form
       separate relevant product markets and note that AV content producers usually
       specialize in either type of content.36
(33)   Similarly, the market investigation yield no clear results as to whether other AV
       content should be separated between (i) premium and (ii) non-premium content.
       However, a small majority of respondents consider that the production of premium
       and non-premium content do not form separate relevant product markets as they both
       compete for viewership and are substitutable from a consumers’ perspective. 37
(34)   With reference to a distinction of the possible relevant markets for the production
       and licensing of pre-produced AV content according to exhibition windows, the
       results of the market investigation are overall inconclusive. 38 A small majority of
33  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 7.
34  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 8.1.
35  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 8.2.
36  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 8.3.
37  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 8.4.
38  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 9.1.
                                                         7
 ---pagebreak---         respondents is of the opinion that such separation would not be relevant for the
        market for the production and supply of commissioned AV content in Spain.39
        Market participants provided different views as regards possible distinctions they
        consider appropriate. For instance, a few market participants submit that there is a
        single market for AV services in Spain and that customers may use pay TV
        channels, FTA TV channels and SVOD services as a complementary source. 40
(35)    Market participants that provide both linear and non-linear services at retail level
        usually acquire the broadcasting rights for such services together when it comes to
        tailor-made content, but replies by market participants are mixed in relation to pre-
        produced content.41 Furthermore, a small majority of respondents considers that
        there are differences in terms of content, pricing or contract terms when content is
        licensed to pure OTT providers compared to other licensees, although most
        respondents answered that they do not know. However, explanations provided do not
        allow to clearly identify such differences.42
(36)    In light of the above, the Commission concludes, for the purpose of this decision,
        that the production and supply of AV content forms a relevant product market. The
        Commission also considers that, for the purpose of this decision, the question
        whether within this product market further distinctions could be made (i) between
        commissioned and pre-produced AV content; (ii) between different content types;
        and (iii) based on the exhibition window, can be left open, since the Transaction
        does not raise serious doubts as to its compatibility with the internal market or the
        functioning of the EEA Agreement under any such plausible product market
        definitions.
4.1.2. Relevant geographic market
4.1.2.1. The Commission’s previous practice
(37)    In past decisions, the Commission has defined the market for the production and
        supply of AV content (and its relevant segments) to be either national or regional,
        based on linguistically homogeneous areas. 43
4.1.2.2. The Notifying Parties’ view
(38)    The Notifying Parties consider that the appropriate geographic market is national or
        regional in scope, given that the majority of content is licensed on that geographic
        basis. While it is not uncommon to conclude deals that span multiple territories,
        there would usually be different terms for different territories (e.g., with respect to
        titles, licence period, price, etc.).44
(39)    In any event, the Notifying Parties submit that it is not necessary for the Commission
        to reach a conclusion as to the precise geographic market definition for the
39  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 9.2.
40  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 9.3.
41 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 10.
42 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 10.
43  M.8354 – Fox / Sky, para. 69; M.9299 – Discovery / Polsat / JV, para. 54.
44 Form CO, paragraphs 204 – 205.
                                                         8
 ---pagebreak---          production and supply of AV content, as the Transaction would not raise any
         competition concern under any plausible market segmentation. 45
4.1.2.3. The Commission’s assessment
(40)     Almost all suppliers of AV content in Spain licence their content on a national basis.
         Some respondents pointed out that, in some cases, they also license content on a
         regional basis. One respondent replied that it is active in the licencing at all
         geographic levels, from national to worldwide. 46
(41)     In light of the above, for the purpose of this decision, the Commission concludes that
         in Spain the relevant geographic market for the production and supply of AV
         content, including all its possible sub-segments, is national in scope.
4.2.     Wholesale supply of TV channels
4.2.1. Relevant product market
4.2.1.1. The Commission’s previous practice
(42)     In previous decisions, the Commission has identified a wholesale market for the
         supply of TV channels. Within that market, in certain decisions, the Commission has
         further identified two separate product markets for: (i) FTA TV channels, and (ii)
         pay TV channels.47 The Commission further stated that, within the pay TV channels
         market, a further distinction could be made between: (i) basic pay TV channels,
         which are included in the basic subscription fee, and (ii) premium pay TV
         channels,48 for which end customers pay a premium in addition to their basic
         subscription fee.
(43)     In Liberty Global / Corelio / W&W / De Vijver Media, 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 basic pay TV/FTA channels.
         The Commission also considered that there was no need to draw a distinction
         between linear TV channels and their non-linear ancillary services.49
(44)     Further, in previous decisions, the Commission examined a number of other
         potential additional differentiations, 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. 50
45   Form CO, paragraph 209.
46   Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 18.
47   M.7194 - Liberty Global / Corelio / W&W / De Vijver Media, paras. 90-91.
48   M.8785 – The Walt Disney Company / Twenty-First Century Fox, para. 77; Commission decision of 15
     June 2018 in Case M.8861 – Comcast / Sky, para. 50; Commission decision of 6 February 2018 in Case
     M.8665 – Discovery / Scripps, paras. 19- 20; M.8354 – Fox / Sky, paras. 80- 81.
49   M.7194 - Liberty Global / Corelio / W&W / De Vijver Media, paras. 93-94.
50   M.7194 - Liberty Global / Corelio / W&W / De Vijver Media, para. 98; Commission decision of 18 July
     2007 in Case M.4504 – SFR / Télé 2 France, para. 44; Commission decision of 26 August 2008 in Case
     M.5121 - News Corp / Premiere, para. 22.
                                                          9
 ---pagebreak--- (45)    Last, in the recent Telia Company / Bonnier Broadcasting Holding decision, the
        Commission considered that the market for the wholesale supply of TV channels
        should not be further segmented according to the type of infrastructure used for the
        delivery to the consumer (such as cable, satellite, DTH, digital terrestrial TV and
        IPTV) since the competitive condition in the market for the wholesale supply of TV
        channels, and any possible segmentation, would be similar irrespective of the
        distribution technology and type of infrastructure used for the distribution of the TV
        channels.51
4.2.1.2. The Notifying Parties’ view
(46)    The Notifying Parties do not consider it appropriate to make any further distinctions
        within the market for the wholesale supply of TV channels, be it between FTA and
        pay TV, between linear TV channels and non-linear ancillary services, by genre, or
        by means of transmission.52 Regardless, the Notifying Parties submit that it is not
        necessary for the Commission to reach a conclusion on this, as the Transaction
        would not raise any competition concern under any plausible market definition.53
4.2.1.3. The Commission’s assessment
(47)    The Commission focused its investigation in relation to this market on Denmark,
        given that only the Danish wholesale supply of TV channels market is affected (see
        below Section 5.2). With reference to whether FTA TV and pay TV channels form
        separate relevant product markets, respondents to the market investigation provided
        a mixed reply.54 In particular, some respondents noted that there is no real FTA TV
        market in Denmark, with only the public service broadcaster still offering FTA TV
        channels.
(48)    Similarly, within pay TV channels, the results of the market investigation are
        inconclusive regarding whether it remains appropriate to segment the wholesale
        supply of TV channels between FTA and basic pay TV channels on the one hand,
        and premium pay TV channels on the other hand in Denmark. 55 In particular, one
        respondent remarks that “premium” pay TV channels only have a minor presence in
        Denmark, with a decreasing value in a TV market affected by streaming services
        such as Netflix and HBO.
(49)    With reference to a segmentation by genre, including the specific genre of kids’ TV
        channels,56 the results were similarly inconclusive. While a number of respondents
        considered that thematic pay TV channels of a given genre could be alternatives
        (rather than complements) to thematic pay TV channels of a different genre,
        respondents also indicated that they did not consider a market segmentation by genre
51  Commission decision of 12 November 2019 in Case M.9064 - Telia Company / Bonnier Broadcasting
    Holding, para. 162.
52  Form CO, para. 222.
53  Form CO, para. 228.
54  Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 7.
55  Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 8.
56  Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 10.
                                                        10
 ---pagebreak---         appropriate. Respondents noted that TV distributors tend to demand a variety of
        genres to ensure an attractive global offering.57
(50)    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, as the results of the market investigation
        indicated that ancillary services (e.g., TVE, catch-up, PVR, etc.) are associated to
        TV channels in Denmark in order to complement the TV offering and enhance the
        viewer experience of traditional linear channels. 58
(51)    Most of the respondents consider that the market for the wholesale supply of TV
        channels should not be further segmented according to the distribution forms (e.g.,
        cable, IPTV, satellite, terrestrial, or OTT). 59
(52)    In light of the above, the Commission considers that, for the purpose of this decision
        and in line with its decisional practice, 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
        distinguished (i) by genre, (ii) by distribution technology, or between (iii) FTA and
        pay TV channels, and in turn whether pay TV channels can be further split into basic
        pay and premium pay TV channels, or (iv) FTA and basic pay TV channels on the
        one hand, and premium pay TV channels on the other hand can be left open since the
        Transaction does not raise serious doubts as to its compatibility with the internal
        market or the functioning of the EEA Agreement under any such plausible product
        market definitions.
4.2.2. Relevant geographic market
4.2.2.1. The Commission’s previous practice
(53)    In previous decisions, the Commission found the market for the wholesale supply of
        TV channels to be either national in scope, 60 sub-national,61 or delineated by
        linguistically homogeneous areas encompassing more than one EU Member State.62
4.2.2.2. The Notifying Parties’ view
(54)    The Notifying Parties consider that the appropriate geographic market is national in
        scope, given that the majority of wholesale supply relationships are concluded at the
        national level, with some exceptions in which the retail AV service provider obtains
        broadcasting rights to multiple countries/regions with a common language. 63
        Regardless, the Notifying Parties submit that it is not necessary for the Commission
57  Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 9.
58  Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to questions 13-14-15.
59 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 16.
60  M.6369 – HBO / Ziggo / HBO Nederland, para. 39; Commission decision of 15 April 2013 in Case
    M.6880 – Liberty Global / Virgin Media, para. 41; Commission decision of 10 October 2014 in Case
    M.7000 – Liberty Global / Ziggo, para. 98; M.9299 – Discovery / Polsat / JV, para. 70.
61  M.7194 Liberty Global / Corelio / W&W / De Vijver Media, para. 106 onwards.
62  M.8354 – Fox / Sky, para. 90 onwards.
63 Form CO, para. 230.
                                                        11
 ---pagebreak---          to reach a conclusion, as the Transaction will not raise any competition concern
         under any plausible geographic market definition.64
4.2.2.3. The Commission’s assessment
(55)     All respondents to the market investigation distribute their wholesale TV channels to
         retail RV/AV service providers in Denmark on a national basis. One respondent
         clarifies that this reflects the retailers’ scope of operations and the homogenous
         linguistic region.65
(56)     In light of the above, for the purpose of this decision, the Commission concludes that
         in Denmark the relevant geographic market for the wholesale supply of TV channels,
         including all its possible sub-segments, is national in scope.
4.3.     Retail supply of AV services to end customers
4.3.1. Relevant product market
4.3.1.1. The Commission’s previous practice
(57)     The Commission has in previous cases identified two relevant product markets
         within the retail supply of AV services, namely (i) FTA TV services and (ii) pay TV
         services,66 but in other more recent cases has ultimately left open the product market
         definition.67 The Commission has also considered whether the market for retail pay
         TV services should be distinguished further according to: (i) premium pay TV vs.
         basic pay TV services;68 (ii) distribution technologies (e.g. cable, satellite, or
         terrestrial);69 and (iii) linear vs non-linear AV services;70 but ultimately left the
         market definition open.71
(58)     With reference to distribution technologies, in Liberty Global / Corelio / W&W / De
         Vijver Media the Commission recognised that at least retail AV services offered over
         cable and IPTV form part of the same relevant product market.72 In the recent case of
         Telia Company / Bonnier Broadcasting Holding,73 the Commission concluded that
         all the different distribution technologies are part of the same product market.
64   Form CO, para. 233.
65   Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to questio n 16.
66   M.4504 – SFR/Télé 2 France, para. 45.
67   M.8785 - The Walt Disney Company / Twenty-First Century Fox, para. 98; Commission decision of 8
     October 2018 in Case M.8842 – Tele2 / ComHem, para. 37; M.7000 – Liberty Global / Ziggo, para. 137;
     M.8665 – Discovery / Scripps, para. 33; M.8354 – Fox / Sky, para. 101; Commission decision of 3 August
     2016 in Case M.7978 – Vodafone / Liberty Global / Dutch JV, para. 56; M.7194 - Liberty Global / Corelio
     / W&W / De Vijver Media, para. 152.
68   M.7194 - Liberty Global / Corelio / W&W / De Vijver Media, para. 119.
69   M.7194 - Liberty Global / Corelio / W&W / De Vijver Media, para. 127; M.5121 - News Corp / Premiere,
     para. 22; Commission decision of 21 December 2010 in Case M.5932 - News Corp / BskyB, para. 105;
     M.7000 - Liberty Global / Ziggo, para. 113.
70   M.7194 - Liberty Global / Corelio / W&W / De Vijver Media, para. 124; M.5121 - News Corp / Premiere,
     para. 21; M.7000 - Liberty Global / Ziggo, paras. 109–110.
71   M.8785 - The Walt Disney Company / Twenty-First Century Fox, para. 93 and case law cited; M.9299 –
     Discovery / Polsat / JV, para. 82.
72   M.7194 – Liberty Global / Corelio / W&W / De Vijver Media, para. 126.
73   M.9064 - Telia Company / Bonnier Broadcasting Holding, para. 195.
                                                          12
 ---pagebreak--- (59)    With reference to linear and non-linear services, in the past the Commission noted
        that non-linear services have gradually been integrated to complement TV
        broadcasters' and retail AV service providers' offerings and enhance the consumer's
        experience of linear TV channels. Most recently, in NENT / Telenor, the
        Commission indicated that linear and non-linear AV services are increasingly
        regarded as substitutable.74
(60)    Furthermore, the question whether premium and basic pay TV services constitute
        separate product markets has ultimately been left open in recent cases.75
4.3.1.2. The Notifying Parties’ view
(61)    The Notifying Parties consider that the Transaction should be assessed on the basis
        of a single market for the retail supply of AV services, which encompasses all AV
        services (including linear and non-linear, FTA and pay TV, basic and premium),
        delivered through all distribution technologies, including OTT. 76
(62)    More specifically, as regards linear and non-linear services, the Notifying Parties
        submit that customers view these services as substitutable and that data demonstrates
        that viewing time is shifting from linear to non-linear services, especially in
        countries with the highest levels of penetration of OTT platforms. Furthermore,
        linear and non-linear services are being made available to consumers under a single
        subscription, and much of the content available on linear TV channels is also
        available on VOD services.77
(63)    As regards the distribution technology, the Notifying Parties submit that content
        distributed via different retail infrastructures is broadly substitutable from a
        consumer perspective. The Notifying Parties point out that distribution technologies
        are increasingly converging given the rapid development of internet that enables
        consumers to receive video signal of comparable quality to satellite or cable service
        via OTT platforms.78
(64)    Furthermore, with reference to premium and basic pay TV services, the Notifying
        Parties consider that there is no relevant difference between basic and premium
        content, regardless of the type of retail AV service of the commissioning/acquiring
        service provider.79
(65)    In any case, the Notifying Parties submit that, for the purpose of this case, it is not
        necessary for the Commission to reach a conclusion on the precise product market
        definition for the retail supply of AV services, as the Transaction will not raise any
        competition concerns under any plausible market segmentation. 80
74  Commission decision of 30 April 2020 in Case M.9604 – NENT / Telenor / JV, para. 184.
75  See e.g. M.9799 – Discovery / Polsat / JV, para. 82.
76  Form CO, paragraph 254.
77  Form CO, paragraphs 257 – 259.
78  Form CO, paragraph 255.
79  Form CO, paragraph 260.
80  Form CO, paragraph 261.
                                                         13
 ---pagebreak--- 4.3.1.3. The Commission’s assessment
(66)    The Commission focused its investigation in relation to this market on Denmark and
        Spain given that both the Danish and Spanish retail supply of AV services markets
        are relevant (see below Section 5.2). Respondents to the market investigation agree
        that there is a relevant product market for the retail supply of AV content. 81
(67)    With reference to the segmentation between FTA TV channels and pay TV
        channels, the majority of respondents to the market investigation consider that the
        retail supply of FTA TV channels and the retail supply of pay TV channels do not
        form separate product markets. Respondents pointed out that FTA channels, pay TV
        channels and internet platforms compete with each other in the eyes of consumers
        and one respondent specified that differences in revenue models between FTA
        channels, pay TV channels but also internet subscription platforms are blurring. One
        respondent submitted that the distinction between FTA and pay TV channels is
        relevant in the case of sports content. 82
(68)    The majority of respondents consider that the possible market for the retail supply of
        pay TV channels should not be separated between basic pay TV and premium pay
        TV channels. More specifically, all respondents in Denmark replied that basic and
        premium pay TV channels are seen as an alternative, although a number of
        respondents answered that they do not know.83 Replies by market participants in
        Spain are less clear-cut, as the majority replied that these channels are actually
        complements. However, most of the explanations provided suggest that basic and
        premium pay TV channels do not form separate product markets, and that the
        difference between the two has been blurring. One respondent argued that whether a
        difference exists depends on how retail suppliers package their channels, as premium
        channels need to be offered in addition to a basic pay TV channel subscription.84 All
        respondents submit that it would not be accurate to distinguish between the retail
        supply of (i) FTA channels and basic TV channels on the one hand and (ii) premium
        pay TV channels on the other.85
(69)    With reference to a distinction within pay TV channels between linear and non-
        linear pay TV channels, the majority of respondents to the market investigation
        consider that this segmentation is not accurate. More specifically, the majority of
        respondents in Denmark replied that linear and non-linear pay TV channels do not
        form separate product markets.86 In Spain, however, only a small majority of
        respondents believe that linear and non-linear TV channels compete with each other
        for consumers’ viewership. In this regard, one respondent pointed out that pay TV
        providers increasingly integrate non-linear elements alongside linear services, and
81  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 6; Q2 –
    Questionnaire to market participants in the AV sector (Denmark), replies to question 6.
82  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 12; Q2 –
    Questionnaire to market participants in the AV sector (Denmark), replies to question 31.
83  Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 18.
84  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to questions 13.
85  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 13.2; Q2 –
    Questionnaire to market participants in the AV sector (Denmark), replies to question 18.2.
86  Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 19.
                                                         14
 ---pagebreak---         that pay TV services commonly acquire linear and non-linear content rights together
        and incorporate them into the same subscription service. 87
(70)    All respondents to the market investigation consider that non-linear pay AV services
        offered by local OTT SVOD platforms and by international OTT SVOD
        platforms are alternatives and therefore do not form separate product markets. 88
        Overall, respondents pointed to the fact that there is intense competition between
        local and international VOD platforms, as they both contend for the same local
        audiences to which they tailor their content.
(71)    Similarly, all respondents to the market investigation submit that, with reference to
        advertising founded AV services, FTA linear channels and VOD non-linear
        services do not form separate product markets. In general, respondents submit that
        consumers do not differentiate on this basis and that the content on FTA channels
        and VOD platforms is equivalent.89
(72)    With reference to the different distribution technologies, the majority of
        respondents to the market investigation consider different distribution technologies
        for AV content as alternative to each other, although many respondents answered
        that they do not know.90 In this regard, the majority of respondents are generally
        aligned in considering that, from a demand-side perspective, consumers view
        different transmission technologies as substitutable. Furthermore, one respondent
        specified that, from a supply-side perspective, certain retailers use multiple
        distribution technologies to provide services to consumers.
(73)    In light of the above, the Commission considers that, for the purpose of this decision,
        there exists a relevant product market for the retail supply of AV services, separate
        from the production and supply of AV content and the wholesale supply of TV
        channels. However, the Commission considers that the question whether within this
        product market a further distinction can be made (i) between FTA TV channels and
        pay TV channels; (ii) between basic and premium pay TV channels; (iii) between
        linear and non-linear TV channels (and further sub-segmentations thereof); or (iv)
        between different distribution technologies, can be left open, since the Transaction
        does not raise serious doubts as to its compatibility with the internal market or the
        functioning of the EEA Agreement under any such plausible product market
        definitions.
4.3.2. Relevant geographic market
4.3.2.1. The Commission’s previous practice
(74)    The Commission has in the past considered that the geographic scope of the market
        for the retail provision of AV services could be either (i) national, since providers of
87  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to questions 14.
88  Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 15; Q2 –
    Questionnaire to market participants in the AV sector (Denmark), replies to question 20.
89 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 16; Q2 –
    Questionnaire to market participants in the AV sector (Denmark), replies to question 21.
90 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 17; Q2 –
    Questionnaire to market participants in the AV sector (Denmark), replies to qu estion 22.
                                                         15
 ---pagebreak---           retail AV services compete on a nation-wide basis; or (ii) limited to the coverage
          area of each respective cable operator.91
4.3.2.2. The Notifying Parties’ view
(75)      The Notifying Parties consider that the geographic scope of the market for the retail
          provision of AV services is national. According to the Notifying Parties, the
          Commission's previous findings regarding the geographic market for retail AV
          services on the basis of the "coverage area of each cable operator" have been based
          on the premise that the distributor was acting via its regional infrastructure, e.g., a
          cable network. For content delivered directly to consumers over the open internet,
          these restrictions of coverage area are not applicable. In this regard, the Notifying
          Parties note that there is an increasing number of SVOD players such as Disney+,
          Netflix and Amazon Prime Video, which are providing their retail services on a
          national basis.92
(76)      In any case, the Notifying Parties consider that, for the purpose of this case, it is not
          necessary for the Commission to reach a conclusion as to the precise geographic
          scope of the market for the provision of retail AV services, as the Transaction would
          not result in a significant impediment of effective competition under any possible
          geographic market definition.93
4.3.2.3. The Commission’s assessment
(77)      Almost all respondents to the market investigation consider that the relevant
          geographic market for the retail supply of AV services is national in scope.94 One
          respondent submitted that, although some OTT broadcasters are present on a
          worldwide basis, content licensed for a specific country can’t be broadcasted outside
          of such country.
(78)      In light of the above, for the purpose of this decision, the Commission concludes that
          in Spain and Denmark the relevant geographic market for the retail supply of AV
          services, including all its possible sub-segments, is national in scope.
4.4.      Sale of advertising space
4.4.1. Relevant product market
4.4.1.1. The Commission’s previous practice
(79)      The Commission has in previous cases established a distinction between (i) online
          and (ii) offline advertising, on the basis of specificity (i.e. the ability to reach a more
          targeted audience) and pricing model. 95 Within offline advertising, the Commission
91   M.8785 - The Walt Disney Company / Twenty-First Century Fox, para. 100; M.9799 – Discovery / Polsat
     / JV, para. 86.
92   Form CO, paragraphs 263 – 265.
93   Form CO, paragraph 266.
94   Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 19; Q2 –
     Questionnaire to market participants in the AV sector (Denmark), replies to question 32.
95   Commission decision of 9 September 2014 in Case M.7288 – Viacom / Channel 5Broadcasting, para. 35.
                                                          16
 ---pagebreak---         has distinguished separate markets for (i) the sale of advertising on TV channels and
        (ii) for the sale of advertising in newspapers.96
(80)    However, in the market investigation in Viacom / Channel 5 respondents pointed out
        that the line between online advertising and TV advertising is becoming increasingly
        blurred.97 The Commission has never assessed whether advertising placed on OTT
        and VOD services belongs to the market for online or offline advertising.
4.4.1.2. The Notifying Parties’ view
(81)    The Notifying Parties consider that there is only one market for all TV advertising.
        In this regard, the Parties submit that online advertising exercises an increasing
        competitive constrain on advertising through OTT VOD platforms and linear TV
        channels.98
(82)    Further, the Notifying Parties consider that advertising on OTT VOD platforms
        forms part of the same market as advertising via linear TV channels, and that there is
        no need to distinguish between advertising on FTA and pay TV channels. 99
(83)    In any case, the Notifying Parties submit that, for the purpose of this case, the exact
        product market definition for the sale of advertising space can be left open as the
        Transaction would not result in a significant impediment to effective competition
        under any possible product market definition.100
4.4.1.3. The Commission’s assessment
(84)    The Commission focused its investigation in relation to this market on Denmark
        given that only the Danish advertising market is relevant (see below Section 5.2).
        The majority of respondents to the market investigation submit that online and
        offline advertising do not form separate relevant product markets. 101 In this regard,
        some respondents consider that the advertising market is converging and such
        distinction is no longer relevant as it no longer reflects the mechanisms of the
        market. Another respondent submits that offline and online advertising are very
        similar from a customer perspective. Along the same lines, a respondent specified
        that the rise of non-linear VOD viewing is making the boundaries between online
        and offline advertising more blurred and that constraint from online advertising is
        increasing across all forms of advertising media. However, on the other hand, one
        respondent considers that TV and digital advertising have different pricing
        mechanisms and different levels of reach.102
(85)    As regards the possible market for online advertising, a limited number of
        respondents consider that advertising placed on OTT VOD platforms would
96  Commission decision of 7 July 2005 in Case M.3817 – Wegener / PCM / JV, para. 27; Commission
    decision of 1 February 1999 in Case M.1401 – Recoletos / Unedisa, paras. 26-28; M.5932 - News Corp /
    BSkyB, paras. 265 and 266; M.8665 - Discovery / Scripps, para. 40.
97  M.7288 – Viacom / Channel 5Broadcasting, paras. 38 and 40.
98  Form CO, paragraph 283.
99  Form CO, paragraph 284.
100 Form CO, paragraph 287.
101 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 24.
102 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 24.1.
                                                        17
 ---pagebreak---         belong to the market for online advertising, assuming that such a market exists as a
        distinct product market, although many respondents answered that they do not
        know.103
(86)    With reference to a separation of advertising according to the media channel, all
        respondents consider that it is not appropriate to distinguish the market for the
        supply of advertising spaces according to the media channel used (e.g., newspapers,
        radio, TV, Internet). Respondents consider that historic segmentations on the market
        are no longer accurate as today consumers allocate their attention across different
        digital media platforms on the basis of the type of content made available to them. 104
(87)    With reference to both offline TV advertising and online advertising, all respondents
        consider that advertising space sold directly by the publisher (e.g., the OTT
        platform or the TV channel) and advertising space sold through an intermediary
        do not form separate product markets, although many respondents answered that
        they do not know.105
(88)    Finally, the results of the market investigation are inconclusive as to whether, within
        online advertising, search and non-search advertising form separate relevant
        product markets,106 although all respondents consider that, should non-search
        advertising form a separate relevant product market, it would not be appropriate to
        further distinguish between non-search video advertising and other types of non-
        search advertising.107
(89)    The Commission considers that, for the purpose of this decision, the question
        whether within the relevant product market for the sale of advertising space should
        be a further distinction should be made between: (i) online and offline advertising;
        (ii) the different media channels; (iii) advertising sold directly by the publisher or
        through an intermediary; and (iv) online search and non-search advertising, can be
        left open, since the Transaction does not raise serious doubts as to its compatibility
        with the internal market or the functioning of the EEA Agreement under any such
        plausible product market definitions.
4.4.2. Relevant geographic market
4.4.2.1. The Commission’s previous practice
(90)    In previous decisions, the Commission has considered that the market for the supply
        of TV advertising, including the possible separate markets outlined above, is
        national in scope.108
4.4.2.2. The Notifying Parties’ view
(91)    The Notifying Parties agree with previous Commission’s decisions and consider that
        the market for the supply of TV advertising is national in scope. 109 In any case, the
103 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 25.
104 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 24.
105 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to questions 26 and 27.
106 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 28.
107 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 29.
108 Among other cases, M.7288 – Viacom / Channel 5Broadcasting, para. 45.
                                                        18
 ---pagebreak---          Notifying Parties consider that, for the purpose of this case, it is not necessary for the
         Commission to reach a conclusion as to the precise geographic scope of the market
         for the sale of advertising space, as the Transaction would not result in a significant
         impediment of effective competition under any possible geographic market
         definitions.
4.4.2.3. The Commission’s assessment
(92)     The majority of respondents to the market investigation submit that they buy/sell TV
         advertising space on a national basis. In general, respondents submit that they
         operate advertising specifically targeted at the audience of the relevant country. 110
(93)     In light of the above, for the purpose of this decision, the Commission considers that
         the relevant geographic market for the sale of advertising space, including all its
         possible sub-segments, is national in scope.
5.       COMPETITIVE ASSESSMENT
5.1.     Analytical framework
(94)     Article 2 of the Merger Regulation requires the Commission to examine whether
         notified concentrations are compatible with the internal market, by assessing whether
         they would significantly impede effective competition in the internal market or in a
         substantial part of it, in particular through the creation or strengthening of a
         dominant position.111
(95)     In this respect, a merger may entail horizontal and/or non-horizontal (i.e., vertical or
         conglomerate) effects. Horizontal effects are those deriving from a concentration
         where the undertakings concerned are actual or potential competitors of each other in
         one or more of the relevant markets concerned. Non-horizontal effects are those
         deriving from a concentration where the undertakings concerned are active in
         different relevant markets. In a case where a merger entails horizontal or non-
         horizontal effects, the Commission will appraise these effects in accordance with the
         guidance set out in the relevant notices. 112
(96)     Horizontal mergers involve companies which are actual or potential competitors of
         each other in one or more of the relevant markets concerned. 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
109 Form CO, paragraphs 289 – 290.
110 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 33.
111 With regard to the application of the Merger Regulation in the EEA, see Annex XIV to the EEA
     Agreement.
112 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;
     Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of
     concentrations between undertakings ("Horizontal Merger Guidelines"), OJ C 31, 5.2.2004.
                                                        19
 ---pagebreak---         competitors, the limited possibilities for customers to switch suppliers, or the fact
        that the merger would eliminate an important competitive force. 113
(97)    Vertical mergers involve companies operating at different levels of the supply chain.
        There are two main ways in which vertical mergers may significantly impede
        effective competition: input foreclosure and customer foreclosure.
(98)    Input foreclosure may raise competition problems only if it concerns an important
        input for the downstream market, and if the combined entity has a significant degree
        of market power upstream.114 In assessing the likelihood of an anticompetitive input
        foreclosure strategy, the Commission examines: (i) whether the combined entity
        would have the ability to substantially 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 downstream.115
(99)    For a transaction to raise customer foreclosure competition concerns, the combined
        entity must be an important customer with a significant degree of market power in
        the downstream market.116 In assessing the likelihood of an anticompetitive customer
        foreclosure strategy, the Commission examines: (i) whether the combined entity
        would have the ability to foreclose access to downstream markets by reducing its
        purchases from upstream rivals; (ii) whether it would have the incentive to do so;
        and (iii) whether a foreclosure strategy would have a significant detrimental effect
        on consumers in the downstream market. 117
(100) In relation to potential cooperative effects, under Article 2(5) of the Merger
        Regulation, the Commission takes 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.
5.2.    Identification of affected markets
(101) Comcast/Sky and ViacomCBS are active: (i) in the production and supply of
        commissioned AV content and in the licensing of pre-produced AV content; (ii) in
        the wholesale supply of TV channels; and (iii) in the retail supply of AV services to
        end customers. Moreover, Comcast/Sky and ViacomCBS are also active in the sale
        of TV advertising space.118
(102) The JV will be active: (i) in the market for the wholesale supply of TV channels,
        where it will wholesale supply Comcast/Sky and ViacomCBS’ TV channels to
        MVPD platforms; and (ii) in the market for the retail supply of AV services, where it
113 Horizontal Merger Guidelines, paragraphs 27 and following.
114 Non-Horizontal Merger Guidelines, paragraphs 34-35.
115 Non-Horizontal Merger Guidelines, paragraph 32.
116 Non-Horizontal Merger Guidelines, paragraph 58.
117 Non-Horizontal Merger Guidelines, paragraph 59.
118 Form CO, Table 3.
                                                        20
 ---pagebreak---           will develop and operate a SVOD streaming service comprising AV services
          distributed both directly to consumers and via third-party MVPD platforms.
(103) The Transaction gives rise to the following vertically affected markets.
          a) First, the production and supply of pre-produced US film content in Spain119 ,
               where Comcast/Sky and ViacomCBS are active, which is upstream from the
               retail supply of AV services to end-customers in Spain, where the JV is active.
          b) Second, the wholesale supply of pay TV channels in the kids segment in
               Denmark, where ViacomCBS is active, which is upstream from the retail supply
               of AV services to end-customers in Denmark, where the JV is active.
5.3.      Horizontal relationships
(104) The Transaction involves no significant horizontal overlaps between the Parties and
          the JV. At the retail level (i.e., the main focus of the JV), there is no horizontal
          overlap as Sky has no or minimal activities in the JV EEA Territories, ViacomCBS
          has only minor activities in the Nordics through Paramount+, and the JV will have a
          modest share of the retail market. At the wholesale level, the JV will be supplying
          both Parents' TV channels to third parties in the JV Territories. While the Parties'
          activities do overlap in the supply of TV channels, their combined shares are modest,
          and in any event below 20%. Therefore, there are no horizontally affected markets.
5.4.      Vertical relationships
(105) The Transaction gives rise to two vertically affected relationships, in which the
          affected markets are:
          c) Sky and ViacomCBS’ supply of pre-produced US film content in Spain
               (upstream) (Sky: [20-30]%, ViacomCBS: [5-10]%)120 for the JV’s retail supply
               of AV services in Spain (downstream) (JV: […]% in 2024121 , Sky: [0-5]%,
               ViacomCBS: [0-5]%122 ); and
          d) ViacomCBS’s wholesale supply of pay TV channels in the kids segment in
               Denmark (upstream) (ViacomCBS: [60-70]%)123 for the JV’s retail supply of AV
119 The Commission considers that, for the purpose of this decision, the production and supply of US film
     content constitutes the narrowest possible segment in which the activities of the Notifying Parties overlap
     giving rise to affected markets. First, in relation to the distinction between premium and non -premium US
     film content, the Notifying Parties explained that whether specific content is “premium” or not, can’t be
     predicted when it is produced. It essentially depends on the success with which a piece will have sold, and
     its commercial value will change over time. [Reference to the Parties’ commercial strategy] Second, in
     relation to the distinction between US film content based on the exhibition windows, the Notifying Parties
     explained that the film content that they license is the same regardless of which specific exhibition
     window it is licensed in (Form CO, paragraph 201).
120  Form CO, Annex B.1.2.2., Table 14.5 (Spain, 2020 revenue shares for pre-produced US film content).
121  Notifying Parties’ response to the Commission’s RFI No 5 of 29 October 2021. The JV will be a new
     entrant, but is expected to hold […]% in Spain and […]% across all JV territories in the total SVOD
     segment (the JV will be a SVOD only service) in 2024. The Notifying Parties have estimated the projected
     total market and JV SVOD subscribers for Spain using data regarding the population for Spain.
122  Form CO, Annex B.1.2.5, Table 14.1 (Spain, 2020 revenue shares for total pay TV segment).
123  Form CO, Annex B.1.2.3., Table 4.7 (Denmark, 2020 revenue shares for pay TV kids channels).
                                                              21
 ---pagebreak---               services to end-customers in Denmark (downstream) (JV: […]% in 2024124 , Sky:
              [0-5]%, ViacomCBS: [0-5]%125 ).
(106) The Notifying Parties’ combined market shares in the upstream market for the
         supply of pre-produced US film content in Spain are above 30% ([30-40]%).
         Likewise, the Notifying Parties’ combined market shares in the upstream market for
         the supply of pay TV channels in the kids segment in Denmark are above 30% ([60-
         70]%).
(107) Therefore, the Commission has assessed the risk of (i) foreclosure of competing
         suppliers of retail AV services (downstream) from accessing Comcast/Sky and
         ViacomCBS’ supply of pre-produced US film content in Spain (input foreclosure);
         and (ii) foreclosure of competing suppliers of retail AV services (downstream) from
         accessing ViacomCBS’s wholesale pay TV channels in the kids segment in
         Denmark (input foreclosure).
5.4.1. Possible foreclosure of competing suppliers of retail AV services in Spain
         (downstream) from accessing Comcast/Sky and ViacomCBS’ pre-produced US film
         content in Spain (upstream)
5.4.1.1. The Notifying Parties’ views
(108) The Notifying Parties submit that, post-Transaction, the JV will not have the ability
         or incentive to foreclose competing retail suppliers of AV services from accessing
         Comcast/Sky and ViacomCBS’ pre-produced US film content in Spain.
         (A)        Ability to engage in input foreclosure
(109) The Notifying Parties submit that the JV will not have the ability to engage in a
         successful input foreclosure strategy because Comcast/Sky and ViacomCBS do not
         have a significant degree of market power in the market for the supply of pre-
         produced US film content in Spain.
(110) First, the Notifying Parties note that Comcast/Sky and ViacomCBS’ combined
         market share is only slightly above 30% in 2020, and that there are significant
         alternative suppliers of US film content in Spain, including studios of a similar size
         such as Warner Bros, Walt Disney Studios/Twentieth Century Fox and Sony.
         Moreover, the Notifying Parties point out that their combined market share in 2019
         and the first half of 2021 is substantially lower ([10-20]% and [10-20]%
         respectively).126 According to the Notifying Parties, this is due to the endemic
         volatility of revenue shares from year to year in the market at hand, which is
         inconsistent with a position of market power.127 Therefore, retailers of AV content
124 Notifying Parties’ response to the Commission’s RFI No 5 of 29 October 2021. See also footnote 38
    above. In Denmark, the JV is expected to hold […]% in the total SVOD segment in 2024. The Notifying
    Parties have estimated the projected total market and JV SVOD subscribers for Denmark using data
    regarding the number of broadband households for Denmark.
125 Form CO, Annex B.1.2.5, Table 4.1 (Denmark, 2020 revenue shares for total pay TV segment).
126 Form CO, paragraph 360.
127 Form CO, paragraph 360 and footnote 275. The Notifying Parties submit that this volatility is due to
    different studios having successful film releases at different points in time.
                                                            22
 ---pagebreak---        would continue to have a wide variety of alternative choice for US film content in
       Spain.
(111) Second, the Notifying Parties submit that US film content would be an overly
       narrow segment to consider for estimating whether the Parties enjoy a significant
       degree of market power. US film content constitutes only one of the many content
       types that attract viewers, such that it plays a limited role in shaping end consumers’
       choice. In this regard, the Notifying Parties consider that they could not exploit their
       market position on US film content, because it is not an important input for retailers
       of AV services in Spain and it is not determinant of end-consumers’ choice of
       retailer.128
(112) Therefore, the Notifying Parties consider that the JV would not have the ability to
       foreclose Comcast/Sky and ViacomCBS’ pre-produced US film content in Spain.
       (B)        Incentive to engage in input foreclosure
(113) As regards the incentive to engage in input foreclosure, the Notifying Parties note
       that, as part of the Transaction, Comcast/Sky and ViacomCBS [details of licensing
       arrangements].129
(114) Therefore, according to the Notifying Parties, there is no need to assess whether
       Comcast/Sky and ViacomCBS would have the incentive to foreclose their pre-
       produced US film content by rendering it unavailable to the JV’s competitors.130
       (C)        Impact on effective competition
(115) The Notifying Parties further submit that a foreclosure of their pre-produced US film
       content in Spain would not cause any anticompetitive effects vis-à-vis retail suppliers
       of AV content.
(116) First, the Notifying Parties submit that attractiveness of film content for retail
       suppliers of AV services can be measured by box office success, which solely
       depends on the particular films released in cinemas in the relevant year and not on
       the identity of the producing studio. The Notifying Parties note that there is nothing
       unique about their US film content, or about Hollywood studios’ content more
       generally, as any given year non-Hollywood studios produce films which are as
       popular or more popular than the content produced by Comcast/Sky or
       ViacomCBS.131
(117) Second, the Parties will face strong competition in the downstream market for the
       retail supply of AV content from vertically integrated players such as Disney+,
       Amazon Prime Video and Netflix, who produce their own content and have
       committed significant resources to this end. Therefore, these players do not depend
       on the supply of pre-produced US film content by Comcast/Sky and ViacomCBS.
       Moreover, even downstream players that acquire US film content from the Notifying
128 Form CO, paragraph 360.
129 Form CO, paragraph 365.
130 Form CO, paragraph 366.
131 Form CO, paragraph 367.
                                                   23
 ---pagebreak---         Parties do not depend on their input, as Comcast/Sky and ViacomCBS’ US film
        content [scale of the Parties' sales to their customers].132
(118) Third, the Notifying Parties point out that exclusive licensing of US film content is
        common practice by producing studios. [Details of licensing arrangements].
(119) Fourth, the Notifying Parties note that the increasing trend of multi-homing by
        consumers means that they would not cancel their subscription with a particular
        provider and divert their subscription to the JV’s offering simply because a certain
        proportion of US films are no longer available on the previous provider’s platform.
        On the contrary, consumers may continue their current subscription in addition to the
        subscription to the JV’s offering.133
(120) Therefore, the Notifying Parties consider that, even if they were to engage in input
        foreclosure with regard to Comcast/Sky and ViacomCBS’ US film content, such
        practices would not have any impact on competition in the downstream market for
        the retail supply of AV services.
5.4.1.2. Commission’s assessment
(121) For the reasons set out below, the Commission considers that the Transaction does
        not lead to credible input foreclosure concerns in the downstream market for the
        retail supply of AV services in Spain, regardless of the precise product and
        geographic market definitions retained (see Sections 4.1 and 4.3 above).
        (A)        Ability to engage in input foreclosure
(122) The Commission considers that, although Sky and ViacomCBS would be able to
        license their pre-produced US film content to the JV on an exclusive basis, post-
        Transaction the Notifying Parties will not have the ability to engage in a successful
        input foreclosure strategy in Spain, because they will not have a significant degree of
        market power upstream and their US film content does not represent a sufficiently
        important input.
(123) First, the Commission notes that Comcast/Sky and ViacomCBS’ 2020 combined
        market shares in the possible relevant market for the production and supply of pre-
        produced US film content in Spain are just above 30% ([30-40]%), with a modest
        increment of [5-10]%. Moreover, a number of alternative production studios offer
        pre-produced US film content in competition with the Notifying Parties, including
        major Hollywood studios. In this regard, the majority of respondents to the market
        investigation indicate that the level of competition in the market for the production
        and licensing of AV content in Spain is very high or high. 134 Therefore, the
        Commission considers that, post-Transaction, competing retail suppliers of AV
        services in Spain would continue to have access to a variety of alternative choices
        for pre-produced US film content.
(124) Second, the Commission considers that pre-produced US film content offered by the
        Notifying Parties is not particularly strategic for retail suppliers of AV services as
132 Form CO, paragraph 367.
133 Form CO, paragraph 367
134 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 22.
                                                        24
 ---pagebreak---          compared to the US film content offered by other studios. Although the majority of
         respondents to the market investigation consider that US film content in general is
         relevant for the attractiveness of an AV offering to consumers 135 , the market
         investigation also indicates that the US films library licensed by Comcast/Sky and
         ViacomCBS is not particularly important for the competitiveness of retail AV
         services.136
(125) In this regard, a small majority of respondents submit that, should the Notifying
         Parties stop licensing their US film content, they would be able to license other US
         film content from alternative suppliers, but such alternative content would not
         entirely replicate the present arrangements. 137 However, the Commission notes that,
         as explained by the Notifying Parties138 , a number of retail suppliers of AV services
         are independent from Comcast/Sky and ViacomCBS’ offering of US films.
         Moreover, retailers that purchase this content from the Notifying Parties are not
         reliant on them to an extent greater than their market share in the possible market for
         the production and supply of US film content139 (as indicated in paragraphs (105)-
         (106)), and would therefore be able to complement their retail offering with US films
         produced by other studios. Furthermore, the Commission notes that the success of
         even major studios varies and that market shares fluctuate as they depend on the
         consumers’ reception of the particular films released in the reference year.140
(126) Third, the Commission considers that the supply of pre-produced US film content
         amounts to a very narrow market representing only one of the different types of
         content that retail suppliers of AV services offer in order to attract viewers to their
         platforms. In this regard, a number of respondents to the market investigation
         explained that US films usually contribute to build a successful portfolio of content,
         but retail providers of AV services seek to secure a variety of different types of AV
         content in order to maximize the attractiveness of their platform vis-à-vis consumers
         and reach a wider audience.141
(127) [Confidential information from the Parties' internal documents].142
(128) Last, the Commission notes that exclusive licensing of US film content is common
         across suppliers of AV content in Spain, as indicated by all respondents to the
         market investigation.143 A number of attractive platforms including Netflix, Amazon
         Prime Video, HBO and Disney+ compete for consumers’ attention in the
135 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 28.
136 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 27.
137 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 29.
138 Form CO, paragraph 367.
139 Form CO, paragraph 367.
140 Form CO, paragraph 360 and footnote 275. The Notifying Parties explained that there is significant
    volatility in production studios’ revenue shares, as these studios release successful films at different points
    in time. For example, Warner Bros’ share in the US films sub-segment jumped from approximately [20-
    30]% in 2020 to approximately [40-50]% in the first half of 2021 due to successful releases such as
    Godzilla vs Kong, The Conjuring: The Devil Made Me Do it, Wonder Woman 1984 and Mortal Kombat.
141 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 28.1.
142 Notifying Parties’ internal documents, [confidential reference to internal document].
143 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 21.
                                                           25
 ---pagebreak---         downstream market for the retail supply of AV services.144 Such platforms also rely
        on exclusive content to boost their competitiveness 145 , and no respondents to the
        market investigation indicated that this practice has led to the exit of competitors
        from the downstream market so far. Therefore, [Parties’ business strategy], the
        Notifying Parties are unlikely to have the ability to successfully foreclose competing
        retail suppliers of AV services.
(129) Therefore, for the reasons set out above, the Commission considers that the Parties
        would not have the ability to engage in a successful input foreclosure strategy with
        regard to Comcast/Sky and ViacomCBS’ pre-produced US film content in Spain.
        (B)       Incentive to engage in input foreclosure
(130) The Commission notes that the conditions for a successful input foreclosure strategy
        to occur are cumulative. Since the Commission concluded that the Parties would not
        have the ability to engage in a successful input foreclosure, the Commission
        considers that the Parties’ incentive to foreclose competing suppliers of retail AV
        services from accessing Comcast/Sky and ViacomCBS’ pre-produced US film
        content in Spain is not decisive. Therefore, the Commission does not have to take a
        position on the Parties’ incentive to engage in input foreclosure.
(131) For the sake of completeness, the Commission notes that the JV will acquire
        broadcasting rights for pre-produced AV content from each of Comcast/Sky and
        ViacomCBS, [details of licensing arrangements].146 [details of licensing
        arrangements].147
        (C)       Impact on effective competition
(132) The Commission considers that the Parties will not have the ability to engage in a
        successful input foreclosure strategy. In any event, a hypothetical input foreclosure
        strategy from the Parties, even if it could impact some retail suppliers of AV
        services, would not have an overall detrimental impact on effective competition in
        the market for the retail supply of AV services in Spain. Therefore, even if the
        Parties were to foreclose some competing retail suppliers of AV content from
        accessing Comcast/Sky and ViacomCBS’ pre-produced US film content, this would
        not have a detrimental impact on effective competition in the downstream market for
        the retail supply of AV services in Spain.
(133) First, the Commission considers that there are sufficient alternatives for the supply
        of US film content in Spain. In particular, as indicated in paragraph (123) above, a
        number of other US production studios offer US film content comparable to that of
        the Notifying Parties, including major Hollywood studios such as Warner Bros, Walt
        Disney Studios/Twentieth Century Fox and Sony.
144 Form CO, paragraph 367; see also Q1 – Questionnaire to market participants in the AV sector (Spain),
    one competitor’s reply to question 32.
145 Form CO, paragraph 367: for example, Netflix has recently entered into a five-year streaming deal with
    Sony whereby it will acquire exclusive rights to Sony’s films once they leave theatres and premium VOD
    services.
146 Form CO, paragraph 176.
147 Form CO, paragraphs 358 and 367.
                                                        26
 ---pagebreak--- (134) Second, the Commission notes that a number of competing retail providers of AV
       services such as Netflix, Amazon Prime Video, Disney+ and HBO do not depend on
       US film content supplied by the Notifying Parties, as they are vertically integrated
       players that produce their own US films. 148
(135) Third, in any case, while acknowledging that US films in general are important for
       the purpose of building an attractive AV offering vis-à-vis consumers, the
       Commission considers that US films do not constitute per se a sufficiently important
       input for the competitiveness of platforms offering AV services at retail level. In this
       regard, as noted by the Notifying Parties149 , non-Hollywood studios regularly
       produce film content that is very successful at the box office and that drives success
       throughout the entire AV chain, as also specifically pointed out by one respondent to
       the market investigation.150
(136) Therefore, the Commission notes that the Notifying Parties’ [details of licensing
       arrangements] licenses of their US film content to the JV is unlikely to have a
       significant effect on the ability of rival platforms (both vertically integrated and non-
       vertically integrated) to compete.
(137) This conclusion is supported by the results of the market investigation. A majority of
       respondents submit that the Transaction would have a neutral impact on their
       company.151 Only one respondent expressed concerns about the general trend of
       major producers of AV content creating their own OTT platforms and rendering
       access to their AV content, including US films, more difficult and expensive. 152
(138) As regards the impact on the overall market for the retail supply of AV services in
       Spain, the results of the market investigation are inconclusive. Most respondents
       stated that they do not know what the overall impact will be. A few respondents
       consider the impact to be neutral. An equal number of respondents consider that the
       Transaction will have a negative impact on the overall market for the retail supply of
       AV content.153
(139) However, it was specified that, although a different alternative would not completely
       replicate the current arrangements, there would be alternative suppliers of US film
       content in Spain.154 In any case, as an additional element, some respondents to the
       market investigation pointed out that they source content across different genres and
       categories to stay attractive155 and that therefore the success of an AV platform
       would not depend solely on US films.
(140) For the reasons set out above, the Commission considers that, even if the Parties had
       the ability to engage in a successful input foreclosure strategy by ceasing to supply
       their US film content to third-party retail suppliers of AV content, such strategy
148 Form CO, paragraph 367.
149 Form CO, paragraph 367.
150 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 8.2.
151 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 38.
152 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 38.
153 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 39.
154 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 35.1.
155 Q1 – Questionnaire to market participants in the AV sector (Spain), replies to question 27.
                                                        27
 ---pagebreak---         would not have a detrimental impact on competition in the market for the retail
        supply of AV services.
        (D)       Conclusion
(141) The potential market for the supply of pre-produced US films is the narrowest
        possible product market with the largest overlap between the Notifying Parties.
        Under any other potential market definition, their combined market shares would be
        considerably lower.
(142) In light of the above, the Commission concludes that the Transaction does not raise
        serious doubts as to the compatibility with the internal market with respect to
        possible input foreclosure practices of retail AV services in Spain (downstream)
        from accessing Comcast/Sky and ViacomCBS’ AV content in Spain (upstream)
        under any of the alternative product markets for the supply of AV content in Spain.
5.4.2. Possible foreclosure of competing suppliers of retail AV services in Denmark
        (downstream) from accessing ViacomCBS’ wholesale pay TV channels in the kids’
        segment in Denmark (upstream) (input foreclosure)
(143) Upstream, Comcast/Sky and ViacomCBS will both supply their current pay TV
        channels to the JV for wholesale supply in each of the JV EEA Territories.
        Downstream, the JV will become responsible for distributing these channels, and
        will also be active in the retail supply of AV services.
(144) [Parties' strategic decisions with regard to the JV]. Comcast/Sky does not have any
        kids’ channels in Denmark.
5.4.2.1. The Notifying Parties’ views
(145) The Notifying Parties submit that post-Transaction, the Parties will not have the
        ability or incentive to foreclose some or all of ViacomCBS’ pay TV kids’ channels
        in Denmark. Accordingly, the Notifying Parties also consider there would not be any
        plausible negative effect on competition in the downstream retail supply of AV
        services in Denmark.156
        (A)       Ability to engage in input foreclosure
(146) The Notifying Parties submit that, post-Transaction, the Parties will not have the
        ability to engage in a successful input foreclosure strategy.
(147) First, the Notifying Parties submit that ViacomCBS’ market share results from an
        unduly narrow market segmentation, which consists only of kids’ pay TV channels
        in Denmark and is not a real indicator of market power.
(148) Second, the Notifying Parties consider that kids’ pay TV channels are not an
        important input for a retail AV offering in Denmark. Kids’ pay TV channels would
        only account for 1% of the overall pay TV audience and would be considered one of
        the least important genres from the perspective of end-customers.
156 Form CO, paragraph 317.
                                                    28
 ---pagebreak--- (149) Third, pay TV retailers possess credible alternatives, including Disney (e.g., Disney
      Channel, Disney Junior and Disney XD), WarnerMedia (e.g., Cartoon Network and
      Boomerang) as well as FTA channels incorporating similar content.
(150) Therefore, the Notifying Parties argue that the Parties would not have the ability to
      foreclose competing retail suppliers of AV services from accessing ViacomCBS’
      wholesale kids’ pay TV channels in Denmark.
      (B)        Incentive to engage in input foreclosure
(151) As regards incentives, the Notifying Parties submit that, post-Transaction, there is no
      prospect that an input foreclosure strategy would be successful.
(152) First, even if pay TV retailers were no longer able to carry ViacomCBS’ kids’ pay
      TV channels, this is unlikely to result in significant amounts of end-customers
      switching away from these retailers because: (i) kids’ pay TV channels do not play a
      significant role in shaping the end-customers’ choice at the retail level; (ii) retailers
      have credible alternative options (e.g., Disney and Warner Media); and (iii) retailers
      can improve other aspects of their offerings (e.g., content/channels carried, home
      broadband and telephone services).
(153) Second, other retailers (not the JV) would most likely capture any switching away
      from foreclosed pay TV retailers. JV’s SVOD services will not be the closest
      competitors to those linear pay TV retailers that ViacomCBS currently supplies with
      kids’ channels.
(154) Third, there are a number of alternative significant suppliers in the SVOD segment
      in Denmark including Viasat's Viaplay, Netflix, WarnerMedia's HBO Max, TV2's
      TV2 Play, Discovery+, and Disney+.
(155) Fourth, the incentive for ViacomCBS to engage in foreclosure will be significantly
      dampened by its only partial stake in the JV (i.e., 50%). [ViacomCBS' sales strategy
      and financial information].
(156) Finally, this vertical relationship already exists before the Transaction as
      ViacomCBS’ has an existing retail business in Denmark, Paramount+, [Parties'
      strategic decisions with regard to the JV].
(157) Therefore, the Notifying Parties conclude that they will not have the incentive to
      foreclose competing retail suppliers of AV services from accessing ViacomCBS’
      wholesale kids’ pay TV channels in Denmark.
      (C)        Impact on effective competition
(158) The Notifying Parties submit that, even if they had the ability and incentive to
      engage in a successful input foreclosure strategy with regard to ViacomCBS’ pay
      TV kids’ channels in Denmark, this would not have anticompetitive effects vis-à-vis
      retail suppliers of AV content.
(159) In this regard, as set out above, the Notifying Parties consider that downstream
      retailers would have recourse to other upstream providers of kids’ pay TV content if
      they wished to include this in their service. Further, the inclusion of kids-specific TV
      channels would not be essential to the success of a downstream retail AV service.
                                                  29
 ---pagebreak--- (160) Therefore, the Notifying Parties note that a potential input foreclosure strategy
         would not have any plausible negative effect on competition in the market for the
         retail supply of AV services in Denmark.
5.4.2.2. Commission’s assessment
(161) For the reasons set out below, the Commission considers that the Transaction does
         not lead to credible input foreclosure concerns in the downstream markets for retail
         AV services with regard to the wholesale supply of TV channels, regardless of the
         precise product and geographic market definitions retained (see Sections 4.2 and 4.3
         above).
         (A)        Ability to engage in input foreclosure
(162) While ViacomCBS would have the technical ability to implement an exclusivity
         strategy with regards to kids’ pay TV channels vis-à-vis rival retail AV suppliers, the
         Commission considers that the JV will not have the ability to engage in a successful
         input foreclosure strategy.
(163) First, all respondents to the market investigation considered that competition in the
         upstream wholesale market for the supply of kids’ channels in Denmark, is indeed
         high or very high.157 ViacomCBS’s kids’ channels in Denmark face strong
         competition from at least two significant and credible competitors, i.e., Disney and
         WarnerMedia. Disney’s kids’ channels (i.e., Disney Channel, Disney Junior and
         Disney XD) account for a combined audience share of [50-60]% and Warner
         Media’s kids’ channels, (i.e., Cartoon Network and Boomerang) account for a
         combined audience share of [10-20]%.158 Together, Disney and WarnerMedia also
         account for a combined revenue share of [40-50]%.159 The market investigation also
         showed further credible alternatives to ViacomCBS’ kids’ channels in Denmark
         exists, including FTA TV channels, such as by the Danish public service
         broadcaster, Ramasjang.160 Ramasjang, in a hypothetical kids TV channel segment
         (comprising not only pay TV but also FTA channels), would have an audience share
         of approx. [70-80]%.161 Even if the relevant market would be defined as kids’ pay
         TV channels, Ramasjang as FTA channel would therefore constitute an important
         out-of-market constraint.
(164) Second, a majority of respondents to the market investigation explained that
         ViacomCBS’ kids’ channels (and kids’ channels more generally) are unlikely to be a
         sufficiently important input for pay TV retailers for there to exist an ability to
         successfully foreclose.162 One respondent clarified that kids’ pay TV channels are
         not particularly important for the competitiveness of retail services in Denmark,
         since retailers seek to build diverse bundles of attractive channels, regardless of their
         specific “genre”.163 In terms of audience share, kids’ pay TV channels only account
157 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 35.
158 Form CO, Table 5 and Annex D.7.
159 Form CO, Table 4.
160 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 45.1.
161 Form CO, Annex D.7.
162 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 44.
163 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to questions 35.1, 44 and
    50.1.
                                                        30
 ---pagebreak---        for approximately 1% of pay TV audience. Furthermore, viewership of kids’ pay TV
       channels in Denmark has been declining significantly in recent years. Between 2015
       and 2020, there has been a 74% decline in viewership of kids’ pay TV channels in
       Denmark.164 Ampere data also shows that kids’ channels are of limited importance to
       Danish end-customers, with only 1% of Danish consumers identifying “children and
       family” as their favourite genre, with this genre ranking last place amongst the 18
       genres listed.165
(165) Third, in the scenario that a separate market for the supply of kids’ pay TV channels
       would indeed exist, this market forms a very small part of overall pay TV channels.
       This is reflected in the difference in the Notifying Parties’ market shares: while the
       Notifying Parties’ combined market for kids’ pay TV channels amounts to [60-70]%
       by revenue, and [30-40]% by audience in 2020 in Denmark, the Notifying Parties’
       combined market share by revenue for the wholesale supply of all pay TV channels
       in Denmark amounts to just [0-5]%, with a combined audience share of [0-5]%.166
(166) Therefore, for the reasons set out above, the Commission concludes that the JV
       would not have the ability to foreclose rival retail AV suppliers by engaging in a
       total or partial input foreclosure strategy.
       (B)        Incentive to engage in input foreclosure
(167) The Parties’ incentive to foreclose rival retail AV suppliers depends on the balance
       between: (i) the losses from ceasing to supply (or increasing the carriage fees of)
       ViacomCBS’ kids’ channels in Denmark; and (ii) the higher profits obtained by the
       JV downstream from any switching by end-customers to the JV’s SVOD service. In
       light of this trade-off, the Commission concludes that the Parties would not have the
       incentive to engage in an input foreclosure strategy by refusing to supply
       ViacomCBS’ kids’ channels on other channels or degrading the terms under which
       these channels are made available.
(168) The Commission notes that an input foreclosure strategy would only be
       economically viable if ViacomCBS’ kids’ channels were able to attract a sufficiently
       high number of new end-customers to the JV’s SVOD service, and if ViacomCBS
       could profit enough from their viewership. However, such an outcome is unlikely.
(169) First, it should be taken into account that the vertical link between activities in the
       supply of kids’ pay TV channels in Denmark and SVOD services in Denmark exist
       already before the Transaction as ViacomCBS currently operates the SVOD
       platform Paramount+.167 Consequently, only one respondent to the market
       investigation believes it is credible that ViacomCBS’ incentives to license rights to
       its kids’ pay TV channels in Denmark would change as a result of the Transaction. 168
       This respondent does not substantiate its concerns. 169
164 Form CO, Annex D.7.
165 Form CO, Annex C.15.1, Ampere analysis.
166 Form CO, Tables 4-5 and Annex D.7.
167 Form CO, Annex D.7.
168 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 46.
169 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 46.1.
                                                        31
 ---pagebreak--- (170) In contrast, another respondent notes that it has no reason to expect that the
         Transaction would negatively affect ViacomCBS’ incentive to license rights to its
         kids’ pay TV channels to broadcasters and streaming services in Denmark due to the
         pre-existing vertical relationship. According to this respondent, the introduction of
         Paramount+ on the Danish market did not affect its incentive to licence its kids’ pay
         TV channels. On the contrary, in this respondent’s experience, ViacomCBS
         [customer strategy].170
(171) Finally, the Commission recalls that the JV is co-owned by Comcast/Sky (50%).
         This makes foreclosure less attractive for ViacomCBS compared to the situation
         before the Transaction, given that it would need to forego its own upstream profit to
         benefit the JV at the downstream retail level, but after the Transaction it will not
         recapture the entire potential benefit, but only 50% of it.171
(172) Therefore, for the reasons set out above, the Commission concludes that the Parties
         would not have the incentive to foreclose rival AV suppliers by engaging in a total
         or partial input foreclosure strategy.
         (C)        Impact on effective competition
(173) Even if the Parties were to engage in a (total or partial) input foreclosure strategy,
         the Commission considers that such a strategy would not have a material impact on
         competition in the EEA. Rival AV retailers would not be deprived of a sufficiently
         important input, and could still rely on a large array of valuable kids’ channels
         content to attract viewers. Furthermore, as one respondent to the market
         investigation pointed out, the attractiveness of a retail offering is not based on kids’
         channels alone (see paragraphs (163)-(164) above).
(174) This conclusion is consistent with the results of the market investigation. All
         respondents to the market investigation considered that, if ViacomCBS were to cease
         licensing its kids’ pay TV channels or degrade the terms on which it licenses these
         channels, this would not have a negative impact on their company.172 One
         respondent explained specifically that the kids’ content provided by Paramount+ is
         not of particular competitive importance to its SVOD service and it would have
         sufficient alternatives to Paramount+’ kids’ content. 173 The majority of respondents
         also indicated, more generally, that the Transaction would have a neutral or positive
         impact on the retail supply market.174
(175) In light of the above, the Commission finds that a potential (partial or total) input
         foreclosure strategy would not have a material negative impact on effective
         competition in Denmark.
         (D)        Conclusion
(176) The potential market for the supply of kids’ pay TV channels in Denmark is the
         narrowest possible product market with the highest market shares of the Parties.
170 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 48.1.
171 [ViacomCBS' sales strategy and financial information].
172 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 49.
173 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 49.1
174 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to question 53.
                                                         32
 ---pagebreak---           Under any other potential market definition, their combined market shares would be
          considerably lower.
(177) In light of the above, the Commission concludes that the Transaction does not raise
          serious doubts as to the compatibility with the internal market with respect to
          possible input foreclosure practices concerning ViacomCBS’ kids’ channels in
          Denmark (upstream) under any of the alternative product markets for wholesale
          supply of TV channels.
5.5.      Cooperative effects
(178) Sky and ViacomCBS will remain independently active in the same product
          markets as the JV, i.e., the retail supply of AV services to end-customers, both
          within the JV EEA Territories and outside the JV EEA Territories (“Rest of the
          EEA”). ViacomCBS will remain active via the AVOD service Pluto TV.
          Comcast/Sky will remain active via the OTT service hayu, the AVOD service Xumo
          and very limited direct sales of the CNBC linear channel.
(179) Sky and ViacomCBS will also remain independently active in a number of markets
          closely related to the activities of the JV, notably: (a) within the JV EEA
          Territories: (i) the production and supply of AV content (upstream); (ii) the
          wholesale supply of TV channels (upstream); and (iii) the sale of advertising space
          (neighbouring)175 ; and (b) outside the JV EEA Territories (“Rest of EEA”) in the
          wholesale supply of TV channels (upstream).
5.5.1. The Notifying Parties’ views
(180) The Notifying Parties submit that the creation of the JV will not lead to any
          coordination between them and the JV, or amongst themselves, because market
          conditions are not conducive to tacit coordination, confidentiality obligations will be
          in place to limit the use by the Notifying Parties of confidential information obtained
          from the JV and the JV will form only a small part of the Notifying Parties’ overall
          businesses.176
5.5.2. The Commission’s assessment
(181) 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 (i) the production and supply of AV content; (ii) the wholesale supply of
          TV channels; (iii) the retail supply of AV services to end-customers; and (iv) the sale
          of advertising space, both within and outside the JV EEA Territories, for the reasons
          set out below.177
(182) First, the Commission observes that the relevant markets are not conducive to
          coordination between the Parties. The market shares of the Parties are low (see
          Tables 1-3 below), the Transaction does not eliminate a market player, and several
175 Form CO, paragraphs 449 and 456. While the JV will distribute the Parents' linear channels, [Parties'
     strategic decisions with regard to the JV].
176 Form CO, Section 10.
177 Note that the analysis applies in respect of all JV EEA Territories and the Rest of the EEA and does not
     vary by individual country.
                                                          33
 ---pagebreak---          competitors would remain post-Transaction, which would likely disrupt any attempts
         of the Notifying Parties to coordinate their activities on the relevant markets.
         Moreover, the JV will not become a vertically integrated player with its own active
         wholesale and retail services on the market.
(183) In relation to the market for the production and supply of AV content, ViacomCBS's
         market shares for the licensing of all AV content is [5-10]% or less in each of the JV
         EEA Territories. Similarly, Comcast/Sky's market shares for the licensing of all
         AV content is less than [5-10]% in each of the JV EEA Territories (see Table 1
         below).178 The JV will not be active in this market. Post-Transaction, the Notifying
         Parties will continue to face competitive constraints from a number of market
         participants, including large US movie studies (e.g., Disney/Fox, Warner, and Sony),
         smaller players (e.g., Lionsgate and MGM), certain suppliers or retail AV services
         (e.g., Netflix and Amazon Prime Video) and independent content producers. 179
Table 1: Production and supply of AV content (revenue, 2020)
                                 ViacomCBS market share for the      Comcast/Sky market share for the
Country                              licensing of all AV content          licensing of all AV content
Bulgaria                       [0-5]%                               [0-5]%
Croatia                        [0-5]%                               [0-5]%
Czech Republic                 [0-5]%                               [0-5]%
Denmark                        [0-5]%                               [0-5]%
Finland                        [0-5]%                               [0-5]%
Hungary                        [5-10]%                              [0-5]%
Netherlands                    [0-5]%                               [0-5]%
Norway                         [0-5]%                               [0-5]%
Poland                         [0-5]%                               [0-5]%
Portugal                       [0-5]%                               [0-5]%
Romania                        [0-5]%                               [0-5]%
Slovakia                       [0-5]%                               [5-10]%
Slovenia                       [0-5]%                               [0-5]%
Spain                          [0-5]%                               [0-5]%
Sweden                         [0-5]%                               [5-10]%
Source: […]
178 Form CO, paragraph 483. There are a few narrowly defined sub-segments (see paragraph (36)) in which
    ViacomCBS’ share exceeds [5-10]% in certain JV EEA Territories, however, these shares never exceed
    [10-20]%. Similarly, there are a narrowly defined few sub-segments in which Comcast/Sky’s share
    exceeds [5-10]% in certain JV EEA Territories, however, these shares never exceed [20-30]%. The
    highest combined market share in these sub-segments is reached in the production and supply of US film
    content in Spain ([30-40]%). See Form CO, paragraph 477 and Annex B.1.2.2.
179 Form CO, paragraph 495 and Figure 4.
                                                          34
 ---pagebreak--- (184) In relation to the market for the wholesale supply of TV channels, the JV will be
         active in the market for the wholesale supply of TV channels in the JV EEA
         Territories. The JV will distribute all of the Notifying Parties' channels in the JV
         EEA Territories, with the exception of [Parties' strategic decisions with regard to the
         JV],180 there is no overlap in the Parties’ activities in the wholesale supply of TV
         channels in the JV EEA Territories and therefore, no risk of cooperation between the
         Parties in respect of their retained activities in distinct JV EEA Territories.
(185) Outside the JV EEA Territories, in relation to the Rest of the EEA, the JV will not
         be active in the wholesale supply of TV channels. 181 The Notifying Parties’ market
         share in the Rest of the EEA where both Notifying Parties will remain active,
         remains limited.182 Overall, the Notifying Parties’ market share in the wholesale
         supply of TV channels, irrespective of the product market definition, are below [0-
         10]% for both Comcast/Sky and ViacomCBS.183
(186) In relation to the market for the retail supply of AV services to end customers, the
         JV will operate in the JV EEA Territories as an SVOD streaming service
         comprising AV content distributed both: (i) DTC on a variety of consumer devices
         as well as via app stores, and (ii) via third party MVPD platforms. Each of the
         Notifying Parties will retain certain very limited activities in the market for the
         provision of retail AV services. The Notifying Parties will continue to provide these
         limited retail AV services independently, and in competition with each other. While
         both ViacomCBS and Comcast/Sky will continue to be active in this market, based
         on their 2020 revenues, their market shares are minimal. ViacomCBS’ market share
         in the total pay TV segment is less than [0-5]% of subscription revenues in each of
         the JV EEA Territories in which it provides retail AV services. The same applies in
         relation to the OTT sub-segment specifically.184 Similarly, Comcast/Sky’s market
         share in the total pay TV segment is less than [0-5]% in each of the JV EEA
         Territories in which it provides retail AV services. The same applies in relation to
         the OTT sub-segment specifically (see also Table 2 below).185 The JV is expected to
         have […] market share across these Territories. [details of JV's projected market
         shares].186
180 Form CO, paragraphs 499-501.
181 Form CO, paragraphs 533-534.
182 ViacomCBS is active in the wholesale supply of TV channels in every country within the Rest of the
    EEA. Comcast/Sky is active in the wholesale supply of TV channels in almost every country within the
    Rest of the EEA, except in Latvia.
183 Form CO, paragraph 536 and Notifying Parties’ Response to RFI 6, question 2. Please note that there are
    limited exceptions, where the Notifying Parties’ market share remains below 30% (e.g., Ireland (pay TV,
    other genres, basic pay TV and premium pay TV) - Comcast/Sky); and each EEA country which is not a
    JV EEA Territory (Rest of EEA) (kids’ channels, ViacomCBS)).
184 Form CO, paragraph 508 (a) and Tables 15-16.
185 Form CO, paragraph 508 (b) and Tables 17-18. The same conclusions regarding ViacomCBS and
    Comcast/Sky’s market shares apply when considering the various sub -segments as set out in paragraph
    (78). See Form CO, Annex B.1.2.5.
186 Notifying Parties’ Response to RFI 6, question 1. This statement does not apply in relation to the
    Netherlands and Portugal, where the JV’s estimated projected 2024 and 2026 market shares would be
    slightly higher (i.e., [details of the JV's projected market shares ]). See also Form CO, footnote 79,
    Notifying Parties Response to RFI 2 (question 1), RFI 3 (question 10), and RFI 5. [Methodology to
    estimate the JV's projected market shares].
                                                         35
 ---pagebreak--- Table 2: Retail supply of AV services to end-customers (total pay TV and OTT segment) (revenue, 2020)
                                                                         Comcast/Sky      Comcast/Sky
                       ViacomCBS market         ViacomCBS market        market shares        market
                           shares for the          shares for the      for the provision  shares for the
     Country          provision of retail AV     provision of retail      of retail AV     provision of
                      services (total pay TV     AV services (OTT        services (total    retail AV
                              segment)                segment)        pay TV segment)    services (OTT
                                                                                            segment)
Bulgaria              [ViacomCBS          not  [ViacomCBS         not [0-5]%             [Comcast/Sky
                      active]                  active]                                   not active]
Croatia               [ViacomCBS          not  [ViacomCBS         not [0-5]%             [Comcast/Sky
                      active]                  active]                                   not active]
Czech Republic        [ViacomCBS          not  [ViacomCBS         not [0-5]%             [Comcast/Sky
                      active]                  active]                                   not active]
Denmark               [0-5]%                   [0-5]%                 [0-5]%             [0-5]%
Finland               [0-5]%                   [0-5]%                 [0-5]%             [0-5]%
Hungary               [0-5]%                   [0-5]%                 [0-5]%             [Comcast/Sky
                                                                                         not active]
Netherlands           [ViacomCBS          not  [ViacomCBS         not [0-5]%             [0-5]%
                      active]                  active]
Norway                [0-5]%                   [0-5]%                 [0-5]%             [0-5]%
Poland                [0-5]%                   [0-5]%                 [0-5]%             [Comcast/Sky
                                                                                         not active]
Portugal              [ViacomCBS          not  [ViacomCBS         not [0-5]%             [Comcast/Sky
                      active]                  active]                                   not active]
Romania               [ViacomCBS          not  [ViacomCBS         not [0-5]%             [Comcast/Sky
                      active]                  active]                                   not active]
Slovakia              [ViacomCBS          not  [ViacomCBS         not [0-5]%             [Comcast/Sky
                      active]                  active]                                   not active]
Slovenia              [ViacomCBS          not  [ViacomCBS         not [0-5]%             [Comcast/Sky
                      active]                  active]                                   not active]
Spain                 [ViacomCBS          not  [ViacomCBS         not [0-5]%             [0-5]%
                      active]                  active]
Sweden                [0-5]%                   [0-5]%                 [0-5]%             [0-5]%
Source: […].
                                                        36
 ---pagebreak--- (187) Outside the JV EEA Territories, in relation to the Rest of the EEA,187 the JV will
        not be active in the retail supply of AV services. Comcast/Sky’s market share
        remains below 30%.188 ViacomCBS’ market share remains between 0 and 5%, as it
        is accounted for only by the provision of its AVOD Pluto TV service which in 2020
        was available only in Austria and Germany.189 In any event, post-Transaction, the
        Notifying Parties will continue to face competitive constraints from a number of
        market participants, including global competitors (e.g., Netflix) and various recent
        entrants (e.g., Disney+, Amazon Prime Video, Apple TV, Facebook, etc.).
(188) In relation to the market for the sale of advertising space, ViacomCBS’ market share
        is less than [5-10]% in each of the JV EEA Territories in which it sells advertising
        airtime on its TV channels (Table 3 below). ViacomCBS's market share for the
        supply of online advertising is less than [0-5]% in each of the JV EEA Territories in
        which it sells online advertising space. 190 Comcast/Sky's market share for the supply
        of TV advertising is less than [0-5]% in each of the JV EEA Territories in which it
        sells advertising airtime on its TV channels. Comcast/Sky's market share for the
        supply of online advertising is less than [0-5]% in each of the JV EEA Territories in
        which it sells online advertising space (see also Table 3 below).191 ,192 The JV will
        not be active in this market. Post-Transaction, the Notifying Parties will continue to
        face competitive constraints from a number of market participants, including large
        global players (e.g., Google and Facebook)193 and multiple other local competitors
        (e.g., TV2, NENT, SBS in Norway and Denmark, and SBS, NPO and RTL in the
        Netherlands).
Table 3: Sale of TV advertising space (revenue, 2020)
                                ViacomCBS market shares for the           Comcast/Sky market shares for the
Country                             sale of TV advertising space              sale of TV advertising space
Bulgaria                       [0-5]%                                    [0-5]%
Croatia                        […]                                       […]
Czech Republic                 [0-5]%                                    […]
Denmark                        [0-5]%                                    […]
187 ViacomCBS and Comcast/Sky will, in relation to the retail supply of AV services in the Rest of the EEA,
    only both be active in Austria and Germany. Therefore, this paragraph relates to Austria and Germany
    only. Furthermore, these market shares apply irrespective of the exact product market definition.
188 Notifying Parties’ Response to RFI 6, question 3. In relation to an FTA-services only segment,
    Comcast/Sky’s market share remains below [0-5]% (both in Germany and Austria). Further, Comcast/Sky
    notes that the [20-30]% figure is estimated conservatively, as it corresponds to the retail supply of pay TV
    services and not of all AV services (both FTA or pay-TV).
189 Form CO, paragraph 538 and Notifying Parties’ Response to RFI 6, question 3.
190 Form CO, paragraph 461 and Table 11.
191 Form CO, paragraph 461 and Table 12.
192 The same conclusion applies when considering the various sub-segments as set out in paragraph (89). See
    Form CO, Annex B.1.2.7.
193 Form CO, paragraph 477. For instance, according to Salesforce Resea rch, Google Search, YouTube,
    Facebook and Instagram were responsible for 66% of global digital advertising in 2018. See Source:
    Salesforce                                                                                          research,
    https://www.salesforce.com/content/dam/web/en us/www/assets/pdf/datasheets/digital -advertising-
    2020.pdf.
                                                          37
 ---pagebreak---                                ViacomCBS market shares for the         Comcast/Sky market shares for the
Country                            sale of TV advertising space             sale of TV advertising space
Finland                       [0-5]%                                   […]
Hungary                       [5-10]%                                  […]
Netherlands                   [5-10]%                                  [0-5]%
Norway                        [0-5]%                                   [0-5]%
Poland                        [0-5]%                                   [0-5]%
Portugal                      [0-5]%                                   [0-5]%
Romania                       [0-5]%                                   [0-5]%
Slovakia                      […]                                      […]
Slovenia                      […]                                      […]
Spain                         [0-5]%                                   [0-5]%
Sweden                        [0-5]%                                   [0-5]%
Source: […].
(189) Second, the small size of the JV relative to ViacomCBS’ and Sky/Comcast’s
         activities makes it unlikely that the Notifying Parties would have any incentive to
         coordinate their competitive behaviour. [Comparison between the Parties' and the
         JV's revenues] (see also Table 4 below).194 Based on the Commission’s decisional
         practice195 , this suggests that the conduct of the Notifying Parties on the markets is
         unlikely to be influenced by their cooperation in the JV.
Table 4: Ratio of expected turnover over Notifying Parties' estimated turnover (2022 -2024)
                            JV     turnover     (EUR    % of ViacomCBS total         % of Comcast/Sky total
                            million)196                 estimated turnover 197       estimated turnover 198
2022                        [Turnover]                  [Proportion]                 [Proportion]
2023                        [Turnover]                  [Proportion]                 [Proportion]
2024                        [Turnover]                  [Proportion]                 [Proportion]
(190) Third, the Commission notes that antitrust compliance protocols will be in place.
         These include, inter alia, information barriers governing the relationship between the
         JV and its parents to prevent any illegitimate coordination between them in respect
         of activities outside the JV.199
194 Form CO, paragraphs 468, 489, 546 (in relation to the Rest of the EEA).
195 M.9604 – NENT / Telenor / JV, para. 642 and Commission decision of 6 March 2020 in case M.9674 -
    Vodafone Italia / TIM / INWIT JV, para. 434.
196 Form CO, Table 13 [reference to the transaction documents].
197 Based on median broker consensus estimates dated September 2021.
198 Based on Comcast/Sky's best estimates of its consolidated worldwide revenues in each of 2022, 2023 and
    2024.
199 Form CO, paragraphs 470-471, 491, 515, 549 (in relation to the Rest of the EEA), footnote 314 and
    Annex 19. [Reference to the transaction documents].
                                                         38
 ---pagebreak--- (191) Fourth, the markets for the wholesale supply of TV channels, and the retail supply of
         AV services to end customers, are national (see paragraphs (56) and (78) above).
         AV content and TV channels are primarily licensed on a national basis. Therefore,
         the respective agreements often contain different terms. The JV Territories in which
         the JV is active are therefore different markets than the territories where the
         activities of the Notifying Parties overlap. Therefore, the JV is unlikely to increase
         each Notifying Party’s visibility of the other Notifying Party’s activities in the Rest
         of the EEA.
(192) Fifth, certain features of the relevant markets listed above (paragraphs (178) and
         (179)) make it difficult to reach or sustain a tacit, or overt, coordinated outcome. The
         creation of the JV does not change any of these features of the markets and cannot
         therefore increase the likelihood of a coordinated outcome on these markets. These
         markets are complex and constantly evolving. E.g., in the retail supply of AV
         services, retailers adjust permanently to evolving demand patterns. 200 Further, these
         markets lack transparency as, e.g., negotiations are bilateral, and highly
         confidential.201 Last, these are highly competitive markets. Any potential
         coordination strategy could be immediately undermined by competing firms.
(193) Finally, none of the respondents to the market investigation considered that the
         Transaction could give rise to cooperative effects. 202
5.5.3. Conclusion
(194) In light of the above, the Commission concludes that the Transaction does not give
         rise to serious doubts as to its compatibility with the internal market in relation to
         cooperative effects in the EEA in the markets for: (i) the production and supply of
         AV content; (ii) the wholesale supply of TV channels; (iii) the retail supply of AV
         services to end-customers; and (iv) the sale of advertising space.
6.       CONCLUSION
(195) 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
200 For the Notifying Parties’ description of such evolving demand patterns, see Form CO, paragraph 552 (in
    relation to wholesale and retail supply of TV channels/AV services).
201 Form CO, paragraphs 474 (between ad sales houses and their main customers) and 553 (be tween
    wholesale suppliers and their customers).
202 Q2 – Questionnaire to market participants in the AV sector (Denmark), replies to questions 51.1-51.5.
                                                         39