CELEX: 32020M9744
Language: en
Date: 2020-08-17 00:00:00
Title: Commission Decision of 17/08/2020 declaring a concentration to be compatible with the common market (Case No COMP/M.9744 - MASTERCARD / NETS) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                         Brussels, 17.08.2020
                                                                         C(2020) 5744 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                                                                          information omitted has been replaced by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.
                                                                         Mastercard Incorporated
                                                                         2000 Purchase Street,
                                                                         Purchase, NY 10577
                                                                         United States of America
   Subject:              Case M.9744 – MASTERCARD / NETS
                         Commission decision pursuant to Article 6(1)(b) in conjunction with
                         Article 6(2) of Council Regulation No 139/20041 and Article 57 of the
                         Agreement on the European Economic Area2
   Dear Sir or Madam,
1.      On 26 June 2020, the European Commission received notification of a proposed concentration
        pursuant to Article 4 of the Merger Regulation and following a referral pursuant to Article 22 of
        Merger Regulation by which MasterCard Incorporated (“Mastercard” or the “Notifying Party”,
        United States) acquires sole control of Nets’ A/S (“Nets”, Denmark) account-to-account
        payment business (the “Target”) (the “Transaction”).3 Mastercard and the Target are together
        referred to as the “Parties”.
2.      The Transaction was referred to the Commission by the Danish competition authority pursuant
        to Article 22 of the Merger Regulation (the “Referral Request”). The Referral Request was
        subsequently joined by the national competition authorities of Austria, Finland, Norway,
   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     Publication in the Official Journal of the European Union No C 219, 3.7.2020, p. 15.
   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---       Sweden, and the UK. The Commission acquired jurisdiction to examine the Transaction on 2
      April 2020.
   1.      THE PARTIES AND THE OPERATION
3.    Mastercard is a US-based technology company operating in the global payments industry.
      Mastercard’s main activities include ownership and operation of payment card schemes and
      provision of switching services for card transactions. Mastercard is also active in alternative
      payment solutions through its subsidiary VocaLink Holding Limited (“Vocalink”). In particular,
      Vocalink provides account-to-account (“A2A”) core infrastructure services (“CIS”) for
      interbank payment schemes (also known as “A2A CIS”). A2A payment schemes allow for
      payments directly from one bank account to another, with no need for a card.
4.    The Target is currently a business unit within Nets, a payment solution provider headquartered
      in Denmark. The Target operates as a global payments business providing payment services and
      technology solutions, mainly in the Nordic region, as well as in the Single Euro Payments Area
      (“SEPA”). The Target’s activities focus on the provision of (i) A2A CIS, (ii) A2A payment and
      ancillary services and (iii) open banking services.
5.    On 6 August 2019, Mastercard and Nets entered into a sale and purchase agreement pursuant to
      which Mastercard agreed to purchase all the shares of three newly incorporated wholly owned
      indirect subsidiaries of Nets, which hold the assets comprising the Target’s business. Therefore,
      the Transaction consists in the acquisition of sole control by Mastercard of the Target and gives
      rise to a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.
   2.      UNION DIMENSION
6.    The Transaction does not meet the turnover thresholds set out in Articles 1(2) or 1(3) of the
      Merger Regulation. As a result, the Transaction does not have a Union dimension within the
      meaning of Article 1 of the Merger Regulation.
7.    The Transaction was referred to the Commission by the Danish national competition authority
      on the basis of Article 22 of the Merger Regulation on 27 February 2020. The Referral Request
      was subsequently joined by the national competition authorities of Austria, Finland, Norway,
      Sweden and the UK (together with Denmark the “Referring States”) within the legal deadline of
      Article 22(2) of the Merger Regulation.
8.    On 2 April 2020, the Commission adopted six decisions pursuant to Article 22(3) of the Merger
      Regulation accepting the requests of the Referring States.4 On this basis, the Commission
      acquired jurisdiction to examine the Transaction with regard to the Referring States.
   3.      COMPETITIVE ASSESSMENT
9.    The Parties’ activities overlap horizontally mainly with respect to the provision of (i) A2A CIS
      and (ii) A2A payment services.5
   4   C(2020) 2172 final, addressed to Austria; C(2020) 2177 final, addressed to Denmark; C(2020) 2173 final addressed
       to Finland; C(2020) 2174 final, addressed to Norway; C(2020) 2170 final, addressed to Sweden; and C(2020) 2178
       final, addressed to the UK.
                                                                2
 ---pagebreak---     3.1.      A2A CIS
    3.1.1. Overview of the market and the Parties’ activities
10.      A2A CIS consist in providing interbank payment scheme operators6 with the core infrastructure
         and related services required for the processing of payments directly from the payer’s bank
         account to the payee’s bank account, without requiring the use of a card (“A2A payments”).
11.      More specifically, suppliers of A2A CIS provide the core infrastructure/technology required to
         authorise, clear7 and initiate the settlement (i.e. the completion of the transaction through the
         transfer of funds) of A2A payments. The Parties are active in the clearing process but do not
         conduct the settlement process, which is carried out by distinct providers (which are typically
         central banks). In other words, A2A CIS entail all the clearing processes that precede the
         transfer of funds, such as verifying that there are funds or credit available on individual
         accounts, authorising the transactions, bookkeeping, forecasting and liquidity management.8
12.      Depending on the requirements of the interbank payment scheme operator, suppliers of A2A
         CIS may provide (i) batch payment processing (i.e. processing together payment orders at
         discrete intervals of time), (ii) instant (or real-time) payment processing (i.e. processing of
         payments on a transaction-by-transaction basis in real time) or (iii) both. Historically, A2A core
         infrastructures only processed batch payments. However, with the emergence of instant
         payments in the last decade, the market is progressively migrating from batch payments to
         instant payments.
13.      A2A CIS can be provided either as:
         -    a software solution including only the provision of a licence for the software allowing the
              processing of A2A payments (“software-only solution”); or
         -    a managed solution consisting in the provision of A2A core infrastructure (including the
              software, together with the hardware and the telecommunication networks and processes), as
              well as its management and operation in accordance with the rules set out by the scheme
              operator (“managed services”).
14.      The markets for the provision of A2A CIS are essentially bidding markets. Suppliers of A2A
         CIS (as software-only solutions or managed services) compete in tenders for contracts with
         interbank payment scheme operators. A2A CIS contracts are long-term contracts, the duration of
         which can exceed 10 years, which may be periodically tacitly renewed to ensure continuity of
         the infrastructure without switching A2A CIS provider.
15.      Mastercard and the Target both provide software-only solutions and managed services. Their
         respective offering also includes both batch and instant payment processing. The Parties
         participate in A2A CIS tenders across the EEA (and beyond).9 As detailed in Table 1 below, in
         the EEA, the Parties currently provide A2A CIS in several countries. In particular, Mastercard is
    5     The Parties’ activities also overlap in open banking (i.e. system allowing banks and other financial institutions to
          share the financial data of their customers with third-party financial service providers through an application
          programming interface). In relation to open banking, no affected markets arise under any plausible market definition.
    6     Payment scheme operators are typically consortia of banks or banks’ associations. Payment scheme operators act as
          the custodians of a payment scheme’s rules and technical standards, determine access criteria and accept new
          members, procure A2A CIS and take responsibility for regulatory compliance.
    7     Clearing refers to the process of transmitting, reconciling and, in some cases, confirming payment orders prior to the
          completion of the transaction and the transfer of funds (i.e. settlement), including potentially the netting of orders and
          the establishment of final positions for settlement.
    8     A2A core infrastructures may also be referred as A2A clearing platforms.
    9     For instance, at global level, Mastercard also provides A2A CIS in Peru, the Philippines, Saudi Arabia, Singapore,
          Thailand and the US. […]
                                                                        3
 ---pagebreak---  ---pagebreak---        processing (i) co-exist in most cases (e.g. it is common for A2A CIS tenders to cover both batch
       and instant payments); (ii) are characterised by the same competitive landscape and (iii) rely to a
       very large extent on the same core technology and standards. In this respect, the Parties indicate
       that the vast majority of requirements in A2A CIS tenders are identical, notwithstanding whether
       the tenders relate to instant or batch payment processing.15
            (C)          The Commission’s assessment
            (C.i)        Potential segmentation based on the scope of the services provided
20.    The results of the market investigation indicates that software-only solutions and managed
       services are likely to constitute distinct product markets for the following reasons.
21.    First, most competitors and a significant share of customers consider that A2A CIS providers do
       not typically have the capabilities to provide both software solutions and managed services. In
       particular, market participants stressed the fact that the “business model for [managed] services
       and [software] products is quite different” and that providing managed services “implies much
       wider responsibilities and different type of expertise than just delivering a [software]
       product”.16 The Commission notes that this contradicts the argument made by the Parties,
       according to which managed services are simply mechanisms by which the software solution
       may be delivered.
22.    Moreover, several market participants disputed the Parties’ claim that, apart from the software,
       the components required to provide managed services are commodity products readily available
       on the market, indicating that some of these components are “proprietary or complex
       components” (such as core gateways),17 which are difficult to find on the market.18 In addition, a
       competitor stressed that “select[ing], specify[ing] and arrang[ing] these components to work
       effectively with the [software]” is “essential” to be able to provide managed services and require
       specific “knowledge”.19
23.    Second, competitors generally consider that the provision of managed services and software-
       only solutions are characterized by different competitive dynamics and landscape.20 A large
       number of respondents to the market investigation explained that, although some A2A CIS
       providers (such as the Parties) offer both types of solutions, most players provide either only
       managed services or only software solutions. A competitor expressly indicated that “in most
       cases, providers are specialized to offer only one type of solution”. Similarly, a customer stated
       that A2A CIS provider “normally offer one or another kind of solutions, but not both”.21 For
       example, STET indicated that it “only offers the managed service but do not sell the products i.e.
       not the software”.22 This is also reflected in the Parties’ internal documents, which qualify two
       competitors, namely […] and […], as “software vendor”.23 The Parties do not contest the above
    15  See Form CO, paras. 234 and ff. (see also paras. 22, 99 and 101).
    16  See replies to Questionnaires Q1 to competitors (question 11) and Q2 to customers (question 10).
    17  Core gateway are software components providing payment services providers (“PSPs”) (e.g. banks), with a secure
        access to the A2A core infrastructure.
    18  See replies to Questionnaire R1 (question 9.1). Conversely, several market participants confirmed that some the
        components required to provide managed services (such as datacentres and networks) are commodity products
        readily available on the market.
    19  See replies to Questionnaire R1 (question 9.1).
    20  See replies to Questionnaire Q1 to competitors (question 12).
    21  See replies to Questionnaires Q1 to competitors (questions 11 and 12) and Q2 to customers (question 10). See also
        non-confidential versions of the minutes of conference calls with competitors (i) dated 23 April 2020 (3pm), paras.
        16 and 18; (ii) dated 23 April 2020 (5:15pm), paras. 9-10; and (iii) dated 24 April 2020, para. 11.
    22  See Annex 1.6 to the Form CO.
    23  See Annex 5.4-7 to the Form CO, slide 20. In fact, Mastercard expressly acknowledged that “neither […] nor […]
        currently offer managed services in their own” in the EEA, but rather “offer commercial off the shelf (COTS)
                                                                    5
 ---pagebreak---        and expressly acknowledged that a large number of A2A CIS providers do not offer both
       managed and software solutions which, in their view, “may be due to competitors’ capabilities”
       or to “a deliberate strategic choice based on each competitor’s preferred business model”.24
            (C.ii)       Potential segmentation based on the type of payment processing
24.    The results of the market investigation suggest that distinguishing instant and batch payment
       processing would not be warranted.
25.    First, the Commission found that instant payments are progressively replacing batch payments,
       but that the migration of the entire market may take a long time depending on the specificities of
       each country; for this reason, batch payments are expected to continue to exist for many years.25
       As a result, both types of payment processing are currently coexisting in the EEA, where it is not
       uncommon to have A2A CIS tenders requiring solutions covering both batch and instant
       payments. The Parties provided several recent examples of such tenders (including e.g. in the
       Nordics (P27), the UK, Austria, Bulgaria and Slovenia).26 This is also corroborated by the
       feedback received from the market. For example, a competitor stated that “requirements in A2A
       CIS tenders tend to encompass both batch and real-time solutions”.27
26.    Second, a majority of competitors consider that the processing of batch and instant payment
       relies, to a large extent, on the same core technology. For example, a rival of the Parties
       indicated that “the approach to processing A2A instant payments and A2A batch payments
       follow very similar patterns”. Although some market participants took the opposite view, they
       did not deny the existence of similarities between batch and instant payments, but gave a more
       nuanced picture stating that the “underlying technology could be different” or that “while the
       underlying processes can be very similar and the software deployed can also be very similar,
       there are significant differences on how the underlying systems behave”.28
27.    Third, most competitors and customers consider that A2A CIS providers typically have the
       capabilities to process both types of payment. A respondent explained that “traditionally A2A
       CIS players provided batch payment solutions but […] have developed instant payment
       solutions to respond to demand”, which has evolved over time. Several respondent also stressed
       that A2A CIS providers, which do not have yet the capabilities to process instant payments,
       “will complete sooner or later the necessary steps to develop and implement A2A instant
       payment solutions”.29
28.    Finally, competitors generally took the view that the batch and instant payment processing
       should not be considered as separate markets as they present similar competitive dynamics and
       landscape.30
            (D)          Conclusion
29.    Based on the results of the market investigation and for the purpose of this decision, the
       Commission concludes that the provision of A2A core infrastructure managed services and
        software packages to be operated by a local partner or customer organization” (see the Parties’ reply to RFI 1,
        question 74(d)).
    24  See Form CO, para. 332(g) and the Parties’ reply to RFI 2, question 5.
    25  See non-confidential versions of the minutes of conference calls with competitors (i) dated 23 April 2020 (3pm),
        para. 17 and (ii) dated 23 April 2020 (5:15pm), para. 8.
    26  See Annex 6.3 to the Form CO.
    27  See non-confidential version of the minutes of a conference call with a competitor dated 21 April 2020, para. 14. See
        also replies to Questionnaire Q1 to competitors (question 15).
    28  See replies to Questionnaire Q1 to competitors (question 13).
    29  See replies to Questionnaires Q1 to competitors (questions 14 and 16) and Q2 to customers (question 11).
    30  See replies to Questionnaire Q1 to competitors (question 16).
                                                                   6
 ---pagebreak---         software-only solutions constitute distinct product markets. A further differentiation based on
        the type of payment processing is not warranted.
    3.1.2.2. Geographic market definition
             (A)         Commission’s precedents
30.     As previously indicated, the Commission has not assessed in detail the relevant market
        definition for A2A CIS in the past. However, in 2016, in case M.8149  Mastercard/VocaLink,
        the Commission concluded (in line with the view expressed by Mastercard in that case) that the
        provision of A2A CIS presents the characteristics of national markets. This conclusion was
        based on the fact that the Commission has consistently considered that the markets for payments
        processing services are national in scope (due to the existence of various national characteristics)
        and that the core infrastructures in this case were designed according to the specific
        characteristics of the payment schemes in the UK.31
             (B)         The Parties’ views
31.     In the present case, Mastercard and the Target submit that the market is global in scope for
        several reasons.32 First, they claim that the provision of A2A CIS is highly standardised
        worldwide, with the increasing adoption of the ISO 20022 messaging standard at global
        level33 and that there is no material difference between the requirements set by the tendering
        authorities around the world. Second, the Parties consider that the emergence of supra-national
        tenders (such as the P27 Layer 1 tender in the Nordics) demonstrates that demand from
        tendering authorities is wider than national. Third, the Parties argue that A2A CIS providers
        compete across the globe (with non-EEA players bidding in the EEA and EEA players bidding
        outside of the EEA) and that participating in A2A CIS tenders does not involve significant costs
        and risks, or any other significant technical or legal barriers for foreign bidders.
32.     In any event, the Parties conclude that the geographic scope of the market can be left open in
        the present case since the Transaction does not raise competition concerns under any
        plausible geographic market definition.
             (C)         The Commission’s assessment
33.     The market investigation was not fully conclusive with respect to the geographic scope of the
        A2A CIS markets: while the Commission found that these markets are unlikely to be worldwide,
        their exact geographic scope in the EEA is unclear.
             (C.i)       A2A CIS markets are unlikely to be global in scope
34.     As explained below, the market investigation strongly suggests that, contrary to the Parties’
        claim, the A2A CIS markets are unlikely to be global in scope.
35.     First, the market investigation contradicted the Parties’ claim that the market is highly
        standardized across the globe. Although market participants acknowledged “a trend towards the
        ISO20022 standard which provides for a common minimum standard”, they generally stressed
        the fact that this standard “has not been implemented in many countries yet (especially outside of
        Europe)” and that global standardization is “still to be achieved” and “will take many years.”34
    31   See case M.8149  Mastercard/VocaLink, paras. 18-20 and the decisional practice cited.
    32   See Form CO, paras. 247 and ff.
    33   ISO 20022 is an ISO standard for electronic data interchange between financial institutions (see www.iso20022.org).
    34   See replies to Questionnaires Q1 to competitors (question 17) and Q2 to customers (question 12). See non-
         confidential version of the minutes of a conference call with a competitor dated 23 April 2020 (3pm), para. 13.
                                                                     7
 ---pagebreak--- 36.    For example, a competitor indicated that “there are still material differences depending on the
       geography, because jurisdictions have different approaches towards A2A, both in terms of the
       underlying technology, or standards used”.35 Another player noted that “outside Europe, market
       conditions are not uniform, (e.g. the ISO 20022 messaging standard is not uniformly adopted
       across the globe) and vary from country-to-country with different standards and regulations”.36
       Similarly, customers indicated that “at global level there are differences in terms of
       standardization due to different regulations and customer behaviours” and that “the ISO20022
       is not yet globally used everywhere”.37
37.    It follows that both customers and competitors consider that the level of standardization at
       global level is still rather low.38
38.    Second, the Commission found that market conditions are not homogeneous across the globe. A
       large majority of respondents (including both customers and competitors) consider that, as a
       result of the above lack of standardization, the competitive dynamics and landscape differ
       depending on the geographies.39 For instance, a market participant explained that “the
       competitive landscape is generally different in Europe and in Asia because in each specific
       market, a supplier needs to have proven experience and references, taking into consideration the
       market features and the specific regulations”.40
39.    In this respect, the Commission notes that, while the elements in the Commission’s file confirm
       that A2A CIS providers compete, to some extent, across the globe, they also suggest that
       participating in tenders involves significant costs and technical or legal barriers for non-EEA
       bidders and may take up several years. For example, according to a competitor, “albeit non-
       European players […] may participate in EEA/UK tenders and could potentially enter the
       EEA/UK market for A2A CIS, they currently exert limited competitive constraints in the
       EEA/UK because (i) they lack local knowledge and footprint, which are paramount, and (ii) they
       offer A2A CIS solutions that are not SEPA compliant.”41 Other players indicated that “the
       process of participating in a tender is in itself highly complex, expensive and time consuming”.42
40.    Contrary to what the Parties argue, the mere participation of non-EEA players in the RFI phase
       of EEA tenders for the provision of A2A CIS does not disprove the above.43 Indeed, according
       to the Parties themselves “it is the RFP process […] that is the time-consuming element”.44 ,
       The RFP phase is also much more costly: according to Annex 6.57 to the Form CO, the
       costs incurred by the Target for the participation of the RFP phase can be up to […] higher
       than the costs incurred for the RFI phase.45 This is confirmed by a competitor, which
       explained that “the investment required for the RFI phase is rather low, contrary to the RFP
       phase, which requires significant investments and the constitution of a dedicated team”.46 The
    35  See replies to Questionnaires Q1 to competitors (question 17) and Q2 to customers (question 12) (emphasis added).
    36  See non-confidential version of the minutes of a conference call with a competitor dated 24 April 2020, para. 14
        (emphasis added).
    37  See replies to Questionnaire Q2 to customers (question 12).
    38  See replies to Questionnaires Q1 to competitors (question 17) and Q2 to customers (question 12).
    39  See replies to Questionnaires Q1 to competitors (question 19) and Q2 to customers (question 13.1).
    40  See non-confidential version of the minutes of a conference call with a competitor dated 21 April 2020, para. 16.
    41  See non-confidential version of the minutes of a conference call with a competitor dated 24 April 2020, para. 16.
    42  See non-confidential version of the minutes of a conference call with a competitor dated 21 April 2020, para. 16.
    43  The tenders for the provision of A2A CIS typically contain an initial request for information (“RFI”) phase, in which
        bidders set out their capabilities and track record. Following this phase, a number of suppliers are shortlisted for the
        subsequent stage (the request for proposal or “RFP” phase). In the RFP phase, suppliers are invited to submit their
        proposals. On this basis, the payment scheme operator selects a small subset of bidders and conducts contract
        negotiations with them.
    44  See the Parties’ reply to RFI 1, question 41(h).
    45  See Annex 6.57 to the Form CO.
    46  See non-confidential version of the minutes of a conference call with a competitor dated 23 April 2020 (3pm), para. 22.
                                                                     8
 ---pagebreak---        Parties also admit that “tender processes have become more complex over time and hence
       newer process are more costly” and Mastercard indicates that the participation in a single
       tender can cost […]. Moreover, the bidding data submitted by the Parties shows that non-
       EEA players are rarely shortlisted (i.e. invited to the RFP phase) in EEA tenders and that,
       conversely, EEA players have a very limited track record outside of the EEA.47
            (C.ii)       The exact geographic of the A2A CIS markets in the EEA is unclear
41.    The results of the market investigation are not conclusive as regards the exact geographic scope
       of the A2A CIS markets in the EEA.
42.    On the one hand, several elements suggest that the A2A CIS are no longer national in scope and
       could be potentially regional (e.g. pan-Nordic) or EEA-wide.
43.    First, in recent years, the provision of A2A CIS in the EEA has been increasingly governed by
       international standards (e.g. the messaging standard ISO 20022). In particular, respondents
       emphasized the role of the SEPA48 and the European Payment Council (“EPC”)’s payment
       schemes49 in the increasing standardisation and competition in the EEA. It follows that
       customers and competitors generally consider that the provision of A2A CIS is relatively
       standardized at EEA level.50
44.    Second, some recent tenders for the provision of A2A CIS took place at supranational level,
       such as the pan-Nordic level Layer 1 tender issued by P27 in 2018 and the pan-European tender
       organised by EBA Clearing in 2015.51
45.    Third, EEA customers do not always require A2A CIS providers to have a local presence at
       national level. For instance, […]. An EEA customer also explained that datacentres are not
       always needed at national level but should be “at least located in the EEA for regulatory reasons
       and technical limitations (having data centres located too far away could undermine the
       processing of instant payments)”.52
    47  See Annex 6.3 to the Form CO.
    48  The SEPA is a payment-integration initiative of the EU for simplification of bank transfers in euro. As of 2020, there
        were 36 members in SEPA, consisting of the EEA countries (including the UK), Switzerland, Andorra, Monaco, San
        Marino, and Vatican City.
    49  The EPC is an international non-profit association composed of 76 members who are PSPs (mostly banks) or
        associations of PSPs, whose purpose is to support and promote the integration and development of European
        payments. In particular, the EPC has developed and manages four payment schemes that facilitate domestic and
        cross-border euro payments within the SEPA: (i) the SEPA Credit Transfer (“SCT”) scheme (launched in 2008); (ii)
        the SEPA Instant Credit Transfer (“Inst SCT”) scheme (launched in 2017); (iii) the SEPA Direct Debit Core (“SDD
        Core”) schemes (launched in 2009) and (iv) the SEPA Direct Debit Core Business-to-Business (“SDD B2B”) scheme
        (launched in 2009). Pursuant to Regulation (EU) No 260/2012 of 14 March 2012 (also known as the “SEPA
        Regulation”), the SCT and the SDD Core schemes are mandatory for all PSPs offering euro credit transfer and
        direct debit services in the EEA. The SCT Inst and the SDD B2B schemes are optional (i.e. PSPs are free to propose
        services based on these two schemes). See https://www.europeanpaymentscouncil.eu.
    50  See replies to Questionnaires Q1 to competitors (question 17) and Q2 to customers (question 12). For example, a
        competitor stated that “in EEA region significant standardization progress has been made in the past years (SEPA,
        ISO20022)”. Another player indicated that “There is further standardisation in the EEA due to the EPC schemes”.
        See also non-confidential versions of the minutes of conference calls with competitors (i) dated 23 April 2020 (3pm),
        para. 14 (“Through the SEPA project, the Eurozone has been a leader in the migration to a harmonised version of
        the ISO 20022 messaging standard. As a consequence, the non-Euro countries in the EEA (UK, Sweden, Denmark,
        etc.) have equally adopted these standards in parallel to legacy standards for domestic transactions.”); (ii) dated 23
        April 2020 (5:15pm), para. 13; (iii) dated 24 April 2020, para. 13.
    51  EBA Clearing is a provider of pan-European payment infrastructure solutions. Founded in 1998, the EBA Clearing is
        owned by 50 of the major banks operating in Europe and based on a country-neutral governance model. See:
        https://www.ebaclearing.eu/about-eba-clearing/at-a-glance/the-company.
    52  See non-confidential version of a conference call with a customer dated 22 April 2020, paras. 14 and 15.
                                                                    9
 ---pagebreak--- 46.    Fourth, the main EEA providers of A2A CIS, including the Parties, compete across the EEA.53
47.    Finally, customers consider that competitive dynamics are rather homogenous across the EEA.
       While competitors disagree with this statement, they share the customers’ views that
       competition for the provision of A2A CIS is homogeneous in the Nordic region (due notably to
       the P27 project).54
48.    On the other hand, other elements in the file also suggest that the geographic market could still
       be national.
49.    First, although the level of standardization in the EEA is higher than in other geographies, several
       competitors and customers stressed the “lack of interoperability across Europe” which, according
       to them, reveals “a lack of standardization (even in Europe)”. Another market participant
       explained that “in EEA, SEPA has achieved a high level of standardization, but even here there
       are differences in implementation due to different interpretation of SEPA Implementation
       Guidelines or because some aspects of processing are left open to the market”. As a result,
       competitors generally expressed the view that competition is not homogeneous in the EEA.55
50.    Second, many market participants stressed the importance of having a local footprint due to the
       existence of national specificities and the need to tailor the A2A core infrastructures to meet
       specific customer needs and local requirements/specificities. For example, a competitor
       explained that “even in Europe, [A2A] core infrastructure solutions are highly customised to
       local market dynamics”.56 Similarly, another player stressed the “existence of local
       specificities/requirements (e.g. legal requirement for payments data to be held in data centres
       located in the same country/region)” and the fact that “consumers’ habits remain very different
       from one country to another (including in the EEA). As a result of the above, it is important to
       have local presence/footprint and, depending on the region/country, the competitive
       dynamics/conditions may differ (including in the EEA)”.57
51.    In this respect, some elements in the file suggest that the local footprint may be more important
       for managed services than for software services. For instance, according to a competitor, the
       local footprint is “of paramount importance, especially for managed services (providers being
       usually required to operate the system locally notably for data privacy constraints)” and that
       “local presence is, to some extent, less relevant for the provision of software-only solution”.58
52.    Finally, the Commission notes that the Parties themselves acknowledged that it is an “inherent
       part of any A2A CIS providers’ business model to understand the particularities of local
       markets, obtaining regulatory approval and building up working relationships with the local
       national bank”,59 which is also corroborated by their internal documents.60
            (D)         Conclusion
53.    Based on the results of the market investigation and for the purpose of this decision, the
       Commission considers that it can be left open whether the A2A CIS markets are national,
       regional within the EEA or EEA-wide in scope as these alternative geographic market
    53  See notably the bidding data submitted by the Parties (Annex 6.3 to the Form CO).
    54  See replies to Questionnaires Q1 to competitors (question 19) and Q2 to customers (questions 13.2 and 13.3).
    55  See replies to Questionnaires Q1 to competitors (question 17) and Q2 to customers (question 12).
    56  See replies to Questionnaires Q1 to competitors (question 17) and Q2 to customers (question 12). Emphasis added.
    57  See non-confidential version of the minutes of a conference call with a competitor dated 23 April 2020 (3pm), para. 15.
    58  See non-confidential version of the minutes of a conference call with a competitor dated 23 April 2020 (5:15pm),
        para. 14 (emphasis added).
    59  See Form CO, para. 258.
    60  See e.g. Annex 5.4.3-3 to the Form CO, pp. 21, 27, 33, and 37.
                                                                    10
 ---pagebreak---         delineations do not affect the Commission’s conclusions regarding the compatibility of the
        Transaction with the internal market.
    3.1.3. Competitive assessment
    3.1.3.1. The Parties’ views
54.     The Parties submit that the Transaction does not give rise to competition concerns regardless of
        the exact scope of the A2A CIS market. Their main arguments are summarized below.
55.     First, the Parties submit that, post-Transaction, the new entity would face significant
        competition in the EEA from a wide range of competitors with relevant capabilities across both
        managed services and software-only solutions. In particular, over the period 2014-2019, the
        Parties have identified 21 competitors having participated in EEA tenders for the provision of
        A2A CIS. The Parties note that several of these rivals have been shortlisted and have won at
        least once.61
56.     Second, the Parties argue that the growing trend towards the constitution of bidding partnerships
        (or consortia) by A2A CIS providers favours competition. Consortia allow A2A CIS providers
        (i) to participate in tenders for projects that they would not be able to run on their own or (ii) to
        improve their offer and, thus, their chances to win (by e.g. partnering with a local partner). The
        Parties also note that sometimes the creation of consortia is even encouraged by A2A CIS
        customers.62 In this context, the Parties submit that, when assessing the number of credible
        players currently active on the market, the Commission should not only consider players able to
        bid on their own but should also take into consideration consortia. They also submit that bidding
        in consortia allows providers unable to bid on their own to progressively gain expertise and
        build a track record.
57.     Third, the Parties consider that they are not each other’s closest competitors in the market for the
        provision of A2A CIS. This, according to them, is corroborated by the bidding data. In terms of
        offerings, the Parties observe that their products are largely complementary: [Parties views on
        how their products compare to each other].63
58.     Fourth, the Parties consider that A2A CIS customers play a critical role in ensuring an adequate
        level of competition within the market. These sophisticated customers have the relevant
        expertise to design competitive tender processes and generally extend the invitation to a large
        number of providers, including the possibility to participate in consortia. In addition, the Parties
        submit that customers’ capability to develop A2A CI solutions in-house further exerts
        significant competitive pressure on A2A CIS providers.64
59.     Finally, the Parties consider that the market for A2A CIS is characterised by relatively low
        barriers to entry and to switching. In particular, they note that customers often impose
        transitional arrangements on incumbent providers to facilitate the switching to new providers.
        They also observe that increasing standardization facilitates market access.65
    61   Form CO, paras. 334 and ff.; Supplemental Submission on managed services, para. 4 and paras. 8 and ff.
    62   Form CO, paras. 245 (e); Supplemental Submission on managed services, paras. 29 and ff.
    63   Form CO, paras. 340-342; Supplemental Submission on managed services, para. 4 and paras 50 and ff.
    64   Form CO, paras. 386 and ff.; Supplemental Submission on managed services, paras. 80 and ff.
    65   Form CO, paras. 458-460; Supplemental Submission on managed services, paras. 64 and ff.
                                                                11
 ---pagebreak---     3.1.3.2. The Commission’s assessment
             (A)          Preliminary remarks
60.     As a preliminary remark, the results of the market investigation, do not materially differ
        depending on the EEA country or region concerned.66 Although national or regional specificities
        exist (with e.g. different incumbent providers and specific local requirements), the main
        characteristics of supply and demand in the A2A CIS markets can be described along the same
        set of dimensions across the EEA. Therefore, unless otherwise specified, the findings of Section
        3.1.3.2 (regarding e.g. competitive landscape, closeness of competition, barriers to entry and
        switching) do not materially differ depending on the geographic market at stake.
61.     In addition, as explained in Section 3.1.1 above, A2A CIS markets are essentially bidding
        markets where competition primarily takes place during the tender processes for the award of
        contracts with payment scheme operators. Moreover, the latter typically award their contracts to
        a single successful bidder (“winner-takes-all” principle). In this context, the Commission
        considers, in this case, that the number of credible competitors is a better metric of market
        power than market shares (at a given date), because momentary market share figures are
        unlikely to give reliable indications as to how competition will unfold when a new tender comes
        up).67 The above is not disputed by the Parties.68 In this context, the Commission’s assessment
        will focus on the number of alternative credible competitors remaining active on the A2A CIS
        markets post-Transaction.
             (B)          Market for the provision of managed services
62.     For the reasons set out below, the Commission finds that the Transaction raises serious doubts as
        to its compatibility with the internal market with respect to the provision of managed services in
        the EEA under all plausible market definition.
63.     First, the number of credible players able to bid on their own for the provision of managed
        services in the EEA is limited. In this market, the elements in the Commission’s file, including
        the feedback received from the market investigation, as well as the Parties’ internal documents
        and bidding data, revealed that the Transaction would lead to the reduction in the number of
    66   See e.g. replies to questions 25.4 and 34.3 of Questionnaire Q1 to Competitors and question 19.4 of Questionnaire
         Q2 to Customers.
    67   See e.g. cases M.8258 – Advent International/Morpho, paras. 161-162, and M.3641 – BT/Infonet, para. 16. Such a
         finding does not mean that market shares have no value when assessing the strength of the various competitors on a
         bidding market, especially where those market shares remain relatively stable over time (see e.g. case /-210/01 –
         General Electric v. Commission, paras. 149-150). However, in the present case, the data available does not cover a
         sufficiently long period of time, which is due to the relatively recent emergence of instant payments (in the last
         decade) and to the fact that tenders are infrequent.
    68   See Form CO, paras. 245, 327 and 435. Nevertheless, the Parties provided market shares estimates for the provision of
         A2A CIS at EEA level based on different metrics: (i) the volume of transactions processed through the core
         infrastructure in the EEA (Mastercard: [10-20]%; Target: [5-10]%) and (ii) the number of A2A tenders won in the
         EEA since 2014 (Mastercard: [5-10]%, Target: [20-30]%). However, the Parties submit that the above market share
         estimates are not reliable since: (i) these market shares are mere internal estimates, with no public available data to
         support them and (ii) these are bidding markets, which are lumpy markets. For the same reasons, the Parties also
         strongly contest the approach taken by the Danish competition authority consisting in computing market shares based on
         the value of the EEA contracts reported in the Parties’ bidding data (Mastercard: [30-40]%; Target: [20-30]%).
         The Commission considers that, irrespective of the metrics used, the above market shares estimates do not accurately
         depict the Parties’ market power for several reasons. First, market shares at a given date are less relevant to assess
         market power in bidding markets and the limited data available does not cover a sufficiently long period of time to
         assess the market share evolution. Second, depending on the metrics used, the Parties’ combined market share at
         EEA level differs significantly (i.e. [20-30]% based on the volume of transaction, [20-30]% based on the number of
         tenders won; [50-60]% based on the contract value). Third, the market shares provided by the Parties based on the
         volume of transactions are of limited relevance since (i) those are computed on the basis of a broadly defined total
         market (encompassing of total transaction volumes for credit transfers and direct debits) that is clearly much broader
         than the A2A CIS market at stake; and (ii) the Parties have not been able to allocate [40-60]% of this broadly defined
         market. Fourth, market share estimates based on the number of tenders won suffer from the problem of treating all
         bids as equal and identical despite significant differences in complexity and total contract value.
                                                                      12
 ---pagebreak---        credible competitors from five to four, the Parties’ main and only credible competitors in the
       EEA being Equens, SIA69 and STET.70
64.    In fact, many of the players mentioned in the Form CO (i) do not consider themselves as
       competitors of the Parties71 and (ii) are perceived by market participants as being neither
       credible72 nor competitive73 providers of managed services in the EEA. Several respondents also
       stressed that the “number of managed service providers [is] more restricted” than for software-
       only solutions and that “very few providers offer Managed Services”.74
65.    This is also corroborated by the Parties’ internal documents, which suggest that several players
       mentioned in the Form CO are not active or credible in managed services. For example, the
       Parties’ internal documents (i) qualify […] as “software vendor”;75 and state that (ii) […];76 that
       (iii) […];77 and that (iv) […].78
66.    Similarly, the bidding data submitted by the Parties79 shows that, while many players are
       participating in the RFI phase of tenders for the provision of managed services,80 very few have
       been shortlisted at least once (namely […]81) and (ii) only three of them (i.e. Equens, STET and
       SIA) have won at least one tender82 (see Table 2 below).
    69  The Parties explained that, in the Eurozone, SIA typically bids in consortium with EBA Clearing and independently
        from EBA Clearing outside the Eurozone. EBA Clearing is a provider of pan-European payment infrastructure
        solutions, owned by the largest European banks, which has a long lasting partnership with SIA. Under this
        partnership, SIA provides EBA Clearing with its A2A CIS technology. In particular, SIA has implemented and
        manages the pan-European A2A core infrastructures of EBA Clearing, namely STEP2 (clearing platform for batch
        payments launched in 2003) and RT1 (clearing platform for instant payments launched in 2017 and awarded to SIA
        pursuant to a tender process). The Commission understands that EBA Clearing does not have its own A2A CIS
        technology and does not bid independently from SIA.
    70  See e.g. replies to Questionnaires Q1 to competitors, (question 25) and Q2 to Customers (question 19).
    71  See replies to Questionnaires Q1 to competitors (question 4). For example, a respondent indicated that it “does not
        have A2A capabilities”; a second one explained that it “does not provide a Software-only solution or a Managed
        Service”; a third one stated that it has “no activity in the EEA”; a fourth one indicated that it “does not see itself as a
        provider of A2A CIS” and a fifth one explained that it “does not provide A2A CIS”.
    72  See replies to Questionnaires Q1 to competitors (question 25), and Q2 to Customers (question 19).
    73  See replies to Questionnaires Q1 to competitors (question 26), and Q2 to Customers (question 20).
    74  See non-confidential version of the minutes of a conference call with a competitor dated 23 April 2020 (5:15pm),
        paras. 9 and 10, as well as replies to Questionnaires Q1 to competitors (question 25), and Q2 to customers (questions
        15 and 19). See also Section 3.1.3.2(C) below.
    75  See Annex 5.4-7 to the Form CO, slide 20.
    76  See Annex 5.4.3-36 to the Form CO, slide 10.
    77  See Annex 5.4.3-3 to the Form CO, slide 36.
    78  See Annex 5.4.3-3 to the Form CO, slides 32 and 34.
    79  See Annex 6.3 to the Form CO.
    80  In that respect, the Commission considers that the Parties’ claim that competitors have the ability to constrain the
        Parties by their mere participation in the RFI phase suffers from several flaws. In particular, participation in the RFI
        phase, which is relatively easy and entails limited costs (see paragraph 40 above), does not guarantee the ability to
        win. Moreover, the larger number of bidders involved in the RFI phase appears to be explained, at least partly, by the
        fact that it is possible to bid in consortia, however, that does not mean that each consortia member individually can
        constrain the Parties. See also non-confidential version of the minutes of a conference call with a customer, dated 22
        April 2020, para. 6 indicating that several bidders involved in the RFI phase of its tender for managed services were
        “not credible bidders for the A2A clearing and settlement”.
    81  With respect to […], the Commission notes that, apart from Annex 6.3 to the Form CO, there is no indication in the
        file (neither in the Parties’ internal documents, nor in the feedback received from the market) that […] is active or
        credible in the provision of A2A CIS in the EEA (e.g. no market participants mentioned it as a competitor). […] has
        also been shortlisted twice in consortia with software providers (i.e. […]) but does not currently have the ability to
        participate in A2A CIS tenders on a stand-alone basis.
    82  Equens won a tender for the provision of managed services in the Netherlands in 2016 and […]. STET won a tender
        in Belgium in 2016 […], currently provides managed services in France and […]. SIA won […] the tender organized
        by EBA in 2016 for the provision of managed services at pan-European level.
                                                                      13
 ---pagebreak--- 67.    Second, although the market investigation confirmed that it is common to bid in consortia when
       participating in tenders for the provision of managed services, it also revealed that the
       competitive constraints exerted by consortia in A2A CIS tenders are more limited than
       suggested by the Parties.
68.    On the one hand, the results of the market investigation suggest that such consortia allow
       competitors that would not have the capabilities to run a project on their own to leverage the
       footprint or the specialized capabilities of third parties to submit credible bids.83 Some
       respondents also confirmed that consortia may compete on an equal level with providers bidding
       on their own.84
69.    However, on the other hand, the Commission found that setting up consortia may be difficult
       since some of the components required to provide managed capabilities are “proprietary or
       complex” and, thus, hard to find on the market.85 The market investigation also suggests that
       consortia are not relevant for all tenders and mainly concern large and complex projects, which
       are less common. For smaller and less sophisticated tenders, consortia are primarily justified by
       the need to acquire the required local footprint, rather than the need to acquire capabilities that
       are missing in-house.86 Moreover, several respondents stressed that consortia may be riskier and
       more complex, which can affect the competitiveness of the bid. For example, a customer
       explained that an A2A CIS provider bidding on its own “offers “one-stop-shopping”: avoiding
       the need to run multiple procurement processes, enabling less complexity in the contractual
       constructions without back-to-back agreements and multi-vendor governance, and a more stable
       and secure delivery of procured services.” Similarly, another customer stated that a “consortium
       is less competitive, due to the division of tasks and responsibilities between companies and
       because of the mixing of different technologies.” Similarly, another competitor stated that “it is
       not easy to set up a consortium to participate in an A2A CIS tender (and be successful)” and that
       a “fully integrated solution is inherently lower risk than a partnership”.87 The Commission also
       observes that, albeit bidding in consortia might facilitate, over time, the emergence of new
       credible stand-alone providers of managed services in the EEA (by allowing players unable to
       bid on their own to progressively gain expertise and build a track record), this would necessarily
       take time and depend on the ability of these players to develop the missing managed service
       capabilities in-house.
70.    In view of the foregoing, the Commission considers that the existence of consortia is not
       sufficient to compensate the limited number of credible competitors currently able to bid on
       their own for the provision of managed services in the EEA.
71.    Third, the Commission found that the Parties are strong competitors in the EEA. Market
       participants perceive Mastercard as the most competitive player in the EEA, while the Target’s
       competitiveness is similar to or slightly better than the other main players (i.e. Equens, SIA and
       SET).88
72.    This is also supported by the Parties’ internal documents. For example, an internal presentation
       of the Target reads: […].89 Similarly, another internal presentation refers to […] and to the fact
       that […].90
    83  See replies to Questionnaires Q1 to competitors (questions 28 and 29), and Q2 to customers (question 22).
    84  See replies to Questionnaires Q1 to competitors (questions 28 and 29), and Q2 to Customers (question 22).
    85  See replies to Questionnaires R1, questions 9.1.
    86  See replies to Questionnaires Q1 to competitors (questions 28 and 29) and Q2 to customers (question 22). For
        instance, a competitor stated that, in managed services, it is “more likely to partner with local players knowledgeable
        about country regulations and providing local services”.
    87  See replies to Questionnaire Q1 to competitors (question 28), and Q2 to Customers (question 22).
    88  See replies to Questionnaire Q1 to competitors (question 26), and Q2 to Customers (question 20).
    89  See Annex 5.4.3-56 to the Form CO, pp. 4, 10 and 13 (emphasis added).
                                                                     14
 ---pagebreak---  ---pagebreak---         weakened […], which had to find an alternative partner (namely […]), at short notice in the
        middle of the tender process.99 The Parties challenge this view, which is however corroborated
        by their internal documents. For instance, […].100
76.     In the Nordics, the Target is the incumbent provider of the existing domestic A2A core
        infrastructures in Norway and Denmark, whereas Mastercard won in 2019 the P27 Layer 1
        tender for the future provision of managed services at pan-Nordic level. The market participants
        […] confirm that the market in the Nordics is expected to migrate within a few years from
        existing domestic A2A core infrastructures (including the ones operated by the Target) to the
        new P27 pan-Nordic A2A core infrastructure,101 which is expected to be more innovative and
        cheaper (owning to economies of scale). In this respect, the Commission notes that the above
        tender has been awarded prior the Transaction and that the progressive phasing out of the
        domestic A2A core infrastructures currently managed by the Target largely reflects the “winner-
        takes-all” feature of the A2A CIS markets, and that there is thus no merger specificity in this
        respect. That being said, the Commission also notes that (i) there is an intrinsic degree of
        uncertainty as to whether the P27 project, which is not operational yet, will go forward for the
        entire Nordic region, including Norway and that (ii) the launch of P27 is subject to a merger
        filing and clearing licence approval. In this context, the Commission considers that the reduction
        in the number of credible providers of managed services for future A2A CIS tenders in the EEA
        could potentially affect the Nordics region.
77.     Fourth, albeit the market investigation suggests a certain complementarity between the Parties’
        activities (Mastercard is characterised by a large geographic footprint and a rather dated
        technology, while the Target is perceived by the market as an innovative and regional player),102
        market participants consider that the Parties are close competitors (and potentially each other’s
        closest competitors according to their rivals).103 This conclusion is also supported by the Parties’
        (i) internal documents, where Mastercard and the Target are identified as […],104 and (ii)
        bidding data (see Table 2 above).
78.     Fifth, the elements in the Commission’s file suggest that one of the three credible competitors
        active in the EEA, namely STET, exerts limited competitive constraints on the market. This is
        notably illustrated by […].105 Several competitors share the above view, submitting that STET
        “focuses its activities in France and Belgium and is reluctant to bid in other EEA/UK
        countries”.106 One competitor even indicated that it “does not consider STET […] as [a] real
        competitor[]” since the latter “does not show a strong appetite to compete outside of French
    99   The UK CMA considers that the Target’s withdrawal decision could be part of a strategy aimed at foreclosing […] in
         the NPA tender and, more generally, weakening the competitive constraints over Mastercard. This is strongly
         contested by the Parties, which submit that the Target’s decision to withdraw from the consortium with […] was
         taken unilaterally and not motivated by any foreclosure strategy. The Parties admitted that the withdrawal decision
         was related to the Transaction but claimed that it was a measure of competition law compliance, i.e. to avoid having
         access to sensitive commercial information on […]’s bid. In other words, absent the Transaction, the Target would
         still compete against Mastercard in the UK NPA tender.
    100  See Annex 6-40.13 to the Form CO (emphasis added). See also para. 78 below.
    101  See e.g. non-confidential version of the minutes of a conference call with a competitor, dated 24 April 2020, para.8:
         “P27 will constitute an alternative to the Target’s solutions in Denmark and Norway and that the A2A markets in
         these two countries will progressively migrate from the Target’s solutions to P27, both with respect to Layer 1 (A2A
         CIS) and Layer 2 (overlay services)”.
    102  See replies to Questionnaire Q1 to competitors (question 27).
    103  See replies to Questionnaires Q1 to competitors (questions 36-38) and Q2 to customers (questions 27-29). See also
         non-confidential version of the minutes of a conference call with a competitor dated 21 April 2020, para. 17: “Nets
         and the vertically-integrated Mastercard are close competitors (if not each other’s closest competitor) and are the
         two major players in the RTP core infrastructure space, both in the EU and worldwide, having competed head-to-
         head as the most credible bidders in various jurisdictions”. Other competitors cited as equally close (or closer) to the
         Parties by customers include Equens, STET, and SIA/EBA Clearing.
    104  See e.g. Annex 5.4.3-1, pp. 12 and 24 (Mastercard) and Annex 5.4.3-36 to the Form CO, slide 23.
    105  See Annex 5.4.3-1, pp. 12 and 24.
    106  See non-confidential version of the minutes of a conference call with a competitor, dated 24 April 2020, para. 15.
                                                                    16
 ---pagebreak---         speaking countries”.107 The above does not mean that STET never participates in tenders outside
        of France and Belgium ([…]) but that its participation in A2A CIS tender across the EEA is
        much more limited than the Parties, SIA and Equens.
79.     Sixth, the market investigation largely confirmed that barriers to entry are high for the
        provision of managed services, requiring “capabilities (expertise, track record, security…) that
        cannot be acquired either easily or in the short-term”.108 In addition to the track record and
        expertise, the main barriers to entry appear to be the need to have local or regional footprint
        depending on the tenders’ requirements (e.g. some tenders require to have datacenters at
        national, others at regional level), the investments required and the duration of the contracts.109
        Moreover, although customers may impose transitional arrangements in their contracts,
        switching A2A CIS provider remains difficult. In fact, virtually all competitors and customers
        consider that switching is either difficult or very difficult and very few customers have
        switched suppliers in the last 10 years (including as a result of a new tender).110
80.     Seventh, the market investigation did not support the Parties’ claim that A2A CIS customers
        have significant countervailing buying power. In particular, a large majority of customers
        indicated that they are not able to develop A2A CIS solutions in house.111
81.     Finally, many competitors expressed competition concerns regarding the impact of the
        Transaction in the EEA, especially in the Nordics where most of them anticipate a negative
        impact of the Transaction.112
82.     Competitors are notably concerned by the fact that the market is “already, pre-Transaction, quite
        concentrated with a limited number of providers and that the Transaction would further reduce the
        number of players in the EEA”.113 One of them also stressed that “the Transaction already had a
        negative impact on the market, distorting competition in Europe”, in particular in the UK as a
        result of the Target’s withdrawal from the ongoing NPA tender (see paragraph 75 above).114
83.     In addition to the above, several players raised a risk of foreclosure explaining that the
        combination of Mastercard’s financial strength and card payment activities with the Target’ state
        of the art A2A solution (see footnote 93 above), and the Parties’ respective track records, will
        significantly strengthen the leading player (Mastercard) and that “post-Transaction, it might be
        difficult for the rival […] to be as competitive as the Parties”.115
84.     In particular, one competitor stressed that, post-Transaction, it will very difficult to “successfully
        bid […] especially in the Nordics”, where “the combination of the Target’s A2A payment
        activities and Mastercard’s card payment activities would enable the new entity to control the
        whole financial infrastructure in the Nordics and, thus, to potentially foreclose its competitors.”
        This respondent considers that the Transaction constitutes a “dangerous move for the market” on
    107 See non-confidential version of the minutes of a conference call with a competitor, dated 23 April 2020 (5:15pm),
         paras 10-11.
    108 See replies to Questionnaire Q1 to competitors (question 34.5).
    109 See replies to Questionnaire Q1 to competitors (questions 34 and 35).
    110 See replies to Questionnaires Q1 to competitors (question 39) and Q2 to customers (questions 30-31).
    111 See replies to Questionnaire Q2 to customers (question 24).
    112 See replies to Questionnaire Q1 to competitors (question 41).
    113 See non-confidential version of the minutes of a conference call with a competitor, dated 23 April 2020 (3pm), paras
         25-26. See also non-confidential version of the minutes of a conference call with a competitor, dated 23 April 2020
         (5:15pm), paras 15-16: “in the EEA, the Transaction will lead to the reduction in the number of players in a market,
         which is already pre-Transaction characterised by a limited number of competitors”. See also replies to
         Questionnaire Q1 to competitors (question 40).
    114 See non-confidential version of the minutes of a conference call with a competitor, dated 23 April 2020 (5:15pm),
         paras 15-16.
    115 See non-confidential versions of the minutes of conference calls with competitors (i) dated 23 April 2020 (3pm),
         paras 25-26; and (ii) dated 23 April 2020 (5:15pm), para. 16.
                                                                    17
 ---pagebreak---         the ground that, post-Transaction, “Mastercard might offer price below cost in the A2A space, by
        using its card payment revenues to cross-subsidize its A2A activities”, which would allow the
        Notifying Party to “end up dominating both the card-based and A2A payment systems”. In other
        words, according to this player, Mastercard has the ability and incentive to leverage its strong
        market position on the card payment markets to expand its activities in the A2A space.
        According to this player, this is notably illustrated by the fact that, already pre-Transaction,
        “Mastercard is very aggressive in the A2A payment space, acquiring A2A companies (such as
        Vocalinks and the Target) at a very high price (above market price) and bidding at very low
        price (and potentially below costs) ([…]) to gain strong market positions” in the A2A payment
        space in order to “preempt the decline of card payments”.116 In this respect, the Commission
        notes that […].117
85.     Although most customers did not complain about the Transaction, some of them share the
        competitors’ views. In particular, one customer stated that (i) apart from the Parties, “the other
        suppliers that participated in [its] tendering process [for managed services] do not offer a
        suitable alternative” and that (ii) Mastercard’s expansion into the A2A space could be
        detrimental for competition, suggesting that Mastercard could potentially “give priority” to cards
        over instant payments, “making the latter less attractive as the method for displacing cash”. 118
86.     In view of the above considerations, the Commission concludes that the Transaction raises
        serious doubts as to its compatibility with the internal market and the functioning of the EEA
        Agreement with respect to the overlaps between the Parties’ activities in the market for the
        provision of A2A CI managed services under any plausible geographic markets (i.e. national,
        regional or EEA-wide).
             (C)         Market for the provision of software-only solutions
87.     Albeit some of the findings described in the previous section also apply to the provision of
        software-only solutions (i.e. the Parties are strong players and perceived as close competitors
        also in the provision of software-only solutions), the results of the market investigation revealed
        that the provision of such solutions presents different features allowing the Commission to
        exclude serious doubts on this potential market.
88.     First, the market investigation confirmed that a sufficient number of credible providers of
        software-only solutions would remain active in the EEA post-Transaction. Indeed, the
        Commission found that the number of players in the software-only market is higher than in the
        market for managed services. The differences in the competitive landscape are confirmed by the
        market investigation results, in which the majority of competitors indicated that A2A CIS
        providers do not have typically the ability to provide both managed services and software-only
        solutions.119 One customer mentioned that “based on [its] experience […], very few providers
        offer Managed Services while all of them have software-only solutions available”,120 explaining
        that “during [its] tender process [for the provision of managed services], big majority of
        participating tenderers only had the capability of Software-only solutions”.121 Another customer
        confirmed that “there are more providers in the software-only solutions market segment than in
        the managed services market”.122 In the software market, the Parties face several credible
        players, including Equens, SIA/EBA Clearing, but also players that are not active (or not
        perceived as credible) in the market for managed services, such as Montran, ACI and, to a more
    116  See non-confidential version of the minutes of a conference call with a competitor dated 24 April 2020, paras. 18-22.
    117  See Annex 8.c to RFI 6, “P27_Revised Bus_Case_15_Jan_2019”, p.3.
    118  See replies to Questionnaire Q2 to customers (questions 32 and 33).
    119  Questionnaire Q1 to competitors (question 11).
    120  Questionnaire Q2 to customers (question 15.5).
    121  Questionnaire Q2 to customers (question 10.1).
    122  Questionnaire Q2 to customers (question 10.1).
                                                                   18
 ---pagebreak---         limited extent, IBM.123 For instance, according to the Parties’ bidding data, which underestimate
        the winning rates of some competitors,124 IBM and Montran were able to win tenders for
        software-only solutions in, respectively, Spain and Portugal (IBM) and Bulgaria and Romania
        (Montran). In addition to these players, other providers (such as ACI) 125 have the capability to
        offer software-only solutions in the EEA and are perceived by market participants as being
        credible. As a result of the above, the competitive landscape for A2A CI software-only solutions
        appears more dynamic than for managed services, with a sufficient number of competitors
        remaining post-Transaction.126
89.     Second, the market investigation revealed that barriers to entry are lower in software-only
        solutions. Market participants explained that providing software-only solutions requires less
        expertise and responsibilities. In comparison with providing managed service solutions and
        referring to the provision of software-only solutions, one competitor mentioned that “managing
        a service implies much wider responsibilities and different type of expertise than just delivering
        a product”.127 The need for a local (national or regional) footprint also appears to be less
        prominent, having a local footprint being not considered essential for a credible bid in tenders
        for software-only solutions.128 For instance, a competitor explained that there was no
        requirements for a local footprint in the recent Bulgarian tender for the provision of software-
        only solution.129 Another competitor added that “it is easier to supply software-only solution as
        track-record and experience in managing the solution will not be a factor in the tender.130”
        Moreover, A2A CIS providers generally indicated that their respective software solutions could
        be easily customized to be adapted to different geographies and requirements. Therefore,
        barriers to entry in this market appear lower than in the market for managed services, allowing
        more players to present credible offers and, eventually, win tenders for the provision of
        software-only solutions.
90.     The higher number of current credible players for A2A CI software-only solutions and the lower
        barriers to entry render this market more dynamic and competitive compared to the market for
        managed services.
91.     In view of the above considerations, the Commission concludes that the Transaction does not
        raise serious doubts as to its compatibility with the internal market and the functioning of the
        EEA Agreement with respect to the overlaps between the Parties’ activities in the market for the
        provision of A2A CI software-only solutions in the EEA, under any plausible geographic market
        definition (i.e. national, regional and/or EEA-wide).
    123 According to competitors, IBM is more an IT integrator than an A2A CIS provider, since it does not have a
         specialised A2A software solution. That said, by exception, in some instances, IBM has implemented small A2A
         clearing solutions based on its generic software solution Financial Transaction Manager (“FTM”), which is an
         industry software product that can be used to create integrated applications that manage, orchestrate and monitor
         financial transactions. IBM’s FTM product employs data models and message models that are based on the ISO
         20022 industry standard . IBM participates in A2A CIS tenders but usually in consortia with third parties (including
         SIA in Canada). See non-confidential version of the minutes of a conference call with a competitor dated 23 April
         2020 (5:15pm), para. 11.
    124 See replies to questionnaire Q1 to competitors (question 9).
    125 Although ACI does not currently provide A2A CIS in the EEA, it (i) currently provides software solutions in several
         countries outside the EEA, (ii) regularly participates in EEA tenders for the provision of software-only solutions (for
         instance, –[…] see Annex 6.3 to the Form CO), and (iii) is perceived by customers and competitors as a credible
         provider of A2A CI software in the EEA (see replies to questionnaires Q1 (question 25) and Q2 (question 19)),
         which is also corroborated […]. The Commission notes that also CMA Small Systems AB (“CMA”), a Swedish-
         based A2A CIS provider, can be considered as a credible player with the capability to offer software-only solutions
         in the EEA, despite the fact that it does currently not provide A2A CIS in the EEA.
    126 Questionnaires Q1 to competitors (questions 5 and 6) and Q2 to customers (question 10).
    127 Questionnaire Q1 to competitors (question 12.1).
    128 Questionnaire Q1 to competitors (question 25).
    129 See non-confidential version of the minutes of a conference call with a competitors dated 23 April 2020 (5:15pm), para. 14.
    130 Questionnaire Q1 to competitors (question 25.5).
                                                                      19
 ---pagebreak---     3.1.3.3. Conclusion
92.      In view of the above considerations, taking into account the market investigation and all the
         evidence available, the Commission concludes that the Transaction raises serious doubts as to its
         compatibility with the internal market and functioning of the EEA Agreement with respect to
         overlaps between the Parties’ activities in the EEA market(s) for the provision of A2A CI
         managed solutions in the EEA under any plausible geographic market definition (i.e. national,
         regional and/or EEA-wide).. The Commission notes that, in relation to the market for the
         provision of A2A CI software-only solutions, due to the presence of a sufficient number of
         competitors post-Transaction and the lower barriers to entry, no serious doubts arise. In any
         event, the final commitments offered by the Parties fully address the competition concerns
         identified in the decision in relation to the provision of A2A CI managed services in the EEA
         (see Section 4 below).
    3.2.        A2A Payment Services
    3.2.1. Overview of the market and the Parties’ activities
93.      A2A payment services are end-user services/applications, using an A2A core infrastructure, to
         transfer money from one bank account to another.131 A2A payments are typically made from
         consumers to businesses ("C2B") or between businesses ("B2B"). A2A payment services are
         mainly used for payments that are recurring (e.g. monthly utilities bill) but can also be used for
         the payment of one-off invoices.132
94.      In this area, the Target offers several A2A payments solutions:
         -      in Denmark it offers solutions including (i) BetalingsService, a direct debit payments
                solution designed for one-off and recurring invoice payments from consumers to businesses
                (C2B); (ii) LeverandørService, a direct debit payments solution designed for one-off and
                recurring payments from business debtors (B2B); as well as ancillary services, and
         -      in Norway it offers solutions including (i) eFaktura, a corporate e-billing service (i.e.
                designed to receive and pay bills electronically) covering both B2C and B2B transactions (in
                partnership with Vipps, a Norwegian mobile payment application); (ii) AvtaleGiro, a
                consumer bill payment and direct debit payments solution; (iii) Autogiro, a corporate bill
                payment and direct debit payment solution for B2B; as well as ancillary services.
95.      In these countries, the Target is the incumbent player, having provided the dominant A2A
         payment services solutions for over 40 years in Denmark and over 30 years in Norway. In
         addition, the Target offers OmniBilling, an e-billing solution for end-customers both on the
         creditor and debtor side, […].
96.      Mastercard does not currently offer A2A payments services in Denmark, Norway or more
         generally in the Nordics. However, Mastercard does offer certain A2A payment
97.      The Parties are currently competing for the ongoing P27 tender for A2A payment services in the
         Nordics (the “P27 Layer 2 tender”). The P27 project currently aims at covering Denmark,
         Finland and Sweden. Norwegian banks were also initially part of the project but withdrew from
    131 A2A payment services can also be referred as “overlay services”. However, the Commission understands that the
           latter category is broader as it encompasses end-user services/applications to make A2A payments (A2A payment
           services) but also to provide ancillary services (e.g. proxy services).
    132 For the purposes of this decision A2A payment services refer to services for the payment of invoices and excludes
           payments between consumers (“C2C” or “P2P” for peer-to-peer).
                                                                        20
 ---pagebreak---         it in 2018. However, the Parties still expect that […].133 The P27 Layer 2 tender intends to
        capture use cases currently covered by the different (national) bill payment legacy solutions
        throughout the Nordics (including A2A payment solutions such as BetalingsService in
        Denmark), such as direct debit payments for B2B and C2B transactions. It also aims at covering
        additional payment scenarios such as: (i) invoices currently not processed through an end-to-end
        bank-served solution; (ii) recurring payments processed via card-on-file solutions (e.g. online
        subscriptions); and (iii) one-off e-commerce and Point-of-Sale (“POS”) payments currently
        addressed primarily by card payment services providers (merchant acquirers). […] The tender
        process was put on hold in June 2020 and the RFP may be sent out in the late autumn of 2020.
    3.2.2. Market definition
    3.2.2.1. Product market definition
             (A)        Commission’s precedents
98.     The Commission has not specifically assessed the relevant product market definition for A2A
        payment services in the past. However, in case M.2567 – Nordbanken/Postgirot, the
        Commission assessed a market for “services provided by payment systems”, including A2A
        domestic payment services, by way of so-called “giro payment systems services” in Sweden.
        The Commission considered the market for such services as potentially distinct from bilateral
        bank transactions.134
             (B)        The Parties’ views
99.     In the absence of Commission precedents, the Parties submit that, under the narrowest possible
        market delineation, A2A payment services would be part of the market for invoice payment
        services (i.e. services enabling remote payments of invoices), including both A2A payment
        services and recurring card payments, as they are both used interchangeably by individuals and
        businesses to pay bills.135
100.    Recurring card payments cover both withdrawals at regular intervals and payments that recur
        when the customer decides to use the relevant service, and are used for periodic payments or
        subscriptions, for instance towards telecom operators, transport companies and streaming
        services providers. Such services are usually provided by merchant acquirers (such as Adyen,
        Worldpay, Worldline, or Nets).136
             (C)        The Commission’s assessment
101.    The market investigation did not fully support the Parties’ claims that recurring card-based
        payment services and A2A payment services form part of a single product market for invoice
        payment services. Competitors and customers expressed differing views on this part. To the
        contrary, some elements of the market investigation clearly suggest that A2A payment services
        form part of a distinct product market from recurring card payment services.
102.    While responding competitors indicated that A2A payment services and recurring card-based
        payment services are interchangeable for EEA customers (financial institutions or end users),
        this was contradicted by a large majority of responding customers.137 One customer notes, for
    133 This is reflected both in the Parties’ submissions and their internal documents. Also see Annex 20 to Form CO
         according to which […].
    134 See case M.2567  Nordbanken/Postgirot, paras. 25-34.
    135 Form CO, paras. 280 and ff.
    136 None of the Parties provides card-based invoice payment services.
    137 See replies to Questionnaires Q1 to competitors (question 44) and Q2 to customers (question 36).
                                                                  21
 ---pagebreak---        instance, that “cards are rarely used for payment of invoices (e.g. monthly utilities) - A2A
       payment instruments (SCT and SDD) are the preferred methods”. 138
103.   A significant share of responding customers highlight that competitive dynamics are different
       between A2A and recurring card-based payment services, in particular due to differences in
       terms of technologies, prices and the role of international card schemes.139 Only a minority of
       responding competitors indicate competitive dynamics differ between these segments, and one
       of them notes there is increased convergence across segments, stating that “dynamics are
       different today, but with the increasing demand and availability of instant payments, open
       banking and mobile payments solutions, they are becoming more blurred”.140
104.   Regulatory requirements may also vary between recurring card-based payment services and
       A2A payment services, in particular in terms of fees regulation. For instance, one competitor
       notes that “providers of A2A-based IPS (such as direct debit solutions, payment slips) are
       allowed to apply a surcharge freely, which is not the case for card-based IPS for which the
       application of surcharge is banned”.141 Another competitor notes that “some A2A payments are
       today subject to deeper checks like sanction screening and transaction monitoring”.142
105.   The market investigation also indicated that a segmentation based on the type of transactions
       concerned (B2B, C2B, or C2C) or A2A payment methods (direct debit, payment slips, account-
       to-account payments provided by banks, and mobile payment solutions) could be relevant.
       Indeed, the feedback received from the market and the review of the Parties’ internal documents
       suggest that the competitive landscape and dynamics for the provision of A2A payment services
       differ significantly depending on the type of transactions concerned or A2A payment method.143
            (D)          Conclusion
106.   For the purpose of this decision, the exact product market definition for the provision of A2A
       payment services and the question of whether they are part of a wider market for invoice
       payment services including recurring card-based payments, or segmented based on the types and
       methods of A2A transactions concerned can be left open as the Transaction does not raise
       serious doubts as to its compatibility with the internal market under any plausible market
       definition.
   3.2.2.2. Geographic market definition
            (A)          Commission’s precedents
107.   The Commission has not specifically assessed the relevant geographic market definition for
       A2A payment services in the past.
   138  See replies to Questionnaire Q2 to customers (question 36).
   139  See replies to Questionnaire Q2 to customers (question 38).
   140  See replies to Questionnaire Q1 to competitors (question 46).
   141  See non-confidential version of the minutes of a conference call with a competitor dated 24 April 2020 (9:30am), para. 21.
   142  See replies to Questionnaire Q1 to competitors (question 44).
   143  See e.g. the Parties’ reply to RFI 17 (question 5) showing that the competitive landscape differs significantly on the
        potential B2B and C2B segments (with many more players on the B2B segment); and Annex 5.4.3-56 to the Form CO
        (pp. 4 and 10) providing the Target’s market share on the “A2A C2B market”. See also non-confidential version of the
        minutes of a conference call with a competitor dated 24 April 2020 (9:30am), paras. 12 to 22. As the competitive
        assessment would not differ when taking into account these potential segments, and as the Parties’ solutions relate
        primarily to direct debit solutions for B2B and C2B payments, they will not be further discussed in this decision.
                                                                      22
 ---pagebreak--- 108.   In its past decisional practice relating to services provided by payment systems, the Commission
       has consistently considered markets to be national or wider in scope, but ultimately left the
       decision open.144
            (B)         The Parties’ views
109.   In the present case, the Parties argue that the market for invoice payment services is no longer
       national but regional, covering the entire Nordic region (where the Parties’ A2A payment
       service activities overlap). In particular, the Parties submit that the Nordic region is increasingly
       integrated with the progressive removal of national regulatory and technical barriers and
       increasing cross-border activities, as illustrated by the P27 project.145
            (C)         The Commission’s assessment
110.   The market investigation did not fully support the Parties’ claims that the markets for A2A
       payment services were regional in scope. In fact, the market investigation indicated that markets
       for A2A payment services (regardless of the type of transaction or A2A payment method
       concerned) are likely national in scope.
111.   The market investigation indicated that there is a relatively low level of standardisation of
       invoice payment services at supra-national level, both in the EEA and in the Nordic region.146
       The typical geographic scope of invoice payment services is national according to a large
       majority of respondents, meaning such solutions can only be used in a given country.147
       Providers of payment solutions indicate that their solutions are largely standardised, but require
       local customisation. This may require providers of invoice payment solutions to work together
       with local financial services institutions such as banks. One provider of such services in the
       Nordic stated for instance that “[their] A2A solution has been developed specifically and
       requires an initial collaboration with banks operating in the country where [they] offer [their]
       services […].”148
112.   Trans-border competition is perceived by most market participants (customers and competitors
       alike) as limited, including competition from neighbouring countries.149 As a result, the markets
       are unlikely to be EEA-wide in scope. Some respondents note that the situation may be different
       in the Nordics. One competitor notes that “[i]n large economies, there is little competition
       across invoice payment services. In smaller nations, such as the Nordics and Central Eastern
       Europe, there is more competition across national boundaries”, another one that “[t]he Nordics
       are more harmonized as a region”. However, cross-border transactions are considered as more
       complex, in particular among different currencies,150 and all Nordic countries currently use
       different currencies. Going forward, the pan-Nordic scope of the P27 project, which will include
       A2A payment services in its scope, may indicate that A2A payment services in the Nordics will
       become increasingly regional in scope.
113.   For card-based invoice payment services specifically, the market investigation indicates that
       competitive dynamics are usually more homogenous at supranational level, as they follow the
       rules set by international card schemes, such as Mastercard or Visa. One competitor notes for
       instance that “[e]nd user UX [User Experience] seems more standardised with card based
       payments”, a customer states that “the level of standardisation is higher on a cross country level
       for card based payments services, as these services are regulated by one common set of rules set
   144  See case M.2567  Nordbanken / Postgirot, para. 37.
   145  Form CO, paras. 313 and ff.
   146  See replies to Questionnaires Q1 to competitors (question 47) and Q2 to customers (question 39).
   147  See replies to Questionnaires Q1 to competitors (question 48) and Q2 to customers (question 40).
   148  See replies to Questionnaire Q1 to competitors (question 43).
   149  See replies to Questionnaires Q1 to competitors (question 49) and Q2 to customers (question 41).
   150  See non-confidential version of the minutes of a conference call with a competitor dated 24 April 2020 (9:30am), para. 12.
                                                                      23
 ---pagebreak---        by the scheme”, and another one that “[c]ard payments are very standardized and users can rely
       on the fact that they will be able to make a payment with their card regardless of the country
       they are in and country where the card was issued”.151
            (D)        Conclusion
114.   For the purpose of this decision, the exact geographic market definition for the provision of A2A
       payment services can be left open as the Transaction does not raise serious doubts as to its
       compatibility with the internal market under any plausible market definition (national or
       regional at the Nordic level).
   3.2.3. Competitive assessment
115.   The Transaction gives rise to affected markets for invoice payment services and A2A payment
       services in the Nordics where horizontal overlaps arise.
116.   As none of the Parties is active in recurring card-based payments, the Commission’s assessment
       will primarily focus on the narrower markets for A2A payment services.
       -    In Denmark, where the Target is the incumbent provider of A2A payment services, in
            particular with its BetalingsService and Leverandørservice solutions. Moreover, both the
            Target and Mastercard submitted a bid for the ongoing P27 Layer 2 tender.
       -    In Norway, where the Target is the incumbent provider of A2A payment services, in
            particular with its eFaktura, AvtaleGiro, and Autogiro solutions. Moreover, both the Target
            and Mastercard submitted a bid for the ongoing P27 Layer 2 tender, […].
       -    In the Nordic region, including Denmark, Norway, Sweden and Finland (all at least
            potentially included within the scope of the P27 project) due to the Target’s incumbent
            position in Denmark and Norway, and the Parties’ bids for the P27 Layer 2 tender. At
            Nordic level, the Target’s market share is currently below 20%, i.e. technically below the
            affected market threshold. However, the competitive assessment will consider the Nordic
            region in light of the P27 Layer 2 tender.
   3.2.3.1. The Parties’ views
117.   The Parties indicate that Mastercard does not currently compete in the Nordics in the area of
       invoice payment services, and there is therefore no overlap between the Parties’ activities. The
       Parties also consider that the Transaction would not give rise to significant anti-competitive
       effects on the invoice payment services markets, even if Mastercard was to be considered as a
       (potential) competitor to the Target in invoice payment services. The Parties argue in particular
       that (i) competitors, including providers of A2A payment transfers such as banks, will maintain
       sufficient competition on the merged entity post Transaction; (ii) […]; (iii) […].152
118.   In a supplementary submission focusing specifically on the impact of the Transaction in
       Denmark,153 the Parties further argue that (i) […], and that (ii) […].
   151 See replies to Questionnaires Q1 to competitors (question 47.2) and Q2 to customers (question 39.3).
   152 Form CO paras. 394 and ff.
   153 See the Parties’ Supplemental submission on the impact of P27 on Danish segments of the A2A CIS and A2A
         Payment Services markets (the “Supplemental submission on Denmark”), dated 22 July 2020.
                                                                 24
 ---pagebreak---  ---pagebreak---        market share of [70-80]% and [50-60]% in Denmark and Norway respectively for A2A payment
       services for C2B transactions.159
            (B)         A2A payment services markets present some characteristic of natural monopolies
123.   Markets for A2A payment services are largely “winner-takes-all” markets. In addition to the
       payment services offered directly by the banks or new services, such as mobile payments,
       offered by fintech providers (which currently concern a much more limited number of
       transactions in the Nordics), there is typically one dominating provider of A2A payment services
       per EEA country, besides banks that provide A2A transfer services. The Target is the incumbent
       provider for such services in Denmark and Norway, where it is currently the only market player
       offering specific transfer modalities such as direct debit in Denmark and Norway.
124.   A2A payment solutions are two-sided in nature, connecting creditors and debtors. As a result,
       individuals and businesses favour using the solutions with the widest target base, which
       complicates the development of multiple similar solutions in parallel. The market investigation,
       as well as the Parties’ own submissions, confirm that A2A payment services are characterized
       by strong network effects.160
125.   In that respect, bank support and integration has proven important historically to the
       development and adoption of successful A2A payment services. A2A payment services
       sponsored by banks typically expand quickly to become the de facto standard. For instance,
       MobilePay exited the Norwegian market after the launch of Vipps, which was supported by
       Norwegian banks and gained more traction in the country.161 Similarly, the Target’s successful
       position in Denmark results from its cooperation with local banks. In 2014, Nets entered into a
       cooperation agreement with around 21 Danish and foreign banks under which Nets committed to
       […]. These same banks are largely expected to support the P27 initiative, and some of them are
       even driving the project.
126.   Markets are also tender-driven, with procedures typically involving RFIs and RFPs to multiple
       service providers as the standard procurement modalities according to the majority of respondents
       to the market investigation. However, vendors may be selected based on long-term vendor
       relationships.162 The markets also involve long product lifecycles, as the retained solution
       becomes a de facto standard for A2A payment services. One competitor notes for instance that it is
       “[d]ifficult to replace something which is already accepted and all kind of interfaces are already
       in place (e.g. ERP system)”, another one qualifies A2A payment services as “bid-driven market
       with long selling lifecycle”.163 This implies that, similarly as for A2A CIS, competition for A2A
       payment services largely takes place for the market, as opposed to in the market (even if some
       competition takes place at the latter level, primarily with bank and fintech players).
127.   These characteristics of A2A markets explain why the markets, including in Denmark, Norway
       and the Nordics are not perceived by a significant number of competitors as involving a
       sufficient number of suppliers or a large degree of competition,164 and characterized by
       important barriers to entry or expansion.165
   159 Annex 5.4-56 to the Form CO, pp. 4 and 10. See also Annex 5.4.3-35 to the Form CO, p.4, according to which the
        Target’s has a [40-50]% market share in the Danish and Norwegian “BillPay markets” (including recurring card
        payment solutions).
   160 See replies to Questionnaires Q1 to competitors (question 59) and Q2 to customers (question 42). See non-confidential
        version of the minutes of a conference call with a competitor dated 24 April 2020 (9:30am), paras. 4 and 12.
   161 See non-confidential version of the minutes of a conference call with a competitor dated 24 April 2020 (9:30am), para. 4.
   162 See replies to Questionnaire Q2 to customers (question 35).
   163 See replies to Questionnaire Q1 to competitors (question 59).
   164 See replies to Questionnaire Q1 to competitors (questions 52 and 61).
   165 See replies to Questionnaire Q1 to competitors (question 59).
                                                                     26
 ---pagebreak---             (C)         The Parties are competitors on the market as evidenced by their participation in the
                        P27 Layer 2 tender
128.   Contrary to the Parties’ claim, Mastercard cannot be considered only as a potential competitor of
       the Target. The Parties both currently compete in the P27 Layer 2 tender. As mentioned above,
       A2A payment services markets are largely characterized by markets with competition for the
       market. As a result, Mastercard and the Target should be considered as actual competitors for
       the provision of A2A services in the Nordics (including Denmark and potentially Norway).
129.   Mastercard is not perceived as one of the top players in the A2A payment services field by
       customers. Locally, the main market players mentioned include (i) the Target, Tieto/Evry and
       Bankgirot in the Nordics, (ii) the Target and MobilePay in Denmark, as well as (iii) the Target,
       Tieto/Every and Vipps in Norway. Mastercard is not mentioned by any customer as a national or
       regional player in the Nordic.166 However a significant number of competitors see Mastercard as
       a top supplier of A2A payment services at EEA level, and a material number of competitors
       (who participated in the P27 Layer 2 tender) consider the company to be an important player in
       either Denmark, Norway or the Nordics more broadly.167
130.   The market investigation indicated that the Parties are perceived as having different commercial
       profiles. While the perceived key strength of Mastercard is its global card presence and related
       brand recognition, the key strengths of the Target include primarily its strong presence in A2A
       solutions in Denmark and Norway.168 However, Mastercard and the Target are perceived as
       particularly close competitors, in particular by competing A2A players, primarily as a result of
       the head-to-head competition between the Parties in the context of the P27 Layer 2 tender, in
       which both Parties are particularly credible bidders.169
            (D)         The competitive landscape is expected to change drastically following the award of
                        the P27 Layer 2 tender
131.   The P27 A2A payment services solution is expected to benefit from the network effects
       described above, potentially even more so than national solutions due to its wider geographic
       reach. Adoption of the P27 A2A payment services solution will necessarily take place to the
       detriment of national solutions, including the Target’s in Denmark (and potentially Norway).
132.   […]. An overwhelming majority of respondents to the market investigation indicate that
       providing A2A CIS is an advantage to succeed in a tender for A2A payment services by the
       same tender authority. Reasons cited include primarily the ease of integration into the A2A CIS
       platform as well as “keep[ing] the contractual relationship simple”, or “cost, functionality and
       operations”.170 […].171 Internal documents also indicate that A2A CIS and A2A payment
       services form part of the same ecosystem and are closely linked products, both technically and
       commercially.172 […]173 […]174 Mastercard’s internal documents also estimate that […],175
   166  See replies to Questionnaire Q2 to customers (question 45).
   167  See replies to Questionnaire Q1 to competitors (question 53).
   168  See replies to Questionnaires Q1 to competitors (question 54) and Q2 to customers (question 46).
   169  See replies to Questionnaires Q1 to competitors (question 60) and Q2 to customers (question 50).
   170  See replies to Questionnaire Q1 to competitors (question 23) and Q2 to customers (question 17).
   171  See Annex 22 to the Form CO which reads that […].
   172  See Annex 61 to Form CO, slides 10 and ff.
   173  See Annex 110.3 to Form CO. Mastercard requested […] (see Annex 110.1 to the Form CO).
   174  See Annex 110.3 to Form CO, which explains that Mastercard […].
   175  See annex 163 to Form CO.
                                                                  27
 ---pagebreak---        […]. Furthermore, […].176 Considering […], it further evidences Mastercard’s position as a
       frontrunner for the provision of A2A payment services in the Nordics.
133.   […]. The Target would indeed be able to facilitate (or hinder) the transition from the national
       A2A payment services (in particular in Denmark) to the pan-Nordic ones following the tender.
       Internal documents of the Parties reveal that […].177
134.   As explained below, while competition between the Parties exists, the Transaction does not
       appear to restrict effective competition significantly on the relevant markets for A2A payment
       services, due to the lack of merger-specificity in relation to the tender, and in light of the number
       of participants involved in the process, as mentioned in Section 3.2.3.2(E) below.
135.   The award of the P27 Layer 2 tender to Mastercard […], would lead the Transaction to combine
       the legacy incumbent player for A2A payment services in Denmark ([…]) and the new solution
       provider at pan-Nordic level. Both the Parties and respondents to the market investigation expect
       the pan-Nordic A2A services to be offered following the P27 Layer 2 tender to compete with the
       domestic A2A payment solutions currently available in the Nordic region, such as the Target’s
       BetalingsService solution in Denmark.178
136.   While competition between the P27 Layer 2 laureate (potentially Mastercard) and the Target’s
       solutions in Denmark ([…]) may occur, such competition would only take place for a limited
       period of time, and would unavoidably be resolved in favour of the P27 Layer 2 laureate. While
       respondents to the market investigation indicate that the precise impact of the P27 Layer 2
       tender on the market for payment services remains uncertain at this stage,179 the market features
       (characterized by strong network effects) and statements by various players indicate that P27
       will become the preferred solution for market participants in the Nordics. All respondents to the
       market investigation expect the P27 Layer 2 services to compete effectively with the A2A
       payment solutions currently available in the Nordic region (including BetalingsService in
       Denmark) and in fine replace them.180 This also seems to be the intent of the banks involved in
       the P27 tender, according to […].181 The same banks currently support the use of
       BetalingsService in Denmark. This is particularly relevant in light of the importance of network
       effects and bank support for the provision of successful A2A payment services as detailed in
       paragraphs 123 to 127 above.
137.   In addition, a material number of respondents to the market investigation indicate that Nets’
       technology in A2A payment services is dated and that the company is not a strong innovator.182
       BetalingsService itself is over 40 years old. Based on the information on the Commission’s file
       it is likely that customers would switch to the new P27 solutions which is expected to be cheaper
       (in particular due to economies of scale), more innovative, and include additional features,
       compared to the legacy Target solutions,183 to the extent that they will remain available.
138.   In any event, with regard to Denmark specifically, […]. Internal documents of the Target indeed
       state that, […]184 […]185 As market dynamics are largely similar in both countries, the same
   176 While the Parties mention the initiative as pan-European, this is contradicted by information received in the course of
        the market investigation.
   177 See Annexes 121 and 124 to the Form CO. Internal documents note for instance that […].
   178 See replies to Questionnaires Q1 to competitors (question 56) and Q2 to customers (question 48).
   179 See non-confidential version of the minutes of a conference call with a competitor dated 24 April 2020 (9:30am), para. 31.
   180 See replies to Questionnaires Q1 to competitors (question 56) and Q2 to customers (question 48).
   181 See Annex 5.4-63 to the Form CO which reads: […].
   182 See replies to Questionnaire Q1 to competitors (question 54).
   183 See e.g. Annex 1-3 to the Form CO. P27 mentioned in a meeting with the Danish Competition authority that “[t]he
        rationale behind P27 is the benefit of economies of scale and the improvement of customer experiences across the
        Nordic countries”.
   184 See Annexes 124 and 126 to the Form CO. The documents reads that […].
                                                                     28
 ---pagebreak---        scenario would most likely materialise in Norway should the P27 project cover the Norwegian
       market.
                     Figure 1 – Market share projections – P27 and domestic schemes
                                                            […]
                                              Source: Annex 124 to Form CO
139.   In that respect, the Commission notes that the award of the P27 Layer 2 to Mastercard, […]
       would also potentially generate synergies, as it would facilitate operational and technical
       integration between the different A2A layers (A2A CIS and A2A payment services
       respectively), which is particularly attractive to financial institutions relying on the platform.186
       Furthermore, in that scenario, the Transaction would also generate efficiencies in the sense that
       it would likely facilitate migration from the legacy national solutions, at least in Denmark (and
       potentially Norway). Internal documents of the Parties indicate that the Target […].187
            (E)          There are multiple competitors for A2A payment services in the Nordics
140.   There are multiple competitors to the Parties active on the A2A payment services segment.
141.   This includes in particular competition for the market, as outlined by the P27 Layer 2 tender
       process. P27 indicated that this tender is “very competitive” with many credible bidders.188 In
       addition to the Parties, several other bidders were […] by the tendering authority, and can thus
       be considered as credible competitors. There is therefore a significant pool of credible players
       competing against the Parties in the P27 Layer 2 tender.
142.   In addition to the core competition for the market for A2A payment services, by way of
       participation in tenders to operate the main national service, some more limited degree of
       competition will remain in the market. Such competition results from the activities of fintech
       players and banks, which are expected to continue offering A2A payment solutions competing
       with the Target’s in Denmark and Norway, as well as P27’s in the Nordics should it materialise.
       This is for instance the case of MobilePay in Denmark or Vipps in Norway. Regardless of the
       P27 Layer 2 tender outcome, more generally, EEA markets for invoice payment services are
       considered dynamic. The market investigation confirms that there has been recent entry, in
       particular by fintech players including in the Nordics (with MobilePay in Denmark and Finland,
       Vipps and Klarana in Norway Swish in Sweden, and Nordic API Gateway in all these
       jurisdictions).189 Open banking and the implementation of the Directive (EU) 2015/2366 on
       payment services (so-called “PSD2”) will likely further facilitate entry in this segment. The
       PSD2 regulatory technical standards, which came into force on 14 September 2019, set out the
       terms on which financial institutions must provide third parties access to information based on
       customer payment accounts for a defined set of services (also known as open banking), which
       should lead to the emergence of additional payment methods and market players.
143.   All respondents to the market investigation expect the A2A payment service market to
       significantly evolve in the next five years, including in terms of competitive landscape and the
       technology used, in particular due to the expected growth of the markets,190 which may attract
       additional players to compete at the margin with the merged entity.
   185 See Annex 124 to the Form CO, slide 5. Mastercard also shares the same expectation. See Annex 22 to form CO that
        reads that […] .
   186 See replies to Questionnaires Q1 to competitors (questions 22 and 23) and Q2 to customers (questions 16 and 17).
        See Annex 29 to Form CO.
   187 See Annexes 121 and 124 to the Form CO. The Target’s considers that they […].
   188 See non-confidential version of the minutes of the conference call with a customer dated 22 April 2020, para. 16.
   189 See replies to Questionnaires Q1 to competitors (question 57) and Q2 to customers (question 49).
   190 See replies to Questionnaires Q1 to competitors (question 55) and Q2 to customers (question 47).
                                                                 29
 ---pagebreak---             (F)          Limited concerns expressed by market participants
144.    Most respondents to the market investigation expect the Transaction to have a neutral or positive
        impact on competition for A2A payment services.
145.    A material number of competitors expect a negative impact of the Transaction, but these
        concerns are either not substantiated or do not appear to be merger-specific.191
        -    Out of the competitors expecting a negative impact in A2A payment services, one considers
             that the Transaction “may discourage new solutions to establish in Denmark, Norway - as
             Mastercard will be a huge and very strong competitor”. However, the Commission notes
             that the network effects identified in the relevant market, and the outcome of the P27 Layer
             2 tender necessarily entail that market players will be discouraged from establishing a
             competing A2A payment service in the Nordics, and that competition is currently primarily
             taking place for the market.
        -    Another competitor notes that “[w]ith wider client base, the Target will be providing further
             standardised services that are easier to exploit by innovators within the ecosystem, reducing
             cost rather than having to create country and group specific solutions”, which appears to be
             a concern relating to potential synergies and efficiencies brought about by the Transaction.
        -    Lastly, another one mentions it is “unable to provide a clear answer to this question [on the
             impact of the Transaction] as this will depend on the plans that Mastercard has for Nets,
             and the results of the P-27 overlay services tender in the Nordics”. However, as mentioned
             above, even in the case Mastercard were to be awarded the P27 Layer 2 tender, the
             Transaction would give rise to a certain number of synergies and efficiencies.
146.    In contrast, customers who responded to the market investigation unanimously consider that the
        Transaction will have a neutral or positive impact in the Nordic region, as well as in Denmark
        and Norway.192 Responding customers unanimously consider that there will remain sufficient
        alternative suppliers of invoice payment services to obtain competitive offers at Nordics level, as
        well as in Denmark and Norway.193
   3.2.4. Conclusion
147.    Based on the above considerations, the Commission considers that the Transaction does not
        raise serious doubts as to its compatibility with the internal market in relation to the potential
        market for the provision of A2A payment services (or the wider market for invoice payment
        services) in Denmark and Norway or the wider Nordic region.
   4.       COMMITMENTS
   4.1.     Framework for the assessment of the Commitments
148.    Where a concentration raises serious doubts as regards its compatibility with the internal market,
        the parties may undertake to modify the concentration to remove the grounds for the serious
        doubts identified by the Commission. Pursuant to Article 6(2) of the Merger Regulation, where
        the Commission finds that, following modification by the undertakings concerned, a notified
   191 See replies to Questionnaire Q1 to competitors (question 62).
   192 See replies to Questionnaire Q2 to customers (question 52).
   193 See replies to Questionnaire Q2 to customers (question 51). The only customer indicating that there would not
         remain sufficient alternative suppliers at EEA level did not substantiate its claim.
                                                                     30
 ---pagebreak---         concentration no longer raises serious doubts, it shall declare the concentration compatible with
        the internal market pursuant to Article 6(1)(b) of the Merger Regulation.
149.    As set out in the Commission’s Remedies Notice,194 the commitments have to eliminate the
        competition concerns entirely, and have to be comprehensive and effective from all points of
        view.195
150.    In assessing whether commitments will maintain effective competition, the Commission
        considers all relevant factors, including the type, scale and scope of the proposed commitments,
        with reference to the structure and particular characteristics of the market in which the
        transaction is likely to significantly impede effective competition, including the position of the
        parties and other participants on the market.196
151.    In order for the commitments to comply with those principles, they must be capable of being
        implemented effectively within a short period of time. Concerning the form of acceptable
        commitments, the Merger Regulation gives discretion to the Commission as long as the
        commitments meet the requisite standard. Structural commitments will meet the conditions set
        out above only in so far as the Commission is able to conclude with the requisite degree of
        certainty, at the time of its decision, that it will be possible to implement them, and that it will be
        likely that the new commercial structures resulting from them will be sufficiently workable and
        lasting to ensure that the serious doubts are removed. 197 Divestiture commitments are normally
        the best way to eliminate competition concerns resulting from horizontal overlaps.
   4.2.      Proposed Commitments
152.    In order to render the concentration compatible with the internal market, the Parties submitted a
        set of commitments under Article 6(2) of the Merger Regulation on 27 July 2020, which were
        slightly amended on 29 July 2020 (the “Initial Commitments”). The Commission market tested
        the Initial Commitments to assess whether they are sufficient and suitable to remedy the serious
        doubts identified in Section 3 of this decision.
   4.2.1. Description of the Initial Commitments
153.    Under the Initial Commitments, the Parties offered a perpetual, EEA-wide (or global at the
        option of the remedy taker), irrevocable, transferable, assignable, (conditionally) sub-licensable,
        fully paid up, sole licence to distribute, supply, sell, develop, modify, upgrade or otherwise use
        Nets’ Realtime 24/7 technology, with which the Target currently participates in A2A CIS
        tenders (the “Licensed Technology”) to a suitable remedy taker (the “Remedy Taker”). The
        Licensed Technology includes the relevant software, the corresponding source code and related
        documentation, as well as all versions and sub-components of the technology.
154.    The Initial Commitments provide that the Remedy Taker shall have the exclusive benefit of
        supplying the Licensed Technology within the EEA (and, at the Remedy Taker’s discretion, on a
        non-exclusive basis outside the EEA). The Parties shall not distribute, supply, sell, develop,
        modify or otherwise use the Licensed Technology in competing for new A2A CIS opportunities
        within the EEA (the “non-compete” clause). However, the Parties would retain the rights to
        supply the Licensed Technology within the EEA to support existing customers of the Target
        (that are not transferred to the Remedy Taker) and meet contractual commitments.
   194 Commission Notice on remedies acceptable under Council Regulation (EC) No 139/2004 and under Commission
         Regulation (EC) No 802/2004, the “Remedies Notice” (OJ C 267, 22.10.2008, p. 1-27).
   195 Remedies Notice, paragraph 9.
   196 Remedies Notice, paragraph 12.
   197 Remedies Notice, paragraph 10.
                                                               31
 ---pagebreak--- 155.   In addition to the benefit of the Licensed Technology, the assets covered by the Initial
       Commitments (the “Assets”) include transitional agreements, specifically:
        -        Consultancy Services Agreement. This agreement would cover the provision of
                 consultancy services to the Remedy Taker ([…]), for technical support (including
                 education and training of staff and application maintenance and operations) and non-
                 technical support (including product support, programme management and business
                 operations) for a period of up to […]. The Remedy Taker would obtain access to key
                 personnel of the Target’s A2A CIS business (“Key Personnel”) under this agreement.
                 More specifically, the Consultancy Services Agreement would offer the Remedy Taker
                 access to […] full time equivalents (“FTEs”) on a consultancy basis.
        -        Transitional Support Services Agreement (“TSSA”). This agreement would cover
                 updates, relating to regulatory updates and new functional updates ([…]) for the period
                 necessary to cover updates committed as of the date of the present decision.
156.   Conversely, the Assets in the Initial Commitments would not include the transfer of:
        -        Current A2A CIS customer contracts of the Target. According to the Parties, retention of
                 the customer contracts by the new entity avoids the complications, delay and uncertainty.
                 Such hurdles arise from the contractual obligation to obtain the consent from customers
                 to transfer the contract. In addition, customers themselves may be subject to their own
                 regulatory notification and consent requirements.
        -        Personnel currently involved in the Target’s A2A CIS business. The Parties argued that
                 (i) the transfer of personnel would be challenging since no legal entity would be
                 transferred and that (ii) they need to keep personnel to deal with the retained customer
                 contracts. The Parties also submitted that the Remedy Taker would have access to the
                 Key Personnel on a consultancy basis and that Consultancy Services Agreement would
                 not include a non-solicitation obligation on the Remedy Taker who will be entitled to
                 interview and offer employment to the Key Personnel.
        -        Additional components required to provide managed services (such as datacentres and
                 networks). The Parties consider them as ancillary and commodity services readily
                 available on the market and thus not needed to ensure the viability and competitiveness
                 of the Assets.
157.   In addition to the standard purchaser requirements contained in the Commission’s template for
       divestiture remedies,198 the Initial Commitments provide that the Remedy Taker should have (i)
       experience in providing financial services in a regulated environment to individual banks or to
       banking communities and a strategic desire to build long term business relationships in the
       sector; (ii) experience in operating relevant business and IT services to deliver, operate and
       develop software and operational processes (ideally including a proven record of delivering IT
       ecosystems in areas such as the processing of payment transactions, securities or other financial
       instruments, telecommunications or the provision of other mission critical infrastructure); and
       (iii) access to sufficient financial resources to support the provision of long term A2A CIS
       contracts including participation in lengthy contract tender processes (typically lasting one to
       two years) (together the “Remedy Taker Criteria”).
   198 Which include (i) independence, (ii) sufficient financial resources, proven expertise and incentive to use, develop and
        maintain the Assets as a viable and active competitive force, and (iii) lack of prima facie competition concerns. See
        Model text for divestiture commitments, available from the Commission’s official website at
        https://ec.europa.eu/competition/mergers/legislation/template commitments en.pdf.
                                                                   32
 ---pagebreak---    4.2.2. Results of the market test
158.   The market test was launched on 29 July 2020 and sought to assess the scope and effectiveness
       of the Initial Commitments, the viability and attractiveness of the assets, the appropriateness of
       the remedy taker suitability criteria and the implementation risks.
159.   Overall, and subject to the shortcomings detailed below, most respondents indicated that the
       Initial Commitments include all necessary assets for the Remedy Taker to effectively compete
       on the EEA market(s) for the provision of managed services.199 In particular, respondents
       generally confirmed that (i) the sole licence to use the Target’s A2A CI technology
       (RealTime24/7)200 and (ii) the consultancy services provided under the Consultancy Services
       Agreement201 were sufficient to ensure the viability and competitiveness of the Assets. A
       majority of respondents also considers that the Initial Commitments would solve potential
       competition concerns arising from the Transaction with respect to the provision of A2A CI
       managed services.202
160.   However, respondents to the market investigation also identified the following main
       shortcomings in relation to the Initial Commitments.
161.   First, a significant number of respondents to the market test indicated that some qualified
       personnel would need to transfer to the Remedy Taker for the latter to become a viable a
       competitive force.203 One responding competitor notes for instance that “know-how related to
       personnel is critical to the successful functioning of the services”, another one that “the lack of
       experience on the Target's system will represent a greater challenge in the integration of the
       licensed and new components as well potentially extending the time required to achieve a
       competitive system to offer the market”. Similarly one customer notes that “[a]t least part of the
       team that developed and maintains the product should move to the new company. This is
       essential for the success of the operation, because of the non formal knowledge and
       "environmental" related assets that are always involved in these cases”, and another one that
       “[t]ransfer just technology without the due experts, both in the technical and business side,
       might not be effective”.204 Some respondents provided additional elements as to the functions
       and roles of the personnel that should transfer. One respondent notes in particular that “Key
       Personnel must be existing direct employees of the Target with the relevant technical and
       operational knowledge and expertise • Key Personnel must include key architects, product
       managers, commercial managers, development leads and operations leaders • We estimate that
       the remedy taker will require 15-20 (depending on the identity of the individuals in question and
       their seniority) subject matter experts in the Licensed Technology product and business and 15-
       30 (depending on the identity of the individuals in question and their seniority) IT/development
       engineers in a dedicated or permanent basis. • Key personnel to be named and/or level of
       skill/experience to be specified in the proposed Commitments and agreement”.205 […]206
162.   Second, the market test indicates that the additional components required for the provision of
       managed service (as opposed to software-only) should be offered to the Remedy Taker or
       already available to it in-house. Contrary to the Parties’ claims, while some of these components
       are commodity (including for example data centre services), others, such as core gateway
       services (see footnote 17 above), are “proprietary” or “complex” and thus cannot be easily
   199  See replies to Questionnaire R1 (question 3).
   200  See replies to Questionnaire R1 (question 4).
   201  See replies to Questionnaire R1 (question 5).
   202  See replies to Questionnaire R1 (question 22).
   203  See replies to Questionnaire R1 (question 8).
   204  See replies to Questionnaire R1 (question 8.1).
   205  See replies to Questionnaire R1 (question 5.1).
   206  See Annex 26 to Form CO.
                                                         33
 ---pagebreak---        sourced on the market.207 Moreover, one respondent notes that even if the remedy taker could
       source some of these components on the market, it “will need to have access to the relevant
       knowledge and expertise on how the components need to be arranged to work with the software
       in order for it to have a viable offer”.208 Respondents note that whether the transfer of such
       components is required ultimately depends on the identity of the Remedy Taker and its in-house
       capabilities.209
163.   Third, a significant number of respondents to the market test indicated that transferring existing
       customer contracts would be important for the viability of the remedy. According to them, this
       would allow the remedy taker to effectively gain experience and build up a track record of
       successfully operating an A2A CIS system.210 However, the market test also confirmed that
       transferring such contracts would lead to implementation risks and delays, due to the consent
       rights of customers. In particular, this was expressly confirmed by the current customers of the
       Target who responded to the market test. One of them explicitly mentions that he would not
       transfer its contract to the Remedy Taker, stating that they “would anyway quite likely not go for
       it”.211
164.   Fourth, regarding the TSSA and Consultancy Agreement, feedback from the market
       investigation suggests that their duration should be extended to […].212 One respondent notes
       that “[i]t takes significant time to build up in-house knowledge so […] is our best estimate”,
       another one mentions that “the time needed to establish a new and similar clearing service to the
       service provided by Nets today, [is estimated to be] between […]”, while a competitor notes that
       “[w]ith a sales cycle potentially taking […]”.213 Relatedly, the market test results indicate that
       the scope, terms and conditions of the Consultancy Services and TSSA should be further
       detailed, including in particular a non-discriminatory provision to ensure that the Remedy Taker
       would not be treated less favourably than the merged entity’s own business, and the agreements
       should include additional safeguards to limit the risk of exchange of commercially sensitive
       information.214
165.   Fifth, the non-compete provision included in the Initial Commitments should be strengthened.
       Indeed, some respondents indicated that, under the wording of the Initial Commitments, there is
       a risk that the Parties would be able to use the Licensed Technology (or part of it in combination
       with Mastercard’s technology) to bid in future EEA tenders.215
166.   Sixth, the market test indicates that, in order to ensure the viability and competitiveness of
       Assets, the Remedy Taker Criteria set out in the Initial Commitments should be supplemented.
       In particular, a majority of respondents indicated that a suitable Remedy Taker should:
        -     Have expertise in A2A CIS (but not necessarily in the EEA);216
        -     Have a footprint in the EEA;217
   207  See replies to Questionnaire R1 (question 9).
   208  See replies to Questionnaire R1 (question 9.1).
   209  See replies to Questionnaire R1 (question 10.1).
   210  See replies to Questionnaire R1 (questions 3.1 and 21.2).
   211  See replies to Questionnaire R1 (question 21.2).
   212  See replies to Questionnaire R1 (question 6).
   213  See replies to Questionnaire R1 (question 6.1).
   214  See replies to Questionnaire R1 (question 3.1). One respondent notes for instance that “conditions for the new
        functionalities to be included in the licensed SW might be non acceptable or non favourable in relation to
        [Mastercard] conditions”.
   215 See replies to Questionnaire R1 (question 18.1). One respondent notes for instance that “restrictions on Mastercard
        being able to use the Licensed Technology to develop an entire new product that is then launched in the EEA would
        also be important and required to prevent undermining the viability of the Assets in the hands of the Purchaser”.
   216 See replies to Questionnaire R1 (question 16.1).
                                                                  34
 ---pagebreak---         -     Offer complementary overlay services (such as fraud management, analytics, etc.);218 and
        -     Be able to offer the additional components of managed services in-house.219
167.   Lastly, the market test results indicate that an upfront buyer clause is warranted in the present
       case. Most of the interest for the Initial Commitments arose from players who do not prima facie
       meet the Remedy Taker Criteria,220 including those which appear necessary in light of the
       market test feedback as summarised in the previous paragraph. Moreover, a majority of
       respondents to the market test foresee implementation risks (irrespective of the transfer of
       customer contracts).
   4.2.3. The Final Commitments
168.   In order to take into account the results of the market tests, the Parties submitted revised
       commitments on 11 August 2020 (the “Final Commitments”).
169.   The Final Commitments differ from the Initial Commitments on the following points:
       -    Personnel currently involved in the Target’s A2A CIS business. The Final Commitments
            provide for the transfer of Key Personnel, defined as all personnel necessary for the Remedy
            Taker to compete effectively in the market for the provision of A2A CIS services in the
            EEA and identified in the Schedule to the Final Commitments. The Parties commit to use
            their best efforts to obtain the Key Personnel’s consent to be transferred to the remedy taker
            and to facilitate such transfer; 221
       -    Consultancy Services Agreement and additional components required to provide managed
            services. In addition to the Consultancy Services already described in the Initial
            Commitments, the Final Commitments also include the Parties’ undertaking to provide
            services relating to the provision of managed solutions ([…]). These services will consist in
            advising on the selection, specification, procurement and arrangement of the components
            (including hardware, sofrware, and services) that may be required to allow the remedy taker
            to incorporate the Licensed Technology as part of a managed service offering;222
            Consultancy Services under the Consultancy Services Agreement will be made available
            during […]. The Final Commitments also add a non-discriminatory provision and additional
            safeguards to limit the risk of exchange of commercially sensitive information between the
            Parties and the remedy taker to the Consultancy Services Agreement; 223
       -    TSSAs and additional components required to provide managed services. The Final
            Commitments provide for an additional TSSA between the Remedy Taker and Nets. This
            additional TSSA provides access, for a period of up to […], to managed services capabilities
            currently offered by the Target and sourced from Nets directly in the provision of a managed
            service offering under a separate TSSA. The Final Commitments also add a non-
   217 See replies to Questionnaire R1 (question 16.2). One respondent notes for instance that “EEA footprint/knowledge of
        EEA payments would typically be important in tenders”.
   218 See replies to Questionnaire R1 (question 16.3). One respondent notes for instance that “[c]reating a business case
        only with basic A2A payment services without any value added services would be extremely difficult”, and another
        one that “this will give options and possibilities for purchasing additional services related to A2A CIS”.
   219 See replies to Questionnaire R1 (question 16.4). One respondent notes for instance that “[t]he more managed
        services [a company offers], the easier to build a business case”.
   220 See replies to Questionnaire R1 (question 12).
   221 Final Commitments, para. 6(ii) and para. 75.
   222 Final Commitments, para. 6 (iii) and para. 78.
   223 Final Commitments, paras. 76-78.
                                                                     35
 ---pagebreak---             discriminatory provision and additional safeguards to limit the risk of exchange of
            commercially sensitive information between the Parties and the remedy taker to the TSSAs;224
       -    Additional safeguards accompanying the Licensed Technology – Non-compete provision.
            The Final Commitments strengthen the Remedy Taker’s protection for its exclusive use of
            the Licensed Technology within the EEA, by providing that the Parties not only will not
            distribute, supply, sell, develop, modify or use the Licensed Technology in the EEA but also
            any updates or improved versions thereof nor any parts or components for the purposes of
            competing for new A2A CIS tender opportunities in the EEA; 225
       -    Geographic scope of the License. Under the Final Commitments, the License to the
            Licensed Technology outside of the EEA is no longer optional but included by default in the
            scope of the remedy (on a non-exclusive basis). The extension of the geographic scope of
            the License ensures that the Remedy Taker will be able to participate in the upcoming A2A
            CIS tenders on a global basis (and not only in the EEA) and, thus, to gain experience and
            build up a track record.
       -    Remedy Taker Criteria. The Final Commitments strengthen the Remedy Taker Criteria, by
            adding that the remedy taker shall have (i) a presence and business activities in the EEA, (ii)
            expertise in the provision of A2A CIS including by way of consortia, (iii) the ability to offer
            complementary overlay services, including by way of consortia, and (iv) have at its disposal
            sufficient and sufficiently capable staff in order to compete effectively in the market for the
            provision of A2A CI software and managed solutions in the EEA, including by way of
            outsourcing agreements;226
       -    Upfront buyer requirement. The Final Commitments include an upfront buyer requirement,
            meaning that the Transaction will not be implemented before the Parties have entered into a
            final and binding sale and purchase agreement for the implementation of the Final
            Commitments and the Commission has approved the Remedy Taker. 227
170.   As regards the current A2A CIS customer contracts of the Target, they will not be transferred to
       the Remedy Taker in order to avoid complications, which may hamper the implementation of
       the Final Commitments. The market test and additional submission by the Parties indeed
       confirmed that the transfer of such contracts would trigger contractual change of control consent
       requirements, causing significant delays (at least 8 to 11 months) and uncertainty in the
       execution of the Final Commitments.228
   4.2.4. Commission’s assessment
171.   The Commission considers that the amendments described in Section 4.2.3 adequately address
       the concerns raised by the market test respondents and the Commission itself in relation to the
       Initial Commitments and contributes to the viability and competitiveness of the Assets.
172.   On the basis of the above, the Commission concludes that the Final Commitments encompass all
       necessary assets to ensure the viability and competitiveness of the Assets, including the
       RealTime24/7 technology and high-skilled Key Personnel, which constitute the core elements of
       the Target’s A2A CIS business. The Final Commitments also provide for transitional
       agreements, which are sufficient, both in terms of scope and duration, to ensure a smooth
       transfer of the Assets to the Remedy Taker.
   224  Final Commitments, para. 6(iv) and para. 79 (i) and (ii).
   225  Final Commitments, para. 70.
   226  Final Commitments, para. 14 (ii) (c) and (e).
   227  Final Commitments, para. 4.
   228  Form RM, paras. 2.24-2-25.
                                                                  36
 ---pagebreak--- 173.  The Commission also observes that the market test largely confirmed the uncertainty as to the
      transferability of the Target’s existing customer contracts to the Remedy Taker. This is due to
      the existence of strict mechanisms applicable in case of change of control under the relevant
      contracts and the reluctance expressed by customers in relation to such transfer. Consequently,
      the Commission considers that the inclusion of these contracts in the scope of the remedy could
      jeopardize the effective implementation of the Final Commitments.
174.  The strengthening of the non-compete provision, which will effectively prevent the Parties from
      using the Licensed Technology (or part of it) for upcoming tenders in the EEA ensures the
      viability and competitiveness of the Asset.
175.  Furthermore, the revised Remedy Taker Criteria set forth in the Final Commitments will ensure
      that the Assets will be transferred to a suitable Remedy Taker. Such Remedy Taker will not only
      have a presence in the EEA, allowing it to readily participate in any A2A CIS tender in the region,
      but also expertise in A2A CIS, complementary overlay services and the required staff to provide
      managed services, ensuring a smooth transition of the assets to a knowledgeable market player.
176.  Finally, the upfront buyer requirement mitigates implementation risks and ensures that the
      Assets will be transferred to a suitable Remedy Taker.
177.  In view of the foregoing, the Commission concludes that the Final Commitments would allow
      the Remedy Taker to effectively and credibly compete for the provision of A2A CIS as managed
      services in the EEA. The Final Commitments thus fully address the competition concerns
      identified in the decision resulting from the reduction in the number of credible providers of
      A2A CI managed services in the EEA.
178.  For the reasons outlined above, the Commission concludes that the Final Commitments are
      sufficient in scope and suitable to eliminate the serious doubts as to the compatibility of the
      Transaction with the internal market on all plausible markets.
   5.     CONDITIONS AND OBLIGATIONS
179.  Under the first sentence of the second subparagraph of Article 6(2) of the Merger Regulation, the
      Commission may attach to its decision conditions and obligations intended to ensure that the
      undertakings concerned comply with the commitments they have entered into vis-à-vis the
      Commission with a view to rendering a notified concentration compatible with the internal market.
180.  The achievement of the measure that gives rise to the structural change of the market is a
      condition, whereas the implementing steps which are necessary to achieve this result are
      generally obligations on the Parties. Where a condition is not fulfilled, the Commission’s
      decision declaring the concentration compatible with the internal market no longer stands.
      Where the undertakings concerned commit a breach of an obligation, the Commission may
      revoke the clearance decision in accordance with Article 8(6) of the Merger Regulation. The
      undertakings concerned may also be subject to fines and periodic penalty payments under
      Articles 14(2) and 15(1) of the Merger Regulation.
181.  In accordance with the distinction described above, the Decision in this case is conditioned on
      the full compliance with the requirements set out in Section B of the Final Commitments
      (including the Schedule), which constitute conditions. The remaining requirements set out in the
      other section of the Final Commitments constitute obligations on the Parties.
182.  The detailed text of the Final Commitments is annexed to this decision. The full text of the Final
      Commitments (including the Schedule) forms an integral part of this Decision.
                                                         37
 ---pagebreak---    6.     CONCLUSION
183.  For the above reasons, the Commission has decided not to oppose the notified operation as
      modified by the Final Commitments and to declare it compatible with the internal market and
      with the functioning of the EEA Agreement, subject to full compliance with the conditions in
      Section B of the Final Commitments annexed to the present decision and with the obligations
      contained in the other sections of the said Final Commitments. This decision is adopted in
      application of Article 6(1)(b) in conjunction with Article 6(2) of the Merger Regulation and
      Article 57 of the EEA Agreement.
                                                          For the Commission
                                                          (Signed)
                                                          Margrethe VESTAGER
                                                          Executive Vice-President
                                                     38
 ---pagebreak--- CASE M.9744 – MASTERCARD INCORPORATED / PARTS OF THE CORPORATE
                             SERVICES ASSETS OF NETS A/S
                 COMMITMENTS TO THE EUROPEAN COMMISSION
Pursuant to Article 6(2), of Council Regulation (EC) No 139/2004 (the "Merger
Regulation"), Mastercard Incorporated ("Mastercard") and Nets A/S ("Nets") hereby enter
into the following Commitments (the "Commitments") vis-à-vis the European Commission
(the "Commission") with a view to rendering the acquisition of parts of the corporate
services business of Nets ("Target") compatible with the internal market and the functioning
of the EEA Agreement.
The Commitments shall take effect upon the date of adoption of the Decision. The overall
purpose of the Commitments is to restore effective competition in the market for the supply
of account to account ("A2A") core infrastructure ("CIS") software and managed services by
making available to the Remedy Taker such assets and tools as to enable the Remedy Taker
to operate on the market immediately and compete effectively in future competitive tenders
for A2A CIS contracts.
This text shall be interpreted in light of the Commission's decision pursuant to Article 6(1)(b)
of the Merger Regulation to declare the Concentration compatible with the internal market
and the functioning of the EEA Agreement (the "Decision"), in the general framework of
European Union law, in particular in light of the Merger Regulation, and by reference to the
Commission Notice on remedies acceptable under Council Regulation (EC) No 139/2004 and
under Commission Regulation (EC) No 802/2004 (the "Remedies Notice").
        SECTION A. DEFINITIONS
1.      For the purpose of the Commitments, the following terms shall have the following
        meaning:
        A2A: Account-to-account.
        Access to Personnel: Personnel made available including under the Consultancy
        Agreement which shall include such staff as may be necessary in order to ensure the
        viability and competitiveness of the Assets in accordance with these Commitments.
        The Consultancy Agreement will not include the imposition of an employee non-
        solicit obligation on the Remedy Taker who will be entitled to interview and offer
        employment to Personnel engaged in the development, provision or management of
        the Licensed Technology at any time.
        Affiliated Undertakings: undertakings controlled by the Parties and/or by the
        ultimate parents of the Parties, whereby the notion of control shall be interpreted
        pursuant to Article 3 of the Merger Regulation and in light of the Commission
        Consolidated Jurisdictional Notice under Council Regulation (EC) No 139/2004 on
        the control of concentrations between undertakings (the "Consolidated
        Jurisdictional Notice").
        Agreements: the Licence Agreement, the Consultancy Agreement and the TSSAs.
        Assets: the benefit of the Licensed Technology, Key Personnel Transfer Commitment
        and Consultancy Services (including Access to Personnel) as well as the Transitional
        Services as described in more detail in Section B and in the Schedule which
        Mastercard commits to provide.
        CIS: core infrastructure software and managed services.
                                                  39
 ---pagebreak--- Closing: the provision of the Assets to the Remedy Taker.
Closing Period: the period of […] from the approval of the Remedy Taker and the
terms of provision of the Assets by the Commission.
Confidential Information: any business secrets, know-how, commercial information,
or any other information of a proprietary nature that is not in the public domain.
Conflict of Interest: any conflict of interest that impairs the Trustee's objectivity and
independence in discharging its duties under the Commitments.
Consultancy Agreement: the agreement under which the Remedy Taker will be
provided with the Consultancy Services.
Consultancy Services: The technical and non-technical consultancy services as
defined in Section B and in the Schedule, which shall include such services as may be
necessary in order to ensure the viability and competitiveness of the Assets in
accordance with these Commitments, the benefit of which Mastercard commits to
provide to the Remedy Taker under the Consultancy Agreement.
Divestiture Trustee: one or more natural or legal person(s) who is/are approved by
the Commission and appointed by Mastercard and who has/have received from
Mastercard the exclusive Trustee Mandate to provide the Assets to a remedy taker at
no minimum price.
EEA: the United Kingdom and those other countries participating in the European
Economic Area as of the Effective Date.
Effective Date: the date of adoption of the Decision.
First Divestiture Period: the period of […] from the Effective Date, subject to any
extension granted by the Commission under the procedure set out in paragraph 39.
ICC: International Chamber of Commerce
Identified Staff: the list of Target employees, as further specified in Table 2 in the
Schedule, from among which the Remedy Taker may recruit Key Personnel to be
transferred pursuant to the Key Personnel Transfer Commitment.
Key Personnel: all personnel necessary for the Remedy Taker to compete effectively
in the market for the provision of A2A CIS services in the EEA on the basis of the
Commitments, as further specified in the Schedule and to be transferred to the
Remedy Taker pursuant to the Key Personnel Transfer Commitment.
Key Personnel Transfer Commitment: the commitment set out in paragraph 75
below.
Licence Agreement: the agreement under which the Parties agree to licence the
Licensed Technology to the Remedy Taker.
Licensed Technology: the technology as defined in Section B and in the Schedule
which Mastercard commits to license to the Remedy Taker under the Licence
Agreement (including committed updates thereto as at Closing).
Licensor: the licensor of the Licensed Technology.
Mastercard: Mastercard Incorporated, incorporated under the laws of the United
States of America, with its registered office at Wilmington, State of Delaware.
                                           40
 ---pagebreak---    Monitoring Trustee: one or more natural or legal person(s) who is/are approved by
   the Commission and appointed by Mastercard, and who has/have the duty to monitor
   the Parties' compliance with the conditions and obligations attached to the Decision.
   Parties: Mastercard and Nets.
   Personnel: all staff currently involved in the Target’s A2A CIS business.
   Remedies Notice: Notice on remedies acceptable under Council Regulation (EC) No
   139/2004 and under Commission Regulation (EC) No 802/2004.
   Remedy Taker: the entity approved by the Commission as the licensee for the
   Licensed Technology in accordance with the criteria set out in Section D.
   Remedy Taker Criteria: the criteria laid down in paragraph 13 of these
   Commitments that the Remedy Taker must fulfil in order to be approved by the
   Commission.
   Schedule: the schedule to these Commitments describing more in detail the Assets.
   Target: those parts of the corporate services business of Nets A/S to be purchased by
   Mastercard.
   Trustee(s): the Monitoring Trustee and/or the Divestiture Trustee as the case may be.
   Trustee Divestiture Period: the period of […] from the end of the First Divestiture
   Period.
   Transitional Services: the transitional services as defined in Section B and in the
   Schedule, the benefit of which the Parties commit to provide to the Remedy Taker
   under the TSSAs.
   TSSAs: the transitional support services agreements as defined in Section B and in
   the Schedule which the Parties commit to enter into with the Remedy Taker.
   SECTION B. THE COMMITMENTS
   Commitment to provide the Assets
2. In order to maintain effective competition, Mastercard commits to provide, or procure
   the provision of the Assets by the end of the Trustee Divestiture Period to a remedy
   taker and on terms of provision of the Assets approved by the Commission in
   accordance with the procedure described in paragraph 14 of these Commitments.
   Mastercard commits to find a remedy taker and to enter into final binding Agreements
   within the First Divestiture Period. If Mastercard has not entered into such
   Agreements at the end of the First Divestiture Period, Mastercard shall grant the
   Divestiture Trustee an exclusive mandate to provide the Assets in accordance with the
   procedure described in paragraph 24 in the Trustee Divestiture Period.
3. Mastercard shall be deemed to have complied with this commitment if:
   (i)     by the end of the Trustee Divestiture Period, Mastercard or the Divestiture
           Trustee has entered into final binding Agreements and the Commission
           approves the proposed remedy taker and the terms of provision of the Assets
           as being consistent with the Commitments in accordance with the procedure
           described in paragraph 14; and
                                              41
 ---pagebreak---    (ii)    the Closing of the provision of the Assets to the Remedy Taker takes place
           within the Closing Period.
4. The proposed concentration shall not be implemented before the Parties or the
   Divestiture Trustee have entered into a final binding sale and purchase agreement for
   the implementation of these Commitments and the Commission has approved the
   Remedy Taker and the terms of the agreement with the Remedy Taker in accordance
   with paragraph 15.
5. In order to maintain the structural effect of the Commitments, Mastercard shall, for a
   period of 10 years after Closing, not acquire, whether directly or indirectly, the
   possibility of exercising influence (as defined in paragraph 43 of the Remedies
   Notice, footnote 3) over the whole or part of the Remedy Taker, unless, following the
   submission of a reasoned request from Mastercard showing good cause and
   accompanied by a report from the Monitoring Trustee (as provided in paragraph 39 of
   these Commitments), the Commission finds that the structure of the market has
   changed to such an extent that the absence of influence over the Remedy Taker is no
   longer necessary to render the proposed concentration compatible with the internal
   market.
   Structure and definition of the Assets
6. The Assets, which are described in more detail in Schedule 1, include the following:
   (i)     A perpetual, global irrevocable, transferable, assignable, sub-licensable, fully
           paid up, sole licence of those intangible assets which comprise the Licensed
           Technology.
   (ii)    The Key Personnel Transfer Commitment.
   (iii)   Consultancy Services (to be provided by the Parties to the Remedy Taker,
           unless the Remedy Taker demonstrates that it does not need those in whole, or
           in part, in order to compete effectively in the market for A2A CIS services in
           the EEA on the basis of the Commitments) including the following core
           elements relating to technical support for a period of up to […], provided […]
           and otherwise on terms and conditions to be approved by the Commission:
           (a)     education and training of staff; and
           (b)     application maintenance and operations.
           (c)     product support       (support    with    customer   on-boarding     and
                   configuration);
           (d)     programme management (providing in-depth support for the operation
                   of the product and customer implementation);
           (e)     business operations (monitoring of business operational activities); and
           (f)     advice on the selection, specification, procurement and arrangement of
                   all the components that may be required to allow the Remedy Taker to
                   incorporate the Licensed Technology as part of a managed service
                   offering.
                                              42
 ---pagebreak---        (iv)     Transitional support services agreements (provided […] and otherwise on
                terms and conditions to be approved by the Commission) ("TSSAs")
                providing:
                (a)     Updates relating to regulatory updates and new functional updates
                        which will be made available until such period as may be necessary to
                        implement the updates to which the Licensor is committed as at
                        Closing, to a potential remedy taker without undue delay;
                (b)     Access (supplied directly by Nets) to managed service capabilities to
                        the extent that these are currently offered by the Target (all of which
                        are sourced by the Target from Nets) in the provision of a managed
                        service offering (including, in particular, supply of any components of
                        a managed service, such as datacentres, network and professional
                        services as provided under the transitional services agreement between
                        Nets and the Target) for a period of up to […].
7.     In providing services to the Remedy Taker under the Consultancy Agreement and the
       TSSAs the Parties shall apply the same standards of service as they apply in providing
       comparable services to their own A2A CIS business activities or to the Target and, in
       providing those services under the Consultancy Agreement and the TSSAs, the Parties
       shall not act with the purpose of favouring Mastercard's and/or the Target's own A2A
       CIS business activities to the detriment of the Remedy Taker's A2A CIS business
       activities.
8.     The Parties shall put in place strict firewall procedures to prevent any exchange of
       competitively sensitive information between the Remedy Taker and either of the
       Parties by virtue of the services provided as part of the Consultancy Agreement or the
       TSSAs.
9.     The Remedy Taker shall have the exclusive benefit of supplying the Licensed
       Technology within the EEA and on a non-exclusive basis outside the EEA.
       Mastercard and its Affiliated Undertakings (including the Licensor) shall not
       distribute, supply, sell, develop, modify or otherwise use (i) the Licensed Technology
       or (ii) any updated or somehow improved versions of the Licensed Technology or (iii)
       any parts or components of the Licensed Technology used in combination with other
       technology, at any time in competing for new A2A CIS opportunities within the EEA.
       Mastercard and its Affiliated Undertakings shall retain rights to supply the Licensed
       Technology within the EEA only in order to enable the Licensor to support the
       existing customers of the retained business and to meet the contractual commitments
       of the retained business as at Closing.1 For the avoidance of doubt, nothing provided
       in these Commitments shall be construed as limiting any right of Mastercard and its
       Affiliated Undertakings to also distribute, supply, sell, develop, modify or otherwise
       use the Licensed Technology outside of the EEA. Subject to the above, Mastercard
       and its Affiliated Undertakings shall also retain the ability to compete in future A2A
       CIS contract tenders within the EEA using technology that it owns, develops or
       modifies, or sources from a third party provided that this does not involve the use of
       (i) the Licensed Technology or (ii) any updated or somehow improved versions of the
1  As described in Annex 1 to the Schedule.
                                                   43
 ---pagebreak---          Licensed Technology or (iii) any parts or components of the Licensed Technology
         used in combination with other technology.2
SECTION C. RELATED COMMITMENTS
Preservation of viability, marketability and competitiveness
10.      From the Effective Date until Closing, the Party with control of the Licensed
         Technology shall preserve or procure the preservation of the economic viability,
         marketability and competitiveness of the Assets, in accordance with good business
         practice, and shall minimise as far as possible any risk of loss of competitive potential
         of the Assets. In particular, the Party with control of the Licensed Technology
         undertakes not to carry out any action that might have a significant adverse impact on
         the value or competitiveness of the Assets or that might alter the nature and scope of
         activity of the Assets.
Due diligence
11.      In order to enable potential remedy takers to carry out a reasonable due diligence of
         the Assets, Mastercard shall, subject to customary confidentiality assurances and
         dependent on the stage of the licensing process:
         (a)       provide to potential remedy takers sufficient information as regards the Assets;
         (b)       provide to potential remedy takers sufficient information relating to the
                   Personnel and Key Personnel and allow them reasonable access to the
                   Personnel and Key Personnel.
Reporting
12.      Mastercard shall submit written reports in English on potential remedy takers of the
         Assets and developments in the negotiations with such potential remedy taker to the
         Commission and the Monitoring Trustee no later than 10 days after the end of every
         month following the Effective Date (or otherwise at the Commission's request).
         Mastercard shall submit a list of all potential remedy takers having expressed interest
         in the Assets to the Commission at each and every stage of the process, as well as a
         copy of all the offers made by potential remedy takers within five days of their
         receipt.
13.      Mastercard shall inform the Commission and the Monitoring Trustee on the
         preparation of the data room documentation and the due diligence procedure and shall
         submit a copy of any information memorandum to the Commission and the
         Monitoring Trustee before sending the memorandum out to potential remedy takers.
SECTION D. THE REMEDY TAKER
14.      In order to be approved by the Commission, the Remedy must fulfil the following
         criteria:
2   This includes the ability for Mastercard to use the Licensed Technology in any renewal or extension of any
    or all existing contracts listed in Annex 1 to the Schedule within the EEA. If a contract tender process is
    commenced by a customer to replace such an existing A2A CIS contract within the EEA, Mastercard shall
    not use the Licensed Technology in competing in such tender, but shall not be precluded from agreeing an
    extension or renewal of such existing contract involving the use of the Licensed Technology if that is the
    customer's preference.
                                                           44
 ---pagebreak---     (i)    The Remedy Taker shall be independent of and unconnected to Mastercard
           and its Affiliated Undertakings (this being assessed having regard to the
           situation following the licensing).
    (ii)   The Remedy Taker shall have the financial resources, proven expertise and
           incentive to use, develop and maintain the Assets as a viable and active
           competitive force in competition with Mastercard and other competitors. The
           Remedy Taker should have a presence and business activities in the EEA and
           should have the following attributes:
           (a)      experience in providing financial services in a regulated environment
                    to individual banks or to banking communities and a strategic desire to
                    build long term business relationships in the sector;
           (b)      experience in operating relevant business and IT services to deliver,
                    operate and develop software and operational processes. This should
                    include a proven record of delivering IT ecosystems in areas such as
                    the processing of payment transactions, securities or other financial
                    instruments, telecommunications or the provision of other mission
                    critical infrastructure;
           (c)      expertise in the provision of A2A CIS, as evidenced, for example,
                    through participation in A2A CIS tenders by way of consortia;
           (d)      access to sufficient financial resources to support the provision of long-
                    term A2A CIS contracts including participation in lengthy contract
                    tender processes (typically of 1-2 years in duration); and
           (e)      an ability to offer complementary overlay services such as A2A
                    payment services or other value added services (e.g. fraud management
                    and analytics) including by way of consortia, outsourcing or other
                    commercial arrangements
    (iii)  The provision of the Assets to the Remedy Taker must neither be likely to
           create, in light of the information available to the Commission, prima facie
           competition concerns nor give rise to a risk that the implementation of the
           Commitments will be delayed.
    (iv)   By virtue of the Personnel Transfer Commitment in light of its own resources,
           the Remedy Taker shall have at its disposal (including by virtue of outsourcing
           arrangements) sufficient and sufficiently capable staff in order to compete
           effectively in the market for the provision of A2A CIS services in the EEA.
15. The final binding Agreements relating to the provision of the Assets shall be
    conditional on the Commission's approval. When Mastercard has reached an
    agreement with a remedy taker, it shall submit a fully documented and reasoned
    proposal, including a copy of the final agreement(s), within one week to the
    Commission and the Monitoring Trustee. Mastercard must be able to demonstrate to
    the Commission that the Remedy Taker fulfils the Remedy Taker Criteria and that the
    Assets are being provided in a manner consistent with the Commission's Decision and
    the Commitments. For the approval, the Commission shall verify that the Remedy
    Taker fulfils the Remedy Taker Criteria and that the Assets are being provided in a
    manner consistent with the Commitments including their objective to bring about a
                                                45
 ---pagebreak---     lasting structural change in the market. The Commission may approve the transfer of
    the benefit of the Assets without one or more Assets or by substituting one or more
    Assets with one or more different assets, if this does not affect the viability and
    competitiveness of the Assets after the transfer.
    SECTION E. TRUSTEE
    I.      Appointment procedure
16. Mastercard shall appoint a Monitoring Trustee to carry out the functions specified in
    these Commitments for a Monitoring Trustee. Mastercard commits not to close the
    Concentration before the appointment of a Monitoring Trustee.
17. If Mastercard has not entered into binding Agreements regarding the provision of the
    Assets one month before the end of the First Divestiture Period or if the Commission
    has rejected a remedy taker proposed by Mastercard at that time or thereafter,
    Mastercard shall appoint a Divestiture Trustee. The appointment of the Divestiture
    Trustee shall take effect upon the commencement of the Trustee Divestiture Period.
18. The Trustee shall:
    (i)     at the time of appointment, be independent of the Parties and their Affiliated
            Undertakings;
    (ii)    possess the necessary qualifications to carry out its mandate, for example have
            sufficient relevant experience as an investment banker or consultant or auditor;
            and
    (iii)   neither have nor become exposed to a Conflict of Interest.
19. The Trustee shall be remunerated by Mastercard in a way that does not impede the
    independent and effective fulfilment of its mandate. In particular, where the
    remuneration package of a Divestiture Trustee includes a success premium linked to
    the final transfer value of the Assets, such success premium may only be earned if the
    licensing takes place within the Trustee Divestiture Period.
    Proposal by Mastercard
20. No later than two weeks after the Effective Date, Mastercard shall submit the names
    of at least two natural or legal persons whom Mastercard proposes to appoint as the
    Monitoring Trustee to the Commission for approval. No later than one month before
    the end of the First Divestiture Period or on request by the Commission, Mastercard
    shall submit a list of one or more persons whom Mastercard proposes to appoint as
    Divestiture Trustee to the Commission for approval. The proposal shall contain
    sufficient information for the Commission to verify that the person or persons
    proposed as Trustee fulfil the requirements set out in paragraph 17 and shall include:
    (i)     the full terms of the proposed mandate, which shall include all provisions
            necessary to enable the Trustee to fulfil its duties under these Commitments;
    (ii)    the outline of a work plan which describes how the Trustee intends to carry
            out its assigned tasks; and
                                               46
 ---pagebreak---     (iii)    an indication whether the proposed Trustee is to act as both Monitoring
             Trustee and Divestiture Trustee or whether different trustees are proposed for
             the two functions.
    Approval or rejection by the Commission
21. The Commission shall have the discretion to approve or reject the proposed Trustee(s)
    and to approve the proposed mandate subject to any modifications it deems necessary
    for the Trustee to fulfil its obligations. If only one name is approved, Mastercard shall
    appoint or cause to be appointed the person or persons concerned as Trustee, in
    accordance with the mandate approved by the Commission. If more than one name is
    approved, Mastercard shall be free to choose the Trustee to be appointed from among
    the names approved. The Trustee shall be appointed within one week of the
    Commission's approval, in accordance with the mandate approved by the
    Commission.
    New proposal by Mastercard
22. If all the proposed Trustees are rejected, Mastercard shall submit the names of at least
    two more natural or legal persons within one week of being informed of the rejection,
    in accordance with paragraphs 19 and 20 of these Commitments.
    Trustee nominated by the Commission
23. If all further proposed Trustees are rejected by the Commission, the Commission shall
    nominate a Trustee, whom Mastercard shall appoint, or cause to be appointed, in
    accordance with a trustee mandate approved by the Commission.
    II.      Functions of the Trustee
24. The Trustee shall assume its specified duties and obligations in order to ensure
    compliance with the Commitments. The Commission may, on its own initiative or at
    the request of the Trustee or Mastercard, give any orders or instructions to the Trustee
    in order to ensure compliance with the conditions and obligations attached to the
    Decision.
    Duties and obligations of the Monitoring Trustee
25. Monitoring Trustee shall:
    (i)      propose in its first report to the Commission a detailed work plan describing
             how it intends to monitor compliance with the obligations and conditions
             attached to the Decision;
    (ii)     propose to Mastercard such measures as the Monitoring Trustee considers
             necessary to ensure Mastercard's compliance with the conditions and
             obligations attached to the Decision;
    (iii)    review and assess potential remedy takers as well as the progress of the
             licensing process and verify that, dependent on the stage of the licensing
             process potential remedy takers receive sufficient and correct information
             relating to the Assets in particular by reviewing, if available, the data room
             documentation, the information memorandum and the due diligence process;
                                                  47
 ---pagebreak---     (iv)    act as a contact point for any requests by third parties, in particular potential
            remedy takers, in relation to the Commitments;
    (v)     provide to the Commission, sending Mastercard a non-confidential copy at the
            same time, a written report within 15 days after the end of every month so that
            the Commission can assess whether the conduct of Mastercard is consistent
            with the Commitments and the progress of the licensing process as well as
            potential remedy takers;
    (vi)    promptly report in writing to the Commission, sending Mastercard a non-
            confidential copy at the same time, if it concludes on reasonable grounds that
            Mastercard is failing to comply with these Commitments;
    (vii)   within one week after receipt of the documented proposal referred to in
            paragraph 19 of these Commitments, submit to the Commission, sending
            Mastercard a non-confidential copy at the same time, a reasoned opinion as to
            the suitability and independence of the proposed remedy taker and as to
            whether the Assets are provided in a manner consistent with the conditions
            and obligations attached to the Decision in particular, if relevant, whether the
            transfer of the benefit of the Assets without one or more of Assets affects the
            viability of the Assets after taking account of the proposed remedy taker;
    (viii)  appoint an expert in the payments and financial infrastructure industry to assist
            the Trustee, in agreement with the Commission and at the expense of
            Mastercard . Only the Trustee shall be entitled to issue instructions to the
            expert; and
    (ix)    assume the other functions assigned to the Monitoring Trustee under the
            conditions and obligations attached to the Decision.
26. If the Monitoring and Divestiture Trustee are not the same legal or natural persons,
    the Monitoring Trustee and the Divestiture Trustee shall cooperate closely with each
    other during and for the purpose of the preparation of the Trustee Divestiture Period
    in order to facilitate each other's tasks.
    Duties and obligations of the Divestiture Trustee
27. Within the Trustee Divestiture Period, the Divestiture Trustee shall provide at no
    minimum price the Assets to a licensee, provided that the Commission has approved
    both the Remedy Taker and the final binding Agreements as in line with the
    Commission's Decision and the Commitments in accordance with paragraphs 13 and
    12 of these Commitments. The Divestiture Trustee shall include in the Agreements
    (as well as in any ancillary agreements) such terms and conditions as it considers
    appropriate for an expedient provision of the Assets in the Trustee Divestiture Period.
    In particular, the Divestiture Trustee may include in the Agreements such customary
    representations and warranties and indemnities as are reasonably required to effect the
    provision of the Assets. The Divestiture Trustee shall protect the legitimate financial
    interests of Mastercard, subject to Mastercard's unconditional obligation to provide
    the Assets at no minimum price in the Trustee Divestiture Period.
28. In the Trustee Divestiture Period (or otherwise at the Commission's request), the
    Divestiture Trustee shall provide the Commission with a comprehensive monthly
                                                48
 ---pagebreak---     report written in English on the progress of the licensing process. Such reports shall
    be submitted within 15 days after the end of every month with a simultaneous copy to
    the Monitoring Trustee and a non-confidential copy to Mastercard.
    III.     Duties and obligations of Mastercard
29. Mastercard shall provide and shall cause their advisors to provide the Trustee with all
    such co-operation, assistance and information as the Trustee may reasonably require
    to perform its tasks. The Trustee shall have full and complete access to any of the
    Target's books, records, documents, management or other personnel, facilities, sites
    and technical information necessary for fulfilling its duties under the Commitments
    and Mastercard shall provide the Trustee upon request with copies of any document.
    Mastercard shall make available to the Trustee one or more offices on their premises
    and shall be available for meetings in order to provide the Trustee with all information
    necessary for the performance of its tasks.
30. Mastercard shall provide the Monitoring Trustee with all managerial and
    administrative support that it may reasonably request. Mastercard shall provide and
    shall cause their advisors to provide the Monitoring Trustee, on request, with the
    information submitted to potential remedy takers, in particular give the Monitoring
    Trustee access to the data room documentation and all other information granted to
    potential remedy takers in the due diligence procedure. Mastercard shall inform the
    Monitoring Trustee on possible remedy takers, submit lists of potential remedy takers
    at each stage of the selection process, including the offers made by potential remedy
    takers at those stages, and keep the Monitoring Trustee informed of all developments
    in the licensing process.
31. Mastercard shall grant or procure Affiliated Undertakings to grant comprehensive
    powers of attorney, duly executed, to the Divestiture Trustee to effect the provision of
    the Assets (including ancillary agreements), the Closing and all actions and
    declarations which the Divestiture Trustee considers necessary or appropriate to
    achieve the provision of the Assets and the Closing, including the appointment of
    advisors to assist with the process. Upon request of the Divestiture Trustee,
    Mastercard shall cause the documents required for effecting the provision of the
    Assets and the Closing to be duly executed.
32. Mastercard shall indemnify the Trustee and its employees and agents (each an
    "Indemnified Party") and hold each Indemnified Party harmless against, and hereby
    agrees that an Indemnified Party shall have no liability to Mastercard for, any
    liabilities arising out of the performance of the Trustee's duties under the
    Commitments, except to the extent that such liabilities result from the wilful default,
    recklessness, gross negligence or bad faith of the Trustee, its employees, agents or
    advisors.
33. At the expense of Mastercard, the Trustee may appoint advisors (in particular for
    corporate finance or legal advice or advice in the payments and financial
    infrastructure industry), subject to Mastercard's approval (this approval not to be
    unreasonably withheld or delayed) if the Trustee considers the appointment of such
    advisors necessary or appropriate for the performance of its duties and obligations
    under the Trustee Mandate, provided that any fees and other expenses incurred by the
    Trustee are reasonable. Should Mastercard refuse to approve the advisors proposed by
                                              49
 ---pagebreak---     the Trustee the Commission may approve the appointment of such advisors instead,
    after having heard Mastercard. Only the Trustee shall be entitled to issue instructions
    to the advisors. Paragraph 36 of these Commitments shall apply mutatis mutandis. In
    the Trustee Divestiture Period, the Divestiture Trustee may use advisors who served
    Mastercard during the First Divestiture Period if the Divestiture Trustee considers this
    in the best interest of an expedient provision of the benefit of the Assets.
34. Mastercard agrees that the Commission may share Confidential Information
    proprietary to the Target with the Trustee. The Trustee shall not disclose such
    information and the principles contained in Article 17 (1) and (2) of the Merger
    Regulation apply mutatis mutandis.
35. Mastercard agrees that the contact details of the Monitoring Trustee are published on
    the website of the Commission's Directorate-General for Competition and they shall
    inform interested third parties, in particular any potential remedy takers, of the
    identity and the tasks of the Monitoring Trustee.
36. For a period of 10 years from the Effective Date the Commission may request all
    information from Mastercard that is reasonably necessary to monitor the effective
    implementation of these Commitments.
    IV.     Replacement, discharge and reappointment of the Trustee
37. If the Trustee ceases to perform its functions under the Commitments or for any other
    good cause, including the exposure of the Trustee to a Conflict of Interest:
    (i)     the Commission may, after hearing the Trustee and Mastercard, require
            Mastercard to replace the Trustee; or
    (ii)    Mastercard may, with the prior approval of the Commission, replace the
            Trustee.
38. If the Trustee is removed according to paragraph 36 of these Commitments, the
    Trustee may be required to continue in its function until a new Trustee is in place to
    whom the Trustee has effected a full hand over of all relevant information. The new
    Trustee shall be appointed in accordance with the procedure referred to in paragraphs
    19 to 22 of these Commitments.
39. Unless removed according to paragraph 36 of these Commitments, the Trustee shall
    cease to act as Trustee only after the Commission has discharged it from its duties
    after all the Commitments with which the Trustee has been entrusted have been
    implemented. However, the Commission may at any time require the reappointment
    of the Monitoring Trustee if it subsequently appears that the relevant remedies might
    not have been fully and properly implemented.
    SECTION F. THE REVIEW CLAUSE
40. The Commission may extend the time periods foreseen in the Commitments in
    response to a request from Mastercard or, in appropriate cases, on its own initiative.
    Where Mastercard requests an extension of a time period, it shall submit a reasoned
    request to the Commission no later than one month before the expiry of that period,
    showing good cause. This request shall be accompanied by a report from the
                                                50
 ---pagebreak---     Monitoring Trustee, who shall, at the same time send a non-confidential copy of the
    report to Mastercard. Only in exceptional circumstances shall Mastercard be entitled
    to request an extension within the last month of any period.
41. The Commission may further, in response to a reasoned request from Mastercard
    showing good cause waive, modify or substitute, in exceptional circumstances, one or
    more of the undertakings in these Commitments. This request shall be accompanied
    by a report from the Monitoring Trustee, who shall, at the same time send a non-
    confidential copy of the report to Mastercard. The request shall not have the effect of
    suspending the application of the undertaking and, in particular, of suspending the
    expiry of any time period in which the undertaking has to be complied with.
    SECTION G. FAST TRACK DISPUTE RESOLUTION
42. In the event that the Remedy Taker claims that Mastercard or an Affiliated
    Undertaking is failing to comply with the requirements of the Commitments vis-à-vis
    the Remedy Taker, the fast track dispute resolution procedure as described herein
    shall apply. Such fast track dispute resolution mechanism will be an additional option
    to the benefit of the Remedy Taker and not an obligation for it.
43. If the Remedy Taker wishes to avail itself of the fast track dispute resolution
    procedure, it shall send a written request to Mastercard (with a copy to the Trustee)
    setting out in detail the reasons leading that party to believe that Mastercard is failing
    to comply with the requirements of the Commitment. The Remedy Taker and
    Mastercard will use their best efforts to resolve all differences of opinion and to settle
    all disputes that may arise through co-operation and consultation within a reasonable
    period of time not exceeding fifteen 15 working days after receipt of the request.
44. The Trustee shall present its own proposal (the "Trustee Proposal") for resolving the
    dispute within eight 8 working days, specifying in writing the action, if any, to be
    taken by Mastercard or an Affiliated Undertaking in order to ensure compliance with
    the commitments vis-à-vis the Remedy Taker, and be prepared, if requested, to
    facilitate the settlement of the dispute.
45. Should the Remedy Taker and Mastercard (together the "Parties to the Arbitration")
    fail to resolve their differences of opinion in the consultation phase, the Remedy
    Taker shall serve a notice (the "Notice"), in the sense of a request for arbitration, to
    the International Chamber of Commerce (the "ICC"), with a copy of such Notice and
    request for arbitration to Mastercard.
46. The Notice shall set out in detail the dispute, difference or claim (the "Dispute") and
    shall contain, inter alia, all issues of both fact and law, including any suggestions as to
    the procedure, and all documents relied upon shall be attached, e.g. documents,
    agreements, expert reports, and witness statements. The Notice shall also contain a
    detailed description of the action to be undertaken by Mastercard (including, if
    appropriate, a draft contract comprising all relevant terms and conditions) and the
    Trustee Proposal, including a comment as to its appropriateness.
47. Mastercard shall, within 10 working days from receipt of the Notice, submit its
    answer (the "Answer"), which shall provide detailed reasons for its conduct and set
    out, inter alia, all issues of both fact and law, including any suggestions as to the
    procedure, and all documents relied upon, e.g. documents, agreements, expert reports,
                                                  51
 ---pagebreak---        and witness statements. The Answer shall, if appropriate, contain a detailed
       description of the action which Mastercard proposes to undertake vis-à-vis the
       Remedy Taker (including, if appropriate, a draft contract comprising all relevant
       terms and conditions) and the Trustee Proposal (if not already submitted), including a
       comment as to its appropriateness.
Appointment of the Arbitrators
48.    The Arbitral Tribunal shall consist of three persons. The Remedy Taker shall
       nominate its arbitrator in the Notice; Mastercard shall nominate its arbitrator in the
       Answer. The arbitrator nominated by the Remedy Taker and by Mastercard shall,
       within five working days of the nomination of the latter, nominate the chairman,
       making such nomination known to the parties and the Arbitral Institution which shall
       forthwith confirm the appointment of all three arbitrators.
49.    Should the Remedy Taker wish to have the Dispute decided by a sole arbitrator it
       shall indicate this in the Notice. In this case, the Remedy Taker and Mastercard shall
       agree on the nomination of a sole arbitrator within five working days from the
       communication of the Answer, communicating this to the Arbitral Institution.
50.    Should Mastercard fail to nominate an arbitrator, or if the two arbitrators fail to agree
       on the chairman, or should the Parties to the Arbitration fail to agree on a sole
       arbitrator, the default appointment(s) shall be made by the Arbitral Institution.
51.    The three-person arbitral tribunal or, as the case may be, the sole arbitrator, are herein
       referred to as the "Arbitral Tribunal".
Arbitration Procedure
52.    The Dispute shall be finally resolved by arbitration under the ICC rules, with such
       modifications or adaptations as foreseen herein or necessary under the circumstances
       (the "Rules"). The arbitration shall be conducted in London, England in the English
       language.
53.    The procedure shall be a fast-track procedure. For this purpose, the Arbitral Tribunal
       shall shorten all applicable procedural time-limits under the Rules as far as admissible
       and appropriate in the circumstances. The Parties to the Arbitration shall consent to
       the use of e-mail for the exchange of documents.
54.    The Arbitral Tribunal shall, as soon as practical after the confirmation of the Arbitral
       Tribunal, hold an organisational conference to discuss any procedural issues with the
       Parties to the Arbitration. Terms of Reference shall be drawn up and signed by the
       Parties to the Arbitration and the Arbitration Tribunal at the organisational meeting or
       thereafter and a procedural time-table shall be established by the Arbitral Tribunal.
       An oral hearing shall, as a rule, be established within two months of the confirmation
       of the Arbitral Tribunal.
55.    In order to enable the Arbitral Tribunal to reach a decision, it shall be entitled to
       request any relevant information from the Parties to the Arbitration, to appoint experts
       and to examine them at the hearing, and to establish the facts by all appropriate
       means. The Arbitral Tribunal is also entitled to ask for assistance by the Trustee in all
       stages of the procedure if the Parties to the Arbitration agree.
                                                   52
 ---pagebreak--- 56.    The Arbitral Tribunal shall not disclose confidential information and apply the
       standards attributable to confidential information under the Merger Regulation. The
       Arbitral Tribunal may take the measures necessary for protecting confidential
       information in particular by restricting access to confidential information to the
       Arbitral Tribunal, the Trustee, and outside counsel and experts of the opposing party.
57.    The burden of proof in any dispute under these Rules shall be borne as follows: (i) the
       Remedy Taker must produce evidence of a prima facie case and (ii) if the Remedy
       Taker produces evidence of a prima facie case, the Arbitral Tribunal must find in
       favour of the Remedy Taker unless Mastercard can produce evidence to the contrary.
Involvement of the Commission
58.    The Commission shall be allowed and enabled to participate in all stages of the
       procedure by:
       (i)     receiving all written submissions (including documents and reports, etc.) made
               by the Parties to the Arbitration;
       (ii)    receiving all orders, interim and final awards and other documents exchanged
               by the Arbitral Tribunal with the Parties to the Arbitration (including Terms of
               Reference and procedural time-table);
       (iii)   giving the Commission the opportunity to file amicus curiae briefs; and
       (iv)    being present at the hearing(s) and being allowed to ask questions to parties,
               witnesses and experts.
59.    The Arbitral Tribunal shall forward, or shall order the Parties to the Arbitration to
       forward, the documents mentioned to the Commission without delay.
60.    In the event of disagreement between the Parties to the Arbitration regarding the
       interpretation of the Commitment, the Arbitral Tribunal may seek the Commission's
       interpretation of the Commitment before finding in favour of any Party to the
       Arbitration and shall be bound by the interpretation.
Decisions of the Arbitral Tribunal
61.    The Arbitral Tribunal shall decide the dispute on the basis of the Commitment and the
       Decision. Issues not covered by the Commitment and the Decision shall be decided
       (in the order as stated) by reference to the Merger Regulation, EU law and general
       principles of law common to the legal orders of the Member States without a
       requirement to apply a particular national system. The Arbitral Tribunal shall take all
       decisions by majority vote.
62.    Upon request of the Remedy Taker, the Arbitral Tribunal may make a preliminary
       ruling on the Dispute. The preliminary ruling shall be rendered within one month after
       the confirmation of the Arbitral Tribunal, shall be applicable immediately and, as a
       rule, remain in force until a final decision is rendered.
63.    The Arbitral Tribunal shall, in the preliminary ruling as well as in the final award,
       specify the action, if any, to be taken by Mastercard or an Affiliated Undertaking in
       order to comply with the commitments vis-à-vis the Remedy Taker (e.g. specify a
                                                   53
 ---pagebreak---     contract including all relevant terms and conditions). The final award shall be final
    and binding on the Parties to the Arbitration and shall resolve the Dispute and
    determine any and all claims, motions or requests submitted to the Arbitral Tribunal.
    The arbitral award shall also determine the reimbursement of the costs of the
    successful party and the allocation of the arbitration costs. In case of granting a
    preliminary ruling or if otherwise appropriate, the Arbitral Tribunal shall specify that
    terms and conditions determined in the final award apply retroactively.
64. The final award shall, as a rule, be rendered within six months after the confirmation
    of the Arbitral Tribunal. The time-frame shall, in any case, be extended by the time
    the Commission takes to submit an interpretation of the Commitment if asked by the
    Arbitral Tribunal.
65. The Parties to the Arbitration shall prepare a non-confidential version of the final
    award, without business secrets. The Commission may publish the non-confidential
    version of the award.
66. Nothing in the arbitration procedure shall affect the power to the Commission to take
    decisions in relation to the Commitment in accordance with its powers under the
    Merger Regulation.
    SECTION H. ENTRY INTO FORCE
67. The Commitments shall take effect upon the date of adoption of the Decision.
                                              54
 ---pagebreak---                                                 SCHEDULE
(a)      The Assets as operated to date have the following legal and functional structure:
         The remedy proposed involves the provision of the Assets, as described in more detail
         in Section B. These are not stand alone businesses. As such, the Assets do not have a
         "legal and functional structure".
(b)      Following paragraph 3 of these Commitments, the Assets include, but are not
         limited to:
         (a)       the following main tangible assets;
         (b)       the following main intangible assets;
68.      There are no tangible assets
69.      Intangible assets include copies of and a perpetual global, irrevocable, transferable,
         assignable, sub-licensable, fully paid up, sole license3 to distribute, supply, sell,
         develop, modify, upgrade or otherwise use, the relevant software (including source
         code and all documentation) for the Nets' Realtime 24/7 (RTP) provision. This is
         comprised of the next-gen modular instant payment solution developed by Nets (all
         versions and sub-components - […]4 […]) – real time clearing applications and
         committed updates thereto as at Closing ("Licensed Technology")5 . The Licensed
         Technology shall include all related application-programming interfaces (“APIs”),
         which are necessary and used, previously used or planned to be used by Nets or the
         Target as at the Closing to connect the Nets Realtime 24/7 (RTP) provision with
         financial institutions and/or overlay services, including core gateway APIs.
70.      The Remedy Taker shall have the exclusive benefit of supplying the Licensed
         Technology within the EEA and on a non-exclusive basis outside the EEA.
         Mastercard and its Affiliated Undertakings (including the Licensor) shall not
         distribute, supply, sell, develop, modify or otherwise use (i) the Licensed Technology
         or (ii) any updated or somehow improved versions of the Licensed Technology or (iii)
         any parts or components of the Licensed Technology used in combination with other
         technology, in competing for new A2A CIS opportunities within the EEA.
         Mastercard and its Affiliated Undertakings shall retain rights to supply the Licensed
         Technology within the EEA only in order to enable the Licensor to support the
         existing customers of the retained business and to meet the contractual commitments
         of the retained business as at Closing6. For the avoidance of doubt, nothing provided
         in these Commitments shall be construed as limiting any right of Mastercard and its
         Affiliated Undertakings to also distribute, supply, sell, develop, modify, upgrade or
         otherwise use the Licensed Technology outside of the EEA. Mastercard shall also
         retain the ability to compete in future A2A CIS contract tenders within the EEA using
         technology that it owns, develops or modifies, or sources from a third party provided
         that this does not involve the use of (i) the Licensed Technology or (ii) any updated or
3   Licensor may only license/ sublicense to support its own use and that of its customers and the customers'
    service providers.
4   […].
5   The licence excludes any trademark rights but the Remedy Taker may provide positive attributions with
    regards to the source of the original development of the Licensed Technology (i.e. the Remedy Taker may
    refer to the fact that the Licensed Technology was developed by Nets).
6   As described in Annex 1 to this Schedule.
                                                          55
 ---pagebreak---     somehow improved versions of the Licensed Technology or (iii) any parts or
    components of the Licensed Technology used in combination with other technology,.
(c) The following main licences, permits and authorisations:
71. The following is a list of all licenses currently used by the Target to exploit the
    Licensed Technology:
    (i)     Service Licences. […];
    (ii)    Application Licences. […];
    (iii)   Infrastructure Licences. […]:
    (a)     Database: […];
    (b)     Operating Systems: […].
72. For completeness, a number of other paid and Open-Source tools are used by the
    Target (e.g. for network, file transfer, etc.), but these are standard commodity services
    that would typically be provided by a security outsourcer provider, such as […].
(d) the following main          contracts,     agreements,      leases,   commitments     and
    understandings
73. None.
(e) the following customer, credit and other records:
74. No customer, credit or other records will be included within the Assets.
(f) the following personnel:
75. The Key Personnel will be transferred to the Remedy Taker as part of the Assets,
    subject to their consent. The Parties shall use their best efforts to the extent permitted
    by law, to obtain such consent and to facilitate the transfer to the Remedy Taker of
    Key Personnel on the basis set out below (the Key Personnel Transfer
    Commitment):
    (a)     The Parties have identified the Key Personnel as set out in Table 1 below:
                                                 56
 ---pagebreak---                          Table 1: Key Personnel
                  Area of business           Role   Number of      Number of
                                                   employed staff  outsourced
                                                     (Group A     (Group B Key
                                                       Key         Personnel)7
                                                    Personnel)
                       Business              […]       […]
                                             […]       […]
                                             […]       […]
                  Tech Application           […]       […]
                                             […]       […]
                                             […]       […]            […]
                                             […]       […]            […]
                                             […]       […]            […]
                   Tech Managed              […]       […]
                        Services
                                             […]       […]
                                             […]       […]
                                             […]       […]
                                             […]       […]
                                             […]       […]
                                             […]       […]
7 As listed in Annex 4 to the Schedule
                                                57
 ---pagebreak---                 The Remedy Taker may recruit Target employees to make up the composition
                of Group A Key Personnel from among the identified staff in Table 2 below
                ("Identified Staff"):
                         Table 2: Identified Staff
                   Area of business              Role       Number          of
                                                            employed staff 8
                         Business                 […]              […]
                                                  […]              […]
                                                  […]              […]
                   Tech Application               […]              […]
                                                  […]              […]
                                                  […]              […]
                                                  […]              […]
                                                  […]              […]
                  Tech         Managed            […]             […]9
                  Services
                                                  […]              […]
                                                  […]              […]
                                                  […]              […]
                                                  […]              […]
                                                  […]              […]
                                                  […]              […]
8 As listed in Annex 4 to the Schedule
9 […].
                                                   58
 ---pagebreak--- Group A Key Personnel
(b)   The following provisions shall apply to the recruitment by the Remedy
      Taker of Group A Key Personnel from among the Identified Staff. The
      Parties shall provide relevant contact details for the Identified Staff to
      the Remedy Taker or otherwise make the Identified Staff available to
      the Remedy Taker for interview subject to compliance with applicable
      laws.
(c)   The Parties shall promptly facilitate interviews between the Identified
      Staff and the Remedy Taker, and the Parties shall encourage the
      Identified Staff from participating in such interviews, and shall not
      interfere in employment negotiations between the Identified Staff and
      the Remedy Taker.
(d)   The Remedy Taker shall recruit such members of the Identified Staff
      as are required to make up the composition of Group A Key Personnel
      as listed in Table 1 above. To the extent that (i) the Remedy Taker is
      not able to identify and recruit a Key Personnel member from amongst
      the Identified Staff, or for such other Role that it considers reasonably
      necessary in order to compete effectively using the Assets; or (ii) the
      Remedy Taker reasonably considers, and the Monitoring Trustee
      agrees after reviewing the Remedy Taker's written explanation and
      consulting with the Parties, that the number and/or roles of the Key
      Personnel listed in Table 1 are insufficient to enable the Remedy Taker
      to compete effectively using the Assets in the market for the provision
      of A2A CIS services in the EEA, then the Parties shall promptly put
      forward a reasonable proposal to the Monitoring Trustee and the
      Commission identifying such further staff within their respective
      businesses as would be relevant to the business need identified by the
      Remedy Taker (and should identify to the Monitoring Trustee and the
      Commission that the replacement or addition, as the case may be, is
      well suited to carry out the functions required by the Remedy Taker),
      and this paragraph shall apply mutatis mutandis with respect to such
      further relevant staff, or any alternative solution suitable to the
      Monitoring Trustee and the Commission.
(e)   Subject to the provisions of sub-paragraph (d), with respect to each
      such Identified Staff member who receives an offer of employment
      from the Remedy Taker (conditional on or following the Closing) (an
      Employee Receiving an Offer), the Parties shall do the following: (i)
      not prevent, prohibit or restrict such Employee Receiving an Offer
      from being employed by the Remedy Taker, and shall not offer any
      incentive to such Employee Receiving an Offer to decline employment
      with the Remedy Taker; if the Employee Receiving an Offer accepts
      such offer of employment with the Remedy Taker, the Parties shall
      cooperate with the Remedy Taker in effecting the transfer of such
      Employee Receiving an Offer to the employment of the Remedy
      Taker, and the Parties shall waive or amend the relevant provisions of
      such Employee Receiving an Offer’s agreements, stock options and
      other employee benefit arrangements so that they do not suffer adverse
                                  59
 ---pagebreak---                     consequences as a result of their negotiations with, or acceptance of an
                    offer from, the Remedy Taker.
            (f)     The Parties shall, at their own cost, put in place an incentivisation
                    scheme to be agreed promptly with the Monitoring Trustee and on the
                    basis of industry practice in order to incentivise the Key Personnel
                    identified above (and any other employees identified pursuant to sub-
                    paragraph (c)) that have received offers of employment from the
                    Remedy Taker to accept such offers. In addition the Parties will work
                    loyally with the Remedy Taker to identify relevant incentive schemes
                    for the Remedy Taker to consider when offering employment.
            (g)     Each of the Parties undertakes, subject to customary limitations, that in
                    relation to Key Personnel that are hired by the Remedy Taker pursuant
                    to this paragraph, that it will not solicit, and will procure that its
                    Affiliated Undertakings will not solicit, such employees for a period of
                    […] after Closing or after the date of termination of employment of
                    such employee by the Parties (as applicable).
            Group B
            The Parties shall use reasonable best efforts to facilitate negotiations between
            the outsourced service providers providing the Group B Key Personnel and the
            Remedy Taker, in order to procure outsourcing agreements on no less
            favourable terms than the existing outsourcing agreements such that the
            Remedy Taker shall continue to have access to the Group B Key Personnel.
    Consultancy
76. The Parties shall provide consultancy services under the Consultancy Agreement, as
    described further in sub-paragraph (g) below unless the Remedy Taker demonstrates
    that it does not need those in whole, or in part, in order to in order to compete
    effectively in the market for A2A CIS services in the EEA on the basis of the
    Commitments. The Consultancy Agreement, to be approved by the Commission, will
    not include the imposition of an employee non-solicit obligation on the Remedy Taker
    who will be entitled to interview and offer employment to such employees at any
    time.
(g) the arrangements for the supply with the following products or services by the
    Parties or Affiliated Undertakings for a transitional period of up to […] after
    Closing:
77. Consultancy Services shall be made available, within the […] transitional period for
    up to a total number of hours as may be agreed between the Parties and the
    Monitoring Trustee in order to ensure that the Remedy Taker can compete effectively
    in the market for A2A CIS services.
78. The Parties shall put in place strict firewall procedures to prevent any exchange of
    competitively sensitive information between the Remedy Taker and either of the
    Parties by virtue of the services provided as part of the Consultancy Agreement or the
    TSSAs.
                                              60
 ---pagebreak---  ---pagebreak---             professional services as provided under the transitional services agreement
            between Nets and the Target) for a period of up to […].
80. The Assets shall not include:
    Customer contracts, accounts or pricing; existing operations and operational assets;
    hardware or software acquired by the Parties on the open market; trademarks, service
    marks or brands or any licenses thereto (including without limitation any rights to use
    the names "Nets", or "Mastercard" alone or in connection with any of the Assets); any
    IP rights or customer contracts relating to other product offerings, platforms or
    delivery mechanisms of the Parties; land and buildings; goodwill;; any obligation to
    support or maintain any software or other IP transferred to the Remedy Taker except
    as set forth herein or in the TSSAs
                                              62
 ---pagebreak---            ANNEX 1
Target Contractual Commitments
              […]
                 63
 ---pagebreak---           ANNEX 2
Committed Updates (Confidential)
            […]
                64
 ---pagebreak---             ANNEX 3
Non-Committed Updates (Confidential)
               […]
                  65
 ---pagebreak---                                          ANNEX 4
Details of (i) Identified Staff for potential recruitment as Group A Key Employees and
                        (ii) Group B Key Employees (Confidential)
                                             […]
                                                 66