CELEX: 31992M0218
Language: en
Date: 1992-05-18 00:00:00
Title: COMMISSION DECISION of 18.05.1992 declaring a concentration to be compatible with the common market (Case No IV/M.218 - EUCOM / DIGITAL) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

Avis juridique important

|

31992M0218

COMMISSION DECISION of 18.05.1992 declaring a concentration to be compatible with the common market (Case No IV/M.218 - EUCOM / DIGITAL) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 140 , 03/06/1992 P. 0000

 COMMISSION DECISION of 18.05.1992 declaring a concentration to  be compatible with the common market (Case No IV/M.218 - EUCOM  / DIGITAL) according to Council Regulation (EEC) No 4064/89  (Only the English text is authentic)  The paper version of the decision is available through the  sales offices of the Office of Official Publications of the  European Communities. PUBLIC VERSION MERGER PROCEDURE ARTICLE 6(1)(b) DECISION Registered with advice of delivery To the notifying parties Dear Sirs, Subject: <ind> Case No. IV/M.218 - EUCOM / DIGITAL <tab> <ind> Your notification pursuant to Article 4 of Council  Regulation (EEC) No. 4064/89  1.<ind> On 15.04.1992 Eucom Telekommunikation-Mehrwertdienst  mbH (EUCOM) and Digital Equipment (Holdings) BV jointly  notified to the Commission an operation pursuant to Article 4  of the Merger Regulation concerning the creation of Euro-Log  Holding BV (EURO-LOG), a jointly owned company which will  provide a value added network service in the transportation  sector.  2.<ind> After examination of the notification, the Commission  has concluded that the notified operation falls within the  scope of application of Council Regulation (EEC) No. 4064/89  and that it is compatible with the common market.  I.<tab> THE PARTIES  3.<ind> EUCOM, which is a fifty-fifty JV between France Télécom  and Deutsche Bundespost Telekom, is a holding company that  develops specific value added network services by cooperating  with other partners or by investing in existing companies.  4.<ind> Digital Equipment (Holdings) BV is a wholly owned  subsidiary of Digital EquipmentCorporation (Digital). The main  activities of the Digital Group include the design,  manufacture, sale and service of computer systems, associated  peripheral equipment and related software products.  5.<ind> EURO-LOG will be a limited liability company under the  laws of the Netherlands. It will develop and market a specific  value added service in the telecommunications sector. EURO-LOG  will provide a freight management information system linking  all logistic partners in the transportation chain, which will  aim to provide an integrated and comprehensive service to  subscribers. At the outset EURO-LOG's share capital will be  owned by EUCOM [Deleted: business secret] and Digital [Deleted:  business secret]. However, within a 2 years period EUCOM's and  Digital's shareholdings are expected to be reduced to [Deleted:  business secret] and [Deleted: business secret] respectively by  accepting as new shareholders the German consulting firm  Technologie Management Gruppe GmbH (TMG) with a [Deleted:  business secret] stake and a group of financial investors for  the balance.  II.<tab> CONCENTRATION  6.<ind> Although EUCOM will keep under the present and  anticipated future capital structure the majority of the share  capital, EURO-LOG will be jointly controlled by France Télécom  and Deutsche Bundespost via EUCOM, and Digital since the  shareholders' agreement provides that major decisions  concerning the business activities of EURO-LOG such as for  example the approval and implementation of the Business Plan,  the dividend policy and the appointment of the top managers  need the consent of EUCOM and Digital. [Deleted: business  secret]  7.<ind> EURO-LOG will perform on a lasting basis all the  functions of an autonomous economic entity. France Télécom,  Deutsche Bundespost and Digital will transfer to EURO-LOG all  the know-how and assets required for the initial start up of  the operations. For the marketing and customer service of its  products EURO-LOG plans to create, in each country it will  enter, joint ventures with local investors. EURO-LOG will keep  51% of the shares of these JVs. Thus, EURO-LOG will not depend  for the building and maintenance of its customer base on its  parents.  8.<ind> The freight management system to be marketed by EURO- LOG will be a new type of development, operating through the  Europe-wide cellular network Groupe Spécial Mobile (GSM). The  parent companies presently are not providing this service and  it would not be an economically reasonable course of action for  them to do it independently in the foreseeable future.  Potential subscribers to the service include consignors and  consignees of goods, transport companies, and air, rail and sea  carriers. The network will enable the subscribers to effect  electronic exchanges of documents thereby integrating existing  communication systems in the transport sector.  9.<ind> The notifying parties claim that the integrated  networking service to be provided by EURO-LOG will be a new  development on the market, and accordingly not in competition  with any existing value added service.  10.<ind> EUCOM has already to a limited extent developed a  value added network service in the transportation sector  through its majority owned subsidiary TRANSPONET, which  provides EDI-based services. The parties intend that  TRANSPONET's business will be [included in] EURO-LOG.  11.<ind> This operation is therefore a concentration within the  meaning of Article 3(2) of Council Regulation No. 4064/89.  III.<tab> COMMUNITY DIMENSION  12.<ind> The notified operation has a Community dimension since  total worldwide turnover of the undertakings concerned largely  exceed the 5 billion ECU threshold, the aggregate Community- wide turnover of at least two undertakings concerned is more  than 250 million ECU and they do not achieve more than two  thirds of their Community-wide turnover in one and the same  Member State.  <ind> Each of France Télécom and Deutsche Bundespost Telekom  has to be considered as an undertaking concerned within the  meaning of Article 1, since EUCOM is a vehicle to enable the  two companies to participate in projects such as EURO-LOG.  IV.<tab> COMPATIBILITY WITH THE COMMON MARKET  13.<ind> Although there is no unique definition of value added  network services (VANS), it is generally accepted that they  include a wide range of services associated with the exchange  of information via computer facilities connected by a  telecommunications network. The VANS supplier will usually add  functionality to the telecommunication transmission and  switching services and provide a new service on a commercial  basis to third parties.  14.<ind> Community demand for VANS is expected to exceed 5  billion ECU in 1992. It is a sector which is developing and  changing quickly, with high growth rates expected.  15.<ind> The service to be marketed by EURO-LOG is described as  a highly developed VANS which will provide a specialised  network service in the logistics and transportation chain  providing for the integration of existing equipment and  software of customers with the vendor's in-house system.  Tracking and tracing of cargo will also be possible by the use  of GSM and satellite communication where applicable. Total  annual turnover of EURO-LOG by 1998 is estimated at around  [Deleted: business secret]. This is based on the assumption  that EURO-LOG can attain a [Deleted: business secret] share of  the predicted revenue from freight management information  systems in the countries where it will initially be set up  (Belgium, France, Germany and the Netherlands).   16.<ind> Since this is a new service, it is not possible to  indicate in precise terms who competitors may be. Potential  entrants include inter alia telecommunications operators,  telecommunications equipment manufacturers and computer  software companies.  17.<ind> The service which EURO-LOG will offer is a new one in  the fast growing VANS sector where the technology is still  evolving. EURO-LOG's purpose is to provide a high value-added  open and neutral information system for the complete management  and control of the transportation supply chain. There is no  indication that EURO-LOG will foreclose a market to any  significant extent. France Télécom and Deutsche Bundespost are  obliged in any case under Community law to offer the same  telecommunications service to competitors of EURO-LOG as they  will to EURO-LOG. The assets and know-how which Digital is  transferring to EURO-LOG constitute its initial development  work  in this business area. The open nature of this initial  development work would not appear to allow Digital to foreclose  this fast evolving market.  18.<ind> On the basis of the facts of this case it is concluded  that the proposed concentration does not create or strengthen a  dominant position as a result of which effective competition  would be significantly impeded in the common market or in a  substantial part of it.  19.<ind> For the above reasons the Commission has decided not  to oppose the notified concentration and to declare it  compatible with the common market. This decision is adopted in  application of Article 6(1)b of Council Regulation (EEC) No.  4064/89.  For the Commission,