CELEX: 31995M0662
Language: en
Date: 1995-12-21 00:00:00
Title: COMMISSION DECISION of 21/12/1995 declaring a concentration to be compatible with the common market (Case No IV/M.662 - Leisure Plan) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31995M0662

COMMISSION DECISION of 21/12/1995 declaring a concentration to be compatible with the common market (Case No IV/M.662 - Leisure Plan) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 063 , 02/03/1996 P. 0005

 COMMISSION  DECISION of 21/12/1995 declaring a concentration to be compatible with the common market (Case No IV/M.662  - Leisure  Plan)  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 To the notifying parties Dear Sirs, Subject :<ind> Case No IV/M.662  LEISURE PLAN <ind>  <ind> Notification of 22.11.1995  pursuant to Article 4 of Council Regulation No 4064/89 <ind>  On  22.11.1995 the Commission received a notification of    an   operation   whereby   Leisureplan   (Pty)    Ltd. ("Leisureplan"), the Thomas Cook Group Ltd. ("Thomas Cook"), and  Philips Media Services B.V. ("Philips Media") establish a  joint  venture, to be named LPI Ltd ("LPI"),  which  will develop and market worldwide a multimedia travel information planning  and  booking system for professional providers  of travel services. <ind>  After examination of the notification, the Commission has  concluded that the notified operation falls within  the scope  of  application of Council Regulation No 4064/89  and does  not raise serious doubts as to its compatibility  with the  common  market  and  with the functioning  of  the  EEA Agreement. I.<ind> THE PARTIES AND THE OPERATION <ind>  The business activities of the undertakings concerned are: <tab><ind>  Leisureplan: a South African company  active  in the development of multimedia software for travel planning. <tab><ind> Thomas Cook: a U.K. company active in the  travel services sector. <tab><ind>  Philips  Media: a Dutch company  active  in  the development   of   software   in   publishing   and    media applications. <tab><ind> LPI.: a U.K. company active in the development of a  multimedia  travel  information system  for  professional travel agents. <ind>  The  joint  venture involves the incorporation  of  a joint  venture company, LPI, with its shares to be  held  in three  equal  proportions by Leisureplan,  Thomas  Cook  and Philips  Media.  LPI will be active in the  development  and marketing  worldwide  of  a  multimedia  travel  information planning and booking system which is a pointofsale tool  for professional  providers of travel services  such  as  travel agents. <ind> Leisureplan was founded approximately three years  ago in  Cape Town South Africa to develop multimedia software to assist travel professionals in the selection and booking  of travel products. <ind>  Leisureplan  will contribute  to  the  joint  venture company  all its travel related assets consisting  primarily of  software,  a  database, systems and  processes  for  the operation  of  a multimedia travel information planning  and booking  system.  Both Thomas Cook and  Philips  Media  will contribute  to  the  joint venture company  a  cash  capital contribution. II.<ind> CONCENTRATION <ind> Joint control <ind> The shares in LPI will be held in equal proportions of one  third  by each of Leisureplan, Thomas Cook and  Philips Media.  Each shareholder has the right to be represented  on the  Board  of  Directors of the joint  venture  company  by appointing two of its members. Decisions of the board are to be made by consensus of Leisureplan, Thomas Cook and Philips Media.  If consensus of the parties cannot be reached  after ninety  days it has been agreed that the resolution will  be referred to an independent mediator who will, after  hearing the  parties, recommend a solution in the best interests  of the  company  and  the  parties will  adopt  the  mediator's recommendation  as  a  resolution  in  accordance  with  the decision  making  rules  on  unanimity  contained   in   the Agreement.  The  effect  of this  arrangement  is  that  all decisions of the company will be taken by consensus  of  all the shareholders. <ind> Concentration <ind> LPI will be a concentrative joint venture. The parents will  not  operate  in the same market as LPI.  Thomas  Cook operates  downstream  of  LPI,  and  is  expected  to  be  a potential customer but not the major one. Similarly, Philips Media  operates  upstream  of  LPI,  and  will  supply  some hardware and software, but LPI will not be the main customer of Philips Media. <ind> With the contribution to LPI by Leisureplan of all its travel   related   assets   (software,   database   systems, copyrighted materials, fixed assets, and goodwill),  and  by the contribution to LPI by Thomas Cook and Philips Media  of an  appropriate amount of liquid capital, LPI will have  the means to perform on a lasting basis all the functions of  an autonomous economic entity. III.<tab> COMMUNITY DIMENSION <ind>  The  undertakings concerned have a combined aggregate worldwide  turnover in excess of 5000 million ECU.  Each  of Thomas Cook andPhilips Media has a Communitywide turnover in excess of 250 million ECU, but they do not achieve more than twothirds  of their aggregate Communitywide turnover  within one  and  the  same  Member State.  The  notified  operation therefore has a Community dimension. IV.<tab> COMPATIBILITY WITH THE COMMON MARKET <ind>  Leisureplan (and hence LPI) does not as yet have  any turnover in the EU. <ind>  The  product to be marketed worldwide by LPI  is  the Leisureplan Multimedia Global Travel Information System (the "LP  System").  This  is  a multimedia  travel  information, planning  and booking system designed primarily as a  "point of sale" tool for professional providers of travel services. The  LP System is designed to assist consumers in the choice of travel products such as accommodation, tours, attractions and  transportation  and can facilitate  bookings  of  these products.  The database for the LP System will initially  be offered  on  CDROM  and  as an online service  via  Computer Reservations Systems and the Internet. The LP  System  is  a large  global multimedia (combined image and text) database, covering  hotel  accommodations,  tours,  attractions,   and transport   facilities  in  all  major  travel  destinations worldwide. The CDROM software has been designed to mirror  a person's   intuitive  decision  making   process   (identify preferences,  compare  among products,  and  decide  between them), and guide the user through that process. Because  all information is carefully captured, edited and presented in a standardised  way,  the  user is able  to  compare  products easily across categories. <ind> Horizontal relationships <ind>  The  LP  System  will be unmatched  by  any  products currently  on the market. Such products can be divided  into those   offered  by  Airline  Computer  Reservation  Systems ("CRS")  companies, and those developed and  distributed  by nonCRS companies. <ind>  As  far  as CRS companies are concerned,  no  product offers  the  degree  of sophistication provided  by  the  LP System. For instance, a US company called "Galileo" offers a multimedia  hotel location mapping system in North  America, but  the  product (called "Spectrum") does not  offer  video imaging.  Again,  nonCRS companies do  not  currently  offer products  which  compete directly with the  LP  System.  For example,  Microsoft  is developing a  system  of  a  similar nature, but does not provide multimedia hotel information or search  and compare facilities. Hence LPI will in effect  be creating  a new market in the EU, with a product  for  which there are currently only imperfect substitutes. <tab> Vertical relationships <ind> As already stated, Philips Media operates upstream  of LPI  and will supply some hardware and software but LPI will not be the main customer of Philips Media. <ind> Again, Thomas Cook operates downstream of LPI, and  is expected to be a potential customer. <ind>  However, it is the intention that the LP System shall be marketed worldwide, and Thomas Cook will not be the major customer  of  LPI.  In previous decisions [IV/M.229   Thomas Cook / LTU / West LB] the Commission has defined the markets for  travel  services  as national in scope.  Thomas  Cook's current  share  of  the UK market is about [Business  secret less  than  20%] for travel agency services  and   [Business secret  less than 10%] for the tour operations sector.  Thus Thomas  Cook will be only one of many organisations  in  the travel   services   sector  which  may  benefit   from   any competitive advantages to be derived from the LP system, and Thomas Cook does not in any event have high market shares in any EU market in this sector. V.<ind> ANCILLARY RESTRAINTS <ind> The parties to the joint venture have agreed that  for a  period of two years following the implementation  of  the joint venture they will not take an interest in any business which  competes  with  the  joint venture.  This  noncompete agreement   is  directly  related  and  necessary   to   the implementation of the concentration, in order to protect the value of the assets transferred. <ind> CONCLUSION <ind>   It   follows  from  the  above  that  the   proposed concentration  would  not create or  strengthen  a  dominant position   as  a  result  of  which  competition  would   be significantly  impeded  in  the  common  market  or   in   a substantial part of it. <ind> For the above reasons, the Commission has decided  not to   oppose  the  notified  operation  and  to  declare   it compatible with thecommon market and with the functioning of the  EEA  Agreement. This decision is adopted in application of Article 6(1)(b) of Council Regulation No 4064/89. For the Commission,