CELEX: 31995M0668
Language: en
Date: 1995-12-22 00:00:00
Title: COMMISSION DECISION of 22/12/1995 declaring a concentration to be compatible with the common market (Case No IV/M.668 - Philips / Origin) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

Avis juridique important

|

31995M0668

COMMISSION DECISION of 22/12/1995 declaring a concentration to be compatible with the common market (Case No IV/M.668 - Philips / Origin) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 058 , 28/02/1996 P. 0003

 COMMISSION  DECISION of 22/12/1995 declaring a concentration to be compatible with the common market (Case No IV/M.668  - Philips  /Origin) 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 :Case No IV/M.668  PHILIPS/ORIGIN  <ind> <ind> Notification of 21.11.1995 pursuant to Article 4 of Council Regulation No 4064/89 1.<ind>  On  22  November  1995  Philips  Electronics   N.V. ("Philips")  notified the Commission  of  its  intention  to acquire  sole control of BSO Beheer B.V. ("BSO"  holding  of BSO/ORIGIN group of companies "ORIGIN"). 2.<ind> After examination of the notification the Commission has  concluded that the notified operation falls within  the scope  of  application of Council Regulation N  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 3.<ind>  Philips  is  the ultimate  parent  company  of  the Philips'  group  of  companies  ("Philips").  Philips  is  a company  involved in the design, manufacture and sale  of  a broad   range   of   electronic   products.   Through    its Communication  & Processing ("C&P") group, Philips  is  also active on the InformationTechnology Services ("IT" Services) market.  The Philips C&P group offers a range of IT services with a focus on the management of IT systems. The major part of  Philips  C&P's services portfolio relates to  processing services. 4.<ind> BSO is the holding company of the "ORIGIN" group  of companies,  which  is engaged in the business  of  supplying information and communication technology services.  "ORIGIN" mainly  offers  system  management, system  integration  and consulting services. Only a minor part of the activities  of "ORIGIN" relates to processing services.  5.<ind> The operation consists of the acquisition by Philips of sole control of "ORIGIN". II. <ind> COMMUNITY DIMENSION 6.<ind>  The  combined aggregate worldwide turnover  of  the undertakings  concerned  exceeds  5.000  million  ECU.   The aggregate  Community wide turnover of Philips  and  "ORIGIN" exceeds  250  million  ECU. They do not  achieve  more  than twothirds  of  their  turnover in one and  the  same  Member State. The operation has therefore a Community dimension. III. <ind> THE RELEVANT MARKETS 7.<ind>  There are different segments within the information technology  software  and  services  domain  which  can   be differentiated  by  a  number  of  characteristics  such  as capital  investment  requirements,  role  of  brand   image, development costs, switching costs (installed base  effect), etc.  <ind>  Four  areas of activity within the  IT  software  and services domain have been identified by the parties: <ind>  <ind>  Consultancy services: the  rending  of  advice regarding   communication   and  information   systems   (IT services). <ind>  <ind> Operational support services: included in  this category  are services performed on behalf of customers,  ie installation,   operation   and   optimisation   of    their information systems network (IT services). <ind>   <ind> Application development and delivery services: the   integration  of  existing  systems  by  means  of  the development   and  installation  of  custom   software   for clients.This  activity  may also be  designated  "customised software"  or  "systems  integration  and  development"  (IT software). <ind>  <ind> Processing services: the "contracting  out"  of certain data processing needs (IT services). <ind>  It  is however not necessary in the present  case  to decide if these segments constitute distinct product markets within the meaning of the Regulation, as the operation  does not  create  or strengthen a dominant position even  on  the narrowest market definition. <ind>  A distinction should be made between IT services  and IT  software. The IT services market is basically a services market  requiring a close and constant relationship  between the  service  provider and the client while the IT  software market  which includes the application software is a product market  in which the product can be sold or licensed to  the clients. 8.<ind>  The  geographic markets for services  are  normally national  markets  as  the ability  to  communicate  in  the customer's   own  language  is  essential  and   the   close relationship  with clients often requires a local  presence. On   the   contrary,  software  products   can   easily   be imported/exported   from   one  country   to   another   and distributed after linguistic and regulatory adaptations have been made. The precise definition of geographic markets  can however  be left open in this case since the operation  does not  raise serious doubts as to its compatibility  with  the common market even on a national basis.  IV. <ind> ASSESSMENT 9.<ind>  On  the  basis of the above market definitions  the combined market shares of the parties, even on the narrowest definitions,  does not exceed 15%. The markets in  questions are  highly  fragmented.  On each  of  the  possible  market definitions  the parties face competition of companies  like EDS, IBM, CSC, ICL, Digital, AT&T. V. <ind> ANCILLARY RESTRICTIONS 10.<ind>  Philips envisages to treat the new company  for  a period  of  not more than three years as preferred supplier. This  restriction  can  be considered  as  necessary  for  a startup period which must not exceed three years. VI. <ind> CONCLUSION 11.<ind>  For the above reasons, the Commission has  decided not  to  oppose  the notified operation and  to  declare  it compatible  with the common 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,