CELEX: 32014M7241
Language: en
Date: 2014-07-08 00:00:00
Title: Commission Decision of 08/07/2014 declaring a concentration to be compatible with the common market (Case No COMP/M.7241 - ADVENT INTERNATIONAL / BAIN CAPITAL INVESTORS / NETS HOLDING) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

|[pic]                             |EUROPEAN COMMISSION                                                                                      |

Brussels, 08.07.2014
C(2014) 4943 final

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To the notifying party:

Dear Sir/Madam,

Subject:    Case M.7241 - ADVENT INTERNATIONAL/ BAIN CAPITAL INVESTORS/ NETS HOLDING
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1]

1) On 2 June 2014, the European Commission received a notification of a proposed concentration pursuant to Article 4 of Council  Regulation  (EC)
  No 139/2004 by which Advent International Corporation ("Advent International", the U.S.) and Bain Capital Investors L.L.C ("Bain Capital", the
  U.S.) collectively referred to as "the Notifying Parties" acquire within the meaning of Article 3(1)(b) of the Merger Regulation joint control
  of the undertaking Nets Holding A/S ("Nets", Denmark) by way of  purchase of shares,[2] hereinafter referred to as "the proposed transaction".
  The Notifying Parties and Nets are jointly referred to as "the Parties".

       THE PARTIES

2) Advent International is a private equity investor with holdings in various  sectors,  including  industrial,  retail,  media,  communications,
  information technology, internet, healthcare and pharmaceuticals. Advent International also controls Oberthur Technologies SAS ("Oberthur"), a
  company active in the provision of security-based smart cards technology and services. Oberthur also supplies certain private label  cards  in
  Denmark and Norway. Advent International also controls KMD Equity A/S ("KMD") a supplier of IT related services and products headquartered  in
  Denmark.

3) Bain Capital is a private equity investor with holdings in companies across a number  of  industries,  among  which,  information  technology,
  communications, healthcare, retail and consumer products.

4) Bain Capital and Advent International jointly control WorldPay (UK) Limited  and  its  affiliates  (hereinafter  "WorldPay").  WorldPay  is  a
  provider of electronic payment processing solutions for the most part to merchants located in the UK and the Republic of Ireland. It primarily
  offers merchant acquiring and payment card acquiring processing services, physical point of sale ("POS") terminals and distance payment  cards
  services ("eCommerce").

5) Nets is a provider of payments, cards and information services in Denmark,  Norway,  Sweden,  Finland  and  Estonia.  More  specifically  Nets
  provides payment solutions, business, information and E-security services to its customers. It operates the  Dankort  and  BankAxept  domestic
  card schemes in Denmark and Norway, respectively. It is active though Nets Oy as the financial issuer of credit cards in  Finland.  Nets  also
  provides merchant solutions including physical POS payment processing services, eCommerce payment services dedicated to online  merchants,  as
  well as integrated payment services for merchants with both physical and online sales. Finally, through its subsidiary Teller,  Nets  provides
  merchant acquiring services for international payment cards, primarily in Denmark, Norway and Sweden.

       THE OPERATION

6) The proposed transaction consists in the acquisition of joint control over Nets by  Bain  Capital  and  Advent  International  via  a  special
  purpose vehicle Nassa A/S ("Nassa"). Post transaction Bain Capital and Advent International will hold each  47.25%  of  Nassa's  capital,  the
  remaining non-controlling stake of 5% will be held by ATP Funds. The Board of Directors of Nassa will be  comprised  of  four  directors.  The
  Parties will each nominate one director and jointly nominate two independent directors. Resolutions of the Board of Nassa shall be  passed  by
  simple majority, provided that such majority must include at least one director nominated by Advent International and one  director  nominated
  by Bain Capital. Through their control of Nassa the Parties will jointly control Nets because they will have the right to  indirectly  appoint
  and remove seven out of twelve of the directors of the board of Nets that will undertake the day-to day and  management  functions,  including
  approval of the budget and the business plan. Moreover, commercial  decisions  in  respect  of  Nets  will  require  consent  of  both  Advent
  International and Bain Capital. It follows therefore that the Parties will exercise joint control over Nets.

7) Therefore, the proposed transaction represents a concentration within the meaning of Article 3(1)(b) of the Merger Regulation.

       EU DIMENSION

8) The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000  million[3]  (Advent  International:  EUR  […]
  million, Bain Capital: EUR […] million, Nets: EUR […] million). Each of them has an EU-wide turnover in excess  of  EUR  […]  million  (Advent
  International: EUR […] million, Bain Capital: EUR […] million, Nets: EUR […] million), and they do not achieve more than two-thirds  of  their
  aggregate EU-wide turnover within one and the same Member State. The notified operation therefore has an EU dimension, within the  meaning  of
  Article 1(2) of the Merger Regulation.

       ASSESSMENT

9) The proposed transaction gives rise to affected markets in the field of payment services, in particular  as  regards  the  merchant  acquiring
  services market and the market for the provision of acquiring processing services where both Nets and WorldPay are active[4].

10) More precisely, Nets and WorldPay both offer merchant acquiring and acquiring processing services to serve their national  customers  through
  the provision of physical POS terminals or web-enabled payment interfaces. Nets is focused on the provision of  these  services  and  actively
  targets customers based in Denmark, Finland, Sweden, Norway and  Estonia.  WorldPay  is  predominantly  focused  on  supplying  and  targeting
  customers based in the UK and Ireland. Notwithstanding this very different geographic focus, WorldPay generates some revenues  in  Nets'  core
  territories[5] arising through sales aimed at supporting existing customers of WorldPay beyond the core jurisdictions in which those merchants
  are currently and for the most part serviced (the UK and Ireland) and mainly for eCommerce transactions. Insofar  as  large  online  merchants
  require merchant acquiring and acquiring processing  solutions,  WorldPay  will  support  those  retailers  geographically  according  to  the
  retailers' place of business. Similarly, as a general principle, Nets actively targets customers located in its core markets and generates  no
  more than [0-5]% of its revenues outside these core markets.

11) On the whole, therefore, WorldPay and Nets target their services to firms located in their  respective  domestic  regions  and  only  provide
  services to a very limited extent in each other's core jurisdictions as a result of which the geographic overlap of their activities  is  very
  limited.

1 Market definition

1 Merchant acquiring

1 Product market definition

12) The Commission has previously defined separate markets for payment card issuing and merchant acquiring services.[6] The Commission  has  also
  considered that merchant acquiring services should be regarded as a distinct product market from payment card processing.[7] In addition,  the
  Commission has envisaged a possible further segmentation, based on: (i) payment  card  schemes  (domestic/international),  (ii)  payment  card
  brands (Visa, Visa Electron, MasterCard, Maestro etc.) and (iii) the type of payment card (credit/debit).[8]

13) In the present case a further segmentation between merchant acquiring services for payments  through  physical  POS  terminals  and  merchant
  acquiring services for payments through web-enabled interfaces (eCommerce) has been considered.

14) In the opinion of the  Notifying  Parties  the  distinction  between  domestic  and  international  cards  is  increasingly  blurred  because
  international cards can be used for domestic payments and also as a result of the creation of the Single Euro Payment Area. In  addition,  the
  fundamental services provided by the merchant acquirer are the  same,  irrespective  of  the  card/scheme  used.  From  the  demand  side,  an
  overwhelming majority of merchants choose to enter into a single agreement to acquire merchant acquiring services covering as  many  types  of
  payment cards as possible. Nevertheless, the Notifying Parties acknowledge the existence of pricing differences between domestic/international
  payment cards, between debit/credit cards and, between the different brands of cards.

15) The Notifying Parties further submit that besides the existence of  differences  between  merchant  acquiring  services  provided  through  a
  physical POS terminal and through web-enabled interfaces the market should not be segmented in this way, essentially because the  majority  of
  merchants require both types of services. Nevertheless, there is a specific category of customers made of  large  online  merchants  (such  as
  airline companies). WorldPay targets this customer category through its eCommerce division which has a wider geographic spread than WorldPay's
  remaining divisions, mirroring the global footprint of large online merchants.

16) Ultimately, the Notifying Parties submit that it is not necessary to delineate the precise scope of the product market definition.

17) The majority of the participants in the market investigation considered that the market for merchant  acquiring  services  can  be  segmented
  based on the card schemes i.e. national/international. Customers generally consider this segmentation relevant for countries where there is  a
  domestic card scheme in place such as Dankort in Denmark or BankAxept in Norway. This is due to the differences in terms of price. In addition
  some suppliers focus their business activities on one or the other type of card schemes. Customers may also have different merchant  acquirers
  for international and for domestic card schemes.

18) Customers and competitors also consider that the segmentation based on the type of card (credit/debit) is appropriate due to  differences  in
  terms of price, interchange fees or commercial conditions.

19) As to the segmentation based on card brand, the Commission considers, on the basis of the results of the market investigation that  from  the
  demand side, there is no need to divide the market for merchant acquiring in this manner. By contrast, from the supply side the results of the
  market investigation were inconclusive.

20) Finally, the majority of the respondents considered that the market could be segmented between merchant acquiring services for  physical  POS
  terminals and merchant acquiring services for web-enabled interfaces. This is due to material differences concerning technical infrastructure,
  commercial strategy, risk and fraud management requirements. Some customers have separate contracts for each type of services  with  different
  terms and conditions and even different services providers.

21) The Commission considers that for the purpose of this case the market for merchant acquiring services could be  segmented  depending  on  the
  card scheme (national/international), the type of card (credit/debit), the card brand, and lastly depending on whether services  are  required
  for payments made through physical POS terminals or via web-enabled interfaces.

22) However, the precise scope of the product market definition can be left open since the proposed transaction will not  give  rise  to  serious
  doubts as to it compatibility with the internal market irrespective of the product market definition.

2 Geographic market definition

23) The Commission has previously found that the geographic market for merchant acquiring may be national in scope or  is,  at  most,  EEA  wide,
  irrespective of the type of card, the card scheme and the card brand.[9]

24) The Notifying Parties submit that the Commission does not need to conclude on the precise scope of the geographic  market  definition,  since
  the proposed transaction gives rise to no competitive concerns even on the narrowest (national) level.

25) As regards the hypothetical segment of merchant acquiring services  for  payments  through  web-enabled  interfaces,  the  Notifying  Parties
  consider that the market is at least EEA wide, if not worldwide.

26) The results of the market investigation are inconclusive as regards whether the scope of merchant acquiring services for payments  through  a
  physical POS terminal is national or wider. However they point to a market  definition  wider  than  national  for  the  segment  of  merchant
  acquiring services for payments through web-enabled interfaces.

27) Indeed, even though some players provide POS services across the EEA, the respondents to the market investigation stress  the  importance  of
  having a local presence and access to local infrastructure. In addition, the existence of national card schemes (such as  Dankort  in  Denmark
  and BankAxept in Norway) and country specific technical requirements create obstacles for cross-border activity in the POS segment, which  are
  less relevant for web-enabled activities.

28) In Denmark, Dankort debit cards or co-branded Visa/Dankort cards are the most common payment product issued. The same applies to  Norway  and
  to the BankAxept national card scheme. Therefore, a merchant acquirer should be able to provide acceptance of these national cards in order to
  be competitive in these countries and be in a position to operate a large scale business.  This  factor  is  less  important  for  web-enabled
  merchant acquiring services where the transactions are generally processed through international card schemes such as MasterCard or Visa.

29) Further, payment services at the POS through physical terminals are made using "On-line" or "Off-line" technology, depending on the  country.
  For instance, the UK and Ireland are "Off-line" PIN technology countries whereas Sweden,  Denmark  and  Norway  are  based  on  "On-line"  PIN
  technology. Therefore, […].

30) Therefore, based on the result of the market investigation, and for the purpose of this case, the Commission considers that  the  market  for
  merchant acquiring services for all plausible market segmentations, except web-enabled transactions, is most likely national in scope, whereas
  the market for merchant acquiring services for payments made through web-enabled interfaces would be at least EEA-wide. However,  the  precise
  scope of the geographic market definition can be left open since the proposed transaction does not give rise to serious doubts irrespective of
  the geographic market definition.

2 Acquiring processing

1 Product market definition

31) The Commission has previously defined a distinct market for payment card processing, and within  that  has  distinguished  between  acquiring
  processing and payment card issuer processing, although it left the market definition open.[10]

32) According to these previous decisions acquiring processing is the merchant oriented  side  of  processing  a  transaction.  It  includes  the
  network routing of payments towards the corresponding issuing entity and the POS authorisation. Issuing processing is the issuer oriented side
  of processing a card transaction. It mainly includes the financial and technical requests for payment authorization from the  issuing  entity,
  maintenance of local and international blocking lists, verification of card limits, management of  card  accounts,  generation  of  cardholder
  statements and invoicing. The Parties agree with this product market definition.

33) On the basis of the results of the market investigation, the Commission has  confirmed  that  acquiring  processing  and  issuing  processing
  should be regarded as different segments due mainly to the nature of the services provided, the pricing structure,  the  regulatory  framework
  and the competitive landscape. Indeed, the majority of players offering both services  often  provide  them  as  separate  services  to  their
  customers.

34) In addition, several competitors have mentioned that national card schemes require  processes  specific  to  a  particular  country,  whereas
  international schemes have the same processing in all countries.

35) The Commission has also investigated whether a segmentation between services for POS transactions and services for  web-enabled  transactions
  should be made. One supplier explained that although transactions are processed in the same way when they reach the acquiring processor  there
  are some differences as regard the technical infrastructure. Both suppliers and customers stress the particularly important role  of  security
  in the web-enabled segment due to the higher risk of fraud. However, the vast majority of the suppliers process both  types  of  transactions.
  Also the majority of customers need acquiring processing for both POS transactions and web-enabled transactions.

36) Therefore, based on the results of the market investigation, and for the purpose of this case, the Commission considers that the  market  for
  acquiring processing services could be further segmented between national/international card schemes, and between acquiring processing for POS
  transactions and acquiring processing for web-enabled transactions. Ultimately, the precise scope of the product market definition can be left
  open, since the proposed transaction does not raise serious doubts as to its compatibility with  the  internal  market  with  respect  to  any
  plausible market definition.

2 Geographic market definition

37) The Commission has previously left open the geographic  market  for  acquiring  processing  services[11],  although  it  mentioned  that  for
  processing national payment cards the market tends to remain national due to various entry barriers.  The  most  recent  market  investigation
  indicated that acquiring processing also with respect to international cards is still national in scope.[12]

38)  The Notifying Parties consider that, should there be a segmentation between  POS/web-enabled  transactions,  the  geographic  scope  of  the
  market for acquiring processing transactions at the POS would be national, whereas the scope of the market for acquiring processing  for  web-
  enabled transactions would be wider, EEA or even global. According to the Notifying Parties, this is due to the fact  that  online  merchants,
  with a presence in more than one country, will often enter into a single contract for all their  acquiring  processing  needs.  Moreover,  the
  procurement of acquiring processing services by such customers is usually centralised. In addition, there are no territorial  restrictions  to
  enter the market for acquiring processing for web-enabled transactions with regard to Europe, insofar as suppliers do not need to  have  local
  presence to provide services in one specific country, provided that customers' card scheme acquiring licences cover the  relevant  country  or
  are pan-European.

39) On the basis of the results of the market investigation, the Commission considers that for the purpose of this case the scope of  the  market
  for acquiring processing, for all plausible market segmentations except web-enabled transactions, is national.  This  is  due  to  limitations
  related to the need to have local presence and connections with the local POS infrastructure and  other  legal  requirements.  Moreover,  some
  suppliers mentioned that in some countries, referring to Denmark and Norway, there are strong national elements related to  the  existence  of
  national card schemes that limit cross-border activity for processing national cards (technical requirements in particular).

40) As regards the geographic scope of the market for acquiring processing for web-enabled transactions, on the  basis  of  the  results  of  the
  market investigation the Commission considers that it could be wider than national, most probably EEA-wide. Indeed, customers  indicated  that
  in order to cover their needs in this segment they look for suppliers that are able to handle transactions in several jurisdictions.

41) However, the geographic market definition can be left open for the purpose of this case as the proposed transaction does  not  raise  serious
  doubts as to its compatibility with the internal market with respect to any geographic definition.

2 Competitive assessment

1 Merchant acquiring

42) The activities of Nets and WorldPay overlap in the provision of merchant acquiring services in Denmark, Finland, Ireland, Norway, Sweden  and
  the UK.

43) The overlaps giving rise to affected markets are limited to Finland, Ireland, UK, Denmark and Norway.

44) In the first three countries the increment is close to[0-5]% (due to the limited presence of WorldPay in Finland and of Nets in  Ireland  and
  the UK) and the combined market share of Nets and WorlPay does not exceed [50-60]% ([50-60]% in Finland, [20-30]% in Ireland and  [30-40]%  in
  the UK).

45) In Denmark and Norway the combined market share of Nets and WorldPay exceeds [50-60]% and the increment, although limited ([0-5]%  or  less),
  is higher for certain segments. Therefore, the competitive assessment will focus on these two countries.

46) The Commission will first assess the market for merchant acquiring services and will then analyse the segmentations based on the  differences
  between national/international card schemes, credit/debit cards and card brands.  Finally, it will focus on the alternative segmentation based
  on the differences between merchant acquiring services for payments at the POS through physical terminals and merchant acquiring services  for
  payments through web-enabled interfaces.

  (i)Overall market for merchant acquiring in Denmark and Norway

47) The Notifying Parties submit that WorldPay's market share generated in Denmark and Norway corresponds to merchants  located  in  Ireland  and
  the UK which have specifically requested a uniform e-Commerce  payment  solution  across  its  international  operations  (or  in  a  specific
  territory).

48) In Denmark, the combined market shares of Nets and WorldPay on the overall market for merchant acquiring is [90-100]% in 2013.  However,  the
  overlap generated by WorldPay's limited activities in this country is of only [0-5]%. Post-transaction, the Parties will continue  to  compete
  with Nordea and Swedbank each of them having a market share of[0-5]%. As to Norway, the Notifying Parties combined market share on the overall
  market for merchant acquiring is [5-10]% with an increment of [0-5]%, thus it does not result into an affected market.

  (ii) Market segmentations based on the differences between national/international card schemes, credit/debit cards and card brands.

49) Should the market be split into national/international card schemes, the overlap would arise as regards international card schemes only.  The
  combined market share of the Nets and WorldPay in this segment in Denmark would be [80-90]% with an increment of [0-5]%.  The  HHI  is  [6000-
  7000] and the post-merger HHI delta [200-300]. According to the Notifying  Parties,  the  market  share  would  not  differ  materially  if  a
  segmentation into credit/debit cards, or card brands was considered. WorldPay offers essentially merchant  acquiring  for  international  card
  schemes, and focuses mainly on merchant acquiring services for credit cards and for international card brands. Nets and WorldPay will continue
  to compete post-transaction on the segment for international card schemes with Swedbank and Nordea, having each a market share of  [5-10]%.

50) In Norway, if only international card schemes were considered the combined market share of the Parties would be  [40-50]%  in  2013  with  an
  increment of [0-5]%. The market shares would not be materially different if a segmentation between  credit/debit  cards  or  card  brands  was
  considered. In the segment for international card schemes, the Notifying Parties will continue  to  face  competitive  constrains  from  other
  market players among which Elavon ([20-30] %), Nordea ([10-20]%), Handelsbanken ([5-10]%) and Swedbank ([5-10]%).

  (iii) Market segmentation based on the differences between merchant acquiring  services  for  payments  through  POS  terminals  and  merchant
  acquiring services for payments through web-enabled interfaces

51) Worldpay does not have physical presence or POS terminals in Denmark and Norway. The Commission has  confirmed  this  on  the  basis  of  the
  market investigation. Therefore, should the market be segmented into merchant acquiring for payments at the POS through physical terminals and
  merchant acquiring for payments through web-enabled interfaces, the overlap arising in Denmark and Norway  would  be  limited  to  the  second
  segment mentioned.

52) As indicated in the section on geographic market definition the geographic  scope  of  the  segment  concerning  the  provision  of  merchant
  acquiring services for payments through web-enabled interfaces would be wider than national, probably EEA-wide or even  global.  The  combined
  market shares of the Parties in a hypothetical EEA wide market would be of [10-20]% (with an increment of [0-5]% for Nets).

53) Even though there is no overlap as regards the Danish and Norwegian markets for merchant acquiring services for payments at the  POS  through
  physical terminals, the market investigation revealed that WorldPay has [limited activity] in Finland for the provision of merchant  acquiring
  and acquirer processing services for payments at the POS. Therefore, the Commission has investigated whether WorldPay can be considered  as  a
  significant potential competitor in this market.

  As regards Denmark and Norway, competitors consider the domestic card schemes existing in these  countries  as  the  main  barrier  to  entry,
  followed by the need to set up local infrastructure and the need to adjust to  some  specific  technical  requirements.  Indeed,  the  Finnish
  national card scheme has been phased out, as opposed to Denmark and Norway where it plays an important role. In addition, Finland is a country
  based on "Off-line" PIN technology as it is the case for WorldPay's core countries, namely the UK and Ireland, whereas Denmark and Norway  are
  based on "On-line" PIN technology. According to the Notifying Parties, the lack of a national card scheme and the similarities in terms of PIN
  technology between the UK and Ireland on the one side and Finland on the other side […]. In any case the overlap in this country is  close  to
  [0-5]% for all segments even if account is taken of this recent contract.

54) The Notifying Parties submit and the internal documents provided show that […].

55) Overall customers and competitors consider that following the transaction, the intensity of competition in the market for merchant  acquiring
  will remain unchanged, irrespective of the segment considered. WorldPay is  not  perceived  as  a  player  currently  exerting  a  significant
  competitive constraint in Nets' core jurisdictions, nor as a potential competitor. In any case, there are other players that could be seen  as
  potential competitors (Barclays, Global Collect, Ongone, etc.)

56) In the light of the above mentioned elements, the Commission considers that the proposed transaction does not raise serious doubts as to  its
  compatibility with the internal market.

2 Acquiring Processing

57) In the overall market for acquiring processing, the Parties' activities overlap in Denmark, Estonia, Finland,  Ireland,  Norway,  Sweden  and
  the UK. Due to their different geographic focus, in all these countries the increment brought by the transaction would be minimal  (less  than
  [0-5]%). However, in Denmark and Norway Nets' market shares in the last three financial years on the overall market for  acquiring  processing
  were very high (in 2013 they reached [90-100] % in Denmark and [90-100]% in Norway)[13]. Therefore, the analysis of the impact of the proposed
  transaction will focus only on these two countries.

    (i) Overall market for acquiring processing in Denmark and Norway

58) According to the Notifying Parties, their position in the overall market for acquiring processing does not  give  raise  to  any  competition
  concerns for several reasons. Firstly, the increment brought by the transaction is of less than [0-5]% and the HHI delta is of less than [100-
  200]. Secondly, WorldPay focuses on UK and Ireland, […]. Thirdly, WorldPay's transactions in Denmark and Norway are […]. Moreover, WorldPay is
  providing acquiring processing services to its services as an ancillary service to its merchant acquiring activities for its customers […].

59) In addition, the Parties mention a recent decision of the Danish Competition Authority that imposes Nets to  follow  certain  maximum  prices
  with respect to front-end acquiring processing for a period of two years. Also in Norway, Nets (i.e., Nets and Teller) is under an  obligation
  to grant non-discriminatory access to its payment solutions until 2017.

60) Finally, the Parties mentioned banks' capabilities to conduct their own acquiring processing services (as it is the  case  in  Sweden,  where
  the majority of banks have this service internalised).

61) Indeed, the presence of WorldPay in these two markets does not reveal constant sales volume. Moreover, a review of the market shares for  the
  last three consecutive years shows that the volume of the transactions of WorldPay in both Denmark and Norway has […] (with the  exception  of
  year 2012 when the volume for transactions in Denmark […] compared the previous year).

62) The replies of the participants in the market investigation indicate that WorldPay is perceived as  a  provider  oriented  towards  customers
  using mostly web-enabled transactions, whereas Nets seems to be rather focused on merchants with  physical  POS  terminals,  with  a  dominant
  position in both Denmark and Norway.

63) On the basis of the results of the market investigation, the Commission has confirmed too that WorldPay is not a close competitor of Nets  in
  acquiring processing and that it is hardly known as supplier of acquiring processing services in Denmark or Norway. Moreover,  the  Commission
  has also confirmed that banks have their in-house capabilities to do acquiring processing themselves.

64) Therefore the Commission considers that the proposed transaction does not raise serious doubts as to  its  compatibility  with  the  internal
  market regarding the overall market for acquiring processing services.

   (ii) Market segmentation based on the differences between acquiring processing services for national/international card schemes

65) Should the market be segmented between national/international card schemes the overlap  would  only  arise  as  regards  international  cards
  schemes as WorldPay does not provide acquiring processing services for national cards schemes.

66) In Denmark, the combined market shares of the Parties excluding the national  cards  transactions  (transactions  processed  through  Dankort
  scheme) are similar to the ones on the overall market for acquiring processing, and reach [90-100]%  in  2013  with  an  increment  of  [0-5]%
  brought by WorldPay. In Norway, the market position would be slightly different reaching [60-70]% in 2013 if the national  cards  transactions
  (transactions processed through BankAxept scheme) are excluded, with an increment of [0-5]% brought by WorldPay.

67) In spite of the limited competition remaining post-merger, the arguments  mentioned  above  as  regards  the  overall  market  for  acquiring
  processing are relevant also for the hypothetical market of acquiring processing for international cards schemes, which is  the  only  segment
  where WorldPay is active. Therefore, based on these arguments the Commission considers that the proposed transaction does  not  raise  serious
  doubts as to its compatibility with the internal market regarding acquiring processing for international cards schemes.

   (iii) Market segmentation based on the differences between acquiring processing for payments through POS terminals  and  acquiring  processing
   for payments through web-enabled interfaces

68) Should the market be segmented into acquiring processing for POS/web-enabled transactions, the  second  segment  would  not  be  an  affected
  market as the combined market shares of the Parties would remain below [10-20]% at EEA level, with WorldPay  and  Nets  competing  with  other
  suppliers such as Elavon, Barclays, First Data, etc.

69) As for the segment for physical POS, WorldPay is not active in the countries where Nets  is  present,  except  for  […].  Nets  and  Worldpay
  combined market share on the market for physical POS in Finland is estimated at [90-100]% due to Nets share. However, the increment  is  close
  to [0-5]% and, as explained above, […].

70) In the light of the above mentioned elements, the Commission considers that the proposed transaction will not raise serious doubts as to  its
  compatibility with the internal market.

       CONCLUSION

71) For the above reasons, the European Commission has decided not to oppose the notified  operation  and  to  declare  it  compatible  with  the
  internal market and with the EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the Merger Regulation.

For the Commission
(signed)

Joaquín ALMUNIA
Vice-President

-----------------------
[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]   Publication in the Official Journal of the European Union No C 173, 07.06.2014, p. 9.

[3]   Turnover calculated in accordance with Article 5(1) of the Merger Regulation and the  Commission  Consolidated  Jurisdictional  Notice  (OJ
C95, 16.04.2008, p1).

[4]   There is also a limited horizontal overlap between the activities of Nets and KMD, a company controlled by  Advent  International,  in  the
field of corporate distance payment services where they both supply credit transfer services  via  the  Danish  NemKonto  payment  scheme.  Their
combined market share will be of less than [0-5] % in any plausible geographic  market  definition.  As  regards  vertical  links,  the  proposed
transactions results in a vertical link between the Trusted Service  Managers  services  (TSM)  offered  by  Advent  International's  subsidiary,
Oberthur, and Nets' mobile wallet platform. According to the Parties, Nets is in the process of developing a mobile wallet platform solution  but
it is not yet active on this market. Oberthur's market share in the market for the provision of TSM services is below [20-30]% in  any  plausible
geographic market definition..There is also a vertical relationship between Advent International's subsidiary, KMD, which supplies IT  management
services to a company jointly owned by Nets and Post Denmark A/S, e-Boks A/S ("e-Boks"), active  in  the  supply  of  secure  electronic  mailbox
services in Denmark and Norway. Nevertheless the market shares of both KMD and e-Boks in their respective markets are very low.

[5]   According to the Parties, in 2013 WorldPay revenues in Nets' core areas (Denmark, Estonia, Finland, Norway and Sweden)  accounted  for  [0-
5]% of the business unit's total revenues.

[6]   See Commission decision of 3 October 2008 in Case  No  COMP/M.5241  –  American     Express/Fortis/Alpha  Card,  paragraph  23;  Commission
decision of 3 October 2007 in Case No COMP/M.4844 - Fortis/ABN AMRO Assets, Commission decision of 2  June  2005  in  Case  No  M.3740   Barclays
Bank/Foreningssparbanken/JV, paragraph. 11. In the context of antitrust proceeding see Commission decision  of  19  December  2007  in  Cases  No
COMP/34.579 – MasterCard, COMP/36.518 -EuroCommerce and COMP/38.580 – Commercial Cards.

[7]   See Commission decision of 3 October 2008 in Case  No  COMP/M.5241  –  American     Express/Fortis/Alpha  Card,  paragraph  23;  Commission
decision of 3 October 2007 in Case No
      COMP/M.4844 - Fortis/ABN AMRO Assets, Commission decision of 2  June  2005  in  Case  No  M.3740  -  Barclays  Bank/Foreningssparbanken/JV,
paragraph. 11. In the context of antitrust proceeding see Commission decision  of  19  December  2007  in  Cases  No  COMP/34.579  –  MasterCard,
COMP/36.518 - EuroCommerce and COMP/38.580 – Commercial Cards.

[8]   Case COMP/M.4316  Atos  Origin/Banksys/BCC,  paragraph  21;  Case  COMP/M.4814  AIB/FDC/JV,  paragraph  13;  Case  COMP/M.5968  Advent/Bain
Capital/RBS WorldPay, paragraph 12; Case COMP M.6956 Telefonica/Caixa Bank/Banco Santander/JV, paragraph 46; and  Case  COMP/M.6967  BNP  Paribas
Fortis/Belgacom/Belgian Mobile Wallet, paragraph 106.

[9]   Case COMP/D.1/29.373 VISA II, paragraph 45; Case COMP/37.860  Morgan  Stanley/Visa  International  and  Visa  Europe,  paragraph  41;  Case
COMP/M.2567 Nordbanken/PostGirot, paragraphs 17-18; Case      COMP/M.4316 Atos Origin/Banksys/BCC, paragraphs 19-23;  Case  COMP/M.5241  American
Express/Fortis/Alpha Card, paragraph 28; Case COMP/M.5968 Advent/Bain Capital/RBS WorldPay,  paragraph  12;  Case  COMP  M.6956  Telefonica/Caixa
Bank/Banco Santander/JV, paragraph 46; and Case COMP/M.6967 BNP Paribas Fortis/Belgacom/Belgian Mobile Wallet, paragraph 106.

[10]  Case COMP/M.4316 Atos Origin/Banksys/BCC, paragraph 17; Case COMP/M.4814 AIB/FDC/JV,      paragraph 15; and  Case  COMP/M.5968  Advent/Bain
Capital/RBS WorldPay, paragraph 12.

[11]  Case COMP/M.4316 Atos Origin/Banksys/BCC, paragraph 26-27; Case COMP/M.4814 AIB/FDC/JV,   paragraph 15; and  Case  COMP/M.5968  Advent/Bain
Capital/RBS WorldPay, paragraph 12.

[12]  Case COMP/M.4814 AIB/FDC/JV,      paragraph 20.

[13]  In the other markets the combined market shares were of [60-70]% in Estonia, [90-100]% in Finland, [30-40]% in Ireland, [10-20]% in  Sweden
and [40-50]% in UK. In all these countries, the overlap is close to [0-5]%.

-----------------------
 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.

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