CELEX: 32020M9963
Language: en
Date: 2020-10-26 00:00:00
Title: Commission Decision of 26/10/2020 declaring a concentration to be compatible with the common market (Case No COMP/M.9963 - ILIAD / PLAY COMMUNICATIONS) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                               Brussels, 26.10.2020
                                                               C(2020) 7496 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                                                                 information omitted has been replaced by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.
                                                               To the notifying party
Subject:             Case M.9963 – Iliad S.A./Play Communications S.A
                     Commission decision pursuant to Article 6(1)(b) of Council Regulation
                     No 139/20041 and Article 57 of the Agreement on the European Economic
                     Area2
Dear Sir or Madam,
(1)         On 21 September 2020, the European Commission received notification of a
            proposed concentration pursuant to Article 4 of the Merger Regulation by which
            Iliad S.A. (“Iliad”, France; the “Notifying Party”) acquires within the meaning of
            Article 3(1)(b) sole control of Play Communications S.A. (“Play
            Communications”,          Luxembourg)        (the     “Transaction”).       Iliad     and      Play
            Communications are designated hereinafter as the “Parties”.
1.          THE PARTIES
(2)         Iliad is active in the provision of fixed and mobile telecommunications services,
            fixed internet and TV services in France 3 and mobile telecommunications services
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     Via the brand “Free”.
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---            in Italy4 . Iliad is ultimately controlled by Mr. Xavier Niel. Other companies
           controlled by Mr. Xavier Niel (together with Iliad; the “Xavier Niel Group”
           (“XNG”)) are active in particular in the following sectors: telecoms, media, IT
           services, start-up businesses and real estate. In the sector of telecommunications,
           XNG is mainly active in Ireland5 , Malta6 and Cyprus7 , in addition to the activities
           of Iliad.
(3)        Play Communications (headquartered in Luxembourg) is a public limited
           company listed on the Warsaw Stock Exchange and the holding company of P4 Sp.
           z o. o., a Polish company that provides mainly retail mobile, fixed telephony and
           fixed internet access services in Poland (the “P4 Group”).
2.         THE OPERATION
(4)        The Transaction consists of a public tender offer by Iliad on 100% of the shares in
           Play Communications, announced on 21 September 2020.8
(5)        Therefore, the Transaction consists of the acquisition of sole control by Iliad over
           Play Communications within the meaning of Article 3(1)(b) of the Merger
           Regulation.
3.         EU DIMENSION
(6)      The undertakings concerned have a combined aggregate worldwide turnover of more
         than EUR 5 000 million9 (Iliad: [confidential], Play Communications: EUR 1 660
         million). Each of them has an EU-wide turnover in excess of EUR 250 million
         (Iliad: [confidential]; Play Communications: EUR 1 660 million), but they do not
         achieve more than two-thirds of their aggregate EU-wide turnover within one and
         the same Member State.
(7)        The notified operation therefore has an EU dimension within the meaning of
           Article 1(2) of the EUMR.
4   Via the brand “Iliad Italia”.
5   Via the brand “Eir”. Eir provides mobile and fixed telecommunications services as well as fixed internet
    and TV services. Eir also provides connectivity services to Irish companies with subsidiaries or branches
    in the UK.
6   Via the brand “Vodafone Malta”. Vodafone Malta provides mobile and fixed telecommunications
    services.
7   Via the brand “Epic”. Epic provides mobile and fixed telecommunications services as well as fixed
    internet and TV services.
8   On 10 August 2020, Iliad entered into a share purchase agreement (“SPA”) with the two reference
    shareholders of Play Communications (Kenbourne Invest II S.à r.l and Tollerton Investments Limited, or
    “the Sellers”). Based on this agreement, the Sellers committed to irrevocably subscribe for the sale of their
    block of shares in the tender offer. The sellers together represent approximately 40.2% of the share capital
    and voting rights of Play Communications.
9   Turnover calculated in accordance with Article 5 of the Merger Regulation and the Commission
    Consolidated Jurisdictional Notice (OJ C 95, 16.4.2008, p. 1).
                                                           2
 ---pagebreak--- 4.       R ELEVANT M ARKETS
(8)      The Transaction does not result in any horizontal overlaps because XNG is not
         active in Poland, whereas the P4 Group is exclusively active in Poland. Therefore,
         considering the national dimension of the retail telecommunication markets, there
         are no horizontal overlaps.
(9)      The Transaction gives rise to vertical relationships in the EEA countries in which
         the Parties are present (i.e., Cyprus, France, Ireland, Italy and Malta for XNG, and
         Poland for the P4 Group) in connection with:
       (a)      at the upstream level:
                –       The wholesale markets for international roaming services in (i)
                        Cyprus, France, Ireland, Italy, and Malta (XNG), and (ii) Poland (the
                        P4 Group);
                –       The wholesale market for mobile call termination services on (i) the
                        P4 Group’s mobile network in Poland and on (ii) the XNG’s mobile
                        networks in Cyprus, France, Ireland, Italy and Malta; and
                –       The wholesale market for fixed call termination services on the
                        XNG’s networks in Cyprus, France, Ireland, and Malta.
       (b)      at the downstream level:
                –       The retail market for mobile telecommunication services in (i)
                        Cyprus, France, Ireland, Italy, and Malta (XNG) and (ii) Poland (the
                        P4 Group); and
                –       The retail markets for fixed telephony services in (i) Cyprus, France,
                        Ireland, and Malta (XNG) and (ii) Poland (the P4 Group).
4.1.     Retail mobile communications services
(10)     Mobile communications services to end customers or "retail mobile communication
         services" include services for national and international voice calls, SMS (including
         MMS and other messages), mobile internet with data services, access to content via
         the mobile network and retail international roaming services.
4.1.1.   Product market definition
(11)     In its previous practice, the Commission has not further segmented the overall
         retail mobile market based on the type of service (voice calls, SMS, MMS, mobile
         Internet data services), or the type of network technology. The Commission has
         considered possible segments of the overall retail market for mobile
         telecommunication services between pre-paid or post-paid services and private
         customers or business customers, concluding that these did not constitute separate
                                                   3
 ---pagebreak---             product markets but represent rather market segments within an overall retail
            market and leaving the questions of these possible further segmentations open.10
(12)        The Notifying Party does not object to the existence of an overall retail mobile
            market.11
(13)        Nothing in the Commission's file indicated that the market for retail supply of
            mobile telecommunications services should be further segmented according to the
            type of services, the type of customers or the network technology used.
(14)        In light of the foregoing, the Commission considers that, for the purpose of this
            decision, the relevant product market definition is the overall retail market for
            mobile telecommunications services.
4.1.2.      Geographic market definition
(15)        In previous decisions, the Commission has consistently concluded that the market
            for the provision of retail mobile communication services is national in scope. 12
(16)        The Notifying Party does not object to this market definition.13
(17)        The Commission observes that nothing in the present case indicates that it would
            be justified to depart from its previous practice – in particular considering that
            licences to mobile operators are granted on a national basis. Consequently, for the
            purpose of the present decision and in line with its previous decisional practice, the
            Commission considers the market for retail mobile services to be national in scope.
4.2.        Retail supply of fixed telephony services
(18)        Fixed telephony services comprise the provision of connection services at a fixed
            location or access to the public telephone network, for the purpose of making
            and/or receiving calls and related services.
4.2.1.      Product market definition
(19)        In previous decisions, the Commission considered whether a distinction between
            local/national and international calls as well as between residential and non-
            residential customers should be drawn, based on the distinctions in the Commission
            Recommendation 2003/311/EC,14 but ultimately left the exact product market
            definition open.15
10   Commission decisions of 15 July 2019 in case M.9370, Telenor/DNA, para. 41; of 27 July 2018 in case
     M.8883, PPF/Telenor Target Companies; of 27 November 2018 in case M.8792, T-Mobile NL/Tele2 NL;
     of 4 April 2007 in Case M.4591, Weather Investments/Hellas Telecommunications, para. 10.
11   Form CO, para. 65.
12   Commission decision of 15 July 2019 in case M.9370, Telenor/DNA; Commission decision of 27 July
     2018 in case M.8883, PPF/Telenor Target Companies; Commission decision of 27 November 2018 in
     case M.8792, T-Mobile NL/Tele2 NL.
13   Form CO, para. 66.
14   Commission Recommendation of 11 February 2003 on relevant product and service markets within the
     electronic communications sector susceptible to ex ante regulation in accordance with Directive
                                                        4
 ---pagebreak--- (20)       More recently, the Commission also considered that managed Voice over Internet
           Protocol (“VoIP”) services16 and traditional telephony are interchangeable and
           therefore belong to the same market. In recent decisions, the Commission
           considered that an overall retail market for fixed telephony services exists, which
           includes VoIP services.17 In Liberty Global/Ziggo18 the Commission left the exact
           market definition open (and in particular whether there is a separate market for
           residential and non-residential customers, as well as whether VoIP and traditional
           fixed telephony belong to the same market) while in Liberty Global/BASE19 and in
           Vodafone/Liberty Global/Dutch JV 20 the Commission considered that an overall
           retail market for fixed telephony services exists.
(21)       The Notifying Party does not object to the existence of an overall retail market for
           fixed telephony services.21
(22)       With regard to a possible segmentation of the market for the retail provision of
           fixed telephony services, nothing in the Commission’s file provided reason to
           depart from its approach in previous cases.
(23)       In light of the foregoing, the Commission concludes that it is appropriate to not
           depart from its previous practice, and considers that, for the purpose of this
           decision, the relevant product market is the overall retail market for fixed telephony
           services without any further segmentations.
4.2.2.     Geographic market definition
(24)       In previous decisions, the Commission has consistently considered that the market
           for the supply of fixed telephony services is national in scope, as this reflects the
           continuing importance of the role of national regulation in the telecommunications
           sector, the supply of upstream wholesale services on a national basis, as well as the
           fact that the pricing policies of telecommunications providers are predominantly
           national.22
    2002/21/EC of the European Parliament and of the Council on a common regulatory framework for
    electronic communication networks and services (Text with EEA relevance) (notified under document
    number C(2003) 497), OJ L 114, 8.5.2003, p. 45–49.
15  Commission decisions of 18 July 2019 in case M.8864, Vodafone/Certain Liberty Global Assets, recital
    40; of 15 July 2019 in case M.9370, Telenor/DNA, para. 52; of 29 January 2010 in case M.5730,
    Telefónica/Hansenet Telekommunikation, paras. 16-17; of 29 June 2009 in case M.5532, Carphone
    Warehouse/Tiscali UK, paras. 35 and 39; of 7 September 2005 in case M.3914, Tele2/Versatel, para. 10.
16  VoIP is a technology that allows users to make voice calls using a broadband internet connection instead
    of a regular (or analogue) phone line.
17  Commission decision of 20 September 2013 in case M.6990, Vodafone/Kabel Deutschland, paras. 130-
    131.
18  Commission decision of 30 May 2018 in case M.7000, Liberty Global/Ziggo, para. 147.
19  Commission decision of 4 February 2016 in case M.7637, Liberty Global/BASE Belgium, para. 69.
20  Commission decision of 3 August 2016 in case M.7978, Vodafone/Liberty Global/Dutch JV, para. 26.
21  Form CO, para. 68.
22  Commission decision of 27 November 2018 in case M.8792, T-Mobile NL/Tele2 NL, para. 271; of 15 July
    2019 in case M.9370, Telenor/DNA; of 27 July 2018 in case M.8883, PPF/Telenor Target Companies; of
    3 August 2016 in case M.7978, Vodafone/Liberty Global/Dutch JV, para. 40; of 4 February 2016 in case
    M.7637, Liberty Global/BASE Belgium, para. 64.
                                                        5
 ---pagebreak--- (25)       The Notifying Party does not object to this geographic market definition. 23
(26)       The Commission observes that nothing in the present case indicates that it would
           be justified to depart from its previous practice –in particular taking into account
           the importance of national regulation in the telecommunications sector and the fact
           that the upstream wholesale services are provided on a national basis.
           Consequently, for the purpose of the present decision and in line with its previous
           decisional practice, the Commission considers that the market for the supply of
           fixed telephony services is national in scope.
4.3.       Wholesale market for international roaming
(27)       International roaming services allow mobile telecommunication subscribers to
           make and receive calls and use other services such as text messages and data
           services, when abroad. To offer such services to their end-users, Mobile Network
           Operators (MNOs) conclude wholesale agreements with one another providing
           access and capacity on mobile networks in the foreign country. MNOs select their
           partner operators based on network coverage, price, network quality and
           reciprocity. Demand for wholesale international roaming services comes (i) from
           foreign mobile operators who wish to provide their own customers with mobile
           services outside their own network and downstream (ii) from subscribers wishing
           to use their mobile telephones outside their own countries.
(28)       In the EEA, wholesale         international roaming services are regulated.24 Mobile
           network operators must         meet all reasonable requests for wholesale roaming
           access under a reference     offer and wholesale charges for the making of regulated
           roaming services (voice       calls to non-Value-Added Services, SMS and data
           roaming) are capped.
4.3.1.     Product market definition
(29)       In previous decisions, the Commission considered a separate product market for
           wholesale international roaming services comprising both terminating calls and
           originating calls.25
(30)       The Notifying Party does not object to this market definition.26
(31)       The Commission concludes, in line with previous decisions, that the market for
           international roaming comprising both terminating calls and originating calls
23   Form CO, para. 69.
24   Regulation (EU) No 531/2012 of the European Parliament and of the Council of 13 June 2012 on
     roaming on public mobile communications networks within the Union (OJ 2012 L 172/10), last
     amended by Regulation (EU) 2017/920 of the European Parliament and of the Council of 17 May
     2017 (OJ 2017 L 147/1) (the "Roaming Regulation").
25 Commission decision of 27 November 2018 in case M.8792, T-Mobile NL/Tele2 NL, para. 250;
     Commission decision of 15 July 2019 in case M.9370, Telenor/DNA; Commission decision of 27 July
     2018 in case M.8883, PPF/Telenor Target Companies; Commission decision of 1 March 2010 in case
     M.5650, T-Mobile/Orange; Commission decision of 12 December 2012 in case M.6497, Hutchison 3G
     Austria/Orange Austria.
26 Form CO, para. 71.
                                                        6
 ---pagebreak---             constitutes a separate product market.27 For originating calls while roaming, the
            foreign or visited mobile network is used to make phone calls when abroad and a
            wholesale roaming charge is paid by the home network to the visited network. For
            terminating calls, the call is routed by the home network to the visited mobile
            network and the home network pays for the international carriage of the call and
            the normal termination charge to the visited network. Demand for wholesale
            international roaming services comes first from foreign mobile operators who wish
            to provide their own customers with mobile services outside their own network and
            also downstream from subscribers wishing to use their mobile telephones outside
            their own countries.
4.3.2.      Geographic market definition
(32)        In previous decisions, the Commission found that the wholesale market for
            international roaming is national in scope, given that wholesale international
            agreements can be concluded only with companies that have an operating licence
            in the relevant country and the licences to provide mobile services are restricted to
            a national territory.28
(33)        The Notifying Party does not object to this geographic market definition.29
(34)        The Commission observes that nothing in the present case indicates that it would
            be justified to depart from its previous practice, in particular due to the existence of
            regulatory barriers to offering mobile services. 30 Consequently, for the purpose of
            the present decision and in line with its previous decisional practice, the
            Commission considers that the markets for international roaming are national.
4.4.        Wholesale market for mobile and fixed call termination services
(35)        Call termination is the service provided by a network operator on the supply side to
            other network operators on the demand side, whereby a call originating in a
            demand side operator's network is delivered to a user in the supply side operator's
            network. This service is required by every originating operator, as it is necessary
            for its customers to be able to communicate with the customers of other networks.
            Call termination is therefore a wholesale service that is resold or used as an input
            for the provision of downstream retail telephony and mobile services. In previous
27   Commission decision of 1 September 2016 in case M.7758, Hutchison 3G Italy / Wind / JV, recitals
     182-184; Commission decision of 12 December 2012 in Case COMP/M.6497, Hutchison 3G
     Austria/Orange Austria, recital 64.
28 Commission decision of 28 May 2014 in case M. 6992, H3G/Telefónica Ireland, recital 151;
     Commission decision of 12 December 2012 in case M.6497, Hutchison 3G Austria/Orange Austria,
     recital 78; Commission decision of 1 March 2010 in case M.5650, T-Mobile/Orange, recital 35;
     Commission decision of 20 August 2007 in case M.4748, T-Mobile/Orange Netherlands, recital 27;
     Commission decision of 26 April 2006 in case M.3916, T-Mobile Austria/Tele.ring, recital 28;
     Commission decision of 20 September 2013 in case M. 6990, Vodafone/Kabel Deutschland, recital 252.
29 Form CO, para. 72.
30 Commission decision of 27 November 2018 in case M.8792, T-Mobile NL/Tele2 NL, para. 251;
     Commission decision of 15 July 2019 in case M.9370, Telenor/DNA; Commission decision of 27 July
     2018 in case M.8883, PPF/Telenor Target Companies; Commission decision of 3 August 2016 in case
     M.7978, Vodafone/Liberty Global/Dutch JV, paras 202.
                                                       7
 ---pagebreak---            decisions, the Commission has identified relevant markets for the provision of
           wholesale call termination on mobile and fixed networks. 31
4.4.1.     Wholesale market for mobile call termination services
4.4.1.1. Product market definition
(36)       In previous decisions, the Commission has found that there is no substitute for call
           termination on each individual network, as the operator transmitting the call can
           reach the intended recipient only through the operator of the network to which the
           recipient is connected.32 Therefore, each individual network, either fixed or mobile,
           constitutes a separate market.33
(37)       The Notifying Party does not object to this market definition.34
(38)       The Commission observes that nothing in the present case indicates that it would
           be justified to depart from its previous practice –in particular considering that a
           network operator transmitting a call can reach the intended recipient only through
           the operator of the network to which the recipient is connected. Consequently, for
           the purpose of the present decision, and in line with its previous decisional practice,
           the Commission considers that, as regards wholesale call termination services,
           termination on each individual mobile network constitutes a separate product
           market.
4.4.1.2. Geographic market definition
(39)       In previous decisions, the Commission considered that the market for wholesale
           mobile call termination services is national in scope, as each wholesale market for
           call termination corresponds to the dimensions of the operator’s network and is
           limited to the national territory of the operator's network. 35 This is primarily due to
           regulatory barriers as the geographic scope of a network licence is, in principle,
           limited to areas that do not extend beyond the borders of a Member State.
31  Accordingly, the 2003 Commission’s Recommendation on the relevant product and service markets
    within the electronic communications sector susceptible to ex ante regulation in accordance with the
    Framework Directive (Directive 2002/21/EC of the European Parliament and of the Council on a common
    regulatory framework for electronic communications networks and services ) has distinguished call
    termination on individual networks, mobile or fixed as separate markets. A distinction between
    termination on these networks is further justified by the characteristics of the terminals themselves such a s
    the different functionalities and the mobility guaranteed by the mobile service.
32  Commission decisions: of 27 November 2018 in case M.8792, T-Mobile NL/Tele2 NL, para. 259; of 15
    July 2019 in case M.9370, Telenor/DNA, para. 70; of 27 July 2018 in case M.8883, PPF/Telenor Target
    Companies, para. 26; of 12 December 2012 in case M.6497, Hutchison 3G Austria/Orange Austria, para.
    68.
33  Commission decision of 27 November 2018 in case M.8792, T-Mobile NL/Tele2 NL, para. 259;
    Commission decision of 15 July 2019 in case M.9370, Telenor/DNA; Commission decision of 27 July
    2018 in case M.8883, PPF/Telenor Target Companies; Commission decision of 12 December 2012 in
    case M.6497, Hutchison 3G Austria/Orange Austria, para. 68.
34  Form CO, para. 74.
35  Commission decisions: of 27 November 2018 in case M.8792, T-Mobile NL/Tele2 NL, para. 263; of 15
    July 2019 in case M.9370, Telenor/DNA, para. 73; of 27 July 2018 in case M.8883, PPF/Telenor Target
    Companies, para. 28; of 3 August 2016 in case M.7978, Vodafone/Liberty Global/Dutch JV, para 196.
                                                            8
 ---pagebreak--- (40)      The Notifying Party does not object to this geographic market definition.36
(41)      The Commission observes that nothing in the present case indicates that it would
          be justified to depart from its previous practice – in particular, considering that the
          geographic scope of each wholesale market for mobile call termination corresponds
          to the geographic dimension of each mobile operator’s network which, due to
          regulatory barriers, is limited to the national territory within which it operates.
          Consequently, for the purpose of the present decision, and in line with its previous
          decisional practice the Commission considers that the market for wholesale mobile
          call termination services is national in scope.
4.4.2.    Wholesale market for fixed call termination services
4.4.2.1. Product market definition
(42)      As in the case of wholesale mobile call termination services, in previous decisions
          the Commission has established that there are no potential substitutes for call
          termination on each fixed network since the operator transmitting the call can reach
          the intended recipient only through the operator of the network to which the
          recipient is connected.37
(43)      The Notifying Party, in accordance with the Commission’s decisional practice,
          does not object to this product market definition.38
(44)      The Commission observes that nothing in the present case indicates that it would
          be justified to depart from its previous practice –in particular considering that a
          fixed network operator transmitting a call can reach the intended recipient only
          through the operator of the network to which the recipient is connected.
          Consequently, for the purpose of the present decision, and in line with its previous
          decisional practice the Commission considers that, as regards wholesale call
          termination services, termination on each individual fixed network constitutes a
          separate product market.
4.4.2.2. Geographic market definition
(45)      In previous decisions, the Commission has found that the market for wholesale
          fixed call termination services is national in scope, considering that the geographic
          scope of each wholesale market for call termination should correspond to the
          dimensions of the operator’s network, which is limited to national borders due to
          regulatory barriers.39
36  Form CO, para. 75.
37  Commission decisions: of 27 November 2018 in case M.8792, T-Mobile NL/Tele2 NL, para. 259, of 15
    July 2019 in case M.9370, Telenor/DNA, para. 78, of 27 July 2018 in case M.8883, PPF/Telenor Target
    Companies, para. 32; of 12 December 2012 in case M.6497, Hutchison 3G Austria/Orange Austria, para.
    68.
38 Form CO, para. 77.
39 Commission decisions: of 27 November 2018 in case M.8792, T-Mobile NL/Tele2 NL, para. 263; of 15
    July 2019 in case M.9370, Telenor/DNA, para. 81; of 27 July 2018 in case M.8883, PPF/Telenor Target
    Companies, para. 35; of 3 August 2016 in case M.7978, Vodafone/Liberty Global/Dutch JV, para. 210.
                                                       9
 ---pagebreak--- (46)       The Notifying Party agrees, in line with previous Commission decisions, that the
           market for wholesale fixed call termination services is national. 40
(47)       The Commission observes that nothing in the present case indicates that it would
           be justified to depart from its previous practice – in particular, considering that the
           geographic scope of each wholesale market for fixed call termination corresponds
           to the dimension of each operator’s network which, due to regulatory barriers, is
           limited to the national territory within it operates. Consequently, for the purpose of
           the present decision, and in line with its previous decisional practice the
           Commission considers that the market for wholesale fixed call termination services
           is national in scope.
5.         COMPETITIVE ASSESSMENT
5.1.     Analytical framework
(48)       Article 2 of the Merger Regulation requires the Commission to examine whether
           notified concentrations are compatible with the internal market, by assessing
           whether they would significantly impede effective competition in the internal
           market or in a substantial part of it, in particular through the creation or
           strengthening of a dominant position.
(49)       In this respect, a merger may entail horizontal and/or non-horizontal (i.e. vertical or
           conglomerate) effects. Horizontal effects are those deriving from a concentration
           where the undertakings concerned are actual or potential competitors of each other
           in one or more of the relevant markets concerned. Vertical effects are those
           deriving from a concentration where the undertakings concerned are active on
           different or multiple levels of the supply chain. Conglomerate effects are those
           deriving from a concentration where the undertakings concerned are in a
           relationship which is neither horizontal nor vertical.
(50)       With respect to concentrations entailing vertical effects, the Commission
           Guidelines on the assessment of non-horizontal mergers under the Merger
           Regulation (the "Non-Horizontal Merger Guidelines")41 distinguish between two
           main ways in which vertical mergers may significantly impede effective
           competition, namely input foreclosure and customer foreclosure.
(51)       For a transaction to raise input foreclosure competition concerns, the merged entity
           must have a significant degree of market power upstream. 42 In assessing the
           likelihood of an anticompetitive input foreclosure strategy, the Commission has to
           examine whether (i) the merged entity would have the ability to substantially
           foreclose access to inputs; (ii) whether it would have the incentive to do so; and
40   Form CO, para. 78.
41   Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control of
     concentrations between undertakings ("Non-Horizontal Merger Guidelines"), OJ C 265, 18.10.2008.
42 Non-Horizontal Merger Guidelines, para. 35.
                                                       10
 ---pagebreak---            (iii) whether a foreclosure strategy would have a significant detrimental effect on
           competition downstream.43
(52)       For a transaction to raise customer foreclosure competition concerns, the merged
           entity must be an important customer with a significant degree of market power in
           the downstream market. In assessing the likelihood of an anticompetitive customer
           foreclosure strategy, the Commission has to examine whether (i) the merged entity
           would have the ability to foreclose access to downstream markets by reducing its
           purchases from upstream rivals; (ii) whether it would have the incentive to do so
           and (iii) whether a foreclosure strategy would have a significant detrimental effect
           on consumers in the downstream market.44
5.2.      Identification of affected markets
(53)       In the present case and in line with the information submitted by the Notifying
           Party, the Transaction does not give rise to any horizontally affected markets.45
(54)       As set out in paragraphs (27) and (35), international roaming and call termination
           services are wholesale services provided by network operators that allow users of
           different networks to communicate with each other. Therefore, the foreign markets
           for international roaming services and wholesale termination of calls on mobile /
           fixed networks are vertically related to the national retail markets for fixed and
           mobile telephony services.
(55)       In this regard, the Transaction gives rise to the following vertical relationships:
         (a)      The upstream markets for the wholesale provision of international roaming
                  services in the countries where XNG is active (Cyprus, France, Ireland, Italy
                  and Malta) and where P4 Group is active (Poland), in connection with the
                  downstream markets for the retail provision of mobile communication
                  services in the countries where P4 Group is active (Poland) and where XNG
                  is active (Cyprus, France, Ireland, Italy and Malta) respectively;
         (b)      The upstream markets for the wholesale provision of mobile call termination
                  services on XNG’s networks in Cyprus, France, Ireland, Italy and Malta and
                  on P4 Group’s network in Poland; in connection with
                  –         the downstream markets for the retail provision of mobile
                            communication services in the countries where P4 Group and XNG
                            are active, respectively, (see above (a)); and
                  –         the downstream markets for the retail provision of fixed telephony
                            services in the countries where P4 Group (Poland) and XNG (Cyprus,
                            France, Ireland and Malta) are active, respectively;
43   Non-Horizontal Merger Guidelines, paras. 32 to 57.
44   Non-Horizontal Merger Guidelines, paras. 58 to 77.
45 As set out in para. (8), XNG is not present on the retail mobile telecommunications, fixed telephony,
     wholesale international roaming and mobile call termination markets in Poland, whereas the P4 Group is
     exclusively active in Poland.
                                                         11
 ---pagebreak---  ---pagebreak--- 5.2.1.    Wholesale markets for international roaming services – Retail market for mobile
          telecommunications services
(56)    XNG is active on the market for wholesale international roaming services on its own
        mobile networks in Cyprus, France, Ireland and Malta. The P4 Group is active on
        this market on their own network in Poland. The wholesale market for international
        roaming services is upstream of the markets for the retail supply of mobile
        telecommunication services, where the Parties have the market shares indicated in
        Table 1 above.
5.2.1.1. The Notifying Party's view
(57)      The Notifying Party submits that the Transaction will not result in any
          anticompetitive input or customer foreclosure concerns for the reasons set out
          below.
(58)      In relation to any input foreclosure concern:
        (a)      First, following the Transaction, the merged entity's competitors in the retail
                 markets for mobile telecommunication services will continue to have at least
                 two alternative operators in each of the Cypriot, French, Irish, Italian,
                 Maltese and Polish markets from which to purchase international roaming
                 services, such as Orange, SFR, Bouygues Telecom, TIM, Vodafone, and
                 Wind Tre.47
        (b)      Second, the Notifying Party submits that the merged entity will be bound by
                 the EU Roaming Regulation, which imposes a price cap on wholesale prices
                 MNOs can charge. The Notifying Party further submits that they have
                 entered into Discount Agreements for international roaming with a large
                 number of MNOs in the EEA, including Member States where each of the
                 Parties operate its mobile network and offers wholesale international roaming
                 services.48
        (c)      Third, the Notifying Party considers that neither of the Parties has significant
                 market power to influence competition in the respective countries. In
                 addition, the Notifying Party notes that the markets shares in terms of
                 provision of domestic mobile services or wholesale international roaming in
                 Poland are very limited. Hence, they are not in a position to influence the
                 conditions of competition in vertically related markets where each of the
                 Parties offers its roaming services.49
        (d)      Finally, the Notifying Party concludes that the roaming charges in each
                 interested Member State represent a very small percentage of the costs
                 incurred by mobile operators. Therefore, any changes in the roaming costs
                 will have no significant impact on the relevant competitors’ price structure.
(59)      In relation to any customer foreclosure concern:
47  Form CO, para. 89.
48  Form CO, para. 89.
49  Form CO, para. 89.
                                                     13
 ---pagebreak---          (a)       The Notifying Party submits that, post-Transaction, the Parties’ market
                   shares will remain limited and below 30% on most markets. The Parties’
                   market shares will only exceed 30% on the retail market for mobile
                   telecommunications services in Malta and Cyprus.
         (b)       However, according to the Notifying Party, these market shares correspond to
                   XNG’s position in terms of provision of domestic mobile services and they
                   do not accurately reflect the very limited XNG’s share of demand for
                   wholesale international roaming in Poland. Moreover, the Notifying Party
                   asserts that roaming in Poland does not account for a significant portion of
                   XNG’s outbound roaming.
         (c)       Therefore, the Parties will not be able to foreclose their competitors on the
                   upstream market for international roaming services in Poland by internalizing
                   the need of their Maltese and Cypriot subscribers when roaming in Poland. 50
5.2.1.2. The Commission's assessment
(60)       In the first place, the Commission considers that the Transaction does not raise any
           input foreclosure concerns in the downstream markets for (i) the retail supply of
           mobile communication services in Cyprus, France, Ireland, Italy and Malta (where
           XNG is active), and (ii) the retail supply of mobile communication services in
           Poland (where the P4 Group is active); in connection with the upstream markets for
           wholesale international roaming services in (i) Poland (where the P4 Group is
           active), and (ii) Cyprus, France, Ireland, Italy and Malta (where XNG is active), for
           the following reasons.
(61)       First, the Commission notes that the market for wholesale international roaming
           activities is subject to sector-specific Union regulation, which prevents mobile
           operators from refusing access to their network and from charging excessive
           termination fees.51 Under the Roaming Regulation, MNOs (i) must meet all
           reasonable requests for wholesale roaming access, and (ii) are bound by price caps
           on the wholesale prices that MNOs can charge to their roaming customers. Key
           obligations under the regulation include an obligation to meet all reasonable
           requests, an obligation to publish a reference offer, caps on wholesale and retail
           charges (for calls, SMS messages and data services), and transparency and
           information requirements.
(62)       The price caps, introduced by the Roaming Regulation, have been based on a cost
           model, commissioned by the Commission, of an efficiently operating mobile
           network in each Member State, plus Norway. 52 On the one hand, at wholesale
50  Form CO, para. 89.
51  According to Article 12 of the Roaming Regulation, the average wholesale charge that the visited network
    operator may levy on the roaming provider for the provision of regulated data roaming services by means
    of that visited network shall not exceed a safeguard limit of EUR 3,50 per gigabyte of data transmitted
    since 1 January 2020. That maximum wholesale charge shall decrease to […] to EUR 3,00 per gigabyte
    on 1 January 2021 and to EUR 2,50 per gigabyte on 1 January 2022. It shall, without prejudice to Article
    19, remain at EUR 2,50 per gigabyte of data transmitted until 30 June 2022.
52 Study SMART 2017/0091, 'Assessment of the cost of providing mobile telecom services in the EU/EEA'
    by AXON, July 2019.
                                                         14
 ---pagebreak---            level, the price caps have been conceived to ensure that market players can benefit
           from wholesale rates that allow for the provision of roaming services to their
           customers without levying any charge on top of the domestic price. In addition,
           they are programmed to further decline every year. 53 At the same time, the
           wholesale roaming price caps also ensure that wholesale costs are fully recovered
           by the operator providing the wholesale roaming service. Consequently, wholesale
           caps laid down in the Regulation have in practice acted as low ceilings on prices,
           triggering competitive market dynamics between operators offering wholesale
           roaming access below those ceilings. Accordingly, in view of the way the cap is
           established, any potential foreclosure is unlikely to have a significant detrimental
           effect on the concerned downstream markets. 54
(63)       Second, following the proposed Transaction, the merged entity’s competitors will
           continue to have at least two alternative operators from which to purchase
           international roaming services in each of Cyprus, France, Ireland, Italy, Malta and
           Poland.
(64)    Third, in any event, the wholesale international roaming charges in each Member
        State concerned represent a very small percentage of the costs incurred by mobile
        operators. Therefore, any changes in the roaming costs would have only limited
        impact on the relevant competitors’ price structure. For instance, the Table below
        shows what the costs incurred for the purchase of international wholesale roaming
        services in Poland account for in the total costs for the provision of mobile services
        for XNG. It stems from the below Table that the costs incurred for the purchase by
        XNG of international wholesale roaming services in Poland account for less than
        [confidential] of the total costs incurred for the provision of national retail mobile
        telecommunication services concerned.55
53  See Article 12 of the Roaming Regulation.
54  See for instance, Report from the Commission to the European Parliament and the Council on the review
    of         the        roaming        market,        SWD       (2019)        416        final,       at
    https://ec.europa.eu/transparency/regdoc/rep/1/2019/EN/COM-2019-616-F1-EN-MAIN-PART-1.PDF.
55 Form CO, para. 89.
                                                         15
 ---pagebreak---         Table 2: % of costs incurred for purchase of international wholesale roaming
        services in Poland in total costs for provision of retail mobile
        telecommunication services for XNG
          Country          Operator       Costs incurred     Total costs incurre d (A)/(B)
                                          for            the for the provision of
                                          purchase        of retail
                                          international      telecommunication
                                          wholesale          services in 2019
                                          roaming            (million EUR)
                                          services        in
                                          Poland in 2019     (B)
                                          (million EUR)
                                          (A)
          France           XNG            [confidential]     [confidential]        [confidential]
          Italy            XNG            [confidential]     [confidential]        [confidential]
          Ireland          XNG            [confidential]     -                     [confidential]
          Malta            XNG            [confidential]     -                     [confidential]
          Cyprus           XNG            [confidential]     -                     [confidential]
(65)      Therefore, the Commission concludes that the merged entity is unlikely to have the
          ability or the incentive to engage in an input foreclosure strategy, and even if they
          did, there would be no significant detrimental effect on competition on the markets
          concerned.
(66)      In the second place, the Commission considers that the Transaction does not lead to
          any customer foreclosure concerns in the wholesale market for the provision of
          international roaming services in Cyprus, France, Ireland, Italy, Malta and in
          Poland for the following reasons.
(67)      First, the Parties’ market shares in the downstream retail mobile markets involved
          remain limited and below 30% on most markets. The Parties’ market shares will
          only exceed 30% on the retail market for mobile telecommunications services in
          Malta and Cyprus.
(68)   Second, in this respect, the costs incurred for the purchase of international wholesale
       roaming services in Poland in 2019 by the XNG’s was just [confidential] from Malta
       and [confidential] from Cyprus.56 The total value of the Polish market for
       international roaming services is estimated at more than 30 EUR million.57
       Therefore, Maltese and Cypriot XNG’s subscribers’ roaming activity in Poland is
56  Form CO, para. 89.
57  Form CO, para. 85.
                                                   16
 ---pagebreak---          limited and any possible internalization cannot have any significant impact on the
         competitive situation of the roaming market in Poland.
(69)       Therefore, the Commission concludes that the merged entity is unlikely to have the
           ability or the incentive to engage in a customer foreclosure strategy, and even if
           they did, there would be no significant detrimental effect on competition on the
           markets concerned.
(70)       In the third place, the above conclusions (recitals (60) and (66)) are confirmed by
           the result of the market investigation. The majority of respondents considered that
           competition would likely increase or stay the same on the wholesale market for
           international roaming services and the retail market for mobile telecommunications
           services.58 The majority of respondents to the market investigation did not raise any
           issues related to vertical competition concerns arising from the Transaction on the
           market for wholesale international roaming services on the one hand, and the
           market for retail supply of mobile telecommunications services on the other hand. 59
(71)       In light of the analysis above, the Commission concludes that the proposed
           Transaction would not raise serious doubts as to its compatibility with the internal
           market relative to (1) any hypothetical input foreclosure strategy of the Notifying
           Parties in relation to the downstream markets for the retail supply of mobile
           telecommunication services, and (2) any hypothetical customer foreclosure strategy
           of the Notifying Parties in relation to the upstream markets for wholesale
           international roaming services.
5.2.2.     Markets for wholesale call termination services on mobile and fixed networks
(72)       With regard to the wholesale markets for mobile and fixed call termination
           services, to the extent that each operator’s network constitutes a separate market,
           each of the Parties holds a 100% market share in the market for call termination
           services on their own mobile and fixed networks ("one net – one market"
           principle). Therefore, P4 Group has a 100% market share on mobile call
           termination on its own network in Poland, XNG holds a 100% market share in
           mobile and fixed call termination on its networks in Cyprus, France, Ireland and
           Malta and a 100% market share on its mobile network in Italy.
(73)       The market is upstream to the markets for the retail supply of mobile
           communication services and the retail supply of fixed telephony services, where
           the Parties’ market shares are as follows:
58  Questionnaire Q1 – reply to questions 6.1 and 6.3.
59  Questionnaire Q1 – reply to questions 6.1 and 6.3. In relation to the retail mobile market, some
    respondents submitted that Iliad is a particularly aggressive competitor, e.g., that uses an aggressive
    strategy to eliminate competition in the mobile market due to drastic reductions in retail prices and loss of
    revenues. The Commission considers that “aggressive” competition could be beneficial to consumers and
    that in any case P4 Group has a market share in Poland inferior to 30% and this position will not be
    reinforced by the present Transaction. In relation to the who lesale market for international roaming
    services, some respondents submitted that the Transaction could make it increasingly difficult for small
    and medium-sized independent operators to enter into roaming agreements with foreign operators within
    the EU. The Commission has addressed these concerns in recitals (60) to (69).
                                                         17
 ---pagebreak---  ---pagebreak---            competitors for access to mobile call termination services in Cyprus, France,
           Ireland, Italy and Poland.64
(77)     Second, the Notifying Party asserts, in essence, that any attempt by the Parties to
         foreclose their competitors in Cyprus, France, Ireland, Italy and Poland, by means of
         wholesale mobile call termination services is unlikely to be effective, since neither
         XNG or the P4 Group can influence the cost structure of their competitors in a
         significant manner.65 By way of example, the costs of termination services in Poland
         paid by XNG account for less than [confidential] of the total costs incurred for the
         provision of retail mobile telecommunications services in France and Italy. 66
         Furthermore, according to the Notifying Party, traffic flows originating from or
         terminating in Poland are limited. Any attempt, therefore, by the Parties to increase
         their termination charges would only have little or no impact on the cost structure of
         their competitors. Therefore, the Parties cannot influence the cost structure of their
         competitors in Cyprus, France, Ireland, Italy and Poland. 67
                  (b) The Commission's assessment
(78)       In the first place, the Commission considers that the Transaction does not raise any
           input foreclosure concerns in the market for the retail supply of mobile
           communication services in (i) Cyprus, France, Ireland, Italy and Malta; and (ii)
           Poland; by means of discrimination against the Parties’ competitors for access to
           call termination services in these countries or by degrading terms and conditions
           for access to these services, for the following reasons.
(79)       First, the Commission notes the existence of a regulatory framework for the
           electronic communications networks and services comprising of five Directives.
           This legislative package aims at establishing a harmonised regulatory framework
           for networks and services across the EU. Pursuant to Article 15 of the Framework
           Directive,68 the Commission is required to adopt a recommendation on relevant
           product and services markets with the aim to identify those product and services
           markets within the electronic communications sector whose characteristics justify
           the imposition of regulatory obligations. The market for wholesale call termination
           services on mobile networks has been identified as one of these markets and as
           such has been listed in the Annex to the Recommendation on the relevant product
           and service markets within the electronic communication sector of 9 October
           2014,69 , which the Commission has adopted pursuant to the Framework Directive.
           By this inclusion, this market is subject to ex ante regulation.70 Pursuant to this ex
64  Form CO, para. 95.
65  Form CO, para. 95.
66  Form CO, para. 95.
67  Form CO, para. 95.
68  Directive 2002/21/EC of the European Parliament and of the Council on a common regulatory framework
    for electronic communication networks and services . OL L 108, 24 04 2002, p. 0033-0050.
69  Commission Recommendation of 9 October 2014, on relevant product and service markets within the
    electronic communications sector susceptible to ex ante regulation in accordance with Directive
    2002/21/EC of the European Parliament and of the Council on a common regulatory framework for
    electronic communications networks and services. OJ L 295, 11.10.2014, p. 79–84 (revising the
    Recommendation 2007/879/ EC of 17 December 2007.
70  Ibid..
                                                         19
 ---pagebreak---            ante regulation, which is laid out in the specific Directives, the National Regulatory
           Authorities (“NRAs”) have designated operators with significant market power,
           including operators of wholesale call termination services on mobile networks, and
           imposed on them a number of regulatory obligations.71
(80)       Those regulatory obligations include access to and use of specific network
           facilities.72 In this regard, operators are required, inter alia, to give third parties
           access to specified network elements, to negotiate in good faith with undertakings
           requesting access and not withdraw access to facilities already granted. Additional
           obligations include transparency (in relation to the publication of draft
           interconnection agreements on the network operator’s website), 73 non-
           discrimination, to ensure that operators apply equivalent conditions in equivalent
           circumstances to undertakings providing equivalent services, 74 including a ban on
           favouring their own services, and price control. 75
71  For mobile call termination services, see Décision n°2017-1453 de l’Autorité de régulation des
    communications électroniques et des postes en date du 12 décembre 2017 portant sur la détermination des
    marchés pertinents relatifs à la terminaison d’appel vocal sur les réseaux fixes en France et à la
    terminaison d’appel vocal sur les réseaux mobiles en France, la désignation d'opérateurs exerçant une
    influence significative sur ces marchés et les obligations imposées à ce titre pour la période 2017-2020
    (France), AGCOM, delibera n°599/18/CONS, Identificazione e analisi dei mercati dei servizi della
    terminazione delle chiamate vocali su singola rete mobile (mercato n°2/2014) (Italy), Commission for
    Communications Regulation, Decision D11/19 of 23 May 2019, Price Control Obligations for Fixe d and
    Mobile Call Termination Rates (Ireland), Malta Communications Authority, decision MCA/D/18-3409,
    19 December 2018, Wholesale voice call termination on individual mobile networks in Malta - Definition,
    assessment of SMP & regulation of relevant markets (Malta). ΓΕΡΗΕT, Α.Δ.Π. 598/2015, ΕΕ. 4684, 25
    Σεπτεμβρίου 2015, Απόφαση αναφορικά με την εξέταση της Αγοράς (Απόληξης) Τερματισμός
    φωνητικών κλήσεων σε μεμονωμένα δίκτυα κινητής τηλεφωνίας σε επίπεδο χονδρικής, και την επιβολή
    Ρυθμιστικών Υποχρεώσεων στον οργανισμό με ΣΙΑ (ΜΤΝ), Α.Δ.Π. 598/2015, ΓΕΡΗΕT, Α.Δ.Π.
    597/2015, Ε.Ε. 4684, 25 Σεπτεμβρίου 2015, Παράρτημα Τρίτο Μέρος Απόφαση αναφορικά με την
    εξέταση της Αγοράς (Απόληξης) Τερματισμός φωνητικών κλήσεων σε μεμονωμένα δίκτυα κινητής
    τηλεφωνίας σε επίπεδο χονδρικής, και την επιβολή Ρυθμιστικών Υποχρεώσεων στον οργανισμό με ΣΙΑ
    (ATHK), Α.Δ.Π. 597/2015, ΓΕΡΗΕT, Α.Δ.Π. 596/2015, Ε.Ε. 4684, 25 Σεπτεμβρίου 2015, Παράρτημα
    Τρίτο Μέρος ΙΙ Απόφαση αναφορικά με την εξέταση της Αγοράς (Απόληξης) Τερματισμός φωνητικών
    κλήσεων σε μεμονωμένα δίκτυα κινητής τηλεφωνίας σε επίπεδο χονδρικής, και την επιβολή Ρυθμιστικών
    Υποχρεώσεων στον οργανισμό με ΣΙΑ (CABLENET), Α.Δ.Π. 596/2015 and ΓΕΡΗΕT, Α.Δ.Π 595/2015,
    ΕΕ 4684, 25 Σεπτεμβρίου 2015, ΠΑΡΑΡΤΗΜΑ ΤΡΙΤΟ ΜΕΡΟΣ ΙΙ Απόφαση αναφορικά με την εξέταση
    της Αγοράς (Απόληξης) Τερματισμός φωνητικών κλήσεων σε μεμονωμένα δίκτυα κινητής τηλεφωνίας σε
    επίπεδο χονδρικής, και την επιβολή Ρυθμιστικών Υποχρεώσεων στον οργανισμό με ΣΙΑ (PRIMETEL),
    Α.Δ.Π. 595/2015 (Cyprus). UKE, 14 grudnia 2012, No. DART–SMP-6040-4/12(34) (Aero2 sp. z o.o.),
    Decision No. DART-SMP-6040-10/11(49) (P4 sp. z o.o.), Decision No. DART-SMP-6040-8/11(65)
    (Polkomtel sp. z o.o.), Decision No. DART–SMP–6040-7/11(82) (T-Mobile Polska S.A.), Decision No.
    DART-SMP-6040-9/11(58) (Orange Polska S.A.) (Poland).
72  Article 12 of the Access Directive
73  Article 9 of the Access Directive
74  Article 10 of the Access Directive
75  Commission decisions CY/2019/2219 and CY/2019/2220: Wholesale call termination on individual
    public telephone networks provided at a fixed location and wholesale voice call termination on individual
    mobile networks in Cyprus; Commission decision FR/2018/2077: Wholesale voice call termination on
    individual mobile networks in France; Commission decision IE/2019/2151: Wholesale voice call
    termination on individual mobile networks in Ireland; Commission decision IT/2018/2119: Wholesale
    voice call termination on individual mobile networks in Italy; Commission decision MT/2018/2120:
    Voice call termination on individual mobile networks in Malta; and Commission decision PL/2009/0904 -
    Voice call termination on individual mobile networks in Poland.
                                                         20
 ---pagebreak--- (81)       Second, as established by Article 75 of the European Electronic Communications
           Code,76 by 31 December 2020 the Commission shall adopt a delegated act setting
           the Eurorates (a single Union-wide mobile and a single Union-wide fixed
           termination rate). More precisely, the European Electronic Communications Code,
           with the aim to “reduce the regulatory burden in addressing the competition
           problems relating to wholesale voice call termination consistently across the
           Union”, empowers the Commission to establish by means of a delegated act a
           single maximum voice termination rate for mobile services, that apply Union-wide.
           That means that termination rates, currently established by the Cypriot, French,
           Irish, Italian, Maltese and Polish regulators, will be determined by the European
           Commission through a delegated act, to be adopted pursuant to the said Directive.
           The Commission observes that while the said act is not yet in force, the fact that its
           introduction is imminent implies that even if the merged entity could discriminate–
           which does not appear likely in light of the reasons set out in this section – any
           such effects would not be long-term.
(82)       Third, the Commission observes that the provision of wholesale mobile call
           termination services originating from Poland and terminating in Cyprus, France,
           Ireland, Italy or Malta, and vice versa, i.e., to the P4 Group or XNG and their
           competitors are limited.77 In this regard, the Commission considers that any
           increase by the merged entity of its termination charges upstream would have only
           a limited impact on the cost structure of the merged entities’ competitors in the
           relevant countries. Therefore, a possible input foreclosure strategy is unlikely to be
           profitable for the merged entity.
(83)       Fourth, in view of the small traffic volume of mobile calls originating from Poland
           and terminating in Cyprus, France, Ireland, Italy or Malta, and vice versa, the
           Transaction is not expected to have a detrimental effect on competition in the
           downstream market for the retail supply of mobile telephony services in Cyprus,
           France, Ireland, Italy, Malta and Poland.
(84)       Therefore, the Commission concludes that the merged entity is unlikely to have the
           ability or the incentive to engage in an input foreclosure strategy, and even if they
           did, there would be no significant detrimental effect on competition on the markets
           concerned.
(85)       In the second place, the Commission considers that the Transaction does not lead to
           any customer foreclosure concerns, in (i) XNG’s network in Cyprus, France,
           Ireland, Italy, and Malta, and (ii) P4 Group’s network in Poland for the following
           reasons.
76  Directive (EU) 2018/1972 of the European Parliament and of the Council of 11 December 2018
    establishing the European Electronic Communications Code.
77 In line with the Notifying Party’s submission, the traffic flow originating from Poland (all operators, in
    minutes), in 2019, and terminating in France, Ireland, Italy and Malta represented respectively:
    [confidential], [confidential], [confidential] and [confidential] of total international traffic which
    terminates in XNG’s network. The traffic flow originating from Cyprus, France, Ireland, Italy and Malta
    (all operators, in minutes), in 2019, and terminating in Poland represented respectively: [confidential],
    [confidential], [confidential], [confidential] and [confidential] of total international traffic, which
    terminates in P4 Group’s network (Information generated from para. 95 to the Form CO).
                                                         21
 ---pagebreak--- (86)       First, the Commission observes that XNG’s and P4 Group’s presence in the
           downstream market for the retail supply of mobile telecommunication services is
           limited (estimated below 30% in Poland for P4 Group; and below 30% in France,
           Ireland and Italy for XNG). XNG’s shares appears to hold a more important market
           share in Malta with 39.3% and in Cyprus with [40-50]%.78
(87)       Second, the Commission considers that in view of the regulatory obligations
           applicable to the upstream market for wholesale mobile call termination services,
           set out in recitals (79) - (81), foreclosure of XNG’s and P4 Group’s rivals in the
           upstream market, cannot be effective. Such obligations include an obligation on
           operators to meet a reasonable request for access to and use of their network
           facilities, in, inter alia, situations “where denial of access or unreasonable terms
           and conditions having a similar effect would hinder the emergence of a sustainable
           competitive market at the retail level”.79 In that respect, the Commission recalls
           that such regulatory obligations aim at addressing market failures identified at retail
           level.80 Additional obligations such as non-discrimination or price control are likely
           to reduce the merged entity’s incentive to reduce purchases from P4 Group’s rivals
           in the upstream Polish market and from XNG’s rivals in the upstream Cypriot,
           French, Irish, Italian and Maltese market, since the merged entity will not have the
           possibility to benefit from higher prices in the upstream market.
(88)       Third, on the basis of the data provided by the Notifying Party, in this market there
           are alternative operators active, with higher or similar market shares in the overall
           market of retail mobile telecommunication services (in 2019 in volume, in France,
           Orange: [30-40]%, SFR: [20-30]%, Bouygues Tel.: [10-20]%; in Italy, TIM: [20-
           30]%, Vodafone: [20-30]%, Wind Tre: [20-30]%; in Ireland81 , Vodafone: 38.3%,
           Three Ireland: 35.3%; in Malta, GO: 37%; in Cyprus, Cytamobile-Vodafone: [40-
           50]%, in Poland, Orange: [20-30]%, Polkomtel (Plus): [20-30]%).82 In view of
           this, the Transaction is not expected to have detrimental effects on the upstream
           market for the provision of wholesale mobile call termination services in Cyprus,
           France, Ireland, Italy, Malta and Poland.
(89)       Therefore, the Commission concludes that the merged entity is unlikely to have the
           ability or the incentive to engage in a customer foreclosure strategy, and even if
           they did, there would be no significant detrimental effect on competition on the
           markets concerned.
(90)       In the third place, and confirming the Commission’s conclusions in recitals (78)
           and (85), the Commission notes that the majority of respondents to the market
           investigation did not raise any concerns related to vertical issues arising from the
           Transaction in the market for wholesale mobile call termination services on the one
           hand, and the retail supply of mobile telecommunications services on the other
78  Form CO, para. 86.
79  Article 12 of the Access Directive
80 See Commission’s Recommendation of 9 October 2014, recital (7), providing that “ For both the
    Commission and national regulatory authorities the starting point for the identification of wholesale
    markets susceptible to ex ante regulation is the analysis of corresponding retail markets”.
81 Data as of Q4 in 2019.
82 Form CO, para. 86.
                                                          22
 ---pagebreak---            hand.83 In that respect, a Cypriot telecommunications operator noted that, “we do
           not expect any changes due to the transaction”.84 According to one UK
           telecommunications operator, active in the relevant countries, “no impact is
           anticipated”.85
(91)       On the basis of the foregoing, the Commission concludes that the proposed
           Transaction does not give rise to serious doubts as to its compatibility with the
           internal market relative to (1) any hypothetical input foreclosure strategy of the
           Notifying Parties in relation to the downstream market for retail supply of mobile
           telecommunications services, and (2) any hypothetical customer foreclosure
           strategy of the Notifying Parties in relation to the upstream markets for wholesale
           mobile call termination services.
5.2.2.2. Wholesale markets for mobile call termination services – Retail market for fixed
           telephony services
(92)       P4 Group is active on the market for wholesale mobile call termination services on
           its own network in Poland. XNG is also active on the market for wholesale mobile
           call termination services on its own networks in Cyprus, France, Ireland, Italy and
           Malta. The wholesale markets where the Parties hold 100% market share on their
           own networks are upstream of the markets for the retail supply of fixed telephony
           services. The Parties’ market shares in those downstream markets are presented in
           the Table 4 above.
                   (a) The Notifying Party's view
(93)       The Notifying Party submits that the Transaction will not result in any
           anticompetitive foreclosure concerns for the reasons set out below.
(94)     In addition to the arguments put forth in recitals (76) and (77) above86 , the Notifying
         Party asserts that any attempt by the Parties to foreclose their competitors is unlikely
         to be effective, since they cannot influence the cost structure of their competitors. By
         way of example, the cost of termination services in Poland paid by XNG account for
         less than [confidential] in the total costs incurred for the provision of retail fixed
         telecommunication services in France. 87 International fixed to mobile voice calls
         originating or terminating in Poland, according to the Notifying Party, represent
         extremely limited traffic flows. The Notifying Party considers that the Parties
         represent [0-5]% of the overall demand on each of the upstream markets for mobile
83  Questionnaire Q1 – reply to questions 6.1 and 6.4. In relation to the wholesale market for mobile
    termination call services, some respondents submitted that the vertical relationship could provide the
    merged entity with a competitive advantage vis -à-vis local operators. Moreover, it was submitted that Iliad
    could send all the traffic from Poland to one of the countries where XNG is active to the relevant
    subsidiary of the Group, thus decreasing the transited traffic other operators receive from internatio nal
    sources. The Commission has considered these foreclosure concerns in recitals (78) and (89) above. In
    relation to the retail market for mobile telecommunication services, please see footnote 59 above.
84  Questionnaire Q1 – reply to questions 6.1.1.
85  Questionnaire Q1 – reply to questions 6.1.1.
86  Form CO, para. 96.
87  Form CO, para. 96.
                                                          23
 ---pagebreak---          call termination services in Cyprus, France, Ireland, Italy and Poland. Therefore, the
         Notifying Party considers that any risk of foreclosure can be ruled out. 88
                  (b) The Commission's assessment
(95)       In the first place, the Commission considers that the Transaction does not raise any
           input foreclosure concerns on the market for (i) retail fixed telephony services in
           Cyprus, France, Ireland, and Malta; and (ii) retail fixed telephony services in
           Poland; by means of discrimination against P4 Group’s and XNG’s competitors for
           access to call termination services in the countries where XNG (Cyprus, France,
           Ireland, and Malta) and P4 Group (Poland) operate or by degrading terms and
           conditions for access to these services, for the following reasons.
(96)       First, in line with what has been discussed in recitals (79) - (81), the merged entity
           will not have the ability to discriminate against (i) XNG’s competitors in Cyprus,
           France, Ireland and Malta, for access to mobile call termination services in Poland,
           and (ii) P4 Group’s competitors in Poland, for access to mobile call termination
           services in Cyprus, France, Ireland, Italy and Malta. Accordingly, the Commission
           also considers that the merged entity will not have the ability to otherwise degrade
           terms and conditions for the provision of wholesale fixed call termination services.
(97)       Second, the Commission observes that the provision of wholesale mobile call
           termination services (i) originating from Poland and terminating in Cyprus, France,
           Ireland, Italy and Malta; and (ii) originating from Cyprus, France, Ireland and
           Malta and terminating in Poland, i.e., to XNG, P4 Group and their competitors are
           limited.89 In this regard, the Commission considers that any increase by the merged
           entity of its termination charges upstream would have only a limited impact on the
           cost structure of the merged entities’ competitors in (i) Cyprus, France, Ireland and
           Malta, and in (ii) Poland. Therefore, a possible input foreclosure strategy is
           unlikely to be profitable for the merged entity.
(98)       Third, in view of the small traffic volume of fixed calls (i) originating from Cyprus,
           France, Ireland and Malta and terminating in Poland, and (ii) originating from
           Poland, and terminating in Cyprus, France, Ireland, Italy and Malta; the
           Transaction is not expected to have a detrimental effect on competition in the
           downstream market for the retail supply of fixed telephony services in (i) Cyprus,
           France, Ireland and Malta, and (ii) Poland.
(99)       Therefore, the Commission concludes that the merged entity is unlikely to have the
           ability or the incentive to engage in an input foreclosure strategy, and even if they
88  Form CO, para. 96.
89  In line with the Notifying Party’s submission, the traffic flow originating from Poland (all operators, in
    minutes), in 2019, and terminating in France, Ireland, Italy and Malta, each represented less than
    [confidential], of total international traffic which terminates in XNG’s network. The traffic flow
    originating from Cyprus, France, Ireland and Malta (all operators, in minute), in 2019, and terminating in
    Poland, represented [confidential], [confidential], [confidential] and [confidential] respectively of total
    international traffic which terminates in P4 Group’s network (Information generated from Form CO, para.
    100). Note that the figures for calls originating from Cyprus, Ireland and Malta (XNG’s network)
    overestimate the ratio since they do not only include fixed -to-mobile telecommunications between these
    countries and Poland, but any telecommunications between each of these countries and Poland.
                                                          24
 ---pagebreak---           did, there would be no significant detrimental effect on competition on the markets
          concerned.
(100)     In the second place, the Commission considers that the Transaction does not lead to
          any customer foreclosure concerns, in XNG’s network in Cyprus, France, Ireland
          and Malta; and in P4 Group’s network in Poland.
(101)     First, in that respect, the Commission observes that P4 Group’s presence in the
          downstream market for the retail supply of fixed telephony services in Poland is
          limited (estimated [0-5]% in volume). The Commission observes the same for
          XNG’s presence in the downstream market for the retail supply of fixed
          telecommunications services in Cyprus (estimated 7.7% in volume) and Malta
          (estimated [0-5]% in volume). The Commission notes that XNG’s presence in
          Ireland and France appears to be more significant (estimated 38.8% and [20-30]%
          respectively in volume).
(102)     Second, the Commission considers that in view of the regulatory obligations
          applicable to the upstream market for wholesale mobile call termination services,
          set out in recitals (79) - (81), foreclosure of XNG’s and P4 Group’s rivals in the
          upstream market, cannot be effective. Such obligations include an obligation on
          operators to meet a reasonable request for access to and use of their network
          facilities, in, inter alia, situations “where denial of access or unreasonable terms
          and conditions having a similar effect would hinder the emergence of a sustainable
          competitive market at the retail level”.90 In that respect, the Commission recalls
          that such regulatory obligations aim at addressing market failures identified at retail
          level.91 Additional obligations such as non-discrimination or price control are likely
          to reduce the merged entity’s incentive to reduce purchases from XNG’s and P4
          Group’s rivals in the upstream market, since XNG and P4 Group will not have the
          possibility to benefit from higher prices in the upstream market.
(103)     Third, on the basis of the data provided by the Notifying Party, in this market there
          are alternative operators active, with higher and similar market shares in the overall
          market of retail fixed telephony services (in 2019, in Cyprus, Cytamobile-
          Vodafone with 63.4%, PrimeTel with 14.5% and Cablenet with 14.4%; in France,
          Orange with [30-40]%, SFR with [20-30]%; in Ireland, Virgin Media with 23.9%;
          in Malta, GO with [50-60]%, Melita with [40-50]%; and in Poland, Orange with
          [40-50]%, UPC with [10-20]%, Netia with [5-10]%, Multimedia with [0-5]%).92 In
          view of this, the Transaction is not expected to have detrimental effects on the
          upstream market for the provision of wholesale mobile call termination services in
          Cyprus, France, Ireland, Italy, Malta and Poland.
(104)     Therefore, the Commission concludes that the merged entity is unlikely to have the
          ability or the incentive to engage in a customer foreclosure strategy, and even if
90 Article 12 of the Access Directive
91 See Commission’s Recommendation of 9 October 2014, recital (7), providing that “For both the
   Commission and national regulatory authorities the starting point for the identification of wholesale
   markets susceptible to ex ante regulation is the analysis of corresponding retail markets”.
92 Form CO, para. 97.
                                                          25
 ---pagebreak---            they did, there would be no significant detrimental effect on competition on the
           markets concerned.
(105)      In the third place, confirming the Commission’s conclusions in recitals (95) and
           (100), the Commission notes that the vast majority of the respondents to the market
           investigation did not raise any concerns related to vertical issues arising from the
           Transaction in the market for wholesale mobile call termination services on the one
           hand, and the retail supply of fixed telephony services on the other hand. 93 In that
           respect, according to two French telecommunications operators, “the retail market
           for fixed telephony services in France will not be affected by the Transaction”.94
(106)      On the basis of the foregoing, the Commission concludes that the proposed
           Transaction does not give rise to serious doubts as to its compatibility with the
           internal market relative to (1) any hypothetical input foreclosure strategy of the
           Notifying Parties in relation to the downstream market for retail supply of fixed
           telephony services, and (2) any hypothetical customer foreclosure strategy of the
           Notifying Parties in relation to the upstream markets for wholesale mobile call
           termination services.
5.2.2.3. Wholesale markets for fixed call termination services – Retail market for fixed
           telephony services.
(107)      XNG is active on the market for wholesale fixed call termination services on its
           own network in Cyprus, France, Ireland and Malta. P4 Group is not active on the
           market for wholesale fixed call termination services. The wholesale markets where
           XNG hold 100% market share on their own networks are upstream of the markets
           for the retail supply of fixed telephony services. P4 Group’s market shares on these
           downstream markets are presented in Table 4 above.
                  (a) The Notifying Party’s view
(108)      The Notifying Party submits that the Transaction will not result in any
           anticompetitive foreclosure concerns for the reasons set out below.
(109)      First, the Notifying Party submits that the market for the provision of wholesale
           fixed call termination services are subject to ex ante regulation by the respective
           national regulatory authorities. Such regulations ensure that access to call
           termination is granted on reasonable conditions and rates remain reasonable and
           non-discriminatory. In addition, as set out in paragraph (76) following the adoption
           of the respective delegated act, by 31 December 2020, mobile and fixed
           termination rates will no longer be established by the Cypriote, French, Irish and
93  Questionnaire Q1 – reply to questions 6.2 and 6.4. In relation to the fixed telephony market, some
    respondents noted that the Transaction allows the merged entity a comp etitive advantage, based on its
    presence in other European markets, which could weaken the ability of local operators to compete, e.g. in
    Poland. In this regard, the Commission addresses the question whether this Transaction would impede
    effective competition (irrespective of whether this competition stems from local operators or not) in the
    Polish fixed telephony market in recitals (95) to (104) above. In relation to the wholesale market for
    mobile call termination services, please see footnote 83 above.
94 Questionnaire Q1 – reply to questions 6.2.1.
                                                           26
 ---pagebreak---            Maltese national regulators, but by the Commission through a delegated act.95
           Therefore, in the Notifying Party’s view, in line with previous Commission
           decisions,96 the merged entity would not have the ability to discriminate against P4
           Group’ competitors in Poland for access to fixed call termination services in these
           countries.97
(110)      Second, the Notifying Party asserts that in essence, any attempt by the merged
           entity to foreclose P4 Group’s competitors in Poland is unlikely to be effective,
           since neither Party can influence the cost structure of P4 Group’s downstream
           competitors in a significant manner. International fixed-to-fixed voice calls
           originating in Poland represent extremely limited traffic flows, according to the
           Notifying Party. The Notifying Party considers that the Parties represent [0-5]% of
           the overall demand on each of the upstream markets for fixed call termination
           services in Cyprus, France, Ireland and Malta. Therefore, the Notifying Party
           considers that any risk of customer foreclosure can be ruled out. 98
                  (b) The Commission’s assessment
(111)      In the first place, the Commission considers that the Transaction does not raise any
           input foreclosure concerns with respect to the market for the retail supply of fixed
           telephony services in Poland, by means of discrimination against XNG’s
           competitors for access to fixed call termination services in Cyprus, France, Ireland
           and Malta, or by degrading terms and conditions for access to these services, for
           the following reasons.
(112)      First, in line with what has been discussed in recitals (79) - (81), the Commission
           notes that, pursuant to Article 15 of the Framework Directive, the upstream market
           for the provision of wholesale call termination services on fixed networks is
           included in the Annex to Commission’s Recommendation, on the relevant product
           and service markets within the electronic communication sector susceptible to ex
           ante regulation.99 In this regard, the National Regulatory Authorities, in each of
           Cyprus, France, Ireland and Malta have imposed a number of regulatory
           obligations on operators holding a significant market power. 100 Such regulatory
           obligations include obligation of access to and use of specific network facilities. 101
95  Form CO, para. 106.
96  Commission decisions: of 27 July 2018 in case M.8883, PPF Group/Telenor Target Companies, paras. 56
    and 59; of 20 April 2015 in case M.7499, Altice/PT Portugal, paras. 183-188.
97  Form CO, para. 106.
98  Form CO, para. 106.
99  Commission Recommendation of 9 October 2014, on relevant product and service markets within the
    electronic communications sector susceptible to ex ante regulation in accordance with Directive
    2002/21/EC of the European Parliament and of the Council on a common regulatory framework for
    electronic communications networks and services. OJ L 295, 11.10.2014, p. 79–84.
100 Décision n°2017-1453 de l’Autorité de régulation des communications électroniques et des postes en date
    du 12 décembre 2017 portant sur la détermination des marchés pertinents relatifs à la terminaison d’appel
    vocal sur les réseaux fixes en France et à la terminaison d’appel vocal sur les réseaux mobiles en France,
    la désignation d'opérateurs exerçant une influence significative sur ces marchés et les obligations
    imposées à ce titre pour la période 2017-2020 (France) ; Commission for Communications Regulation,
    Decision D11/19 of 23 May 2019, Price Control Obligations for Fixed and M obile Call Termination Rates
    (Ireland), Malta Communications Authority, 18 December 2018, decision MCA/D/18-3411, The
                                                          27
 ---pagebreak--- (113)      In this regard, network operators should meet reasonable requests for access to and
           use of their network elements and associated facilities. Additional obligations
           include, transparency (in relation to publication of draft interconnection agreements
           on the network operator’s website), 102 non-discrimination, aiming at ensuring that
           operators apply equivalent conditions in equivalent circumstances to undertakings
           providing equivalent services, including a ban on favouring their own services 103
           and price control.104
(114)      Second, as established by Article 75 of the European Electronic Communications
           Code, by 31 December 2020 the Commission shall adopt a delegated act setting the
           Eurorates (a single Union-wide mobile and a single Union-wide fixed termination
           rate). More precisely, the European Electronic Communications Code, with the aim
           to “reduce the regulatory burden in addressing the competition problems relating
           to wholesale voice call termination consistently across the Union”, empowers the
           Commission to establish by means of a delegated act a single maximum voice
           termination rate for fixed services that apply Union-wide. That means that
           termination rates, currently established by the Cypriot, French, Irish and Maltese
    provision of call termination on individual public telephone networks at a fixed location in Malta -
    Definition, assessment of SMP & regulation of relevant markets (Malta). For Cyprus, the relevant
    decisions are: ΓΕΡΗΕT, Απόφαση αναφορικά με την εξέταση της Αγοράς χονδρικής παροχής σε σταθερή
    θέση τερματισμού κλήσεων στο μεμονωμένο δημόσιο τηλεφωνικό δίκτυο της Primetel PLC και την
    επιβολή ρυθμιστικών υποχρεώσεων σε αυτήν, ως Οργανισμό με Σημαντική ισχύ στη σχετική (Αγορά 1
    της Σύστασης της 9ης Οκτωβρίου 2014), ΓΕΡΗΕT, Απόφαση αναφορικά με την εξέταση της Αγοράς
    χονδρικής παροχής σε σταθερή θέση τερματισμού κλήσεων στο μεμονωμένο δημόσιο τηλεφωνικό δίκτυο
    της MTN (Cyprus) Ltd και την επιβολή ρυθμιστικών υποχρεώσεων σε αυτήν ως Οργανισμό με
    Σημαντική Ισχύ στην σχετική Αγορά (Αγορά 1 της Σύστασης της 9ης Οκτωβρίου 2014), ΓΕΡΗΕT,
    Απόφαση αναφορικά με την εξέταση της Αγοράς χονδρικής παροχής σε σταθερή θέση τερματισμού
    κλήσεων στο μεμονωμένο δημόσιο τηλεφωνικό δίκτυο της ΑΤΗΚ και την επιβολή ρυθμιστικών
    υποχρεώσεων σε αυτή ως Οργανισμό με Σημαντική Ισχύ στην σχετική Αγορά (Αγορά 1 της Σύστασης
    της 9 ης Οκτωβρίου 2014), ΓΕΡΗΕT, Απόφαση αναφορικά με την εξέταση της Αγοράς χονδρικής
    παροχής σε σταθερή θέση τερματισμού κλήσεων στο μεμονωμένο δημόσιο τηλεφωνικό δίκτυο της
    Callsat International Telecommunications Ltd και την επιβολή ρυθμιστικών υποχρεώσεων σε αυτήν ως
    Οργανισμό με Σημαντική ισχύ στην σχετική Αγορά (Αγορά 1 της Σύστασης της 9ης Οκτωβρίου 2014),
    ΓΕΡΗΕT, Απόφαση αναφορικά με την εξέταση της Αγοράς χονδρικής παροχής σε σταθερή θέση
    τερματισμού κλήσεων στο μεμονωμένο δημόσιο τηλεφωνικό δίκτυο της Cablenet Communications
    Systems Ltd και την επιβολή ρυθμιστικών υποχρεώσεων σε αυτήν ως Οργανισμό με Σημαντική ισχύ στη
    σχετική Αγορά (Αγορά 1 της Σύστασης της 9ης Οκτωβρίου 2014), ΓΕΡΗΕT, Απόφαση αναφορικά με την
    εξέταση της Αγοράς χονδρικής παροχής σε σταθερή θέση τερματισμού κλήσεων στο μεμονωμέν ο
    δημόσιο τηλεφωνικό δίκτυο της MYTELCO Ltd και την επιβολή ρυθμιστικών υποχρεώσεων στην
    MYTELCO Ltd, ως Οργανισμό με Σημαντική ισχύ στην σχετική Αγορά (Αγορά 1 της Σύστασης της 9ης
    Οκτωβρίου 2014).
101 Article 12 of Directive 2002/19/EC of the European Parliament and of the Council of 7 March 2002 on
    access to, and interconnection of, electronic communications networks and associated facilities (Access
    Directive), O.J. L. 108, 24.04.2002, p.007
102 Article 9 of the Access Directive
103 Article 10 of the Access Directive
104 Article 13 of the Access Directive. With respect to Cyprus, see Commission decision CY/2019/2219 and
    CY/2019/2220, Wholesale call termination on individual public telephone networks provided at a fixed
    location and wholesale voice call termination on individual mobile networks in Cyprus ; with respect to
    France, see Commission decision FR/2011/1236, call termination on individual public telephone
    networks provided at a fixed location in France; with respect to Ireland, see Commission decision
    IE/2020/2263, wholesale call termination on individual public telephone networks provided at a fixed
    location in Ireland; with respect to Malta, see Commission decision MT/2018/2128, Wholesale call
    termination on individual public telephone networks pro vided at fixed location in Malta.
                                                        28
 ---pagebreak---            regulators, will be set by the European Commission through a delegated act, to be
           adopted pursuant to the said Directive. The Commission observes that while the
           said act is not yet in force, the fact that its introduction is imminent implies that
           even if the merged entity could discriminate –which does not appear likely in light
           of the reasons set out in this section– any such effects would not be long-term.
(115)      Therefore, XNG will not have the ability to discriminate against P4 Group’s
           competitors in Poland for access to fixed call termination services in Cyprus,
           France, Ireland and Malta.
(116)      Third, the Commission observes that the provision of wholesale fixed call
           termination services in Cyprus, France, Ireland and Malta to Poland (fixed
           networks) is limited.105 In this regard, the Commission considers that any increase
           by the merged entity of its termination charges would have only a limited impact
           on the cost structure of the merged entities’ competitors in these countries.
           Therefore, a possible input foreclosure strategy is unlikely to be profitable for the
           merged entity. In addition, in view of the small traffic volume, the Transaction is
           not expected to have a detrimental effect on the downstream retail market for fixed
           telephony services in Poland.
(117)      Therefore, the Commission concludes that the merged entity is unlikely to have the
           ability or the incentive to engage in an input foreclosure strategy, and even if they
           did, there would be no significant detrimental effect on competition on the markets
           concerned.
(118)      In the second place, the Commission considers that the Transaction does not lead to
           any customer foreclosure concerns in the market for the provision of wholesale
           fixed call termination services in the countries where XNG operates (Cyprus,
           France, Ireland and Malta) for the following reasons.
(119)      First, the Commission observes that P4 Group’s presence on the downstream
           market for retail fixed telephony services in Poland is limited ([0-5]%).
(120)      Second, the Commission, on the basis of the provided information, observes that in
           Poland there are alternative operators active, with Orange holding a market share of
           [40-50]% and UPC holding a market share of [10-20]%.106
(121)      Third, the Commission considers, that to the extent that each network operator
           holds a 100% market share in its individual network in the upstream market for
           wholesale fixed call termination services, and, as set out in recital (115), and in line
           with what has been discussed in recitals (79) - (81), regulatory obligations exist,
           foreclosure of rivals in the upstream market is not effective. To the extent that fixed
           voice call termination rates regulation is envisaged to be established by the
           European Commission, following adoption of the relevant delegated act, the
105 In line with the Notifying Party’s submission, the incoming traffic flow to France, Ireland and Malta
    (XNG) originating from Poland (all operators; fixed networks, minutes) (P4 Group), represented
    respectively: [confidential], [confidential] and [confidential] against total international traffic which
    terminates in XNG’s network (Information generated from Form CO, para. 106).
106 Form CO, para. 98.
                                                        29
 ---pagebreak---           merged entity will not be in a position to impede P4 Group’s competitors from
          obtaining access to fixed call termination services in Cyprus, France, Ireland and
          Malta.
(122)     Therefore, the Commission concludes that the merged entity is unlikely to have the
          ability or the incentive to engage in a customer foreclosure strategy, and even if
          they did, there would be no significant detrimental effect on competition on the
          markets concerned.
(123)     In the third place, confirming the Commission’s conclusions in recitals (111) and
          (117), the Commission notes that the majority of the respondents to the market
          investigation did not raise any concerns related to the vertical issues arising from
          the Transaction in the market for wholesale fixed call termination services on the
          one hand, and the retail supply of fixed telephony services, on the other hand. 107
          The market investigation has confirmed that the level of competition in these
          markets is anticipated to not change as a result of the Transaction. 108 For instance,
          from the supply-side, a telecommunications operator active in Poland, does not
          expect “any changes to the competitive landscape on the retail market for fixed
          telephony services”.109
(124)     On the basis of the foregoing, the Commission concludes that the proposed
          Transaction does not give rise to serious doubts as to its compatibility with the
          internal market relative to (1) any hypothetical input foreclosure strategy of the
          Notifying Parties in relation to the downstream markets for retail supply of fixed
          telephony services, and (2) any hypothetical customer foreclosure strategy of the
          Notifying Parties in relation to the upstream market for wholesale fixed call
          termination services.
5.2.2.4. Wholesale markets for fixed call termination services – Retail market for mobile
          telecommunication services.
(125)     XNG is active on the market for wholesale fixed call termination services on its
          own network in Cyprus, France, Ireland and Malta. P4 Group is not active on the
          market for wholesale fixed call termination services. The wholesale markets where
          XNG holds 100% market share on their own networks are upstream of the markets
          for the retail supply of mobile telecommunication services. P4 Group’s market
          shares in this downstream market are presented in Table 3 above.
                 (a) The Notifying Party’s view
(126)     The Notifying Party submits that the Transaction will not result in any
          anticompetitive foreclosure concerns.
107 Questionnaire Q1 – reply to questions 6.2 and 6.5. In relation to the wholesale market for fixed call
    termination services, one respondent submitted that after the Transaction Iliad could send all the traffic
    from Poland to one of the countries where XNG is active to the relevant subsidiary of the Group, thus
    decreasing the transited traffic other operators receive from international sources . The Commission has
    addressed foreclosure concerns in recitals (111) to (122). In relation to the retail market for fixed
    telephony services, please see footnote 93 above.
108 Questionnaire Q1 – reply to questions 6.2 and 6.5.
109 Questionnaire Q1 – reply to question 6.2.
                                                          30
 ---pagebreak--- (127)      In addition to the arguments put forth in recital (109), the Notifying Party asserts
           that any attempt by XNG to foreclose P4 Group’s competitors is unlikely to be
           effective, since XNG cannot influence the cost structure of P4 Group’s downstream
           competitors on retail markets for mobile telecommunication services. 110 The
           Notifying Party considers that the P4 Group represents [0-5]% of the overall
           demand on each of the upstream markets for fixed call termination services in
           Cyprus, France, Ireland and Malta. Therefore, the Notifying Party considers that
           any risk of foreclosure can be ruled out. 111
                  (b) The Commission’s assessment
(128)      In the first place, the Commission considers that the Transaction does not raise any
           input foreclosure concerns in the market for the retail supply of mobile
           communication services in Poland for the following reasons.
(129)      First, the Commission observes that, for the reasons set out in recitals (112) - (114),
           the merged entity will not have the ability to discriminate against P4 Group’s
           competitors in Poland, for access to fixed call termination services in Cyprus,
           France, Ireland and Malta. Accordingly, the Commission also considers that the
           merged entity will also not have the ability to otherwise degrade terms and
           conditions for the provision of wholesale fixed call termination services.
(130)      Second, the Commission observes that the provision of wholesale fixed call
           termination services, originating from Poland (mobile networks) and terminating in
           Cyprus, France, Ireland and Malta are limited.112 In this regard, the Commission
           considers that any increase by the merged entity of its termination charges would
           have only a limited no impact on the cost structure of P4 Group’s competitors in
           Poland.
(131)      Therefore, in view of the small traffic volume, the Transaction is not expected to
           have a detrimental effect on competition in the downstream market for the supply
           of retail mobile communication services in Poland.
(132)      Therefore, the Commission concludes that the merged entity is unlikely to have the
           ability or the incentive to engage in an input foreclosure strategy, and even if they
           did, there would be no significant detrimental effect on competition on the markets
           concerned.
(133)      In the second place, the Commission considers that the Transaction does not lead to
           any customer foreclosure concerns in the wholesale market for the provision of
           fixed call termination services in Cyprus, France, Ireland and Malta for the
           following reasons.
110 Form CO, para. 103.
111 Form CO, para. 103.
112 In line with the Notifying Party’s submission, the traffic flow originating from Pola nd (P4 Group) and
    terminating to France, Ireland and Malta (XNG) represented (in minutes): [confidential], [confidential]
    and [confidential] respectively against total international traffic which terminates in XNG’s network
    (Information generated from Form CO, para. 103).
                                                        31
 ---pagebreak--- (134)     First, the Commission observes that P4 Group’s market shares on the retail mobile
          market in Poland remain below 30% ([20-30]%).
(135)     Second, on the basis of the data provided by the Notifying Party, in the Polish retail
          mobile market, there are alternative operators holding similar market shares, in
          2019 in Poland such as: Orange, Polkomtel (Plus) and T-Mobile with, respectively,
          a market share of [20-30]%, [20-30]% and [10-20]%.113
(136)     Third, due to the existence of regulatory obligations in the upstream market for
          wholesale fixed call termination services which XNG is subject to, as set out in
          recital (115), and in line with what has been discussed in recitals (79) - (81),
          foreclosure of the merged entity’s rivals in the upstream market is not effective.
(137)     Therefore, in view of a sufficient large customer base, other than the merged
          entity’s customer base, the Transaction is not expected to have a detrimental effect
          on the upstream market for the provision of wholesale fixed call termination
          services in Cyprus, France, Ireland and Malta. Hence, it will not be profitable for
          the merged entity to engage in a customer foreclosure strategy.
(138)     Therefore, the Commission concludes that the merged entity is unlikely to have the
          ability or the incentive to engage in a customer foreclosure strategy, and even if
          they did, there would be no significant detrimental effect on competition on the
          markets concerned.
(139)     In the third place, confirming the Commission’s conclusions in recitals (128) and
          (132), the Commission notes that the majority of the respondents to the market
          investigation did not raise any concerns related to the vertical issues arising from
          the Transaction in the market for wholesale fixed call termination services on the
          one hand, and the retail supply of mobile communication services, on the other
          hand.114
(140)     On the basis of the foregoing, the Commission concludes that the proposed
          Transaction does not give rise to serious doubts as to its compatibility with the
          internal market relative to (1) any hypothetical input foreclosure strategy of the
          Notifying Parties in relation to the downstream market for retail mobile
          telecommunications services, and (2) any hypothetical customer foreclosure
          strategy of the Notifying Parties in relation to the upstream market for wholesale
          fixed call termination services.
113 Form CO, para. 87.
114 Questionnaire Q1 – replies to questions 6.1 and 6.5. In relation to the wholesale market for fixed call
    termination services, please see also footnote 107 above. In relation to the retail market for mobile
    telecommunication services, please see also footnote 59 above.
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 ---pagebreak--- 6.    CONCLUSION
(141) 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 and Article 57 of the EEA Agreement.
                                                   For the Commission
                                                   (Signed)
                                                   Margrethe VESTAGER
                                                   Executive Vice-President
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