CELEX: 32021M10364
Language: en
Date: 2021-10-29 00:00:00
Title: Commission Decision of 29/10/2021 declaring a concentration to be compatible with the common market (Case No COMP/M.10364 - ECI / BONAK / FAST GROUP) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                Brussels, 29.10.2021
                                                                C(2021) 7963 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                                                                  information omitted has been replaced by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.
                                                                EC Investments a.s.
                                                                Pařížská 130/26
                                                                Josefov, 110 00 Prague 1
                                                                Czech Republic
                                                                Bonak a.s.
                                                                Evropská 2690/17
                                                                Dejvice, 160 00 Prague 6
                                                                Czech Republic
Subject:             Case M.10364 - ECI / BONAK / FAST GROUP
                     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 27 September 2021, the Commission received notification of a concentration
          pursuant to Article 4 of the Merger Regulation, which would result from a proposed
          transaction by which EC Investments a.s. (‘ECI’, incorporated in the Czech
          Republic) and Bonak a.s. (‘Bonak’, incorporated in the Czech Republic) intend to
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’).
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---       acquire joint control, within the meaning of Article 3(1)(b) and 3(4) of the Merger
      Regulation, over various companies incorporated in the Czech Republic, Slovakia,
      Hungary and Poland (together referred to in this Decision as the ‘Fast Group’ or ‘the
      Target’) 3 by way of a purchase of shares (‘the Transaction’).4 In this Decision, ECI
      and Bonak are referred to as ‘the Notifying Parties’ and are, together with the Fast
      Group, collectively referred to as ‘the Parties’. The entity that would result from the
      Transaction is referred to as ‘the Merged Entity’.
1.    THE PARTIES
(2)   ECI is a Czech company solely controlled by the EP Corporate Group (‘EPCG’, the
      Czech Republic). EPCG is active in the e-commerce and wholesale sectors,
      including via the Metro Group, a specialist food and non-food wholesaler active
      across the EU, and in the online retail of daily consumer goods in the Czech
      Republic, via MFresh and its subsidiary Košík. Additionally, ECI jointly controls –
      together with Bonak – the Mall Group, which is primarily an e-commerce retailer in
      Central and Eastern Europe;
(3)   Bonak is a company belonging to the PPF Group N.V., which is an international
      investment group active globally (‘PPF N.V.’, the Netherlands). PPF N.V. controls,
      in particular, (i) the PPF Group (‘the PPF Group’, the Czech Republic) which is
      active in the e-commerce retail sector in Central and Eastern Europe through the
      Mall Group and – among others – (ii) the mobile operators O2 (active in the Czech
      Republic and Slovakia) and Telenor (active in Hungary, Bulgaria, Serbia and
      Montenegro); and
(4)   The Fast Group is a wholesaler and retailer of consumer electronics, household
      appliances and IT and telecommunication (‘TC’) products and other non-food
      products primarily in Central and Eastern Europe, both via brick-and-mortar shops
      and e-shops. Furthermore, the Fast Group provides after-sales repair services.
2.    THE CONCENTRATION
(5)   The Transaction is to be achieved by means of the execution of a share purchase
      agreement (‘SPA’) dated 9 June 2021, by which ECI and Bonak are to acquire [...]%
      of the issued share capital of the Fast Group and each to own indirectly 5 […]% of the
      shares.6 The Board of Directors of BidCo shall be composed by [shareholders’
      nomination rights]. [Executive authority and veto rights].
(6)   Post-Transaction, the undertakings forming the Fast Group will remain full-function.
      In particular, the Fast Group will continue to have sufficient resources to operate and
3   The Fast Group is represented by (i) FAST ČR, a.s., incorporated in the Czech Republic; (ii) FAST
    PLUS, a.s., incorporated in Slovakia; (iii) FAST HUNGARY Kereskedelmi Korlátolt Felelősségű
    Társaság, incorporated in Hungary; (iv) FAST POLAND sp. z o.o., incorporated in Poland,
    (vi) SENCOR EUROPE, spol. s r.o. incorporated in the Czech Republic; (v) Favia s r.o., incorporated
    in the Czech Republic; and (vi) PLANEO BETA, spol. s r.o., incorporated in the Czech Republic.
4   Publication in the Official Journal of the European Union No C 405, 07.10.2021, p. 5.
5   Through the vehicle company BidCo.
6   A minority shareholder, Rockaway (owning the remaining […]% of the issued share capital), will have
    no form of control over the FAST Group.
                                                        2
 ---pagebreak---         expand its business activities, will continue to have its own management, will remain
        an independent market player and will deal with both the Notifying Parties and third
        parties based on standard commercial conditions.
(7)     In light of the above, the Transaction will result in a concentration within the
        meaning of Articles 3(1)(b) and 3(4) of the Merger Regulation.
3.      UNION DIMENSION
(8)     The Parties have a combined aggregate world-wide turnover of more than
        EUR 5 000 million 7 (ECI: EUR […]; Bonak: EUR […]; the Fast Group: EUR […]).
        Each of at least two of them has a Union-wide turnover in excess of
        EUR 250 million (ECI: EUR […]; Bonak: EUR […]; the Fast Group: EUR […]),
        but none of the Parties achieves more than two-thirds of their aggregate Union-wide
        turnover within one and the same Member State.
(9)     The concentration, therefore, has a Union dimension within the meaning of
        Article 1(2) of the Merger Regulation.
4.      MARKET DEFINITION
4.1.    Activities of the Parties
(10)    The Parties activities that give rise to overlaps are (i) the procurement of electronics,
        (ii) the wholesale and retail of electronics and other non-food products, and (ii) the
        retail of mobile telecommunication services. While the Notifying Parties are mainly
        online players, the Target achieves the majority of its sales in its brick-and-mortar
        stores.
(11)    This Section examines the product and geographic market definitions for all
        products in relation to which the Parties’ activities overlap horizontally or are
        vertically related, namely (i) the procurement of electronics, (ii) the wholesale of
        electronics, (iii) the wholesale of non-food products, (iv) the retail of electronics,
        (v) the retail of non-food products and (vi) the retail of mobile telecommunication
        services.
4.2.    Product market definition
4.2.1. Procurement of electronics
4.2.1.1.         The Commission’s past practice
(12)    With respect to the procurement of electronics, the Commission’s decisional practice
        considered a possible market encompassing all types of electronics, as well as
        possible narrower segments according to product group, 8 while leaving the exact
7     Turnover calculated in accordance with Article 5 of the Merger Regulation.
8     Namely, procurement of (i) brown goods (television sets, audio equipment, and similar household
      appliances), (ii) large domestic appliances (‘LDA’, non-portable or semi-portable machines used for
      routine housekeeping tasks such as cooking, washing laundry, or food preservation), (iii) small
      domestic appliances (‘SDA’, portable or semi-portable machines, generally used on table-tops, counter-
                                                         3
 ---pagebreak---         market definition open. 9 More recently, the Commission considered only one overall
        electronics procurement market encompassing all potential product segments in a
        case concerning a referral to a national competition authority.10
(13)    Additionally, the Commission considered whether the procurement market includes
        solely procurement from manufacturers or also from other wholesalers, while
        ultimately leaving the exact market definition open. 11
4.2.1.2.         The Notifying Parties’ view
(14)    The Notifying Parties submit that the procurement market should comprise all types
        of electronics, as the majority of market participants (both retailers and wholesalers)
        typically procure the entire portfolio of products. 12 The Notifying Parties are also of
        the view that no distinction should be made between direct procurement from
        manufacturers and procurement from wholesalers. 13
4.2.1.3.         The Commission’s assessment
(15)    The Commission considers that, consistently with its past practice, plausible relevant
        product markets for the procurement of electronics could encompass all types of
        electronics, as well as possible narrower segments according to product groups.
        Besides, a further distinction based on procurement from manufacturers or
        wholesalers might be relevant.
(16)    The results of the market investigation support the fact that market participants
        procure a wide range of consumer electronics, household appliances, IT, and
        telecommunication products as opposed to individual product groups only. 14
        Additionally, the results of the market investigation support the fact that companies
        sourcing electronics would generally procure indifferently from both manufacturers
        and wholesalers. 15 It is not, however, entirely possible to exclude narrower product
        markets.
(17)    In any event, the Commission considers that the exact product market definition can
        be left open since the Transaction does not raise serious doubts as to its compatibility
        with the internal market or the functioning of the EEA Agreement under any
      tops or other platforms, to accomplish a household task, and include i.a. microwave ovens, toasters,
      humidifiers, food processors and coffeemakers), (iv) IT products (‘IT’), i.e. any computer related
      software, subscription or information technology hardware including but not limited to PC hardware,
      PC software, accessories and peripherals, and (v) telecommunication products (‘TC’), i.e. products that
      are primarily intended to fulfil or enable the function of information processing and communication by
      electronic means, including transmission and display, including but not limited to mobile phones,
      tablets, wearables.
9     See, e.g. Commission decision of 18 May 2017 in Case M.8469 - Sonepar Italia/Sacchi, paragraph 14;
      Commission decision of 25 June 2014 in Case M.7259 - Carphone Warehouse/Dixons,
      paragraphs 26-28; Commission decision of 30 November 2006 in Case M.4392 - DSGI/FR-Invest/F-
      Group JV, paragraphs 14-15.
10    Commission decision of 26 June 2020 in Case M.9894 - Mobilux/Conforama France, paragraphs 13-15.
11    Commission decision of 30 November 2006 in Case M.4392 – DSGI / FR-INVEST / FGROUP JV,
      paragraph 15.
12    Form CO, paragraph 120.
13    Form CO, paragraph 121.
14    Replies to Q1 - questionnaire to retailers in the Czech Republic, question 7.
15    Replies to Q1 - questionnaire to retailers in the Czech Republic, question 8.
                                                           4
 ---pagebreak---         plausible product market definition. Under a very conservative approach, the
        Transaction will be assessed (i) by both product groups and sub-segments thereof
        and/or (ii) distribution channels (distinguishing between procurement from
        manufacturers and from wholesalers).
4.2.2. Wholesale of electronics
4.2.2.1.         The Commission’s past practice
(19)    With regard to the wholesale of electronics, while leaving the exact market definition
        open, the Commission has considered separate product markets16 for (i) the
        wholesale of IT products (e.g. PC hardware and PC software), (ii) the wholesale of
        consumer electronics (‘CE’) products (e.g. televisions, digital projectors, microwave
        ovens, air conditioners, camcorders and digital cameras), and (iii) the wholesale of
        TC products (e.g. mobile phones and media tablets). 17 While the Commission
        considered a possible market encompassing the wider segment of products under the
        broader CE category, it also considered possible narrower segments based on other
        product categories, while ultimately leaving the exact market definition open.18
        Further, in a number of decisions concerning primarily the wholesale of IT/TC
        devices, while leaving the exact market definition open, the Commission considered
        separate product markets for (i) the wholesale of IT products19 and (ii) the wholesale
        of TC products20, but also considered potential sub-segmentation according to even
        more narrowly defined product categories relevant for the assessment of the merger
        in question.
(20)    With regard to product channel (or procurement), the Commission considered in
        previous decisions whether the markets should comprise separate markets for direct
        and indirect sales (i.e. sales by manufacturers and wholesalers respectively), or
        whether the direct and indirect markets should be considered as belonging to the
        same market. In some cases, the Commission’s market investigation provided
        support in favour of the inclusion of direct sales in the same market as indirect sales.
        On the other hand, in some other cases, the Commission concluded that direct sales
        and indirect sales might potentially belong to separate relevant product markets.21
16    Please refer to FN 7 for the definition of the relevant product groups.
17    Commission        decision       of      10      December        2010   in Case  M.5986     -
      SCHINDLER/DROEGE/ALSO/ACTEBIS, paragraphs 10-17.
18    Commission decision of 25 June 2014 in Case M.7259 – Carphone Warehouse/Dixons, paras. 26-28;
      Commission decision of 30 November 2006 in Case M.4392 – DSGI/FR-Invest/F-Group JV,
      paras. 14-15.
19    See, e.g. Commission decision of 19 May 2008 in Case M.5099 - ARROW ELECTRONICS/LOGIX,
      paragraphs 13-22; Commission decision of 5 October 2007 in Case M.4868 - AVNET/MAGIRUS EID,
      paragraphs 7-12; or Commission decision of 25 September 2008 in Case M.5303 - ARQUES/SHC,
      paragraphs 27-30.
20    See e.g. Commission decision of 25 September 2008 in Case M.5303 - ARQUES/SHC,
      paragraphs 31-34.
21    See, e.g. Commission decision of 19 May 2018 in Case M.5099 - ARROW ELECTRONICS/LOGIX,
      paragraphs 14-17; or Commission decision of 5 October 2007 in Case M.4868 - AVNET/MAGIRUS
      EID, paragraph 8.
                                                            5
 ---pagebreak--- (21)    Finally, when assessing mergers concerning electronics manufacturers (i.e. direct
        sales), the Commission sub-segmented broader product categories (IT, CE or TC
        products) on an individual product basis. 22
4.2.2.2.        The Notifying Parties’ view
(22)    The Notifying Parties submit that, taking into account that the Target is a non-
        specialised full-range wholesaler, the segmentation corresponding to the standard
        retail-market segmentation, i.e. of (i) brown goods, (ii) LDA, (iii) SDA, (iv) IT
        products and (v) TC products should be retained. According to the Notifying Parties,
        this definition should include both direct sales by manufacturers and indirect sales by
        wholesalers. 23
4.2.2.3.        The Commission’s assessment
(23)    The Commission considers that plausible relevant product markets for the wholesale
        of electronics could be defined according to broad product categories such as brown
        goods, LDA, SDA, IT, TC, or sub-segments (e.g. electrical cooking pots,
        juicers/pressers, home audio systems, tablets etc.).
(24)    The results of the market investigation support the fact that wholesalers sell the
        whole range of products with regard to consumer electronics, household appliances,
        IT and telecommunication (or at least most of them24), and that retailers usually
        source from both direct and indirect sales channels. 25 It is not, however, entirely
        possible to exclude narrower product markets.
(25)    In any event, for the purpose of this Decision, the Commission considers that the
        exact product market definition can be left open since the Transaction does not raise
        serious doubts as to its compatibility with the internal market or the functioning of
        the EEA Agreement under any plausible product market definition. Under a
        conservative approach, the Transaction will be assessed (i) by both product groups
        and sub-segments thereof, and (ii) distinguishing between direct/indirect sales.
4.2.3. Wholesale of non-food products
4.2.3.1.        The Commission’s past practice
(26)    With regard to the wholesale of non-food products, the Commission has previously
        considered markets consisting of broad product categories such as (i) the wholesale
        supply of electrical products (comprising electrical installation equipment, conduits
22    Commission decision of 13 December 2018 in Case M.9139 - HAIER/CANDY, paragraphs 6 et seq.;
      Commission decision of 19 November 2012 in Case M.6717 - Whirlpool/Alno, paragraphs 12 et seq.;
      Commission decision of 7 July 2010 in Case M.5859 - Whirlpool/Privileg Rights, paragraphs 10-11;
      Commission decision of 11 November 2003 in Case M.2621 - SEB/MOULINEX, paragraph 59;
      Commission decision of 21 November 2016 in Case M.8091- SEB INTERNATIONALE/WMF
      GROUP, paragraphs 31-32; Commission decision of 29 September 2009 in Case M.5421 -
      Panasonic/Sanyo.
23    Form CO, paragraph 159.
24    Replies to Q3 - questionnaire to wholesalers in the Czech Republic, question 6; Replies to Q4 -
      questionnaire to wholesalers in Slovakia, question 6.
25    Replies to Q1 - questionnaire to retailers in the Czech Republic, question 4, Replies to Q2 -
      questionnaire to retailers in the Slovakia, question 4; Replies to Q3 - questionnaire to wholesalers in the
      Czech Republic, question 3; Replies to Q4 - questionnaire to wholesalers in Slovakia, question 3.
                                                            6
 ---pagebreak---         and cables, lighting, security products, communication products and tools) 26 and
        (ii) the wholesale of cookware products (comprising all non-electric kitchen
        appliances that are primarily used for cooking purposes, such as pots, pans, pressure
        cookers and woks).27 In its previous decisional practice concerning the non-food
        retail segment, the Commission has also considered other non-food products than
        electrical and cookware products, and distinguished non-food categories by large
        product groups such as: (i) clothing and footwear; (ii) DIY, home improvement and
        garden centres; (iii) health and beauty; (iv) toys and games; and (v) sporting goods
        and camping. 28
4.2.3.2.         The Notifying Parties’ view
(27)    The Notifying Parties submit that, consistent with the Commission's product-based
        approach in these markets and the products procured by the Target, the wholesale of
        non-food products can be divided into the following product type categories for the
        purposes of this Transaction: (i) household goods; (ii) garden/DIY goods;
        (iii) maternity products; (iv) motor car accessories; (v) toys and games; (vi) watches
        and jewellery; (vii) sports goods; and (viii) musical instruments. 29
4.2.3.3.         The Commission’s assessment
(28)    The Commission considers that, consistently with its past practice, plausible relevant
        product markets for the wholesale of non-food products could be defined according
        to the broad product categories referred to in paragraph (26), but will under a very
        conservative approach also look at even narrower segments (i.e. maternity products
        and toys and games).
(29)    In any event, for the purpose of this Decision, it can be left open whether the market
        for the wholesale of non-food products should be segmented by product type as the
        Transaction does not raise serious doubts as to its compatibility with the internal
        market or the functioning of the EEA Agreement under any plausible product market
        definition. The Transaction will be assessed based on (i) product groups and sub-
        segments thereof, and (ii) distribution channels (distinguishing between
        direct/indirect sales).
4.2.4. Retail of electronics
4.2.4.1.         The Commission’s past practice
(30)    In its previous decisional practice concerning the retail of electronics, the
        Commission considered dividing the market (i) according to the use of the products
        and (ii) into different distribution channels.
(31)    In relation to point (i), while leaving the exact definition of the relevant market open,
        the Commission generally considered segmenting the electronics retailing market
        into four markets: (a) retail of brown goods, (b) retail of LDA, (c) retail of SDA and
26    E.g., Commission decision of 22 February 2008 in Case M.4963 - REXEL/HAGEMEYER.
27    E.g., Commission decision of 21 November 2016 in Case M.8091 - SEB INTERNATIONALE/WMF
      GROUP.
28    Commission decision of 16 February 2010 in Case M.5721 - OTTO/PRIMONDO ASSETS,
      paragraph 19.
29    Form CO, paragraph 172.
                                                       7
 ---pagebreak---         (d) retail of IT/TC products. 30 Additionally, while leaving the exact definition of the
        relevant market open, the Commission also considered further sub-segmentation of
        brown goods (divided into photographic products, audio, vision and games) and
        IT/TC products (divided into PC hardware, PC software, communications and
        accessories/peripherals)31. Finally, in the Carphone Warehouse / Dixons case
        concerning specialised retailers of mobile phones and tablets, for the purposes of that
        concentration, the Commission defined two separate sub-markets for the retail of
        IT/TC products, i.e. (a) the retail sale of mobile phones and (b) the retail sale of
        tablets.32
(32)    In relation to point (ii), in past cases the Commission considered a distinction
        between brick-and-mortar shops (also known as ‘offline retailing’) and home
        shopping (which includes ‘online shopping’ and ‘shopping by catalogue’). 33 The
        Commission has in the main left the exact product market definition open in
        previous decisions, although in the Carphone Warehouse / Dixons decision, most
        respondents to the Commission’s market investigation reckoned that customers view
        brick-and-mortar shops and online channels as substitutable for the purpose of
        purchasing mobile phones and tablets. Furthermore, a large majority of respondents
        confirmed that customers compare prices between internet distribution channels and
        brick-and-mortar shops before engaging in any purchasing decision. 34
4.2.4.2.         The Notifying Parties’ view
(33)    The Notifying Parties submit that, in line with the Commission’s precedents, the
        retail of electronics should be segmented into (i) retail of brown goods, (ii) retail of
        LDA, (iii) retail of SDA and (iv) retail of IT/TC products, but not further.35
        Additionally, the Notifying Parties are of the view that both offline and online sales
        channels are part of the same product market.36
4.2.4.3.         The Commission’s assessment
(34)    The Commission considers that, consistently with its past practice, plausible relevant
        product markets for the retail of electronics could be defined according to (i) the use
        of the products and (ii) distribution channels.
30    See, e.g. Commission decision of 22 February 2013 in Case M.6847 - TRITON/SUOMEN
      LÄHIKAUPPA, paragraph 17; Commission decision of 29 June 2006 in Case M.4226 -
      DSGI/FOTOVISTA, paragraph 9; Commission decision of 30 November 2006 in Case M.4392 -
      DSGI/FR-Invest/F-Group JV, paragraph 9; or Commission decision of 18 June 1998 in Case
      IV/M.1188 - KINGFISHER/WEGERT/PROMARKT, paragraph 10.
31    Commission decision of 29 June 2006 in Case M.4226 - DSGI/FOTOVISTA, paragraph 10; or
      Commission decision of 30 November 2006 in Case M.4392 - DSGI/FR-Invest/F-Group JV,
      paragraphs 10 and 13.
32    Commission decision of 25 June 2014 in Case M.7259 - Carphone Warehouse/Dixons, paragraph 19.
33    Commission decision of 29 June 2006 in Case M.4226 - DSGI/FOTOVISTA, paragraph 14; or
      Commission decision of 30 November 2006 in Case M.4392 - DSGI/FR-Invest/F-Group JV,
      paragraph 12.
34    Commission decision of 25 June 2014 in Case M.7259 - Carphone Warehouse/Dixons, paragraph 20.
      See also Commission decision of 21 December 2016 in Case M.8274                               -
      CINVEN/PERMIRA/ALLEGRO/CENEO, paragraph 23.
35    Form CO, paragraph 186.
36    Form CO, paragraph 196.
                                                      8
 ---pagebreak--- (35)    The results of the market investigation seem to indicate that retailers sell the whole
        range of consumer electronics, household appliances and IT and telecommunication
        products (i.e. brown goods, LDA, SDA, and IT/TC). 37 Additionally, market
        participants seem to consider the competitive dynamics between brick-and-mortar
        and online sales to be quite similar. 38 It is not, however, entirely possible to exclude
        that the market for the retail of electronics should not be further segmented (i) by
        product group; and/or (ii) distribution channel.
(36)    In any event, the exact product market definition can be left open since the
        Transaction does not raise serious doubts as to its compatibility with the internal
        market or the functioning of the EEA Agreement under any plausible product market
        definition. Under a conservative approach the Transaction will be assessed based on
        (i) product groups and sub-segments thereof. and (ii) distribution channels
        (distinguishing between brick-and-mortar (offline) and online sales (offline).
4.2.5. Retail of non-food products
4.2.5.1.         The Commission’s past practice
(37)    In its previous decisional practice concerning the retail of non-food products, the
        Commission considered distinctions according to (i) product groups and
        (ii) distribution channels.
(38)    In relation to point (i), in its previous decisional practice the Commission considered
        that the non-food retail segment could be divided into the following product
        categories: (a) clothing and footwear; (b) furniture and furnishings; (c) electronics
        and appliances; (d) DIY, home improvement and garden centres; (e) health and
        beauty; (f) toys and games; and (g) sports goods and camping. 39
(39)    In relation to point (ii), in past cases the Commission, while ultimately leaving the
        market definition open, considered a potential distinction between online and offline
        (also referred to as brick-and-mortar) distribution channels. The Commission further
        acknowledged that the level of interrelation between offline and online retailing
        could depend on the product category.40
4.2.5.2.         The Notifying Parties’ view
(40)    The Notifying Parties submit that, in line with the activities of the Target, retail of
        non-food products should be segmented into (i) household goods; (ii) garden/DIY
        goods; (iii) maternity products; (iv) motor car accessories; (iv) toys and games;
        (v) watches and jewellery; and (vi) sports goods. 41 Additionally, the Notifying
37    Replies to Q1 - questionnaire to retailers in the Czech Republic, questions 9 and 10; Replies to Q2 -
      questionnaire to retailers in Slovakia, question 6.
38    Replies to Q1 - questionnaire to retailers in the Czech Republic, question 12; Replies to Q2 -
      questionnaire to retailers in Slovakia, question 7.
39    Commission decision of 16 February 2010 in Case M.5721 - Otto/Primodo Assets, paragraphs 19
      and 30;     Commission        decision    of    21     December    2016    in   Case    M.8274      -
      CINVEN/PERMIRA/ALLEGRO/CENEO, paragraph 21.
40    Commission        decision       of      21      December     2016      in    Case     M.8274       -
      CINVEN/PERMIRA/ALLEGRO/CENEO, paragraph 23.
41    Form CO, paragraph 229.
                                                           9
 ---pagebreak---         Parties are of the view that both offline and online sales channels are part of the
        same product market.42
4.2.5.3.        The Commission’s assessment
(41)    The Commission considers that, consistently with its past practice, it is not possible
        to exclude that the market for the retail of non-food products should not be further
        segmented (i) by product groups and/or (ii) distribution channels. Under a very
        conservative approach, the Commission will also consider sub-segments of product
        groups (i.e. maternity products and toys and games) for the purposes of this
        Decision.
(42)    In any event, the Commission considers that the exact product market definition can
        be left open since the Transaction does not raise serious doubts as to its compatibility
        with the internal market or the functioning of the EEA Agreement under any
        plausible product market definition. The Transaction will be assessed (i) by product
        groups and sub-segments thereof, and (ii) by distribution channels (distinguishing
        between brick-and-mortar (offline) and online sales).
4.2.6. Retail of mobile telecommunications services
4.2.6.1.         The Commission’s past practice
(43)    In its past decisional practice, the Commission stated that the product market for
        retail mobile telecommunications services included mobile services such as voice,
        SMS/MMS, data and international roaming services. As regards potential further
        segmentations of the market for retail mobile telecommunications services, in case
        M.7612 - HUTCHISON 3G UK / TELEFONICA UK the Commission considered
        the following potential segmentations: (i) according to the type of technology (2G,
        3G and 4G); (ii) between voice, SMS and data services; (iii) between prepaid and
        post-paid services; (iv) between SIM-only and handset subscriptions; and
        (v) between private and business customers. Ultimately, the Commission defined the
        relevant product market as the retail market for mobile telecommunications services
        without any further segmentation.43 The Commission confirmed this approach in a
        number of its subsequent decisions, even though it has based its competitive
        assessment on a segmentation of the retail market between residential and business
        customers.44
4.2.6.2.        The Notifying Parties’ view
(44)    The Notifying Parties believe that it is not necessary to segment the individual
        markets for mobile telecommunications services.45
4.2.6.3.        The Commission’s assessment
(45)    The Commission considers that, consistently with its past practice, it is not entirely
        possible to exclude that the market for the retail of non-food products should not be
42    Form CO, paragraph 228.
43    Commission decision of 26 June 2017 in Case M.7612 - HUTCHISON 3G UK / TELEFONICA UK.
44    Commission decision of 27 July 2018 in Case M.8883 - PPF GROUP / TELENOR TARGET
      COMPANIES.
45    Form CO, paragraph 250.
                                                     10
 ---pagebreak---         further segmented based on (i) the type of mobile telecommunications services
        offered and (ii) the type of customers.
(46)    In any event, the Commission considers that the exact product market definition can
        be left open since the Transaction does not raise serious doubts as to its compatibility
        with the internal market or the functioning of the EEA Agreement under any
        plausible product market definition. For the purpose of this decision, since there are
        no affected markets on the segments based on type of mobile telecommunication
        services offered or type of customers, the Transaction will be assessed on the overall
        market for the retail of mobile telecommunication services.
4.3.    Geographic market definition
4.3.1. Procurement of electronics
4.3.1.1.         The Commission’s past practice
(47)    In its previous decisional practice the Commission considered the geographic scope
        of the respective procurement markets to be at least national, while leaving the
        precise market definition open. 46
4.3.1.2.         The Notifying Parties’ view
(48)    The Notifying Parties are of the view that the geographic scope of the procurement
        market is wider than national. The Notifying Parties submit that many of the
        European market participants procure electronics on an EU-wide basis or at least on
        a regional basis (such as Central Europe, the pan-Nordic area, etc.). Furthermore,
        according to the Notifying Parties, market participants tend to procure the products
        centrally for their entire business groups or organise their purchasing activities in
        purchasing co-operations. Moreover, many global electronics manufacturers have
        wider than national sales operations. 47
4.3.1.3.         The Commission’s assessment
(49)    With respect to the procurement of electronics, the majority of respondents submit
        that they procure the majority of products either at the EEA level or globally. With
        regard to IT/TC products, respondents submit that they procure these at the EEA
        level or in the same country where the sales take place.48 In line with its past
        decisional practice, the Commission considers, however, that it is not entirely
        possible to exclude that the geographic market for the procurement of electronics
        should be narrower and, in particular, formed by a cluster of countries or national.
(50)    In any event, for the purpose of this Decision, the exact geographic market definition
        with regard to the procurement of electronics may be left open, as the Transaction
        does not give rise to serious doubts as to its compatibility with the internal market or
        the functioning of the EEA Agreement regardless of the precise geographic market
46    See, e.g., Commission decision of 25 August 2020 in Case M.9894 - MOBILUX/CONFORAMA
      FRANCE, paragraph 17; Commission decision of 25 June 2014 in Case M.7259 - Carphone
      Warehouse/Dixons, paragraph 35-37; Commission decision of 30 November 2006 in Case M.4392 -
      DSGI/FR-Invest/F-Group JV, paragraphs 19-21.
47    Form CO, paragraph 126.
48    Replies to Q1 - questionnaire to retailers in the Czech Republic, question 10.
                                                           11
 ---pagebreak---         definition. Under a conservative approach, the Commission will analyse the market
        of procurement of electronics on a national basis.
4.3.2. Wholesale of electronics
4.3.2.1.          The Commission’s past practice
(51)    In its past decisional practice, the Commission considered the wholesale of
        electronics (primarily of IT products), to be either EU/EEA-wide49 or national. 50
4.3.2.2.          The Notifying Parties’ view
(52)    The Notifying Parties are of the view that the geographic scope of the wholesale
        markets is at least EEA-wide. This is primarily because larger retailers throughout
        Europe procure on the EEA level, since higher purchase volumes of goods typically
        command lower prices. Wholesalers therefore typically organise their sales
        operations on an EEA-wide level. 51
4.3.2.3.          The Commission’s assessment
(53)    With respect to the wholesale of electronics, the majority of respondents submit that
        they sell the majority of electronic products to a cluster of countries at the EEA
        level. 52 The Commission considers, however, that it is not entirely possible to
        exclude that the geographic market for the wholesale of electronics should be
        narrower and, in particular, national.
(54)    In any event, for the purpose of this Decision, the exact geographic market definition
        with regard to the wholesale of electronics may be left open, as the Transaction does
        not give rise to serious doubts as to its compatibility with the internal market or the
        functioning of the EEA Agreement regardless of the precise geographic market
        definition. Under a conservative approach, the Commission will analyse the markets
        for the wholesale of electronics on a national basis.
4.3.3. Wholesale of non-food products
4.3.3.1.          The Commission’s past practice
(55)    In its decisions concerning the wholesale supply of electrical products (i.e. electrical
        installation equipment, conduits and cables, lighting, security products,
        communication products and tools), the Commission considered the relevant markets
49    Commission decision of 24 March 2003 in Case M.3107 - TECH DATA CORPORATION/AZLAN
      GROUP, paragraph 14.
50    See, e.g., Commission decision of 19 May 2008 in Case M.5099 - ARROW ELECTRONICS/LOGIX,
      paragraph 23-26; Commission decision of 5 October 2007 in Case M.4868 - AVNET/MAGIRUS EID,
      paragraphs 13-15; or Commission decision of 10 December 2010 in Case M.5986 -
      SCHINDLER/DROEGE/ALSO/ACTEBIS, paragraphs 18-20.
51    Form CO, paragraph 163.
52    Replies to Q3 - questionnaire to wholesalers in the Czech Republic, question 7; Replies to Q4 -
      questionnaire to wholesalers in Slovakia, question 7.
                                                         12
 ---pagebreak---         to be national.53 Similarly, in a case concerning the wholesale market for cookware
        products, the Commission considered the market national in scope.54
4.3.3.2.        The Notifying Parties’ view
(56)    In line with the Commission’s past practice, the Notifying Parties do not oppose a
        national market definition. 55
4.3.3.3.        The Commission’s assessment
(57)    The Commission considers, in line with its past practice, that the relevant geographic
        markets for the wholesale of non-food Products are likely national in scope, and will
        make its competitive assessment on this basis.
(58)    In any event, for the purpose of this Decision, the exact geographic market definition
        with regard to the wholesale of non-food products may be left open, as the
        Transaction does not give rise to serious doubts as to its compatibility with the
        internal market or the functioning of the EEA Agreement regardless of the precise
        geographic market definition.
4.3.4. Retail of electronics
4.3.4.1.        The Commission’s past practice
(59)    In its past decisional practice, while ultimately leaving the exact geographic market
        definition open, the Commission considered the geographic market for electrical
        retailing to likely be national in scope. The Commission has also considered wider
        markets, as in case DSGI/FR-Invest/F-Group JV where it stated that the market
        investigation supported the proposition that electrical retailing markets tend to be
        national, although there is evidence of cross-border parallel imports. 56 The
        possibility of a narrower scope was, however, also taken into account with regard to
        offline shopping (20 – 30-minute driving time catchment areas around a store).57
4.3.4.2.        The Notifying Parties’ view
(60)    The Notifying Parties submit that the relevant market should be defined as national.
        In particular, the Notifying Parties argue that (i) the market for the retail sale of
        electronics in the Czech Republic and Slovakia is characterised by online players
        and retail chains operating on a countrywide basis; (ii) online sales represent a
        substantial part of the electronics retailers' turnover and their importance is steadily
53    E.g., Commission decision of 22 February 2008 in Case M.4963 - REXEL/HAGEMEYER,
      paragraphs 25-27.
54    Commission decision of 21 November 2016 in Case M.8091 - SEB INTERNATIONALE/WMF
      GROUP, paragraph 30.
55    Form CO, paragraph 178.
56    Commission decision of 30 November 2006 in Case M.4392 - DSGI/FR-Invest/F-Group JV,
      paragraph 18.
57    Commission decision of 30 November 2006 in Case M.4392 - DSGI/FR-Invest/F-Group JV,
      paragraph 16; or Commission decision of 25 June 2014 in Case M.7259 - Carphone Warehouse/Dixons,
      paragraph 30.
                                                       13
 ---pagebreak---         increasing; and (iii) all major players who previously sold electronics primarily
        through brick-and-mortar stores also run an online store. 58
4.3.4.3.        The Commission’s assessment
(61)    With respect to the retail of electronics, all respondents submit that electronic
        products and appliances are usually sold at national level, both online and offline.59
        The Commission considers, however, that it is not entirely possible to exclude that
        the geographic market for the offline retail of electronics should be narrower,
        consisting of local catchment areas around a particular store.
(62)    In any event, the Commission considers that the exact geographic market definition
        can be left open since the Transaction does not raise serious doubts as to its
        compatibility with the internal market or the functioning of the EEA Agreement
        under any plausible geographic market definition. Under a conservative approach,
        the Transaction should be assessed based on local markets for the offline segment.
        As the Notifying Parties submit, however, that, to the best of their knowledge, there
        are no local offline markets that would be affected, the Commission will base the
        competitive assessment on national markets.
4.3.5. Retail of non-food products
4.3.5.1.        The Commission’s past practice
(63)    In its past decisional practice, the Commission considered the geographic market for
        the retail of non-food products as being at most national in scope.60 For the brick-
        and-mortar channel the Commission considered also regional or even local markets,
        typically in the form of catchment areas corresponding to the specific driving time
        required for reaching a store.61
4.3.5.2.        The Notifying Parties’ view
(64)    The Notifying Parties submit that the geographic scope of the individual non-food
        products retail markets should be defined as national. 62 In particular, the Notifying
        Parties bring forward the same arguments as those outlined in paragraph (60) above
        with regard to the retail of electronics.
4.3.5.3.        The Commission’s assessment
(65)    The Commission considers that, consistently with its past practice, the relevant
        geographic markets for the online retail of non-food products is likely national,
        whereas the offline segment could be local, regional or national in scope.
58    Form CO, paragraph 216.
59    Replies to Q1 - questionnaire to retailers in the Czech Republic, question 14; Replies to Q2 -
      questionnaire to retailers in Slovakia, question 9.
60    Commission        decision       of      21      December 2016    in     Case      M.8274      -
      CINVEN/PERMIRA/ALLEGRO/CENEO, paragraph 26.
61    Commission decision of 16 February 2010 in Case M.5721 - Otto/Primondo Assets, paragraphs 31-33;
      Commission decision of 26 June 2020 in Case M.9894 - MOBILUX/CONFORAMA FRANCE,
      paragraph 16; Commission decision of 21 December 2016 in Case M.8274 -
      CINVEN/PERMIRA/ALLEGRO/CENEO, paragraph 26.
62    Form CO, paragraph 235.
                                                          14
 ---pagebreak--- (66)    In any event, for the purpose of this Decision, the exact geographic market definition
        with regard to the retail of non-food products may be left open, as the Transaction
        does not give rise to serious doubts as to its compatibility with the internal market or
        the functioning of the EEA Agreement regardless of the precise geographic market
        definition. Under a conservative approach the Transaction should be analysed based
        on local markets for the offline segment, but as the Notifying Parties submit that, to
        the best of their knowledge, there are no local offline markets that would be affected,
        the Commission will base the competitive assessment of (i) both the offline and the
        online segment and (ii) the online segment, on national markets.
4.3.6. Retail of mobile telecommunications services
4.3.6.1.          The Commission’s past practice
(67)    The Commission has consistently found that the markets for retail mobile services
        provided to end consumers are national in scope.63
4.3.6.2.          The Notifying Parties’ view
(68)    In line with the Commission’s past decisional practice, the Notifying Parties submit
        that the geographic scope should be defined as national.64
4.3.6.3.          The Commission’s assessment
(69)    For the purpose of this Decision, the exact geographic market definition with regard
        to the retail of telecommunication services may be left open, as the Transaction does
        not give rise to serious doubts as to its compatibility with the internal market or the
        functioning of the EEA Agreement regardless of the precise geographic market
        definition. The Commission will base its competitive assessment on national markets
        for the retail of mobile telecommunication services.
4.4.    Affected markets
(70)    ECI is active in the wholesale of food and non-food products via the Metro Group,
        and in e-commerce retail via the Mall Group. Bonak is also active in e-commerce
        retail via the Mall Group, and in the provision of mobile telecommunication services
        via O2 and Telenor. The Fast Group is active in the wholesale and retail of
        consumer electronics, household appliances, IT/TC products and other non-food
        products.
(71)    The Transaction leads to the following affected markets in the Czech Republic,
        Slovakia, Bulgaria, Croatia and Slovenia:65
63    Commission decision of 27 July 2018 in Case M.8883 - PPF GROUP/TELENOR TARGET
      COMPANIES, para. 15.
64    Form CO, paragraph 252.
65    The Transaction leads to additional technically horizontally affected markets, namely (i) market for
      electronics wholesale in the Czech Republic and certain sub-segmentations, (ii) market for electronics
      online retail in the Czech Republic and certain sub-segmentations, (iii) market for non-food online
      retail in the Czech Republic and certain sub-segmentations, (iv) market for electronics procurement in
      Slovakia and certain sub-segmentations, (v) market for electronics wholesale in Slovakia and certain
      sub-segmentations, (vi) market for electronics online retail in Slovakia and certain sub-segmentations
      and (vii) market for non-food online retail in Slovakia and certain sub-segmentations. In these
                                                        15
 ---pagebreak--- Table 1: Summary of those of the Parties’ activities that lead to affected markets66
                                                Horizontal or
 Country               Markets                                                 Activities of the Parties
                                                   vertical
                                                                    The Mall Group, the Metro Group, O2 and
    CZ       Procurement of electronics           Horizontal
                                                                    the Target.
    CZ       Retail of electronics                Horizontal        The Mall Group, O2 and the Target.
                                                                    Activities of the Mall Group, O2 and the
    SK       Retail of electronics                Horizontal
                                                                    Target.
                                                                    Upstream: the Target’s wholesale activities.
             Wholesale/Retail of
    CZ                                             Vertical         Downstream: the Mall Group’s retail
             electronics
                                                                    activities.
             Wholesale of                                           Upstream: the Target’s wholesale activities.
    CZ       electronics/Retail of                 Vertical         Downstream: O2's activities concerning the
             telecommunication services                             retail sale of IT/TC devices.
                                                                    Upstream: the Target’s wholesale activities.
             Wholesale/Retail of non-
    CZ                                             Vertical         Downstream: the Mall Group’s retail
             food products
                                                                    activities.
                                                                    Upstream: the Target’s wholesale activities.
             Wholesale/Retail of
    SK                                             Vertical         Downstream: the Mall Group’s retail
             electronics
                                                                    activities.
                                                                    Upstream: the Target’s wholesale activities.
             Wholesale/Retail of non-
    SK                                             Vertical         Downstream: the Mall Group’s retail
             food products
                                                                    activities.
             Wholesale of                                           Upstream: the Target’s wholesale activities.
   BG        electronics/Retail of                 Vertical         Downstream: Telenor's activities
             telecommunication services                             concerning the retail sale of IT/TC devices.
                                                                    Upstream: the Target’s wholesale activities.
             Wholesale/Retail of
   HR                                              Vertical         Downstream: the Mall Group’s retail
             electronics
                                                                    activities.
                                                                    Upstream: the Target’s wholesale activities.
             Wholesale/Retail of
   SLO                                             Vertical         Downstream: the Mall Group’s retail
             electronics
                                                                    activities.
       technically affected markets the increment is de-minimis, i.e. (i) the combined market shares under all
       plausible product and geographic market definitions are less than 50% and (ii) the increment (delta) of
       the HHI resulting from the concentration is below 150. As explained in point 6 of the Commission
       Notice on a simplified procedure for treatment of certain concentrations under Council Regulation (EC)
       No 139/2004 (the ‘Notice’), such overlaps are unlikely to raise competition concerns. The Commission
       notes that none of the characteristics set out in the Notice that could lead to a full merger assessment
       despite point 6 being satisfied are met in relation to those markets. In addition, no concern was raised
       during the market investigation on those markets. Taking into consideration that the Notifying Parties
       confirmed that there are no horizontal overlaps in the offline retail markets, and also that the upstream
       and downstream market shares for local offline markets are all below 30%, these markets are not
       analysed for the purpose of this Decision.
66     Form CO, Annex 33.
                                                           16
 ---pagebreak--- 5.    COMPETITIVE ASSESSMENT
5.1.  Legal framework of the assessment
(72)  Pursuant to Article 2(2) and (3) of the Merger Regulation, the Commission must
      assess whether a concentration 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. In this respect, a merger can entail horizontal
      and/or non-horizontal effects.
(73)  As regards the analysis of horizontal overlaps, the Guidelines on the assessment of
      horizontal mergers under the Council Regulation on the control of concentrations
      between undertakings67 (hereinafter, the ‘Horizontal Merger Guidelines’) distinguish
      two main ways in which mergers between actual or potential competitors in the same
      relevant market may significantly impede effective competition, namely coordinated
       and non-coordinated effects. Non-coordinated effects can significantly affect
       competition by removing significant competitive constraints on one or more
       undertakings, which would then have market power without resorting to
       coordination of behaviour. In this respect, the Horizontal Merger Guidelines not only
       consider the direct loss of competition between the merging firms, but also the
       reduction of the competitive constraint on third party firms active in the same market
       that may result that may result from the merger.
(74)   The Horizontal Merger Guidelines lists a number of factors that may influence the
      likelihood of a transaction giving rise to significant non-coordinated effects, such as
      the high market shares of the merging parties, the fact that the merging parties are
      close competitors, limited opportunities for customers to switch suppliers, or the fact
      that the transaction eliminates an important driver of competition. It is not necessary
      for all factors considered relevant to the analysis of non-coordinated effects in the
      Horizontal Merger Guidelines to be present to make the existence of significant
      horizontal effects likely. Furthermore, the list of factors set out in the Horizontal
      Merger Guidelines should not be considered exhaustive.
(75)  As regards non-horizontal relationships, anti-competitive effects may arise when the
      parties to a concentration operate on different levels of the supply chain in certain
      relevant markets (vertical effects). The Commission appraises non-horizontal effects
      in accordance with the guidance set out in the Non-Horizontal Merger Guidelines. 68
(76)  The Non-Horizontal Merger Guidelines distinguish between two main ways in
      which mergers between companies operating at different levels of the supply chain
      may significantly impede effective competition, namely non-coordinated and
      coordinated effects.
67   Commission guidelines on the assessment of horizontal mergers under the Council Regulation on the
     control of concentrations between undertakings (OJ C 31, 05.02.2004, pages 5-18), in particular
     paragraphs 4 and 22.
68   Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control of
     concentrations between undertakings (OJ C 265, 18.10.2008, p. 6).
                                                      17
 ---pagebreak--- (77)    In non-horizontal mergers, non-coordinated effects may arise, inter alia, when the
        concentration gives rise to foreclosure. In vertical mergers, foreclosure can take the
        form of input foreclosure, where the merger is likely to raise costs of downstream
        rivals by restricting their access to an important input; and/or the form of customer
        foreclosure, where the merger is likely to foreclose upstream rivals by restricting
        their access to a sufficient customer base.69
(78)    In assessing the likelihood of an anticompetitive foreclosure scenario, the
        Commission examines whether the Merged Entity would have post-transaction the
        ability to foreclose access to either inputs or customers, whether the Merged Entity
        would have the incentives to do so and whether such foreclosure strategy would have
        a detrimental effect on competition.70
(79)    The present Section assesses whether the Transaction is likely to raise horizontal or
        vertical non-coordinated effects on the markets examined in Section 4 above.
5.2.    Horizontal overlaps
5.2.1. Market for the procurement of electronics in the Czech Republic
(80)    Based on the market shares communicated by the Notifying Parties, the Transaction
        would give rise to horizontally affected markets for the procurement of electronics in
        the Czech Republic on a number of markets.71 As the Notifying Parties confirmed
        that, to the best of their knowledge, the Merged Entity’s market shares would not be
        higher when segmenting the procurement market between manufacturers and
        wholesalers, the market shares assessed in this chapter will include both procurement
        from manufacturers and from wholesalers. 72
(81)    The Notifying Parties confirmed that, with regard to the procurement markets of
        electronics (overall and for all sub-segments, i.e. brown goods, LDA, SDA and
        IT/TC), the combined market share of the Merged Entity would be below 20% at the
        EEA level. 73 At national level, the combined market share of the Merged Entity in
        the Czech Republic would be [20-30]% in the overall market for the procurement of
        electronics, [20-30]% for the procurement of brown goods, [20-30]% for the
        procurement of LDA and [30-40]% for the procurement of SDA. 74
69    Non-Horizontal Merger Guidelines, para 30.
70    Non-Horizontal Merger Guidelines, para 30.
71    Based on the market shares communicated by the Notifying Parties, the Transaction would not give rise
      to horizontally affected markets for the procurement of electronics in segments other than those
      outlined in Table 2.
72    The Notifying Parties’ response to RFI 3, 26 October 2021.
73    The Notifying Parties’ response to RFI 2, 13 October 2021.
74    The Notifying Parties submit that, at national level, the combined market share of the Merged Entity for
      the procurement of IT and TC devices in the Czech Republic would be below 20%. (Annex D to the
      Notifying Parties’ reply to Pre-Notification RFI 2, 10 September 2021)
                                                          18
 ---pagebreak--- (82)     Table 2 outlines the Parties’ market shares for all relevant sub-segments of brown
         goods, LDA and SDA.
Table 2: Market shares for electronic procurement in the Czech Republic in 2020 75
     Segment                    Sub-segment            Notifying Parties         Fast Group      Combined
                            audio home systems              [10-20]%              [10-20]%       [20-30]%
   Brown goods                 TVs (PTV/flat)               [10-20]%              [10-20]%       [20-30]%
                          video gaming, consoles            [10-20]%               [5-10]%       [20-30]%
                                   Cooking                   [5-10]%              [10-20]%       [20-30]%
                                    Cooling                  [5-10]%              [10-20]%       [20-30]%
                                 dishwashers                [10-20]%               [5-10]%       [20-30]%
       LDA                          freezers                [10-20]%               [5-10]%       [20-30]%
                                     hoods                   [5-10]%              [10-20]%       [20-30]%
                                tumble dryers                [5-10]%              [10-20]%       [20-30]%
                             washing machines               [10-20]%              [10-20]%       [30-40]%
                                 air treatment              [10-20]%               [5-10]%       [20-30]%
                          electrical cooking pots           [10-20]%               [5-10]%       [20-30]%
                             food preparation76              [5-10]%              [30-40]%       [40-50]%
                            shaving/hair cutting             [5-10]%              [10-20]%       [10-20]%
       SDA
                                   hair care                 [5-10]%              [10-20]%       [20-30]%
                           hot beverage makers              [10-20]%              [30-40]%       [40-50]%
                                      irons                 [10-20]%              [10-20]%       [20-30]%
                               juicers/pressers             [10-20]%              [10-20]%       [20-30]%
(83)     The Transaction is not likely to raise serious doubts as to its compatibility with the
         internal market as regards the above markets for the procurement of electronics in
         the Czech Republic for the following reasons.
(84)     Firstly, the Merged Entity’s market shares post-Transaction would still be at 30% or
         below both on the overall procurement market, as well as for all product groups in
75     Form CO, Annex 33.
76     This sub-segment includes the following items grouped by the research agency GFK: (i) grilling,
       (ii) cutting and mincing, (iii) mixing and whipping, (iv) baking, (v) food robots and food processors,
       (vi) sandwich makers and toasters, (vii) kitchen scales, (viii) soda stream home carbonation systems,
       and (ix) fruit dryers.
                                                         19
 ---pagebreak---        the Czech Republic. Even when looking at sub-segments of those product groups,
       the Merged Entity’s combined market shares would not be above approx. 45%.
(85)   Secondly, a healthy number of viable competitors are active with regard to all
       product groups and sub-segments thereof, as confirmed by the market
       investigation. 77 These competitors include large multiproduct electronics retailers,
       specialised electronics wholesalers and/or retailers typically focused on one of the
       electronics product groups, mobile operators and generalist retailers offering at least
       some electronics categories within their retail portfolio. The key competitors of the
       Merged Entity for the procurement of electronics in the Czech Republic are Alza
       (approximate market share of [20-30]%), HP Tronic (approximate market share
       of [20-30]%), OKAY Elektro (approximate market share of 5-10%), NAY Group
       (approximate market share of 5-10%), as well as other smaller players. For product
       groups and sub-segments thereof, the key competitors are as follows:
       (a)       procurement of brown goods and sub-segments thereof in the Czech
                 Republic: Alza (approximate market share of [20-30]%), HP Tronic
                 (approximate market share of [20-30]%), NAY Group (approximate market
                 share of [10-20]%), as well as other smaller players;
       (b)       procurement of LDA and sub-segments thereof in the Czech Republic: HP
                 Tronic (approximate market share of [20-30]%), Alza (approximate market
                 share of [10-20]%), OKAY Elektro (approximate market share of 5-10%), as
                 well as other smaller players;
       (c)       procurement of SDA and sub-segments thereof in the Czech Republic: Alza
                 (approximate market share of [20-30]%), HP Tronic (approximate market
                 share of [10-20]%), OKAY Elektro (approximate market share of 5-10%), as
                 well as other smaller players. 78
(86)   In conclusion, on the basis of the results of the market investigation and the
       information provided by the Notifying Parties, the Commission considers that the
       Transaction does not raise serious doubts as to its compatibility with the internal
       market as regards the market for the procurement of electronics in the Czech
       Republic.
5.2.2. Market for the retail of electronics in the Czech Republic
(87)   Based on the data communicated by the Notifying Parties, at national level, besides
       the narrow sub-segments in Table 3 below, the combined market shares of the
       Merged Entity in the Czech Republic for the overall retail of electronics as well as
       for the main product groups (namely, brown goods, LDA, SDA, IT and TC), when
       considering the online and offline distribution channels together would not give rise
       to affected markets.79 The combined market shares of the Merged Entity in the
       Czech Republic for the online segment only would result in a number of technically
       affected markets with de minimis increments that according to the assessment
       provided in footnote 63 raise no serious doubts as to its compatibility with the
       internal market.
77    Replies to Q1 - questionnaire to retailers in the Czech Republic, questions 17, 18 and 19.
78    Form CO, paragraph 465.
79    Form CO, Annex 32.
                                                           20
 ---pagebreak--- (88)    With regard to the offline segment only, the Notifying Parties' submit that, to the
        best of their knowledge, there are no local offline markets that would be horizontally
        affected in the Czech Republic.80
(89)    Table 3 below reports the Parties’ market shares for all relevant sub-segments of
        brown goods, LDA, SDA, IT and TC.
Table 3: Market shares for the retail of electronics overall (online + offline) in the Czech
Republic in 202081
     Segment               Sub-segment            Notifying Parties       Fast Group  Combined
   Brown Goods             set-top-boxes                [5-10]%            [10-20]%   [20-30]%
                      electrical cooking pots          [10-20]%             [5-10]%   [20-30]%
       SDA
                         food preparation               [5-10]%            [10-20]%   [20-30]%
(90)    The Transaction is not likely to raise serious doubts as to its compatibility with the
        internal market as regards the market for the retail of electronics (the sub-segments
        in Table 3) in the Czech Republic for the following reasons.
(91)    Firstly, the Merged Entity’s market shares post-Transaction would be modest and, in
        any event, they would be below 25% for all sub-segments for the retail of
        electronics.
(92)    Secondly, the business models of the Parties differ largely. The Notifying Parties
        control The Mall Group which is mainly an online player, whereas the Target
        achieves the majority of its electronics sales (including the product segments
        discussed above and their sub-segments) in its brick-and-mortar stores. Only approx.
        […]% of the Target's sales in 2020 was represented by online sales. 82
(93)    Thirdly, a healthy number of viable competitors are active in the overall market for
        the retail of electronics in the Czech Republic, as well as with regard to all relevant
        product groups and sub-segments thereof. For the retail of brown goods and sub-
        segments thereof, the main competitors in the Czech Republic are Alza (approximate
        market share of [20-30]%), HP Tronic (approximate market share of [20-30]%) and
        the NAY Group (approximate market share of [10-20]%). For the retail of SDA and
        sub-segments thereof, the main competitors in the Czech Republic are Alza
        (approximate market share of [20-30]%), HP Tronic (approximate market share of
        [10-20]%) and OKAY Elektro (approximate market share of 5-10%). Furthermore,
        the market investigation confirmed that the level of competition in the retail sale of
        each of brown goods and SDA (both online and offline) in the Czech Republic is
        very high. 83
(94)    Fourthly, with regard to potential barriers to enter the Czech electronics retail
        market, entering the electronics market is generally not restricted by legal or factual
        barriers.
80     Form CO, paragraph 398.
81     Form CO, Annex 33.
82     Form CO, paragraph 514.
83     Replies to Q1 - questionnaire to retailers in the Czech Republic, question 20.
                                                             21
 ---pagebreak--- (95)     In conclusion, based on the results of the market investigation and the information
         provided by the Notifying Parties, the Commission considers that the Transaction
         does not raise serious doubts as to its compatibility with the internal market as
         regards the market for the retail of electronics in the Czech Republic.
5.2.3. Market for the retail of electronics in Slovakia
(96)     Based on the data communicated by the Notifying Parties, at national level, the
         combined market share of the Merged Entity in Slovakia for the overall retail of
         electronics or main product groups (brown goods, LDA, IT, TC) does not give rise
         to affected markets on any segmentation by distribution channels. 84 The only
         exception is the SDA segment (online and offline combined), on which the Merged
         Entity would have a market share of [20-30]%. On narrower sub-segments of the
         main product groups, the Merged Entity would also have market shares above 20%
         (see Table 4 below). 85
(97)     With regard to the offline segment only, the Notifying Parties submit that, to the best
         of their knowledge, there are no local offline markets that would be horizontally
         affected in Slovakia. 86
(98)     Table 4 below reports the Parties’ market shares for all relevant sub-segments of
         brown goods, LDA, SDA and IT.
Table 4: Market shares for the retail of electronics (online and online+offline) in Slovakia
in 202087
     Segment                Sub-segment            Notifying Parties Fast Group   Combined
                                               Online+Offline
   Brown goods         audio home systems                [0-5]%       [20-30]%     [30-40]%
        IT          accessories and peripherals        [10-20]%         [0-5]%     [20-30]%
       LDA                      freezers                [5-10]%       [10-20]%     [20-30]%
                             air treatment             [10-20]%       [10-20]%     [20-30]%
                      electrical cooking pots          [10-20]%       [20-30]%     [30-40]%
                          food preparation              [5-10]%       [30-40]%     [30-40]%
                               hair care                [5-10]%       [10-20]%     [20-30]%
       SDA             hot beverage makers              [5-10]%       [10-20]%     [20-30]%
                                  irons                 [5-10]%       [10-20]%     [20-30]%
                           juicers/ pressers            [5-10]%       [10-20]%     [20-30]%
                                 kettles                [5-10]%       [20-30]%     [30-40]%
                          vacuum cleaners               [5-10]%       [10-20]%     [20-30]%
                                                    Online
       SDA                food preparation             [10-20]%        [5-10]%     [20-30]%
84     Form CO, Annex 32.
85     Form CO, annex 33.
86     The Notifying Parties’ response to RFI 3, 26 October 2021.
87     Form CO, Annex 33.
                                                           22
 ---pagebreak--- (99)   The Transaction is not likely to raise serious doubts as to its compatibility with the
       internal market as regards the market for the above markets for the retail of
       electronics in Slovakia for a number of reasons.
(100) Firstly, the Merged Entity’s market shares post-Transaction would be modest even
       on the very narrow sub-segments presented in Table 4. They would be below or
       around 30%, with the only exception being the very narrow segment of ‘food
       preparation’, for which market shares still remain below 40%.
(101) Secondly, a healthy number of viable competitors are active in the overall market for
       the retail of electronics in Slovakia, as well as on the narrower segments for the main
       product groups and sub-segments thereof. For the retail of electronics in Slovakia,
       the main competitors are Alza (approximate market share of 25-35%), NAY Group
       (approximate market share of 20-30%), HP Tronic (approximate market share
       of 5-10%) and OKAY Elektro (approximate market share of 5-10%).88 Furthermore,
       the market investigation confirmed that the level of competition in the retail sale of
       electronic products in Slovakia, as well as for the narrower product groups and sub-
       segments thereof, is high. 89
(102) Thirdly, with regard to potential barriers to enter the Slovak electronics retail market,
       entering the electronics market is generally not restricted by legal or factual
       barriers.90
(103) In conclusion, based on the results of the market investigation and the information
       provided by the Notifying Parties, the Commission considers that the Transaction
       does not raise serious doubts as to its compatibility with the internal market as
       regards the market for the retail of electronics in Slovakia.
5.2.4. Conclusion on horizontal non-coordinated effects
(104) In light of the considerations outlined in paragraphs 5.2.1 – 5.2.3, and based on the
       results of the market investigation as well as on all the information available to it, the
       Commission concludes that the concentration does not raise serious doubts as to its
       compatibility with the internal market with respect to horizontal non-coordinated
       effects in (i) the markets for the procurement of electronics in the Czech Republic,
       (ii) the markets for the retail of electronics in the Czech Republic and (iii) the
       markets for the retail of electronics in Slovakia.
5.3.   Vertical relationships
5.3.1. Market for the wholesale (upstream) and retail (downstream) of electronics in the
       Czech Republic
(105) Based on the market shares communicated by the Notifying Parties, the Transaction
       would give rise to a vertical relationship between the wholesale supply of certain
       SDA products (upstream) by the Fast Group and the Mall Group’s activities
       concerning the retail sale of the same products (downstream) in the Czech Republic.
88    Form CO, paragraph 472.
89    Replies to Q2 - questionnaire to retailers in Slovakia, questions 13 and 14.
90    Form CO, paragraph 519.
                                                           23
 ---pagebreak--- (106) With regard to the wholesale of electronics, Table 5 reports the Parties’ market
        shares for all relevant sub-segments to the main product groups including both direct
        and indirect sales, as the Notifying Parties confirmed that, to the best of their
        knowledge, the combined market share of the Merged Entity would not be higher
        when segmenting between direct and indirect sales.91
Table 5: Market shares for the wholesale and retail of electronics in the Czech Republic
in 202092
    Affected upstream market/sub-                         Affected downstream market/sub-
                                           Combined                                                  Combined
               segment                                                   segment
                                                            Online retail of food preparation         [10-20]%
                                                            Offline retail of food preparation        [20-30]%
                                                            Overall retail of food preparation        [20-30]%
   SDA (wholesale of food preparation)     [40-50]%
                                                                  Online retail of SDA                [10-20]%
                                                                  Offline retail of SDA               [20-30]%
                                                                  Overall retail of SDA               [10-20]%
                                                             Online retail of juicers/pressers        [10-20]%
                                                            Offline retail of juicers/pressers        [10-20]%
                                                            Overall retail of juicers/pressers        [10-20]%
   SDA (wholesale of juicers/ pressers)    [30-40]%
                                                                  Online retail of SDA                [10-20]%
                                                                  Offline retail of SDA               [20-30]%
                                                                  Overall retail of SDA               [10-20]%
   SDA (wholesale of electrical cooking    [20-30]%
                 pots)                                         Offline retail of electrical cooking pots
                                                                                [40-50]%
        SDA (wholesale overall)            [20-30]%
(107) The Transaction is not likely to either lead to input or customer foreclosure as, post-
        Transaction, the Parties would likely not have the ability nor the incentive to
        foreclose the Merged Entity’s upstream and downstream competitors for the
        following reasons.
(108) Firstly, the 30% threshold in the upstream market is exceeded solely in relation to
        two narrow sub-segments, namely products for food preparation and juicers/pressers.
        Equally, in the downstream market, the 30% threshold is exceeded only in one
        narrow segment, i.e., the offline retail of electrical cooking pots. Overall, even
        considering these narrow sub-segments, markets shares remain modest. Also, the
91     The Notifying Parties’ response to RFI 3, 26 October 2021.
92     Form CO, Annex 33.
                                                         24
 ---pagebreak---        market investigation revealed that the Merged Entity would not have the ability or
       incentive to increase wholesale prices or reduce supply to competing retailers for the
       above segments of SDA products.93
(109) Secondly, the respondents in the market investigation consider that wholesalers will
       have sufficient customers for SDA products. 94 Several competitors (i.e. large
       multiproduct electronics retailers) are active in the downstream market:
       Alza ([20-30]%), HP Tronic ([20-30]%), NAY Group ([10-20]%), K+B
       Progres ([0-5]%), Mironet ([0-5]%), TS Bohemia ([05]%), OKAY Elektro ([0-5]%),
       Exasoft ([0-5]%).95
(110) Thirdly, the majority of the respondents in the market investigation consider 96 that
       the Transaction will not have a negative impact on any of the product segments in
       Table 5.
(111) Fourthly, input foreclosure would be unlikely as a sufficient number of competitors
       would remain for the affected markets at the wholesale level: Philips Česká
       Republika S.R.O. ([20-30]%), Delonghi Appliances SRL ([20-30]%), Groupe SEB
       ČR S.R.O. ([10-20]%), BSH Domácí Spotřebiče S.R.O. ([10-20]%), HP
       Tronic ([0-5]%), Alza ([0-5]%), Singer Sewing Machine CO., SPOL. S ([0-5]%),
       and Remoska S.R.O. ([0-5]%). 97
(112) In conclusion, in light of the above, the Commission considers that the Merged
       Entity would not have the ability nor the incentive to engage in a foreclosure strategy
       and that, in any event, a foreclosure strategy would not have a significant impact on
       effective competition.
(113) Based on the considerations above, and in light of the results of the market
       investigation and of the evidence available to it, the Commission considers that the
       Transaction does not give rise to serious doubts as to its compatibility with the
       internal market or the functioning of the EEA Agreement because of vertical non-
       coordinated effects in the markets for the wholesale to retailers of electronics, as
       well as in the market for the retail sale of electronics in the Czech Republic.
5.3.2. Wholesale of electronics (upstream) and retail of mobile telecommunication services
       (downstream) in the Czech Republic
(114) Based on the market shares communicated by the Notifying Parties, the Transaction
       would give rise to a vertical relationship between the wholesale supply of certain
       IT/TC products (upstream) by the Fast Group and O2’s activities concerning the
       retail sale of IT/TC devices as part of its retail mobile telecommunications services
       (downstream) in the Czech Republic. Table 6 reports the Parties’ market shares for
       the narrowest possible markets.
93    Replies to Q3 - questionnaire to wholesalers in the Czech Republic, question 16.
94    Replies to Q3 - questionnaire to wholesalers in the Czech Republic, questions 17 and 18.
95    Form CO, paragraph 469.
96    Replies to Q3 - questionnaire to wholesalers in the Czech Republic, question 15.
97    Form CO, paragraph 466.
                                                          25
 ---pagebreak--- (115) With regard to the wholesale of IT/telecommunication devices, Table 6 reports the
         Parties’ market share including both direct and indirect sales, as the Notifying
         Parties confirmed that, to the best of their knowledge, the combined market share of
         the Merged Entity would not be higher when segmenting between direct and indirect
         sales. 98
(116) With regard to the retail of mobile telecommunication services, Table 6 reports the
         Parties’ market share for the overall market, as the Notifying Parties confirmed that,
         to the best of their knowledge, the combined market share of the Merged Entity
         would not be higher under all possible segmentations (i.e. based on (i) the type of
         mobile telecommunications services offered and (ii) the type of customers).99
Table 6: Market shares for the wholesale of IT/TC products and retail of mobile
telecommunication services in the Czech Republic in 2020100
     Affected
     upstream
                     Combined             Affected downstream market/sub-segment            Combined
    market/sub-
     segment
  Wholesale of IT
                        [0-5]%
      devices
    Wholesale of
telecommunication       [0-5]%
      devices
                                    Market for retail of mobile telecommunications services [30-40]%
    Wholesale of
                         <3%
   mobile phones
    Wholesale of
                         <3%
      tablets
(117) The Transaction is not likely to lead to customer foreclosure as, post-Transaction,
         the Parties would likely not have the ability nor the incentive to foreclose the
         Merged Entity’s upstream competitors for the following reasons.
(118) Firstly, post-Transaction, the Merged Entity’s market share downstream is relatively
         low ([30-40]%). The upstream IT/TC segment would be very small
         (approx. [0-5]%).101
(119) Secondly, the mobile devices are essentially used as a marketing tool to promote the
         services102 and there are sufficient retailers who sell them on a standalone basis. 103
98     The Notifying Parties’ response to RFI 3, 26 October 2021.
99     The Notifying Parties’ response to RFI 3, 26 October 2021.
100    Form CO, Annex 33.
101    Form CO, paragraph 418.
102    Paragraph 34 of the Non-Horizontal Guidelines.
103    Form CO, paragraph 480.
                                                          26
 ---pagebreak--- (120) In conclusion, based on the above considerations and in light of the results of the
        market investigation and of the evidence available to it, the Commission considers
        that the Merged Entity would have neither the ability nor the incentive to engage in a
        foreclosure strategy and that, in any event, a foreclosure strategy would not have a
        significant impact of effective competition.
5.3.3. Wholesale (upstream) and retail (downstream) of non-food products in the Czech
        Republic
(121) Based on the market shares communicated by the Notifying Parties, the Transaction
        would give rise to a vertical relationship between the wholesale supply of certain
        non-food products by the Fast Group (upstream) and the Mall Group’s activities
        concerning the retail sale of the same products (downstream) in the Czech Republic.
(122) In Table 7 below, the Parties’ market shares for all relevant sub-segments are
        presented. With regard to these sub-segments, namely wholesale of maternity
        products and toys and games, the Parties’ market share are presented including both
        direct and indirect sales, as the Notifying Parties confirmed that, to the best of their
        knowledge, the combined market share of the Merged Entity would not be higher
        when segmenting between direct and indirect sales.104
(123) With regard to the retail of maternity products and toys and games, the Notifying
        Parties confirmed that, to the best of their knowledge, there are no local offline
        markets that would be affected in the Czech Republic.105
Table 7: Market shares for the wholesale and retail of non-food products in the Czech
Republic in 2020106
     Affected upstream
                                 Combined       Affected downstream market/sub-segment         Combined
    market/sub-segment
    Wholesale of maternity          <2%         Market for online retail of maternity products [30-40]%
           products
  Wholesale of toys and games      [0-5]%        Market for online retail of toys and games    [30-40]%
(124) The Transaction is not likely to lead to customer foreclosure as, post-Transaction,
        the Parties would likely not have the ability nor the incentive to foreclose the
        Merged Entity’s upstream competitors for the following reasons.
(125) Firstly, post-Transaction, the Merged Entity’s market shares downstream are
        moderate, at around [30-40]%, even on the very narrow sub-segments in Table 7. On
        an overall retail market for maternity products, the Merged Entity’s market share
        would amount to approximately [5-10]%,107 whereas the Merged Entity’s market
        share on the overall retail market for toys and games would amount to approximately
        [10-20]%.108
104   The Notifying Parties’ response to RFI 3, 26 October 2021.
105   The Notifying Parties’ response to RFI 3, 26 October 2021.
106   Form CO, Annex 33.
107   Form CO, paragraph 483.
108   Form CO, paragraph 485.
                                                        27
 ---pagebreak--- (126) Secondly, the market share of the Fast Group on the upstream (wholesale) market is
         negligible (below 2% with regard to the wholesale market for the supply of
         maternity products as well as toys and games). 109
(127) Thirdly, in the Czech Republic the online retail market for maternity products
         represents approx. 15% of the overall retail market for maternity products,110
         whereas the online retail market for toys and games represents approx. 35% of the
         overall retail market for toys and games. 111
(128) In conclusion, based on the above considerations and in light of the results of the
         market investigation and of the evidence available to it, the Commission considers
         that the Merged Entity would not have the ability nor the incentive to engage in a
         foreclosure strategy and that, in any event, a foreclosure strategy would not have a
         significant impact on effective competition.
(129) Based on the considerations above, and in light of the evidence available to it, the
         Commission concludes that the Transaction does not give rise to anti-competitive
         vertical non-coordinated effects with regard to the wholesale to retailers of non-food
         products in the Czech Republic.
5.3.4. Wholesale (upstream) and retail (downstream) of electronics in Slovakia
(130) Based on the market shares communicated by the Notifying Parties, the Transaction
         would give rise to a vertical relationship between the wholesale supply of brown
         goods and SDA products by the Fast Group (upstream) and Mall Group’s activities
         concerning the online retail sale of SDA (downstream) in Slovakia.
(131) Table 8 below reports the Parties’ market shares for all relevant product groups and
         sub-segments. The market shares presented in Table 8 include both direct and
         indirect sales, as the Notifying Parties confirmed that, to the best of their knowledge,
         the combined market share of the Merged Entity would not be higher when
         segmenting between direct and indirect sales.112
Table 8: Market shares for the wholesale and retail of electronics in Slovakia in 2020113
      Affected upstream
                                 Combined       Affected downstream market/sub-segment   Combined
     market/sub-segment
                                                      Online retail of food preparation  [20-30]%
                                                      Offline retail of food preparation [50-60]%
    SDA (wholesale of food                           Overall retail of food preparation  [30-40]%
                                 [30-40]%
         preparation)                                       Online retail of SDA         [10-20]%
                                                            Offline retail of SDA        [30-40]%
                                                            Overall retail of SDA        [20-30]%
109    Form CO, Annex 33.
110    Form CO, paragraph 483.
111    Form CO, paragraph 485.
112    The Notifying Parties’ response to RFI 3, 26 October 2021.
113    Form CO, Annex 33.
                                                         28
 ---pagebreak---       Affected upstream
                                 Combined       Affected downstream market/sub-segment             Combined
     market/sub-segment
    Wholesale of audio home
                                 [10-20]%
           systems                             Market for offline retail of audio home systems     [50-60]%
  Wholesale of brown goods        [5-10]%
      Wholesale of SDA           [10-20]%
                                                      Market for offline retail of SDA             [30-40]%
  Wholesale of air treatment      [5-10]%
      Wholesale of SDA           [10-20]%
    Wholesale of electrical                       Market for offline retail of air treatment       [30-40]%
                                 [20-30]%
         cooking pots
      Wholesale of SDA           [10-20]%
                                              Market for offline retail of electrical cooking pots [40-50]%
Wholesale of food preparation    [30-40]%
      Wholesale of SDA           [10-20]%
  Wholesale of hot beverage                      Market for offline retail of food preparation     [50-60]%
                                  [5-10]%
            makers
      Wholesale of SDA           [10-20]%
                                               Market for offline retail of hot beverage makers    [30-40]%
     Wholesale of kettles        [10-20]%
      Wholesale of SDA           [10-20]%             Market for offline retail of kettles         [30-40]%
     Wholesale of vacuum
                                  [5-10]%
           cleaners                              Market for offline retail of vacuum cleaners      [30-40]%
      Wholesale of SDA           [10-20]%
    Wholesale of audio home
                                 [10-20]%
           systems                             Market for overall retail of audio home systems     [30-40]%
  Wholesale of brown goods        [5-10]%
    Wholesale of electrical
                                 [20-30]%
         cooking pots                         Market for overall retail of electrical cooking pots [30-40]%
      Wholesale of SDA           [10-20]%
Wholesale of food preparation    [30-40]%
                                                 Market for overall retail of food preparation     [30-40]%
      Wholesale of SDA           [10-20]%
  Wholesale of hot beverage
                                  [5-10]%
            makers                                   Market for overall retail of kettles          [30-40]%
      Wholesale of SDA           [10-20]%
(132) The Transaction is not likely to lead to input or customer foreclosure as, post-
         Transaction, the Parties would likely not have the ability to foreclose the Merged
         Entity’s upstream or downstream competitors for the following reasons.
(133) Firstly, at the wholesale (upstream) level, the markets shares of the Fast Group are
         modest, reaching a maximum of [30-40]% in the very narrow sub-segment of
         wholesale of products for food preparation. Consistent with these data, the market
         investigation revealed that the Merged Entity would not have the ability or incentive
         to increase wholesale prices or reduce supply to competing retailers for the above
         segments of brown goods of SDA products 114.
114    Replies to Q2 - questionnaire to retailers in Slovakia, question 18, Replies to Q4 - questionnaire to
       wholesalers in Slovakia, questions 13 and 14.
                                                          29
 ---pagebreak--- (134) Secondly, at the retail (downstream) level, apart from some relatively high market
       shares in certain very narrow market sub-segments, namely the offline retail of
       products for food preparation ([50-60]%), the offline retail of audio home systems
       ([50-60]%) and the offline retail of electrical cooking pots ([40-50]%), the market
       shares of the Mall Group are modest. The respondents to the market investigation
       consider that wholesalers will have sufficient customers115 and retailers would be
       able to switch suppliers in the hypothetical case of prices increases/supplies
       reduction, including for food preparation, audio home systems and electrical cooking
       pots116.
(135) Thirdly, the majority of the respondents to the market investigation consider that the
       Transaction will not have a negative impact on any of the product segments from
       Table 8. 117
(136) Fourthly, for the offline retail segments listed in Table 8, the Transaction would not
       have a significant effect because beside Metro Groups’ estimated [0-5]% market
       share on any market segment, the rest of the upstream and downstream offline
       activity belongs to the Fast Group.118
(137) Fifthly, for the overall markets presented in Table 8, there would be sufficient
       competitors with regard to all the product groups and sub-segments thereof post-
       Transaction.119 At the wholesale level, the Merged Entity would have competitive
       restraints in the affected markets from the following companies: Philips Česká
       Republika S.R.O. (15-25%), Delonghi Appliances SRL (15-25%), Groupe SEB ČR
       S.R.O. (15-25%), BSH Domácí Spotřebiče S.R.O. (5-10%), HP Tronic (15-25%),
       Alza ([0-5]%), Singer Sewing Machine CO., SPOL. S ([0-5]%), and Remoska
       S.R.O. ([0-5]%). 120 Also at retail level there enough competitors remaining on the
       market: Alza (20-30%), NAY Group (20-30%), HP Tronic ([10-20]%), OKAY
       Elektro (5-10%), Andrea shop ([5-10]%), TPD ([0-5]%), Domoss ([0-5]%) and
       IKEA ([0-5]%).121
(138) Based on the considerations above, and in light of the results of the market
       investigation and of all the evidence available to it, the Commission concluded that
       the Transaction does not give rise to serious doubts as to its compatibility with the
       internal market or the functioning of the EEA Agreement because of vertical non-
       coordinated effects in the markets presented in Table 8.
5.3.5. Wholesale (upstream) and retail (downstream) of non-food products in Slovakia
(139) Based on the market shares communicated by the Notifying Parties, the Transaction
       would give rise to a vertical relationship between the wholesale supply of maternity
       products by the Fast Group (upstream) and Mall Group’s activities concerning the
       online retail sale of maternity products and of toys and games (downstream) in
       Slovakia. Table 9 reports the Parties’ market shares for the narrowest possible
       markets.
115   Replies to Q2 - questionnaire to retailers in Slovakia, question 19.
116   Replies to Q2 - questionnaire to retailers in Slovakia, question 20.
117   Replies to Q4 - questionnaire to wholesalers in Slovakia, question 15.
118   Form CO, paragraph 488.
119   Form CO, paragraph 489.
120   Form CO, paragraph 466.
121   Form CO, paragraph 472.
                                                           30
 ---pagebreak--- (140) With regard to the wholesale maternity products and toys and games, Table 9 reports
        the Parties’ market share including both direct and indirect sales, as the Notifying
        Parties confirmed that, to the best of their knowledge, the combined market share of
        the Merged Entity would not be higher when segmenting between direct and indirect
        sales. 122
Table 9: Market shares for the wholesale and retail of non-food products in the Slovakia
in 2020123
      Affected upstream
                                  Combined       Affected downstream market/sub-segment         Combined
     market/sub-segment
    Wholesale of maternity
           products                  <2%         Market for online retail of maternity products [40-50]%
  Wholesale of toys and games                     Market for online retail of toys and games
                                     <2%                                                        [40-50]%
(141) The Transaction is not likely to lead to customer foreclosure as, post-Transaction,
        the Parties would likely not have the ability nor the incentive to foreclose the
        Merged Entity’s upstream competitors for the following reasons.
(142) Firstly, notwithstanding the fact that the Mall Group’s market shares in the
        downstream markets for the online retail of maternity products and toys and games
        are relatively high ([40-50]% and [40-50]% respectively), post-Transaction there
        would be credible alternative online retailers for these two segments in Slovakia.
        Alternative online retailers of maternity products in Slovakia include Alza (5-10%),
        Feedo (5-10%), as well as others.124 Alternative online retailers of toys and games in
        Slovakia include DRÁČIK – DIVI s.r.o. (20-40%), Alza ([10-20]%), as well as
        others.125
(143) Secondly, in Slovakia some degree of competitive constraint is represented by the
        offline retail market, as the online retail market for maternity products represents
        approx. 10% of the overall retail market for maternity products,126 whereas the
        online retail market for toys and games represents approx. 20% of the overall retail
        market for toys and games. 127
(144) Thirdly, post-Transaction, the Merged Entity’s market share on the overall retail
        market for maternity product would amount to approximately [5-10]%,128 whereas
        the Merged Entity’s market share on the overall retail market for toys and games
        would amount to approximately [5-10]%.129
122    The Notifying Parties’ response to RFI 3, 26 October 2021.
123    Form CO, Annex 33.
124    The Notifying Parties’ response to RFI 1, 11 October 2021.
125    The Notifying Parties’ response to RFI 1, 11 October 2021.
126    Form CO, paragraph 490.
127    Form CO, paragraph 491.
128    Form CO, paragraph 490.
129    Form CO, paragraph 491.
                                                         31
 ---pagebreak--- (145) Fourthly, the market share of the Fast Group on the upstream (wholesale) market is
         negligible (below 2% with regard to the wholesale market for the supply of
         maternity products as well as toys and games). 130
(146) In conclusion, in light of the above, the Commission considers that the Merged
         Entity would not have the ability nor the incentive to engage in a foreclosure strategy
         and that, in any event, a foreclosure strategy would not have a significant impact of
         effective competition.
(147) Based on the considerations above, and in light of the results of the market
         investigation and of all the evidence available to it, the Commission concluded that
         the Transaction does not give rise to serious doubts as to its compatibility with the
         internal market or the functioning of the EEA Agreement because of vertical non-
         coordinated effects in the markets presented in Table 9.
5.3.6. Market for the wholesale of electronics (upstream) and the retail of
         telecommunication services (downstream) in Bulgaria
(148) Based on the market shares communicated by the Notifying Parties, the Transaction
         would give rise to a vertical relationship between the wholesale supply of IT/TC
         products by the Fast Group (upstream) and Telenor's activities concerning the retail
         sale of telecommunication services (downstream) in Bulgaria. Table 10 reports the
         Parties’ market shares for all the relevant segments and sub-segments.
(149) With regard to the wholesale of IT/Communication devices, Table 10 reports the
         Parties’ market share including both direct and indirect sales, as the Notifying
         Parties confirmed that, to the best of their knowledge, the combined market share of
         the Merged Entity would not be higher when segmenting between direct and indirect
         sales. 131
(150) With regard to the retail of mobile telecommunication services, Table 10 reports the
         Parties’ market share for the overall market, as the Notifying Parties confirmed that,
         to the best of their knowledge, the combined market share of the Merged Entity
         would not be higher under all possible segmentations (i.e., based on (i) the type of
         mobile telecommunications services offered and (ii) the type of customers).132
Table 10: Market shares for the wholesale of IT/TC products and the retail of
telecommunication services in Bulgaria in 2020133
    Affected upstream                                    Affected downstream
                                   Combined                                      Combined
   market/sub-segment                                     market/sub-segment
                                                            Market for retail of
       Wholesale of
                                                                 mobile
    IT/communication                  <1%                                        [30-40]%
                                                           telecommunications
         devices
                                                           services in Bulgaria
130    Form CO, Annex 33.
131    The Notifying Parties’ response to RFI 3, 26 October 2021.
132    The Notifying Parties’ response to RFI 3, 26 October 2021.
133    Form CO, Annex 33.
                                                         32
 ---pagebreak--- (151) The Transaction is not likely to lead to customer foreclosure as, post-Transaction,
       the Parties would likely not have the ability nor the incentive to foreclose Merged
       Entity’s upstream competitors for the following reasons.
(152) Firstly, Telenor’s market shares in the downstream markets for the retail of
       telecommunication services is modest, amounting to [30-40]%. This means that,
       post-Transaction, there would be credible alternative telecommunication mobile
       operators in Bulgaria besides Telenor. Mobile operators active in Bulgaria include
       A1 ([30-40]%) and Vivacom ([30-40]%). 134
(153) Secondly, the Fast Group’s market share on the Bulgarian wholesale market of
       IT/TC devices would be safely below 1% under any potential relevant market
       definition and the turnover generated by its wholesale of products belonging to the
       categories IT and TC in Bulgaria is negligible (approx. EUR […] in 2020). 135
(154) In conclusion, in light of the above, the Commission considers that the Merged
       Entity would not have the ability nor the incentive to engage in a foreclosure strategy
       and that, in any event, a foreclosure strategy would not have a significant impact of
       effective competition.
(155) Based on the considerations above, and in light of the results of the market
       investigation and of all the the evidence available to it, the Commission considers
       that the Transaction does not give rise to serious doubts as to its compatibility with
       the internal market or the functioning of the EEA Agreement because of vertical
       non-coordinated effects in the markets for the wholesale sales to retailers of
       IT/communications devices, as well as in the market for the retail sale of mobile
       telecommunication services in Bulgaria.
5.3.7. Market for the wholesale (upstream) and retail (downstream) of electronics in
       Croatia
(156) Based on the market shares communicated by the Notifying Parties, the Transaction
       would give rise to a vertical relationship between the wholesale supply of SDA
       products by the Fast Group (upstream) and Mall Group’s activities concerning the
       online retail sale of SDA (downstream) in Croatia. Table 11 reports the Parties’
       market shares for all the relevant segments.
(157) With regard to the wholesale of SDA, Table 11 reports the Parties’ market share
       including both direct and indirect sales, as the Notifying Parties confirmed that, to
       the best of their knowledge, the combined market share of the Merged Entity would
       not be higher when segmenting between direct and indirect sales.136
134   Form CO, paragraph 472.
135   Form CO, paragraph 346.
136   The Notifying Parties’ response to RFI 3, 26 October 2021.
                                                        33
 ---pagebreak--- Table 11: Market shares for the wholesale and retail of electronics in Croatia in 2020137
    Affected upstream                                     Affected downstream
                                    Combined                                       Combined
   market/sub-segment                                      market/sub-segment
  Wholesale of SDA (as                 <1%                Market for online retail [30-40]%
     well as under any                                           of SDA
 potential relevant-market
        definition)
(158) The Transaction is not likely to lead to customer foreclosure as, post-Transaction,
          the Parties would likely not have the ability nor the incentive to foreclose the
          Merged Entity’s upstream competitors for the following reasons.
(159) Firstly, the Merged Entity’s market share in the downstream markets for the online
          retail of SDA in Croatia would be modest, amounting to [30-40]%. Additionally, a
          sufficient number of credible alternative (online) retailers of SDA remain active in
          Croatia, namely Elipso ([20-30]%), eKupi ([10-20]%), Emmezeta ([10-20]%),
          Pevex ([10-20]%) and others.138
(160) Secondly, the Fast Group’s market share on the Croatian wholesale market would be
          safely below 1% under any potential relevant market definition and the turnover
          generated by its wholesale of SDA products is negligible (approx. EUR […]
          in 2020), represented by cross-border sales.139
(161) In conclusion, in light of the above, the Commission considers that the Merged
          Entity would not have the ability nor the incentive to engage in a foreclosure strategy
          and that, in any event, a foreclosure strategy would not have a significant impact on
          effective competition.
(162) Based on the considerations above, and in light of the results of the market
          investigation and of all the evidence available to it, the Commission concluded that
          the Transaction does not give rise to serious doubts as to its compatibility with the
          internal market or the functioning of the EEA Agreement because of vertical non-
          coordinated effects in the markets for online wholesale sales (direct and indirect) of
          SDA and online retail sale of SDA in Croatia.
5.3.8. Market for the wholesale (upstream) and retail (downstream) of electronics in
          Slovenia
(163) Based on the market shares communicated by the Notifying Parties, the Transaction
          would give rise to a vertical relationship between the wholesale supply of electronic
          products by the Fast Group (upstream) and Mall Group’s activities concerning the
          retail sale of electronic products (downstream) in Slovenia. Table 12 reports the
          Parties’ market shares for all the relevant segments and sub-segments.
137     Form CO, Annex 33.
138     The Notifying Parties’ response to RFI 1, 11 October 2021.
139     Form CO, paragraph 492.
                                                          34
 ---pagebreak--- (164) With regard to the wholesale of electronics, Table 12 reports the Parties’ market
         share including both direct and indirect sales, as the Notifying Parties confirmed
         that, to the best of their knowledge, the combined market share of the Merged Entity
         would not be higher when segmenting between direct and indirect sales.140
Table 12: Market shares for the wholesale and retail of electronics in Slovenia in 2020141
    Affected upstream                                     Affected downstream
                                    Combined                                         Combined
   market/sub-segment                                      market/sub-segment
Wholesale of CE (as well
                                                             Market for overall
  as under any potential
                                      <0.1%              (online and offline) retail [30-40]%
     relevant-market
                                                                    of CE
        definition)
 Market for wholesale of
  electronics (as well as
                                                             Market for online
    under any potential               <0.1%                                          [60-70]%
                                                              electronics retail
     relevant-market
        definition)
 Market for wholesale of
 brown goods (as well as
                                                          Market for online retail
    under any potential               <0.1%                                          [60-70]%
                                                              of brown goods
     relevant-market
        definition)
(165) The Transaction is not likely to lead to customer foreclosure as, post-Transaction,
         the Parties would likely not have the ability nor the incentive to foreclose the
         Merged Entity’s upstream competitors for the following reasons.
(166) Firstly, the Mall Group’s market shares in the downstream markets for the online
         retail of CE in Slovenia is modest, amounting to [30-40]%. Despite the fact that the
         Mall Group’s market shares in the downstream markets for the online retail of
         electronics and brown goods in Slovenia are more substantial ([60-70]% and
         [60-70]% respectively), a sufficient number of credible alternative (online) retailers
         of electronics overall, and brown goods in particular, remain active in Slovenia,
         namely Big Bang ([10-20]% in both markets), Harvey Norman ([5-10]% in both
         markets), Enaa ([5-10]% in both markets) and others.142
(167) Secondly, the Fast Group’s presence in Slovenia is negligible, therefore rendering
         any potential foreclosure strategy of the Merged Entity unlikely to succeed, as the
         Merged Entity would not have capacity (upstream) to meet its own demand
         (downstream). The Fast Group’s market share on the Slovenian wholesale market
         would be safely below 1% under any potential relevant market definition and the
         turnover generated by its wholesale of electronics in Slovenia is represented by
         marginal sales of brown goods (approx. EUR […] in 2020). 143
140     The Notifying Parties’ response to RFI 3, 26 October 2021.
141     Form CO, Annex 33.
142     The Notifying Parties’ response to RFI 1, 11 October 2021.
143     Form CO, paragraph 348.
                                                          35
 ---pagebreak--- (168) In conclusion, in light of the above, the Commission considers that the Merged
       Entity would not have the ability nor the incentive to engage in a foreclosure strategy
       and that, in any event, a foreclosure strategy would not have a significant impact of
       effective competition.
(169) Based on the considerations above, and in light of the results of the market
       investigation and of all the evidence available to it, the Commission considers that
       the Transaction does not give rise to serious doubts as to its compatibility with the
       internal market or the functioning of the EEA Agreement because of vertical non-
       coordinated effects in the markets for the wholesale sales (direct and indirect) of
       electronics and the retail sale of electronics in Slovenia.
5.3.9. Conclusion on vertical non-coordinated effects
(170) In light of the considerations outlined in paragraphs 5.3.1 – 5.3.8, and based on the
       results of the market investigation as well as on all the information available to it, the
       Commission concludes that the concentration does not raise serious doubts as to its
       compatibility with the internal market with respect to vertical non-coordinated
       effects in (i) the markets for the wholesale (upstream) and retail (downstream) of
       electronics in the Czech Republic; (ii) the markets for the wholesale of electronics
       (upstream) and retail of mobile telecommunication services (downstream) in the
       Czech Republic; (iii) the markets for the wholesale (upstream) and retail
       (downstream) of non-food products in the Czech Republic; (iv) the markets for the
       wholesale (upstream) and retail (downstream) of electronics in Slovakia; (v) the
       markets for the wholesale (upstream) and retail (downstream) of non-food products
       in Slovakia; (vi) the markets for the wholesale of electronics (upstream) and the
       retail of telecommunication services (downstream) in Bulgaria; (vii) the markets for
       the wholesale (upstream) and retail (downstream) of electronics in Croatia; and
       (viii) the markets for the wholesale (upstream) and retail (downstream) of electronics
       in Slovenia.
6.     CONCLUSION
(171) For the above reasons, the Commission has decided not to oppose the notified
       operation and to declare it compatible with the internal market and with the
       functioning of 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
                                                   36