CELEX: 32021M10447
Language: en
Date: 2021-12-07 00:00:00
Title: Commission Decision of 07/12/2021 declaring a concentration to be compatible with the common market (Case No COMP/M.10447 - NN / METLIFE GREECE / METLIFE POLAND) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                Brussels, 07.12.2021
                                                                C(2021) 9240 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                                                                 information omitted has been replaced by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.
                                                                NN Group N.V.
                                                                Schenkkade 65
                                                                2595 AS The Hague
                                                                Netherlands
Subject:             Case M.10447 - NN / METLIFE GREECE / METLIFE POLAND
                     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 29 October 2021, the European Commission received notification of a proposed
          concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004
          (“EUMR”), by which NN Group N.V. (together with its subsidiaries, "NN", or the
          "Notifying Party", the Netherlands), acquires within the meaning of Article 3(1)(b)
          sole control of the whole of MetLife Life Insurance S.A. (together with its subsidiary
          MetLife Mutual Fund Company, "MetLife Greece") and of MetLife Towarzystwo
          Ubezpieczeń na Życie i Reasekuracji S.A. (together with its subsidiaries (i) MetLife
          Towarzystwo Funduszy Inwestycyjnych S.A.; (ii) MetLife Powszechne
          Towarzystwo Emerytalne S.A., and (iii) MetLife Services sp. z o.o., "MetLife
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---          Poland") by way of purchase of shares (“the Transaction”)3. MetLife Greece and
         MetLife Poland are together referred to as “the Target” and together with NN as the
         “Parties”.
1.       THE PARTIES
(2)      NN is a financial services company listed on the Euronext Amsterdam with a
         presence in 20 countries, including several European countries and Japan. NN offers
         retirement services, pensions, insurance, investments, and banking services. NN is
         inter alia active in Poland, in life insurance and asset management, and in Greece, in
         life and health insurance.
(3)      MetLife Greece is active in the provision of life and health insurance in Greece.
(4)      MetLife Poland is active in the provision of life insurance and asset management in
         Poland.
2.       THE OPERATION AND THE CONCENTRATION
(5)      By virtue of two separate share purchase agreements, one for MetLife Greece and
         one in MetLife Poland (“SPA”), both signed on 4 July 2021 by NN Continental
         Europe Holdings B.V., which holds NN's insurance activities in Europe, and
         MetLife EU Holding Company Limited, the Target’s current owner, NN will acquire
         sole control of MetLife Greece4 and of MetLife Poland5.
(6)      The Notifying Party notes that pursuant to Article 5(2) of EUMR, the Proposed
         Transaction constitutes a single concentration as it concerns transactions entered into
         between the same undertakings which take place within a two-year period.6
(7)      The Transaction therefore constitutes a concentration under Article 5(2) of the
         EUMR.
3.       UNION DIMENSION
(8)      The undertakings concerned have a combined aggregate world-wide turnover of
         more than EUR 5 000 million 7 (NN: EUR 14 864 million; Target: EUR […]
         million). Each of NN and the Target has a Union-wide turnover in excess of
         EUR 250 million (NN: EUR […] million; Target: EUR […] million), but they do not
         achieve more than two-thirds of their aggregate Union-wide turnover within one and
         the same Member State. The notified operation therefore has a Union dimension.
3   Publication in the Official Journal of the European Union No C 453, 09.11.2021, p. 5.
4   MetLife Mutual Fund Company, an entity owned for 90% and wholly controlled by MetLife Greece.
5   MetLife Towarzystwo Funduszy Inwestycyjnych S.A., MetLife Powszechne Towarzystwo Emerytalne
    S.A. and MetLife Services sp. z o.o., all 100% owned by MetLife Poland;
6   Point 50 of the Jurisdictional Notice confirms that Article 5(2) of EUMR also applies to "simultaneous
    transactions between the same parties”.
7   Turnover calculated in accordance with Article 5 of EUMR.
                                                          2
 ---pagebreak--- 4.       COMPETITIVE ASSESSMENT
4.1.     Activities of the Parties
(9)      The Transaction results in horizontal overlaps in life insurance, pension products
         and insurance distribution in Greece and Poland, as well as in asset management in
         Poland.
(10)     Regarding life insurance in Greece and pension products in Greece and Poland, the
         Transaction gives rise to horizontally affected markets in certain plausible
         segmentations, which may constitute separate markets.
(11)     Regarding the horizontal overlaps in the insurance distribution sector in Greece, as
         well as in the life insurance, insurance distribution and asset management sectors in
         Poland, the Transaction does not give rise to any horizontally affected markets under
         any plausible market definition. 8 Moreover, the market investigation did not give
         rise to any suggestion that the Transaction would raise serious doubts as to its
         compatibility with the internal market in any of these markets in either Greece, or
         Poland.9 Therefore, these markets will not be further assessed in this decision.
(12)     The Transaction also results in vertical relationships between the Parties' life
         insurance and pension products activities on the one hand and their limited activities
         either upstream (in reinsurance), or downstream (in life insurance distribution and
         asset management) on the other.
(13)     The Commission takes note that in Poland pension products, by law, cannot be
         distributed through indirect distribution channels by third parties.10 Each pension
         products provider has to distribute its own products and cannot distribute the
         products of another pension products providers. Therefore, no vertical link arises
         between pension products and insurance distribution in Poland.
(14)     Moreover, the Commission takes note that all pension funds active in the affected
         segment in Poland carry out the management of assets of those pension funds
         exclusively in-house. 11 Therefore, to date no real market exists in which asset
         managers compete for asset management mandates from pension funds or, vice
         versa, where pension funds seek third party asset management services in Poland.
         The emergence of such a market in the future is highly unlikely given the regulatory
         changes (discussed in section 4.3.1.3 below), which means that the affected pensions
         fund market segment in Poland will likely cease to exist.
(15)     The Parties’ activities in the relevant upstream and downstream markets are
         negligible: reinsurance worldwide [0-5]%; insurance distribution in Greece [0-5]%,
         respectively.
(16)     Nevertheless, the Transaction would result in these markets being vertically affected
         given that in several potentially narrower markets in the area of life and health
8    Form CO, Sections 6.5, 6.6, 6.7, 6.14, 6.15, 6.16, 6.17 and 6.18.
9    Replies to Q1 – Questionnaire to competitors - Greece, questions 11 and 19, Q2 – Questionnaire to
     corporate customers - Greece, question 20 and Q3 Questionnaire to competitors – Poland question 8.
10   Form CO paragraph 94.
11   Form CO paragraphs 208 & 221-222.
                                                            3
 ---pagebreak---          insurance in Greece and of pension products in Greece and Poland the combined
         market shares of the Parties are above 30%
4.2.     Market definitions
4.2.1. Life and health insurance (Greece)
4.2.1.1. Product market definition
(17)     In previous decisions, the Commission distinguished between three broad categories
         of insurance products: (i) life insurance, (ii) non-life insurance and
         (iii) reinsurance.12 The Commission also considered the definition of a downstream
         market for insurance distribution, 13 upstream markets for asset management14 and
         pension administration, 15 and considered assistance services as distinct from the
         provision of non-life insurance products.16 The Transaction leads to horizontally
         affected markets in relation to life insurance.
(A)      Commission’s decisional practice
(18)     As regards the product market definition for life insurance products, from a demand-
         side perspective the Commission distinguished between the following product
         categories in its decisional practice: (i) pure risk protection products, (ii) pension
         products17, and (iii) savings/investment products.18
(19)     In certain decisions, the Commission also distinguished between life insurance for
         individuals and for group customers. 19 Furthermore, a distinction between unit-
         linked life insurance products on the one hand and non-unit-linked life insurance
         products on the other hand20 was considered as well, depending on the product and
         country in question. In M.4701 – Generali / PPF Insurance Business, the
         Commission looked at unit-linked savings and investment products.21 In M.8257 –
         NN Group / Delta Lloyd, the Commission discussed a separate market for unit-
         linked insurance for certain pension products and savings and investment products.22
12  Case M.9796 – Uniqa/Axa (Insurance, Asset Management and Pensions – Czechia, Poland and Slovakia),
    paragraph 7; Case M.9531 – Assicurazioni Generali/Seguradoras Unidas/AdvanceCare, paragraph 9; Case
    M.7478 – Aviva/Friends Life/Telenet, paragraph 23; Case M.6883 – Canada Life/Irish Life, paragraph 16.
13  Case M.9796 – Uniqa/Axa (Insurance, Asset Management and Pensions – Czechia, Poland and Slovakia),
    paragraph 7.
14  Case M.8257 – NN Group/Delta Lloyd, paragraphs. 108-115; Case M.6812 SPFI/Dexia, paras. 30-33.
15  Case M.8257 – NN Group/Delta Lloyd, paragraphs 78-81.
16  Case M.9531 – Assicurazioni Generali/Seguradoras Unidas/AdvanceCare, paragraph 9.
17  The product market definitions for pension products in Greece and in Poland are further discussed in
    sections 4.3.1.2 and 4.3.1.3 below.
18  Case M.9796 – Uniqa/Axa (Insurance, Asset Management and Pensions – Czechia, Poland and Slovakia),
    paragraph 8; Case M.7478 – Aviva/Friends Life/Telenet, paragraph 13 and further cases cited therein.
19  Case M.9796 – Uniqa/Axa (Insurance, Asset Management and Pensions – Czechia, Poland and Slovakia),
    paragraph 8; Case M.8837 – Blackstone/Thomson Reuters F&R Business, paragraph 29.
20  Unit-linked policies do not offer any form of guarantees, whereas non-unit-linked policies include certain
    guarantees in respect of the value of the capital accumulated over the period up to retirement, and the risk
    is therefore not entirely with the members.
21  Case M.4701 – Generali / PPF Insurance Business, paragraphs 18 et seq.
22  Case 8257 – NN Group / Delta Lloyd, paragraphs 17 et seq.
                                                           4
 ---pagebreak---         In M.9796 – Uniqa / Axa, a plausible market for index-linked and unit-linked life
        insurance was assessed for Slovakia. 23
(20)    In some cases, the Commission has considered additional segmentations of the life
        insurance sector, including based on national insurance classifications. 24
(21)    However, from a supply-side perspective, the Commission has recognised that the
        conditions for the provision of life insurance covering different risk types are quite
        similar and most large insurance companies are active in several risk types, which
        suggests that many different types of life insurance could be included in the same
        relevant product market.25
(22)    In past practice, the Commission considered health insurance as a potential separate
        market within non-life insurance.26 In previous decisions, the Commission further
        took specifics of national health insurance markets into account. Specifically for
        Belgium, it considered a separate market for accident and health insurance without
        further segmentation. 27 With respect to Ireland, the Commission defined and
        assessed a separate market for health insurance without further segmentation.28
(23)    The Commission has ultimately always left open the definition of the relevant
        product market for life insurance.
(B)     Notifying Party’s submissions
(24)    The Notifying Party argues that the relevant product market is the market for savings
        and investment products and that the latter should not be segmented further.29
(25)    The Notifying Party explains that under the national legal framework implementing
        the Solvency II Directive (i.e. the Greek Insurance Act) and according to decisional
        practice of the Hellenic Competition Council (“HCC”), health insurance is included
        in the segment of pure risk protection products and therefore in the overall life
        insurance market.30
(C)     Commission’s assessment
(26)    The market investigation provided evidence confirming the Notifying Party’s claim
        that a further sub-segmentation of the life insurance market may not be relevant in
        the case of the Greek insurance sector. The overwhelming majority of competitors
        responding to the market investigation indicated that most insurers offer all types of
23  Case M.9796 – Uniqa/Axa (Insurance, Asset Management and Pensions – Czechia, Poland and Slovakia),
    paragraphs 15 et seq.
24  Case M.1712 – Generali/INA, paragraphs 9 et seq. and Case M.2768 - Generali/Banca Intesa/JV,
    paras 11-19.
25  Case M.7478 Aviva/Friends Life/Tenet, paragraphs 15-22 and Case M.4844 – Fortis/ABN Amro Assets,
    paragraph 71; Case M.4284 – AXA/Winterthur, paragraphs 9 to 10.
26  Case M.4284 – Axa/Winterthur, paragraph 8 and further cases cited therein.
27  Case M.6217 – Baloise Holding / Nateus / Nateus, para 39; Case M.4284 – Axa/Winterthur, paragraph 14.
28  Case M.8010 – Irish Life / Aviva Health / GloHealth, paragraphs 10 et seq.
29  Response to RFI 4, paras. 2 et seq.
30  Opposed to considering health insurance as part of non-life insurance, as appropriate in other countries.
    Form CO, paras. 289 et seq.
                                                         5
 ---pagebreak---         life insurance, and that therefore competition would primarily take place at the
        overall level of life insurance.31
(27)    Similarly, customers of pure risk protection group life insurance in Greece32 that
        provided an opinion on this question in the market investigation considered that
        competition takes place primarily on the overall pure risk protection life insurance
        market, and not at the level of individual risk types (e.g. health, credit, term-life and
        whole-life).
(28)    As regards a potential segmentation of savings and investment life insurance
        products into unit-linked and non-unit linked products, the Commission notes that
        the Parties’ activities only overlap in the provision of unit-linked policies. 33 For the
        purposes of this Decision, the Commission will assess an overall market for savings
        and investment life insurance products, as well as a plausible sub-segment of such
        unit-linked products.
(29)    In any event, for the purposes of the present decision, the exact scope of the product
        market definition for the supply of life insurance products can be left open, since the
        Transaction does not raise serious doubts as to its compatibility with the internal
        market under any of the plausible product market definitions discussed in section (A)
        above.
(30)    Specifically concerning the inclusion of health insurance in the market of pure risk
        protection life insurance products, the Commission notes that it has assessed further
        potential segments of this market separately, including a potential segment for health
        insurance as part of non-life insurance. The Commission also notes that neither of
        the Parties is active in non-life insurance in Greece. The market investigation has
        given no indication that health insurance would be separate from overall life
        insurance in Greece.34 Therefore, the issue of whether health insurance is part of life-
        insurance or of non-life insurance can be left open in the present case.
4.2.1.2. Geographic market definition
(31)    The Commission typically considered that the sector for life insurance products and
        its segments are likely to be national in scope, as a result of national distribution
        channels, established market structures, fiscal constraints and specific regulatory
        systems among Member States.35
(32)    The Notifying Party does not contest the Commission’s previous findings.
31  See replies to Q1 - Questionnaire to competitors – Greece, question 3.
32  The Commission notes that customers of other affected markets in life insurance in Greece are
    individuals.
33  Form CO, paragraph 397.
34  See replies to Q1 - Questionnaire to competitors – Greece, question 3.
35  Case M.9796 – Uniqa/Axa (Insurance, Asset Management and Pensions – Czechia, Poland and Slovakia),
    para. 10.
                                                          6
 ---pagebreak--- (33)    The Commission’s market investigation did not reveal any reason to depart from its
        decisional practice in the present case. 36 Therefore, life and health insurance
        products and its segments are national in scope.
4.2.2. Pension products - Private group pension insurance (Greece)
4.2.2.1. Product market definition
(A)     Description of the Greek pensions’ system
(34)    The pension system in Greece is based on three 'pillars': (i) Pillar I, public social
        pension insurance – a mandatory publicly managed PAYG (pay-as-you-go) system;
        Pillar II, private occupational pension insurance – supplementary, voluntary
        pensions managed by private professional funds; and (iii) Pillar III, private group
        pension insurance – supplementary, voluntary pensions managed by private
        insurance companies with a license for provision of life insurance products. 37
(35)    The Notifying Party submits that in Greece, unlike in many other countries, the
        second and third pillars of the pension system (i.e. the private voluntary pension
        insurance) are not well-developed. The current pension system is to a very
        significant extent based on Pillar I.
(36)    The Parties' activities with respect to pension products in Greece only overlap in
        Pillar III.
(37)    Within Pillar III of the Greek pension system, Greek life insurance providers offer
        group pension fund products (also referred to as Deposit Administration Fund
        ("DAF") contracts). DAF contracts are group pension fund plans where the
        contributions made are held in a special fund and managed by the insurer. Such
        contracts are offered only on a group basis and are typically entered into by
        employers for the benefit of employees. The contract of the group policy governs the
        rights of the employees to participate in the pension scheme, the amount and
        frequency of contributions and who is responsible for paying them (the employees,
        the employer or both), as well as the minimum retirement age and conditions of an
        early withdrawal, if any. The pension benefits are paid either in case of termination
        of employment or after reaching a retirement age provided for in the contract.
(38)    Under Greek law, DAF assets are held in separate deposit administration funds
        maintained by the insurance provider. Additionally, DAF contracts offer certain tax
        advantages, since contributions paid by employees and by employers on behalf of
        employees are excluded from the calculation of the taxable income and pension
        benefits are taxed independently. Therefore, these products can be distinguished
        from “regular” savings and investment products with a profit-sharing mechanism or
        with investment returns.
(39)    DAF contracts may be offered in the form of (i) defined contribution pension plans
        or (ii) defined benefit pension plans.
36  See replies to Q1 – Questionnaire to competitors - Greece, questions 11 and 19, Q2 – Questionnaire to
    corporate customers - Greece, question 20.
37  See analysis of the pension system in Greece, Form CO, section 11.
                                                        7
 ---pagebreak--- (40)     In the case of plans offered on a defined benefit basis, the benefit is defined in the
         contract on the basis of factors such as the employee's salary and life tables. In
         defined benefit plans, the contribution is not predefined, but is recalculated annually
         through an actuarial valuation study.
(41)     In the case of plans offered on a defined contribution basis, the contribution is
         defined in the contract as a percentage of the employee's salary, and the benefit is not
         predefined but calculated on the basis of the accumulated amount of contributions
         plus any investment returns.
(42)     A further distinction can also be made (i) between accumulation versus
         decumulation products38 ); and (ii) between products with fixed annuities
         (guaranteeing the payment of a certain regular amount) versus products with
         variable annuities(with no guaranteed level of benefits) 39.
(B)      Notifying Party’s submissions
(43)     The Notifying Party submits 40 that for a number of years, DAF policies offered on
         the Greek market are predominantly defined contribution policies. Since the interest
         of companies for defined benefit DAF policies is negligiblesuch policies are not
         currently offered on the Greek market.41 Thus, the Notifying Party submits that for
         an assessment of competitive dynamics with respect to DAF, a sub-segmentation
         between defined benefit and defined contribution policies is irrelevant. 42
(44)     Moreover, the Notifying Party considers43 that any further sub-segmentation of DAF
         into (i) accumulation versus decumulation products and into (ii) products with
         variable annuities versus products with fixed annuities is not appropriate. Firstly, in
         the Greek market DAF policies are offered with fixed annuities and/or with an
         option for a lump sum withdrawal. 44 Secondly, no stand-alone decumulation DAF
         products and no DAF policies with variable annuities are offered on the Greek
         market. Finally, there is no overlap between the Parties with respect to DAF policies
         with annuities, since there are no DAF policies with an annuity option in NN
         Greece's existing portfolio).
(45)     Consequently, the Notifying Party concludes that it is not necessary to further sub-
         segment DAF in the context of the proposed transaction, because there is no active
38  The accumulation phase is the period during which an active scheme member pays contributions into
    his/her pension while the decumulation phase is the payment out of the pension after retirement age, via
    an annuity.
39  A fixed annuity, while a variable annuity offers no guaranteed level of benefits.
40  Form CO, paragraphs 261, 262 and 264.
41  Such policies have not been issued since 2015. To the extent that there are still any running defined
    benefit DAF policies, these correspond to existing policies rather than new business.
42  This general market trend is confirmed by the Parties' DAF businesses: [Descritpion of NN Greece's DAF
    business], which in 2020 corresponded to merely [0-5]% of NN's GWP in DAF. In 2020 approximately
    [90-100]% of MetLife's GWP corresponded to defined contribution DAF schemes and merely [10-20]%
    to defined benefit DAF schemes. [Description of MetLife's DAF business].
43  Form CO, paragraphs 261, 262 and 264.
44  The overwhelming majority of participants select the pay out of a lump sum when they reach retirement
    age (which means that there is no decumulation phase and no fixed or variable annuity).
                                                          8
 ---pagebreak---          overlap between the Parties with regard to DAF and because such sub-segmentations
         are not relevant in the context of the Greek market.45
(46)     The Notifying Party also submits that occupational pension funds within Pillar II
         exert a competitive pressure on DAF products. 46
(C)      Commission’s assessment
(47)     In responses to the market investigation competitors of the Parties confirmed that
         DAF group pension fund products are mainly accumulation, fixed annuity
         products.47 For example one competitor said that “…Accumulation products
         dominate the Greek Market…”.
(48)     Moreover, the Commission notes that the majority of both competitors and
         customers of the Parties consider that Pillar II products and Pillar III products
         closely compete with each other and therefore can be seen as belonging to the same
         market.48 For example one competitor said that “…The way that the Greek
         Insurance market works Pillar II ( OPFs ) and Pillar III ( Group Life Saving and
         Investment products ) although with different tax incentives, compete with each
         other…”. A customer concluded that “…We consider that the products offered
         under the two Pillars belong to the same market…”.
(49)     In any event, the Commission considers that, for the purposes of the present
         decision, the exact scope of the product market definition for the supply of pension
         products in Greece (that is if there is an overall market, composed of Pillars II and
         III, or if each of Pillars II and III is a separate market) can be left open, since the
         Transaction does not raise serious doubts as to its compatibility with the internal
         market under any plausible product market definition.
4.2.2.2. Geographic market definition
(50)     The Commission typically considered that the sector for pension products are likely
         to be national in scope, as a result of national distribution channels, established
         market structures, fiscal constraints and specific regulatory systems among Member
         States.49
(51)     The Notifying Party does not contest the Commission’s previous findings.
45  Form CO, paragraphs 265 - 267.
46  Form CO, paragraph 265. Pillar II’s purpose is to provide an additional (occupational) pension on top of
    the one provided by the mandatory public social pension insurance. It is provided by specialised
    institutions, under the supervision of the Greek government. The insured person has to pay the
    contributions determined by the providers and has the right to request the termination of its membership if
    it has been insured for at least one year. Benefits are provided in kind or in cash and are distributed either
    in a one-off payment or periodically. The benefits provided as one-off payment are exempt from tax,
    whereas periodical payments are subject to applicable income tax rate. The Parties have no activities in
    Pillar II.
47  See replies to Q1 - Questionnaire to competitors – Greece, questions 13 and 13.1.
48  See replies to Q1 - Questionnaire to competitors – Greece, questions 12 and 12.1, as well as replies to Q2
    - Questionnaire to customers – Greece, questions 13 and 13.1.
49  Case M.9796 – Uniqa/Axa (Insurance, Asset Management and Pensions – Czechia, Poland and Slovakia),
    para. 10.
                                                            9
 ---pagebreak--- (52)     The Commission’s market investigation did not reveal any reason to depart from its
         decisional practice in the present case. 50 Therefore, DAF products in Greece are
         national in scope.
4.2.3. Pension products – Open pension funds (Poland)
4.2.3.1. Product market definition
(A)      Commission’s decisional practice
(53)     As discussed in a recent Commission decision, the Polish pension system has a
         relatively complex and unique structure.51 Since 1999, it has had three pillars, each
         based on different types of pension. The first two pillars are based upon mandatory
         contributions from salaries.
(54)     The second pillar was initially run by open pension funds (“OFE”, Polish: otwarte
         fundusze emerytalne). These are independent legal entities created and managed by a
         joint stock company 52 that needs to obtain a permission from the Insurance and
         Pension Funds Supervisory Commission. The system was significantly reformed in
         2013. Pursuant to this reform, contributions of OFE participants (previously
         allocated to open pension funds only) were allocated towards the first pillar (unless
         the account holder decided to keep a part in the open pension fund). As a result, the
         market for OFEs decreased by nearly one half.
(55)     Additionally, in 2019, the government announced a plan to liquidate the OFE system
         in its current form by transferring the remaining savings from OFEs either to the first
         pillar, or to personal voluntary schemes. The market investigation in the recent case
         referred to in paragraph (52) above confirmed that the importance of open pension
         funds is diminishing, and that they will ultimately be liquidated and cease to exist. 53
(56)     The Commission has previously not concluded on the exact market definition of the
         Polish pension system. In the recent case referred to above, the market investigation
         had indicated that obligatory pensions (pillars one and two) and voluntary pensions
         (pillar three) form two separate product markets, but the Commission ultimately left
         the market definition open.54
(B)      Notifying Party’s submissions
(57)      The Notifying Party does not contest the Commission’s previous findings.
50  See replies to Q1 – Questionnaire to competitors - Greece, questions 11 and 19, Q2 – Questionnaire to
    corporate customers - Greece, question 20 and Q3 Questionnaire to competitors – Poland question 8.
51  Case M.10326 – Allianz Holding/Santander/Aviva Companies/Santander Aviva Companies,
    paragraphs 31- 42.
52  Pension fund societies (Powszechne Towarzystwa Emerytalne, "PTEs")
53  Case M.10326 – Allianz Holding/Santander/Aviva Companies/Santander Aviva Companies,
    paragraphs paras. 61 (c) and 62.
54  Ibid paras. 37 - 38.
                                                       10
 ---pagebreak--- (C)     Commission’s assessment
(58)    The Commission’s market investigation did not reveal any reason to depart from its
        previous decisional practice in the present case and therefore it will consider the
        second pillar of the Polish pensions system in its analysis. 55
4.2.3.2. Geographic market definition
(59)    In the past the Commission has considered that OFE pension products in Poland are
        national in scope. 56
(60)    The Notifying Party does not contest the Commission’s previous findings.
(61)    The Commission’s market investigation did not reveal any reason to depart from its
        decisional practice in the present case. 57 Therefore, OFE pension products in Poland
        are national in scope.
4.2.4. Reinsurance
4.2.4.1. Product market definition
(62)    The Commission held in previous decisions that reinsurance consists in providing
        insurance cover to another insurer for some or all of the liabilities assumed under its
        insurance policies, in order to transfer risk from the insurer to the reinsurer. The
        Commission has considered a separate market for reinsurance (distinguished from
        the markets for the provision of life and non-life insurance) but has left open the
        question of whether the reinsurance market should be further segmented between life
        and non-life reinsurance.58
(63)    The Notifying Party does not contest the Commission’s previous findings.
(64)    The Commission considers that, for the purposes of the present decision, the exact
        scope of the product market definition for the supply of reinsurance can continue to
        be left open, since the Transaction does not raise serious doubts as to its
        compatibility with the internal market under any plausible product market definition
        (reinsurance overall or subsegmentations for life and non-life reinsurance).
4.2.4.2. Geographic market definition
(65)    The Commission has consistently held in its decisional practice that the relevant
        geographic market for reinsurance is worldwide in scope due to the need to pool
        risks on a global basis. 59
(66)    The Notifying Party does not contest the Commission’s previous findings.
55  See replies to Q3 - Questionnaire to competitors – Poland.
56  Case M.10326 – Allianz Holding/Santander/Aviva Companies/Santander         Aviva Companies,
    paragraph 42.
57  See replies to Q3 Questionnaire to competitors – Poland question 8.
58  Case M.8257 – NN Group/Delta Lloyd, paras. 103 to 107.
59  Case M.8257 – NN Group/Delta Lloyd, paragraphs. 105 to 107.
                                                         11
 ---pagebreak--- (67)    The Commission’s investigation did not reveal any reason to depart from its
        previousdecisional practice in the present case. Therefore, the Commission will
        consider reinsurance as worldwide in scope.
4.2.5. Insurance distribution
4.2.5.1. Product market definition
(68)    In previous cases, the Commission has analysed whether the market for insurance
        distribution comprises only outward distribution channels or whether it should also
        be considered to include the sales force and office networks of the insurer (that is to
        say direct sales). This question was ultimately left open. The Commission has also
        considered whether a distinction could be made between the markets for the
        distribution of life and non-life insurance products, but ultimately left open the
        relevant product market definitions 60 as well as whether there was a potential
        separate market for insurance broking. With regard to (non-life) insurance broking,
        the Commission has considered that it is appropriate to define separate relevant
        product markets for the supply of commercial risk brokerage (i) by type of
        underlying risk, and (ii) at least for certain risk types, by customer type (namely for
        sales to large multinational customers). 61–
(69)    The Notifying Party does not contest the Commission’s previous findings.
(70)    The Commission considers that, for the purposes of the present decision, the exact
        scope of the product market definition for the supply of insurance distribution can be
        left open, since the Transaction does not raise serious doubts as to its compatibility
        with the internal market under of the any plausible product market definitions
        discussed in paragraph 68 above.
4.2.5.2. Geographic market definition
(71)    As regards the geographic scope of a potential market for insurance distribution, the
        Commission has previously considered insurance distribution to be national in scope
        but ultimately left the exact definition of the relevant geographic market open.62 For
        certain segments, in particular if they related to brokerage services in relation to
        large commercial or specialty risks, the Commission has considered such segments
        to be EEA-wide or worldwide in scope. 63
(72)    The Notifying Party does not contest the Commission’s previous findings.
(73)    The Commission’s investigation did not reveal any reason to depart from its
        previous approach in the present case. In any event, the Commission considers that,
        for the purposes of the present decision, the exact scope of the geographic market
        definition for the provision of insurance distribution can be left open between
        national, EEA-wide and worldwide, since the Transaction does not raise serious
60  Case M.6957 – IF P&C/Topdanmark, paragrahs. 22 to 29. Case M.1307 – Marsh & McLennan/Sedgwick,
    paragraph. 19.
61  Cases M.9196 - Marsh & McLennan Companies / Jardine Lloyd Thompson Group paragraphs 22-23 &
    M.9829 – Aon / Willis Towers Watson, Sections 6.14 and 6.15. [decision to be published].
62  Case M.8617 – Allianz/LV General Insurance Business, paragraph 25.
63  Case M.9196 – Marsh & McLennan/Jardine Lloyd Thompson Group, paragrahs 41 and 49 to 51.
                                                      12
 ---pagebreak---           doubts as to its compatibility with the internal market under any plausible
          geographic market definition. The Commission nevertheless notes that for the case at
          hand which concerns distribution of life and health insurance products and of
          pension products in Greece, the most plausible geographic market definition is
          national (Greece)
4.3.      Analytical framework
(74)      Under Articles 2(2) and 2(3) of EUMR, the Commission must assess whether a
          proposed 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.
(75)      A concentration can entail horizontal effects. In this respect, in addition to the
          creation or strengthening of a dominant position, the Commission Guidelines on the
          assessment of horizontal mergers under EUMR 64 (“the Horizontal Merger
          Guidelines”) distinguish between two main ways in which mergers between actual
          or potential competitors on the same relevant market may significantly impede
          effective competition,65 namely (a) by eliminating important competitive constraints
          on one or more firms, which consequently would have increased market power,
          without resorting to coordinated behaviour (non- coordinated effects); and (b) by
          changing the nature of competition in such a way that firms that previously were not
          coordinating their behaviour are now significantly more likely to coordinate and
          raise prices or otherwise harm effective competition. A merger may also make
          coordination easier, more stable or more effective for firms, which were coordinating
          prior to the merger (coordinated effects). Concentrations which, by reason of the
          limited market share of the undertakings concerned are not liable to impede effective
          competition may be presumed to be compatible with the internal market. An
          indication to this effect exists, in particular, where the market share of the
          undertakings concerned does not exceed 25 % either in the internal market or in a
          substantial part of it.66
(76)      Furthermore, a concentration can entail vertical effects. The Commission Guidelines
          on the assessment of non-horizontal mergers under EUMR 67 (the “Non- Horizontal
          Merger Guidelines”) also distinguish between two main ways in which non-
          horizontal mergers may significantly impede effective competition: (a) when they
          give rise to input and/or customer foreclosure (non-coordinated effects); and (b)
          when the merger changes the nature of competition in such a way that firms that
          previously were not coordinating their behaviour, are now more likely to coordinate
          to raise prices or otherwise harm effective competition (coordinated effects).68 The
          Non-Horizontal Merger Guidelines distinguish two types of foreclosure: (a) where
          the merger is likely to raise the costs of downstream rivals by restricting their access
          to an important input (input foreclosure) and (b) where the merger is likely to
          foreclose upstream rivals by restricting their access to a sufficient customer base
64   Commission Guidelines on the assessment of horizontal mergers under the Merger Regulation, OJ C 31, 5
     February 2004, paragraphs 5–18.
65   Ibid, paragraph 22.
66   Ibid, paragraph 18.
67   Commission Guidelines on the assessment of non-horizontal mergers under the Merger Regulation, OJ C
     265, 18 October 2008, paragraphs 6–25.
68   Ibid, paragraphs 17-19.
                                                       13
 ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---         This supports the Notifying Parties view that the combined market positions of the
        Parties have been declining in the past years.76
(80)    Further, combined market share levels in each potential segment of the Greece life
        and health insurance market as laid out in Tables 1 and 2 above remain still moderate
        and do not exceed [30-40]%. This is also the case for a potential segment for health
        insurance, which, for the purpose of this decision, has been included in the Greek life
        insurance market. In all potential market segments, the merged entity faces a number
        of competitors with a significant market position.
(81)    Secondly, the Parties are not particularly close competitors in the Greek life and
        health insurance market or any potential segment thereof listed above, even though
        both companies are relatively strong in the segments health insurance and savings
        and investment products. Based on market shares, the Commission notes a certain
        complementarity in the sense that NN appears to be relatively stronger in the
        provision of individual life insurance, while MetLife Greece is relatively stronger in
        the provision of group life insurance.
(82)    The market investigation further confirmed that the Parties are not particularly close
        competitors. The large majority of competitors state that NN and MetLife compete in
        the Greek life and health insurance market, but there would be other insurers who
        would compete just as strongly / closely. No competitor responding to the market
        investigation considered the Parties to be particularly close competitors. 77 Similarly,
        no customer of group pure risk protection life insurance products in Greece
        responding to the market investigation indicated that NN and MetLife are
        particularly close competitors in this market or any of its potential segments. 78
(83)    Thirdly, there will continue to be sufficient alternative competitors on the market
        that customers can switch to. The presence of suitable alternative competitors is
        confirmed by the market shares provided above (see also paragraph (79) of this
        Decision) and by the market investigation. Competitors responding to the market
        investigation rate at least two competitors at a comparable level as the Parties in
        terms of competitive strength (Ethniki and Eurolife), and attribute a considerable
        competitive strength to Generali / Axa and Interamerican. 79 The large majority of
        competitors further submit that sufficient competitive pressure would be exercised
        on the merged entity by remaining competitors post-Transaction. 80
(84)    These findings were broadly confirmed by customers of group pure risk protection
        life insurance products in Greece responding to the market investigation, who rated
        the competitive strength of four competitors at comparable levels to those of the
        Parties.81 No customer of group pure life insurance products in Greece responding to
76  Form CO, Tables 14 to 19 and 22 to 39.
77  See replies to Q1 – Questionnaire to competitors – Greece, question 8.
78  See replies to Q2, – Questionnaire to customers – Greece, question 8.
79  See replies to Q1 – Questionnaire to competitors – Greece, question 6.
80  See replies to Q1 – Questionnaire to competitors – Greece, question 7.
81  See replies to Q2, – Questionnaire to customers – Greece, question 7. The Commission notes that group
    pure risk protection life insurance customers attribute significantly less competitive strength to NN than to
    MetLife, which is in line with the market position of both Parties in group and individual life insurance
    respectively.
                                                           18
 ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---         Generalli/AXA, Eurolife, Allianz, Interamerican, Groupama and European
        Reliance).
(101) Moreover, the Commission notes that [NN strategy for DAF products] (hence its
        [0-5]% in market share on a NWP basis in 2019 and 2020). Currently, the Notifying
        Party submits that NN's activities in this regard focus on managing a small closed-
        book portfolio. 92
(102) Finally, the Notifying Party submits that it will continue to face competitive
        pressure, from occupational pension funds within Pillar II as well.
(103) Competitors responding to the market investigation indicated that MetLife Greece is
        the strongest competitor in the DAF market. They also confirmed that Ethniki,
        Generalli/Axa, Eurolife and Groupama are stronger competitors of Metlife Greece
        than NN is.93 Moreover, their responses clearly indicated that enough competitive
        pressure will remain in the Greek DAF group pension fund products market after the
        Transaction. 94 For example one competitor said that “…Post-transaction, there will
        remain enough credible competitors to exert pressure on the combined entity…”
        Finally, none of the competitors that expressed a view believes that the Transaction
        would have a negative impact either on competition for the provision of DAF group
        pension fund products in Greece.95
(104) In the same vain, customers of the Parties indicated that they consider Generali/Axa,
        Ethniki and Intramerican as stronger competitors to MetLife Greece than NN is. 96
        Customers also consider that there will be sufficient competitors left after the
        Transaction for the provision of DAF group pension fund products in Greece.97
        Finally, all customers also consider that the Transaction would not have a negative
        impact either on competition for the provision of DAF group pension fund products
        in Greece, or on themselves.98
(105) In light of the above considerations, the Commission concludes that the Transaction
        does not raise serious doubts as to its compatibility with the internal market or the
        functioning of the EEA agreement as a result of a horizontal effects in the market for
        DAF group pension fund products in Greece.
4.4.1.3. Pension products in Poland
(106) The following section focusses on OFE pension products in Poland. The Parties are
        active only in this segment of the Greek pensions market, which is the only market
        affected by the Transaction
92  For the sake of completeness the Notifying Party notes that if a potential (existing) customer approaches
    NN and requests a DAF product, NN will [Descrition of NN sales policy and strategy for DAF products],
    see Form CO fn 292.
93  See replies to replies to Q1 – Questionnaire to competitors - Greece, question 15.
94  See replies to replies to Q1 – Questionnaire to competitors - Greece, question 16.
95  See replies to replies to Q1 – Questionnaire to competitors - Greece, questions 17 and 18.
96  See replies to replies to Q2 – Questionnaire to customers - Greece, question 16.
97  See replies to replies to Q2 – Questionnaire to customers - Greece, questions 17 and 18.
98  See replies to replies to Q2 – Questionnaire to customers - Greece, questions 17 and 18.
                                                          23
 ---pagebreak---  ---pagebreak---         shares above this increment. The Commission also notes that Allianz will acquire the
        joint venture Aviva has with Santander for OFE’ in Poland.,99 Thus, Aviva’s total
        market share would be around [20-30]% on an AuM basis and [20-30]% by the
        number of participants.
(110) Competitors of the Parties in OFEs in Poland largely supported the argument that by
        virtue of various consecutive reforms of the Polish pension system the importance of
        the OFEs is diminishing and OFEs will most probably ultimately be liquidated and
        cease to exist in the foreseeable future. For example one respondent said that “the
        importance of OFE funds is diminishing due to various pension reforms in Poland”.
        Another stated that “…The reform, which was implemented in 2014, banned
        acquisition of new clients to OFE and introduced so called “zipper mechanism”,
        which over time will liquidate all assets of Open Pension Fund (OFE). On the other
        side current government plans the transformation of Open Pension Fund (OFE),
        what will probably contribute to faster liquidation of current system…”.
(111) The Commission notes that competitors 100 of the Parties believe that there will
        remain enough competitive pressure in the Polish OFE pension product market after
        the Transaction. One competitor said that “… After transaction there still will be 8
        competing OFEs, which still should ensure enough competition, especially if we take
        into consideration that there is no active acquisition of new clients to OFE by any of
        PTE’s…”,. Another stressed that “… OFE pensions product market is diminishing
        with OFE likely to be ultimately liquidated. Acquisition of new clients is very limited
        and the competition focused on investment performance. As the investment
        performance bonus as set out in the pensions legislation depends on relative
        performance versus other OFEs and as there is still number of other OFEs in the
        market, the transaction is not going to change this main competitive incentive…”.
(112) Finally, competitors of the Parties believe 101 that the Transaction will have no
        impact on competition for the provision of OFE pension products in Poland. As one
        respondent put it “Open Pension Fund product is not actively sold. Open pension
        fund market is highly regulated and fees for the clients should not be influenced by
        the merger.”
(113) In light of the above considerations, the Commission concludes that the Transaction
        does not raise serious doubts as to its compatibility with the internal market or the
        functioning of the EEA agreement as a result of a horizontal effects in the market for
        pension products? in Poland.
4.4.2. Vertical relationships
4.4.2.1. Reinsurance (upstream) and life insurance in Greece and pension products in
          Greece and Poland (downstream)
(114) On the upstream, NN is active in reinsurance with a market share below 1%
        (worldwide), while MetLife Greece and MetLife Poland are not. The merged entity
99  Case M.10326 – Allianz Holding/Santander/Aviva Companies/Santander Aviva Companies.
100 See replies to question 5, Q3 - Questionnaire to competitors – Poland.
101 See replies to question 6, Q3 - Questionnaire to competitors – Poland.
                                                         25
 ---pagebreak---         would not have any ability for input foreclosure due to marginal upstream market
        shares.
(115) On the downstream markets the combined market shares of the Parties are
        above 30% in five segments of life insurance in Greece (namely in life and health
        insurance overall ([30-40%]), life and health insurance – individual policies
        ([30-40%]), life and health insurance – group policies ([30-40%]), pure (risk)
        protection products for whole and term life insurance ([30-40%]) and savings and
        investment products ([30-40%]), [30-40%] in pension products in Greece and
        [30-40%] in pension products in Poland.
(116) Given that reinsurance is provided on a global basis for various types of insurance,
        the markets listed in the previous paragraph account only for a very small part
        (below 1%) of the overall customer base for reinsurance services.
(117) Therefore, upstream competitors of the Parties in reinsurance will continue to have a
        large number of customers worldwide to provide their reinsurance services to,
        should the merged entity choose to procure for its reinsurance needs in-house.
        Moreover, no responding competitor, or customer, indicated that the Transaction
        would have a negative impact on the market for reinsurance worldwide. 102
(118) For the above reasons, the Commission considers that the Transaction does not raise
        serious doubts as to its compatibility with the internal market as regards the vertical
        links between the upstream market for reinsurance worldwide and the downstream
        markets for life insurance in Greece and pension products in Greece and Poland.
4.4.2.2. Life insurance and pension products (upstream) and insurance distribution in
          Greece (downstream)
(119) On the upstream markets, the combined market shares of the Parties are above 30%
        in five segments of life insurance (namely in life and health insurance overall
        ([30-40%]), life and health insurance – individual policies ([30-40%]), life and
        health insurance – group policies ([30-40%]), pure (risk) protection products for
        whole and term life insurance ([30-40%]) and savings and investment products
        ([30-40%]), and [30-40%] in pension products.
(120) On the downstream market for insurance distribution in Greece, the Parties do not
        distribute the insurance products of their competitors. Therefore there is no risk of
        customer foreclosure.
(121) Regarding distribution of their own products, NN does so through exclusive
        channels – tied agents ([70-80]%) and an exclusive cooperation with [Name of
        Bank] ([20-30]%),103 while MetLife Greece does so through tied agents ([40-50]%)
        and direct sales ([30-40]%). So, less than 20% of its sales are through non-exclusive
        third-party channels (brokers and non-exclusive cooperation with banks). 104
102 See replies to Q1 – Questionnaire to competitors - Greece, questions 11 and 19, Q2 – Questionnaire to
    customers - Greece, questions 12 and 20 and Q3 – Questionnaire to customers - Poland question 8.
103 Form CO, table 42.
104 Form CO, table 43.
                                                       26
 ---pagebreak--- (122) The Notifying Party submits that the merged entity would not be able to pursue a
        strategy of input foreclosure vis-à-vis their own third party distributors by
        internalising the small part of their life insurance and pension products which is
        hitherto distributed via non-exclusive third-party channels, given the Parties
        combined position and remaining strong competitors post-Transaction on the
        upstream markets.
(123) The Commission observes that in the upstream market of insurance the merged
        entity’s shares remain moderate (30-39%) and that in each plausible market a
        number of credible insurance providers will remain. Moreover, no responding
        competitor, or customer indicated that the Transaction would have a negative impact
        on the market for insurance distribution in Greece.105
(124) For the above reasons, the Commission considers that the Transaction does not raise
        serious doubts as to its compatibility with the internal market as regards the vertical
        links between the upstream markets for life insurance and pension products in
        Greece and the downstream market for insurance distribution in Greece.
5.      CONCLUSION
(125) For the above reasons, the European Commission has decided not to oppose the
        notified operation and to declare it compatible with the internal market and with the
        EEA Agreement. This decision is adopted in application of Article 6(1)(b) of EUMR
        and Article 57 of the EEA Agreement.
                                                               For the Commission
                                                               (Signed)
                                                               Margrethe VESTAGER
                                                               Executive Vice-President
105 See replies to Q1 – Questionnaire to competitors - Greece, questions 11 and 19 and Q2 – Questionnaire to
    customers - Greece, questions 12 and 20.
                                                         27