CELEX: 32018M8842
Language: en
Date: 2018-10-08 00:00:00
Title: Commission Decision of 08/10/2018 declaring a concentration to be compatible with the common market (Case No COMP/M.8842 - Tele2 / Com Hem Holding) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                  Brussels, 8.10.2018
                                                                  C(2018) 6690 final
      In the published version of this decision, some information
      has been omitted pursuant to Article 17(2) of Council
                                                                              PUBLIC VERSION
      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      information omitted has been replaced by ranges of figures  To the notifying party
      or a general description.
Subject:              Case M.8842 – Tele2 / Com Hem Holdings
                      Commission decision pursuant to Article 6(1)(b) of Council
                      Regulation No 139/2004 1 and Article 57 of the Agreement on the
                      European Economic Area 2
Dear Sir or Madam,
(1)        On 3 September 2018, the European Commission received notification of a
           proposed concentration pursuant to Article 4 of Council Regulation (EC)
           No 139/2004 3 by which Tele2 AB (Sweden) ("Tele2" or the “Notifying Party"),
           controlled by Kinnevik AB (“Kinnevik”), intends to acquire sole control of Com
           Hem Holding AB (Sweden) ("Com Hem") by way of a statutory merger (the
           "Transaction") 4. Tele2 and Com Hem are collectively referred to as the "Parties".
1.         THE PARTIES AND THE TRANSACTION
(2)        Tele2 is a Swedish telecommunications provider mainly offering mobile
           telecommunications services (voice and data), and to a lesser extent fixed
           telephony services, fixed internet access services, as well as data communication
           services and related services, in several European countries. In Sweden, Tele2
1    OJ L 24, 29.1.2004, p. 1 (the 'Merger Regulation'). With effect from 1 December 2009, the Treaty on
     the Functioning of the European Union ('TFEU') has introduced certain changes, such as the
     replacement of 'Community' by 'Union' and 'common market' by 'internal market'. The terminology of
     the TFEU will be used throughout this Decision.
2    OJ L 1, 3.1.1994, p. 3 (the 'EEA Agreement').
3    OJ L 24, 29.1.2004, p. 1 (the "Merger Regulation").
4    Publication in the Official Journal of the European Union No C 321, 11.9.2018, p. 5.
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---          operates as a mobile network operator (“MNO”) and also operates a fixed
         backbone network, partly owned and partly leased, which is connected to Tele2’s
         mobile networks. Tele2 operates in Sweden through its subsidiary Tele2 Sverige
         AB. Tele2 is listed on Nasdaq Stockholm.
(3)      Tele2 is de facto controlled by Kinnevik which holds about 47.9% of its voting
         rights, representing between 67 and 70% of the votes at Tele2’s general meetings
         in 2014-2017. Kinnevik is a Swedish investment company listed on Nasdaq
         Stockholm. Kinnevik has equity interests in various companies active inter alia in
         the sectors of telecommunications, e-commerce, entertainment and financial
         services.
(4)      Currently the main shareholders of Kinnevik are Verdere S.a.r.l ("Verdere"),
         which holds 7% of Kinnevik’s share capital and 30% of the voting rights, and
         Camshaft S.a.r.l. ("Camshaft"), which holds 2.4% of Kinnevik’s share capital and
         10% of the voting rights. […]. 5
(5)      Verdere and Camshaft also hold 1.9% of the share capital in Modern Times
         Group MTG AB ("MTG"), which, including its subsidiary Viasat AB (“Viasat”),
         is primarily active in Sweden as a retail TV services distributor, programme
         company and producer of TV content. 6 This participation does not give Verdere
         and Camshaft any specific right or power over MTG’s commercial strategy other
         than standard shareholder rights. Verdere and/or Camshaft (and/or Kinnevik)
         neither have any affiliated member in the MTG board of directors or in the
         nomination committee appointing the directors nor any specific right to be
         represented in the board and/or in the nomination committee. Therefore, Verdere
         and Camshaft have no relevant influence over MTG and this participation will
         thus not be further considered in this Decision.
(6)      Com Hem offers broadband, TV, mobile and telephony services to Swedish
         households and companies. In the provision of retail TV services, Com Hem’s
         subscriber base consists of approximately 50% of Sweden’s households. Com
         Hem is listed on Nasdaq Stockholm. Kinnevik is the largest shareholder in Com
         Hem, with a share participation of 19%. However, no shareholder has sole or joint
         control over Com Hem.
(7)      On 9 January 2018, Tele2 and Com Hem entered into a merger agreement and a
         joint merger plan. The Parties have agreed to combine their business operations
         through a statutory merger in accordance with Swedish Law. The Transaction will
5   For the purposes of the competitive assessment in the present case, the question whether Verdere and
    Camshaft control Kinnevik can be left open given that the outcome of the competitive assessment will
    not change whether or not they control it. For the purposes of the case at hand, the Commission has
    therefore undertaken the competitive assessment of the Transaction as if, with their combined 40% of
    voting rights, Verdere and Camshaft exercise de facto control over Kinnevik.
6   This situation is the result of Kinnevik’s decision to distribute all of the shares that it held in MTG to
    its shareholders. For completeness, it is mentioned that Kinnevik previously had a minority
    shareholding in MTG. However, following a reclassification of Kinnevik’s MTG class A shares into
    MTG class B shares on 1 August 2018, and a distribution of Kinnevik’s MTG class B shares to
    Kinnevik’s shareholders on 14 August 2018, Kinnevik does not own any shares in MTG. See:
    https://www kinnevik.com/media--contact/press-releases/2018/8/2208838-Kinneviks-Board-of-
    Directors-has-set-the-record-date-for-the-distribution-of-Kinneviks-shares-in-MTG.                  MTG’s
    shareholding structure is currently widely dispersed and MTG is not controlled by any of its
    shareholders. See: https://www mtg.com/the-share/#ownership.
                                                          2
 ---pagebreak---         be implemented by Tele2 absorbing Com Hem. Post-Transaction, Tele2 will
        remain listed on Nasdaq Stockholm and de facto controlled by Kinnevik.
(8)     The Transaction constitutes a concentration within the meaning of Article 3(1)(b)
        of the Merger Regulation.
2.      EU DIMENSION
(9)     The undertakings concerned have a combined aggregate world-wide turnover of
        more than EUR 5 000 million7 (Tele2: EUR […] ; Com Hem: EUR 740.6
        million; in 2017). Each of them has an EU-wide turnover in excess of EUR 250
        million (Tele2: EUR […]; Com Hem 740.6 million; in 2017), but they do not
        achieve more than two-thirds of their aggregate EU-wide turnover within one and
        the same Member State. The notified operation therefore has an EU dimension. 8
3.      RELEVANT MARKETS
(10)    In Sweden, the Parties' activities mainly overlap in the areas of: (i) retail supply of
        fixed internet access services; (ii) retail supply of mobile telecommunications
        services; and (iii) retail supply of multiple play services. Moreover, Tele2 and/or
        Com Hem are active in Sweden in the areas of (iv) retail supply of fixed
        telephony services (Tele2 and Com Hem) and (v) retail supply of TV services
        (Com Hem).
(11)    In addition, Tele2 and/or Com Hem are present in the areas of: (i) wholesale
        access and call origination on mobile networks (Tele2); (ii) wholesale mobile call
        termination services (Tele2); (iii) wholesale fixed call termination services (Tele2
        and Com Hem), and (iv) wholesale international roaming services (Tele2). Those
        services are vertically linked to (i) retail supply of mobile telecommunications
        services and (ii) retail supply of fixed telephony services.
3.1.    Retail supply of fixed telephony services
(12)    Fixed telephony services comprise the provision of connection services at a fixed
        location or access to the public telephone network, for the purpose of making
        and/or receiving calls and related services. Both Tele2 and Com Hem offer fixed
        telephony services at retail level in Sweden.
3.1.1.    Product market definition
(13)    The Notifying Party submits that the market for retail fixed telephony services
        constitutes one single market without the need to distinguish between type of call
        (local, national and international) or type of technology (traditional fixed lines or
        VoIP).
7   Turnover calculated in accordance with Article 5 of the Merger Regulation.
8   See paragraph 74, Form CO.
                                                        3
 ---pagebreak--- (14)     In previous decisions 9, the Commission considered whether a distinction between
         local/national and international calls as well as between residential and non-
         residential customers should be drawn on the basis of the distinctions in the
         Commission Recommendation 2003/311/EC but ultimately left the exact product
         market definition open.
(15)     More recently, the Commission also considered that managed Voice over Internet
         Protocol ("VoIP") services and traditional telephony are interchangeable and
         therefore belong to the same market. 10 In Liberty Global/Ziggo11 the Commission
         left the exact market definition open (and in particular whether there is a separate
         market for residential and non-residential customers, as well as whether VoIP and
         traditional fixed telephony belong to the same market) while in Liberty
         Global/BASE 12 and in Vodafone/Liberty Global/Dutch JV 13 the Commission
         considered that an overall retail market for fixed telephony services exists.
(16)     The market investigation in the present case has not provided any indication that
         the Commission should depart from its previous findings.
(17)     In any event, the Commission considers that for the purposes of this Decision, the
         exact scope of the product market definition, and specifically, whether fixed line
         and VoIP telephony services belong to the same product market, and whether
         there is a separate market for residential and non-residential customers, can be left
         open as the Transaction does not raise serious doubts as to its compatibility with
         the internal market under any possible market definition.
3.1.2.     Geographic market definition
(18)     The Notifying Party submits that, in line with the previous approaches taken by
         the Commission, the relevant geographic scope of the market is national.
(19)     In its previous decisions, the Commission concluded that the retail market for the
         provision of fixed telephony services was national in scope. 14 The market
         investigation in the present case has not provided any indication that the
         Commission should depart from its previous findings. 15
(20)     Therefore the Commission considers that the relevant market for the retail
         provision of fixed telephony services is national in scope.
9   Commission decision of 7 September 2005 in Case M.3914 – Tele2/Versatel, paragraph 10;
    Commission decision of 29 June 2010 in Case M.5532 – Carphone Warehouse/Tiscali UK,
    paragraphs 35 and 39; Commission decision of 9 January 2010 in Case M.5730 – Telefónica/Hansenet
    Telekommunikation, paragraphs 16 and 17.
10  Commission decision of 20 September 2013 in Case M.6990 - Vodafone/Kabel Deutschland,
    paragraph 131.
11  Commission decision of 10 October 2014 in Case M.7000 Liberty Global/Ziggo, recital 125.
12  Commission decision of 4 February 2016 in case M.7637 Liberty Global/BASE Belgium, recital 69.
13  Commission decision of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV,
    paragraph 26.
14  See Commission decision of 10 October 2014 in Case M.7000 Liberty Global/Ziggo, recital 127;
    Commission decision of 19 May 2015 in Case M.7421 Orange/Jazztel, recital 37. Commission
    decision of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV, paragraph 29.
15  See replies to Q1 – mobile operators of 4 September 2018, question 18. See also Q2 – fixed operators
    of 4 September 2018, question 18.
                                                      4
 ---pagebreak--- 3.2.       Retail supply of fixed internet services
(21)     Fixed internet access services at the retail level consist of the provision of a fixed
         telecommunications link enabling customers to access the internet. Both Tele2
         and Com Hem offer fixed internet access services at retail level in Sweden.
3.2.1.     Product market definition
(22)     The Notifying Party submits that the relevant product market is the overall market
         for the retail provision of fixed internet access services, without further
         segmentations. In particular, the Notifying Party considers that a distinction by
         customer type is not needed and that the market for the retail supply of fixed
         internet access services should include both residential and small business
         customers, as well as large business customers and public authorities. The
         Notifying Party further considers that there the market should not be further
         segmented on the basis of the different type of distribution mode (such as fibre,
         cable xDSL). Finally, the Notifying Party does not consider that a combined fixed
         and mobile internet retail market exists in Sweden today since, despite significant
         advances in mobile broadband connectivity, consumers do not view mobile and
         fixed internet as direct substitutes.
(23)     In recent cases, the Commission considered but ultimately left open possible
         segmentations according to (i) product type (distinguishing narrowband,
         broadband, and dedicated access), and (ii) distribution mode (distinguishing
         xDSL, fibre, cable, and mobile broadband), and has acknowledged that the retail
         market for fixed internet access services should not be divided according to
         download speed or technology. 16 The Commission has also considered
         distinguishing between residential and small business customers, on the one hand,
         and larger business and public authorities, on the other hand. 17
(24)     With regard to a possible segmentation of the market for the retail provision of
         fixed internet services according to customer type or according to distribution
         technology (i.e. DSL, cable or fibre), on the one side, mobile and fixed operators
         provided mixed results on whether this distinction is necessary. 18 On the other
         side, with regard to a possible segmentation by customer type, business customers
         highlighted the difference between the provision of fixed internet access services
         targeted at private and at business customers. 19
(25)     With regards to a potential segmentation in multiple dwelling units ("MDUs")
         such as housing associations or apartment buildings, and single dwelling units
         ("SDUs") such as individual households, the market investigation provided mixed
         results on whether the market for retail fixed internet access services should be
16  See Commission decision of 29 June 2010 in Case M.5532 – Carphone Warehouse/Tiscali UK,
    recitals 7-21; Case M.6990 Vodafone/Kabel Deutschland, recital s192-194. Commission decision of
    3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV, paragraph 38.
17 See Commission decision of 19 May 2015 in case M.7421 Orange/Jazztel, recital 42; Commission
    decision of 10 October 2014 in case M.7000 Liberty Global/Ziggo, recital 132; Commission decision
    of 7 October 2016 in case M.8131 Tele2 Sverige/TDC Sverige, recital 32.
18 See replies to Q1 – mobile operators of 4 September 2018, question 12. See also Q2 – fixed operators
    of 4 September 2018, question 12.
19 See replies to Q3 – business customers of 4 September 2018, question C.A.4.
                                                      5
 ---pagebreak---          split by MDU and SDU. 20 While most of the respondents did not express a view,
         one respondent indicated that fixed internet services delivered over fiber based
         access networks and cable-TV-networks to SDUs, and fixed internet services
         delivered over fiber based access networks and cable-TV-networks to MDUs
         constitute separate product markets.
(26)     In any event, the Commission considers that for the purposes of this Decision, the
         exact scope of the product market definition can be left open as the Transaction
         does not raise serious doubts as to its compatibility with the internal market under
         any possible market definition.
3.2.2.     Geographic market definition
(27)     The Notifying Parties submit that, in line with the previous approaches taken by
         the Commission and the Swedish Post and Telecom Authority (Post- och
         telestyrelsen – PTS), the relevant geographic scope of the market is national.
(28)     In its previous decisions, the Commission concluded that the retail market for the
         provision of fixed internet services was national in scope. 21 The market
         investigation in the present case has not provided any indication that the
         Commission should depart from its previous findings. 22 Therefore the
         Commission considers that the relevant market for the retail provision of fixed
         internet services is national in scope.
3.3.       Retail supply of TV services
(29)     In the market for the retail provision of TV services, the suppliers of linear and
         non-linear (mainly Video-On-Demand, "VOD") TV services serve end customers
         who wish to purchase such services. The TV services supplied by TV distributors
         to end users consist of: (i) packages of linear TV channels (which they have either
         acquired or produced themselves); and (ii) content aggregated in non-linear
         services, such as Video on Demand ("VOD"), Subscription VOD ("SVOD"),
         Transaction VOD ("TVOD") and Pay Per View ("PPV"). TV content can be
         delivered to end users through a number of technical means including cable,
         satellite and IPTV 23. So-called over-the-top (“OTT”) 24 players deliver channels
         and content in both a linear and non-linear fashion through the use of the internet.
(30)     Com Hem (but not Tele2) offers retail TV services in Sweden to end consumers.
20  See replies to Q1 – mobile operators of 4 September 2018, question 13. See also Q2 – fixed operators
    of 4 September 2018, question 13.
21  See Commission decision of 29 June 2010 in Case M.5532 – Carphone Warehouse/Tiscali UK,
    recital 47; Case M.5730 Telefonica/Hansenet, recital 28; Case M.6990 Vodafone/Kabel Deutschland,
    recital 197. Commission decision of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch
    JV, paragraph 40.
22  See replies to Q1 – mobile operators of 4 September 2018, question 18. See also Q2 – fixed operators
    of 4 September 2018, question 18. See replies to Q3 – business customers of 4 September 2018,
    question C.B.2.
23  IPTV is the abbreviation for Internet Protocol TV; it is a system through which television services are
    delivered using the Internet protocol over a packet-switched network such as the internet, instead of
    being delivered through traditional terrestrial, satellite signal and cable television formats.
24  Over-the-top (OTT) is any application or service that provides a product over the Internet and bypasses
    traditional distribution. Applications and services that are provided as 'over-the-top' are most typically
    related to media and communication.
                                                             6
 ---pagebreak--- 3.3.1.     Product market definition
(31)     The Notifying Party submits that it is not relevant to delineate the market for the
         retail provision of TV services based on the segmentation analysed by the
         Commission in its previous decisions 25, namely: (i) the type of technology used;
         (ii) the nature of TV services provided in terms of Pay TV and Free-To-Air
         (“FTA”) TV services; and, (iii) the nature of TV services provided in terms of
         linear and non-linear services.
(32)     According to the Notifying Party, a potential distinction in the Swedish TV
         market would be between MDUs and SDUs. This distinction has been considered
         in past decisions of the Swedish Competition Authority ("SCA") in this
         industry. 26 In SDUs the end customer typically chooses its own TV distributor
         and pays directly for its subscription. In MDUs, on the other hand, it is common
         to have a collective agreement between the landlord / housing association and a
         single TV distributor. In such a setup the landlord / housing association chooses
         the TV distributor and pays for a basic TV package (this cost is covered through a
         portion of the monthly management fees paid by apartment owners to the housing
         association).
(33)     In its previous decisions the Commission has considered the retail provision of
         FTA TV and Pay TV services as separate markets but ultimately left open the
         product market definition 27. The Commission also considered whether retail TV
         can be segmented further according to: (ii) linear vs non-linear -TV services 28;
         (iii) according to distribution technologies (e.g. cable, OTT, satellite, IPTV or
         terrestrial) 29; and (iv) premium Pay-TV vs basic Pay-TV services 30 but, has left
         open the market definition with regard to each of these potential sub-segments.
25  Commission decision of 21 December 2010 in case M.5932 News Corp/BskyB; Commission decision of
    22 September 2006 in case M.4353 Permira/All3Media Group; Commission decision of 15 April 2013
    in case M.6880 Liberty Global/Virgin Media; Commission decision of 24 February 2015 in case
    M.7194 Liberty Global/Corelio/W&W/De Vijver Media.
26  See e.g., SCA decision of 21 September 2016, Dnr 411/2016, Com Hem /Boxer, recitals 50-52.
27  Commission decisions of 18 July 2007 in case M.4504 SFR/Télé 2 France, recital 40, and of
    25 June 2008 in case M.5121 News Corp / Premiere, recital 20. See also, Commission decision of 7
    April 2017 in case M.8354 – Fox / Sky, paragraph 97; Commission decision of 3 August 2016 in case
    M.7978 – Vodafone/Liberty Global/Dutch JV, paragraph 56; Commission decisions of
    24 February 2015 in case M.7194 Liberty Global / Corelio / W&W / De Vijver Media, recital 119-120,
    of 25 June 2008 in case M.5121 News Corp/Premiere, recitals 15 and 21, and of 10 October 2014 in
    case M.7000 Liberty Global/Ziggo, recital 108).
28  Commission decision of 6 February 2018 in case M.8665 – Discovery / Scripps, paragraph 33;
    Commission decision of 7 April 2017 in case M.8354 – Fox / Sky, paragraph 98 and 99; Commission
    decision of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV, paragraph 58;
    Commission decision of 24 February 2015 in case M.7194 Liberty Global / Corelio / W&W / De
    Vijver Media, recital 124. Commission decision of 25 June 2008 in case M.5121 News Corp/Premiere,
    recital 21. Commission decision of 10 October 2014 in case M.7000 Liberty Global/Ziggo,
    recitals 109–110.
29  Commission decision of 6 February 2018 in case M.8665 – Discovery / Scripps, paragraph 33;
    Commission decision of 7 April 2017 in case M.8354 – Fox / Sky, paragraph 100; Commission
    decision of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV, paragraph 62;
    Commission decision of 24 February 2015 in case M.7194 Liberty Global / Corelio / W&W / De
    Vijver Media, recital 127. Commission decision of 25 June 2008 in case M.5121 News Corp/Premiere,
    recital 22; Commission decision of 21 December 2010 in case M.5932 News Corp/BskyB, recital 105.
    Commission decision of 10 October 2014 in case M.7000 Liberty Global/Ziggo, recital 113.
                                                       7
 ---pagebreak--- (34)     The Commission has also previously considered whether retail TV services to
         SDUs and MDUs form part of the same product market but ultimately left it
         open. 31
(35)     Most of the respondents to the market investigation indicated that the market for
         the provision of retail TV services in Sweden should not be segmented into
         (i) FTA and Pay-TV services; (ii) linear and non-linear services, or by
         (iii) distribution technologies. 32
(36)     With regards to a potential segmentation in SDU and MDU, most of the
         respondents to the market investigation consider that the market for retail supply
         of TV services should not be split by MDU and SDU since similar content is
         distributed through the different technologies and there are not significant pricing
         differences. 33
(37)     In any event, given the fact that the assessment of the Transaction would remain
         the same whether (i) FTA services and Pay TV services, (ii) linear Pay TV
         services and non-linear Pay TV services, (iii) different distribution technologies,
         and (iv) SDUs and MDUs are considered to belong to the same product market or
         to give rise to separate markets, the exact scope of the relevant market for TV
         services can be left open in this regard.
(38)     In any event, the Commission considers that for the purposes of this Decision the
         exact product market definition can be left open as the Transaction does not raise
         serious doubts as to its compatibility with the internal market under any possible
         market definition.
3.3.2.     Geographic market definition
(39)     The Commission has in the past considered that the geographic scope of the
         market for the retail provision of TV services could be national since providers of
         retail TV services compete on a nationwide basis or limited to the coverage area
         of each cable operator. 34
(40)     The Notifying Party considers that the question whether the scope of the market
         for the retail provision of TV services should be either national, since TV
30  Commission decision of 24 February 2015 in case M.7194 Liberty Global / Corelio / W&W / De
    Vijver Media, recital 119.
31  Commission decision of 20 September 2013 in case M.6990 – Vodafone/Kabel Deutschland,
    paragraphs 92-96.
32  See replies to Q1 – mobile operators of 4 September 2018, question 20. See also Q2 – fixed operators
    of 4 September 2018, question 20.
33  See replies to Q1 – mobile operators of 4 September 2018, question 21. See also Q2 – fixed operators
    of 4 September 2018, question 21.
34  Commission decision of 26 February 2007 in case M.4521 LGI/Telenet, recital 25; Commission
    decision of 24 February 2015 in case M.7194 Liberty Global/Corelio/W&W/De Vijver Media,
    recital 139. Commission decision of 25 June 2008 in Case M.5121 - News Corp/Premiere, recital 24;
    Commission decision of 25 January 2010 in Case M.5734 - Liberty Global Europe/Unitymedia,
    recitals 40 and 43; Commission decision of 21 December 2010 in Case M.5932 - NewsCorp/BSkyB,
    recital 109; Commission decision of 21 December 2011 in Case M.6369 - HBO/Ziggo/HBO
    Nederland, recital 42; Commission decision of 15 April 2013 in Case M.6880 - Liberty Global/Virgin
    Media, recital 54; Case M.7000 – Liberty Global/Ziggo, recital 118.
                                                       8
 ---pagebreak---          distributors compete on a nationwide basis, or limited to the coverage area of each
         cable operator, could be left open.
(41)     Most of the respondents to the market investigation consider that the market for
         the retail provision of TV services is national in scope. 35
(42)     In any event, the Commission considers that the exact geographic market
         definition can be left open in this case as the Transaction does not raise serious
         doubts as to its compatibility with the internal market under any possible market
         definition.
3.4.       Retail supply of mobile telecommunications services
(43)     Mobile telecommunications services to end customers (also referred to as "retail
         mobile services") include services for national and international voice calls, SMS
         (including MMS and other messages), mobile internet with data services, access
         to content via the mobile network and retail international roaming services. 36
         Both Parties provide mobile telecommunication services at retail level to end-
         customers in Sweden. 37
3.4.1.     Product market definition
(44)     The Notifying Party submits that, in line with previous Commission decisions, the
         relevant product market is the overall retail market for mobile
         telecommunications services. It considers that it is not necessary for the
         Commission to further segment this market by reference to type of customer
         (business or private), service type (national or international calls, internet data
         services, voice and text services), type of tariff (post-paid or pre-paid) or type of
         network technology.
(45)     In previous cases concerning retail mobile telecommunications services, the
         Commission has considered that there is an overall retail market for mobile
         telecommunications services constituting a separate market from retail fixed
         telecommunication services. 38 The Commission did not further segment the
         overall retail mobile market based on the type of service (voice calls, SMS, MMS,
         mobile Internet data services), or the type of network technology. The
         Commission considered possible segments of the overall retail market for mobile
         telecommunication services between pre-paid or post-paid services and private
         customers or business customers, concluding that these did not constitute separate
         product markets but represent rather market segments within an overall retail
         market. 39
35  See replies to Q1 – mobile operators of 4 September 2018, question 22. See also Q2 – fixed operators
    of 4 September 2018, question 22.
36  See Commission decision of 10 October 2014 in Case M.7000 – Liberty Global/Ziggo, recital 137.
37  At present, Tele2 is active in this market as an MNO and Com Hem as an MVNO.
38  Commission decision of 11 May 2016 in case M.7612 – Hutchison 3G UK/Telefónica UK, recital 252;
    Commission decision of 10 October 2014 in Case M.7000 – Liberty Global/Ziggo, recital 141 and
    Commission decision of 2 July 2014 in case No M.7018 – Telefónica Deutschland/E-Plus, recital 64.
39  Commission decision of 1 September 2016 in case M.7758 – Hutchison 3G Italy / Wind / JV, recital ;
    Commission decision of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV,
    paragraph 74; Commission decision of 11 May 2016 in case M.7612 – Hutchison 3G UK/Telefónica
                                                        9
 ---pagebreak--- (46)     Most respondents to the market investigation in the present case agreed with the
         Commission’s previous product market definition and considered that the retail
         market for mobile telecommunications services should be defined as an overall
         market, without further segmentations. 40
(47)     In any event, for the purpose of this Decision, the exact product market definition
         in relation to the provision of retail mobile telecommunications services can be
         left open as the Transaction does not raise serious doubts as to its compatibility
         with the internal market under any possible market definition.
3.4.2.     Geographic market definition
(48)     The Notifying Party submits that, in line with the Commission's previous
         decisions, 41 the market for mobile telecommunications services to end customers
         is national in scope and therefore corresponds to the territory of Sweden.
(49)     The market investigation in the present case has not provided any indications that
         the Commission should depart from its previous findings. 42 In light of the above,
         the Commission considers that the retail market for mobile telecommunications
         services is national in scope.
3.5.       Retail supply of multiple play services
(50)     The term "multiple play" relates to offers comprising two or more of the
         following services provided to retail consumers: mobile telecommunication
         services, fixed telephony, fixed internet access and TV services. Multiple play
         comprising two, three or four of these services is referred to as dual play ("2P"),
         triple play ("3P") and quadruple play ("4P") respectively.
(51)     Three of the four services referenced in paragraph (50) above, namely fixed
         telephony, TV services and fixed internet access, are fixed services as they are
         provided over a fixed network such as cable, copper or fibre infrastructure.
         Multiple play comprising any combination of two or more of these fixed services
         without a mobile component is referred to as "fixed multiple play". Multiple play
         comprising one or more of these fixed services in combination with a mobile
         component (including either voice or data, or both together) is referred to as
    UK, recitals 255, 261, 270, 279, 287; Commission decision of 2 July 2014 in case M.7018 – Telefónica
    Deutschland/E-Plus, recitals 31 to 55; Commission decision of 10 October 2014 in Case M.7000 –
    Liberty Global/Ziggo, recital 141; Commission decision of 28 May 2014 in case M.6992 – Hutchison
    3G UK/Telefónica Ireland, recital 141; Commission decision of 12 December 2012 in case M.6497 –
    Hutchison 3G Austria/Orange Austria, recital 58.
40 See Replies to Q1 – mobile operators of 4 September 2018, questions 10 and 11.
41 Commission decision of 1 September 2016 in case M.7758 – Hutchison 3G Italy / Wind / JV,
    recital 166; Commission decision of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch
    JV, paragraph 76; Commission decision of 11 may 2016 in case M.7612 – Hutchison 3G
    UK/Telefónica UK, recitals 293; Commission decision of 10 October 2014 in Case M.7000 – Liberty
    Global/Ziggo, recital 143; Commission decision of 2 July 2014 in case No M.7018 – Telefónica
    Deutschland/E-Plus, recital 74; Commission decision in case M.6497 – Hutchison 3G Austria/Orange
    Austria, recital 73; Commission decision in case No M.5650 – T Mobile/Orange UK, paragraphs 25
    and 26 and Commission decision of 28 May 2014 in case No M.6992 – Hutchison 3G UK/Telefónica
    Ireland, recital 164.
42 See replies to Q1 – mobile operators of 4 September 2018, question 18. See also Q2 – fixed operators
    of 4 September 2018, question 18. See replies to Q3 – business customers of 4 September 2018,
    question B.B.1.
                                                      10
 ---pagebreak---          "fixed-mobile multiple play" or “fixed-mobile convergence” (“FMC”). Fixed-
         mobile multiple play may involve a single mobile subscription (SIM card) or
         more than one mobile subscription combined with the fixed services.
(52)     Both Tele2 and Com Hem offer fixed multiple play bundles, Com Hem to a
         greater extent than Tele2. None of the Parties offers fixed-mobile multiple play
         services.
3.5.1.     Product market definition
(53)     The Notifying Party submits that multiple play markets are not relevant in
         Sweden, due mainly to their limited scope, and that the competitive assessment of
         the Transaction should be carried out separately in each individual market (fixed
         telephony, fixed internet, TV services and mobile services).
(54)     In previous cases the Commission has considered but ultimately left open the
         question as to whether there exist one or more multiple play markets which are
         distinct from each of the underlying individual telecommunication services. 43
(55)     In previous cases the Commission has also noted that due to different services,
         delivered over different infrastructures (fixed for dual play and triple play or fixed
         and mobile for quadruple play), that are included in the different multiple play
         bundles, instead of one possible market for multiple play, there could be several
         candidate multiple play markets: a market for fixed bundles (dual play and triple
         play) and another separate market for FMC bundles. The possibility for several
         mobile subscriptions to be included in a quadruple play bundle further
         complicates the picture. 44
(56)     In Sweden, the uptake of multiple play services remains relatively modest.
         In 2017, the total number of bundled telecommunication subscriptions amounted
         to roughly 1.9 million compared to a total of approximately 14.4 million mobile
         telecommunication services subscriptions, 3.9 million fixed broadband
         subscriptions and 5.3 million television subscriptions. 45
(57)     The most common multiple play service in Sweden is the 2P combination of
         television and fixed internet services (approximately 551 700 subscriptions
         in 2017). There is a marked ongoing decline in the number of subscriptions of
         multiple play bundles with a fixed telephony component in tune with the decline
         of overall standalone fixed telephony subscriptions. 46 Moreover, in Sweden,
         fixed-mobile multiple play bundles are not widespread. In 2017, mobile
         subscriptions sold in a 4P bundle represented less than 1% of all mobile
         subscriptions.
43  Commission decision of 3 August 2016 in case M.7978 – Vodafone / Liberty Global / Dutch JV,
    recital 108; Commission decision of 4 February 2016 in case M.7637 – Liberty Global / BASE
    Belgium, recital 96; Commission decision of 19 May 2015 in case M.7421 – Orange / Jazztel,
    recitals 86 and 91.
44 Commission decision of 3 August 2016 in case M.7978 – Vodafone / Liberty Global / Dutch JV,
    recital 107.
45 See Annex 7 of Form CO.
46 See Table 9, Annex 7 of Form CO.
                                                   11
 ---pagebreak---  ---pagebreak--- (63)     Most respondents to the market investigation of the case at hand considered that a
         possible market for multiple play (irrespective of what type of multiple play
         bundles are included in such possible market) would be national in scope. 50
(64)     Therefore, for the purposes of this Decision, the Commission considers that the
         geographic scope of any possible retail market for multiple play services in
         Sweden would be national.
3.6.       Wholesale access and call origination on mobile networks
(65)     MNOs provide wholesale access and call origination services which enable
         operators without their own network, namely MVNOs and Service Providers, to
         have access to one or more of the MNOs networks in order to provide retail
         mobile services to end customers “Full” or “thick” MVNOs maintain their own
         core infrastructure and use MNOs only for access to a radio network. By contrast,
         “light” or “thin” MVNOs do not have their own infrastructure and rely entirely on
         the infrastructure of an MNO. 51 As far as the Parties are concerned, only Tele2 is
         active on this market in Sweden. Three more providers in Sweden offer wholesale
         access and call origination on mobile networks, namely, Telia, Telenor and Tre.
3.6.1.     Product market definition
(66)     In line with previous Commission decisions, the Notifying Party submits that
         there is an overall market for wholesale access and call origination services.
(67)     In previous cases, 52 the Commission defined a wholesale market for access and
         call origination on public mobile networks. The services provided by MNOs to
         non-MNOs were considered as key elements required for non-MNOs to be able to
         provide retail mobile communication services. Since both services were
         considered to be generally supplied together they were seen to be part of a single
         market. The market investigation in the present case has not provided any reasons
         to depart from this approach.
(68)     In view of the above, the Commission concludes that there is a distinct wholesale
         market for access and call origination on public mobile telephone networks.
50  See replies to Q1 – mobile operators of 4 September 2018, question 18. See also Q2 – fixed operators
    of 4 September 2018, question 18.
51 Light MVNOs may also use the services of a mobile virtual network enabler (“MVNEs“), an
    organisation that provides business infrastructure solutions to MVNOs such as billing, administration,
    operations support, mobile site subsystem support and other related services.
52 Commission decision of 3 August 2016 in case M.7978 – Vodafone / Liberty Global / Dutch JV,
    paragraph 187; Commission decision of 11 May 2016 in case M.7612 – Hutchison 3G UK/Telefónica
    UK, recitals 295 to 300; Commission decision of 2 July 2014 in case M.7018 – Telefónica
    Deutschland/E-Plus, recitals 77 to 79; Commission decision of 28 May 2014 in case M.6992 –
    Hutchison 3G UK/Telefónica Ireland, recital 156; Commission decision of 12 December 2012 in case
    M.6497 – Hutchison 3G Austria/Orange Austria, recitals 61 to 63; Commission decision of
    1 March 2010 in case M.5650 – T-Mobile/Orange, paragraphs 27 to 30; Commission decision of
    27 November 2007 in case M.4947 – Vodafone/Tele2 Italy/Tele2 Spain, paragraph 15.
                                                        13
 ---pagebreak--- 3.6.2.    Geographic market definition
(69)    In line with previous Commission decisions, the Notifying Party submits that the
        relevant geographic scope of the market for wholesale access and call origination
        on mobile networks is national, i.e. limited to the territory of Sweden.
(70)    In previous cases, the Commission considered the wholesale market for access
        and call origination to be national in scope due to regulatory barriers stemming
        from the fact that licenses granted to MNOs are generally national in scope. 53 The
        market investigation in the present case has not provided any reasons to depart
        from this approach.
(71)    Based on the above, the Commission concludes the wholesale market for access
        and call origination on public mobile networks to be national in scope, that is to
        say limited to the territory of Sweden.
3.7.      Wholesale market for call termination on mobile networks
(72)    Call termination services are provided when calls originate from one network and
        terminate on another network. Call termination thus allows users of different
        networks to communicate with one another. Call termination is a wholesale
        service provided by various network operators to one another on the basis of
        interconnection agreements, upstream of the provision of communication services
        to end customers. 54 Call termination services could be provided either on mobile
        or fixed networks.
(73)    Tele2 is active on the wholesale market for call termination on mobile networks
        in Sweden.
3.7.1.    Product market definition
(74)    The Notifying Party submits that each individual network constitutes a separate
        wholesale market for call termination on mobile networks, in line with previous
        Commission decisions.
(75)    In previous cases, the Commission concluded that each individual mobile
        network constitutes a separate product market. 55 More specifically, the
        Commission considered that there is no substitute for call termination on each
        individual network since the operator transmitting the outgoing call can reach the
        intended recipient only through the operator of the network to which the recipient
53  Commission decision of 3 August 2016 in case M.7978 – Vodafone / Liberty Global / Dutch JV,
    paragraph 190; Commission decision of 11 May 2016 in case M.7612 – Hutchison 3G UK/Telefónica
    UK, recitals 305 and Commission decision of 12 December 2014 in case M.6497 – Hutchison 3G
    Austria/Orange Austria, recitals 74 to 77 with further references.
54 See Commission decision of 2 July 2014 in case M.7018 – Telefónica Deutschland/E-Plus, recital 84;
    Commission decision of 12 December 2012 in case M.6497 - Hutchison 3G Austria/Orange Austria,
    paragraph 68; Commission decision of 1 March 2010 in case M.5650 - TMobile/Orange, paragraph 36.
55 See Commission decision of 3 July 2012 in case M.6584 – Vodafone/Cable & Wireless, recital 47;
    Commission decision of 3 July 2012 in case M.5650 – T-Mobile/Orange UK, recitals 36, 37; See also
    Commission decision M.1493 – Telia / Telenor, M.2803 Telia / Sonera and M.3806 – Télefonica /
    Cesky. See also Revised Commission Recommendation of 17 December 2007 referring to wholesale
    voice call termination on individual mobile networks.
                                                        14
 ---pagebreak---         is connected. Each individual network therefore constitutes a separate market for
        termination. This applies both to fixed networks and to mobile networks. 56
(76)    In view of the above, the Commission concludes that each individual mobile
        network constitutes a separate wholesale market for call termination. More
        specifically for the purposes of this case, the Commission concludes that the
        relevant market is the wholesale market for call termination on the mobile
        network of Tele2.
3.7.2.    Geographic market definition
(77)    The Notifying Party submits that wholesale market for call termination should
        correspond to the dimensions of the operator's network and therefore be
        considered as national in scope.
(78)    In line with its previous decisions 57, the Commission considers the market to be
        national in scope. The information available to the Commission does not provide
        any indication that it would be warranted for the present case to depart from the
        previous practice for defining the geographic market. For the purposes of this
        Decision, the Commission therefore concludes that the wholesale markets for call
        termination on mobile networks are national.
3.8.      Wholesale international roaming services
(79)    In order for a provider of retail mobile services to be able to provide its end
        customers with telecommunication services outside their home countries, it must
        enter into agreements with providers of wholesale international roaming services
        which are primarily active in other national markets. Only Tele2 is active on this
        market, both in Sweden and in the Netherlands.
(80)    Roaming agreements can be concluded with a preferred foreign operator which
        offers tailor-made service conditions, as can be seen in particular in the creation
        of international roaming alliances.
3.8.1.    Product market definition
(81)    The Notifying Party submits that the Commission has defined a separate
        wholesale market for international roaming services comprising both terminating
        calls and originating calls. 58
(82)    In the case at hand, the Commission retains its previous product market definition
        of a separate wholesale market for international roaming comprising both
        terminating calls and originating calls.
56  See Commission decision of 3 July 2012 in case M.5650 – T-Mobile/Orange UK, recitals 36, 37.
57  See Commission decision of 3 July 2012 in case M.6584 – Vodafone/Cable & Wireless, recital 48;
    Commission decision of 3 July 2012 in case M.5650 – T-Mobile/Orange UK, recital 39.
58 See Commission decision of 2 July 2014 in Case M.7018 - Telefónica Deutschland/E-Plus, recital 97;
    Commission decision of 20 September 2013 in Case M.6990 Vodafone/Kabel Deutschland, recital
    249; Commission decision of 3 July 2012 in case M.5650 T-Mobile/Orange, paragraph 34;
    Commission decision of 12 December 2012 in case No. M.6497 Hutchison 3G Austria/Orange
    Austria, paragraph 67; Commission decision of 4 February 2016 in Case M.7637 Liberty Global/Base
    Belgium, recital 119.
                                                     15
 ---pagebreak--- 3.8.2.     Geographic market definition
(83)     In line with previous Commission decisions 59 the Notifying Party submits that the
         wholesale market for international roaming services is national in scope, i.e.
         Sweden, for the case at hand. This is due to the fact that wholesale international
         agreements can only be concluded with companies which have an operating
         licence in the relevant country and the licences to provide mobile services are
         restricted to a national territory.
(84)     In line with its past decisions 60, the Commission retains its previous geographic
         market definition and considers that the wholesale market for international
         roaming services is national in scope.
3.9.       Wholesale call termination services on fixed networks
(85)     As explained in paragraph (72) above, call termination is the wholesale service
         provided by network operators that allows users of different networks to
         communicate with each other.
(86)     The market for wholesale termination of calls on fixed networks is therefore
         vertically related to the retail markets for fixed and mobile telephony services.
(87)     Both Tele2 and Com Hem are active in the provision of wholesale call
         termination services on fixed networks in Sweden.
3.9.1.     Product market definition
(88)     In line with previous Commission decisions 61, the Notifying Party submits that
         the relevant product market is the wholesale market for call termination on each
         individual fixed network.
(89)     In previous decisions the Commission considered an overall wholesale market for
         call termination on each individual fixed network, without it being necessary to
         consider further possible segmentations of the market. 62
59  See Commission decision of 3 July 2012 in case M.5650 T-Mobile/Orange, paragraph 35;
    Commission decision of 12 December 2012 in case M.6497 Hutchison 3G Austria/Orange Austria,
    paragraph 78-79; Commission decision of 2 July 2014 in case M.7018 Telefónica Deutschland/E-Plus,
    recital 100; and Commission decision of 4 February 2016 in case M.7637 Liberty Global/Base
    Belgium, recital 122.
60 See Commission decision of 3 July 2012 in case M.5650 T-Mobile/Orange, paragraph 35;
    Commission decision of 12 December 2012 in case M.6497 Hutchison 3G Austria/Orange Austria,
    paragraph 78-79; Commission decision of 2 July 2014 in case M.7018 Telefónica Deutschland/E-Plus,
    recital 100; and Commission decision of 4 February 2016 in case M.7637 Liberty Global/Base
    Belgium, paragraph 122; Commission decision of 20 September 2013 in case M.6990 Vodafone/Kabel
    Deutschland, recital 252.
61 See Commission decision of 3 August 2016 in case M.7978 – Vodafone / Liberty Global / Dutch JV;
    Commission decision of 27 November 2007 in case M.4947 - Vodafone/Tele2 Italy/Tele2 Spain,
    recital 13; Commission decision of 1 March 2010 in case M.5650 - T-Mobile/Orange, recital 37;
    Commission decision of 3 July 2012 in case M.6584 - Vodafone/Cable & Wireless, recital 23; and
    Commission decision of 20 September 2013 in case M.6990 - Vodafone/Kabel Deutschland,
    recital 117.
62 See Commission decision of 3 August 2016 in case M.7978 – Vodafone / Liberty Global / Dutch JV;
    Commission decision of 4 February 2016 in case M.7637 - Liberty Global/BASE Belgium, recital 126;
                                                     16
 ---pagebreak---      (90)     For the purposes of the present Decision, the Commission retains its previous
              product market definition and considers that the relevant product market is the
              overall wholesale market for call termination on the fixed network of Tele2 and
              the wholesale market for call termination on the fixed network to which Com
              Hem has access.
     3.9.2.     Geographic market definition
     (91)     The Notifying Party considers the geographic scope of the wholesale market for
              call termination on fixed networks to be national. This is primarily due to
              regulatory barriers as the geographical scope of licenses is in principle limited to
              areas which do not extend beyond the borders of a Member State.
     (92)     In line with previous decisions the Commission considers the geographic scope of
              the wholesale market for call termination on a fixed network to be national. 63
     4.       COMPETITIVE ASSESSMENT
4.1.      Analytical framework
     (93)     Under Article 2(2) and (3) of the Merger Regulation, 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.
     (94)     In this respect, a merger may entail horizontal and/or non-horizontal effects.
              Horizontal effects are those deriving from a concentration where the undertakings
              concerned are actual or potential competitors of each other in one or more of the
              relevant markets concerned. Non-horizontal effects are those deriving from a
              concentration where the undertakings concerned are active in different relevant
              markets.
     (95)     As regards non-horizontal mergers, two broad types of such mergers can be
              distinguished: vertical mergers and conglomerate mergers. 64 Vertical mergers
              involve companies operating at different levels of the supply chain. 65
              Conglomerate mergers are mergers between firms that are in a relationship which
              is neither horizontal (as competitors in the same relevant market) nor vertical (as
              suppliers or customers). 66
         Commission decision of 3 July 2012 in case M.6584 - Vodafone/Cable & Wireless, recital 23;
         Commission decision of 1 March 2010 in case M.5650 - T-Mobile/Orange, recital 37.
     63  See Commission decision of 3 August 2016 in case M.7978 – Vodafone / Liberty Global / Dutch JV;
         Commission decision of 20 September 2013 in case M.6990 - Vodafone/Kabel Deutschland,
         recital 121; Commission decision of 4 February 2016 in case M.7637 - Liberty Global/BASE Belgium,
         recital 128; Commission decision of 3 July 2012 in case M.6584 - Vodafone/Cable & Wireless,
         recital 24; Commission decision of 1 March 2010 in case M.5650 - T-Mobile/Orange, recital 38;
         Commission decision of 27 November 2007 in case M.4947 - Vodafone/Tele2 Italy/Tele2 Spain,
         recital 16.
     64  Non-Horizontal Merger Guidelines, recital 3.
     65  Non-Horizontal Merger Guidelines, recital 4.
     66  Non-Horizontal Merger Guidelines, recital 5.
                                                          17
 ---pagebreak--- (96)    A case where a merger entails both horizontal and non-horizontal effects may for
        instance be when the merging firms are not only in a vertical or conglomerate
        relationship, but are also actual or potential competitors of each other in one or
        more of the relevant markets concerned. In such a case, the Commission will
        appraise horizontal, vertical and/or conglomerate effects in accordance with the
        guidance set out in the relevant notices. 67
(97)    The Commission appraises horizontal effects in accordance with the guidance set
        out in the relevant notice, that is to say the Horizontal Merger Guidelines. 68
        Additionally, the Commission appraises non-horizontal effects in accordance with
        the guidance set out in the relevant notice, that is to say the Non-Horizontal
        Merger Guidelines. 69
4.1.1.    Horizontal effects
(98)    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, namely non-coordinated and
        coordinated effects.
(99)    As regards horizontal non-coordinated effects, under the substantive test set out in
        Article 2(2) and (3) of the Merger Regulation, also mergers that do not lead to the
        creation or the strengthening of the dominant position of a single firm may be
        incompatible with the internal market. Indeed, the Merger Regulation recognises
        that in oligopolistic markets, it is all the more necessary to maintain effective
        competition. 70 This is in view of the more significant consequences that mergers
        may have on such markets. For this reason, the Merger Regulation provides that
        "under certain circumstances, concentrations involving the elimination of
        important competitive constraints that the merging parties had exerted upon each
        other, as well as a reduction of competitive pressure on the remaining
        competitors, may, even in the absence of a likelihood of coordination between the
        members of the oligopoly, result in a significant impediment to effective
        competition". 71
(100) The Horizontal Merger Guidelines list a number of factors which may influence
        whether or not significant horizontal non-coordinated effects are likely to result
        from a merger, such as the large market shares of the merging firms, the fact that
        the merging firms are close competitors, the limited possibilities for customers to
        switch suppliers, or the fact that the merger would eliminate an important
        competitive force. That list of factors applies equally regardless of whether a
        merger would create or strengthen a dominant position, or would otherwise
67  Non-Horizontal Merger Guidelines, recital 7.
68  Guidelines on the assessment of horizontal mergers under the Council Regulation on the control of
    concentrations between undertakings ("Horizontal Merger Guidelines"), OJ C 31, 05.02.2004.
69 Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control
    of concentrations between undertakings ("Non-Horizontal Merger Guidelines"), OJ C 265, 18.10.2008.
70 Merger Regulation, recital 25.
71 Merger Regulation, recital 25. Similar wording is also found in paragraph 25 of the Horizontal Merger
    Guidelines. See also Commission decision of 2 July 2014 in case No M.7018 – Telefónica
    Deutschland/E-Plus, recital 113; Commission decision of 28 May 2014 in case No M.6992 –
    Hutchison 3G UK/Telefónica Ireland, recital 179; Commission decision of 12 December 2012 in case
    No M.6497 – Hutchison 3G Austria/Orange Austria, recital 88.
                                                      18
 ---pagebreak---         significantly impede effective competition due to non-coordinated effects.
        Furthermore, not all of these factors need to be present to make significant non-
        coordinated effects likely and it is not an exhaustive list. 72 Finally, the Horizontal
        Merger Guidelines describe a number of factors, which could counteract the
        harmful effects of a merger on competition, including the likelihood of buyer
        power, entry and efficiencies.
(101) A merger in a concentrated market may also significantly impede effective
        competition due to horizontal coordinated effects where, through the creation or
        the strengthening of a collective dominant position, it increases the likelihood that
        firms are able to coordinate their behaviour and raise prices, even without
        entering into an agreement or resorting to a concerted practice within the meaning
        of Article 101 TFEU. A merger may also make coordination easier, more stable
        or more effective for firms that were already coordinating before the merger,
        either by making the coordination more robust or by permitting firms to
        coordinate on even higher prices. 73
(102) To assess whether a merger gives rise to horizontal coordinated effects, the
        Commission should examine, first, whether it would be possible to reach terms of
        coordination and, second, whether the coordination would be likely to be
        sustainable. 74
4.1.2.    Vertical effects
(103) A merger is said to result in foreclosure where actual or potential rivals' access to
        supplies or markets is hampered or eliminated as a result of the merger, thereby
        reducing these companies' ability and/or incentive to compete. 75 Such foreclosure
        may discourage entry or expansion of rivals or encourage their exit. Such
        foreclosure is regarded as anti-competitive where the merged entity — and,
        possibly, some of its competitors as well — are as a result able to profitably
        increase the price charged to consumers. 76
(104) Two forms of vertical foreclosure can be distinguished. The first is where the
        merger is likely to raise the costs of downstream rivals by restricting their access
        to an important input (input foreclosure). The second is where the merger is likely
        to result in foreclosure of upstream rivals by restricting their access to a
        sufficiently large customer base (customer foreclosure).
4.1.3.    Conglomerate effects
(105) In the majority of circumstances, conglomerate mergers do not lead to any
        competition problems but in certain specific cases there may be harm to
        competition. 77 The main concern in the context of conglomerate effects is that of
        foreclosure. 78 Conglomerate mergers may allow the merged entity to combine
72  Horizontal Merger Guidelines, paragraph 26.
73  Horizontal Merger Guidelines, paragraph 39.
74  Horizontal Merger Guidelines, paragraph 42.
75  Non-horizontal Merger Guidelines, paragraph 29.
76  Non-horizontal Merger Guidelines, paragraph 29.
77  Non-horizontal Merger Guidelines, paragraph 92.
78  Non-horizontal Merger Guidelines, paragraph 93.
                                                    19
 ---pagebreak---  ---pagebreak---  ---pagebreak--- (112) Therefore, the Commission considers that the Transaction does not give rise to
        serious doubts as to the compatibility with the internal market as regards the
        wholesale markets for call termination on Com Hem's and Tele2's fixed networks
        and this market will, therefore, no longer be discussed in this Decision.
(113) As regards the wholesale market for mobile call termination services, since each
        MNO's network constitutes a separate market for the provision of wholesale call
        termination, there is no horizontal overlap between the Parties’ activities on this
        market, as only Tele2 is active on a its own separate mobile network with a 100%
        market share over its network. However, the Transaction gives rise to vertically
        affected markets since Com Hem is a customer of Tele2 with regard to wholesale
        call termination services on mobile networks in its capacity as provider of fixed
        telephony and mobile telecommunications services.
(114) However, in Sweden the market for wholesale call termination on mobile
        networks is regulated ex-ante by the PTS. In its latest decision on call termination
        on mobile networks, PTS imposed price caps and non-discrimination obligations
        on both Tele2 ensuring that its call termination services are provided on a fair
        basis. 84
(115) Therefore, the Commission considers that the Transaction does not give rise to
        serious doubts as to the compatibility with the internal market as regards the
        wholesale market for mobile call termination services, on Tele2’s mobile
        network. Therefore, this market will no longer be discussed in this Decision.
(116) As regards the market for wholesale international roaming, the Commission notes
        that this market is subject to sector-specific EU regulation, which prevents mobile
        operators from refusing access to their network and from charging excessive
        termination fees. 85 Under the Roaming Regulation, MNOs must meet all
        reasonable requests for wholesale roaming access 86 and MNOs are bound by the
        price cap imposed by the Roaming Regulation on the wholesale prices that MNOs
        can charge to their roaming customers. Key obligations under the regulation
        include an obligation to meet all reasonable access requests, an obligation to
        publish a reference offer, caps on wholesale and retail charges (for calls, SMS
        messages and data services), and transparency and information requirements. The
        Roaming Regulation therefore effectively prevents MNOs from refusing access to
        their respective network and from charging excessive termination fees.
84 See PTS decision of 13 September 2016, Dnr: 16–9404, Analys av marknaden för mobil
   samtalsterminering (marknad 2) enligt 8 kap. 5 och 6 §§ (2003:389) om elektronisk kommunikation,
   page                   67,                 http://www.pts.se/globalassets/startpage/dokument/legala-
   dokument/beslut/2016/telefoni/mkd2-slutbeslut/slutlig_beslut-mobil-samtalsterminering-
   tele2270878_tmp.pdf.
85 Regulation (EU) No 531/2012 of the European Parliament and of the Council of 13 June 2012 on
   roaming on public mobile communications networks within the Union (OJ L 172, 30.6.2012, pp. 10–
   35 (the “roaming Regulation”); amended by Regulation (EU) No 2015/2120 of the European
   Parliament and the Council of 25 November 2015 laying down measures concerning open internet
   access and amending Directive 2002/22/EC on universal service and users’ rights relating to electronic
   communications networks and services and Regulation (EU) No 531/2012 on roaming on public
   mobile communications networks within the Union, OJ L 310, 26.11.2015, p. 1–18.
86 Article 3 Regulation (EU) No 531/2012 and Article 7 Regulation (EU) No 2015/2120.
                                                     22
 ---pagebreak---  ---pagebreak---         services to the consumer market in Sweden. Telenor Sweden provides voice and
        data services to both businesses and consumers, through a range of wireless, fixed
        and broadband technologies. Tre is the fourth largest MNO offering mobile
        telephony and mobile broadband to both businesses and consumers in Sweden.
(122) In the retail fixed internet market, the other main players are Bahnhof and
        Bredband2. Bahnhof was one of the country's first independent internet service
        providers ("ISP"). Bredband2 is an internet access provider that provides its
        services based on optical fibre technology. Both companies offer fixed broadband
        services to private and business customers and mobile services to business
        customers.
(123) Viasat operates a satellite Pay TV platform in Sweden and is part of the MTG
        group, primarily active as a retail TV distributor. Viasat is also active in the retail
        provision of fixed broadband services through open fibre networks.
(124) With respect to multiple play offers, at present Telia and Telenor are the main
        players, offering different bundles including all services. In particular they offer
        all types of fixed-only bundles and have recently launched quadruple play offers
        (including mobile services).
 4.4.   Assessment of horizontal effects
4.4.1. Retail market for the provision of mobile telecommunications services
4.4.1.1. Notifying Party’s view
(125) The Notifying Party submits that the Transaction would not give rise to any
        competitive concerns in relation to the retail market for mobile
        telecommunications services in Sweden for the following reasons. First, the
        increment brought about by the Transaction is minimal (less than [0-5]%).
        Second, Com Hem does not have a meaningful standalone presence on this
        market given that it sells mobile services only to business customers. Third, as
        suggested by diversion ratios, Com Hem is not a close competitor of Tele2.
        Fourth, the merged entity will face post-transaction strong competitive pressure
        from the other MNOs in the market.
4.4.1.2. Commission's assessment
(126) The Parties and their main competitors' market shares by number of subscribers
        and by value for the overall retail mobile market for the possible segmentation
        into private customers and business customers are illustrated in Table 5 and Table
        6 below. As shown below the increment brought about by the Transaction would
        be less than 1% under any of these possible market segmentations. 87 Such a low
        increment indicates that the Transaction is unlikely to affect the structure of the
        market.
87  Tele2 and Com Hem’s respective market positions would not significantly differ for any other relevant
    segmentations discussed in Section 3.4. (see Annex 7, Form CO).
                                                      24
 ---pagebreak---  ---pagebreak---          operator in the provision of retail mobile services. 89 In particular, business
         customers do not consider Com Hem as a viable competitor to the four MNOs in
         Sweden. 90 Finally, most of the respondents to the market investigation consider
         that the Transaction would not have a significant impact on the market for the
         provision of retail mobile telecommunications services in Sweden. 91
(129) Finally, with reference to potential coordinated effects, the Commission notes that
         post-Transaction the market structure in the retail mobile market would remain
         unchanged with the only exception related to the limited increment of Tele2's
         position in the business segment brought by Com Hem's position. The market
         leader Telia will have a market share significantly higher compared to the one of
         the merged entity and the other two main players Telenor and Tre would remain
         in the market with a significant market share, respectively [10-20]%
         and [10-20]% by subscribers. As a result, the Transaction would not bring about
         any significant changes (either by increasing market symmetry or by removing a
         potential disruptive player), which would facilitate coordination.
4.4.1.3. Conclusion
(130) In light of the above, the Commission considers that the Transaction does not
         raise serious doubts as to its compatibility with the internal market as regards the
         retail market for mobile telecommunications services in Sweden.
4.4.2. Retail market for the provision of fixed internet access services
4.4.2.1. Notifying Party’s view
(131) The Notifying Party submits that the Transaction would not give rise to any
         competitive concerns in relation to the retail market for fixed internet access
         services in Sweden for the following reasons. First the increment brought about
         by the Transaction is not significant (approximately [0-5]% in terms of
         subscribers). Second, the Parties do not consider themselves to be close
         competitors and maintain that the internet offerings of Com Hem and Tele2 are
         largely complementary. Third, several alternative operators would remain active
         in the market after the Transaction.
4.4.2.2. Commission's assessment
(132) The Parties and their main competitors' market shares by number of subscribers
         and by value for the overall retail fixed internet access market as well as for the
         possible segmentation into private customers and business customers are
         illustrated in Table 7 and Table 8 below. As shown below the combined market
         share of the merged entity would be around or slightly above 20% under any
89  See replies to Q1 – mobile operators of 4 September 2018, question 27. See also Q2 – fixed operators
    of 4 September 2018, question 27.
90 See replies to Q3 – business customers of 4 September 2018, question B.C.1.
91 See replies to Q1 – mobile operators of 4 September 2018, question 83.2. See also Q2 – fixed
    operators of 4 September 2018, question 85.2. See replies to Q3 – business customers of
    4 September 2018, question E.2.
                                                     26
 ---pagebreak---  ---pagebreak--- (134) The market shares figures would not differ significantly in the possible narrower
         market for the provision of fixed internet services to private and business
         customers. With respect to the segment of broadband services to private
         customers, the merged entity’s share would be [20-30]% by volume and [20-30]%
         by value, with the increment from Tele2 amounting to [0-5]% and [0-5]%
         respectively. With respect to the segment of broadband services to business
         customers, the merged entity’s share would be around [20-30]% by volume
         and [10-20]% by value. Telia will remain the clear leader with market shares
         above 30% in all segments while Telenor will be the third largest operator in the
         market, with a share by subscribers of [10-20]% in the private segment and of
         [5-10]% in the business one.
(135) Moreover, with regards to the competitive dynamics on the fixed internet market
         in Sweden, the Commission notes that according to the majority of respondents to
         the market investigation the level of price competition in the retail market for
         fixed internet services in Sweden (on the overall market as well as on the
         residential and business segments of it) is either high or very high pre-
         Transaction. 94
(136) The results of the market investigation also indicate that Tele2 and Com Hem are
         not close competitors for the provision of fixed internet access services in Sweden
         with Telia being the closest competitor to both Tele2 and Com Hem. 95 In
         particular, business customers consider Telia and Telenor's offering as closest
         competitor to Tele2 in terms of parameters such as brand and network quality in
         Sweden. 96 Finally, most of the respondents to the market investigation consider
         that the Transaction would not have a significant impact on the market for the
         provision of retail fixed internet access services in Sweden. 97
4.4.2.3. Conclusion
(137) In light of the above, the Commission considers that the Transaction does not
         raise serious doubts as to its compatibility with the internal market as regards the
         retail market for internet access services in Sweden.
4.4.3. Retail market for the provision of multiple play services
4.4.3.1. Notifying Party’s view
(138) The Notifying Party submits that the Transaction would not give rise to any
         competitive concerns in relation to the retail market for the provision of multiple
94  See replies to Q1 – mobile operators of 4 September 2018, question 40. See also Q2 – fixed operators
    of 4 September 2018, question 40.
95 See replies to Q1 – mobile operators of 4 September 2018, question 41. See also Q2 – fixed operators
    of 4 September 2018, question 41.
96 See replies to Q3 – business customers of 4 September 2018, question C.C.1.
97 See replies to Q1 – mobile operators of 4 September 2018, question 83.2. See also Q2 – fixed
    operators of 4 September 2018, question 85.2. See replies to Q3 – business customers of
    4 September 2018, question E.2. A fixed internet operator expressed some concerns on the future
    availability of dark fibre and on the incentive of Tele2, following the Transaction, to offer its dark
    fibre to operators competing with the merged entity. However, Tele2 holds less than [0-5]% in the
    segment of dark fibre and Com Hem is not active in it. Moreover, several suppliers of wholesale
    network services would remain available in the market, in particular: Telia (through Skanova),
    Trafikverket and Svenska Kraftnät, Vattenfall AB, Teracom and IP-Only Network AB.
                                                       28
 ---pagebreak---  ---pagebreak---          predominantly fixed player, the Commission has also considered the likelihood of
         each Party, absent the Transaction, becoming a significant player in the FMC
         segment 99 and the effect the Transaction might have on this potential competition
         between the Parties.
(144) In this respect, the Commission firstly notes that the FMC multiple play segment
         is nascent in Sweden and has come into existence in earnest only recently through
         the launch of quadruple play offers from Telia and Telenor. The total number of
         such subscriptions amounted to just 140 000 at the end of 2017. The Commission
         has examined, through the review of internal documents, the Parties' respective
         FMC capabilities and ambitions in the standalone scenario absent the Transaction.
(145) Com Hem has tried to secure an MVNO agreement with a view to couple their
         fixed services with a mobile component for a number of years. The Commission
         has reviewed the conditions and parameters set out in Com Hem's latest request
         for quote as well as the conditions in the single offer received by […] and has
         concluded that, […]. 100
(146) […]. In conclusion, absent the Transaction, Tele2's capabilities to offer a FMC
         product remain uncertain.
(147) Moreover, Tele2's internal documents include […] 101 […] 102 […]. The
         Commission considers this as at least an indication that the Transaction may
         increase competition in the FMC segment compared to the situation that would
         likely materialize absent the Transaction.
(148) With reference to potential coordinated effects, the Commission notes that post-
         Transaction the market structure in the multiple play markets, and possible sub-
         segments, will remain highly asymmetric. In an overall market including all
         subscriptions of all types of multiple play services, the market leader Telia will
         have a market share roughly twice that of the merged entity and roughly four
         times that of the third largest actor, Telenor. With particular regard to fixed-
         mobile multiple play services, if anything, the entry of a third player on this
         market would be likely to make any potential coordination more difficult
         compared to the situation absent the Transaction.
(149) Finally, it is also worth noting that, although Tre does not currently supply
         multiple play services it would still enjoy a significant presence in the retail
         mobile telecommunications services markets and thanks to the presence of open
         fibre networks and third party fixed network operators in Sweden it could
99  Com Hem by securing an MVNO contract with one of the MNOs active in the market and Tele2 either
    through organic growth by taking advantage of the open fibre networks that are prevalent in Sweden
    or, for example, through the acquisition of a smaller fixed network operator such as Bahnhof or
    Bredband2, or by reaching a wholesale access agreement with such operators.
100 Between 2015 and 2017, the average mobile data consumption per subscription in Sweden has
    increased by approximately 120% from 1881 Mbyte/subscription to 4137 Mbyte/subscription (source:
    PTS, http://statistik.pts.se/svensk-telekommarknad/tabeller/mobila-samtals-och-datatjaenster/tabell-15-
    mobila-datatjaenster/). Similarly, the average mobile data consumption in Sweden for all private Tele2
    customers has increased by […]% between January 2017 and August 2018 (see Reply to Question 4 of
    RFI 11).
101 See Tele2 Annex 5.4(i).5, p.128 and p.134 of the Form CO.
102 See RFI 11. Tele2 Annex 5.4(ii).54 and Tele2 Annex 5.4(ii).42.
                                                        30
 ---pagebreak---         potentially enter the multiple play markets based on wholesale fixed network
        access or partner with remaining fixed operators and could disrupt any possible
        coordination.
4.4.3.3. Conclusion
(150) In light of the above, the Commission considers that the Transaction does not
        raise serious doubts as to its compatibility with the internal market as regards any
        of the potential retail markets for multiple play services in Sweden.
 4.5.   Assessment of conglomerate effects
(151) Tele2's services in the market(s) for retail mobile telecommunications services
        and Com Hem's services in the markets for fixed telecommunications and TV
        services are complementary or at least closely related. Accordingly, the
        Commission has examined whether the Transaction would give rise to
        conglomerate effects by foreclosing competitors in the retail market for mobile
        telecommunications services, the retail market for fixed telephony services, the
        retail market for internet access services, the retail market for TV services and/or
        a potential market for multiple-play bundles.
(152) According to the Commission's Guidelines on the assessment of Non-horizontal
        Merger Guidelines, 103 conglomerate effects require (a) the ability to foreclose,
        (b) the incentives to foreclose and (c) the likelihood that a foreclosure strategy
        would have a significant detrimental effect on competition and harm consumers.
        In order to be taken into account, any conglomerate effect must be merger
        specific. In other words, the conglomerate effect must result from Tele2's
        acquisition of Com Hem.
4.5.1. Notifying Party's view
(153) The Notifying Party submits that the Transaction would not result in anti-
        competitive foreclosure of standalone service providers.
(154) First, the Notifying Party points to the Non-horizontal Merger Guidelines in
        which the Commission recognizes that conglomerate mergers do not normally
        lead to competition problems and can produce significant procompetitive benefits.
(155) Secondly, the development of FMC services in Sweden is at a nascent stage. The
        number of fixed mobile bundles is still very limited and significant demand for
        standalone services will remain. With specific regard to fixed Internet and TV,
        standalone subscriptions constitute the majority of subscriptions (more than 50%
        for broadband and around 75%, for TV). Consequently, even if the Transaction
        would increase FMC uptake in Sweden, it would not result in anti-competitive
        foreclosure of standalone service providers.
(156) Furthermore, the Parties’ combined shares in mobile services and fixed
        broadband services range between approximately 15–30%, i.e. at levels that do
        not confer significant market power. Consequently, according to the Notifying
        Party the combined entity will lack the market power to unduly leverage its
103 Non-horizontal Merger Guidelines, paragraph 91 onwards.
                                                     31
 ---pagebreak---        position from mobile services into fixed services or from fixed broadband
       services into mobile services.
(157) With specific regard to TV services, where the combined entity will hold approx.
       [50-60]% of TV subscriptions, the Notifying Party submits that this high market
       share does not result in market power in light of the recent developments and in
       particular the build-out of fibre:
       -      The rapid build out of fibre allows a majority of customers to subscribe to
              Pay TV services through IPTV from Com Hem, Telia, Telenor and Viasat.
              Since the overbuild between the fibre network and coax network is already
              in excess of 80% and likely to be higher with respect to MDUs, the threat
              from IPTV is real. The number of Pay TV subscriptions via fibre-based
              IPTV has nearly doubled from 2014 to 2017 and in this segment Com Hem
              holds only a [10-20]% share;
       -      The build out of fibre is transforming the competitive dynamics by
              allowing a greater choice of service providers. This has in turn resulted in
              high competitive pressure even from smaller market participants in the Pay
              TV market. Hence, the combined entity will lack any market power to
              leverage its position in Pay TV services into other services by raising
              standalone TV prices. Moreover, increasing competition from OTT
              services further constrains the pricing of all Pay TV distributors as it allows
              customers to completely bypass traditional Pay TV distributors’ services, in
              particular for Premium TV.
(158) The Notifying Party further submits that the Swedish telecommunications market
       is characterized by low switching costs for both fixed and mobile services.
(159) With regard to the mobile segment, the Notifying Party submits that Sweden
       boasts a larger share of corporate paid mobile subscriptions compared to other
       European countries (almost one in four in 2016). Corporate customers would in
       principle not be potential FMC customers and therefore mobile only providers
       will have continued opportunities to compete for customers even if FMC were to
       pick up in the Swedish market.
(160) With respect to the FMC-addressable mobile segment, i.e. post-paid subscriptions
       for private customers, this would account for approx. half of the Swedish market
       and consequently there would be ample room for a mobile only player.
       Furthermore, also in this segment customers are currently purchasing mobile
       separate from fixed and many customers are expected to continuously prefer
       standalone services.
(161) The Notifying Party concludes that the Transaction is likely to increase rollout of
       FMC services in Sweden, and that this will benefit consumers. However, there is
       nothing to suggest that standalone suppliers of fixed and mobile services would
       risk being marginalised following the Transaction.
4.5.2. Commission's assessment
(162) The Commission has assessed the likely impact of the Transaction on the merged
       entity's ability and incentive to engage in practices related to multiple play
       bundles which would likely result in anticompetitive foreclosure of competitors in
                                                 32
 ---pagebreak---        the retail market for mobile telecommunications services, in the retail market for
       fixed telephony services, in the retail market for internet access services, in the
       retail market for TV services and/or in a potential market for multiple-play
       bundles with mobile and fixed components.
(163) Some respondents to the market investigation have expressed concerns with
       respect to the possibility for the merged entity to foreclose standalone operators
       by offering multiple play bundles. According to these respondents, the
       combination of Tele2 and Com Hem would allow the merged entity to offer FMC
       services on terms which others would find challenging to match. One respondent
       considers that the merged entity would be able to enter into exclusivity
       arrangements with TV channel/content providers, which would seriously weaken
       the competitors' ability to compete in Sweden.
(164) Another company submitted that the Transaction will give Tele2 access to an
       extensive fixed infrastructure network in Sweden covering more than 50% of the
       Swedish households via Com Hem’s cable/fibre footprint and its DTT platform
       Boxer. 104 Tele2’s stated rationale for the merger would be to create a leading
       integrated operator in Sweden by leveraging Com Hem’s strong presence in
       residential fixed-line and cross-selling services to the respective customer bases.
       The merged entity will have the ability and the incentive (i) to offer fixed-mobile
       bundles in which the mobile component is discounted and subsidised by the fixed
       component, thus inciting customers to migrate to converged fixed/mobile
       offerings, and (ii), even where there is no formal bundling, to cross-sell its mobile
       offerings to Com Hem’s fixed line customers. The merged entity's strategy could
       be particularly successful for MDU customers, because they would be locked-in
       by virtue of long term contracts.
(165) The Commission has assessed whether the merged entity would have the ability
       and incentive to use its market power in one market to foreclose competitors in
       another market by bundling products after the Transaction.
4.5.3. Ability to foreclose
(166) In order to have the ability to foreclose rivals, the merged entity must have a
       significant degree of market power in at least one of the markets concerned. That
       is, at least one of the Parties' products must be viewed by many customers as
       particularly important and there must be few relevant alternatives for that
       product. 105
(167) With respect to the market for retail mobile telecommunications services in
       Sweden, the merged entity's market share will be below 30%. Moreover, there are
       at least two significant competitors with a comparable market position (Telia and
       Telenor) and a third MNO with a 15% market share. The Commission is therefore
       of the view that based on its position in the market for retail mobile
       telecommunications services in Sweden, it is unlikely that after the Transaction
       the merged entity will have the ability to leverage its position in the market for
       retail mobile telecommunications services into the retail market for fixed
       telephony services, the retail market for internet access services, the retail market
104 Submission of 30.7.2018, ID313.
105 Non-horizontal Merger Guidelines, paragraph 99.
                                                    33
 ---pagebreak---          for TV and/or in a potential market for multiple-play bundles with mobile and
         fixed components.
(168) Similarly, the merged entity's estimated market shares will not exceed 30%
         neither in the retail market for fixed telephony services nor in the retail market for
         internet access services.
(169) The only potential market where Com Hem has a sizable market share is the
         market for retail supply of TV services, where it had a market share of [50-60]%
         in terms of subscriptions in 2017. 106 However, in terms of revenues Com Hem's
         market share is more limited, at [30-40]% in 2016. 107
(170) In this regards, first it appears that customers in Sweden have relevant alternatives
         in the TV market: Telia and Telenor have both a market share in TV subscriptions
         higher than 15%. MTG/Viasat has to be considered as well, taking into account
         (i) its market share of [5-10]% in subscriptions and [10-20]% in revenues, and
         (ii) the fact that it is an integrated TV player active both as TV (satellite) retail
         distributor and as TV channels provider.
(171) Moreover, Com Hem's market share is declining (it was [50-60]% in 2015 and
         [50-60]% in 2016). This is partially due to the fact that Com Hem distributes its
         TV services mainly through Digital Terrestrial Television – DTT, that is
         declining, and through its coax network, that is submitted to the increasing
         competitive pressure of IPTV via fibre, where Com Hem's presence is more
         limited, with a [10-20]% market share (Telia is by far the leader with [50-60]%
         and Telenor has [10-20]%). In this last respect, in 2017, about 70% of Swedish
         households had access to fibre (75% in urban areas). 108 According to Com Hem's
         estimation, more than […] of its coax network is already overbuilt by fibre. 109
         Total subscriptions for IPTV via fibre passed from 596 000 in 2014 (11.4% of the
         market) to more than one million in 2017 (19.5% of the market).
(172) The situation does not change substantially focusing on the MDU segment. In this
         respect, Com Hem's market share, although slightly higher, is declining (from
         [50 - 60]% in 2014 to [50 - 60]% in 2017, first half), confronted with the rise of
         IPTV via fibre: 377 000 total subscriptions in 2014 (13% of the total market),
         520 000 in 2017 first half (17.2% of the market). Com Hem has a limited share in
         IPTV for MDU customers ([10 - 20]%), Telia again having a much higher share
         of [60 - 70]% . As for the alleged advantage enjoyed by Com Hem because of the
         long-term contracts concluded with MDU customers, actually about […] of Com
         Hem MDU subscribers are not bound by any binding period and may terminate
         their contracts with […] notice. As for the remaining […], […]. 110
106 The Notifying Party maintains that this share overestimates its position due to double counting, as it
    includes both analogue and digital subscriptions, whereas especially in MDU there can be overlaps.
    The adjusted market share would be 48.1% (Form CO, annex 7).
107 Form CO, annex 7. Except where otherwise specified, the market data mentioned in the following
    paragraphs are from annex 7 of the Form CO.
108 Data from PTS, mobiltäcknings- och bredbandskartläggning 2017, p. 27 and from the Final Report
    Broadband Coverage in Europe 2017, a study prepared for the European Commission, available
    at: https://ec.europa.eu/digital-single-market/en/news/study-broadband-coverage-europe-2017.
109 Tele2 submission of 12 September 2018, page 5.
110 Tele2 submission of 12 September 2018, page 5.
                                                        34
 ---pagebreak--- (173) Furthermore, the Commission notes that the Swedish FMC market is still at an
         early stage and most subscriptions in all services are still sold standalone: notably
         in 2017, according to PTS data, only 25% of TV subscriptions were sold bundled
         with one or more other telecommunications services. Only (i) 2% of mobile
         subscriptions, (ii) 8% of broadband subscriptions and (iii) 27% of fixed telephony
         subscriptions were sold in a bundle including TV services. 111 Although, as
         pointed out by some respondents to the market investigation 112, the Transaction
         may somewhat speed up the uptake of fixed-mobile bundles and notably of
         bundles including TV, it appears that providers of standalone services (or of
         bundled services excluding TV) would still have a sizeable share of the market at
         their disposal. It is in particular worth noting that currently the number of mobile
         subscriptions sold in bundle with TV services is marginal 113.
(174) As mentioned above, mobile services are mainly sold stand-alone in Sweden.
         Even if the merged entity were to start offering fixed-mobile bundles at
         discounted prices compared to the price of the standalone components, the
         possible increase in fixed-mobile bundles in the next years does not seem to allow
         a radical and rapid change of this situation to such an extent as to marginalise
         providers of standalone services (or of bundled services excluding TV) reducing
         their ability and incentive to compete. Moreover, this is all the more true when
         considering the limited interaction between mobile services and TV services. In
         this respect one participant to the market investigation pointed to the upcoming
         developments of the mobile communication services and the increasing
         possibility to use mobile handsets for digital connectivity as well as for voice and
         messaging. 114 Moreover, bundles including TV services are less relevant for
         business consumers, who represent a considerable portion of the mobile market in
         Sweden. In light of that, also in a scenario of increasing relevance of FMC offers
         in Sweden, it is unlikely that mobile-only operators would be marginalised.
(175) Finally, with respect to the alleged ability of the merged entity to enter into
         exclusivity arrangements with TV channel/content providers, which would
         weaken the competitors' ability to compete in Sweden, at present Tele2 is not
         active in the TV sector and as a consequence the Transaction would not directly
         increase the presence of the merged entity in the markets for the acquisition of TV
         content and/or for the acquisition of TV channels. Moreover, considering the
         limited interaction between mobile telecommunications and TV services in
         Sweden, it is unlikely that any possible development of FMC offers would
         substantially increase the market power of the merged entity as to obtain
         exclusive arrangements with the most important TV rights holders/channel
         providers.
111 PTS statistics portal, comparison of multiple play subscriptions (Table 30) with subscriptions for fixed
    call services (table 6), subscriptions for mobile services (Table 11), subscriptions for fixed broadband
    (Table 23), subscriptions for TV services (Table 28): http://statistik.pts.se/en/the-swedish-
    telecommunications-market/tables/.
112 See replies to Q1 – mobile operators of 4 September 2018, questions 35 and 35.1.
113 Most respondents to the market investigation have confirmed that in order to compete effectively on
    the Swedish market for retail supply of mobile telecommunications services it is not indispensable to
    offer any additional services (with only two respondents arguing that this could change in the next
    2-3 years) (See replies to Q1 – mobile operators of 4 September 2018, questions 35 and 35.1).
114 Replies to Q1 – mobile operators of 4 September 2018, question 35.1.
                                                         35
 ---pagebreak--- (176) Based on the above, considering the competitive scenario and the current
         development of the FMC in Sweden, the Commission considers that customers in
         Sweden will have relevant alternatives in the TV market and multiple play
         products including TV services could be easily substituted by the stand-alone
         components. Therefore, the merged entity will not have the ability to foreclose
         competitors in the adjacent markets.
4.5.4. Incentive to foreclose
(177) The Commission has also assessed whether the merged entity will have an
         incentive to engage in bundling of retail supply of mobile telecommunications
         services and fixed telecommunications, fixed Internet access and TV services, to
         foreclose rivals from effectively competing for customers who purchase both
         fixed and mobile services.
(178) After the Transaction, the merged entity might consider introducing a price-
         discrimination strategy consisting of somewhat increasing the price of the
         standalone fixed products and/or to lower the price of fixed-mobile bundles. 115 As
         a result of such a price discrimination strategy, customers who buy fixed and
         mobile products separately could incur an increase in their total cost of ownership
         while customers who opt into the bundle could be better-off.
(179) As regards the potential increase in the price of standalone fixed products, the
         Commission considers that the incentive to do so for the merged entity would be
         mitigated by the existence of alternative fixed offers by Telia, Telenor and other
         relevant fixed operators (see table 4 at paragraph (119)). Moreover, it is doubtful
         that this strategy could be viable, considering that most subscriptions in all
         services, including fixed ones, are still sold standalone.
(180) As regards the sale of bundles at a discount, the Commission considers this to be
         in the interest of consumers and unlikely to lead to the marginalisation of mobile-
         only players who will continue to compete to sell mobile services to customers
         who purchase both fixed and mobile services (as well as to customers who
         purchase exclusively mobile services). In this respect, the vast majority of
         consumers in Sweden still subscribes separately to fixed and mobile products. 116
         The incentives are further mitigated by the fact that the merged entity will have a
         fixed cable infrastructure that covers only about 60% of the Swedish households
         and hence cannot rely on this infrastructure to offer fixed and mobile bundles in
         all parts of Sweden.
4.5.5. Effects on competition
(181) The Commission has also assessed the effects of a possible foreclosure strategy
         on competition, and thus on consumers.
(182) As for the possible impact on mobile-only operators, it has already been
         mentioned that only relatively few customers currently use fixed-mobile bundles.
115 Commission decision of 3 August 2016 in case M.7978 – Vodafone/Liberty Global/Dutch JV,
    recital 625.
116 In light of this the Commission also considers that the merged entity will have no incentive to engage
    in pure bundling, that is, to exclusively offer fixed-mobile bundles.
                                                          36
 ---pagebreak---        In particular, in 2017 fixed/mobile subscriptions represented less than 4% of the
       total mobile subscriptions. 117 This implies that a significant demand for mobile-
       only products will remain on the market, also in case of a discount strategy by the
       merged entity and an increasing development of FMC offers, in light of the
       elements mentioned above, at paragraphs (173) and (180).
(183) The Transaction might accelerate the trend towards fixed-mobile convergence in
       Sweden. By combining a strong fixed offer with a strong mobile offer, the
       Transaction could somewhat speed up the uptake of FMC offers. However, the
       Commission considers that even where customers would be converted more
       rapidly into fixed-mobile bundles, this does not in itself undermine the ability of
       mobile-only competitors to effectively compete for customers. Finally, it is also
       worth noting that, as discussed in paragraph (149) above, mobile-only operators
       could potentially enter the multiple play markets based on wholesale fixed
       network access or partner with remaining fixed operators.
(184) In addition, the Commission considers that the Transaction generates a third, fully
       integrated player owning both a fixed and a mobile network. According to the
       Parties' internal documents, a major rationale of the Transaction would be to
       increase the Parties' ability to market fixed-mobile bundles by combining Tele2's
       mobile assets with Com Hem's fixed assets. As a result, the Commission
       considers that the Transaction has the potential to stimulate the Notifying Parties'
       ability to compete in fixed-mobile bundles with Telia and Telenor.
4.5.6. Conclusion on conglomerate effects
(185) Based on the above considerations, the Commission is of the view that the
       Transaction does not give rise to serious doubts as to its compatibility with the
       internal market in relation to anti-competitive conglomerate effects.
5.     CONCLUSION
(186) For the above reasons, the European Commission has decided not to oppose the
       notified operation and to declare it compatible with the internal market and with
       the EEA Agreement. This Decision is adopted in application of Article 6(1)(b) of
       the Merger Regulation and Article 57 of the EEA Agreement.
                                                                  For the Commission
                                                                  (Signed)
                                                                  Margrethe VESTAGER
                                                                  Member of the Commission
117 PTS statistics portal, comparison of multiple play subscriptions (Table 30) with subscriptions for
    mobile services (Table 11): http://statistik.pts.se/en/the-swedish-telecommunications-market/tables/.
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