CELEX: 32014M7360
Language: en
Date: 2014-10-09 00:00:00
Title: Commission Decision of 09/10/2014 declaring a concentration to be compatible with the common market (Case No COMP/M.7360 - 21st CENTURY FOX / APOLLO / JV) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

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Brussels, 09.10.2014
C(2014) 7472 final

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|To the notifying parties                                               |                                                                       |

Dear Sir/Madam,

Subject:    Case M.7360 - 21st Century Fox/ Apollo/ JV
Commission decision pursuant to Article 6(1)(b) of Council Regulation No 139/2004[1]

    1) On 4 September 2014, the European Commission received a notification of a proposed concentration pursuant  to  Article  4  of  the  Merger
       Regulation by which Twenty-First Century Fox, INC (‘21st Century Fox’, United States of America)  and  Apollo  Management,  LP  (‘Apollo’,
       United States of America) acquire within the meaning of Article 3(1)(b) and 3(4) of the Merger Regulation joint control of the whole of  a
       joint venture (the ‘JV’), by way of contribution to the JV of their respective businesses in the production  and  distribution  of  audio-
       visual content, namely the Shine Group (‘Shine’, United Kingdom) of 21st Century Fox, and Endemol Holding BV (‘Endemol’, the  Netherlands)
       as well as CORE Media Group (‘CORE Media’, United States of America) of Apollo.

    2) 21st Century Fox and Apollo are collectively referred to as ‘Notifying Parties’. 21st Century Fox, Apollo, Shine, Endemol and  CORE  Media
       are collectively referred to as ‘Parties’.

       THE PARTIES

    3) 21st Century Fox is a media and entertainment company with operations all over the world in both the production and  the  distribution  of
       film and TV content. It controls Shine, a group of production companies, which is active in the  production  and  distribution  of  audio-
       visual content in 12 countries. Shine also distributes a catalogue of pre-produced  TV  content  and  formats  to  TV  channel  suppliers.
       Moreover, 21st Century Fox controls Fox International Channels which operates TV channels including the Fox Channel, National  Geographic,
       Baby TV, and STAR channels. 21st Century Fox will retain control over Fox International Channels.

    4) Apollo manages investment funds which invest in companies involved in various businesses around the world. Funds managed by Apollo control
       Endemol and CORE Media. Endemol produces and distributes audio-visual content for broadcasting and to other platforms. It also distributes
       a catalogue of pre-produced TV content to TV channel suppliers. CORE Media consists of SHARP Entertainment, which produces and distributes
       TV content in the U.S., and 19 Entertainment, which is active in TV production, recording and artist management. In the EEA it  is  active
       in the licensing of audio-visual TV content.

       THE OPERATION

    5) On 25 July 2014, 21st Century Fox and Apollo entered into an agreement with the purpose of combining their respective  businesses  in  the
       production and distribution of audio-visual content and constitute the JV.

    6) 21st Century Fox and Apollo will each hold […]. The agreement envisages that 21st Century Fox and Apollo will each  have  the  ability  to
       appoint […] voting directors of the Board of Directors, and that approval by at least […] voting directors will  be  required  for,  inter
       alia, […]. Both 21st Century Fox and Apollo will have the ability to […]. 21st Century Fox and Apollo will thus acquire joint control over
       the JV.

    7) The agreement envisages that the JV will have its own  management  dedicated  to  the  day-to-day  operations  and  access  to  sufficient
       resources. It will conduct the businesses previously conducted by each of Endemol, CORE Media  and  Shine,  which  involves  operating  an
       integrated, standalone business beyond one specific function for 21st Century Fox and Apollo. The JV will be selling to companies  outside
       to its parents’ groups and it will operate on a lasting basis. The JV will thus be full-function.

    8) Therefore, the proposed transaction constitutes a concentration within the meaning of Article 3(1)(b) and 3(4) of the Merger Regulation.

       EU DIMENSION

    9) The undertakings concerned have a combined aggregate world-wide turnover of more than EUR 5 000 million[2] (21st Century Fox:  EUR  21 682
       million[3], Apollo: EUR […][4]). Each of them has an EU-wide turnover in excess of EUR 250 million (21st Century Fox: EUR […], Apollo: EUR
       […]), but they do not achieve more than two-thirds of its aggregate EU-wide turnover within one and the same Member  State.  The  notified
       operation therefore has an EU dimension pursuant to Article 1(2) of the Merger Regulation.

       INTRODUCTION: THE TV VALUE CHAIN AND THE PARTIES’ ACTIVITIES

   10) Audio-visual TV content (hereinafter, also ‘TV content’) comprises entertainment products (films,  sports,  series,  shows,  live  events,
       documentaries, etc.) that can be broadcasted via TV.[5] In its past  decisional  practice,  the  Commission  has  distinguished  different
       activities in the value chain for TV-related content, namely: (1) the production of TV content; (2) the licensing of  broadcasting  rights
       relating to TV content; (3) the wholesale supply of TV channels; and (4) the retail supply of TV services to end customers.[6]

   11) The proposed transaction mostly relates to activities (1) and (2) identified above, since the  activities  contributed  by  the  Notifying
       Parties to the JV relate to the production of TV content and the licensing of broadcasting rights relating to TV content rights.[7]

1 Production of TV content

   12) This part of the value chain concerns the production of new TV content. TV production companies produce TV content either (i) for internal
       use on their own TV channels or video-on-demand (‘VOD’) services if they are vertically integrated in the wholesale supply of TV  channels
       and/or in the retail of TV services (i.e., captive TV production), or (ii) for supply  to  third-party  customers  (i.e.,  non-captive  TV
       production). Third-party customers are typically (i) TV channel suppliers, which  then  incorporate  them  into  linear  TV  channels;  or
       (ii) content platform operators, which then retail the TV content to end users on a non-linear basis (i.e., Pay-Per-View (‘PPV’)  or  VOD,
       including non-traditional platforms, i.e. Over-The-Top (‘OTT’) platforms).

   13) In most cases, TV production companies produce TV content tailored to the needs of their customers on the basis of original TV  formats[8]
       that they develop themselves or that they acquire from right holders (so-called ‘commissioned production’). However, in some instances, TV
       production companies are hired by TV channel suppliers or content platform operators to simply provide the technical production means  and
       deliver the finished programme based on a TV format owned or acquired by the hiring company (so-called ‘production-for-hire’ or ‘supply of
       TV production services’).

   14) The production costs are most often borne entirely or almost entirely by the TV  channel  suppliers  or  content  platform  operators.  As
       regards ownership of the various rights relating to the TV content (e.g., primary TV broadcast rights, catch up, VOD, etc.), the extent to
       which those rights are retained by the production company – as opposed to the acquirer of TV content – may  vary  based  on  a  number  of
       factors, such as national regulation in the country concerned, the type of  broadcasting,  the  outcome  of  the  commercial  negotiations
       between  the  parties,  etc.  Producers  and/or  the  acquirers  of  TV  content  may  then  achieve   secondary   revenues   by   further
       licensing/distributing the TV content or the TV format to third parties.

   15) In light of the above, the supply-side of this market comprises TV production companies, while the  demand-side  comprises  third  parties
       that commission the production of TV content or hire TV production services, typically TV channel suppliers or content platform operators.

16) As regards the supply-side of the market:

 a. Shine produces TV content for customers based in several EEA countries;

 b. Endemol, likewise, produces TV content for customers based in several EEA  countries; and

 c. CORE Media does not produce TV content in the EEA.

   17) As regards the demand-side of the market only 21st Century Fox is a customer of these services in the EEA.

2 Licensing of broadcasting rights relating to TV content

   18) This part of the value chain concerns the licensing of broadcasting rights relating to pre-existing TV content, i.e. TV content  that  has
       been previously produced and is subsequently made available ‘off-the-shelf’ by the rights holder (so-called ‘pre-produced’ TV content).

   19) The broadcasting rights relating to TV content can belong to either (or a combination  of)  the  rights  holder  to  the  TV  format,  the
       production company that produced the TV content or the company that commissioned the production  of  the  TV  content.  In  addition,  the
       broadcasting rights can belong to a third-party distributor, to which they were licensed by the original owner, along with a right to sub-
       license.

   20) All of these categories of rights owners, which constitute the supply-side of the market, license these  rights  to  content  aggregators,
       which constitute the demand-side of the market, namely: (i) TV channel suppliers or (ii) content platform operators.

21) As regards the supply-side of the market:

   22) Shine is active in the licensing of broadcasting rights relating to TV content across the EEA;

   23) Endemol, likewise, is active in the licensing of broadcasting rights relating to TV content across the EEA; and

   24) CORE Media has limited activities in relation to the licensing of individual TV content in EEA.

   25) As regards the demand-side of the market only 21st Century Fox acquires licences of broadcasting rights relating to TV content in the EEA.

3 Wholesale supply of TV channels

   26) TV channel suppliers use the TV content that they have acquired or produced in-house in order to package it into linear  TV  channels.  TV
       channel suppliers (which constitute the supply-side of the market) then license their channels to providers of retail TV  services  (which
       constitute the demand-side of the market) for supply to end users. Some TV channels suppliers are vertically integrated as they  are  also
       active as a retail TV operator. Other TV channel suppliers are not vertically integrated and rely on retail  TV  operators  to  distribute
       their channels.

   27) Only 21st Century Fox is active at this part of the value chain from both the supply-side and demand-side.

4 Retail supply of TV content to end users

   28) At retail level, TV services are supplied to end users by content platform operators (i) in packages of linear  TV  channels  (which  they
       have either acquired or produced themselves) and (ii) via non-linear TV services (i.e. PPV, VOD and OTT). TV content can be  delivered  to
       end users through a number of technical means.[9]

29) Only 21st Century Fox is active in the retail supply of TV content to end users.

5 Conclusions

   30) The proposed transaction gives rise to horizontal overlaps and affected markets with respect to  production  of  TV  content  and  to  the
       licensing of broadcasting rights related to TV content.[10]

   31) There are also vertical relationships between the upstream activities of Shine, Endemol and CORE Media, and the downstream  activities  of
       21st Century Fox as a TV channel supplier (Fox International Channels) and as a retailer of TV services, at least  until  the  closing  of
       BSkyB’s proposed acquisition of Sky Italia and Sky Germany.[11] However, in view of the Parties' market shares  the  proposed  transaction
       gives rise to affected markets only with regard to the retail supply of TV services to end customers.

   32) Therefore this decision will only focus: (1) the production of TV content; (2)  the  licensing  of  broadcasting  rights  relating  to  TV
       content; and (3) the retail supply of TV services to end customers. .

       RELEVANT MARKETS

1 Production and licensing of audio-visual content

1 Product market definition

1 Models for acquisition of TV content

   33) TV channel suppliers and content platform operators, which acquire TV content, generally have  a  choice  between  (i)  commissioning  the
       production of new tailor-made content, either from a third party production company  or  from  their  in-house  production  arm,  or  (ii)
       acquiring broadcasting rights for pre-produced content (sometimes referred to as ‘off-the-shelf’ or ‘tape sales’).

   34) The Notifying Parties claim that these models for acquisition of TV content are substitutable and should be considered as part of the same
       relevant market. This is because when deciding how to allocate budget and which TV content to acquire all the options would  represent  an
       equal alternative.

   35) The Notifying Parties also claim that in-house production constitutes a constraint for producers of TV content  and  should  be  therefore
       included in the relevant market. Moreover, from the supply side perspective it would be common for the same production house to offer  all
       types of production options.

   36) In past decisions the Commission has considered separately (i) the market for the production of non-captive TV content and (ii) the market
       for licensing/acquisition of rights for TV content.[12] This segmentation has proved to be relevant for product market definition purposes
       also in more recent investigations,[13] where the Commission has considered the markets for commissioned  production  of  TV  content  and
       licencing of broadcasting rights of pre-produced content. The Commission has also considered that in-house production of TV content, which
       is not available in the market, should be excluded from the relevant market for the production of TV content.[14]

   37) The results of the market investigation in the present case clearly indicated  that,  while  several  TV  channel  suppliers  and  content
       platform operators do have in-house or captive production capacity, that is not an option for all of them. Moreover, TV channel  suppliers
       and content platform operators, which currently are not active in the in-house production of audio-visual TV content, cannot start  to  do
       so within a short timeframe and without incurring significant additional costs.[15] Substitution between external and in-house  production
       can also be limited by lack of capacity or by the fact that many times it is not possible to acquire the rights to a TV format  separately
       from the production services.[16] Therefore, consistently with its precedents, the Commission considers that the relevant market  for  the
       assessment of the present case should be limited to the non-captive production of audio-visual TV content.

   38) According to the majority of both TV channel suppliers and production companies, licensing of pre-produced content is less  expensive  for
       the TV channel suppliers and content platform operators than the commissioned production of new content. Some  customers,  however,  point
       out that, while this is true in general, the costs also vary depending on type of content.  In  any  event,  the  results  of  the  market
       investigation revealed that a majority of the TV channel suppliers would not substitute commissioned TV with pre-produced content  in  the
       event of a price increase in commissioned TV content. Some of the reasons for choosing  commissioned  TV  over  pre-produced  content  put
       forward by the TV channel suppliers were: quality of content, control of the content and public service obligations. Since the TV  channel
       suppliers' and content platform operators' choice of sourcing model is not only driven by costs but also by the need to offer their target
       audience a given mix of TV content, the sourcing models tend to be complementary rather than substitutes.[17]

   39) The Commission also examined whether ‘full’ commissioned production of TV content (i.e.  production  services  including  the  format  and
       production for hire services (i.e. production services on the basis of a format which is acquired  separately)  could  be  considered  two
       different market segments with the commissioned production of TV content. In this regard, the results of the  market  investigation  were,
       however, inconclusive.

   40) Based on the results of the market investigation in the case at hand, the Commission concludes that the production of TV content  and  the
       licensing of broadcasting rights for TV content appear to belong to separate relevant product markets. However, the  Commission  considers
       that the question whether the market for the production of TV content is to be further segmented between  'full'  commissioned  production
       and hiring of production services can be left open because the proposed transaction does not raise serious doubts as to its  compatibility
       with the internal market regardless of the exact product market definition applied.

2 Type of content

   41) The Parties further submit that it would be appropriate to define a single market for the production and supply of audio-visual TV content
       including all types of content, i.e. sports, movies and other TV content, and also that no distinction should be made between scripted and
       non-scripted content.[18]

   42) In its past decisional practice regarding the licensing of broadcasting rights for TV content,  the  Commission  has  identified  separate
       markets for (i) films, (ii) sports and (iii) other TV content.[19]

   43) The results market investigation in the case at hand confirm that a distinction could be made between films, sports and other  TV  content
       for the licensing of TV broadcasting rights, and, similarly, for the production of TV content. In particular, the overwhelming majority of
       TV channel suppliers and producers said that the cost of production and acquisition tend  to  vary  significantly  between  films,  sports
       events and other TV content (with sports content and premium films being significantly more expensive). Films, sports and other TV content
       do not appear to be substitutable, as the focus of the channel and the preferences of the target audience play a very  important  role  in
       the choice of TV content, while cost is only one of the relevant factors. Public service TV channel suppliers also pointed  at  regulatory
       constraints on their ability to substitute between different types of content.[20]

   44) The market investigation was not conclusive as regards potential further distinctions of other TV content based on content type,  such  as
       between scripted and non-scripted content. In any event, the Commission considers that the question whether production  and  licensing  of
       audio-visual TV content are to be segmented based on content type can be left open as the proposed transaction  would  not  give  rise  to
       serious doubts as to its compatibility with the internal market under either scenario.

3 Exhibition window

   45) In its past decisional practice regarding the licensing of broadcasting rights for TV content (including for ‘other’  non-film,  non-sport
       TV content, which is the relevant type of content for the purposes of the assessment of the  proposed  transaction),  the  Commission  has
       divided the market for the licensing of broadcasting rights by exhibition window  (i.e.,  subscription  VOD  (‘SVOD’),  transactional  VOD
       (‘TVOD’), PPV, first Pay TV window, second Pay TV window, and Free To Air ('FTA')).[21]

   46) In a recent case,[22] however, the Commission found that, whilst this distinction corresponds to  market  practice  in  the  licensing  of
       broadcasting rights for the pre-produced audio-visual content, it is less relevant in relation to the market for the production of such TV
       content. It therefore concluded that the market for the production of TV content other than film and sports does not necessarily  need  to
       be segmented by exhibition window. As regards the market for the licensing of broadcasting right for general entertainment TV content, the
       Commission found that, once the relevant TV content is produced, the licensor is typically free to decide to whom to license such  content
       and for what exhibition window and may actually license the same content for different exhibition windows  in  different  territories  (or
       even in the same territory). However the Commission ultimately left the question open.

   47) In the present case, the market investigation did not provide any indication as to the need to depart from the market definition  in  this
       recent precedent.

2 Geographic market definition

   48) As regards geographic market definition, consistently with  the  Commission’s  precedents,[23]  the  Notifying  Parties  submit  that  the
       geographic scope of the markets for the supply of TV content would be national or comprise linguistically homogeneous areas.

   49) On the basis of the results of the market investigation, the Commission confirms the precedents. According to the replies  to  the  market
       investigation, the geographic scope of the contracts for the production/commissioning and for the licensing/acquisition of  TV  programmes
       varies depending on the geographic area covered by the TV channel, and is in  general  national  or  corresponding  to  a  given  language
       area.[24]

   50) In any event, the Commission considers that the exact scope of the relevant geographic market can be left open as the proposed transaction
       does not raise serious doubts as to its compatibility with the internal market regardless of the exact geographic market definition.

2 Retail supply of TV services

1 Product market definition

   51) The Notifying Parties submit that the relevant product market for the assessment of the vertical relationship between  the  activities  of
       the JV and 21st Century Fox would be the broad market for the acquisition of individual TV content, including all the universe of possible
       buyers of TV content.

   52) In its past decisions the Commissions has consistently considered the retail supply of TV services to end customers as a  separate  market
       segment which is downstream with respect to the production and licencing of TV content. Within the  retail  supply  of  TV  services,  the
       Commission in past decisions has distinguished between FTA TV services, mainly  financed  by  advertising,  and  Pay-TV  services,  mainly
       financed by subscription fees.[25] It has also distinguished between linear and non-linear TV services.[26]  With  regard  to  a  possible
       further segmentation of the market on the basis of the type of transmission infrastructure (e.g., cable, satellite,  digital  terrestrial,
       etc.), the Commission looked into this possibility in previous cases, but it did not deem it necessary to proceed to any such segmentation
       for the assessment of those cases.[27]

   53) The Commission considers that in the present case there is no need to conclude as regard the relevant product market for the retail supply
       of TV services to end customers as the proposed transaction does not raise serious doubts as to its compatibility with the internal market
       regardless of the exact product market definition.

2 Geographic market definition

   54) As regards geographic market definition, consistently with  the  Commission’s  precedents,[28]  the  Notifying  Parties  submit  that  the
       geographic scope of the downstream market would be national or comprise linguistically homogeneous areas.

   55) In the present case, the Commission considers that the exact scope of the relevant geographic market can be  left  open  as  the  proposed
       transaction does not raise serious doubts as to its compatibility with the internal market  regardless  of  the  exact  geographic  market
       definition.

       COMPETITIVE ASSESSMENT

1 Horizontal assessment

   56) The proposed transaction gives rise to horizontal overlaps between the activities of Shine, Endemol and CORE  Media  in  several  possible
       market segments for the production and licensing of TV content in several national markets. However, the Parties’ combined  market  shares
       remain well below 20 % in all possible relevant markets, with two exceptions: (i) the market for  'full'  commissioned  production  of  TV
       content (excluding captive supply) in Sweden and (ii) the market for 'full' commissioned  production  of  TV  content  (excluding  captive
       supply) in Norway.

   57) On the basis of the data provided by the Notifying Parties, in 2013  the  Parties’  combined  market  shares  in  the  market  for  'full'
       commissioned production of TV content in Sweden amounted to [40-50] % by revenues, with an increment of [0-5] % brought  by  Endemol.  The
       remaining players with market shares above 5 % would be Zodiak Media ([10-20] %), Nice Entertainment Group ([10-20] %), Nordisk  TV  ([10-
       20] %), and ITV Studios Nordic ([5-10] %).

   58) In Norway, in 2013 the Parties’ combined market shares in the market for 'full' commissioned production of TV  content  amounted  to  [30-
       40] % by revenues, with increment of [0-5] % brought by Endemol. The remaining  players  with  market  shares  above  5 %  would  be  Nice
       Entertainment Group ([30-40] %), Zodiak Media ([10-20] %), Feelgood ([5-10] %) and Nordisk TV ([5-10] %).

   59) Based on the above, the Commission considers that the proposed transaction would bring about  limited  market  share  increments  both  in
       Sweden and in Norway. Moreover, the overwhelming majority of the respondents to the market investigation do not consider that, pre-merger,
       Shine and Endemol were each other’s closest competitors in Sweden or Norway.[29] This is also confirmed by the analysis  of  the  Parties’
       internal documents.

   60) In addition, according to the majority of the  respondents  to  the  market  investigation,  post-merger,  there  will  remain  sufficient
       alternative suppliers for commissioned TV content in both Sweden and Norway.[30] The Commission also notes  that,  on  the  basis  of  the
       information provided by the Notifying Parties, several of these suppliers offer a significant number of TV programmes in the list  of  top
       100 programmes by audience in 2013 in Sweden and Norway, so that these players can be considered as qualitatively relevant alternatives.

   61) Finally, the overwhelming majority of the responding TV channel suppliers also replied that switching between suppliers of TV  content  is
       easy in both Sweden and Norway.[31]

   62) In light of the above, the Commission considers that the proposed transaction does not give rise to serious doubts as to its compatibility
       with the internal market in the affected markets.

2 Vertical assessment

   63) The proposed transaction gives rise to a vertical relationship between the JV’s activities and 21st Century Fox’s activities in the retail
       supply of TV services to end customers in several countries. This vertical relationship would result into affected markets  in  Italy  and
       Germany. Indeed, in 2013 21st Century Fox accounted for respectively [70-80] % and around [30-40] % by value of the markets for the retail
       of Pay-TV services in Italy and Germany.

   64) 21st Century Fox carries out its downstream activities in Italy and Germany via Sky Italia and Sky Deutschland.  On  25  July  2014,  21st
       Century Fox entered into a binding sale and purchase agreements with British Sky Broadcasting Group plc  to  sell  its  interests  in  Sky
       Italia and Sky Deutschland. The transaction was notified to the Commission as case M.7332 BSkyB/Sky Deutschland/Sky Italia and cleared  on
       11 September 2014.

   65) Once the transaction between 21st Century Fox and British Sky Broadcasting Group plc will be closed no vertical  relationship  will  exist
       between the activities of the JV and those of 21st Century Fox.[32]

   66) However, competition concerns can be excluded even in the unlikely case that such transaction would not be closed.  Indeed,  no  input  or
       customer foreclose would arise.

   67) As regards input foreclosure, the JV would not have sufficient market power to successfully engage in an input foreclosure strategy vis-à-
       vis 21st Century Fox downstream competitors. Indeed, the market share of the JV is well below 10 % in any possible market segment for  the
       production and licensing of TV content in Italy and Germany. Moreover, the JV’s  content  is  not  considered  to  be  ‘must-have’  by  TV
       broadcasters or retailers to be able to successfully operate in the market. In addition, the vast  majority  of  the  respondents  to  the
       market investigation in the present considered that the JV would not have an interest to exclusively license/supply  audio-visual  content
       to Sky Italia or Sky Deutschland.[33] A respondent indicated that 21st Century Fox will have a strong incentive as well as the  capability
       (given its nature of industrial parent in the JV) to induce the JV to discriminate in favour  of  Sky  Italia  and  in  prejudice  to  its
       competitors. However, the Commission notes that even if 21st Century Fox would engage in such behaviour, given the limited  activities  of
       the JV in the upstream market in Italy and the presence of alternative suppliers, it is unlikely  that  any  such  conduct  would  have  a
       negative impact on Sky Italia competitors.

   68) As regards customer foreclosure, the Parties would have no ability or incentive to foreclose. Indeed, the limited activities of the JV  in
       Italy and Germany would not be enough to satisfy the content demand of Sky Deutschland and Sky Italia. Moreover, a large majority  of  the
       respondents to the market investigation do not consider that, post-transaction, Sky Italia or Sky Deutschland will  have  an  interest  to
       stop sourcing individual audio-visual TV content from other producers/licensors and exclusively rely on the content provided  by  the  JV.
       The same majority respondents explained their answer with the need for TV broadcasters/retailers to offer a wide variety  of  content  and
       with the capacity constraints of the joint venture.[34]

   69) In light of the above, the Commission considers that the proposed transaction does not give rise to serious doubts as to its compatibility
       with the internal market as regards the vertical relationship between the JV’s activities in production and licensing of  TV  content  and
       21st Century Fox’s activities in the retail supply of TV services to end customers in Italy and Germany.

       CONCLUSION

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

For the Commission
(Signed)
Joaquín ALMUNIA
Vice-President
-----------------------
[1]   OJ L 24, 29.1.2004, p. 1 (the ‘Merger Regulation’). With effect from 1 December 2009, the Treaty on the Functioning of the European Union
(‘TFEU’) has introduced certain changes, such as the replacement of ‘Community’ by ‘Union’ and ‘common market’ by ‘internal market’. The
terminology of the TFEU will be used throughout this decision.

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

[3]   This figure and the other turnover figures for 21st Century Fox in this section are for the business year running from 1 July 2012 to 30
June 2013.

[4]   This figure and the other turnover figures for Apollo in this section are for the business year running from 1 January 2013 to 31 December
2013.

[5]   Commission decision of 25 June 2008 in case M.5121 News Corp / Premiere, paragraph 28.

[6]   See for instance 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; and Commission decision of 15 April 2013 in case M.6880 Liberty Global / Virgin Media.

[7]   Both Shine and Endemol also have activities in digital production and advertising. Shine’s ChannelFlip and Endemol Beyond are companies
which produce and distribute digital entertainment content and advertising campaigns online. The proposed transaction does not give rise to any
affected markets in this area and this overlap will therefore not be further discusses in the present decision.

[8]   TV format refers to the overall concept and branding of a copyrighted TV program.

[9]   In previous decisions, the Commission identified six main technical means of delivering TV content to end users, namely via: (1) analogue
terrestrial television and digital terrestrial television ("DTT"); (ii) satellite (also referred to as Direct to Home ("DTH")); (iii) cable;
(iv) Internet Protocol Television ("IPTV"); (v) the internet more generally; and (vi) mobile technologies. See Commission decision of 15 April
2013 in case M.6880 Liberty Global / Virgin Media, paragraph 44; Commission decision of 21 December 2010 in case M.5932 News Corp/BSkyB,
paragraph 46.

[10]  Horizontal overlaps arise also in the market for digital production and advertising, where the businesses contributed by both the
Notifying Parties are active.

[11]  On 25 July 2014, 21st Century Fox entered into a binding sale and purchase agreement with British Sky Broadcasting Group plc to sell its
interests in Sky Italia and Sky Deutschland. See paragraph (64).

[12]  Commission decision of 22 September 2006 in case M.4353 Permira / All3Media Group.

[13]  Commission decision of 15 September 2014 in case M.7282 Liberty Global / Discovery / All3Media.

[14]  Commission decision of 11 July 2000 in case M.1943 Telefónica / Endemol.

[15]  Commission questionnaire Q2 – Questionnaire to TV broadcasters, questions 7–8.

[16]  Commission questionnaire Q2 – Questionnaire to TV broadcasters, questions 7, 13, 40 and 47.

[17]  Commission questionnaire Q2 – Questionnaire to TV broadcasters, question 10.

[18]  Scripted TV content is content produced based on an existing script, story or character, e.g. dramas and comedies, while non-scripted TV
content is content not based on a script, e.g. game shows, talent show and reality shows.

[19]  Commission decision of 21 December 2011 in case M.6369 HBO / Ziggo / HBO Nederland; Commission decision of 15 April 2013 in case M.6880
Liberty Global / Virgin Media.

[20]  Commission questionnaire Q1 – Questionnaire to TV production companies, questions 16–18. Commission questionnaire Q2 – Questionnaire to TV
broadcasters, questions 16–20.

[21]  Commission decision of 21 December 2011 in case M.6369 HBO / Ziggo / HBO Nederland.

[22]  Commission decision of 15 September 2014 in case M.7282 Liberty Global / Discovery / All3Media.

[23]  Commission decision of 29 June 2000 in case M.1958 Bertelsmann / GBL / Pearson TV; 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.

[24]  Commission questionnaire Q1 – Questionnaire to TV production companies, question 35. Commission questionnaire Q2 – Questionnaire to TV
broadcasters, question 30.

[25]  Commission decision of 21 December 2010 in case M.5932 News Corp/BSkyB; Commission decision of 21 December 2011 in case M.6369 HBO / Ziggo
/ HBO Nederland.

[26]  Commission decision of 21 December 2010 in case M.5932 News Corp/BSkyB; Commission decision of 21 December 2011 in case M.6369 HBO / Ziggo
/ HBO Nederland.

[27]  Commission decision of 21 December 2011 in case M.6369 HBO / Ziggo / HBO Nederland; Commission decision of 18 July 2007 in case M.4504 SFR
/ Télé 2 France; Commission decision of 25 June 2008 in case M.5121 News Corp / Premiere.

[28]  Commission decision of 21 December 2010 in case M.5932 News Corp/BSkyB; Commission decision of 21 December 2011 in case M.6369 HBO / Ziggo
/ HBO Nederland.

[29]  Commission questionnaire Q1 – Questionnaire to TV production companies, questions 48–50. Commission questionnaire Q2 – Questionnaire to TV
broadcasters, questions 35–37.

[30]  Commission questionnaire Q1 – Questionnaire to TV production companies, question 51. Commission questionnaire Q2 – Questionnaire to TV
broadcasters, question 39.

[31]  Commission questionnaire Q2 – Questionnaire to TV broadcasters, questions 37 and 44.

[32]  Twenty-First Century Fox owns a minority share of 39.14% of BSkyB's shares (with voting rights capped at 37.19%). It does not have de jure
or de facto control over BSkyB. See also Commission decision of 21 December 2010 in case M.5932 News Corp/BSkyB.

[33]  Commission questionnaire Q1 – Questionnaire to TV production companies, questions 61 and 63. Commission questionnaire Q2 – Questionnaire
to TV broadcasters, questions 53 and 55.

[34]  Commission questionnaire Q1 – Questionnaire to TV production companies, questions 60 and 62. Commission questionnaire Q2 – Questionnaire
to TV broadcasters, questions 52 and 54.

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 In the published version of this decision, some information has been omitted pursuant to Article 17(2) of Council Regulation (EC)  No  139/2004
 concerning non-disclosure of business secrets and other confidential information.  The  omissions  are  shown  thus  […].  Where  possible  the
 information omitted has been replaced by ranges of figures or a general description.

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