CELEX: 31995M0595
Language: en
Date: 1995-12-22 00:00:00
Title: COMMISSION DECISION of 22/12/1995 declaring a concentration to be compatible with the common market (Case No IV/M.595 - British Telecommunications / VIAG) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)

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31995M0595

COMMISSION DECISION of 22/12/1995 declaring a concentration to be compatible with the common market (Case No IV/M.595 - British Telecommunications / VIAG) according to Council Regulation (EEC) No 4064/89 (Only the English text is authentic)  

Official Journal C 015 , 20/01/1996 P. 0004

 COMMISSION  DECISION of 22/12/1995 declaring a concentration to be compatible with the common market (Case No IV/M.595  - British  Telecommunications  / VIAG)  according  to  Council Regulation (EEC) No 4064/89  (Only the English text is authentic).  The  paper version of the decision is available through  the sales offices of the Office of Official Publications of  the European Communities PUBLIC VERSION MERGER PROCEDURE ARTICLE 6(1)(b) DECISION TO THE NOTIFYING PARTIES Dear Sirs, Subject     :<ind>     Case     No     IV/M.595      British Telecommunications/VIAG <ind>  <ind>  Notification  of a concentration  pursuant  to Article 4 of Council Regulation No 4064/89 1.<ind>  On  24  November 1995, the  Commission  received  a notification of a proposed concentration pursuant to Article 4  of  Council Regulation (EC) No 4064/89 [OJ No  L  395  of 30.12.1989; Corrigendum: OJ No L 257 of 21.09.1990, p.  13.] by  which  the undertakings British Telecommunications  (BT) and  VIAG acquire within the meaning of Article 3 (1)  b  of the  Council  Regulation joint control of their 50:50  joint venture VIAG Interkom (Interkom). 2.<ind>   After   examination  of  the   notification,   the Commission  has concluded that the notified operation  falls within  the scope of Council Regulation No 4064/89 and  does not  raise serious doubts as to its compatibility  with  the common   market  and  with  the  functioning  of   the   EEA Agreement. I. <ind> THE PARTIES 3.<ind>  BT is the main telecommunications operator  in  the United  Kingdom. It has also activities outside  the  United Kingdom, in particular the 'Concert' agreement with  the  US operator MCI, for the provision of advanced business telecom services to multinational companies, as well as other  joint ventures in Italy, Sweden andSpain. Its German subsidiary BT Telecom  (Deutschland)  GmbH had a  turnover  of  less  than [Deleted business secret.  Less than DM 30 million.] million in 1994. 4.<ind>  VIAG is the holding company of operating  companies located primarily in Germany with acitivities mainly in  the areas  of energy, chemicals, packaging and logistics. VIAG´s subsidiary TB & D Telekommunikation Gesellschaft fuer Betrieb und Dienstleistungen GmbH (TB&D) provides telecommunications services  to  VIAG  subsidiaries, but not to  third  parties which  is also not possible from a regulatory point of view. The  telecommunications services are based  on  the  optical fibre  network  owned by Bayernwerk, in  which  VIAG  has  a [Deleted.] share. II.<ind> THE OPERATION 5.<ind> The objective of the parties´ joint venture Interkom is  to become an alternative telecommunications operator  in Germany,  including on the public voice telephony market  as soon  as  this is possible from a regulatory point of  view, and  to  start with the services already liberalized (mainly data  transmission and services to closed user groups,  i.e. private  network  services). All German  activities  of  the parties  in  the  field of Interkom are transferred  to  the joint   venture.  These  consist  of  BT´s  existing  German telecommunications  business and  certain  activities  which VIAG  currently carries out through its subsidiary  TB&D  as well as VIAG´s domestic managed network services. III.<ind> CONCENTRATION 6.<ind> The joint venture will be jointly controlled  by  BT and  VIAG. Each partner has 50% of the shares and  votes  in the  joint  venture.  Each party is  initially  entitled  to appoint  3  members  to  the Partner´s  Committee  which  is responsible  for  taking strategic decisions  including  the approval of the budget. 7.<ind>  Furthermore, the joint venture will  perform  on  a lasting  basis  all  functions  of  an  autonomous  economic entity.  Interkom carries BT´s and VIAG´s telecommunications activities  in Germany. In particular, the exisiting  German telecommunications business of BT will be transferred to the joint  venture. The activities of VIAG´s subsidiary TB&D  in the  business field of Interkom will also be transferred  to Interkom. 8.<ind> The creation of the joint venture will not give rise to  coordination of the competitive behaviour of the parties amongst  themselves or between them and the  joint  venture. Interkom    will    basically   be   a    domestic    German telecommunications  provider. VIAG will  withdraw  from  the markets  on  which  Interkom operates. In  addition,  it  is economically implausible that VIAG will reenter the  markets of  Interkom  because of the size of investment required  to achieve a critical mass on the German market. IV.<ind> COMMUNITY DIMENSION 9.<ind>  The concentration has a Community dimension  within the  meaning  of  Article  1 of the Merger  Regulation.  The combined aggregate worldwide turnover of BT and VIAG amounts to  more than 5.000 million ECU. The aggregate Communitywide turnover  of each is more than 250 million ECU. The  parties do  not  achieve more than twothirds of their  Communitywide turnover in one and the same Memeber State. V.<ind> COMPATIBILITY WITH THE COMMON MARKET 10.<ind>  Interkom will be a competitor of Deutsche Telekom. Its activities involve two distinct dimensions: <ind> <ind> a domestic German dimension where Interkom  will offer  all currently liberalized telecommunications services and   voice  services  to  closed  user  goups;  when   full liberalisation is achieved, it will also offer public  voice telephony services; <ind>  <ind> an international dimension, as a result of  the fact  that  Interkom  will be a subdistributor  of  BT/MCI´s 'Concert'   services,  which  are   by   definition   of   a transnational nature. 11.<ind>  The  servises  provided by Interkom  will  include domestic  and transborder managed network services including data,  voice,  visual  and  integrated  access  services  to customers  in  Germany.  The transborder  services  will  be offered by 'Concert', the joint venture between BT and  MCI. Interkom  will establish and operate a domestic  network  to deliver these services which will be interconnected with the 'Concert'  network. The parties identified these as  product markets: <ind> <ind> domestic value added network services, <ind>   <ind>  private  switched  voice  services  to  large business customers, <ind> <ind> domestic corporate network services and <ind> <ind> public voice services. <ind>  As  there is no risk of the creation  of  a  dominant position   in  any  relevant  market,  the  precise   market definition can however be left open. 12.<ind>  The primary area of activity of the joint  venture is  Germany. Therefore, the relevant geographical market  is Germany. For some services including 'Concert' services  and certain  value  added  and corporate network  services,  the relevant   geographical  market   could   be   European   or worldwide. 13.<ind>  As Deutsche Telekom clearly dominates  the  German market  and there are also other alliances which are  trying to  enter  the  German  market, the  creation  of  a  market domination  position  in Germany can not  be  foreseen.  The operation seems to be positive from the competition point of view.  As  far as the international dimension is  concerned, there is also no threat of a market domination position. VI.<ind> CONCLUSION 14.<ind> The proposed concentration therefore does not raise serious  doubts  as  to its compatibility  with  the  common market. 15.<ind>  For the above reasons, the Commission has  decided not  to  oppose  the notified operation and  to  declare  it compatible  with the common market and with the  functioning of   the   EEA  Agreement.  This  decision  is  adopted   in application  of  Article 6 (1) b of  Council  Regulation  No 4064/89. For the Commission