CELEX: 32021M10075
Language: en
Date: 2021-03-08 00:00:00
Title: Commission Decision of 08/03/2021 declaring a concentration to be compatible with the common market (Case No COMP/M.10075 - NEXI / NETS GROUP) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                Brussels, 08.03.2021
                                                                C(2021) 1637 final
                                                                                  PUBLIC VERSION
                                                                  In the published version of this decision,
                                                                  some information has been omitted
                                                                  pursuant to Article 17(2) of Council
                                                                  Regulation (EC) No 139/2004 concerning
                                                                  non-disclosure of business secrets and other
                                                                  confidential information. The omissions are
                                                                  shown thus […]. Where possible the
                                                                  information omitted has been replaced by
                                                                  ranges of figures or a general description.
                                                                Nexi S.p.A.
                                                                Corso Sempione, 55
                                                                20149 Milan
                                                                Italy
Subject:             Case M.10075 – Nexi/Nets
                     Commission decision pursuant to Article 6(1)(b) of Council Regulation
                                     1
                     No 139/2004 and Article 57 of the Agreement on the European Economic
                           2
                     Area
Dear Sir or Madam,
(1)       On 1 February 2021, the European Commission received notification of a proposed
          concentration pursuant to Article 4 of the Merger Regulation by which Nexi SpA
          (“Nexi”, Italy or the “Notifying Party”) intends to acquire within the meaning of
          Article 3(1)(b) of the Merger Regulation sole control over Nets A/S, Denmark, and
          the Concardis Payment Group, Germany (together “Nets”). Together, Nexi and Nets
          are referred to below as the “Parties”.
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 intro duced certain changes, such as the replacement of
      ‘Community’ by ‘Union’ and ‘common market’ by ‘internal market’. The terminology of the TFEU will
      be used throughout this decision.
2     OJ L 1, 3.1.1994, p. 3 (the ‘EEA Agreement’).
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak--- 1.       THE PARTIES
(2)      Nexi provides payment services for merchants, cardholders and banks, such as
         merchant acquiring services, the provision of point of sale (“POS”) terminals and
         related services, smart payment cards, automated cash handling, clearing services for
         payments and digital corporate services. Nexi is jointly controlled by Advent
         International Corporation (“Advent”, USA) and Bain Capital Investors LLC (“Bain
         Capital”, USA).
(3)      Nets provides, among other product and services, merchant acquiring services, POS
         terminals and enabled payment gateways, card processing services, and smart
         payment cards. Nets is currently solely controlled by funds managed by Hellman &
         Friedman LLC (“Hellman & Friedman”, USA).
2.       THE OPERATION
(4)      The proposed concentration will be structured as follows. Nets TopCo 2, an entity
         controlling Nets will be merged with and into Nexi, which will continue as the
         surviving entity (the “Transaction”). Nexi will continue to be controlled by Advent
         and Bain Capital, whereas funds managed by Hellman & Friedman will only acquire
         a non-controlling minority shareholding in Nexi.
(5)      As a result, Nexi will acquire sole control over Nets. The Transaction constitutes a
         concentration within the meaning of Article 3(1)(b) of the Merger Regulation.
3.       UNION DIMENSION
(6)      The undertakings concerned have a combined aggregate worldwide turnover of more
                                             3
         than EUR 5 000 million (Nexi: EUR [BUSINESS SECRET – FINANCIAL
         INFORMATION]; Nets: EUR 1 019 million). Each of them has an EU-wide
         turnover in excess of EUR 250 million (Nexi: EUR [BUSINESS SECRET –
         FINANCIAL INFORMATION]; Nets: EUR [BUSINESS SECRET – FINANCIAL
         INFORMATION]). None of the two Parties achieve more than two-thirds of their
         aggregate EU-wide turnover in one and the same Member State.
(7)      The notified operation therefore has an EU dimension pursuant to Article 1(2) of the
         Merger Regulation.
4.       RELEVANT M ARKETS
4.1.     Introduction and the Parties’ activities
(8)      The Parties are both active in the provision of financial products and services,
         primarily in Europe, although with a different geographic footprint. While Nexi’s
         activities are focused on Italy, where the company generated over [90-100]% of its
3    Including Advent and Bain Capital.
                                                   2
 ---pagebreak---         worldwide turnover in 2019 and in 2020, Nets is mainly active in the Nordic region,4
        Germany, and Central and Eastern Europe.
(9)     The Parties’ activities overlap in card payment services, as well as in the
        manufacture and supply of personalised smart payment cards.
4.1.1. Card Payment Systems
(10)    Card payment systems allow a cardholder to use a payment card, such as a debit or a
        credit card, to pay for products or services. Through these systems, the merchants are
        connected with financial institutions, namely the bank issuing the card and the bank
        endorsing the cashless payment to the benefit of the merchant, to execute the entire
        transaction from the moment of payment until the merchant’s account is credited.
(11)    The Parties are both active in the following services related to card payment systems:
        (a)      Merchant acquiring: a set of services that enable merchants to accept
                 payment cards at their physical POS or online, and receive the funds from
                 card payments.
        (b)      Acquiring processing: technical services relating to card-based transactions
                 on the merchant side, which involve in particular the routing of payments
                 towards the issuer processor.
        (c)      The provision and management of POS terminals: POS terminals are physical
                 devices, namely card readers in which a payment card is introduced when
                 making a payment transaction in-store, which are often provided by financial
                 companies alongside related services including the management of a terminal
                 or terminal fleet.
4.1.2. Smart Payment Card Manufacture, Supply and Personalisation
                                                                                              5
(12)    Smart payment cards are cards with embedded microprocessor chips. They are
        purchased by banks for use by the end-customer. These cards are first manufactured
        in a non-personalised format (i.e., only having the logo of the bank and/or the
        payment card brand). The cards are subsequently personalised, i.e., by stamping the
        name and account number of the cardholder and by loading his/her electronic data
        onto the chip.
(13)    Nexi does not manufacture smart payment cards but offers personalisation services
        for smart payment cards in Italy.
(14)    Nets does not manufacture smart payment cards. Nets only has limited presence in
        personalisation services in the EEA, operating one personalisation facility in Zagreb,
        Croatia, from which it provides personalisation services for smart payment cards in
        Croatia, Hungary, Slovakia, Slovenia, and Romania. Nets acquired this facility in
        2016 when it acquired Intesa Sanpaolo Card d.o.o. (Intesa Sanpaolo (“ISP”) Group’s
4   For the purposes of this decision, the Nordic region includes Denmark, Finland, Norway, and Sweden.
5   These cards are called “smart” to be distinguished from traditional payment cards which used to have a
    magnetic stripe (and no microprocessor chip). Magnetic stripe technology is today deemed “obsolete” (see
    Commission decision of 19 April 2017, Advent International/Morpho, Case M.8258, paragraph 21).
                                                           3
 ---pagebreak---                                                           6
         in-house personalisation services provider). According to the Notifying Party,
         [BUSINESS SECRET – STRATEGIC DECISION].7 Nets’ activities in smart card
         personalisation focus [BUSINESS SECRET – STRATEGIC DECISION.
(15)     IDEMIA, a portfolio company solely controlled by Advent (which jointly controls
         Nexi alongside Bain Capital) manufactures (non-personalised) smart payment cards
         that it offers worldwide and also offers personalisation services in several countries
         in the EEA.
4.2.     Market Definitions
4.2.1. Merchant acquiring
4.2.1.1. Product market definition
         (A)       The Commission’s precedents
(16)     The Commission has previously considered a relevant product market for merchant
         acquiring services.     The Commission assessed whether the merchant acquiring
         market could be further subdivided on the basis of: (i) types of payment card
         schemes (international or domestic); (ii) payment card brands (e.g., Visa or
         Mastercard); (iii) type of payment card (debit or credit); (iv) physical payment via a
         POS terminal (“POS merchant acquiring”) or web-based payment (“e-commerce
         merchant acquiring”); and (v) wholesale merchant acquiring (to banks) and retail
         merchant acquiring (to merchants) in Italy.8
(17)     In Worldline/Ingenico, the Commission found that POS merchant acquiring and e-
         commerce merchant acquiring constitute separate product markets. The question
         whether the market for POS merchant acquiring services should be sub-segmented
         further was left open.9 In Nexi/ISP, the Commission found that separate product
         markets for wholesale and retail merchant acquiring are appropriate for Italy.10
         (B)       The Notifying Party’s view
(18)     The Notifying Party agrees that retail merchant acquiring and wholesale merchant
         acquiring belong to separate product markets in Italy. The Notifying Party considers
         that further segmentations of the retail merchant acquiring activity are no longer
         relevant in light of the evolution of the market and the high degree of substitutability
6    Reply to RFI 2, question 2.
7    Form CO, Annex 23, paragraph 3.
8    See Cases COMP/M.9776 - Worldline/Ingenico, decision of 30.9.2020, paragraphs 15 et seq;
     COMP/M.9759 - Nexi/Intesa Sanpaolo (Merchant Acquiring Business) , decision of 26.6.2020, paragraphs
     35 et seq; COMP/M.7873 - Worldline/Equens/Paysquare, decision of 20.4.2016, paragraphs 19 et seq;
     COMP/M.7241 - Advent International/Bain Capital Investors/Nets Holding , decision of 8.7.2014,
     paragraphs 12 et seq; COMP/M.7711 - Advent International/Bain Capital/ICBPI, decision of 17.9.2015,
     paragraphs 23 et seq; COMP/M.6956 - Telefonica/Caixabank/Banco Santander, 14.8.2013, paragraph 46;
     and COMP/M.5241 - American Express/Fortis/Alpha Card, decision of 3.10.2008, paragraphs 28 et seq.
9 See, for example, Case COMP/M.9776 - Worldline/Ingenico, decision of 30.9.2020, paragraph 36.
10 See Case COMP/M.9759 - Nexi/Intesa Sanpaolo (Merchant Acquiring Business) , decision of 26.6.2020,
     paragraph 27.
                                                      4
 ---pagebreak---          between payment card schemes, card brands, card types, and the blurring of the
         distinction between POS and e-commerce merchant acquiring.11
         (C)        The Commission’s assessment
(19)     In the present case, there is no reason to depart from the recent decisional practice
         described above. Therefore, the Commission considers that, for the purposes of this
         decision, (i) separate relevant markets exist for wholesale and retail merchant
         acquiring in Italy;12 (ii) separate relevant markets exist for POS merchant acquiring
         and e-commerce merchant acquiring;13 and (iii) it can be left open whether any
         additional segmentations are relevant for POS merchant acquiring. Ultimately, the
         market segmentation does not materially affect the Commission’s assessment of the
         Transaction in relation to merchant acquiring.
4.2.1.2. Geographic market definition
         (A)        The Commission’s precedents
(20)     In Worldline/Ingenico, the Commission considered that (i) the market for the
         provision of POS merchant acquiring services (and its possible sub-segmentations
         regarding credit/debit cards, card brands, and international/domestic card network
         schemes) is national in scope and (ii) the market for the provision of e-commerce
         merchant acquiring services is at least EEA-wide in scope.14 In Nexi/ISP, the
         Commission considered the distinction between wholesale and retail merchant
         acquiring as being relevant to Italy but eventually left open the question whether the
         geographic scope of this market is national or EEA-wide.15
         (B)        The Notifying Party’s view
(21)     The Notifying Party considers that the geographic market for merchant acquiring,
         including for POS merchant acquiring, is wider than national in particular due to (i)
         the EU legislation which harmonises the European payments landscape, such as the
         Second Payment Service Directive (“PSD2”), 16 the Interchange Fees Regulation, 17
         and the creation of a Single Euro Payments Area (“SEPA”)18 and (ii) technological
         changes, including the introduction of mobile wallets.19
11 Form CO, paragraphs 107 et seq.
12 Nets is not active in wholesale merchant acquiring services and this market is not further dis cussed in the
    remainder of the decision.
13 As the market for e-commerce merchant acquiring is not affected, all merchant acquiring markets assessed
    in this decision refer to POS merchant acquiring.
14 See Cases COMP/M.9776 - Worldline/Ingenico, decision of 30.9.2020, paragraph 48.
15 See Case COMP/M.9759 - Nexi/Intesa Sanpaolo (Merchant Acquiring Business) , decision of 26.6.2020,
    paragraphs 50 et seq.
16 Directive (EU) 2015/2366 of the European Parliament and of the Council of 25 November 2015 on
    payment services in the internal market, OJ L 337, 23.12.2015, p. 35.
17 Regulation (EU) 2015/751 of the European Parliament and of the Council of 29 April 2015 on interchange
    fees for card-based payment transactions, OJ L 123, 19.05.2015, p. 1.
18 Regulation (EU) 260/2012 of the European Parliament and of the Council of 14 March 2012 establishing
    technical and business requirements for credit transfers and direct debits in euro, OJ L 94, 30.03.2012, p.
    22.
19 Form CO, paragraphs 115 et seq.
                                                          5
 ---pagebreak---         (C)        The Commission’s assessment
(22)    In the present case, there is no reason to depart from the decisional practice
        described above. Therefore, the Commission considers that, for the purposes of this
        decision, the market for POS merchant acquiring (and its possible sub-segments) is
        national in scope, whereas the market for e-commerce merchant acquiring services is
        at least EEA-wide in scope. For the purposes of this decision, the Commission also
        assesses the market for retail POS merchant acquiring in Italy. 20
4.2.2. Acquiring processing
4.2.2.1. Product market definition
        (A)        The Commission’s precedents
(23)    The Commission previously considered a distinct market for card processing and
        within that market discussed the existence of separate markets for acquiring
        processing services and issuing processing services.21
(24)    Within acquiring processing, the Commission discussed the possibility to segment
        the market based on (i) the payment card scheme (domestic/international) and (ii) the
        platform, distinguishing between physical POS terminals and web-enabled interfaces
        (e-commerce). The exact market definition was ultimately left open. 22
(25)    In a recent decision, the Commission considered that acquiring processing is a
        separate product market and that no further segmentation is appropriate. 23
        (B)        The Notifying Party’s view
(26)    The Notifying Party agrees that card processing should be segmented between
        acquiring processing and issuing processing, in particular because each activity takes
        place through different platforms and are aimed at different customers. The
        Notifying Party considers that it would not be appropriate to make a distinction
        between POS and e-commerce transactions in acquiring processing. 24
        (C)        The Commission’s assessment
(27)    In the present case, the Commissions considers that there is no reason to depart from
        its most recent decisional practice described above. Therefore, the Commission
        considers that, for the purposes of this decision, acquiring processing is a separate
        product market and that no further segmentation is necessary.
20  An EEA-wide market for retail POS merchant acquiring services would not be affected by the proposed
    Transaction and is not discussed in the remainder of the decision.
21 See Cases COMP/M.9452 - Global Payments/TSYS, decision of 16.9.2019, paragraphs 17-25;
    COMP/M.7873 - Worldline/Equens/PaySquare, decision of 20.4.2016, paragraphs 33-37; and M.7241 -
    Advent International/Bain Capital Investors/Nets Holding , decision of 8.7.2014, paragraph 31-36.
22 See Cases COMP/M.8073 - Advent International/Bain Capital/Setefi Services/Intesa Sanpaolo Card ,
    decision of 10.8.2016, paragraphs 22-27; and COMP/M.7241 - Advent International/Bain Capital
    Investors/Nets Holding, decision of 8.7.2014, paragraph 36.
23 See Case COMP/M.9776 - Worldline/Ingenico, decision of 30.9.2020, paragraph 87.
24 Form CO, paragraphs 154 et seq.
                                                           6
 ---pagebreak--- 4.2.2.2. Geographic market definition
         (A)        The Commission’s precedents
(28)     In its decisional practice, the Commission had previously left open whether the
         provision of payment card processing services, in general, and of acquiring
         processing services, in particular, is national or EEA-wide in scope.25 In a recent
         decision, however, the Commission found that the market for acquiring processing
         services should be considered as EEA-wide in scope.26
         (B)        The Notifying Party’s view
(29)     The Notifying Party considers that payment card processing, including acquiring
         processing, is at least EEA-wide in scope, in particular due to the increasingly pan-
         European nature of players and regulatory evolutions including PSD2 and the
         creation of SEPA, which led to more standardisation.27
         (C)        The Commission’s assessment
(30)     In the present case, the Commission considers that, for the purposes of this decision,
         it can be left open whether the market for acquiring processing services should be
         considered as national or EEA-wide in scope.
4.2.3. Provision and management of POS terminals
4.2.3.1. Product market definition
         (A)        The Commission’s precedents
(31)     In its decisional practice, the Commission had defined a market for the provision of
         POS terminals and related services as a market separate from the market for
         merchant acquiring services. The Commission considered whether the market for the
         provision of POS terminals should be further subdivided by type of POS terminal
         (traditional POS terminals, mPOS28 or smartPOS terminals) or based on customer
         size. Ultimately, the Commission left the precise definition open.29 In a recent
         decision, the Commission distinguished (i) the manufacture and supply of POS
         terminals from (ii) the provision and management of POS terminals, and considered
         that a segmentation based customer size or on type of POS terminal was not
         necessary for the provision and management of POS terminals.30
25 See COMP/M.9452 - Global Payments/TSYS, decision of 16.09.2019, paragraphs 28-29; COMP/M.7873 -
    Worldline/Equens/PaySquare, decision of 20.04.2016, paragraphs 112-114; and M.7241 - Advent
    International/Bain Capital Investors/Nets Holding , decision of 8.07.2014, paragraphs 37-41.
26 See Case COMP/M.9776 - Worldline/Ingenico, decision of 30.9.2020, paragraph 92.
27 Form CO, paragraphs 162 et seq.
28 mPOS card readers connect to the merchant’s smartphone or tablet via Bluetooth and an app on that
    smartphone or tablet then connects to the merchant acquirer. See Cases COMP/M.9357 - FIS/WorldPay,
    decision of 5.7.2019, paragraph 28. Smart POS are devices equipped with a touch screen that is easily
    programmable and based on operating systems such as Android or iOS. This device combines the
    functionality of a smartphone with a payment device.
29 See Cases COMP/M.9357 - FIS/WorldPay, decision of 5.7.2019, paragraphs 36-38; and COMP/M.9387 –
    Allied Irish Banks/First Data Corporation/Semeral, decision of 23.10.2019, paragraphs 11-15.
30 See Case COMP/M.9776 - Worldline/Ingenico, decision of 30.9.2020, paragraph 64.
                                                          7
 ---pagebreak---         (B)       The Notifying Party’s view
(32)    The Notifying Party considers that the provision of POS terminals and related
        services forms part of a larger market for the provision of payment acceptance
        solutions which encompasses POS terminals and payment gateways/web-enabled
        interfaces.31
        (C)       The Commission’s assessment
(33)    In the present case, there is no reason to depart from the decisional practice
        described above. Therefore, the Commission considers that, for the purposes of this
        decision, the relevant market is the provision and management of POS terminals
        which does not need to be further segmented.32
4.2.3.2. Geographic market definition
        (A)       The Commission’s precedents
(34)    In its previous decisions, the Commission considered that the geographic market
        definition for the provision and management of POS terminals is likely national in
        scope.33
        (B)       The Notifying Party’s view
(35)    The Notifying Party considers that the market for the provision of POS terminals and
        related services is likely EEA-wide in scope, due to the lack of barriers to entry
        across countries and for all the reasons set out in Section 4.2.1.2(B) above regarding
        merchant acquiring.34
        (C)       The Commission’s assessment
(36)    In the present case, there is no reason to depart from the decisional practice
        described above. Therefore, the Commission considers that, for the purposes of this
        decision, the market for the provision and management of POS terminals should be
        considered as national in scope.
31 Form CO, paragraphs 123 et seq.
32 Neither Nexi nor Nets are active in the manufacturing and supply of POS terminals.
33 See Cases COMP/M.9776 - Worldline/Ingenico, decision of 30.9.2020, paragraphs 65-73; COMP/M.9387
    – Allied Irish Banks/First Data Corporation/Semeral, decision of 23.10.2019, paragraphs 16-18;
    COMP/M.9357 - FIS/WorldPay, decision of 5.07.2019, paragraphs 39-41; and COMP/M.7873 -
    Worldline/Equens/PaySquare, decision of 20.04.2016, paragraphs 128-134.
34 Form CO, paragraphs 133 et seq.
                                                        8
 ---pagebreak--- 4.2.4. Smart payment cards
4.2.4.1. Product market definition
        (A)        The Commission’s precedents
(37)    Smart payment cards used by financial institutions embed microprocessor chips that
        store and protect cardholders’ data and provide embedded security features not available
        with traditional magnetic stripe cards. 35
(38)    The Commission previously found that the market for the manufacture and supply of
        smart payment cards to financial institutions is separate from the overall market for
                                36
        secure plastic cards.
(39)    In Advent International/Morpho,37 the Commission observed that most banks source
        non-personalised cards and card personalisation services from the same supplier. Thus,
        the Commission considered a relevant product market that includes both the
        manufacture and supply of non-personalised smart payment cards and their
        personalisation.38      Nonetheless, the Commission also highlighted the differences
        between these two services. The Commission ultimately left open whether the smart
        payment card market can be segmented into the (i) manufacture and supply of non-
        personalised smart payment cards and (ii) personalisation of smart payment cards.
        (B)        The Notifying Party’s view
(40)    The Notifying Party considers that there is one single relevant market including the
        manufacture/supply and personalisation of smart payment cards. The Notifying
        Party adds that it is not necessary to distinguish between the manufacture and supply
        of non-personalised smart payment cards and the personalisation of these cards.
        According to the Notifying Party, this is the case because (i) all major manufacturers
        of non-personalised smart payment cards (i.e. Thales, G+D, IDEMIA, and
        AustriaCard) also offer personalisation services and (ii) issuers typically procure
        both card manufacturing and card personalisation from the same provider. 39
(41)    In any event, the Notifying Party submits that the relevant product market definition
        for smart payment card manufacture/supply and personalisation can be left open, as
        the Transaction does not raise competition concerns under any plausible market
        definition (i.e., one single market including both manufacture/supply and
        personalisation or separate markets for each of manufacture/supply and
        personalisation of smart payment cards).
        (C)        The Commission’s assessment
(42)    The results of the Commission’s market investigations did not confirm the Notifying
        Party’s arguments. On the contrary, the Commission notes that:
35 Commission decision of 19 April 2017, Advent International/Morpho, Case M.8258, paragraph 15.
36 See Commission decision of 19 May 2006, Axalto/GemPlus, M.3998, paragraph 17 and Commission
    decision of 19 April 2017, Advent International/Morpho, Case M.8258, paragraphs 15-20.
37 This concerns that transaction that led to the creation of IDEMIA.
38 Commission decision of 19 April 2017, Advent International/Morpho, Case M.8258, paragraphs 20, 21,
    and 25.
39 Form CO, paragraph 141.
                                                           9
 ---pagebreak---         (a)     Most customers indicated that they do not source non-personalised smart
                payment cards from the same company they use for card personalisation; 40
        (b)     Customers do take into account different considerations when selecting a
                supplier of non-personalised smart payment cards and when choosing the
                provider of personalisation services. As one competitor puts it, “[c]ustomers
                require fast turnaround, quick delivery of personalized cards (one or two
                working days maximum) at reasonable delivery costs... card manufacturers
                are not bound by strict delivery schedules and can ship cards across
                countries”.41
        (c)     There are several market players who only offer personalisation services
                (including OTP, Global Payments, and Euro-P3C).                      In the market
                investigation, these players indicated that it would be impossible or very hard
                to start manufacturing non-personalised cards.42 Nexi and Nets also offer
                personalisation services only.
        (d)     As the Notifying Party stated, there are several market players that
                manufacture non-personalised cards and also offer personalisation services
                (e.g. G+D, AustriaCard, and Thales as well as IDEMIA). However, the
                Commission considers that this does not mean in itself that the
                manufacture/supply and personalisation of smart payment cards belong to the
                same market. Rather, all of these players manufacture certain volumes of
                non-personalised cards which are made available to other companies for
                personalisation. Moreover, many of these market players have separate
                facilities for the manufacture and for the personalisation of cards. 43
(43)    In light of the above, for the purposes of this decision, the Commission considers
        that there are separate relevant product markets for the (i) manufacture and supply of
        non-personalised smart payment cards and (ii) personalisation of smart payment
        cards.
4.2.4.2. Geographic market definition
        (A)       The Commission’s precedents
(44)    In Advent International/Morpho, the Commission found that a plausible market for
        manufacture and supply of non-personalised cards is broader than national, namely
        EEA-wide or even global in scope. Moreover, in that decision, the Commission
        noted that a plausible market for smart card personalisation is likely national or
        possibly regional in scope (e.g., for EEA countries lacking domestic card schemes).
        The reason is that once personalised, smart payment cards need to be delivered
        within days to the end-customer and thus cannot be shipped from far away. 44 The
40 Questionnaire Q2 to smart payment cards customers, question 6.
41 Notes from call with competitor, 27 January 2021, paragraphs 6 and 9.
42 Questionnaire Q1 to smart payment cards competitors, question 4.
43 Questionnaire Q1 to smart payment cards competitors, question 3.
44 Commission decision of 19 April 2017, Advent International/Morpho, Case M.8258, paragraphs 43-46.
                                                       10
 ---pagebreak---       Commission ultimately left open whether the relevant market for personalisation of
      smart payment cards is (i) EEA-wide or (ii) national in scope.45
      (B)        The Notifying Party’s view
(45)  The Notifying Party considers that the relevant market for manufacture and supply
      of non-personalised smart payment cards is at least EEA-wide in scope. The
      Notifying Party indicates that: (i) there are no material technological differences in
      the smart payment cards supplied across the EEA; (ii) several manufacturers of non-
      personalised cards manufacture in one or two facilities and ship the cards across the
      EEA; and (iii) large customers tend to purchase cards at group level to achieve the
      best possible terms.46
(46)  The Notifying Party also suggests that the relevant market for personalisation
      services regarding smart payment cards is also EEA-wide in scope or at least
      regional (within the EEA).47 The Notifying Party submits that while transportation
      costs and time to market play a key role for smart payment card personalisation
      services, this does not mean that the supplier needs to be present in the same country
      as the customer. According to the Notifying Party, several players offer services to
      customers in one EEA country, while their personalisation centre is based in a
      neighbouring country (e.g., Nets, Thales, AustriaCard, and Global Payments).
      (C)        The Commission’s assessment
(47)  Regarding the manufacture and supply of non-personalised smart payment cards, the
      results of the market investigation confirm the arguments of the Notifying Party.
      The Commission notes the following:
      (a)      The majority of customers indicated that they source non-personalised smart
               payment cards through competitive bidding processes at EEA-level or
               through bilateral agreements at EEA-level.48
      (b)      The same global players (i.e., Thales, G+D, IDEMIA, and AustriaCard) are
               active in several EEA Member States offering non-personalised smart
               payment cards. All of them supply customers across the EEA, while they
               have manufacturing facilities only in a sub-set of EEA countries. For
               example, G+D offers non-personalised smart payment cards across the EEA
               (and beyond) operating one facility in Spain.49 AustriaCard offers non-
               personalised smart payment cards across the EEA (and beyond) operating
               three facilities, one in Austria, one in Romania, and one in Andorra. 50
45 Commission decision of 19 April 2017, Advent International/Morpho, Case M.8258, paragraph 47.
46 Form CO, paragraph 148.
47 Form CO, paragraphs 146-147.
48 Questionnaire Q2 to smart payment cards customers, question 15.
49 Questionnaire Q1 to smart payment cards competitors, question 5.
50 Questionnaire Q1 to smart payment cards competitors, question 5.
                                                      11
 ---pagebreak---        (c)      As one competitor put it, “[t]he conditions of competition for card
                manufacture and supply are fairly similar across the EEA but the relative
                strength of each competitor varies from country to country...”.51
(48)   The market investigation was inconclusive regarding the geographic scope of the
       relevant market for smart payment card personalisation services (namely, whether it
       is national or regional):
       (a)      On the one hand, to comply with the strict time requirements of smart
                payment card personalisation, several suppliers offer these services from
                centres that are located in the same country as the customer. According to
                one competitor, “[w]hen replacing lost/stolen cards, or for new cards, the
                personalization center needs to personalize and ship the card the same or the
                next day after receiving the bank’s request for replacement. The card is
                generally shipped directly to the card holder. Given these same-day or next-
                day delivery requirements..., personalization services are often provided from
                centers located in the country of the customer. This is the general rule for all
                big countries.”52 In the market investigation, the majority of responding
                competitors stated that “the conditions of competition that [they] face differ
                among the various EEA countries”.53
       (b)      On the other hand, for customers based in smaller countries, personalisation
                services can also be provided from neighbouring countries. 54 This is the case
                in Central and Eastern Europe. For example, Nets serves customers in
                Croatia, Hungary, Romania, and Slovakia through its personalisation centre
                in Croatia. AustriaCard offers services to customers in Czechia, Slovenia
                and Slovakia through its personalisation centre in Austria.55
(49)   In light of the above, for the purposes of this decision, the Commission considers
       that the relevant market for the manufacture and supply of non-personalised smart
       payment cards is at least EEA-wide in scope. The exact geographic scope of the
       market for smart payment card personalisation services can be left open, since the
       Transaction does not give rise to serious doubts as to its compatibility with the
       internal market even on the basis of the narrowest plausible geographic market
       definition, i.e., at national level.
5.     LEGAL FRAMEWORK
(50)   Under Articles 2(2) and 2(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.
51 Questionnaire Q1 to smart payment cards competitors, question 6.1.
52 Notes from call with competitor, 26 January 2021, paragraphs 9-10.
53 Questionnaire Q1 to smart payment cards competitors, question 7.
54 Questionnaire Q1 to smart payment cards competitors, question 7.2.
55 Notes from call with competitor, 27 January 2021, paragraph 7.
                                                       12
 ---pagebreak--- 5.1.   Horizontal mergers
(51)   A merger can entail horizontal effects. In this respect, the Commission Guidelines on
       the assessment of horizontal mergers under the Council Regulation on the control of
       concentrations between undertakings (“the Horizontal Merger Guidelines”)56
       distinguish between two main ways in which mergers between actual or potential
       competitors on the same relevant market may significantly impede effective
       competition, namely (a) by eliminating important competitive constraints on one or
       more firms, which consequently would have increased market power, without
       resorting to coordinated behaviour (non-coordinated effects); and (b) by changing
       the nature of competition in such a way that firms that previously were not
       coordinating their behaviour are now significantly more likely to coordinate and
       raise prices or otherwise harm effective competition (coordinated effects).57
5.2.   Non-horizontal mergers
(52)   In addition, a merger can also entail non-horizontal effects when it involves
       companies operating at different levels of the same supply chain or in closely related
       markets. Pursuant to the Commission Guidelines on the assessment of non-
       horizontal mergers under the Council Regulation on the control of concentrations
       between undertakings (the “Non-Horizontal Merger Guidelines”)58 , non-horizontal
       mergers do not entail the loss of direct competition between merging firms in the
       same relevant market and provide scope for efficiencies. However, there are
       circumstances in which non-horizontal mergers may significantly impede effective
       competition. This is in particular the case if they give rise to foreclosure. 59 In the
       assessment of non-horizontal mergers, the Commission distinguishes between two
       broad types of such mergers: vertical mergers and conglomerate mergers.
(53)   Vertical mergers involve companies operating at different levels of the supply chain.
       For example, when a manufacturer of a certain product (the ‘upstream firm’) merges
       with one of its distributors (the ‘downstream firm’), this is called a vertical merger.
(54)   Conglomerate mergers are mergers between firms that are in a relationship that is
       neither horizontal (as competitors in the same relevant market) nor vertical (as
       suppliers or customers). In practice, the Commission focusses on mergers between
       companies that are active in closely related markets (e.g. mergers involving suppliers
       of complementary products or products that belong to the same product range). In
       assessing potential vertical effects of a merger, the Commission analyses whether a
       merger results in foreclosure so that 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. Such foreclosure may discourage
       entry or expansion of rivals or encourage their exit. Foreclosure thus can be found
       even if the foreclosed rivals are not forced to exit the market; it is sufficient that the
       rivals are disadvantaged and consequently led to compete less effectively. Such
       foreclosure is regarded as anti-competitive where the merging companies — and,
       possibly, some of its competitors as well — are as a result able to profitably increase
       the price charged to consumers.
56 OJ C 31, 5.2.2004, p. 5.
57 Horizontal Merger Guidelines, paragraph 22.
58 OJ C 265, 18.10.2008, p. 6.
59 Non-Horizontal Merger Guidelines, paragraph 18.
                                                   13
 ---pagebreak--- (55)     The Non-Horizontal Merger Guidelines distinguish between two forms of vertical
         foreclosure.60 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 foreclose upstream rivals by restricting their access
         to a sufficient customer base (customer foreclosure).
(56)     In assessing vertical foreclosure, the Commission assesses (i) whether the combined
         entity would have the ability to engage in foreclosure; (ii) whether the combined
         entity would have the incentive to do so; and (iii) what would the overall impact of
         such foreclosure strategy be on effective competition in the affected markets.
(57)     The main concern in the context of conglomerate mergers is also that of
         foreclosure.61 The combination of products in related markets may confer on the
         combined entity the ability and incentive to leverage a strong market position from
         one market to another by means of tying or bundling or other exclusionary practices.
         Tying and bundling as such are common practices that often have no anticompetitive
         consequences. Companies engage in tying and bundling in order to provide their
         customers with better products or offerings in cost-effective ways. Nevertheless, in
         certain circumstances, these practices may lead to a reduction in actual or potential
         rivals' ability or incentive to compete. This may reduce the competitive pressure on
         the combined entity allowing it to increase prices.
(58)     In assessing the likelihood of such a scenario, the Commission examines, first,
         whether the merged firm would have the ability to foreclose its rivals, second,
         whether it would have the economic incentive to do so and, third, whether a
         foreclosure strategy would have a significant detrimental effect on competition, thus
         causing harm to consumers. In practice, these factors are often examined together as
         they are closely intertwined.
6.       OVERVIEW OF AFFECTED MARKETS 62
(59) Nexi and Nets are both active in merchant acquiring services; acquiring processing
         services; the provision and management of POS terminals; and the personalisation of
         smart payment cards. Nexi is jointly controlled by Advent, which solely controls
         IDEMIA. IDEMIA manufactures non-personalised smart payment cards and also
         offers personalisation services for smart payment cards.
(60)     Against this background and taking into account the market definitions discussed in
         Section 4 above, the Transaction gives rise to several horizontally affected markets:
60 Non-Horizontal Merger Guidelines, paragraph 30.
61 Non-Horizontal Merger Guidelines, paragraph 93.
62 Affected markets consist of all relevant product and geographic markets, as well as plausible alternative
    relevant product and geographic markets, on the basis of which in the EEA territory: (i) two or more of the
    parties to the concentration are engaged in business activities in the same relevant market and where the
    concentration will lead to a combined market share of 20 % or more (horizontal relationships) and (ii) one
    or more of the parties to the concentration are engaged in business activities in a relevant market, which is
    upstream or downstream of a relevant market in which any other party to the concentration is engaged,
    and any of their individual or combined market shares at either level is 30 % or more, regardless of
    whether there is or is not any existing supplier/customer relationship between the parties to the
    concentration (vertical relationships). See Regulation (EC) No 802/2004 of 21 April 2004 implementing
    the Merger Regulation OJ L 133, 30.04.2004, p. 1, Annex 1, Section 6.3.
                                                         14
 ---pagebreak---      (a)    POS merchant acquiring services in Denmark and Germany and retail POS
            merchant acquiring services in Italy (Section 7.1 below);
     (b)    Acquiring processing services in Croatia, Denmark, Norway and Slovenia
            (Section 7.2 below);
     (c)    Provision and management of POS terminals in Italy and Sweden (Section
            7.3 below); and
     (d)    Personalisation services for smart payment cards in Hungary, Slovakia, and
            Romania (Section 7.4 below).
(61) The Transaction also gives rise to the following vertically affected markets:
     (a)    Acquiring processing (upstream) and         merchant acquiring (downstream)
            (Section 8.1 below); and
     (b)    The manufacture and supply of non-personalised smart payment cards
            (upstream) and the personalisation of smart payment cards (downstream)
            (Section 8.2 below).
7.   COMPETITIVE ASSESSMENT OF THE HORIZONTALLY AFFECTED MARKETS
7.1. Merchant acquiring
(62) Set forth below are the Parties’ and their main competitors’ market shares in POS
     merchant acquiring in Denmark and Germany and retail merchant acquiring in Italy.
                                                15
 ---pagebreak---  ---pagebreak---                 remains under 20 in all of the merchant acquiring markets concerned.66 This
                low share is not due to Nets being a recent entrant in Italy or Nexi being a
                recent entrant in Denmark or Germany (the two companies have been active
                in all these countries for several years).
        (b)     The Parties are not particularly dynamic competitors in these countries either,
                as their share of transaction values remained similar between 2017 and 2020
                in Italy (for Nets), and in Denmark and Germany (for Nexi).67
        (c)     The results of the market investigation clearly confirm that Nets is not
                perceived as exerting a meaningful competitive constraint in Italy, and
                conversely that Nexi does not exert a meaningful competitive constraint in
                Denmark or Germany.68
        (d)     The Parties do not appear to be close competitors. Nexi and Nets virtually
                never participated in the same tenders in any of the affected markets in the
                last three years. Out of the [BUSINESS SECRET – STRATEGIC
                DECISIONS] tenders for merchant acquiring services the Parties participated
                in over the last three years, they only met [BUSINESS SECRET –
                STRATEGIC DECISIONS] in multi-country tenders [ BUSINESS SECRET
                – STRATEGIC DECISIONS].69
        (e)     At least four other players would remain active on the POS merchant
                acquiring market post-Transaction, in each relevant country and segment
                where an affected market arises. Each of these players holds a market share
                far exceeding the increment brought about by the Transaction.
        (f)     In Denmark, where the Parties’ combined shares exceed [90-100]%, Nets’
                market position largely results from its monopoly over the acquiring and
                processing of card transactions under the domestic card scheme Dankort,
                which is regulated by the Danish authorities. Focusing on international cards
                (where the overlap arises), the combined market shares of the Parties would
66 Based on the Horizontal Merger Guidelines (paragraph 20), the Commission is unlikely to identify
   horizontal competition concerns in a merger concerning relevant markets with an HHI delta below 150.
   In the markets listed in Table 1 above, the HHI delta would be below 150 and none of the caveat factors in
   the Horizontal Merger Guidelines apply.
67 Form CO, Annex 22.
68 Responses to questionnaire to competitors in merchant acquiring services sent on 2 February 2021. Two
   respondents to the market investigation indicated that the acquisition of Nets by Nexi would negatively
   affect competition for the provision of merchant acquiring services in the EEA. Howev er, as mentioned
   above in paragraph (63), the EEA market for merchant services (or segments thereof) would not even be
   affected by the Transaction. Furthermore, both respondents express concerns which are not linked to
   potential impediments to effective competition. One respondent is concerned that “ [a] larger company
   that holds a strong financial position will have the capacity to defeat smaller actor s, for example by
   lowering prices”, while the other one indicates that the combined entity will be more appealing to
   multinational customers as “[t]he increased capacity of the new combined entity will be likely to attract
   the big multinational corporate clients, to detriment of the existing players at national level”.
69 Nexi and Nets [BUSINESS SECRET – STRATEGIC DECISIONS AND SUCCESS RATES], and the
   outcome of the other tender [CONFIDENTIA L INFORMATION] (Form CO, paragraph 232).
                                                          17
 ---pagebreak---  ---pagebreak---         (a)       The increment brought about by the Transaction is minimal on all affected
                  markets, as it remains below [0-5]%.73 The HHI delta brought about by the
                  Transaction remains under 5 in all of these markets.74
        (b)       Nothing in the market investigation suggests that Nexi would exert a
                  competitive constraint on Nets or vice versa as regards acquiring processing.
                  In particular, Nexi is not a recent entrant in any of the markets.75 Nexi is not a
                  particularly dynamic competitor either, as its share of transaction values
                  remained similar between 2017 and 2020 in Croatia, Denmark, and
                  Slovenia.76 The results of the market investigation also largely indicate that
                  Nexi does not exert a competitive constraint on Nets in the relevant
                  countries.77
        (c)       The Parties do not appear to be close competitors. Nexi and Nets have never
                  participated in the same tenders in any of the affected markets in the last
                  three years. In fact, Nexi has never participated in any tender to supply
                  acquiring processing to              [BUSINESS SECRET – STRATEGIC
                  DECISIONS].     78
        (d)       At least three other players would remain active on each of the affected
                  markets post-Transaction. Each of these players holds a market share far
                  exceeding the increment brought about by the Transaction.
        (e)       In Denmark, where the Parties’ combined shares exceed [80-90]%, Nets’
                  market position largely results from its monopoly over the acquiring and
                  processing of card transactions under the Dankort scheme explained in
                  Section 7.1 above. Focusing on international cards (where the overlap arises),
                  the combined market shares of the Parties would be significantly lower
                  (around [60-70]%).79
(71)    Two competitors raised concerns in relation to the impact of the Transaction in
        acquiring processing, primarily in the Nordic region. However:
        (a)       One respondent largely refers in its response to the potential acquisition by
                  Nexi of SIA (which offers among other products and services acquiring
73 Form CO, Annex 22
74 Based on the Horizontal Merger Guidelines (paragraph 20), the Commission is unlikely to identify
    horizontal competition concerns in a merger concerning relevant markets with a n HHI delta below 150.
    In the markets for acquiring processing in Croatia, Denmark, Norway, and Slovenia, the HHI delta would
    be below 150 and none of the caveat factors in the Horizontal Merger Guidelines apply.
75 Nexi acquired ISP Processing from ISP in 2016 and has since been [BUSINESS SECRET –
    CONTRACTUAL RELATIONSHIPS]. The customer portfolio of ISP Processing has been [BUSINESS
    SECRET – EVOLUTION OF CUSTOMERS’ PORTFOLIO] ever since (from [BUSINESS SECRET –
    NUMBER OF CUSTOMERS] customers in 2015 to [BUSINESS SECRET – NUMBER OF
    CUSTOMERS] at the end of 2020).
76 Form CO, Annex 22
77 Responses to questionnaire to competitors in acquiring processing services sent on 2 February 2021.
78 Form CO, paragraph 251, footnote 162.
79 While a few respondents to the market investigation raised concerns in relation to Nets’ role in the
    Dankort scheme, these concerns are not merger-specific as Nexi plays no role in the acquiring or
    processing of Dankort transactions. See responses to questionnaire to competitors in merchant acquiring
    services sent on 2 February 2021.
                                                         19
 ---pagebreak---  ---pagebreak---                  –        Italy: The combined market shares of the Parties are close to the 25%
                          threshold on the market for the provision and management of POS
                          terminals, and below in relation to traditional POS terminals (where
                          an overlap arises, as Nets only offers traditional POS in Italy).
        (b)      The increment brought about by the Transaction is minimal on all affected
                 markets, as it remains below [0-5]% regardless of the precise market
                 segmentation. The HHI delta brought about by the Transaction remains under
                 5 in all of the markets, which gives an initial indication competition concerns
                 are unlikely.83
        (c)      Nothing in the market investigation suggests that Nexi would exert a
                 competitive constraint on Nets or vice versa as regards the provision and
                 management of POS terminals. In particular, Nexi is not a recent entrant in
                 Sweden, nor is Nets in Italy. The companies are also not particularly
                 dynamic competitors either, as their share in terms of number of POS
                 terminals supplied has remained similar over the last three years in Italy (for
                 Nets) and Sweden (for Nexi).84
        (d)      The Parties do not appear to be close competitors. In Sweden, Nexi only
                 offers traditional POS, whereas Nets offers other categories of POS terminals
                 as well. Conversely, in Italy, Nets only offers traditional POS, whereas Nexi
                 offers other categories of POS terminals. 85
        (e)      Post-Transaction, at least six other players will remain active in Sweden, and
                 seven in Italy. Each of these players holds a market share far exceeding the
                 increment brought about by the Transaction.
        (f)      Furthermore, no respondent to the market investigation raised concerns in
                 relation to the provision and management of POS terminals in the relevant
                 countries or elsewhere.86
(76)    In light of the above considerations, the Commission concludes that the Transaction
        does not give rise to serious doubts as to its compatibility with the internal market
        for the provision and management of POS terminals in Italy or Sweden.
83 Horizontal Merger Guidelines, paragraph 20.
84 Form CO, Annex 22
85 Form CO, Annex 22
86 Responses to questionnaire to competitors in merchant acquiring and acquiring processing services sent
    on 2 February 2021. Questionnaire Q1 to smart payment cards competitors, question 27 and Questionnaire
    Q2 to smart payment cards customers, question 29.
                                                      21
 ---pagebreak---  ---pagebreak---                 competitors confirmed that they have not encountered Nets in a tender in
                personalisation services in Hungary. 90
        (b)     Post-Transaction, IDEMIA and Nets will continue to face competition
                constraints by at least two competitors, with shares higher than Nets’
                (namely, OTP Bank and ANY).
        (c)     IDEMIA and Nets are not close competitors in Hungary. IDEMIA is active
                in both manufacture/supply and personalisation of smart payment cards,
                while Nets only personalises smart payment cards.                 In the market
                investigation, responding customers and competitors stated that IDEMIA
                competes closely with ANY, Thales, and AustriaCard - but not with Nets.91
        (d)     In the market investigation, the majority of responding competitors indicated
                that they did not expect the Transaction to lead to higher prices or less
                competition in the market of personalisation services for smart payment cards
                in Hungary.92
(80)    In light of the above considerations, the Commission concludes that the Transaction
        does not give rise to serious doubts as to its compatibility with the internal market in
        the market for personalisation services for smart payment cards in Hungary.
7.4.2. Personalisation of smart payment cards in Slovakia
7.4.2.1. The Notifying Party’s view
(81)    The Notifying Party considers that the Transaction does not result in competition
        concerns in the market for personalisation services for smart payment cards in
        Slovakia because (i) Nets’ activities in personalisation services are extremely limited
        in Slovakia and across the EEA, [BUSINESS SECRET – CONTRACTUAL
        RELATIONSHIPS]; (ii) IDEMIA and Nets do not compete closely; and (iii) there
        are no barriers to entry or expansion. 93
7.4.2.2. The Commission’s assessment
(82)    The Commission considers that the Transaction does not give rise to serious doubts
        as to its compatibility with the internal market regarding the market for
        personalisation services in smart payment cards in Slovakia for the following
        reasons:
        (a)     Following the Transaction, the combined share of IDEMIA and Nets would
                be moderate ([30-40]% in 2019). However, the Transaction would not
                significantly change the competitive landscape in personalisation services in
                smart payment cards in Slovakia. Nets rarely competes for new customers in
                Slovakia (or in any country) as explained in recitals (14) and (79)(a) above.
                During the market investigation, all responding competitors confirmed that
90 Questionnaire Q1 to smart payment cards competitors, question 21.
91 Questionnaire Q1 to smart payment cards competitors, question 20.1 and Questionnaire Q2 to smart
    payment cards customers, question 23.1.
92 Questionnaire Q1 to smart payment cards competitors, questions 25 and 26.
93 Form CO, Annex 23, paragraph 3.
                                                      23
 ---pagebreak---                 they have not encountered Nets in a tender in personalisation services in
                Slovakia.94
        (b)     Post-Transaction, IDEMIA and Nets will continue to face competition
                constraints by at least two competitors, including AustriaCard which held a
                share of [20-30]% in 2019 and Global Payments ([5-10]%).
        (c)     IDEMIA and Nets are not close competitors in Slovakia. IDEMIA is active
                in both the manufacture/supply and personalisation of smart payment cards,
                while Nets only personalises smart payment cards.                 In the market
                investigation, the vast majority of responding customers and competitors
                stated that IDEMIA competes closely with SIA and AustriaCard -- but not
                with Nets.95
        (d)     In the market investigation, the majority of responding competitors indicated
                that they did not expect the Transaction to lead to higher prices or less
                competition in the market of personalisation services for smart payment cards
                in Slovakia.96
(83)    In light of the above considerations, the Commission concludes that the Transaction
        does not give rise to serious doubts as to its compatibility with the internal market in
        the market for personalisation services for smart payment cards in Slovakia.
7.4.3. Personalisation of smart payment cards in Romania
7.4.3.1. The Notifying Party’s view
(84)    The Notifying Party considers that the Transaction does not result in competition
        concerns in the market for personalisation services for smart payment cards in
        Romania because (i) Nets’ activities in personalisation services are extremely limited
        in Romania and across the EEA [BUSINESS SECRET – CONTRACTUAL
        RELATIONSHIPS]; (ii) IDEMIA and Nets do not compete closely; and (iii) there
        are no barriers to entry or expansion. 97
7.4.3.2. The Commission’s assessment
(85)    The Commission considers that the Transaction does not give rise to serious doubts
        as to its compatibility with the internal market regarding the market for
        personalisation services in smart payment cards in Romania for the following
        reasons:
        (a)     Following the Transaction, the combined share of IDEMIA and Nets would
                be moderate ([30-40]% in 2019). However, the Transaction would not
                significantly change the competitive landscape in personalisation services in
                smart payment cards in Romania. Nets’ share in this market is limited ([0-
                5]% in 2019) and hence, the increment brought about by the Transaction is
94 Questionnaire Q1 to smart payment cards competitors, question 21.
95 Questionnaire Q1 to smart payment cards competitors, question 20.2 and Questionnaire Q2 to smart
    payment cards customers, question 23.2.
96 Questionnaire Q1 to smart payment cards competitors, questions 25 and 26.
97 Form CO, Annex 23, paragraph 3.
                                                      24
 ---pagebreak---                  minimal.98 Nets rarely competes for new customers in Romania (or in any
                 country) as explained in recitals (14) and (79)(a) above. During the market
                 investigation, all responding competitors confirmed that they have not
                 encountered Nets in a tender in personalisation services in Romania. 99
         (b)     Post-Transaction, IDEMIA and Nets will continue to face competition
                 constraints by at least two competitors, with shares higher than Nets’ (i.e.,
                 Thales and AustriaCard).
         (c)     IDEMIA and Nets are not close competitors in Romania. IDEMIA is active
                 in both the manufacture/supply and personalisation of smart payment cards,
                 while Nets only personalises smart payment cards.                       In the market
                 investigation, the vast majority of responding customers and competitors
                 stated that IDEMIA competes closely with AustriaCard and SIBS - but not
                 with Nets.100
         (d)     In the market investigation, the majority of responding competitors indicated
                 that they did not expect the Transaction to lead to higher prices or less
                 competition in the market of personalisation services for smart payment cards
                 in Romania.101
(86)     In light of the above considerations, the Commission concludes that the Transaction
         does not give rise to serious doubts as to its compatibility with the internal market in
         the market for personalisation services for smart payment cards in Romania.
98 Based on the Horizontal Merger Guidelines (paragraph 20), the Commission is unlikely to identify
    horizontal competition concerns in a merger concerning relevant markets with an HHI delta below 150.
    In the market for personalisation services for smart payment cards in Romania, the HHI delta would be
    below 150 and none of the caveat factors in the Horizontal Merger Guidelines apply. This further
    confirms the Commission’s conclusion that in this relevant market, the Transaction does not give rise to
    serious doubts as to its compatibility with the internal market.
99 Questionnaire Q1 to smart payment cards competitors, question 21.
100 Questionnaire Q1 to smart payment cards competitors, question 20.3 and Questionnaire Q2 to smart
    payment cards customers, question 23.3.
101 Questionnaire Q1 to smart payment cards competitors, questions 25 and 26.
                                                            25
 ---pagebreak--- 8.        COMPETITIVE ASSESSMENT OF NON-HORIZONTALLY AFFECTED MARKETS 102
8.1.      Acquiring processing (upstream) – POS Merchant acquiring (downstream)
(87)      Certain merchant acquirers do not handle the acquiring processing, the technical
          handling and routing of a payment transaction, in-house. When merchant acquirers
          procure their acquiring processing services from a third party, a vertical relationship
          may exist between the provision of acquiring processing services (upstream) and
          POS merchant acquiring services (downstream). Set forth below are Nexi’s and
          Nets’ shares in the relevant vertically affected markets.
102 This Section deals with vertically affected markets. During the Commission’s market investigation, two
     competitors in the manufacture/supply and personalisation of smart payment cards also raised concerns
     regarding potential conglomerate effects of the Transaction. These competitors indicated that card
     payment services markets (e.g., acquiring processing in the EEA or in different EEA countries) are
     neighbouring with the relevant markets for the manufacture/supply and personalisation of smart payment
     cards. The combined entity and/or IDEMIA held market shares of [30-40]% or more in these
     neighbouring markets (or their sub-segments) (see Table 2 and Table 4 above and Table 5 and Table 6
     below). The two competitors were concerned that the combined entity (possibly together with IDEMIA)
     could bundle its offerings in acquiring processing and the manufacture/supply and/or personalisation of
     smart payment cards and as a result possibly foreclose competitors who are not able to make similar
     bundled offerings. The results of the Commission’s market investigation did not confirm these concerns.
     In the market investigation, responding competitors submitted that banks never or rarely purchase
     payment services (e.g., acquiring processing) and smart payment cards (non -personalised and/or
     personalised) as part of the same tender (see Questionnaire Q1 to smart payment cards competitors,
     question 11). Only a minority of responding competitors expect that this would change in the next 3 years
     (see Questionnaire Q1 to smart payment cards competitors, question 11.3). It is thus unlikely that the
     combined entity (and IDEMIA) could easily bundle its offerings in card payment services and smart
     payment cards when bidding for new opportunities. Moreover, competitors could develop counter-
     strategies to respond to any bundling behaviour of the combined entity (and IDEMIA). As one of the two
     competitors who expressed concerns acknowledged, “[a]ll smart payment card manufacturers... have had
     some kind of cooperation with payment services providers because they target the same customers
     (namely, banks)” (see Notes from call with competitor, 27 January 2021, paragraph 22). Finally, no
     responding competitor active in merchant acquiring or acquiring services raised similar concerns (see
     Responses to questionnaire to competitors in merchant acquiring and acquiring processing services sent
     on 2 February 2021). In light of the above, the Commission considers that the Transaction does not raise
     serious doubts as to its compatibility with the internal market regarding conglomerate effects in relation to
     card payment services and smart payment card relevant markets.
                                                           26
 ---pagebreak---  ---pagebreak--- 8.1.1.2. The Commission’s assessment
        A. Considering a plausible EEA-wide market for acquiring processing services
             upstream
(90)    The Commission considers that the Transaction is unlikely to give rise to input
        foreclosure concerns in the downstream markets listed in Table 5 above. The
        combined entity would not have the ability to foreclose its downstream competitors
        in POS merchant acquiring services (or any of the sub-segmentations of this market)
        in Croatia, Denmark, Finland, Norway, or Slovenia by restricting access to acquiring
        processing services in the EEA. Nor would the combined entity have the ability to
        foreclose its downstream competitors in retail POS merchant acquiring services (or
        any of the sub-segmentations of this market) in Italy by restricting access to
        acquiring processing services in the EEA.
(91)    A combined entity has the ability to foreclose downstream competitors when, by
        reducing access to its own upstream products, it can affect the overall availability of
        inputs for the downstream market.106 This is not the case for the combined entity in
        the plausible upstream market for acquiring processing services in the EEA. In this
        market, the combined entity held a market share of approximately [0-5]% in 2019.
        Many other providers of acquiring processing services will remain active on this
        market post-Transaction. These include large players such as Worldline/Ingenico,
        Fiserv/FirstData, FIS/Worldpay, Adyen, SIA, Elavon, or Evo. Customers active in
        the downstream markets for POS merchant acquiring or retail POS merchant
        acquiring (listed in Table 5 above) would be able to turn to one of the many
        upstream competitors and purchase acquiring services in case the combined entity
        decided to engage in a foreclosure strategy.
(92)    As the combined entity would have no ability to foreclose downstream competitors
        in POS merchant acquiring in Croatia, Denmark, Finland, Norway, or Slovenia or in
        retail POS merchant acquiring in Italy, it is not necessary to assess in detail the
        incentives of the combined entity or the overall impact of the Transaction on
        competition. In any event, no respondent to the market investigation raised concerns
        related to input foreclosure in these markets.107
        B. Considering      plausible     national markets        for  acquiring     processing services
             upstream
        B.1.     Finland, Italy, and Slovenia
(93)    The Commission considers that the Transaction is unlikely to give rise to input
        foreclosure concerns in the downstream markets in Finland, Italy, and Slovenia
        (listed in Table 5 above). The Commission considers that the combined entity would
        not have the ability or the incentive to foreclose its downstream competitors in POS
        merchant acquiring services (or any of the sub-segmentations of this market) in
        Finland or Slovenia by restricting access to acquiring processing services at national
        level. Nor would the combined entity have the ability or the incentive to foreclose
        its downstream competitors in retail POS merchant acquiring services (or any of the
106 Non-Horizontal Merger Guidelines, paragraph 36.
107 Responses to questionnaire to competitors in merchant acquiring sent on 2 February 2021.
                                                        28
 ---pagebreak---        sub-segmentations of this market) in Italy by restricting access to acquiring
       processing services at national level.
(94)   A combined entity has the ability to foreclose downstream competitors when, by
       reducing access to its own upstream products, it can affect the overall availability of
       inputs for the downstream market.108 This is not the case for the combined entity in
       the plausible upstream markets for acquiring processing services in Finland, Italy, or
       Slovenia. Post-Transaction, the combined market share of the Parties in each of
       these plausible markets would be below [30-40]%. Many other providers of
       acquiring processing services will remain active on each of these markets post-
       Transaction. These include Worldline, TietoEvry, and Elavon in the Nordic region
       (including Finland); SIA, Worldline, and ICCREA in Italy; and Bankart, Euronet
       and Cetis in Slovenia. Customers active in the downstream markets for POS
       merchant acquiring or retail POS merchant acquiring (listed in Table 5 above) would
       be able to turn to one of the many upstream competitors and purchase acquiring
       processing services in case the combined entity decided to engage in a foreclosure
       strategy.
(95)   As regards incentives to foreclose, the Commission notes that Nets is already today
       active upstream in acquiring processing and downstream in POS merchant acquiring
       in Finland and Slovenia. Nexi is already today active upstream in acquiring
       processing and downstream in retail POS merchant acquiring in Italy but it does not
       offer acquiring processing services to its downstream competitors (only in-house).
       The share increment resulting from the Transaction would be minimal ([0-5]% or
       less) both in the upstream and downstream markets. It is thus unlikely that the
       proposed Transaction would change the incentives of the combined entity to engage
       in an input foreclosure strategy in the downstream markets in Finland, Italy or
       Slovenia.
(96)   As the combined entity would have no ability or incentive to foreclose downstream
       competitors in POS merchant acquiring in Finland or Slovenia or in retail POS
       merchant acquiring in Italy, it is not necessary to assess in detail the overall impact
       of the Transaction on competition. In any event, no respondent to the market
       investigation raised concerns regarding the impact of the proposed Transaction in the
       downstream markets of POS merchant acquiring in Finland or Slovenia or retail POS
       merchant acquiring in Italy, as a result of an input foreclosure strategy involving
       acquiring processing services.109
       B.2.     Croatia, Denmark, and Norway
(97)   The Commission considers that the Transaction is unlikely to give rise to input
       foreclosure concerns in the downstream markets in Croatia, Denmark, and Norway
       (listed in Table 5 above). The Commission considers that the proposed Transaction
       would not give the incentive to the combined entity to foreclose its downstream
       competitors in POS merchant acquiring services (or any of the sub-segmentations of
       this market) in Croatia, Denmark or Norway by restricting access to acquiring
       processing services at national level.
108 Non-Horizontal Merger Guidelines, paragraph 36.
109 Responses to questionnaire to competitors in merchant acquiring sent on 2 February 2021.
                                                        29
 ---pagebreak--- (98)    Nets is already today active upstream in acquiring processing and downstream in
        POS merchant acquiring in Croatia, Denmark, and Norway. The share increment
        resulting from the Transaction in these markets would be minimal ([0-5]% or less)
        both in the upstream and downstream markets. It is thus unlikely that the proposed
        Transaction would change the incentives of the combined entity to engage in an
        input foreclosure strategy in the downstream markets in Croatia, Denmark, or
        Norway.
(99)    As the combined entity would have no increased incentives to foreclose POS
        merchant acquirers in Croatia, Denmark or Norway, it is not necessary to assess in
        detail the ability of the combined entity to foreclose or the overall impact of the
        Transaction on competition. In any event, no respondent to the market investigation
        raised concerns regarding the impact of the proposed Transaction in the downstream
        markets of POS merchant acquiring in Croatia, Denmark, or Norway as a result of an
        input foreclosure strategy involving acquiring processing services. 110
        C. Conclusion
(100) In light of the above considerations, the Commission concludes that the Transaction
        does not give rise to serious doubts as to its compatibility with the internal market in
        relation to a potential input foreclosure for acquiring processing services procured by
        providers of POS merchant acquiring services (including retail POS merchant
        acquirers in Italy).
8.1.2. Customer foreclosure
8.1.2.1. The Notifying Party’s view
(101) The Notifying Party submits that no customer foreclosure concerns arise in relation
        to the vertical relationship for the provision of acquiring processing services
        (upstream) and merchant acquiring services (downstream) for the reasons laid out in
        recital (89) above.
8.1.2.2. The Commission’s assessment
        A. Considering a plausible EEA-wide market for acquiring processing services
             upstream
(102) The Commission considers that the Transaction is unlikely to give rise to customer
        foreclosure concerns in a plausible market for acquiring processing services in the
        EEA. The combined entity would not have the ability to foreclose its upstream
        competitors in acquiring processing services in the EEA by restricting access to a
        significant merchant acquiring customer base for the following reasons.
(103) A combined entity has the ability to engage in customer foreclosure, only when it
        involves a company which is an important customer for the upstream product.111
        This is not the case for Nexi and Nets at an EEA-wide level. As explained in
        paragraph 16(63) above, Nexi and Nets together hold a market share of less than [10-
        20]% in POS merchant acquiring in the EEA. Other POS merchant acquirers with
110 Responses to questionnaire to competitors in merchant acquiring sent on 2 February 2021.
111 Non-Horizontal Merger Guidelines, paragraphs 61 and 66.
                                                        30
 ---pagebreak---        activities in the EEA include FIS/Worldpay, Worldline, Fiserv/First Data, Global
       Payments/TSYS, Elavon, EVO and others.112 In case the combined entity decided to
       only source acquiring services in-house, upstream rivals would continue to offer
       their acquiring services to the many competitors of Nexi and Nets in POS merchant
       acquiring markets in the EEA (including retail POS merchant acquiring in Italy).
(104)  As the combined entity would have no ability to foreclose upstream competitors in a
       plausible market for acquiring processing services in the EEA, it is not necessary to
       assess in detail the incentives of the combined entity or the overall impact of the
       Transaction on competition. In any event, no respondent to the market investigation
       active in the provision of acquiring processing services raised concerns related to
       customer foreclosure.113
       B. Considering       plausible     national markets        for   acquiring    processing services
            upstream
       B.1.      Croatia, Denmark, Finland, Norway, Slovenia
(105) The Commission considers that the Transaction is unlikely to give rise to customer
       foreclosure concerns in plausible national markets for acquiring processing services
       in Croatia, Denmark, Finland, Norway, or Slovenia. The combined entity would not
       have the ability to foreclose its upstream competitors in acquiring processing
       services in these countries by restricting access to a significant merchant acquiring
       customer base for the following reasons.
(106) A combined entity has the ability to engage in customer foreclosure, only when it
       involves a company which is an important customer for the upstream product.114
       This is not the case for the combined entity for the following reasons:
       (a)      In Denmark, Finland and Norway, Nets handles nearly [90-100]% of its
                acquiring processing needs in-house, so that it cannot be considered an
                important customer of acquiring processing services providers. In addition,
                the minimal increment brought by Nexi (less than [0-5]%) does not
                materially impact the ability of the combined entity to engage in customer
                foreclosure in Denmark. Nexi is not active at all in POS merchant acquiring
                services in Finland and Norway and thus the proposed Transaction does not
                change the ability of the combined entity to engage in customer foreclosure
                in these two countries.
       (b)      In Croatia and Slovenia, Nets relies on [BUSINESS SECRET – SUPPLY
                SOURCE] to source acquiring processing for its own merchant acquiring
                activities. However, the merged entity’s downstream presence is limited
                (with a market share below [0-5]%) so that it cannot be considered an
                important customer. In addition, Nexi is not active at all in POS merchant
                acquiring services in Croatia and Slovenia and thus the proposed Transaction
                does not change the ability of the combined entity to engage in customer
                foreclosure in these two countries.
112 Form CO, Annex 13.b – Project Berggreen – Presentation to the BoD, October 24, page 26 and Form CO,
    Annex 22.
113 Responses to questionnaire to competitors in acquiring processing sent on 2 February 2021.
114 Non-Horizontal Merger Guidelines, paragraphs 61 and 66.
                                                         31
 ---pagebreak--- (107) As the combined entity would have no ability to foreclose upstream competitors in a
       plausible market for acquiring processing services in Croatia, Denmark, Finland,
       Norway, or Slovenia, it is not necessary to assess in detail the incentives of the
       combined entity or the overall impact of the Transaction on competition. In any
       event, no respondent to the market investigation active in the provision of acquiring
       processing services raised concerns related to customer foreclosure.115
       B.2.      Italy
(108) The Commission considers that the Transaction is unlikely to give rise to customer
       foreclosure concerns in a plausible national market for acquiring processing services
       in Italy. The proposed Transaction would not give the incentive to the combined
       entity to foreclose its upstream competitors in acquiring processing in Italy by
       restricting access to a significant merchant acquiring customer base for the following
       reasons.
(109) Already today, Nexi holds a share of [30-40]% in the downstream market for retail
       POS merchant acquiring in Italy. Nexi relies on [BUSINESS SECRET – SUPPLY
       SOURCE] for acquiring processing for all its merchant acquiring volumes in Italy,
       with the exception of [BUSINESS SECRET – SUPPLY SOURCE]. Nets does not
       offer acquiring processing services in Italy. Moreover, the increment brought about
       by the Transaction on the downstream market for Retail POS Merchant Acquiring is
       minimal ([0-5]%). It is thus very unlikely that the proposed Transaction would
       change the incentives of the combined entity to engage in a customer foreclosure
       strategy in Italy.
(110) As the combined entity would have no increased incentives to foreclose acquiring
       processing rivals in Italy, it is not necessary to assess in detail in detail the ability of
       the combined entity to foreclose or the overall impact of the Transaction on
       competition. In any event, no respondent to the market investigation raised concerns
       regarding the impact of the proposed Transaction in the upstream market of
       acquiring processing in Italy as a result of a customer foreclosure strategy involving
       POS merchant acquiring.116
       C. Conclusion
(111) In light of the above considerations, the Commission concludes that the Transaction
       does not give rise to serious doubts as to its compatibility with the internal market in
       relation to a potential customer foreclosure for acquiring processing services
       procured by POS merchant acquirers.
8.2.   Manufacture/supply of non-personalised smart payment cards (upstream) –
       Personalisation of smart payment cards (downstream)
(112) Non-personalised smart         payment cards are an input for companies offering card
       personalisation services.        IDEMIA manufactures non-personalised smart payment
       cards while Nets and           IDEMIA offer personalisation services. The proposed
       Transaction results in         vertical overlaps giving rise to affected markets in
       manufacture/supply of         non-personalised smart payment cards (upstream) and
115 Responses to questionnaire to competitors in acquiring processing sent on 2 February 2021.
116 Responses to questionnaire to competitors in merchant acquiring sent on 2 February 2021.
                                                         32
 ---pagebreak---  ---pagebreak---        Hungary, Slovakia, Slovenia, or Romania by restricting access to non-personalised
       smart payment cards for the following reasons.
(115) A combined entity has the ability to foreclose downstream competitors when, by
       reducing access to its own upstream products, it can affect the overall availability of
       inputs for the downstream market. 118 This is not the case for the combined entity
       and IDEMIA regarding the availability of non-personalised smart payment cards for
       the following reasons:
       (a)      While IDEMIA has a meaningful share of [40-50]% in the EEA-wide market
                for personalisation services for smart payment cards, it faces competition
                constraints from several players in this market. These players include Thales,
                G+D, and AustriaCard. In the market investigation, responding competitors
                identified Thales as a player stronger than IDEMIA in the EEA-wide market
                for the manufacture/supply of non-personalised smart payment cards.119
       (b)      IDEMIA’s competitors in the upstream market could expand output to supply
                non-personalised smart payment cards to any downstream players that
                IDEMIA might decide to foreclose. In the market investigation, several
                upstream rivals indicated that they have spare capacity in their manufacturing
                facilities for non-personalised smart payment cards.120
       (c)      In the market investigation, all respondents purchasing non-personalised
                cards that they subsequently personalise stated that there will be a sufficient
                number of suppliers in the EEA post-Transaction and that this will allow
                them to cover their requirements for cards. 121
       (d)      IDEMIA does not offer today non-personalised smart payment cards to any
                personaliser in Croatia. Thus, it does not seem have the ability to foreclose
                Nets’ rivals in that country by restricting access to non-personalised cards.
                As regards Hungary, Slovakia, Slovenia, or Romania, the majority of
                responding competitors do not expect the combined entity (or IDEMIA) to
                have the ability to increase prices or reduce competition in the market of
                personalisation services for smart payment cards. 122
(116)  As the combined entity (and IDEMIA) would have no ability to foreclose smart
       payment card personalisation services providers in Croatia, Hungary, Slovakia,
       Slovenia, or Romania, it is not necessary to assess in detail the incentives of the
       combined entity (and IDEMIA) or the overall impact of the Transaction on
       competition.
118 Non-Horizontal Merger Guidelines, paragraph 36.
119 Questionnaire Q1 to smart payment cards competitors, question 19.1.
120 Questionnaire Q1 to smart payment cards competitors, question 5.1.
121 Questionnaire Q1 to smart payment cards competitors, question 13 and Questionnaire Q2 to smart
    payment cards customers, question 17.
122 Questionnaire Q1 to smart payment cards competitors, questions 25 and 26.
                                                       34
 ---pagebreak--- 8.2.2. Customer foreclosure
8.2.2.1. The Notifying Party’s view
(117) The Notifying Party submits that the combined entity (and IDEMIA) would not have
        the ability or the incentive to foreclose competitors in the upstream market for
        manufacture/supply of non-personalised cards, by restricting access to a significant
        customer base of personalisers. According to the Notifying Party, Nets has a limited
        position in personalisation services for smart payment cards today and its total
        spending for non-personalised smart payment cards in 2019 was EUR [BUSINESS
        SECRET – COST STRUCTURE].123
8.2.2.2. The Commission’s assessment
(118) The Commission considers that the Transaction is unlikely to lead to customer
        foreclosure concerns. The combined entity would not have the ability to foreclose its
        upstream competitors in the manufacture/supply of non-personalised smart payment
        cards in the EEA by restricting access to a significant customer base for the
        following reasons.
(119) A combined entity has the ability to engage in customer foreclosure, only when it
        involves a company which is an important customer for the upstream product.124
        This is not the case for the combined entity in the downstream markets for
        personalisation services of smart payment cards:
        (a)      Nets personalised less than [0-5]% of all smart payment cards that were
                 personalised in the EEA in 2019. Moreover, Nets only offers personalisation
                 services for smart payment cards in five EEA Member States (listed in Table
                 6 above). IDEMIA’s competitors post-Transaction could continue selling
                 non-personalised smart payment cards to (i) 22 Member States where Nets is
                 not active and/or (ii) customers representing [90-100]% of all smart payment
                 cards needed in the EEA, in case the combined entity engaged in a customer
                 foreclosure strategy.
        (b)      Nets does not source non-personalised smart payment cards itself for the
                 majority of its customers. Rather, most of Nets’ customers procure cards
                 directly from the manufacturers.           Nets sourced non-personalised smart
                 payment cards itself for only [BUSINESS SECRET – NUMBER OF
                 CUSTOMER] customers – [BUSINESS SECRET – NAME OF
                 CUSTOMER] in Slovenia. Nets purchased these cards from [BUSINESS
                 SECRET – CONTRACTUAL RELATIONSHIPS] (spending in total EUR
                 [BUSINESS SECRET – COST STRUCTURE] in 2019). This represented
                 less than [0-5]% of the total demand for non-personalised smart payment
                 cards in the EEA in 2019.125 During the market investigation, [BUSINESS
                 SECRET – CONTRACTUAL RELATIONSHIPS] submitted that it does not
                 expect any decrease in the intensity of competition in non-personalised smart
123 Replies to RFIs 4 and 5, questions 9 and 11.
124 Non-Horizontal Merger Guidelines, paragraphs 61 and 66.
125 Reply to RFI 7, question 6.
                                                      35
 ---pagebreak---                 payment cards in the EEA.126           All other responding competitors confirmed
                this.127
(120)  As the combined entity (and IDEMIA) would have no ability to foreclose
       manufacturers of non-personalised smart payment cards in the EEA, it is not
       necessary to assess in detail the incentives of the combined entity (and IDEMIA) or
       the overall impact of the Transaction on competition.
8.2.3. Conclusion
(121) In light of the above considerations, the Commission concludes that the Transaction
       does not raise serious doubts as to its compatibility with the internal market as a
       result of either input or customer foreclosure on the markets for manufacture/supply
       of non-personalised smart payment cards (upstream) and personalisation of smart
       payment cards (downstream).
9.     CONCLUSION
(122) 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
                                                            Executive Vice-President
126 Questionnaire Q1 to smart payment cards competitors, question 24.
127 Questionnaire Q1 to smart payment cards competitors, question 24.
                                                       36