CELEX: 32020M9408
Language: en
Date: 2020-02-27 00:00:00
Title: Commission Decision of 27/02/2020 declaring a concentration to be compatible with the common market (Case No COMP/M.9408 - ASSA ABLOY / AGTA RECORD) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                  Brussels, 27.02.2020
                                                                  C(2020) 1273 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                                                                    information omitted has been replaced by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.
                                                                  To the notifying party
Dear Sir/Madam,
Subject:            Case M.9408 – Assa Abloy/Agta Record
                    Commission decision pursuant to Article 6(1)(b) in conjunction with
                    Article 6(2) of Council Regulation No 139/20041 and Article 57 of the
                    Agreement on the European Economic Area2
(1)        On 9 January 2020, the Commission received a notification of a proposed
            concentration pursuant to Article 4 of Council Regulation (EC) No 139/2004 (the
            ‘Merger Regulation’) by which Assa Abloy AB (publ) (Sweden, ‘Assa Abloy’),
            acquires within the meaning of Article 3(1)(b) of the Merger Regulation sole
            control of the whole of agta record ag (Switzerland, ‘Agta Record’). The
            concentration is accomplished by way of purchase of shares (the ‘Transaction’).3
            Assa Abloy is hereinafter designated as the ‘Notifying Party’. Assa Abloy and Agta
            Record are hereinafter collectively referred to as the ‘Parties’.
*
          Special handling instructions are given at https://europa.eu/!db43PX.
1
            OJ L 24, 29.1.2004 p. 1. With effect from 1 December 2009, the Treaty on the Functioning of the
            European Union (‘TFEU’) has introduced certain changes, such as the replacement of ‘Community’
            by ‘Union’ and ‘common market’ by ‘internal market’. The terminology of the TFEU will be used
            throughout this decision.
2
            OJ L 1, 3.1.1994, p. 3 (the ‘EEA Agreement’).
3
            Publication in the Official Journal of the European Union No C 16, 17.1.2020, p. 47.
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 AND THE OPERATION
(2) Assa Abloy is a group headquartered in Stockholm, Sweden, active across a broad
    range of access solutions, including automatic pedestrian doors, automatic
    industrial doors, locks, sensors, as well as access control systems and related
    components.
(3) Agta Record is a group headquartered in Fehraltorf, Switzerland, focusing on the
    manufacture, supply and servicing of automatic pedestrian doors, with limited
    activities in industrial doors.
(4) Assa Abloy currently owns a non-controlling 38.75% interest in Agta Record.4
2.  THE TRANSACTION
(5) The Transaction involves the acquisition of sole control by Assa Abloy over Agta
    Record. On 6 March 2019, the Parties entered into a share purchase agreement for
    the sale and transfer of the controlling 53.75% interest in Agta Record currently
    owned by Agta Record Finance SAS. After closing, Assa Abloy will own
    approximately 92.5% of Agta Record’s share capital and voting rights.5 Upon
    completion of the Transaction, Assa Abloy is committed to launch a public tender
    offer for the remaining outstanding shares in Agta Record.
(6) The Transaction therefore constitutes a concentration within the meaning of Article
    3(1)(b) of the Merger Regulation.
3.  UNION DIMENSION
(7) Assa Abloy and Agta Record have a combined aggregate worldwide turnover of
    more than EUR 5 000 million (Assa Abloy: EUR 8 412.7 million, Agta Record:
    EUR 375.4 million). Each of them has a Union-wide turnover in excess of EUR
    250 million (Assa Abloy: [Assa Abloy’s Union-wide turnover] million, Agta
    Record: EUR [Agta Record’s Union-wide turnover] million), but they do not
    achieve more than two-thirds of their aggregate Union-wide turnover within one
    and the same Member State. The Transaction therefore has a Union dimension
    pursuant to Article 1(2) of the Merger Regulation.
4.  INTRODUCTION TO THE ENTRANCE AUTOMATION INDUSTRY
(8) As a matter of general introduction, this section summarises the basic features of
    the entrance automation industry and introduces terms and concepts used in the
    remainder of this decision.
(9) Entrance automation systems are motorised products used in and around entrances,
    which allow the opening and closing of, e.g., doors and gates. These systems equip
    commercial, industrial and residential buildings, as well as other types of public
    spaces.
4
    Assa Abloy acquired a non-controlling 37.9% interest in Agta Record in 2010. In 2013, Assa Abloy
    increased its shareholding to the current 38.75% of the share capital and the votes.
5
    The remaining 7.5% shares are free float.
                                                    2
 ---pagebreak--- 4.1.   Relevant entrance automation systems
(10)   For the purpose of assessing the Transaction, two types of automation systems are
       relevant, namely automatic pedestrian doors and industrial doors, as well as
       after-sales services and spare parts for each of these door types.6
4.1.1. Automatic pedestrian doors
(11)   Automatic pedestrian doors are doors used by pedestrians that open and close
       automatically after being triggered by a motion sensor, a push plate or an access
       control device. Automatic pedestrian doors may be used for both interior and
       exterior applications.
(12)   Automatic pedestrian door solutions may involve the sale of (i) standalone
       operators; or (ii) complete door sets.
(13)   An operator is a mounted device that performs the function of opening and closing
       an automatic pedestrian door. Operators usually consist of: (i) operating control
       components (e.g. control boards and sensors); (ii) opening and closing hardware
       (e.g. power supply and gear boxes); (iii) a motor; (iv) safety devices and actuators
       (e.g. safety switches and push buttons); and (v) software.
(14)   Original equipment manufacturers (‘OEMs’) assemble separate parts into operators
       and fit them into aluminium casings. While this assembly process is generally
       manual, cutting aluminium for the casings and the painting and coating requires
       machinery.
(15)   A complete automatic pedestrian door set generally consists of (i) an operator; (ii)
       one or several door leaves; and (iii) a door frame, tracks, carriage wheels, belts (for
       sliding doors) or an arm (for swing doors). Automatic pedestrian doors may come
       with variations in, e.g., the size, colour and thickness of the glass.
(16)   Automatic pedestrian doors include several door types, mainly swing, sliding and
       revolving doors, but also folding and other types of specialty doors:
       (a)     Automatic swing doors (‘swing doors’) open by rotating around an axis.
               Swing doors are more space efficient than sliding or revolving doors in terms
               of the size of wall/frame space needed, but less energy-efficient. Swing doors
               are more often used as interior doors. Most non-automated doors may be
               converted into an automatic swing door with the installation of an operator
               and an arm. Therefore, many sales of swing doors consist in the sale of the
6
       The Transaction gives rise to minor horizontal overlaps in other entrance automation systems, such
       as traffic gates and barriers, roller shutters, garage doors and entrance control units. Since the
       Parties’ activities in these segments are minimal and cannot give rise to affected markets, these will
       not be further assessed in this decision. In particular, according to the Form CO, Agta Record is not
       active in the manufacturing of traffic gates and barriers but only acts as a distributor of FAAC’s
       traffic gates and barriers in The Netherlands, where Assa Abloy is not directly active. Likewise,
       Agta Record is not active in the manufacturing of entrance control but only acts as a distributor of
       FAAC’s, Gunnebo’s and Cominfo’s products in The Netherlands and Boon Edam’s products in
       Poland, where Assa Abloy has either de minimis sales ([Assa Abloy’s sales] in The Netherlands) or
       no presence at all (Poland). Agta Record also has very limited production and distribution of roller
       shutters and garage doors in France (only), whereas in France Assa Abloy makes de minimis sales
       of third party roller shutters ([Assa Abloy’s sales], and of garage doors ([Assa Abloy’s sales]).
                                                         3
 ---pagebreak---              operator and arm only. There is also an existing overall trend towards greater
             adoption of low-energy swing door operators as opposed to full-energy
             operators.7 Low-energy swing operators allow the door to open at lower
             speeds than full-energy operators and remain open for at least five seconds.
     (b)     Automatic sliding doors (‘sliding doors’) open laterally by sliding. They can
             consist of single or bi-parting openings. Sliding doors typically include glass
             leaves and are primarily used for the entrance of buildings. Globally, the
             sliding door segment is forecast to grow the fastest between 2016 and 2021,
             as these are the most popular product type and account for the biggest
             proportion of all automatic doors installed.8
     (c)     Automatic revolving doors (‘revolving doors’) rotate to let pedestrians in and
             out. Revolving doors usually have two, three or four leaves. These doors are
             the most expensive and complex option, but also the most energy-efficient.
             They are almost exclusively found at the entrance of buildings.
     (d)     Automatic folding doors (‘folding doors’) move horizontally and are
             intended for premises with limited space around the door opening.
     (e)     Additionally, there is a heterogeneous group comprising different types of
             specialty automatic doors displaying certain special properties, such as
             sealing capabilities (hermetic doors), fire resistance (fire doors) or bullet or
             blast resistance (security doors).
(17) Even though many of these products may be similar throughout the EEA, there are
     country-specific requirements in terms of national safety norms and regulation that
     result in certain product differences across countries. For instance, some countries
     may impose specific requirements on doors used in escape routes9 or additional
     certificates or declarations.10 While the most important standard in the EU
     applicable to automatic doors is EN 16005, some countries have defined their own
     national standards.11
(18) Figure 1 below illustrates automatic swing, sliding, revolving and hermetic doors.
7
     ‘Door Automation Products. Global Report’, IHS Markit Technology, 24 October 2017, page 19.
8
     ‘Door Automation Products. Global Report’, IHS Markit Technology, 24 October 2017, page 3.
9
     By way of illustration, Germany and Austria require the use of redundant sliding doors (equipped
     with two batteries and two motors), Belgium requires sliding doors with a break-out function and
     France requires sliding doors equipped with a rubber band.
10
     By way of illustration, Hungary requires obtaining the additional certificate NMÉ in order to sell
     automatic doors in the country. In Sweden, some customers require that suppliers are declared by
     SundaHus or Byggvarubedömningen as non-hazardous in order to qualify for tenders.
11
     By way of illustration, Germany and Austria require that automatic pedestrian doors comply with
     the national standards DIN 18650 and DIN 18263.
                                                     4
 ---pagebreak---        Figure 1 – Sample of automatic swing, sliding, revolving doors and hermetic doors
                              Source: prepared by the Commission.
4.1.2. Industrial doors
(19)   Automatic industrial doors (‘industrial doors’) are generally designed to facilitate
        the flow of goods or vehicles in industrial or commercial buildings. They may be
        used for either interior or exterior applications.
(20)   Industrial doors include different types of automatic doors, such as (i) high-speed
        doors; (ii) overhead sectional doors; (iii) industrial folding doors; and (iv) docking
        doors and stations.
        (a)   High-speed doors have a roll-up system with high opening speed and allow
              people and goods to pass through without disrupting the flow.
        (b)   Overhead sectional doors are made of sections that slide up and disappear up
              under the roof when opened in order to save as much space as possible
              around the door opening.
        (c)   Industrial folding doors move horizontally and are intended for premises with
              limited space around the door opening and where the roof space is not
              sufficient to allow for a sectional door.
        (d)   Docking doors and stations are designed for locations with intense traffic
              flow of heavy vehicles. Docking stations enable loading and unloading from
              trucks and allow for adjusting the loading bay to facilitate loading from truck
              beds of different levels.
(21)   Figure 2 below illustrates these different types of industrial doors.
       Figure 2 – Sample high-speed, overhead sectional, industrial folding and docking doors
                                Source: prepared by the Commission.
                                                   5
 ---pagebreak--- 4.1.3. After-sales services
(22)   After-sales services include the maintenance, repair, servicing, overhaul and
       upgrades of automatic doors in operation. After-sales services involve both regular
       maintenance (typically performed on the basis of maintenance contracts12), ad-hoc
       repairs (also known as one-off transactions, call-outs or service calls) and retro-fits
       or overhaul (whereby the provider supplies additional features to an existing
       installation and/or upgrade it to higher or later specification).13
(23)   After-sales services can be provided both by the supplier of the door (either the
       OEM or the non-integrated supplier) or by a third party. They are undertaken with
       the assistance of service tools and may require spare parts. Service tools are
       software-based solutions that can facilitate configuration and troubleshooting.
       Spare parts can be generic or brand specific. Brand specific spare parts typically
       need to be sourced directly or indirectly from the OEM of the door to be repaired
       or maintained. This is particularly true for some parts such as the drive motor and
       the electronic control of the operator.
4.1.4. Spare parts
(24)   Spare parts include components used when assembling automatic doors or even
       sub-assemblies of such components.
(25)   The majority of the supply of spare parts occurs within the context of the provision
       of after-sales services to replace faulty or depleted parts, although spare parts may
       also be sold to non-integrated suppliers for them to assemble automatic doors.
(26)   There are two types of spare parts: generic spare parts and brand-specific spare
       parts.
       (a)     Generic spare parts can be replaced by any sub-component with the same
               function, regardless of brand or certification. These include, e.g., springs,
               rollers, hydraulics, wheels, plastics, belts, cables and metal plates/bends.
       (b)     Brand-specific spare parts are specific to products of a specific brand, which
               must be sourced from the OEM or its dealer network (or from entities that
               resell brand-specific spare parts). These include, e.g., the motor, the drive
               unit or the control board of the door in question, but also mechanical spare
               parts such as carriages, casings, frames and profiles, as well as certain pieces
               of electronics such as batteries.14
12
       Contracts may include maintenance ranging from one to a few times per year, with additional
       options to also include, e.g., spare parts, labour and/or a preferred response time.
13
       Form CO, paragraphs 169, 274, 275; minutes of a call with a competitor of 14 August 2019,
       paragraph 15; minutes of a call with a competitor of 30 October 2019, paragraph 13.
14
       The Notifying Party considers that a distinction can also be made between non-copyable and
       copyable branded spare parts (Form CO, paragraph 315), but the practical relevance of that
       distinction is not entirely clear (e.g,, what determines the copyable nature of a branded spare part,
       what is the level of awareness of what is copyable or not, who can actually copy copyable spare
       parts and under what market conditions). For the purpose of its investigation in the present case, the
       Commission has therefore considered branded-spare parts as a single category, without further
       distinctions.
                                                          6
 ---pagebreak--- 4.2. Value and supply chain of automatic pedestrian doors and industrial doors
(27) The value chain of automatic pedestrian doors and industrial doors typically
     consists in the design of sub-systems, manufacture/procurement of components,
     assembly, sale/wholesale and installation of operators or complete door sets, and
     after-sales services.
(28) This value chain may be more or less centralised depending on the company. Some
     companies manufacture, assemble and ship automatic pedestrian doors in/from the
     same premises, whereas others manufacture in certain premises and ship the
     manufactured products to a different plant for the final assembly and distribution.
(29) The supply chain in the entrance automation systems industry mainly comprises
     two types of suppliers: OEMs (or ‘integrated suppliers’) and independent
     distributors/installers (or ‘non-integrated suppliers’).
(30) OEMs manufacture and supply operators and complete door sets to both end-
     customers and non-integrated suppliers. OEMs also install themselves operators
     and complete door sets at the premises of end-customers and provide after-sales
     services.
(31) Non-integrated suppliers do not have their own proprietary designs and supply
     chain. They source door parts (e.g. operators, door frames and glass leaves), which
     they then assemble, sell and install as a complete door set at the premises of end-
     customers. Operators sold to non-integrated suppliers generally carry the brand of
     the manufacturing OEM.15
(32) On the demand side, there are several types of end-customers of entrance
     automation systems, such as small and medium-sized business owners, key account
     customers, building contractors, façade companies or facility management
     companies.
(33) End-customers may belong to different end-user groups, such as healthcare (e.g.
     hospitals and elderly care), retail (e.g., clothes stores, pharmacies or supermarkets),
     private sector (e.g., office buildings and banks), public sector (e.g., universities,
     libraries and governmental buildings), hospitality (e.g., hotels) or transport (e.g.,
     airports).
(34) OEMs and non-integrated suppliers also sell operators and complete door sets to
     customers who are not the end-users (intermediary customers). These intermediary
     customers tend to be responsible for the construction or refurbishment of a building
     on behalf of an end-user (e.g., contractors or façade companies).
4.3. Procurement process
(35) The procurement process might vary depending on whether the end-customer is a
     public or a private entity. Public entities often organise tenders according to public
     procurement rules, whereas private entities may organise regular tenders or simply
     request quotes from different suppliers. Certain large/key customers also enter into
15
     Questionnaire 1 to competitors, question 14.10; Questionnaire 3 to non-integrated suppliers,
     question 21.
                                                 7
 ---pagebreak---        framework agreements with suppliers, whereas smaller customers rather resort to
       one-off sales to source a single (or a few) door(s).16
(36)   Architects are not customers but have an important role in the competitive process,
       particularly in sales to contractors and façade companies. Architects may influence
       the choice of automatic doors used in a particular building project by, e.g.,
       specifying certain dimensions for a door opening that suits a certain supplier better
       than other potential suppliers.17 For this reason, many OEMs market their products
       to architects with the objective of inducing them to include, in the specifications of
       a building, technical requirements or references to a particular supplier’s product,
       or to mention a particular brand or simply dimension door openings in a way that
       suits them better than other potential OEMs.
(37)   The importance of architects in the procurement process was echoed by
       respondents to the market investigation and also mentioned by Assa Abloy in
       recent earning calls with investors, as follows: ‘[f]or new projects, bigger projects,
       we have a large specification team working together with architects, working
       together with contractors, making sure that the spec in the right solution, an ASSA
       ABLOY solution in their projects. Once it’s spec-ed in, then it’s also much easier
       afterwards to sell your products and your solutions’.18 The market feedback is
       consistent on this point. A majority of respondents who expressed an opinion
       consider that architects play either an ‘important’ or a ‘very important’ role.19 A
       competing OEM expressed that planners and architects usually specify a brand and
       that their influence is very high.20
4.4.   Other products vertically or closely related to entrance automation systems
(38)   Access control systems and components, locking devices and sensors are products
       that are closely related to entrance automation systems.
4.4.1. Access control systems
(39)   Access control systems manage the access credentials into and/or within buildings
       and enable communication between access control components (e.g., cards and
       card readers).
4.4.2. Locks
(40)   Locks secure access to doors of, e.g., buildings, vehicles, furniture or cabinets. A
       traditional lock may be either mechanical (where all parts of the system are
       mechanical) or electromechanical (where are least one part is electronic).
(41)   Mechanical locks typically consist of cylinders, lock cases and a strike plate.
       Mechanical locks are either single-point locks or multi-point locks (which have
       more than one locking point typically activated by a cylinder). The cylinder is
16
       Form CO, paragraphs 242 and 244.
17
       Form CO, paragraph 246.
18
       ASSA ABLOY AB (publ) – Analyst Investor Day, slide 6.
19
       Questionnaire 1 to competitors, question 38.
20
       Questionnaire 1 to competitors, questions 32.1 and 33.1.
                                                       8
 ---pagebreak---        fitted into a lock case (a metal case around the actual lock cylinder) which is placed
       in the door or on the side of the door with the strike plate.
(42)   Electromechanical locks operate by means of electric current.
4.4.3. Electric strikes
(43)   Electric strikes are electromechanical locking devices, activated by an electric
       current and releasing the latch bolt of the lock case by electrically retracting a small
       ramped surface (‘strike’). This allows for opening of the door with a lock in a
       closed position (without operating the lock itself). The strike subsequently returns
       to its original position, relocking the door when closed.
4.4.4. Sensors
(44)   Sensors are devices that detect the presence of pedestrians and vehicles and
       consequently order the door to open automatically. Sensors can work for one or
       multiple types of automatic doors. Sensors can also be used for elevators and
       escalators.
4.5.   Introduction to the Parties’ activities
4.5.1. Overlapping activities of the Parties
(45)   The Parties are both OEMs of automatic doors, including automatic pedestrian
       doors (swing, sliding and revolving) and industrial doors (including high-speed
       doors). The Parties have a fully integrated supply chain ranging from the design of
       operators to the on-site installation of complete door sets (including operators, door
       leaves and other components), and the provision of after-sales services.
(46)   Both companies sell directly to end-customers (e.g., building contractors, façade
       companies, retail chains or hospitals), but also to non-integrated suppliers.
(47)   In the EEA, Assa Abloy sells automatic pedestrian doors to end-customers under
       the Assa Abloy (formerly, until 2018, Besam) brand and to non-integrated
       suppliers under the Entrematic and Ditec brands.21 Agta Record sells swing and
       sliding doors under the record brand, and revolving doors under the BLASI
       brand.22 In addition, it sells hermetic doors under the KOS brand. In the supply of
       industrial doors, Assa Abloy uses the brand Assa Abloy, as well as various local
       brands, for sales to end-customers and brands such as Dynaco, Ditec, Nergeco and
       Normstahl, combined with Entrematic, for sales to non-integrated suppliers.23 Agta
       Record supplies limited volumes of industrial doors under the record brand.24
(48)   Both Assa Abloy and Agta Record provide after-sales services (which may
       comprise the maintenance, repair or upgrade of automatic doors), an activity that
       contributes a sizeable share of their overall revenues and profits ([Assa Abloy’s
21
       Form CO, paragraph 134.
22
       Form CO, paragraph 156. In France, Agta Record also sells swing and sliding doors to non-
       integrated suppliers under the Vercor brand.
23
       Form CO, paragraph 1653.
24
       Form CO, paragraph 1662.
                                                    9
 ---pagebreak---        sales]).25 In addition to offering after-sales services themselves, the Parties also
       supply spare parts required to provide after-sales services on their doors to third-
       party service providers.26
4.5.2. Non-overlapping activities of the Parties
(49)   In addition to its activities related to automatic doors, Assa Abloy provides access
       control systems, locking devices and sensors.
(50)   With regard to access control systems,27 Assa Abloy manufactures and sells both
       access control systems (software) and access control components (hardware). The
       Notifying Party submits that ‘[t]hrough its Global Technologies division, Assa
       Abloy manufactures and sells components to identity solutions and electronic
       access control systems (such as electronic systems to open doors and gates with
       identity cards, pin codes and card readers)’28, while ‘ASSA ABLOY Opening
       Solutions EMEA provides both electronic access control systems (via Aptus,
       Accentra, Abloy OS, Scala, SMARTair and Seawing) and electronic access control
       system components (via e.g. its wholesaler business)’.29 Agta Record does not
       manufacture access control systems or components; at customers’ requests, it
       occasionally sources from third parties electronic access control components to
       operate its automatic doors.30
(51)   With regard to locking devices, Assa Abloy manufactures and sells locks via its
       division ASSA ABLOY Opening Solutions.31 Assa Abloy’s lock brands include
       ABLOY, ASSA ABLOY, IKON, Mul-T-Lock, TESA, UNION, Yale and
       Vachette. Agta Record is not active in the manufacturing of locks.32 At customers’
       requests, it occasionally sources from third parties and resells locks as integrated
       part of its automatic doors.
(52)   Assa Abloy manufactures electric strikes through ASSA ABLOY
       Sicherheitstechnik GmbH (Germany) and ASSA ABLOY Czech & Slovakia s.r.o.
       (Czechia).33 These electric strikes are sold in the EEA through the Opening
       Solutions EMEA division, predominantly under effeff and FAB brands. Agta
       Record is not active in the manufacturing of electric strikes.34 In rare cases an
       electric strike is delivered as part of a door system, Agta Record sources it from a
       third party.
(53)   Finally, with regard to sensors, Assa Abloy’s subsidiary Cedes manufactures and
       supplies sensors to, amongst others, OEMs of automatic doors (including Agta
25
       Agta Record only provides after-sales services for industrial doors in France.
26
       However, the Parties do not manufacture generic spare parts for automatic pedestrian doors and are
       only involved to a limited extent in the supply of generic spare parts.
27
       Form CO, Section D.5.2.
28
       Form CO, Section D.5.2.1., paragraph 2132.
29
       Form CO, Section D.5.2.1., paragraphs 2132 and 2135.
30
       Form CO, Section D.5.2.2., paragraph 2138.
31
       Form CO, Section D.1.2.1., paragraph 1995.
32
       Form CO, Section D.1.2.2., paragraph 2000.
33
       Reply of the Notifying Party to question 1 of the request for information 14, 11 February 2020 and
       reply of the Notifying Party to question 1 of the request for information 15, 21 February 2020.
34
       Reply of the Notifying Party to question 1 of the request for information 15, 21 February 2020.
                                                        10
 ---pagebreak---      Record).35 In contrast, Agta Record does not sell sensors to third parties; it
     manufactures sensors based on a closed interface for exclusive use in some of its
     own automatic door models.
4.6. Entrance automation systems OEMs and non-integrated suppliers in the EEA
(54) Entrance automation systems OEMs active in the EEA have different geographical
     footprints. Some OEMs are present EEA-wide, whereas others have activities only
     in certain Member States. The Parties offer the products and services described in
     Section 4.5 above across the EEA, while their competitors may only offer a range
     of products or be active only in parts of the EEA. Non-integrated suppliers are for
     the most part active only at national or local level.36
(55) In addition to the Parties, some of the main industry players are listed below:
     (a)    For automatic pedestrian doors, the main OEM suppliers include Dormakaba
            International Holding GmbH (‘Dormakaba’), Geze GmbH (‘Geze’), Gretsch-
            Unitas GmbH (‘GU Automatic’), Landert Group AG (‘Tormax’), FAAC
            S.p.A. (‘FAAC’), Gilgen Door Systems AG (‘Gilgen’), Royal Boon Edam
            International B.V. (‘Boon Edam’), Portalp SAS (‘Portalp’), Label S.p.A.
            (‘Label’) and Manusa Gest, S.L. (‘Manusa’).
     (b)    For industrial doors, the main OEM suppliers include Hörmann KG
            Verkaufsgesellschaft (‘Hörmann’), EFAFLEX Tor- und Sicherheitssysteme
            GmbH & Co. KG (‘Efaflex’), Ba2i Technologies SAS (‘Ba2i’), Manurégion
            SARL (‘Manurégion’), Safir SAS (‘Safir’), Portalp and Novoferm GmbH
            (‘Novoferm’).
     (c)    For after-sales services, important providers include Dormakaba, Geze, GU
            Automatic, Gilgen, Kone, Boon Edam, Tormax, Portalp, Thyssenkrupp,
            FAAC, as well as facility management companies.
     (d)    For access control systems and components, the main suppliers include
            Allegion, Dormakaba, Ikor, Hana, Season, Cominfo, Digitalist Finland,
            Westcomp, Victorsson Industrier and OEM Electronics.
     (e)    For locks, suppliers include Bricard, Dormakaba, Marques, Carl Fuhr, DOM-
            MCM, Ezcurra, Mottura Serrature di Sicurezza, jasa, Abson Industry or
            Carlisle Brass/Eurospec.
     (f)    For sensors, suppliers include BEA, Bircher Reglomat, Carlo Gavazzi,
            FRABA, Witt, Optex, Pepperl + Fuchs, SICK, Telco and Horton.
35
     Form CO, Section D.2.1., paragraph 2048 and Section D.2.2.1., paragraphs 2051 and following.
36
     By way of illustration, some of these non-integrated suppliers are Wartecker and Fiegl &
     Spielberger (in Austria), P.D.S. Installatiebedrijf (in Belgium), Nordisk Doer Automatik and
     Scandisolution (in Denmark), Axed, AF Maintenance, Citec and Lacroix (in France), Alois Jakob
     Metall am Bau GmbH, Burmann and Stahl- und Metallbau Schönhut (in Germany), Alvista,
     Chameo and Coenen Automatische Deuren (in the Netherlands), Alumatik d.o.o. (in Slovenia),
     Advanced Entrance Technology and Automatic Door Systems (in Sweden) and Automatic Access
     Limited and The Automatic Door Company (in the United Kingdom).
                                                   11
 ---pagebreak--- 5.       MARKET DEFINITION
(56)     The main products relevant to the merger control assessment of the Transaction are
         automatic pedestrian doors, industrial doors, after-sales services, spare parts, access
         control systems and components, locking devices, and sensors.
(57)     The supply of automatic pedestrian doors and industrial doors is characterized by
         similar features, which are described in Section 5.1 below. In turn, Sections 5.2 and
         5.3 include a specific analysis of the supply of automatic pedestrian doors and
         industrial doors, respectively. The subsequent sections discuss after-sales services,
         spare parts, access control systems and components, locking devices and sensors.
5.1.     General considerations on the market definition of automatic pedestrian doors
         and industrial doors
5.1.1.   Sales channels
5.1.1.1. Notifying Party’s arguments
(58)     The Notifying Party submits that two separate and vertically related product
         markets should be defined within automatic pedestrian doors and industrial doors,
         depending on whether the supplier installs the door at the premises of the end-
         customer, namely (i) an upstream market for automatic door components sold by
         OEMs to non-integrated suppliers (only), which is referred to as the ‘indirect
         channel’ and where installation is not included; and (ii) a downstream market for
         automatic door solutions sold to end-customers (only) by OEMs and non-integrated
         suppliers, which is referred to as the ‘direct channel’ and where installation is
         included.37 Figure 3 below provides an overview of the Notifying Party’s
         proposed segmentation.
        Figure 3 – Notifying Party’s proposed segmentation between an upstream and a
        downstream market
(59)     In this regard, the Notifying Party submits that the upstream market (also referred
         to as the ‘indirect channel’) would consist in the supply of operators (and of
         complete door sets to a limited extent) by OEMs to non-integrated suppliers for
         resale and installation. In turn, the downstream market (also referred to as the
         ‘direct channel’) would comprise the supply to end-customers of complete
         automatic door sets and operators for the automation of existing doors, by both
         OEMs and non-integrated suppliers. According to the Notifying Party, downstream
37
         Form CO, Sections B.2.2.1.1. and C.2.1.2.1.
                                                     12
 ---pagebreak---          sales would usually include the installation and configuration of the automatic
         doors, as well as other on-site services.38
(60)     The Notifying Party explains that indirect sales eventually translate into direct
         sales, as non-integrated suppliers supply end-customers with operators combined
         with door leaves and frames, in competition with the OEMs from which they
         procured the operators in the first place.
(61)     The Notifying Party considers that the proposed segmentation is justified by
         differences in customer demand: in the direct channel a number of on-site services
         are supplied together with the automatic doors (e.g. taking exact measurements,
         discussing the specifications of the door), whereas in the indirect channel
         customers allegedly buy the products in bulk and order them for stocking purposes
         and eventually resale. In addition, the Notifying Party considers that supply side
         substitutability is limited across the two segments, as OEMs supplying end-
         customers downstream need a local presence, whereas non-integrated suppliers
         would need to develop their own automatic door operators (i.e., become OEMs) in
         order to enter the upstream segment.39
5.1.1.2. Commission’s assessment
(62)     In Assa Abloy/Cardo, which related to a concentration between two OEM suppliers
         of industrial doors and related after-sales services,40 the Commission did not retain
         a distinction between an upstream and a downstream market, and the parties did
         not submit that it would be appropriate to do so at the time. In this precedent dating
         from 2011, while leaving the precise market definition open, the Commission
         based instead its competitive assessment on an overall market for industrial doors
         (and each of the different industrial doors types).
(63)     When it cleared Assa Abloy’s acquisition of a non-controlling minority interest in
         Agta Record back in 2010, the United Kingdom’s Office of Fair Trading (‘OFT’)
         distinguished between the sale of operators, on the one hand, and the sale of
         complete automatic pedestrian door sets, on the other hand.41 The OFT did not
         distinguish between an upstream and a downstream market, but merely indicated
         that operators (i.e, ‘automatic door automation systems’) and complete door sets
         (i.e., ‘complete automatic pedestrian door sets’) ‘are sold in the UK through
         different sales channels to end users’.42
(64)     In the present case, contrary to the Notifying Party’s arguments, the Commission
         takes the view that examining competition at OEM-level (i.e., sales by OEMs-only
         to both end-customers and non-integrated suppliers, thus combining OEM sales in
         the direct and indirect channels) is a more appropriate analytical framework to
         assess the impact of the Transaction on competition, for a number of reasons
38
         Revolving doors are generally sold as complete door sets in the direct channel and only very rarely
         as stand-alone operators in the indirect channel as the production process is integrated to a higher
         degree than for other door types.
39
         Form CO, paragraph 331.
40
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo.
41
         OFT decision of 4 February 2011 in Case ME/4792/10 Assa Abloy/Agta Record, paragraphs 12-24.
42
         OFT decision of 4 February 2011 in Case ME/4792/10 Assa Abloy/Agta Record, paragraph 10.
                                                        13
 ---pagebreak---      spelled out below. Figure 4 below provides an overview of the Commission’s
     approach for the assessment of the Transaction.
     Figure 4 – Commission’s retained approach for the assessment of the Transaction
(65) At the outset, the Commission notes that the Transaction involves the combination
     of, and the resulting loss in competition between, two fully integrated OEMs
     supplying both end-customers and non-integrated suppliers with the same products
     by means of a dual distribution structure. However, the Notifying Party’s approach
     does not capture accurately the extent of the loss of competition between the
     Parties as two of the main OEMs active EEA-wide in the supply of automatic
     doors. In particular, the proposed definition of a downstream market encompassing
     sales to end-customers by both OEMs and non-integrated suppliers has the
     consequence of artificially diluting the extent of the Parties’ actual market position,
     which cannot be reflected either by assessing the proposed upstream market in
     isolation. The results of the market investigation support the appropriateness of the
     Commission’s assessment framework.
(66) First of all, a vast majority of competing OEMs and non-integrated suppliers who
     expressed an opinion on this point do not consider that there are material technical
     differences between the automatic doors, including operators or complete door sets,
     supplied to end-customers, on the one hand, and to non-integrated suppliers, on the
     other hand.43 Hence, there is a very high degree of substitutability between the
     products marketed to end-customers and to non-integrated suppliers.
(67) Secondly, a vast majority of respondents to the market investigation have indicated
     that non-integrated suppliers also source door leaves and complete door sets from
     OEMs, i.e., not only standalone operators.44 Moreover, a significant number of
     respondents submitted that, contrary to the Notifying Party’s argument, non-
     integrated suppliers also source products from OEMs on a project/on-demand
     basis, like end-customers do, and not only or even primarily for stocking and resale
     purposes.45 In this regard, a competitor submitted that ‘[t]he automatic door
     business is mainly project driven and specifications are strictly related to all the
     different openings present in each project (dimensions, type of flow, etc.)’.46
     Conversely, as the Parties acknowledge, end-customers also procure operators
43
     Questionnaire 1 to competitors, question 14.7; and Questionnaire 3 to non-integrated suppliers,
     question 19.
44
     Questionnaire 1 to competitors, question 14.5; and Questionnaire 3 to non-integrated suppliers,
     question 14.
45
     Questionnaire 1 to competitors, question 14.6; and Questionnaire 3 to non-integrated suppliers,
     question 18.
46
     Questionnaire 1 to competitors, question 14.6.1.
                                                    14
 ---pagebreak---      only, such as swing operators to automate existing doors.47 Moreover, revolving
     doors are generally sold as complete door sets irrespective of the sales channel,48
     and then primarily in the direct channel. These elements further reinforce the
     substitutability across sale channels, which extends to procurement patterns.
(68) Thirdly, non-integrated suppliers are inherently dependent on OEMs for the core –
     if not the whole – of the automatic door products that they supply. Moreover,
     according to a vast majority of competing OEMs and non-integrated suppliers, the
     brand of originating OEMs is generally affixed on the operators and the complete
     door sets procured by non-integrated suppliers for resale and installation.49 As a
     result, from the end-customer perspective, the products supplied by non-integrated
     suppliers clearly originate from and remain affiliated with OEMs, with potential
     consequences in terms of customer loyalty and cross-selling/sourcing, notably for
     after-sales services.50
(69) Fourthly, the market investigation has revealed that vertical integration gives
     OEMs a significant cost advantage compared to non-integrated suppliers. This is
     particularly apparent from the outcome of an analysis of the realised prices of Agta
     Record’s best-selling products to non-integrated suppliers in each of the United
     Kingdom, Germany and France, compared to the internal prices charged within
     Agta Record for the same products for supply in the same countries.51 That analysis
     revealed differences of up to [information about Agta Record’s margins and cost
     structure] to the benefit of Agta Record’s own local operations. Hence, this
     constitutes strong evidence that non-integrated suppliers are not able to exercise the
     same level of competitive constraints on OEMs than OEMs among themselves,
     notably as basic local operational costs (e.g., labour, operating assets) are largely
     equivalent irrespective of the supplier category.
(70) Fifthly, as explained in section 5.1.2, the outcome of the market investigation
     reveals that a core segment of demand, namely large end-customers and large
     projects, tend to favour direct procurement from OEMs rather than from non-
     integrated suppliers.52 A majority of end-customers that expressed an opinion in
     response to the market investigation also indicated that they source predominantly
     from OEMs.53 Generally, end-customers associate OEMs with specific preferences,
     including prices and technical expertise, which differ from the features associated
     with sourcing from non-integrated suppliers.54
47
     Form CO, paragraph 124.
48
     Idem.
49
     Questionnaire 3 to non-integrated suppliers, question 21. Sometimes, the non-integrated suppliers
     also add their own visual identity on the products in question (see Questionnaire 3 to non-integrated
     suppliers, question 21.2).
50
     A vast majority of end-customers indicate in response to the market investigation that it is frequent
     or very common for them to contact the OEM of their automatic pedestrian doors when requiring
     after-sales services to be performed on the doors in question (see Questionnaire 2 to end-customers,
     question 57).
51
     Reply of Agta Record to a request for information 7, 13 December 2019, question 7 and Annex 7.5.
52
     Questionnaire 1 to competitors, question 41; Questionnaire 2 to end-customers, questions 39-39;
     Questionnaire 3 to non-integrated suppliers, question 51.
53
     Questionnaire 2 to end-customers, question 14.2.
54
     Questionnaire 1 to competitors, question 42; Questionnaire 2 to end-customers, question 40;
     Questionnaire 3 to non-integrated suppliers, question 52.
                                                     15
 ---pagebreak--- (71)     At the end, the direct and indirect channels constitute two alternative ways for
         OEMs such as the Parties to satisfy the demand of end-customers, and to maximise
         sales and output. The service component of direct sales is also inherent to dealings
         with end-customers, as in many industries. Hence, in the present case and in light
         of all available evidence, the Commission considers that it is not appropriate to
         consider separately hypothetical upstream and downstream markets within the
         supply of automatic pedestrian doors and of industrial doors, as advocated by the
         Notifying Party. The Commission will therefore conduct its competitive
         assessment based on an OEM-level approach, which includes sales by OEMs-only
         to both end-customers and non-integrated suppliers. In turn, the Commission will
         factor in its assessment the existence of different sale channels and the level of
         competitive constraints that non-integrated suppliers may still exercise on OEMs
         for sales to end-customers.
5.1.2.   Segmentation by types of supplier and customer group
5.1.2.1. Notifying Party’s arguments
(72)     The Notifying Party submits that it would not be appropriate to further segment the
         market according to the type of supplier (between OEMs and non-integrated
         suppliers) or customer group (between smaller and larger customers).55
5.1.2.2. Commission’s assessment
(73)     Section 5.1.1. explained that it was appropriate in the present case to define
         relevant markets at OEM level, i.e., as encompassing OEM sales to both non-
         integrated suppliers and end-customers. A different, though related, question
         pertains to whether it is appropriate to segment relevant product markets according
         to certain customer groups.
(74)     In Assa Abloy/Agta Record, the OFT noted that ‘large customers’ requirements
         (such as nationwide coverage) may preclude local independents from supplying
         them because large national buyers prefer […] complete automatic door sets from
         established manufacturers’ and that ‘[b]id data [had] revealed that larger
         customers had switched mostly to competing integrated manufacturers’.56 The OFT
         did not ultimately retain a segmentation by customer group in view of bid data
         supplied by Assa Abloy, which would have showed that it had bid for a significant
         number of smaller contracts.57
(75)     In the present case, a majority of competitors and non-integrated suppliers
         submitted that certain final customers (such as large customers operating multiple
         sites) are more likely to procure automatic doors from OEMs rather than from non-
         integrated suppliers.58 A number of respondents indicated that this would be in
         particular the case for categories of customers such as, among others,
55
         Form CO, paragraph 332.
56
         OFT decision of 4 February 2011 in Case ME/4792/10 Assa Abloy/Agta Record, paragraph 26.
57
         OFT decision of 4 February 2011 in Case ME/4792/10 Assa Abloy/Agta Record, paragraph 30.
58
         Questionnaire 1 to competitors, question 40; and Questionnaire 3 to non-integrated suppliers,
         question 50.
                                                     16
 ---pagebreak---      supermarkets, large distribution and Horeca chains, airports, hospitals, facility
     management companies or key account customers.59
(76) Moreover, a majority of competitors and non-integrated suppliers submitted that
     for large projects, final customers are more likely to source automatic doors from
     OEMs rather than from non-integrated suppliers.60 While responses on this point
     were mixed among customers, some indicated that ‘for large projects it is
     important to source via OEMs in order to have one responsible supplier for the
     whole project. If doors are installed at various sites within a certain period of time
     based on one sourcing project it is a large project’.61
(77) A number of competitors also submitted that final customers typically ascribe value
     to procuring automatic pedestrian doors from OEMs rather than from non-
     integrated suppliers given their ‘direct contact […] on technical problems and
     warranty’, their ‘better price and service’ or them being a ‘[s]ingle source of
     supply, consistency of product, reduction in future maintenance/service
     requirements’.62
(78) The Parties’ internal documents further reflect the importance that they ascribe to
     large customers and large projects. Some of the Parties’ ordinary course of business
     documents indicate that Agta Record ‘[Agta Record’s sales policy and strategy]’63,
     while Assa Abloy has ‘[Assa Abloy’s sales policy and strategy]’64.
(79) However, for the purpose of carrying out a meaningful competitive assessment in
     the present case, it appears neither feasible nor warranted to define separate
     markets for ‘large customers’ and/or ‘large projects’ given the inherent
     heterogeneity of these categories. Moreover, the Parties have submitted anecdotal
     evidence that OEMs do also compete for ‘small’ customers and ‘small’ projects.65
     Thus, the Commission considers appropriate in this case to exclude the definition
     of separate markets per customer group and to take customer preferences into
     account, inasmuch as they can be reasonably approximated based on the outcome
     of the market investigation, in the competitive assessment, notably to assess
     competitive constraints.
(80) At the end, the above findings confirm that non-integrated suppliers do not exercise
     competitive constraints on OEMs to the same extent as other OEMs, especially for
     the sizeable share of demand accounted for by large customers and large projects.
     This strongly indicates that there is closer competition amongst OEMs even for
     sales to end-customers, as further developed in Section 7.2.2.3 below.
(81) For the purpose of the decision and in light of all information available to it, the
     Commission therefore considers that while a segmentation by end-customer type is
59
     Questionnaire 1 to competitors, question 40; and Questionnaire 3 to non-integrated suppliers,
     question 50.
60
     Questionnaire 1 to competitors, question 41; and Questionnaire 3 to non-integrated suppliers,
     question 51.
61
     Questionnaire 2 to end-customers, question 39.1.
62
     Questionnaire 1 to competitors, question 42.
63
     Form CO, AA13, slide 4.
64
     Form CO, AA15, slide 36.
65
     Form CO, paragraphs 368 to 371.
                                                   17
 ---pagebreak---          neither feasible nor warranted, the sale of automatic doors to end-customers is
         differentiated inasmuch OEMs appear better placed to address a significant
         segment of demand than non-integrated suppliers. Hence, since the Parties are both
         OEMs and while the differentiation is by nature not absolute, the competitive
         assessment will consider sales by OEMs to end-customers, as a relevant metrics.
         OEM sales to non-integrated suppliers, separately from sales to end-customers,
         constitute assuredly another relevant metric for the competitive assessment in view
         of the common and identifiable characteristics of that other segment of demand.
5.1.3.   Segmentation by end-user segment
5.1.3.1. Notifying Party’s arguments
(82)     The Notifying Party submits that it would not be appropriate to further segment the
         market according to end-customer segments (into, e.g., the healthcare, hospitality,
         private sector, public sector, retail and transport segments), given that (i) operators
         are the same and are not better suited for some end-user segments; (ii) the same
         company may supply projects irrespective of the end-user segment; (iii) the Parties
         do not have separate sales and installation processes per end-user segment; and (iv)
         the Parties often do not sell directly to end-user segments, but to intermediate
         customers (such as building contractors or façade companies).66
5.1.3.2. Commission’s assessment
(83)     A majority of respondents expressing an opinion on this point in the market
         investigation submitted that it is not necessary to consider further segmentations
         based on the specific requirements of different user groups (e.g., residential,
         corporate, retail, hospitals, hotels and restaurants).67 However, some respondents
         indicated that the healthcare sector may have different technical needs for some
         applications, such as ‘e.g. doors for operating rooms’.68
(84)     In light of the Notifying Party’s arguments and the results of the market
         investigation, the Commission takes the view that the Parties’ automatic doors do
         not generally appear to address the needs of distinct end-user segments. As regards
         the need of automatic doors for operating rooms by the healthcare sector, the
         Commission notes that this distinct demand is captured by defining a separate
         product market for hermetic and semi-hermetic doors in Section 5.2.1 below.
(85)     For the purpose of the decision and in light of all information available to it, the
         Commission considers that it is not necessary to further segment the product
         markets for automatic pedestrian doors and industrial doors according to end-
         customer segments.
66
         Form CO, paragraphs 416 and 417.
67
         Questionnaire 1 to competitors, question 9; Questionnaire 2 to end-customers, question 9; and
         Questionnaire 3 to non-integrated suppliers, question 9.
68
         Questionnaire 3 to non-integrated suppliers, question 9.1.
                                                        18
 ---pagebreak--- 5.2.     Automatic pedestrian doors
5.2.1.   Product market definition
5.2.1.1. Notifying Party’s arguments
(86)     The Notifying Party submits that there are separate relevant markets for each of
         swing, sliding and revolving doors.69 This is because substitutability on the demand
         and supply side is limited in practice by the design of the doorway, applications,
         energy efficiency requirements and price levels.70
(87)     The Notifying Party submits that each of the three automatic pedestrian door
         segments (i.e. swing, sliding and revolving) should not be further segmented
         between (i) variants of doors (e.g. differing in colour, size, type of glass, power of
         the motor, etc.)71; (ii) fire doors72; or (iii) hermetic doors73.
(88)     The Notifying Party proposes to leave open the exact product market definition of
         automatic pedestrian folding doors, given the small size of the segment and the
         lack of a substantial horizontal overlap between the Parties.74
5.2.1.2. Commission’s assessment
(89)     The Commission has not previously assessed the product market definition of
         automatic pedestrian doors. In its Assa Abloy/Agta Record decision, the OFT took
         account of indications that there would be separate markets for each of swing,
         sliding and revolving doors.75 In Assa Abloy/Cardo, the Commission noted that the
         market investigation had largely confirmed a distinction between automatic
         pedestrian doors and industrial doors.76
(90)     A majority of respondents having expressed an opinion on this point in the market
         investigation submitted that automatic pedestrian doors constitute a product market
         separate from industrial doors due to limited substitutability for customers in terms
         of, e.g., product characteristics and prices.77
(91)     Moreover, a majority of competitors and end-customers submitted that, from a
         demand-side perspective, each of swing, sliding and revolving doors constitute
         separate product markets due to limited substitutability for customers in terms of
         product characteristics and prices.78 In this regard, a competitor pointed out that the
         choice between these types of doors ‘is basically due to the lateral space that you
69
         Form CO, paragraph 384.
70
         Form CO, paragraphs 387 to 392.
71
         Form CO, paragraphs 393 to 397.
72
         Form CO, paragraphs 405 to 407.
73
         Form CO, paragraphs 398 to 404.
74
         Form CO, paragraph 408 to 411.
75
         OFT decision of 4 February 2011 in Case ME/4792/10 Assa Abloy/Agta Record, paragraph 24.
76
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, paragraph 11.
77
         Questionnaire 1 to competitors, question 6; Questionnaire 2 to end-customers, question 7; and
         Questionnaire 3 to non-integrated suppliers, question 6.
78
         Questionnaire 1 to competitors, question 7; and Questionnaire 2 to end-customers, question 8.
                                                        19
 ---pagebreak---      have to accom[m]odate the leaf when the automatic door opens’.79 While a
     majority of non-integrated suppliers submitted that there could be some
     substitutability between swing, sliding and revolving doors from a demand-side
     perspective80, a vast majority of them – together with a majority of competitors –
     submitted that the assembly of the various types of automatic pedestrian doors
     entail significantly different technical features and costs.81 In this regard, some
     competitors and non-integrated suppliers indicated that, from a supply-side
     perspective, these three types of automatic pedestrian doors rely on ‘[d]ifferent
     operators, different mechanism [and] different motors’.82
(92) A majority of competitors and non-integrated suppliers submitted that it is not
     appropriate to further segment the swing, sliding and revolving door markets based
     on different product variants, such as the number of leaves, materials or size.83
     Similarly, a majority of respondents submitted that it is not appropriate to further
     segment the swing, sliding and revolving door markets based on whether they are
     equipped with low- or full-energy operators.84
(93) The Commission moreover notes that hermetic and semi-hermetic doors offer
     sealing capabilities and are typically used in operating theatres and other areas
     requiring an air-tight environment without bacteria and dust flow (such as in the
     pharmaceutical and the food industry). Hermetic doors are certified under one of
     the air permeability standards EN12207 and, more exceptionally, ANSI/UL 1784,
     whereas semi-hermetic doors offer some sealing capabilities without being
     certified. From a demand-side perspective, a majority of respondents to the market
     investigation submitted that (i) hermetic and semi-hermetic doors would constitute
     a market separate from other types of automatic pedestrian doors due to limited
     substitutability for customers in terms of, e.g., product characteristics and prices;85
     and (ii) hermetic and semi-hermetic automatic doors would not be mutually
     interchangeable for the same or comparable situations.86 From a supply-side
     perspective, a majority of competitors and non-integrated suppliers submitted that
     the production or assembly of hermetic and semi-hermetic doors entail
     significantly different technical features and costs.87 Similarly, a vast majority of
     respondents submitted that automatic fire doors constitute a separate product
     market due to a limited demand-side substitutability.88
79
     Questionnaire 1 to competitors, question 7.1.
80
     Questionnaire 3 to non-integrated suppliers, question 7.
81
     Questionnaire 1 to competitors, question 7.2.; and Questionnaire 3 to end-users, question 7.2.
82
     Questionnaire 1 to competitors, question 7.2.1.
83
     Questionnaire 1 to competitors, question 8; and Questionnaire 3 to non-integrated suppliers,
     question 8.
84
     Questionnaire 1 to competitors, question 13; Questionnaire 2 to end-customers, question 13; and
     Questionnaire 3 to non-integrated suppliers, question 13.
85
     Questionnaire 1 to competitors, question 10; Questionnaire 2 to end-customers, question 10;
     Questionnaire 3 to non-integrated suppliers, question 10.
86
     Questionnaire 1 to competitors, question 10.2; Questionnaire 2 to end-customers, question 10;
     Questionnaire 3 to non-integrated suppliers, question 10.
87
     Questionnaire 1 to competitors, question 10.2; and Questionnaire 3 to non-integrated suppliers,
     question 10.2
88
     Questionnaire 1 to competitors, question 11; Questionnaire 2 to end-customers, question 11;
     Questionnaire 3 to non-integrated suppliers, question 11.
                                                     20
 ---pagebreak--- (94)     For the purposes of this decision and in light of all information available to it, the
         Commission considers that, due to limited demand and supply-side substitutability,
         (i) automatic pedestrian doors and industrial doors do not belong to the same
         product market; (ii) each of swing, sliding and revolving automatic pedestrian
         doors constitute separate markets; and (iii) each of hermetic and semi-hermetic
         automatic doors constitute separate markets. The Commission does not consider
         appropriate to further segment these markets according to (i) different product
         variants (such as leaves, materials or size); or (ii) whether the automatic pedestrian
         doors are equipped with low- or full-energy operators. Since the Transaction does
         not give rise to any affected market for automatic fire doors, it can be left open
         whether the supply of automatic fire doors constitutes a separate product market
         from other types of automatic pedestrian doors.89
5.2.2.   Geographic market definition
5.2.2.1. Notifying Party’s arguments
(95)     In relation to the geographic market definition, the Parties submit that (i) the
         indirect channel is EEA-wide in scope because customers across the EEA purchase
         the same products and OEMs do not need a local presence90; and (ii) the direct
         channel is national in scope because suppliers require a local sales force with local
         language proficiency and knowledge to operate in a given country, as well as
         technicians to provide installation and after-sales services.91
5.2.2.2. Commission’s assessment
(96)     The Commission has not previously assessed the geographic market definition of
         automatic pedestrian doors specifically.92 In its Assa Abloy/Agta Record decision,
         the OFT assessed the transaction at a national level (both for the supply of
         operators and of complete door sets), as the Parties’ shares in the market on a
         national level (for the United Kingdom, in this case) were materially higher than
         their EEA-wide shares.93
(97)     The outcome of the market investigation supports defining national markets for
         automatic pedestrian doors. Respondents having expressed an opinion on this point
         in the market investigation submitted that the supply of each of swing, sliding and
         revolving (including those with hermetic or fire-resistant features) automatic
         pedestrian doors to both end-customers and non-integrated suppliers is national in
89
         The Commission notes that automatic fire doors consist of fire-proof door leaves combined with
         standard operators (Questionnaire 1 to competitors, question 11.2; and Questionnaire 3 to non-
         integrated suppliers, question 11.2). In this regard, Assa Abloy and Agta Record do not have
         operators specifically developed for their automatic fire doors (Form CO, footnotes 81 and 90).
         Assa Abloy manufactures fire-proof door leaves, while Agta Record does not, and there is therefore
         no horizontally affected market at that level. The Commission moreover notes that fire-proof door
         leaves are generally available from local third-party suppliers (Questionnaire 1 to competitors,
         question 11.3; and Questionnaire 3 to non-integrated suppliers, question 11.3).
90
         Form CO, paragraphs 336.
91
         Form CO, paragraphs 337.
92
         In relation to industrial doors, in Assa Abloy/Cardo, the Commission noted that the ‘sourcing of
         industrial doors is not necessarily done on an EEA-wide level’.92
93
         OFT decision of 4 February 2011 in Case ME/4792/10 Assa Abloy/Agta Record, paragraph 41 and
         end note 1.
                                                         21
 ---pagebreak---       scope.94 This is consistent with a number of industry features pointing to national
      markets, including different safety requirements across Member States affecting
      the technical features of (certain) automatic pedestrian doors,95 varying preferences
      across countries between notably swing and sliding doors,96 and significant price
      differences observable across countries.97
(98)  With respect to sales in the indirect channel, in particular, a majority of non-
      integrated suppliers submitted that the technical specificities and the price of
      operators and complete door sets procured from OEMs vary to a material extent
      depending on the country of distribution.98 Moreover, a vast majority of non-
      integrated suppliers are purely national players.99
(99)  Moreover, the Parties monitor closely in their ordinary course of business internal
      documents the national competitive dynamics of the indirect channel. In this
      regard, the Parties’ performance in the indirect channel appear to vary greatly
      across Member States. Assa Abloy considered the Nordics [information about Assa
      Abloy’s business strategy] of the Entrematic brand and Ditec to be ‘[information
      about Assa Abloy’s business strategy] [i]n France’.100
(100) Having a local presence at the level of each national market for the indirect channel
      also appears to be important in the industry. By way of example, an internal
      document from Assa Abloy considered that, while the Entrematic sales
      performance was [information about Assa Abloy’s business strategy] in the
      Nordics, it was [information about Assa Abloy’s business strategy] in the United
      Kingdom, given that ‘the market demands [information about Assa Abloy’s
      business strategy]’.101
(101) For the purpose of the decision and in light of all information available to it, the
      Commission considers that the markets for each of (i) swing; (ii) sliding; and (iii)
      revolving automatic pedestrian doors (including for those with hermetic or fire-
      resistant features) are national in scope.
94
      Questionnaire 1 to competitors, questions 15 to 21; Questionnaire 2 to end-customers, questions 15-
      17; Questionnaire 3 to non-integrated suppliers, questions 22 to 29.
95
      Form CO, paragraphs 191 to 199.
96
      See, e.g., minutes of a call with a competing OEM on 9 August 2019.
97
      In that respect, Agta Record internal pricing reflects differences of up to [20-30]% across countries
      (see Agta Record's reply to Request for information 11 of 20 January 2020 and the annexed Agtatec
      price list).
98
      Questionnaire 1 to competitors, question 16; Questionnaire 2 to end-customers, question 16;
      Questionnaire 3 to non-integrated suppliers, question 24.
99
      Questionnaire 3 to non-integrated suppliers, question 23.
100
      Form CO, AA89. Similar quotes can be found in Form CO, AA92, AA89, AA87, AA84 and AA83.
101
      Form CO, AA90.
                                                      22
 ---pagebreak--- 5.3.     Industrial doors
5.3.1.   Product market definition
5.3.1.1. Notifying Party’s arguments
(102)    The Notifying Party submits that, in line with the decisional practice of the
         Commission102 and the OFT103, automatic pedestrian doors should be distinguished
         from industrial doors.104
(103)    In this regard, the Notifying Party submits that automatic pedestrian doors and
         industrial doors address different customer needs and that manufacturers are not
         able to switch production easily across these door types for reasons of time, cost
         and expertise.105
(104)    Within industrial doors, the Notifying Party submits that there is some degree of
         substitutability between high-speed doors, overhead sectional doors, industrial
         folding doors and docking doors and stations, since two or more of these types may
         fulfil the same or similar needs.106 Moreover, the Notifying Party submits that,
         while high-speed doors and overhead sectional doors are not always substitutable,
         there are situations where they may be interchangeable from a demand-side
         perspective.107
(105)    Within high-speed doors, the Notifying Party submits that it is not necessary to
         consider further segmentations according to (i) whether they are used for interior or
         exterior applications; (ii) the specific application for which they are used; and (iii)
         whether they are made of rigid or fabric materials.108
5.3.1.2. Commission’s assessment
(106)    In Assa Abloy/Cardo, the Commission noted that the market investigation had
         largely confirmed a distinction between automatic pedestrian doors and industrial
         doors.109 Moreover, the Commission also noted that customers had indicated that
         ‘different industrial doors fulfil different functionalities’.110 The Commission
         ultimately left open the exact product market definition, given the absence of
         competition concerns in that decision.111
(107)    As mentioned in paragraph (90) above, the results of the market investigation have
         confirmed that industrial doors and automatic pedestrian doors do not belong to the
         same product market.
102
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, paragraph 11.
103
         OFT decision of 4 February 2011 in Case ME/4792/10 Assa Abloy/Agta Record, paragraphs 17 and
         24.
104
         Form CO, paragraph 1764.
105
         Form CO, paragraphs 1766 and 1767.
106
         Form CO, paragraph 1780.
107
         Form CO, paragraph 1784.
108
         Form CO, paragraphs 1789 and 1790.
109
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, paragraph 11.
110
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, paragraph 12.
111
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, paragraph 12.
                                                     23
 ---pagebreak--- (108) Regarding a further segmentation by types of industrial doors, a majority of end-
      customers and non-integrated suppliers having expressed an opinion in the market
      investigation submitted that customers do not use high-speed doors, overhead
      sectional doors, industrial folding doors and docking doors and stations for the
      same purposes.112 Conversely, a majority of OEMs having expressed an opinion in
      the market investigation submitted that customers may use these four types of
      industrial doors interchangeably.113
(109) Regarding a possible segmentation between interior and exterior applications, a
      vast majority of end-customers and non-integrated suppliers having expressed an
      opinion in the market investigation submitted that customers cannot use high-speed
      doors for interior and exterior applications for the same needs. 114 While OEMs
      expressed mixed opinions in this regard, they unanimously submitted that the
      production of high-speed doors for internal and external applications is
      characterised by significant differences in technical characteristics and costs.115
      Some respondents submitted that wind resistance is the main distinction between
      doors for interior and exterior use.116
(110) Regarding a possible segmentation by fabric and rigid versions of high-speed
      doors, a significant number of OEMs and end-customers submitted that high-speed
      doors in fabric and rigid versions are not substitutable for the same needs.117
      Moreover, OEMs unanimously submitted that the production of high-speed doors
      in fabric and rigid versions is characterised by significant differences in technical
      characteristics and cost.118 Conversely, a majority of non-integrated suppliers
      considered that these two types of high-speed doors may be substitutable from a
      customer demand perspective.119
(111) A distinction between high-speed doors used for interior and exterior applications
      appears consistent with a distinction between high-speed doors in fabric and rigid
      version. Some OEMs, end-customers and non-integrated suppliers indicated that a
      distinction between high-speed doors in fabric and rigid version is only applicable
      to doors used for exterior applications.120
(112) A majority of respondents having expressed an opinion in the market investigation
      submitted that customers do not generally use (i) machine protection; (ii) food
112
      Questionnaire 5 to customers of industrial doors, question 5.
113
      Questionnaire 4 to competitors of industrial doors, question 5.
114
      Questionnaire 5 to customers of industrial doors, question 6.
115
      Questionnaire 4 to competitors of industrial doors, question 6 and 6.2.
116
      Questionnaire 5 to customers of industrial doors, question 6: ‘[u]ne porte en interface extérieure
      doit pouvoir résister au vent’; ‘[l]a tenue au vent va être la différentiation principale (implantation
      intérieure ou extérieure) pour définir la porte rapide adéquate’.
117
      Questionnaire 4 to competitors of industrial doors, question 9; and Questionnaire 5 to customers of
      industrial doors, question 9.
118
      Questionnaire 4 to competitors of industrial doors, question 9.3.
119
      Questionnaire 5 to customers of industrial doors, question 9.
120
      Questionnaire 4 to competitors of industrial doors, question 9.2; and Questionnaire 5 to customers
      of industrial doors, question 9.2. In this regard, some expressed that ‘[l]es po rtes rigide ne sont pas
      adaptées pour l’intérieur car les moteurs ne tiennent pas des cadences de passage important’; ‘en
      intérieur, il y a uniquement des portes souples’; ‘[u]tilisation exclusive de la version souple à
      l'intérieur’; ‘En implantation interne, la contrainte ‘résistance à l'effraction est quasi nulle, donc la
      porte souple s'impose’.
                                                        24
 ---pagebreak---          processing; (iii) clean rooms; (iv) cold storage; (v) material handling; and (vi)
         heavy industry high-speed doors for the same applications.121 In this regard, an
         OEM stated that each type of high-speed door has very specific uses and that a
         high-speed door used in the pharmaceutical industry is different to cold storage.122
         Moreover, a vast majority of OEMs submitted that the production of each of these
         types of high-speed doors is characterised by significant differences in technical
         characteristics and cost.123
(113)    For the purposes of this decision and in light of all information available to it, the
         Commission considers appropriate to leave the exact product market definition
         open within the supply of industrial doors, since the competitive assessment would
         not differ irrespective of the segmentation. As a result, the Commission will
         specifically assess the impact of the Transaction on the supply of each relevant type
         of industrial doors, with a focus on high-speed doors where the overlap between
         the Parties’ activities is the most significant. Conversely, the Parties’ position
         remains similar irrespective of any sub-segmentation within high-speed doors
         based on (i) whether they are used for interior or exterior applications; (ii) the
         specific application for which they are used; or (iii) whether they are made of rigid
         or fabric materials.
5.3.2.   Geographic market definition
5.3.2.1. Notifying Party’s arguments
(114)    The Notifying Party submits that the indirect channel for the sale of industrial door
         components is EEA-wide in scope given that OEMs sell industrial door
         components to non-integrated suppliers on an EEA-wide basis.124 In this regard, the
         Notifying Party submits that: (i) OEMs generally source components on a
         worldwide basis and supply products to non-integrated suppliers across the EEA
         from one or a few factories; (ii) shipping costs are low (between [1-10]%); (iii)
         industrial doors are certified according to European EN-standards; and (iv) it is not
         necessary to have local sales offices to be active on this market.125
(115)    The Notifying Party submits that the direct channel for the sale of industrial door
         solutions is national in scope, while also pointing towards some indicators for the
         market being EEA-wide in scope.126 In this regard, the Notifying Party notes that
         sales to end users require a local service representative that is able to perform site
         visits to take measurements and advice the customer, as well as knowledge of the
         local language and business culture.127
121
         Questionnaire 4 to competitors of industrial doors, questions 7 and 8; Questionnaire 5 to customers
         of industrial doors, questions 7 and 8.
122
         Questionnaire 4 to competitors of industrial doors, question 7.1. Original quote in Spanish: ‘[c]ada
         tipo de puerta rápida tiene utilizaciones muy específicas. Una puerta para industria farmacéutica
         es muy diferente a una puerta para cámaras de congelación’.
123
         Questionnaire 4 to competitors of industrial doors, questions 7.2 and 8.2.
124
         Form CO, paragraph 1801.
125
         Form CO, paragraphs 1802 to 1805.
126
         Form CO, paragraph 1806.
127
         Form CO, paragraph 1809.
                                                         25
 ---pagebreak--- 5.3.2.2. Commission’s assessment
(116)    In Assa Abloy/Cardo, the Commission noted that the ‘sourcing of industrial doors
         is not necessarily done on an EEA-wide level’.128 A Danish precedent concluded
         that the market for the sale of industrial doors is at least national and possibly
         wider.129
(117)    The outcome of the market investigation supports defining national markets for the
         supply of industrial doors. In this regard, a majority of respondents having
         expressed an opinion on this point in the market investigation submitted that the
         technical specificities and the price of the industrial doors procured from OEMs
         vary to a material extent depending on the country of distribution.130 Suppliers of
         industrial doors also have sales forces dedicated to specific countries.131 Moreover,
         a majority of OEMs submitted that they do not supply industrial doors to end-
         customers situated in other countries where they do have local operations, while a
         majority of end-customers indicated that they do not source industrial doors from
         other countries.132
(118)    For the purposes of this decision and in light of all information available to it, the
         Commission considers the markets for high-speed doors is national in scope.
5.4.     After-sales services
5.4.1.   Product market definition
5.4.1.1. Notifying Party’s arguments
(119)    The Notifying Party submits that, in line with the decision practice of the
         Commission133 and of the OFT,134 after-sales services for automatic pedestrian
         doors should be distinguished from after-sales services for industrial doors.135 In
         this regard, the Notifying Party submits that services for the two door types have
         different features and are distinct in terms of service demands and requirements.
(120)    The Notifying Party considers that there is insufficient demand- and supply-side
         substitutability between after-sales services for automatic pedestrian and industrial
         doors, because of two main reasons:136
         (a)      The provision of after-sales services for industrial doors requires more
                  complex expertise from technical staff as well as specific tools due to
128
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, paragraph 12.
129
         Decision of the Danish Competition Authority in Assa Abloy/Nassau, paragraph 7.
130
         Questionnaire 4 to competitors of industrial doors, question 13.
131
         Questionnaire 4 to competitors of industrial doors, question 15; and Questionnaire 5 to customers of
         industrial doors, question 15.
132
         Questionnaire 4 to competitors of industrial doors, question 17; and Questionnaire 5 to customers of
         industrial doors, question 17.
133
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, paragraphs 30
         and 31, although the definition was ultimately left open.
134
         OFT decision of 4 February 2011 in Case ME/4792/10 Assa Abloy/Agta Record, paragraph 35.
135
         Form CO, paragraph 424.
136
         Form CO, paragraph 335.
                                                         26
 ---pagebreak---                   mechanical characteristics and functionalities of industrial doors (such as
                  height and complexity).
         (b)      In practice, service providers tend to focus their services on either industrial
                  or automatic pedestrian doors. The Notifying Party submits that, if a
                  technician for either pedestrian or industrial doors underwent training to
                  provide after-sales services for the other, that technician could service both
                  door types. However, the vast majority of service technicians have not
                  received training for both industrial and automatic pedestrian doors.
(121)    The Notifying Party submits that it would not be appropriate to further segment
         after-sales services according to (i) door type (e.g. within automatic pedestrian
         doors, for swing, sliding and revolving, and within industrial doors, for high-speed,
         overhead sectional, etc.);137 (ii) type of after-sales providers (e.g. OEMs,
         specialised service providers, non-integrated suppliers, elevator companies, facility
         management companies, or in-house service technicians);138 or (iii) customer
         groups.139
5.4.1.2. Commission’s assessment
(122)    In Assa Abloy/Cardo, the Commission explained that the results of the market
         investigation broadly confirmed that after-sales services for industrial and
         automatic pedestrian doors were different. However, it ultimately left the market
         definition open.140
(123)    The Commission inquired about a possible segmentation between the supply of
         after-sales services for automatic pedestrian doors, on the one hand, and for
         industrial doors, on the other hand. Further, the Commission inquired whether non-
         OEMs provided after-sales services on equal footing with OEMs, and whether
         different types of customer groups had different requirements and/or preferences
         regarding after-sales services for automatic pedestrian doors that may influence
         their choice of supplier (e.g. whether larger customers would prefer OEMs).
(124)    Regarding the distinction between after-sales services for automatic pedestrian and
         industrial doors, the majority of respondents to the Commission’s market
         investigation that expressed an opinion on this point indicated that these constitute
         separate product markets. Respondents consider that there is a lack of supply-side
         substitutability for servicing between these doors. A respondent indicated that
         industrial doors ‘[i]s a product that needs more specialized technici[a]ns’.141 An
         end-customer expressed that ‘[m]echanisms and build are fundamentally different.
         On that basis, we would expect different technicians and service requirements’.142
137
         Form CO, paragraph 450.
138
         Form CO, paragraphs 281 and 282.
139
         Form CO, paragraph 451.
140
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, paragraphs 30
         and 31. While the Assa Abloy/Cardo decision uses the expression ‘automated pedestrian doors’, the
         word automated should be understood as meaning ‘automatic’ for the purposes of this decision.
141
         See replies to question 61 of Questionnaire 1 for competitors (automatic pedestrian doors, access
         control systems, locks and sensors).
142
         Questionnaire 2 to end-customers, question 47.
                                                        27
 ---pagebreak--- (125) Regarding a potential further segmentation per door type, the outcome of the
      market investigation indicates that neither after-sales services for automatic
      pedestrian doors nor for industrial doors should be further segmented per door type
      (e.g. for automatic pedestrian doors, swing, sliding, revolving, and for industrial
      doors, high-speed, overhead sectional, folding etc.). The outcome of the market
      investigation shows that technicians carry out after-sales services for all types of
      automatic pedestrian doors.143
(126) Regarding a potential further segmentation per type of after-sales service provider,
      the outcome of the market investigation reveals that, even though third-party
      providers do service automatic doors, they are not technically in a position to
      provide the same range and level of services as the original OEM.144 This is mostly
      due to higher costs of spare parts, less availability of spare parts and specific tools
      and documentation and less experience on the doors than the original OEM.145
      Further, several respondents explained that it was particularly problematic to
      source spare parts and specific tools and documentation from the Parties at a
      reasonable cost and lead-time.146 A competing OEM expressed that: ‘[a]ccess to
      third-party spare parts is not easy, both in terms of sourcing and of pricing.
      Certain companies are not helpful or friendly when asked to provide their spare
      parts. Assa Abloy is known to be the most defensive competitor, whose spare parts
      are most difficult to access.’147 This finding further confirms the inherent
      connection between the supply of doors and the provision of after-sales services
      and the differentiated nature of the latter.
(127) However, even though different types of service providers may be in a different
      position when it comes to offering the same after-sales services, the Commission
      considers that there is a continuum of after-sales services for which demand- and
      supply-side substitutability varies, thereby justifying the definition of a single
      overall market for the supply of after-sales services (for each of, respectively,
      automatic pedestrian doors and industrial doors), thus excluding a segmentation per
      type of provider. However, the respondents’ views about the differentiated nature
      of the provision of after-sales services will be taken into account in the competitive
      assessment, notably to assess competitive constraints (for each of, respectively,
      automatic pedestrian doors and industrial doors).
(128) Regarding a potential further segmentation of after-sales services per type of
      customer groups, the majority of respondents who expressed an opinion on this
      point consider that the relevant market may be further segmented according to
      specific customer groups. In particular, the market investigation reveals that larger
      customers and larger projects tend to prefer OEMs for their after-sales services
      needs.148
143
      Questionnaire 1 to competitors, question 51; Questionnaire 2 to end-customers, question 48;
      Questionnaire 3 to non-integrated suppliers, question 63.
144
      Questionnaire 1 to competitors, question 67.4.
145
      Questionnaire 1 to competitors, question 67.4.
146
      Questionnaire 1 to competitors, question 68.
147
      Minutes of a call with a competitor of 14 August 2019, paragraph 19.
148
      Questionnaire 1 to competitors, question 52; Questionnaire 2 to end-customers, question 50;
      Questionnaire 3 to non-integrated suppliers, question 64.
                                                     28
 ---pagebreak--- (129)    Even though specific customer groups for after-sales services may have a
         preference for OEMs over independent after-sales services providers, the
         Commission considers that there is an inherent heterogeneity in these customer
         group categories, thereby justifying the definition of a single overall market for the
         supply of after-sales services (for each of, respectively, automatic pedestrian doors
         and industrial doors), excluding a segmentation per customer group. However,
         customer preferences will be taken into account in the competitive assessment,
         notably to assess effective competitive constraint, with reference to after-sales
         services for larger clients and projects.
(130)    For the purposes of this decision and in light of all information available to it, the
         Commission considers that the markets for after-sales services for automatic
         pedestrian doors, on the one hand, and industrial doors, on the other hand,
         constitute separate relevant product markets. Conversely, no further segmentation
         by type of door, type of after-sales services providers, or customer group is
         warranted for the purpose of assessing the present Transaction.
5.4.2.   Geographic market definition
5.4.2.1. Notifying Party’s arguments
(131)    Regarding after-sales services for both automatic pedestrian and industrial doors,
         the Notifying Party submits that, in line with the Commission’s precedents and
         those of the Danish Competition and Consumer Authority (for after-sales for
         industrial doors)149 and the OFT,150 the relevant geographic market is national.151
         This is because suppliers of after-sales services need a local sales force and a local
         service network, and the conditions of competition are generally similar across the
         whole of individual countries.152 The Notifying Party submits that it would not be
         appropriate to further segment after-sales services according to geographical spread
         of the customer.153
5.4.2.2. Commission’s assessment
(132)    In Assa Abloy/Cardo, the Commission explained that the results of the market
         investigation broadly confirmed that the scope of the market for after-sales services
         was national. However, it ultimately left the definition open.154
(133)    The market investigation has confirmed the Commission practice in Assa
         Abloy/Cardo endorsed by the Parties that the scope for after-sales services for
         automatic pedestrian doors and industrial doors is national in scope. The vast
149
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, paragraph 30,
         and Danish Competition and Consumer Authority decision of 23 November 2016 in Case FLID-
         16/06846 Assa Abloy/Nassau Door A/S, paragraph 7.
150
         OFT decision of 4 February 2011 in Case ME/4792/10 Assa Abloy/Agta Record, paragraph 42. The
         OFT considered it likely that the market for maintenance contracts was national or local, ultimately
         performing its competition analysis based on a national market.
151
         Form CO, paragraphs 486, 1811 and 1812.
152
         Form CO, paragraph 337.
153
         Form CO, paragraphs 445 to 447.
154
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, paragraphs 30
         and 31.
                                                        29
 ---pagebreak---          majority of respondents who expressed an opinion on this point consider that the
         markets for after-sales services for each of, respectively, automatic pedestrian
         doors and industrial doors have a national scope. 155
(134)    Several end-customers expressly stated that ‘we want a company to have national
         coverage’ and ‘national coverage is a key factor in [the] decision-making
         process’.156
(135)    The outcome of the market investigation indicates that there is no need to further
         segment after-sales services per geographical spread of the customer, as the market
         is national in scope.157 This also means that, as was assessed in the product market
         definition for after-sales services, it is not necessary to make a distinction between
         large customers with national operations versus small customers with local
         operations.
(136)    For the purposes of this decision and in light of all information available to it, the
         Commission considers that the relevant geographic market for after-sales services
         is national in scope.
5.5.     Spare parts
5.5.1.   Product market definition
5.5.1.1. Notifying Party’s arguments
(137)    The Notifying Party submits that generic spare parts should be distinguished from
         brand-specific spare parts. The Notifying Party submits that the manufacture and
         supply of brand-specific spare parts should be considered as multiple markets with
         a distinct market for each manufacturer of automatic pedestrian doors or industrial
         doors. The Notifying Party considers that, in principle, sales of brand-specific spare
         parts are captive sales, for which other manufacturers than the OEMs cannot
         compete.158
(138)    Further, the Notifying Party submits that spare parts for automatic pedestrian doors
         and industrial doors should be distinguished (both for generic and brand-specific
         spare parts).159
5.5.1.2. Commission’s assessment
(139)    The Commission has analysed the relevant product market definition for spare
         parts in other industries, such as in the automotive industry, the aircraft industry
         and the agricultural machinery industry. Regarding the automotive industry, in VW-
         Audi/VW-Audi Sales Centres and Volkswagen/Hahn + Lang the Commission
         identified automotive spare parts as a separate relevant product market, and carried
155
         Questionnaire 1 to competitors, question 58; Questionnaire 2 to end-customers, question 54;
         Questionnaire 3 to non-integrated suppliers, question 70.
156
         Questionnaire 2 to end-customers, question 59.1.
157
         Questionnaire 1 to competitors, question 58; Questionnaire 2 to end-customers, question 54;
         Questionnaire 3 to non-integrated suppliers, question 70.
158
         Form CO, paragraphs 454 and 455.
159
         Form CO, paragraph 2093.
                                                        30
 ---pagebreak---       out its competitive assessment under this premise.160 In the aircraft industry, the
      Commission has considered a relevant product market for spare parts that was
      separate from the provision of Maintenance Repair and Overhaul (‘MRO’),161
      although in other cases it also considered that the provision of MRO services may
      also include the provision of spare parts.162 Regarding the agricultural machinery
      industry, in DA Agravis Machinery / Konekesko Eesti/ Konekesko Latvija /
      Konekesko Lietuva / Konekesko Finnish Agrimachinery Trade Business, the parties
      to the case presented spare parts and after-sales services as separate product
      markets. The Commission did not contest this submission, and ultimately left the
      question open.163
(140) In the present case, in view of the industry structure, including the variety of
      independent after-sales services providers, and the concerns raised over the course
      the market investigation about access to spare parts in order to supply after-sales
      services,164 the Commission considers appropriate to distinguish separate product
      markets for spare parts (including technical information and servicing tools) and
      after-sales services, spare parts being an input for the provision of a range of after-
      sales services.
(141) In its investigation, the Commission inquired into a possible segmentation between
      brand-specific spare parts on the one hand, and generic spare parts on the other.
(142) The vast majority of competitors and non-integrated suppliers consider that
      automatic pedestrian doors, in particular operators, are composed of brand-specific
      parts subject to a proprietary design on the one hand, and generic parts on the
      other.165 All the competitors that expressed a view in this point and the vast
      majority of non-integrated suppliers consider that brand-specific parts are not
      substitutable with parts originating from a third party supplier, whereas generic
      parts can be sourced from third-party suppliers.166
(143)  For the sake of clarity, in this Decision, the Commission will only address the
      market of brand-specific spare parts, and will name these as ‘spare parts’ (instead
      of ‘brand-specific spare parts’) This is because, as mentioned in footnote the
160
      Commission decision of 29 July 2003 in Case COMP/M.3198 VW-Audi/VW-Audi Sales Centres,
      paragraphs 13, 21 to 23; and Commission decision of 16 February 2004 in Case COMP/M.3352
      Volkswagen/Hahn + Lang, paragraphs 13, 23 to 27. Note that in these cases, the Commission
      referred to the sale of Volkswagen’s original car parts.
161
      Commission decision of 26 July 2012 in COMP/M.6410 – UTC/Goodrich, paragraphs 182 to 191.
162
      Commission decision of 4 May 2018 in COMP/M.8658 – UTC/ Rockwell Collins, paragraph 132.
163
      Commission decision of 25 March 2019 in Case COMP/M.9163 – DA Agravis Machinery /
      Konekesko Eesti/ Konekesko Latvija / Konekesko Lietuva / Konekesko Finnish Agrimachinery Trade
      Business, paragraphs 45, 47 and 51. However, what the Commission assessed within these markets
      was whether original and non-original spare parts belonged to the same or separate markets, on the
      one hand, and whether after-sales services and the retail sale of agricultural machinery belonged to
      the same or separate markets.
164
      Questionnaire 1 to competitors, question 72; Questionnaire 3 to non-integrated suppliers, question
      68, as well as minutes of calls with various market participants.
165
      Questionnaire 1 to competitors, question 55; Questionnaire 3 to non-integrated suppliers, question
      67.
166
      Questionnaire 1 to competitors, question 55.2; Questionnaire 3 to non-integrated suppliers, question
      67.2.
                                                      31
 ---pagebreak---          Parties do not manufacture generic spare parts for automatic pedestrian doors and
         are only involved to a limited extent in the supply of generic spare parts.26
(144)    For the purposes of this decision and in light of all information available to it, the
         Commission considers that spare parts (including technical information and
         servicing tools) constitute a relevant product market separate from after-sales
         services, and that brand-specific spare parts and generic spare parts constitute
         separate relevant product markets.
5.5.2.   Geographic market definition
5.5.2.1. Notifying Party’s arguments
(145)    The Notifying Party considers the markets for the manufacture and supply of
         brand-specific and generic spare parts for automatic pedestrian doors is at least
         EEA-wide and possibly global. The Notifying Party argues that spare parts are
         interchangeable, and therefore spare parts sold in one country could be used or
         resold again in a different country without difficulties.167
(146)    Regarding both brand-specific and generic spare parts for industrial doors, the
         Notifying Party submits that these markets should be considered as global. The
         Notifying Party argues that the same spare parts are manufactured and supplied on
         a global basis, and that EU or national approval requirements, safety regulations
         and certifications do not generally affect the individual components/spare parts.168
5.5.2.2. Commission’s assessment
(147)    In Assa Abloy/Cardo, the Commission (where, as mentioned, the Commission did
         not contest the Parties’ submission that considered spare parts to be included within
         after-sales services), explained that the results of the market investigation broadly
         confirmed the national scope of the markets for after-sales services for industrial
         and automatic pedestrian doors. However, it ultimately left the definition open.169
(148)    The Danish Competition and Consumers Authority, in its Assa Abloy/Nassau
         decision, considered that the geographic market for the wholesale supply of
         components and spare parts could be limited to Denmark, and possibly be broader,
         but ultimately left the definition open.170
(149)    Respondents to the market investigation have explained that it is difficult to source
         spare parts from other countries as a workaround if having difficulties sourcing
         spare parts. In particular, a competing OEM expressed that: ‘[w]orkarounds for
         spare part sourcing are difficult (e.g. sourcing spare parts from […] different
         Member States and then shipping them internally), and they are hampered by
         differences in part numbers: the part number of a given spare part differs from
167
         Form CO, paragraph 2093.
168
         Form CO, paragraphs 1813 and 1814.
169
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, paragraphs 30
         and 31.
170
         Danish Competition and Consumer Authority decision of 23 November 2016 in Case FLID-
         16/06846 Assa Abloy/Nassau Door A/S, page 8.
                                                    32
 ---pagebreak---          country to country. [The competing OEM] tried in the past to ship spare parts to
         the United Kingdom from Switzerland, but was unsuccessful.’171
(150)    Therefore, as there seem to be difficulties in sourcing spare parts from other
         Member States, and as the demand for spare parts is national, it would be
         appropriate to consider the market for spare parts for automatic doors (both
         pedestrian and industrial) to be national in scope.
(151)    For the purposes of this decision and in light of all information available to it, the
         Commission considers that the geographic market definition of spare parts for the
         purpose of providing after-sales services for both automatic pedestrian and
         industrial doors is national in scope.
5.6.     Access control systems and components
5.6.1.   Product market definition
5.6.1.1. Notifying Party’s arguments
(152)    The Notifying Party refers to the decisional practice of the Commission which, in
         UTC/GE Security, assessed electronic access control systems in the broader context
         of electronic security systems (‘ESS’), i.e. products designed for the protection of
         people, assets and property by electronic means.172 It also mentions the decision
         B5-25/08 ASSA ABLOY/SimonsVoss AG of the German Federal Cartel Office
         (‘FCO’) in which the manufacturing and wholesale supply of access control
         systems was considered a separate product market.173 A possible further sub-
         segmentation into an electronic access control systems segment is also
         mentioned.174 Overall, the Notifying Party submits that for the assessment of the
         present Transaction, it is not necessary to conclude whether electronic access
         control systems belong to a separate relevant product market or not.175
5.6.1.2. Commission’s assessment
(153)    As put forward by the Notifying Party, in UTC/GE Security, the European
         Commission considered a market for ESS comprising access control systems. 176 It
         however left open the precise market definition and did not conclude on the
         delineation of separate markets for the supply of EES products and the installation
         and maintenance of ESS.
(154)    The results of the market investigation conducted by the Commission in the present
         case reveal that the majority of competitors and direct customers consider that
         access control systems and other types of ESS are not used interchangeably by
171
         Minutes of a call with a competitor, 9 August 2019, paragraph 14.
172
         Form CO, Section D.5.4., paragraph 2149.
173
         Form CO, Section D.5.4., paragraph 2150.
174
         Form CO, Section D.5.4., paragraph 2152.
175
         Form CO, Section D.5.4., paragraph 2153.
176
         Commission decision of 22 February 2010 in Case COMP/M.5735 – UTC/GE Security, paragraphs
         8 and following.
                                                        33
 ---pagebreak---          customers for the same applications.177 However, the majority of non-integrated
         suppliers are of the opposite view.178
(155)    In addition, the majority of competing OEMs of automatic pedestrian doors and
         end-customers state that access control systems (software) and access control
         components (hardware) are generally sourced by customers as a package/complete
         solution.179
(156)    For the purposes of this decision and in light of all information available to it, the
         Commission considers appropriate to leave the exact product market definition
         open since the competitive assessment would not differ irrespective of the
         segmentation.
5.6.2.   Geographic market definition
5.6.2.1. Notifying Party’s arguments
(157)    The Notifying Party refers to the decisional practice of the Commission which in
         UTC/GE Security found that the majority of the customers were able to source
         electronic security systems on an EEA-wide or even worldwide basis, yet it
         ultimately left open the geographic market definition.180
(158)    The Notifying Party submits that if the definition of a distinct electronic access
         control systems segment is to be considered appropriate, the relevant sales are
         EEA-wide.181 It further submits that the relevant components, the installation
         methods and the expertise are the same throughout the EEA. Moreover, major
         suppliers are reported to be active across the EEA, with the assistance of
         installation often subcontracted locally.
5.6.2.2. Commission’s assessment
(159)    As put forward by the Notifying Party, in UTC/GE Security the Commission
         analysed the geographic market for ESS, yet it ultimately left open the exact
         market definition.182
(160)    The market investigation confirms national elements of competition, with certain
         respondents pointing to differences across the EEA, in particular with regard to
         prices.183 However, the majority of respondents share the view that for the purpose
         of assessing competition between suppliers, it is appropriate to consider the supply
177
         Questionnaire 1 to competitors, question 79; Questionnaire 2 to end-customers, question 68.
178
         Questionnaire 3 to non-integrated suppliers, question 90.
179
         Questionnaire 1 to competitors, question 80; Questionnaire 2 to end-customers, question 69.
180
         Form CO, Section D.5.4., paragraph 2149.
181
         Form CO, Section D.5.4., paragraph 2152.
182
         Commission decision of 22 February 2010 in Case COMP/M.5735 – UTC/GE Security, paragraphs
         29 and following.
183
         Questionnaire 1 to competitors, questions 85.2 and 86.2; Questionnaire 2 to end-customers,
         questions 73 and 74; Questionnaire 3 to non-integrated suppliers, questions 96.2 and 97.2.
                                                        34
 ---pagebreak---          of both access control systems and access control components as being EEA-wide
         in scope.184
(161)    For the purposes of this decision and in light of all information available to it, the
         Commission considers appropriate to leave the exact geographic market definition
         open, since the competitive assessment would not differ irrespective of the
         geographic scope considered.
5.7.     Locking devices
5.7.1.    Locks
5.7.1.1. Product market definition
         (A)       Notifying Party’s arguments
(162)    The Notifying Party submits that the market for mechanical lock systems (with all
         parts being mechanical) may be distinguished from the market for
         electromechanical lock systems (where at least one part is electronic).185 It
         considers this distinction to be in line with the decisional practice of the Swedish
         Competition Authority (‘SCA’) and of the German Federal Cartel Office. The
         Notifying Party recalls the reasoning of the SCA, which found that in comparison
         to mechanical locks, electromechanical locks costs significantly more, provide a
         greater security and flexibility, as well as facilitate central monitoring and control
         of doors.
(163)    The Notifying Party also recalls the decisional practice of the SCA to submit that
         separate markets should be distinguished for manufacturing, distribution/wholesale
         and installation of locks.186 The Notifying Party further submits that the relevant
         product market for the assessment of the Transaction is that of the sale of locks by
         lock suppliers to OEMs of manual and automatic windows and doors, excluding
         sales to lock distributors in line again with the decisional practice of both the SCA
         and the FTO.
(164)    On this basis, the Notifying Party submits that the relevant product markets are the
         markets for the supply of, respectively, electromechanical and mechanical locks to
         OEMs of manual and automatic doors and windows.187
         (B)       Commission’s assessment
(165)    In Assa Abloy/Cardo, the Commission did not conclude on whether
         electromechanical and mechanical locks constitute separate products markets.188
(166)    In the present case, the results of the Commission’s market investigation reveal
         that, firstly, standalone locks and intrinsic locking mechanisms (i.e. inherent
184
         Questionnaire 1 for competitors, questions 85 and 86; Questionnaire 2 for customers, questions 73.2
         and 74.2; Questionnaire 3 for non-integrated suppliers, questions 96 and 97.
185
         Form CO, Section D.1.3.1., paragraph 2002.
186
         Form CO, Section D.1.3.1., paragraph 2005.
187
         Form CO, Section D.1.3.1., paragraph 2007.
188
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, Section III.D.
                                                        35
 ---pagebreak---          locking functions within automatic doors’ operators) cannot be used
         interchangeably by customers to achieve the same level of security conditions,
         including meeting the applicable regulatory requirements or insurance
         conditions.189
(167)    Secondly, the results are inconclusive as to whether EEA-based customers use
         mechanical and electromechanical locks interchangeably.190
(168)    Thirdly, a large number of competing OEMs of automatic pedestrian doors and the
         majority of non-integrated suppliers consider that locks used with automatic
         pedestrian doors191 are different from locks used with manual door and windows.192
         A large number of competing OEMs, however, consider that the same types of
         locks are used for automatic doors and manual doors.193
(169)    Fourthly, the majority of competing OEMs of automatic pedestrian doors and half
         of non-integrated suppliers note that the supply of locks, on the one hand, and the
         installation of locks (in, e.g., automatic pedestrian doors), on the other hand, are
         separate activities and may belong to separate product markets.194
(170)    For the purposes of this decision and in light of all information available to it, the
         Commission considers appropriate to leave open the exact product market
         definition, since the competitive assessment would not differ irrespective of the
         segmentation.
5.7.1.2. Geographic market definition
         (A)        Notifying Party’s arguments
(171)    The Notifying Party submits that the geographic markets for the supply of
         mechanical and electromechanical locks sold to OEMs of automatic and manual
         doors and windows are at least EEA-wide.195
(172)    The Notifying Party submits that locks are both produced and procured across
         Europe.196 Moreover, it further submits that these products have to meet
         Europe-wide EN standards, the harmonisation of which facilities cross-border
         competition.197 Even locks imported from outside of Europe typically comply with
189
         Questionnaire 1 to competitors, question 105.5; Questionnaire 3 to non-integrated suppliers,
         question 114.5.
190
         Questionnaire 1 to competitors, question 106; Questionnaire 3 to non-integrated suppliers, question
         115.
191
         In Form CO, Section D.1.4., paragraph 2021 and in its reply to question 5 of request for information
         11, 20 January 2020, the Notifying Party submits that high-speed doors, either for internal or
         external applications, are rarely equipped with locks. Thus, the Commission’s market investigation
         focused on automatic pedestrian doors.
192
         Questionnaire 1 to competitors, question 107; Questionnaire 3 to non-integrated suppliers, question
         116.
193
         Questionnaire 1 to competitors, question 107.
194
         Questionnaire 1 to competitors, question 109; Questionnaire 3 to non-integrated suppliers, question
         118.
195
         Form CO, Section D.1.3.2., paragraph 2008.
196
         Form CO, Section D.1.3.2., paragraph 2009.
197
         Form CO, Section D.1.3.2., paragraph 2010.
                                                        36
 ---pagebreak---          the relevant standards, which allows European purchasers to source from non-
         European suppliers, e.g. from China.198 The Notifying Party does not consider
         additional national standards to restrict this competition at the OEM level.199
(173)    Furthermore, the Notifying Party submits that there are low barriers to trade locks
         across the EEA, with the technology being mature and the products being simple to
         produce.200 Moreover, transport of the products is considered cheap and easy. The
         Notifying Party also submits that switching costs are low and the lead time to
         secure alternative supplies is short.
         (B)        Commission’s assessment
(174)    Already in Assa Abloy/Cardo, the Parties argued that the geographic market for
         mechanical locks sold to OEMs was EEA-wide.201 While the Commission’s
         decision includes parties’ market shares at the national level, the Commission did
         not conclude on the exact market definition.
(175)    The market investigation confirms national elements of competition, with certain
         respondents pointing to differences across the EEA, in particular with regard to
         prices or regulatory requirements.202 However, the majority of both competing
         OEMs of automatic pedestrian doors and non-integrated suppliers consider that for
         the purpose of assessing competitive dynamics in the present case, it is appropriate
         to consider the market for the supply of locks as being EEA-wide in scope.203
(176)    For the purposes of this decision and in light of all information available to it,
         while there are strong grounds to consider the relevant market as EEA-wide, the
         Commission considers appropriate to leave the exact geographic market definition
         open, since the competitive assessment would not differ irrespective of the
         geographic scope considered.
5.7.2.   Electric strikes
5.7.2.1. Product market definition
         (A)        Notifying Party’s arguments
(177)    According to the Notifying Party, an electric strike is an electromechanical locking
         device used mainly for manual and automatic swing doors and installed in the
         doorframe.204 Thus, electric strikes are different from locks, which are installed on
         the door leaf, and intrinsic locking mechanisms (see paragraph (165)).
198
         Form CO, Section D.1.3.2., paragraph 2012 and paragraph 2014.
199
         Form CO, Section D.1.3.2., paragraph 2011.
200
         Form CO, Section D.1.3.2., paragraph 2013.
201
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, paragraph 39.
202
         Questionnaire 1 to competitors, question 111.2; Questionnaire 3 to non-integrated suppliers,
         question 120.2.
203
         Questionnaire 1 to competitors, question 111; Questionnaire 3 to non-integrated suppliers, question
         120.
204
         Reply of the Notifying Party to question 1 of the request for information 14, 11 February 2020.
                                                         37
 ---pagebreak--- (178)    The Notifying Party submits that an electric strike is ‘a separate product most often
         provided by someone else than the automatic door provider (e.g. a locksmith, an
         installer or a door and screen provides).’205
(179)    The Notifying Party further claims that it is not appropriate to segment the market
         based on applications or end-user, due to the use of electric strikes in all types of
         end-user sectors and their multiple applications.206
(180)    As for locks, the Notifying Party puts forwards a distinction of the value chain for
         electric strikes between manufacturing, wholesale and installation.207
(181)    It further notes that the majority of sales of these products go to wholesalers and
         locksmiths, with OEMs of automatic doors constituting an insignificant customer
         segment.208
         (B)        Commission’s assessment
(182)    The Commission became aware of the relevance of electric strikes (also referred to
         as ‘electric door openers’), as a component distinct from locks, over the course of
         its market investigation. The identification of electric strikes as a component
         distinct from locks appears to be consistent with the Notifying Party’s arguments.
(183)    For the purposes of this decision and in light of all information available to it, the
         Commission considers appropriate to leave the exact product market definition
         open, since the competitive assessment would not differ irrespective of the
         segmentation.
5.7.2.2. Geographic market definition
         (A)        Notifying Party’s arguments
(184)    The Notifying Party submits that the relevant geographic market for the supply of
         electric strikes at the upstream level is EEA-wide.209 It further states that electric
         strikes are manufactured and shipped from central production facilities across
         Europe, benefiting from low transport costs.
(185)    Additionally, according to the Notifying Party, no national standards restrict
         cross-border sales, with the same product models being marketed across the EEA.
         Procurement at the upstream level is also claimed to take place on an EEA-wide
         and sometimes even worldwide basis.
(186)    Generally, the Notifying Party submits that ‘suppliers of automatic doors (…)
         generally source [electric strikes] on an ad-hoc basis from local wholesalers and
         locksmiths’ and these products ‘are being produced in large quantities and sold by
         different European and non-European suppliers’.210
205
         Reply of the Notifying Party to question 1 of the request for information 15, 21 February 2020.
206
         Reply of the Notifying Party to question 1 of the request for information 15, 21 February 2020.
207
         Reply of the Notifying Party to question 1 of the request for information 15, 21 February 2020.
208
         Reply of the Notifying Party to question 1 of the request for information 15, 21 February 2020.
209
         Reply of the Notifying Party to question 1 of the request for information 15, 21 February 2020.
210
         Reply of the Notifying Party to question 2 of the request for information 14, 11 February 2020.
                                                         38
 ---pagebreak---          (B)       Commission’s assessment
(187)    As stated in paragraph (182), the Commission was informed about the relevance of
         electric strikes over the course of the Phase I market investigation. The source of
         that information did not specify or discuss the relevant geographic scope for the
         procurement and supply of these products.
(188)    For the purposes of this decision and in light of all information available to it, the
         Commission considers appropriate to leave the exact geographic market definition
         open, since the competitive assessment would not differ irrespective of the
         geographic scope considered.
5.8.     Sensors
5.8.1.   Product market definition
5.8.1.1. Notifying Party’s arguments
(189)    The Notifying Party submits that the relevant product market is the market for the
         manufacturing and supply of sensors to OEMs of entrance automation products
         (automatic doors, elevators, traffic gates).211 A further division by type of OEM
         and product, e.g. manufacturers of automatic pedestrian doors, is considered
         possible.
(190)    Despite certain sensors covering a variety of applications, the Notifying Party
         invokes a limited demand-side substitutability for these products due to, e.g.,
         different degrees of sensitivity required by sensors used for automatic pedestrian
         and industrial doors.212 From the supply side, due to similarities in the technologies
         used, the Notifying Party considers sensors for, e.g., automatic pedestrian doors,
         industrial doors and elevators, as largely substitutable.213 Moreover, certain
         suppliers produce sensors for a large variety of applications.214 In particular, the
         Notifying Party further submits that many sensor models can be used not only for
         automatic doors, but also for other entrance automation products, e.g. elevators.215
5.8.1.2. Commission’s assessment
(191)    According to the results of the Commission’s market investigation, the majority of
         competing OEMs consider that sensors for automatic pedestrian doors constitute a
         separate product market from sensors for other applications,216 as well as from
         sensors for industrial doors.217
211
         Form CO, Section D.2.3., paragraph 2068.
212
         Form CO, Section D.2.3., paragraph 2069.
213
         Form CO, Section D.2.3., paragraph 2070.
214
         Form CO, Section D.2.3., paragraph 2070.
215
         Form CO, Section D.2.3., paragraph 2070.
216
         Questionnaire 1 to competitors, question 120.
217
         Questionnaire 1 to competitors, question 121.
                                                       39
 ---pagebreak--- (192)    Yet, further segmentations of sensors depending on the different types of automatic
         pedestrian doors as well as different sub-types of each of automatic swing, sliding
         and revolving doors is not considered necessary by competing OEMs.218
(193)    For the purposes of this decision and in light of all information available to it, the
         Commission will specifically assess the impact of the Transaction on the supply of
         sensors for automatic pedestrian doors. Generally, though, the Commission
         considers appropriate to leave the exact product market definition open, since the
         competitive assessment would not differ irrespective of the segmentation.
5.8.2.   Geographic market definition
5.8.2.1. Notifying Party’s arguments
(194)    The Notifying Party submits that the relevant product market is at least EEA-wide,
         and possibly global.219
(195)    According to the Notifying Party, while OEMs of entrance automation products in
         the EEA source sensors globally, it is possible that the relevant market is EEA-
         wide due to EU standard requirements.220
5.8.2.2. Commission’s assessment
(196)    According to the results of the market investigation, the majority of competing
         OEMs consider that for the purpose of assessing competitive dynamics in the
         present case, it is appropriate to consider the supply of sensors for automatic
         pedestrian doors as being EEA-wide in scope.221
(197)    In particular, respondents to the market investigation consider that factors such as,
         e.g., technical specificities or consumer preferences are comparable across the
         EEA.222
(198)    Additionally, the market investigation confirms the view of the Notifying Party that
         EEA-based customers generally procure sensors for automatic pedestrian doors on
         a worldwide basis.223
(199)    For the purposes of this decision and in light of all information available to it, the
         Commission considers that the relevant geographic market is at least EEA-wide.
5.9.      Conclusion on market definition
(200)    On the basis of the foregoing, the Commission concludes that, for the purpose of
         carrying out its assessment of the Transaction:
218
         Questionnaire 1 to competitors, questions 122 and 123.
219
         Form CO, Section D.2.3., paragraph 2073.
220
         Form CO, Section D.2.3., paragraph 2073.
221
         Questionnaire 1 to competitors, question 125.
222
         Questionnaire 1 to competitors, question 125.2.
223
         Questionnaire 1 to competitors, question 124.
                                                        40
 ---pagebreak---       (a)     separate relevant product markets arise for the manufacturing and supply of
              each of swing, sliding and revolving doors, as well as for hermetic, semi-
              hermetic and fire doors, which are national in scope;
      (b)     the precise product market definition can be left open for the supply of
              industrial doors, though it is appropriate to focus the assessment on the
              supply of high-speed doors where the overlap between the Parties’ activities
              is the most significant, but that any relevant market would in any event be
              national in scope;
      (c)     separate relevant product markets arise for the provision of after-sales
              services for automatic pedestrian doors (all types of doors combined), on
              the one hand, and the provision of after-sales services for industrial doors
              (all types of doors combined), on the other hand, which are national in
              scope;
      (d)     separate relevant product markets arise for the supply of spare parts
              (including technical information and servicing tools), distinct from after-
              sales services, and for each of brand-specific spare parts and generic spare
              parts, specifically, which are all national in scope;
      (e)     the precise product and geographic market definition can be left open for
              the supply of access control systems and components;
      (f)     the precise product and geographic market definition can be left open for
              the supply of locks;
      (g)     the precise product and geographic market definition can be left open for
              the supply of electric strikes;
      (h)     the precise product market definition can be left open for the supply of
              sensors, and that the geographic market is at least EEA-wide in scope.
6.    COMPETITIVE ASSESSMENT: PRINCIPLES
(201) Under paragraphs 2 and 3 of Article 2 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. In this respect, a merger may
      entail horizontal and/or vertical and/or conglomerate effects.
(202) Horizontal effects are those deriving from a concentration where the undertakings
      concerned are actual or potential competitors of each other in one or more of the
      relevant markets concerned. Vertical effects are those deriving from a
      concentration where the undertakings concerned are active on different or multiple
      levels of the supply chain. Conglomerate effects are those deriving from a
      concentration where the undertakings concerned are active in closely related
      markets.
6.1.  Horizontal effects
(203) In addition to the creation or strengthening of a dominant position, the
      Commission’s Guidelines on the assessment of horizontal mergers under the
                                                 41
 ---pagebreak---        Council Regulation on the control of concentrations between undertakings (the
       ‘Horizontal Merger Guidelines’),224 distinguish between two main other ways in
       which concentrations between actual or potential competitors on the same relevant
       market may significantly impede effective competition:
       (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/or
       (b) By changing the nature of competition in such a way that firms that
       previously were not coordinating their behaviour are now significantly more likely
       to coordinate and raise prices or otherwise harm effective competition. A merger
       may also make coordination easier, more stable or more effective for firms which
       were coordinating prior to the merger (coordinated effects).225
6.1.1. Non-coordinated effects
(204)  Generally, a merger giving rise to non-coordinated effects would significantly
       impede effective competition by creating or strengthening the dominant position of
       a single firm, one which, typically, would have an appreciably larger market share
       than the next competitor post-merger.226
(205)  According to well-established case law, very large market shares – 50 % or more –
       may in themselves be evidence of the existence of a dominant market position.227
(206)  The overall concentration level in a market may also provide useful information
       about the competitive situation. In order to measure concentration levels, the
       Commission often applies the Herfindahl-Hirschman Index (‘HHI’). The HHI is
       calculated by summing the squares of the individual market shares of all the firms
       in the market. While the absolute level of the HHI can give an initial indication of
       the competitive pressure in a market post-merger, the change in the HHI (known as
       the ‘delta’) is a useful proxy for the change in concentration directly brought about
       by a merger.228 The Commission is unlikely to identify horizontal competition
       concerns in a market with a post-merger HHI below 1 000.229 Such markets
       normally do not require extensive analysis. The Commission is also unlikely to
       identify horizontal competition concerns in a merger with a post-merger HHI
       between 1 000 and 2 000 and a delta below 250, or a merger with a post-merger
       HHI above 2 000 and a delta below 150, except where special circumstances are
       present.230
224
       Official Journal C 31, 5.2.2004, paragraphs 5-18.
225
       Horizontal Merger Guidelines, paragraph 22.
226
       Horizontal Merger Guidelines, paragraph 25.
227
       Jugdment of 28 April 1999, Endemol v Commission, T-221/95, [1999] ECR II-1299, paragraph 134,
       and Judgment of 25 March 1999 Gencor v Commission, T-102/96, [1999] ECR II-753, paragraph
       205. It is a distinct question whether a dominant position is created or strengthened as a result of the
       merger.
228
       Horizontal Merger Guidelines, paragraph 16.
229
       Horizontal Merger Guidelines, paragraph 19.
230
       Horizontal Merger Guidelines, paragraph 20.
                                                       42
 ---pagebreak--- (207) Furthermore, non-merging firms in a given market can benefit from the reduction
      of competitive pressure that can result from a merger, since any price increase by
      merging firms may switch some demand to rival firms, which, in turn, may find it
      profitable to increase their prices.231
(208) Mergers in oligopolistic markets involving the elimination of important
      competitive constraints that the parties previously exerted upon each other together
      with a reduction of competitive pressure on the remaining competitors may, even
      where there is little likelihood of coordination between the members of the
      oligopoly, also result in a significant impediment to competition. The Merger
      Regulation clarifies that all mergers giving rise to such non-coordinated effects
      shall also be declared incompatible with the internal market.232
(209) The larger the market share, the more likely a firm is to possess market power.
      Moreover, the larger the addition of market share, the more likely it is that a merger
      will lead to a significant increase in market power. The larger the increase in the
      sales base on which to enjoy higher margins after a price increase, the more likely
      it is that the merging firms will find such a price increase profitable despite the
      accompanying reduction in output.233
(210) In evaluating the likelihood of non-coordinated effects potentially caused by a
      merger, it is important to assess to which extent the products of one merging party
      are close substitutes to the products of the merging firms than when they offer less
      close substitutes.234
(211) Customers may have difficulties in switching to other suppliers where only few
      alternative suppliers exist or where the customers would face substantial switching
      costs. Such customers are particularly vulnerable to price increases. In particular,
      this may be the case for customers that have used dual sourcing from the two
      merging firms as a means of obtaining competitive prices.235
(212) The Commission is unlikely to find that the merger will create or strengthen a
      dominant position or otherwise significantly impede effective competition when
      rival firms have available capacity and find it profitable to expand output
      sufficiently. In other words, the extent to which competitors to the merged entity
      constrain the merged entity from raising prices not only depends on the level of
      their spare capacity but also on whether these firms have the incentive to react
      aggressively to a post-merger price increase.236
(213) Some proposed mergers would, if allowed to proceed, significantly impede
      effective competition by leaving the merged firm in a position where it would have
      the ability and incentive to make the expansion of smaller firms and potential
231
      Horizontal Merger Guidelines, paragraph 24.
232
      Horizontal Merger Guidelines, paragraph 25.
233
      Horizontal Merger Guidelines, paragraph 27.
234
      Horizontal Merger Guidelines, paragraph 28.
235
      Horizontal Merger Guidelines, paragraph 31.
236
      Horizontal Merger Guidelines, paragraph 33.
                                                  43
 ---pagebreak---       competitors more difficult or otherwise restrict the ability of rival firms to
      compete.237
(214) In markets where innovation is an important competitive force, a merger may
      increase the firms’ ability and incentive to bring new innovations to the market
      and, thereby, the competitive pressure on rivals to innovate in that market.
      Alternatively, effective competition may be significantly impeded by a merger
      between two important innovators, for instance between two companies with
      ‘pipeline’ products related to a specific product market.238
(215) Potential competition must also be taken into account in any competitive
      assessment. Potential competition may lead to negative competition effects where
      (i) the potential competitor already exerts a significant constraining influence or
      where there is a significant likelihood that it would grow into an effective
      competitive force (for example plans to enter a market in a significant way); and
      (ii) there is an insufficient number of other potential competitors, which could
      maintain sufficient competitive pressure after the merger.239
(216) Countervailing buyer power should be understood as the bargaining strength that
      the buyer has vis-à-vis the seller in commercial negotiations due to its size, its
      commercial significance to the seller and its ability to switch to alternative
      suppliers.240 One source of countervailing buyer power would be if a customer
      could credibly threaten to resort, within a reasonable timeframe, to alternative
      sources of supply should the supplier decide to increase prices or to otherwise
      deteriorate quality or the conditions of delivery. This would be the case if the buyer
      could immediately switch to other suppliers, credibly threaten to vertically
      integrate into the upstream market or to sponsor upstream expansion or entry for
      instance by persuading a potential entrant to enter by committing to placing large
      orders with this company.241
(217) Countervailing buyer power is, however, only possessed by a customer if it is of a
      certain size, it is of great commercial significance to the supplier and it has the
      ability to switch to alternative suppliers. Moreover, even if some customers were to
      hold such countervailing buyer power, this is not sufficient. In addition, it is not
      enough that sufficient countervailing buyer power may exist pre-merger, it must
      continue to exist post-merger (removing a credible alternative supplier may reduce
      buyer power).242
(218) For entry to be considered a sufficient competitive constraint on the merging
      parties, it must be shown to be likely, timely and sufficient to deter or defeat any
      potential anti-competitive effects of the merger.243
237
      Horizontal Merger Guidelines, paragraph 36.
238
      Horizontal Merger Guidelines, paragraph 38.
239
      Horizontal Merger Guidelines, paragraph 60.
240
      Horizontal Merger Guidelines, paragraph 64.
241
      Horizontal Merger Guidelines, paragraph 65.
242
      Horizontal Merger Guidelines, paragraph 67.
243
      Horizontal Merger Guidelines, paragraph 68.
                                                  44
 ---pagebreak--- 6.1.2. Coordinated effects
(219)  In some markets the structure may be such that firms would consider it possible,
       economically rational, and hence preferable, to adopt on a sustainable basis a
       course of action on the market aimed at selling at increased prices through a
       coordination of their behaviour.244 A merger may increase the likelihood that firms
       are able to coordinate their behaviour and raise prices, even without entering into
       an agreement or resorting to a concerted practice within the meaning of Article 101
       TFEU. A merger may also make coordination easier, more stable or more effective
       for firms that were already coordinating before the merger, either by making the
       coordination more robust or by permitting firms to coordinate on even higher
       prices.245
(220)  Coordination may take various forms, such as setting prices above the competitive
       level, limiting production or capacity, or dividing the market, for instance by
       geographic area or other customer characteristics, or allocating contracts in bidding
       markets.246
(221)  Coordination is more likely to emerge in markets where it is relatively simple to
       reach a common understanding on the terms of coordination. In addition, three
       conditions are necessary for coordination to be sustainable. First, the coordinating
       firms must be able to monitor to a sufficient degree whether the terms of
       coordination are being adhered to. Second, discipline requires that there is some
       form of credible deterrent mechanism that can be activated if deviation is detected.
       Third, the reactions of outsiders, such as current and future competitors not
       participating in the coordination, as well as customers, should not be able to
       jeopardise the results expected from the coordination.247 In applying those criteria,
       it is necessary to avoid a mechanical approach involving the separate verification
       of each of those criteria taken in isolation, while taking no account of the overall
       economic mechanism of a hypothetical tacit coordination.248
(222)  For competitors to reach a common perception as to how the coordination should
       work, coordinating firms should have similar views regarding which actions would
       be considered to be in accordance with the aligned behaviour and which actions
       would not.249 In particular, coordination by way of market division will be easier if
       customers have simple characteristics that allow the coordinating firms to readily
       allocate them. Such characteristics may be based on geography; on customer type
       or simply on the existence of customers who typically buy from one specific firm.
       Coordination by way of market division may be relatively straightforward if it is
       easy to identify each customer’s supplier and the coordination device is the
       allocation of existing customers to their incumbent supplier.250
244
       Horizontal Merger Guidelines, paragraph 39.
245
       Horizontal Merger Guidelines, paragraph 39.
246
       Horizontal Merger Guidelines, paragraph 40.
247
       Judgment of 6 June 2002, Airtours v Commission, T-342/99, EU:T:2002:146, paragraph 62;
       Horizontal Merger Guidelines, paragraph 41.
248
       Judgment in Bertelsmann and Sony Corporation of America v Impala, C-413/06 P, EU:C:2008:392,
       paragraph 125.
249
       Horizontal Merger Guidelines, paragraph 44.
250
       Horizontal Merger Guidelines, paragraph 46.
                                                   45
 ---pagebreak--- (223) Publicly available key information, exchange of information through trade
      associations, or information received through cross-shareholdings or participation
      in joint ventures may also help firms reach terms of coordination.251
(224) Firms may find it easier to reach a common understanding on the terms of
      coordination if they are relatively symmetrical, especially in terms of cost
      structures, market shares, capacity levels and levels of vertical integration.
      Structural links such as cross-shareholdings or participation in joint ventures may
      also help in aligning incentives among the coordinating firms.252
(225) Coordinating firms are often tempted to increase their share of the market by
      deviating from the terms of coordination, for instance by lowering prices, offering
      secret discounts, increasing product quality or capacity or trying to win new
      customers. Only the credible threat of timely and sufficient retaliation keeps firms
      from deviating. Markets therefore require sufficient transparency to allow the
      coordinating firms to monitor to a sufficient degree whether other firms are
      deviating, and thus know when to retaliate. Transparency in the market is often
      higher when the number of active participants in the market is lower. Further, the
      degree of transparency often depends on how market transactions take place in a
      particular market.253
(226) In some markets where the general conditions may seem to make monitoring of
      deviations from coordination difficult, firms may nevertheless engage in practices
      which have the effect of easing the monitoring task, even when these practices are
      not necessarily entered into for such purposes. These practices, such as meeting-
      competition or most-favoured-customer clauses, voluntary publication of
      information, announcements, or exchange of information through trade
      associations, may increase transparency or help competitors interpret the choices
      made. Cross-directorships, participation in joint ventures and similar arrangements
      may also make monitoring easier.254
(227) The possibility of retaliation is important for the stability of coordination.
      Coordination is not sustainable unless the consequences of deviation are
      sufficiently severe to convince coordinating firms that it is in their best interest to
      adhere to the terms of coordination. It is thus the threat of future retaliation that can
      keep the coordination sustainable. However the threat is only credible if, where
      deviation by one of the firms is detected, there is sufficient certainty that some
      deterrent mechanism will be activated.255
(228) Retaliation need not necessarily take place in the same market as the deviation. If
      the coordinating firms have commercial interaction in other markets, these may
      offer various methods of retaliation.256
251
      Horizontal Merger Guidelines, paragraph 47.
252
      Horizontal Merger Guidelines, paragraph 48.
253
      Horizontal Merger Guidelines, paragraphs 49 and 50.
254
      Horizontal Merger Guidelines, paragraph 51.
255
      Horizontal Merger Guidelines, paragraph 52.
256
      Horizontal Merger Guidelines, paragraph 55.
                                                   46
 ---pagebreak--- (229) As regards the specific effects of a merger, a merger may increase the likelihood
      that firms are able to coordinate their behaviour and raise prices, even without
      entering into an agreement or resorting to a concerted practice within the meaning
      of Article 101 TFEU. A merger may also make coordination easier, more stable or
      more effective for firms that were already coordinating before the merger, either by
      making the coordination more robust or by permitting firms to coordinate on even
      higher prices,257 for example by facilitating the detection of deviation, limiting the
      ability and incentives of some market players to deviate and allowing more
      efficient retaliation.258
6.2.  Vertical effects
(230) In general, vertical mergers involve companies operating at different levels of the
      same supply chain. For instance, a vertical merger occurs when a manufacturer of a
      certain product merges with one of its distributors.
(231) Pursuant to the Non-Horizontal Merger Guidelines,259 vertical mergers do not
      entail the loss of direct competition between merging firms in the same relevant
      market, and provide scope for efficiencies.
(232) However, there are circumstances in which vertical mergers may significantly
      impede effective competition. This is in particular the case if they give rise to
      foreclosure.
(233) The Non-Horizontal Merger Guidelines distinguish between two forms of
      foreclosure: input foreclosure, where the merger is likely to raise costs of
      downstream rivals by restricting their access to an important input, and customer
      foreclosure, where the merger is likely to foreclose upstream rivals by restricting
      their access to a sufficient customer base.
(234) Pursuant to the Non-Horizontal Merger Guidelines, input foreclosure arises where,
      post-merger, the new entity would be likely to restrict access to the products or
      services that it would have otherwise supplied absent the merger, thereby raising its
      downstream rivals’ costs by making it harder for them to obtain supplies of the
      input under similar prices and conditions as absent the merger.
(235) For input foreclosure to be a concern, the merged entity should have a significant
      degree of market power in the upstream market. Only when the merged entity has
      such a significant degree of market power, can it be expected that it will
      significantly influence the conditions of competition in the upstream market and
      thus, possibly, the prices and supply conditions in the downstream market.
(236) Pursuant to the Non-Horizontal Merger Guidelines, customer foreclosure may
      occur when a supplier integrates with an important customer in the downstream
      market and because of this downstream presence, the merged entity may foreclose
      access to a sufficient customer base to its actual or potential rivals in the upstream
      market (the input market) and reduce their ability or incentive to compete, which,
257
      Judgment in Bertelsmann and Sony Corporation of America v Impala, C-413/06 P, EU:C:2008:392,
      paragraph 122; Horizontal Merger Guidelines, paragraph 39.
258
      Horizontal Merger Guidelines, paragraph 42.
                                                   47
 ---pagebreak---       in turn, may raise downstream rivals' costs by making it harder for them to obtain
      supplies of the input under similar prices and conditions as absent the merger. This
      may allow the merged entity to profitably establish higher prices on the
      downstream market.
(237) For customer foreclosure to lead to consumer harm, it is thus not necessary that the
      merged entity's rivals are forced to exit the market. The relevant benchmark is
      whether the increased input costs would lead to higher prices for consumers.
6.3.  Conglomerate effects
(238) Conglomerate mergers consist of mergers between companies that are active in
      closely related markets, for instance suppliers of complementary products or of
      products which belong to a range of products that is generally purchased by the
      same set of customers for the same end use.
(239) Pursuant to the Non-Horizontal Merger Guidelines, in most circumstances,
      conglomerate mergers do not lead to any competition problems. However,
      foreclosure effects may arise when the combination of products in related markets
      may confer on the merged entity the ability and incentive to leverage a strong
      market position from one market to another closely related market by means of
      tying or bundling or other exclusionary practices.
(240) The Non-Horizontal Merger Guidelines distinguish between bundling, which
      usually refers to the way products are offered and priced by the merged entity and
      tying, usually referring to situations where customers that purchase one good (the
      tying good) are required to also purchase another good from the producer (the tied
      good).
(241) Within bundling practices, a distinction is also made between pure bundling and
      mixed bundling. In the case of pure bundling the products are only sold jointly in
      fixed proportions. With mixed bundling the products are also available separately,
      but the sum of the stand-alone prices is higher than the bundled price.
(242) Tying can take place on a technical or contractual basis. For instance, technical
      tying occurs when the tying product is designed in such a way that it only works
      with the tied product (and not with the alternatives offered by competitors).
(243) While tying and bundling have often no anticompetitive consequences, in certain
      circumstances such practices may lead to a reduction in actual or potential
      competitors' ability or incentive to compete. This may reduce the competitive
      pressure on the merged entity allowing it to increase prices or deteriorate supply
      conditions in other ways.
(244) 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
                                               48
 ---pagebreak--- 7.    COMPETITIVE ASSESSMENT: NON-COORDINATED EFFECTS
(245) The Transaction gives rise to horizontally affected markets in various types of
      automatic pedestrian doors (i.e. swing, sliding and revolving), industrial doors
      (high-speed) and after-sales services (for automatic pedestrian and industrial
      doors), as well as to non-horizontal links between the upstream supply of spare
      parts and downstream supply of after-sales services, and the upstream supply of
      locks and access control systems and the downstream markets for automatic
      pedestrian doors and industrial doors.
7.1.  Introduction to the market shares methodology
(246) As a preliminary introduction to the assessment of both the horizontal overlaps and
      the non-horizontal links created by the Transaction, the Commission notes that it is
      relevant to consider various measures of market shares in this case.
(247) For the purpose of this decision, the Commission considers that a volume-based
      measure based on the number of operators sold by each supplier in the market is a
      more reliable measure of the importance of a particular supplier compared to a
      value-based measure. In this regard, the Commission notes that operators may be
      sold either as part of a complete door set or as a standalone basis and that the
      inclusion of a door leaf and frame may entail a significantly different value. In
      relation to complete door sets, moreover, the value may depend upon different
      features, such as the size or type of material.
(248) As explained in paragraph (71) above, the Commission will conduct its competitive
      assessment based on an OEM-level approach, which includes sales by OEMs-only
      to both end-customers and non-integrated suppliers. In turn, the Commission will
      factor in its assessment the existence of different sale channels, and will thus also
      consider OEM sales to non-integrated suppliers and OEM sales to end-customers,
      as relevant metrics.
7.2.  Automatic pedestrian doors
(249) The Transaction gives rise to horizontally affected markets in swing, sliding,
      revolving and hermetic doors.260.
(250) As explained in paragraph (71) above, the Commission considers appropriate to
      conduct its competitive assessment for automatic pedestrian doors based on an
      OEM-level approach, which includes market shares reflecting sales by OEMs-only
      to both end-customers and non-integrated suppliers. Based on this approach, the
      Commission carried out a market reconstruction based on actual sales volumes of
      OEMs in order to determine the actual position of the combined entity in the
      automatic pedestrian doors markets. Table 1 below provides an overview of all
      affected markets in swing, sliding and revolving doors according to the
      Commission’s market reconstruction.
260
      The Transaction does not give rise to horizontal overlaps in semi-hermetic doors.
                                                     49
 ---pagebreak---  ---pagebreak---          resort to alternative sources of supply269. The Notifying Party reiterates these same
         arguments for all affected markets in automatic pedestrian doors.
7.2.2.   Commission’s assessment: overview of the market dynamics across different
         national markets in the EEA
(253)    While the markets for automatic pedestrian doors are national in scope, certain
         market features are similar, if not identical, in all the automatic pedestrian door
         product markets within the EEA. These features include: (i) the Parties’ position of
         leadership; (ii) the fact that the markets are already concentrated pre-Transaction;
         (iii) the closeness of competition between the Parties; (iv) the strong scale-effects
         and the high barriers to entry and to expansion; (v) the importance of having a
         broad portfolio; and (vi) the limited buyer power.
(254)    Given that the conditions of competition are similar in each Member State, the
         Commission will first describe the common market features to all the automatic
         pedestrian door product markets across the EEA in Sections 7.2.2.1 to 7.2.2.6
         below. The Commission will then assess the impact on competition of the
         Transaction in each affected market in Section 7.2.3 below.
7.2.2.1. Leadership position of the Parties in automatic pedestrian doors across the EEA
(255)    The Parties consider themselves as leading players in automatic pedestrian doors
         across the EEA. This is supported by the market investigation, as well as the
         Parties’ public declarations and internal documents.
(256)    At the EEA-level, a vast majority of competitors and non-integrated suppliers
         submitted that there is an established market leader in the supply of automatic
         pedestrian doors.270 The vast majority of respondents that expressed an opinion on
         this point submitted that Assa Abloy is the current EEA market leader.271 Agta
         Record is also considered as an EEA market leader by several non-integrated
         suppliers.272 This leadership position is likely to increase following the
         Transaction. In this regard, a non-integrated supplier submitted that ‘Assa Abloy
         will then control most brands on the market. The products will be outsourced and
         some will disappear from the market. With the acquisition of Agta Record by Assa
         Abloy, they will get the market leader position in most products’.273
(257)    At national level, a vast majority of competitors submitted that there are national
         market leaders for the supply of automatic pedestrian doors. Several respondents
         considered Agta Record to be a leader in France and in Switzerland and Assa
         Abloy to be a leader in the Netherlands and in the Nordics.274
268
         Form CO, paragraphs 937 to 940.
269
         Form CO, paragraphs 941 to 942.
270
         Questionnaire 1 to competitors, question 23; and Questionnaire 3 to non-integrated suppliers,
         question 51.
271
         Questionnaire 1 to competitors, question 23.1; Questionnaire 2 to end-customers, question 19; and
         Questionnaire 3 to non-integrated suppliers, question 31.
272
         Questionnaire 3 to non-integrated suppliers, question 31.
273
         Questionnaire 3 to non-integrated suppliers, question 58.
274
         Questionnaire 1 to competitors, question 23.5; and Questionnaire 3 to non-integrated suppliers,
         question 31.5.
                                                        51
 ---pagebreak--- (258)    This leadership position is extensively documented in the Parties’ internal
         documents. In this regard, Assa Abloy openly considers itself as having a ‘market
         leader position in th[e] market [for automatic pedestrian doors]’275 and one of the
         vastest product offerings in the market.276 Assa Abloy’s earning calls with its
         investors reflect that, as ‘the market leader, often, [they] are the first one coming
         with price increase, and [they] see that the market follows. […] When we increase
         prices today, they follow’.277 Moreover, Assa Abloy recognises in its internal
         documents its ambition to ‘be the world-leader, most successful and innovative
         provider of total door opening solutions’.278
(259)    In an internal document prepared in September 2018 for the purpose of the
         Transaction and presented by Agta Record’s CEO, CFO and CMO, Agta Record
         considered that the Parties, together with [third party OEM of automatic pedestrian
         doors], belong to the ‘tier 1’ of automatic pedestrian doors players (See Figure 5
         below).279
                 Figure 5 – The Parties belong to tier 1 of automatic pedestrian doors
[figure from internal document showing twelve OEMs of automatic pedestrian doors and
eight suppliers of access security products divided into three tiers, where Assa Abloy and
Agta Record are listed as “tier 1” for automatic pedestrian doors together with one other
OEM, and where Assa Abloy is the only supplier listed as “tier 1” for access security
market]
                           Source: [AA’s internal documents].
(260)    In the same vein, an internal document from Assa Abloy submitted to its CEO
         discussing the potential acquisition of Agta Record and appears to regard Agta
         Record as belonging to the tier 1 category.280
(261)    In an internal documents from Assa Abloy submitted to its CEO discussing the
         potential acquisition of Agta Record, Assa Abloy considered that ‘Agta Record has
         always [Assa Abloy states that Agta Record is an attractive target]’.281 In an
         internal document submitted to Assa Abloy’s board of directors, it was considered
         that Agta Record’s attractiveness would lie upon its ‘[s]trong market position in
         Europe’, as well as its ‘[s]trong brand and service business’.282 Yet another
275
         ASSA ABLOY AB (publ) – Analyst_Investor Day (14 November 2018), slide 4.
276
         ASSA ABLOY AB (publ) – Analyst_Investor Day (14 November 2018), slide 4. During this same
         investor earning call, reference was also made to ‘our market leader position in that market’; ‘we
         are the leader in most markets’; ‘we, being the market leader, often, we are the first one[s] coming
         with price increases’.
277
         ASSA ABLOY AB (publ) – Analyst_Investor Day, slide 11.
278
         Form CO, AA10, slide 10.
279
         Form CO, 201809_Petrus_MP_AA (002), slide 44.
280
         Form CO, AA09, 13 August 2018, slide 4. Original quote: ‘[i]f we do not buy Agta Record we shall
         look at tier 2 PDS companies in Europe like [name of three third party OEMs of automatic
         pedestrian doors] and others’.
281
         Form CO, AA15, 7 December 2018, slide 2.
282
         Form CO, AA04, 3 October 2018, slide 1.
                                                        52
 ---pagebreak---          internal document considered Agta Record to possess a ‘very strong brand with
         high value’.283
(262)    Due to Agta Record’s perceived value, Assa Abloy regarded the Transaction in
         internal documents submitted to its board of directors as an opportunity to
         ‘reinforce[] its leadership in automated doors’284 and as ‘a one off chance to
         become a strong number one in pedestrian doors’.285 In an internal document
         submitted to its CEO, Assa Abloy considered that the Transaction would
         strengthen its ‘AAES market position within Pedestrian doors’286 and ‘give AAES
         access to a company with a strong market position and an attractive product
         portfolio’.287
7.2.2.2. The automatic pedestrian door industry is already concentrated pre-Transaction
(263)    As explained in paragraph (54) above, entrance automation systems OEMs active
         in the EEA have different geographical footprints. Some OEMs are present EEA-
         wide, whereas others have activities only in certain Member States. The Parties
         offer automatic pedestrian doors across the EEA, while their competitors may only
         offer a range of products or be active only in parts of the EEA. Non-integrated
         suppliers are for the most part active only at national or local level.
(264)    While the automatic door industry is already very concentrated, the Transaction
         would further reduce the number of EEA-level players from four to three for
         swing, sliding doors and revolving doors.
(265)    In swing doors, the combined entity and the two largest remaining competitors
         would together account for more than 75% of the total market’s sales volume (Assa
         Abloy: 10-20%; Agta Record: 10-20%; Dormakaba: 30-40%; and Geze: 10-
         20%).288 No other supplier would account for more than 5% of the market. These
         figures are consistent with the Parties’ estimates.
(266)    In sliding doors, the combined entity and the two largest remaining competitors
         would together account for 52% of the total market’s sales volume (Assa Abloy:
         10-20%; Agta Record: 10-20%; Geze: 10-20%; and Dormakaba: 10-20%).289 No
         other supplier would account for more than 5-7% of the market. These figures are
         consistent with the Parties’ estimates.290
(267)    In revolving doors, the combined entity and the two largest remaining competitors
         would together account for 59% of the total market’s sales volume (Assa Abloy:
         10-20%; Agta Record: 5-10%; Boon Edam: 20-30%; and Dormakaba: 10-20%.291
         No other supplier would account for more than 5-6% of the market. These figures
         are consistent with the Parties’ estimates.
283
         Form CO, AA10, 21 September 2018, slide 25. Internal document submitted to the CEO of AAES.
284
         Form CO, AA05, 26 September 2018, slide 23.
285
         Form CO, AA09, 13 August 2018, slide 4.
286
         Form CO, AA11, 2 September 2018, slide 3.
287
         Form CO, AA11, 2 September 2018, slide 3.
288
         Commission’s market reconstruction.
289
         Commission’s market reconstruction.
290
         Form Co, Annex 7.2.
291
         Commission’s market reconstruction.
                                                     53
 ---pagebreak--- (268)     The Parties’ internal documents also reflect the concentrated degree of the
          automatic pedestrian door industry. In this regard, an internal document from Assa
          Abloy shows that Assa Abloy, Agta Record, Dormakaba and Geze would together
          hold 72% of the swing door and sliding door market in Europe (See                     Figure 6
          below).292
          Figure 6 – The four main industry players hold 72% of the swing and sliding door
                                                 markets
[figure from internal document showing that the four main industry players hold 72% of the
swing and sliding door markets]
                           Source: Form CO, 5(4) documents, AA11 slide 17
(269)     Over the course of the market investigation, various competing OEMs, a majority
          of non-integrated suppliers and a core group of end-customers have raised
          significant concerns regarding the increased concentration brought about by the
          Transaction. These concerns relate to the risk that the Transaction would lead to
          likely increases in the price of automatic pedestrian doors.293
7.2.2.3. The Parties are close competitors
(270)     The Commission notes at the outset that the Parties have comparable business
          models, which is extensively reflected in the Parties’ internal documents prepared
          for the Transaction. In this regard, an internal document from Assa Abloy
          considers Agta Record’s ‘[Agta Record’s business plans]’ as a ‘key rationale’ for
          its acquisition.294 The Transaction is seen to this effect as being ‘highly synergetic
          given overlapping sales, services, product, and infrastructure’.295
(271)     The Commission moreover notes that rivalry between Assa Abloy and Agta Record
          appears to have been an important source of competition on the markets for
          automatic pedestrian doors prior to the Transaction. As indicated in paragraph
          (259) above, in their internal documents prepared for the Transaction the Parties
          regard each other, together with Dormakaba, as belonging to the reduced group of
          ‘tier 1’ players in the overall market for automatic pedestrian doors.296 Assa Abloy
          considers in its internal documents that [names of three third party OEMs of
          automatic pedestrian doors] belong to a ‘tier 2’ category of players297, while Agta
          Record places [names of four third party OEMs of automatic pedestrian doors]
          within this group298.
(272)     As explained in paragraph 77 above, the Commission considers that OEMs may
          have a competitive advantage over non-integrated suppliers and, therefore, exercise
292
          Form CO, AA11, slide 17.
293
          Questionnaire 1 to competitors, questions 44 to 47; Questionnaire 2 to end-customers, questions 42
          to 46.
294
          Form CO, AA05, slide 23. ‘Amanda’ is the term used to describe Agta Record and ‘Athena’
          describes Assa Abloy.
295
          Form CO, AA05, slide 23.
296
          Form CO, 201809_Petrus_MP_AA (002), slide 44.
297
          Form CO, AA09, slide 4.
298
          Form CO, AA11, slide 17.
                                                         54
 ---pagebreak---       a more distant competitive constraint on the Parties’ activities. In particular, non-
      integrated suppliers are dependent on the OEMs’ input and the market investigation
      revealed that OEMs are considered as having competitive advantages over non-
      integrated suppliers for larger customers and larger projects. Hence, competition
      appears to be closer between the reduced pool of OEMs in the market.
(273) Moreover, both Assa Abloy and Agta Record belong to a restricted group of OEMs
      having a broad portfolio of products across all the automatic pedestrian door
      product markets. In this regard, Assa Abloy considers itself as having one of the
      vastest product offerings in the market299 and Agta Record as having an ‘attractive
      product portfolio’.300
(274) The perceived closeness of competition between the Parties further explains why
      their ordinary course of business documents closely monitor each other’s behaviour
      in the market. By way of example, internal documents from Assa Abloy describing
      the ‘negative indicators of the general business climate’ in automatic pedestrian
      doors listed ‘Record [as being] [Agta Record’s sales strategy]’301 or ‘Record [as
      being] [Agta Record’s sales strategy]’302.
(275) The results of the market investigation have consistently considered the Parties as
      close competitors in all the automatic pedestrian door product markets. In this
      regard, a majority of respondents submitted that Assa Abloy would be the closest
      competitor to Agta Record in both swing and sliding doors. 303 The feedback in
      relation to revolving doors has nevertheless been more mixed: while a majority of
      competitors considered that Boon Edam would be the closest competitor to the
      Parties in revolving doors304, a majority of end-customers and non-integrated
      suppliers submitted that Assa Abloy would be the closest competitor to Agta
      Record.305
(276) Moreover, a vast majority of competitors and non-integrated suppliers, as well as a
      majority of end-customers indicated that the Parties offer rather comparable
      products from a technical point of view.306 In this regard, a competing OEM
      submitted that ‘[t]he product ranges of the various Assa Abloy brands and Recod
      ones are similar concerning weight capacity, dimensions of the operators,
      functionality, etc.’.307
299
      Form CO, ASSA ABLOY AB (publ) – Analyst_Investor Day (14 November 2018), slide 4. During
      this same investor earning call, reference was also made to ‘our market leader position in that
      market’; ‘we are the leader in most markets’; ‘we, being the market leader, often, we are the first
      one[s] coming with price increases’.
300
      Form CO, AA11, slide 3.
301
      Form CO, AA107, slide 5.
302
      Form CO, AA102, 73.
303
      Questionnaire 1 to competitors, question 26; Questionnaire 2 to end-customers, question 22; and
      Questionnaire 3 to non-integrated suppliers, question 34.
304
      Questionnaire 1 to competitors, questions 25 and 26.
305
      Questionnaire 2 to end-customers, question 22; and Questionnaire 3 to non-integrated suppliers,
      question 34.
306
      Questionnaire 1 to competitors, question 27.3; Questionnaire 2 to end-customers, question 23.3; and
      Questionnaire 3 to non-integrated suppliers, question 23.3.
307
      Questionnaire 1 to competitors, question 27.3.1.
                                                     55
 ---pagebreak--- (277) The Parties also appear to be close innovative competitors. Contrary to the
      Notifying Party’s argument that innovation ‘plays a minor role’308, a majority of
      respondents considered innovation to be ‘important’ or ‘very important’ in the
      market for automatic pedestrian doors.309 A majority of respondents further
      submitted that both Assa Abloy and Agta Record are particularly innovative
      suppliers of automatic pedestrian doors.310 In this regard, a competing OEM
      submitted that ‘[b]oth suppliers launch regularly new products with new product
      features and new services’, while another one indicated that the Parties ‘are known
      in the market as being innovative companies’.311
(278) The Parties are also perceived as having particularly strong brands in the market for
      automatic pedestrian doors. Contrary to the Notifying Party’s argument that ‘brand
      recognition is low among end users’312, a majority of competitors and non-
      integrated suppliers, as well as an important number of end-customers respondents
      considered brand awareness to be ‘important’ or ‘very important’ in the market for
      automatic pedestrian doors.313 In this regard, an end-user submitted that known
      brands are believed to have more operational reliability and reliable service.314 A
      competing OEM explained that ‘[b]randing activity is very important because this
      is a niche industry where companies cannot spend the huge amount of money the
      multinational groups spend for mass market products’.315 Other respondents stated
      that ‘[b]rand awareness is important as products are specified during the design
      process’ and, given automatic pedestrian doors are ‘only a small part of a building,
      the designer is more likely to select an easy pick - that's top of mind’.316 In this
      sense, ‘[a]rchitects and Planer rely very much on brands’.317 Furthermore, a vast
      majority of respondents submitted that Assa Abloy has particularly strong brands
      as a supplier of automatic pedestrian doors and a majority of respondents submitted
      that this is also the case for Agta Record.318 Consistently with the notion that the
      Parties and Dormakaba are ‘tier 1’ players, a competing OEM indicated that
      ‘[m]ost of the end customers we supply with our access control solutions refer to
      either Assa Abloy or Agta Record or DormaKaba as their reference supplier with
      regards to automatic pedestrian doors’.319
308
      Form CO, paragraph 575.
309
      Questionnaire 1 to competitors, question 28; Questionnaire 2 to end-customers, question 24; and
      Questionnaire 3 to non-integrated suppliers, question 24.
310
      Questionnaire 1 to competitors, question 28.4; Questionnaire 2 to end-customers, question 24.4; and
      Questionnaire 3 to non-integrated suppliers, question 24.4.
311
      Questionnaire 1 to competitors, question 28.4.1.
312
      Form CO, paragraph 575.
313
      Questionnaire 1 to competitors, question 29; Questionnaire 2 to end-customers, question 25; and
      Questionnaire 3 to non-integrated suppliers, question 37.
314
      Questionnaire 2 to end-customers, question 25.1. Original quote in German: ‘[b]ei bekannten
      Marken vermutet man mehr Betriebssicherheit und einen zuverlässigen Service’.
315
      Questionnaire 1 to competitors, question 29.
316
      Questionnaire 1 to competitors, question 29.
317
      Questionnaire 1 to competitors, question 29.
318
      Questionnaire 1 to competitors, question 28.4; Questionnaire 2 to end-customers, question 25.3; and
      Questionnaire 3 to non-integrated suppliers, question 37.3.
319
      Questionnaire 1 to competitors, question 28.4.1.
                                                     56
 ---pagebreak--- 7.2.2.4. Strong scale effects and barriers to entry
(279)    A vast majority of OEMs and a majority of non-integrated suppliers having
         expressed an opinion in the market investigation on that point submitted that the
         overall size of an OEM’s installed base of automatic pedestrian doors (including all
         the automatic pedestrian door product markets) is a significant competitive
         advantage.320 In this regard, a non-integrated supplier submitted that ‘[a] large
         OEM has immense buying power and the ability to move manufacturing to more
         economic areas keeping their own costs lower whilst keeping the sales cost to
         competitors at a premium’321, while a competitor explained that ‘[a] higher
         installed base allows an over proportional growth in cost efficiency’.322
(280)    Given that scale represents a significant competitive advantage, market shares may
         not fully capture the potential for expansion and growth in the industry of
         automatic pedestrian doors. A competing OEM expressed in this regard that ‘[t]he
         market share of an automatic door manufacturer is measured by the market share
         of the annual sales but more importantly by the number of the installed doors that
         gives a sort of brand reputation’.323
(281)    However, since no exact information exists regarding the size of the installed base
         of manufacturers, the Commission will use the OEM’s market shares of sales as a
         proxy for this measure. The Commission believes it is reasonable to approximate
         installed base with market shares of sales because both Parties are consistently
         considered to be ‘Tier 1’ suppliers (and Assa Abloy is considered to be the leader)
         and their market presence has remained consistent over the past years. Therefore,
         going forward, when referring to size of the Parties’ installed base the Commission
         will rely on the approximation provided by their shares of sales.
(282)    A large scale also enables the Parties to compete for larger customers and projects.
         In this regard, customers indicated that ‘a large installed base has probably a
         better and faster service team per country, and hence can answer service calls
         faster and more professional’, or that ‘[b]ecause the bigger [OEMs] are, the more
         chances of having better services and in more areas they can give us’.324 A
         customer indicated that they preferred a ‘company to have national coverage to
         have low cost of servicing’.325 Given these preferences among customers, a
         competing OEM pointed out that ‘[c]ustomers are more and more looking for
         complete solutions and overall projects have increasingly large dimensions, which
         makes competing with OEMs like ASSA ABLOY increasingly difficult’.326
(283)    Overall, the Parties’ combined installed base has raised concerns from a number of
         market participants. A competitor explained to the Commission that it ‘[was]
         particularly concerned by […] the increase of the Parties’ base of installed doors,
320
         Questionnaire 1 to competitors, question 36; Questionnaire 3 to non-integrated suppliers, question
         47.
321
         Questionnaire 3 to non-integrated suppliers, question 47.1.
322
         Questionnaire 1 to competitors, question 36.1.
323
         Questionnaire 1 to competitors, question 36.1.
324
         Questionnaire 2 to end-customers, question 33.1.
325
         Questionnaire 2 to end-customers, question 33.1.
326
         Minutes of a call with a competitor of 30 October 2019, paragraph 8.
                                                        57
 ---pagebreak---       which translated into a bigger profitable growth’.327 Following the Transaction,
      market participants expect the combined entity to leverage its larger installed based
      into a stronger market position. In this regard, a competing OEM expressed that
      ‘[they] expect a combined business of Agta Record and Assa Abloy to gain a more
      significantt market position, based on larger combined market shares and going
      forward better means to gain further market share’.328 A trade organisation further
      expressed that ‘[t]he bigger you are the best price you will be able to have from the
      suppliers, in this way your costs will be lower than your competitor and you can
      lead the market with lower prices’.329
(284) Scale and brand awareness are two of the factors that strongly contribute to high
      barriers to entry in the automatic pedestrian door industry. In this regard, a majority
      of respondents to the market investigation submitted that barriers to entry into the
      supply of automatic pedestrian doors is either ‘significant’ or ‘very significant’.330
      A broad number of respondents considered in this sense that scale, together with
      brand awareness (see paragraph (278) above), constitute major barriers to entry in
      automatic pedestrian doors. Among other respondents, an end-customer indicated
      that ‘the main barrier to entry is the lack of existing installations. Thus it is nearly
      impossible, to show the reliability of a new supplier’ and that ‘[i]t is very difficult
      to enter into the field of automatic doors. The ability and costs required to submit
      tenders, conform to regulations, gain industry and safety accreditation is likely to
      inhibit smaller companies’.331 A competing OEM further submitted that
      ‘[b]arr[i]ers are very significant in terms of brand, in te[r]ms of customer base
      [and in the] number of servicing contracts’.332 A non-integrated supplier in turn
      submitted that ‘[s]ome producers are already so big it is very difficult to compete
      them’.333
(285) Given the high barriers to entry due to scale and brand awareness, a vast majority
      of respondents having expressed an opinion in the market investigation submitted
      that they do not expect new entrants to start supplying automatic pedestrian doors
      (including swing, sliding, revolving or specialty doors) in the EEA in the next two
      to three years.334
(286) A number of competitors confirmed the Notifying Party’s argument that there
      would be no significant capacity constraints in the automatic pedestrian door
      industry. A majority of OEMs expressing an opinion in the market investigation
      submitted that they would be able to increase their production without having to
      incur into major investments if demand for their products were to increase.335 In
      this regard, competitors submitted that ‘capacity is never a restriction’336 for the
327
      Minutes of a call with a competitor of 14 August 2019, paragraph 29.
328
      Questionnaire 1 to competitors, question 73.
329
      Questionnaire 1 to competitors, question 30.1.
330
      Questionnaire 1 to competitors, question 43.2; Questionnaire 2 to end-customers, question 41.2; and
      Questionnaire 3 to non-integrated suppliers, question 54.2.
331
      Questionnaire 2 to end-customers, question 41.2.1.
332
      Questionnaire 1 to competitors, question 43.2.1.
333
      Questionnaire 3 to non-integrated suppliers, question 54.2.1.
334
      Questionnaire 1 to competitors, question 43; Questionnaire 2 to end-customers, question 41; and
      Questionnaire 3 to non-integrated suppliers, question 54.
335
      Questionnaire 1 to competitors, question 31.
336
      Minutes of a call with a competitor of 9 August 2019, paragraph 12.
                                                     58
 ---pagebreak---          production of automatic pedestrian doors, given that ‘only a fairly simple set of
         equipment and manpower is required to manufacture new automatic doors’.337 A
         competing OEM submitted that, while ‘challenging’, it would be able to double
         production if the demand for its products were to increase.338
(287)    Overall, while there appear to be limited restrictions for OEMs to increase their
         production, the Commission notes that the automatic pedestrian door industry is
         characterised for having very high barriers to entry.
7.2.2.5. The importance of having a broad portfolio
(288)    The Transaction would combine the Parties’ already broad product portfolios. As
         explained in paragraph (273) above, this is at the outset an element pointing
         towards closeness of competition between the Parties in the supply of automatic
         pedestrian doors. A competitor expressed in this regard that ‘[i]n the future, [it]
         foresees that it will not be able to match the broad offer that the combined entity
         will be able to offer. While ASSA ABLOY already has a very broad product
         offering, adding Agta gives it for example a strong market position in one-way
         security corridors which ASSA ABLOY currently does not have’.339
(289)    A majority of OEMs and non-integrated suppliers having expressed an opinion in
         the market investigation submitted that the size of a supplier’s product portfolio is
         either ‘important’ or ‘very important’ to be competitive in the business of
         supplying automatic pedestrian doors.340
(290)    In particular, offering a broad portfolio allows OEMS to ‘act as a one-stop-shop
         for all types of automatic pedestrian doors’.341 As a competing OEM explained:
         ‘[i]n an individual construction project, there are often several types of products
         that are included, so to have a wider scope of products means a better competitive
         positioning as the customers tend to prefer having less suppliers’. This complete
         range of products ‘is very important to present a global proposal to the market. The
         same importance is related to the various product certifications’.342
(291)    OEMs may also make use of a broad portfolio to block its competitors. As a
         competing OEM puts it ‘[t]he broader the portafolio is, the fullness of the customer
         needs you may supply, and largest customers you can attend, blocking other
         brands to achieves same customers’.343
(292)    A majority of OEMs and non-integrated suppliers submitted that the practice of
         bundling (i.e, selling together at a discount) the supply of different types of
         automatic pedestrian doors (for instance, swing doors with sliding doors) from the
337
         Minutes of a call with a competitor of 9 August 2019, paragraph 20.
338
         Minutes of a call with a competitor of 14 August 2019, paragraph 14.
339
         Minutes of a call with a competitor of 30 October 2019, paragraph 21.
340
         Questionnaire 1 to competitors, question 30; and Questionnaire 3 to non-integrated suppliers,
         question 38.
341
         Questionnaire 1 to competitors, question 30.1.
342
         Questionnaire 1 to competitors, question 30.1.
343
         Questionnaire 1 to competitors, question 30.1.
                                                        59
 ---pagebreak---          same supplier is ‘frequent’ or ‘common’.344 End-customers also indicated that they
         ‘frequently’ procure different types of automatic pedestrian doors together from the
         same supplier as a bundle.345
7.2.2.6. Limited buyer power
(293)    The Commission notes at the outset that the demand base for automatic pedestrian
         doors is very fragmented. In this regard, most sales consist in one-off sales to
         smaller customers or contractor for a specific project, with only some customers
         resorting to framework agreements.346
(294)    Moreover, customers do not appear to be especially sophisticated in the industry of
         automatic pedestrian doors. A majority of respondents having expressed an opinion
         in the market investigation submitted that end-customers generally rely on
         suppliers to advise them on the best solutions for their automatic pedestrian door
         requirements.347 This statement was supported, in particular, by a number of large
         customers belonging to the supermarket, large distribution, healthcare,
         pharmaceutical or transport segments. In this regard, a competing OEM indicated
         that ‘[c]ustomers are not so knowledgeable about technical properties of automatic
         pedestrian doors and tend to rely on suppliers with strong reputation brand as
         trusted advisors’.348 Furthermore, a majority of competitors and non-integrated
         suppliers, as well as a significant number of end-customers, indicated that when
         procuring automatic pedestrian doors (including swing, sliding or revolving doors),
         customers usually do not factor the overall costs over the life cycle of the doors in
         question.349
(295)    A number of respondents also pointed towards the influence of architects and
         planners in deciding the automatic pedestrian door to use in a particular building350,
         which – as explained in paragraph (36) above – are targeted by OEMs to include in
         the specifications of a building technical requirements or references to a particular
         supplier’s product, or to mention a particular brand or simply dimension door
         openings in a way that suits them better than other potential OEMs.
(296)    Overall, the Commission notes that customers do not appear to have a significant
         bargaining strength vis-à-vis suppliers of automatic pedestrian doors due to their
         size or commercial significance, given (i) the highly fragmented demand base for
         automatic pedestrian doors; and (ii) the fact that customers are generally not
         sophisticated buyers.
344
         Questionnaire 1 to competitors, question 30.2; and Questionnaire 3 to non-integrated suppliers,
         question 38.2.
345
         Questionnaire 2 to end-customers, question 27.2.
346
         Form CO, paragraph 244.
347
         Questionnaire 1 to competitors, question 33; Questionnaire 2 to end-customers, question 30; and
         Questionnaire 3 to non-integrated suppliers, question 44.
348
         Questionnaire 1 to competitors, question 33.
349
         Questionnaire 1 to competitors, question 35; Questionnaire 2 to end-customers, question 32; and
         Questionnaire 3 to non-integrated suppliers, question 46.
350
         Questionnaire 1 to competitors, question 38; Questionnaire 2 to end-customers, question 35; and
         Questionnaire 3 to non-integrated suppliers, question 49.
                                                        60
 ---pagebreak--- 7.2.3.   Assessment of potential horizontal non-coordinated effects on the national markets
         for the manufacture and supply of automatic pedestrian doors
(297)    As indicated in Table 1 above and according to the Commission’s market
         reconstruction, the Transaction gives rise to 14 horizontally affected national
         markets in swing doors, 19 horizontally affected national markets in sliding doors,
         6 horizontally affected national markets in revolving doors and 3 horizontally
         affected national markets in hermetic doors.
(298)    As explained in paragraph (71) above, the Commission considers appropriate to
         conduct its competitive assessment for automatic pedestrian doors based on an
         OEM-level approach, which includes market shares reflecting sales by OEMs-only
         to both end-customers and non-integrated suppliers. Moreover, and as explained in
         paragraph (81) above, the Commission deems appropriate to reflect the closeness
         of competition between OEMs by considering an additional relevant metric
         consisting in the share of supply by OEMs-only to end-customers.
(299)    The Commission moreover notes that market shares in swing, sliding and revolving
         doors have been overall stable across the EEA during the period 2016-2018.351
7.2.3.1. Markets not giving rising to serious doubts
(300)    The Commission notes at the outset that serious doubts can be excluded in some of
         the affected markets provided they fall within one of the following categories: (i)
         the Parties’ combined market share is below 25%352; (ii) the HHI post-Transaction
         is below 1 000353; (iii) the HHI post-Transaction is below 1 000 and 2 000, with a
         delta below 250354; (iv) the HHI post-Transaction is above 2 000, with a delta
         below 150355; or (v) the Parties’ combined market share is below 50%, with a HHI
         delta below 150356.
(301)    In light of this, as well as all evidence available to it, the Commission concludes
         that the Transaction does not raise serious doubts as to its compatibility with the
         internal market or the functioning of the EEA Agreement due to horizontal non-
         coordinated effects in (i) the Belgian, Cypriot, French, Greek, Italian and Spanish
         markets for swing doors; (ii) the Icelandic, Italian, Lithuanian, Luxemburgish,
         Maltese, Polish, Portuguese, Romanian and Swedish markets for sliding doors; (iii)
         the Danish, Dutch and Greek markets for revolving doors; and (iv) the French and
         Romanian markets for hermetic doors.
(302)    The remainder of this Section will provide a competitive assessment for those
         affected markets not falling under any of the categories set out in paragraph (300)
351
         Notifying Party’s estimates, Form CO, Annex 7. By way of illustration, the Parties’ combined
         estimates in the EEA were: (i) for swing doors: [30-40]% in 2016, [30-40]% in 2017 and [30-40]%
         in 2018; (ii) for sliding doors: [30-40]% in 2016, [30-40]% in 2017 and [30-40]% in 2018; (iii) for
         revolving doors: [10-20]% in 2016, [10-20]% in 2017 and [10-20]% in 2018; and (iv) for hermetic
         doors: [10-20]% in 2016, [20-30]% in 2017 and [20-30]% in 2018.
352
         Horizontal Merger Guidelines, paragraph 18.
353
         Horizontal Merger Guidelines, paragraph 20.
354
         Horizontal Merger Guidelines, paragraph 20.
355
         Horizontal Merger Guidelines, paragraph 20.
356
         Commission Notice of 5 December 2013 on a simplified procedure for treatment of certain
         concentrations under Council Regulation (EC) No 139/2004, paragraph 6.
                                                         61
 ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak--- (317) Second, the Transaction only involves a limited increment by Agta Record of 0-
      5%, which is currently the seventh player in the market. Accordingly, while the
      market for the manufacture and supply of swing doors in Czechia is concentrated
      with an HHI level post-Transaction of [above 2 000], the Transaction would only
      entail a HHI delta of [above 150]. The Commission therefore notes that the
      Transaction will not materially change the pre-existing competitive conditions in
      the Czech market for swing doors.
(318) Third, Agta Record is only active to a limited in the indirect channel and would not
      increase Assa Abloy’s share of supply in a segment comprising sales from OEMs-
      only to end-customers (i.e. excluding sales from non-integrated suppliers). When
      considering a segment comprising sales from OEMs to non-integrated suppliers,
      the Parties would hold a combined share of supply of 20-30%, with an increment of
      5-10% by Agta Record, followed by Geze (10-20%), Boon Edam (10-20%),
      Tormax (5-10%) and Manusa (5-10%).357
      (A.ii)   Conclusion
(319) In light of the considerations in paragraphs (316) to (318) above, as well as all
      evidence available to it, the Commission concludes that in the Czech market for
      swing doors, the Transaction does not raise serious doubts as to its compatibility
      with the internal market or the functioning of the EEA Agreement due to horizontal
      non-coordinated effects given (i) the limited increment brought by Agta Record of
      0-5%, the current seventh player in the market, which will not materially change
      the pre-existing competitive conditions; and (ii) the presence of a large number of
      additional smaller competitors which will continue exerting competing pressure on
      the combined entity.
      (B)      Sliding doors
      (B.i)    Commission’s assessment
(320) For the reasons set out below, the Transaction raises serious doubts as to its
      compatibility with the internal market with respect to automatic sliding doors in
      Czechia.
357
      Commission’s market reconstruction, 2018.
                                                66
 ---pagebreak---  ---pagebreak---  ---pagebreak---          10-20%; Agta Record: 10-20%). Although the market for the manufacture and
         supply of sliding doors in Denmark is highly concentrated with an HHI level post-
         Transaction of [above 2 000] and a HHI delta of [above 150], Tormax would
         remain as a strong market leader, with a market share of 40-50%. There would be a
         number of remaining competitors in the Danish market for sliding doors: Geze (10-
         20%), Label (5-10%), Dormakaba (5-10%) and Kone (0-5%).
(328)    Second, when considering a segment comprising sales from OEMs-only to end-
         customers (i.e. excluding sales from non-integrated suppliers), the Parties would
         hold a combined share of supply of 30-40% (with an increment of 10-20%), behind
         Tormax with 50-60%.
         (A.ii)    Conclusion
(329)    In light of the considerations in paragraphs (327) to (328) above, as well as all
         evidence available to it, the Commission concludes that in the Danish market for
         sliding doors, the Transaction does not raise serious doubts as to its compatibility
         with the internal market or the functioning of the EEA Agreement due to horizontal
         non-coordinated effects given (i) the presence of Tormax as a strong market leader;
         and (ii) the presence of a large number of additional smaller competitors.
7.2.3.5. Finland
(330)    For the reasons set out below, the Transaction raises serious doubts as to its
         compatibility with the internal market with respect to the manufacture and supply
         of automatic swing and sliding doors.
         (A)       Swing doors
         (A.i)     Commission’s assessment
(331)    As mentioned above, the Transaction raises serious doubts as to its compatibility
         with the internal market with respect to automatic swing doors in Finland.
                                                 69
 ---pagebreak---  ---pagebreak---  ---pagebreak--- (341)    Agta Record is only present in the indirect channel in Finland. When considering a
         segment comprising sales from OEMs to non-integrated suppliers, the Parties
         would hold a combined share of supply of 20-30% (Assa Abloy: 10-20%; Agta
         Record: 0-5%). Dormakaba would remain the main player in this segment, with a
         share of supply of 30-40%, followed by Tormax (10-20%) and Geze (5-10%).
         (B.ii)    Conclusion
(342)    In light of the considerations in paragraphs (338) to (341) above, as well as all
         evidence available to it, the Commission concludes that in the Finnish market for
         sliding doors, the Transaction raises serious doubts as to its compatibility with the
         internal market or the functioning of the EEA Agreement due to horizontal non-
         coordinated effects given (i) the Parties’ position of leadership in the market, at
         more than 20 points of difference from its immediate competitors; (ii) the fact that
         the markets are already concentrated pre-Transaction; (iii) the strong scale effects
         and the high barriers to entry; (iv) the close competition between the Parties; and
         (v) the insufficient countervailing buyer power.
7.2.3.6. France
(343)    For the reasons set out below, the Transaction raises serious doubts as to its
         compatibility with the internal market with respect to the manufacture and supply
         of automatic sliding and revolving doors.
         (A)       Sliding doors
         (A.i)     Commission’s assessment
(344)    As mentioned above, the Transaction raises serious doubts as to its compatibility
         with the internal market with respect to sliding doors in France.
(345)    Agta Record is an overall market leader of automatic pedestrian doors in France.
         The Parties’ internal documents indicate that Agta Record has a ‘strong footprint’
         in France359. This was perceived as a ‘key rationale’ to acquire Agta Record and
         ‘strengthen [Assa Abloy’s] footprint in France’.360
359
         Form CO, AA10, slide 27.
360
         Form CO, AA05, slide 23.
                                                  72
 ---pagebreak---  ---pagebreak---  ---pagebreak--- (353)    Second, the market for the manufacture and supply of automatic revolving doors in
         France is highly concentrated with an HHI level post-Transaction of [above 2 000]
         and a delta of [above 150]. The Transaction involves a reduction in the number of
         effective competitors from four to three.
(354)    Third, the general market dynamics discussed in Section 7.2.2 above are equally
         applicable to the French market for revolving doors. In particular, as explained in
         Section 7.2.2.3, competition is closer among OEMs, given that non-integrated
         suppliers exercise a more distant competitive constraint on the Parties’ activities.
         When considering a segment comprising sales from OEMs-only to end-customers
         (i.e. excluding sales from non-integrated suppliers), the Parties would hold a
         combined share of supply of 30-40% (with an increment of 5-10%), behind Boon
         Edam with 40-50% and significantly above Dormakaba with 10-20%.
         (B.ii)   Conclusion
(355)    In light of the considerations in paragraphs (352) to (354) above, as well as all
         evidence available to it, the Commission concludes that in the French market for
         revolving doors, the Transaction raises serious doubts as to its compatibility with
         the internal market or the functioning of the EEA Agreement due to horizontal non-
         coordinated effects given (i) the Parties’ position of leadership; (ii) the fact that the
         markets are already concentrated pre-Transaction; (iii) the strong scale effects and
         the high barriers to entry; (iv) the close competition between the Parties; and (v)
         the insufficient countervailing buyer power.
7.2.3.7. Germany
         (A)      Sliding doors
         (A.i)    Commission’s assessment
(356)    The Transaction does not raise serious doubts as to its compatibility with the
         internal market with respect to sliding doors in Germany.
                                                  75
 ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---       market share of 10-20%. There would be a number of smaller fringe players in the
      market, including Kone (5-10%) and Geze (5-10%).
(389) Second, the market for the manufacture and supply of automatic swing doors in
      Netherlands is highly concentrated with an HHI level post-Transaction of [above
      2 000] and a delta of [above 150]. The Transaction involves a reduction in the
      number of effective competitors from three to two.
(390) Third, the general market dynamics discussed in Section 7.2.2 above are equally
      applicable to the Dutch market for swing doors. In particular, as explained in
      Section 7.2.2.3, competition is closer among OEMs, given that non-integrated
      suppliers exercise a more distant competitive constraint on the Parties’ activities.
      When considering a segment comprising sales from OEMs-only to end-customers
      (i.e. excluding sales from non-integrated suppliers), the Parties would hold a
      combined share of supply of 50-60% (with an increment of 20-30%), at great
      distance of its only other competitor, Kone with 10-20%.
      (A.ii)    Conclusion
(391) In light of the considerations in paragraphs (388) to (390) above, as well as all
      evidence available to it, the Commission concludes that in the Dutch market for
      swing doors, the Transaction raises serious doubts as to its compatibility with the
      internal market or the functioning of the EEA Agreement due to horizontal non-
      coordinated effects given (i) the significant combined market shares of the Parties;
      (ii) the high concentration level in the market; (iii) the strong scale effects; (iv) the
      close competition between the Parties; and (iv) the existence of high barriers to
      entry.
      (B)       Sliding doors
      (B.i)     Commission’s assessment
(392) For the reasons set out below, the Transaction raises serious doubts as to its
      compatibility with the internal market with respect to sliding doors in the
      Netherlands.
                                               83
 ---pagebreak---  ---pagebreak---  ---pagebreak--- (399) The Commission notes at the outset that the size of the Portuguese market for
      swing doors is very limited. Out of the total 192 swing doors sold in Portugal in
      2018, [quantities sold] were sold by the Parties (Assa Abloy: [quantities sold]; Agta
      Record: [quantities sold]).363 This leads to very sharp variations in market shares
      across the time. From 2016 to 2017, Assa Abloy increased its sales of swing doors
      by [90-100]% ([quantities sold] doors to [quantities sold]) and Agta Record by
      [1500-1600]% ([quantities sold] doors to [quantities sold]). From 2017 to 2018,
      Assa Abloy reduced its sales by [40-50]% ([quantities sold] doors to [quantities
      sold]) and Agta Record by [60-70]% ([quantities sold] doors to [quantities
      sold]).364
(400) Agta Record is only active in the indirect channel in Portugal and does not have a
      distribution subsidiary in the country. Its activities are carried out by its Spanish
      subsidiary.365 In 2018, its sales of swing doors in Portugal came from sales to
      [number of Agta Record's customers].366
(401) When considering a segment comprising sales from OEMs-only to end-customers
      (i.e. excluding sales from non-integrated suppliers), Assa Abloy’s share of supply
      (20-30%) would be behind Grupsa (20-30%) and Manusa (20-30%).
(402) When considering a segment comprising sales from OEMs to non-integrated
      suppliers, the Parties would hold a combined share of supply of 40-50% (Assa
      Abloy: 20-30%; Agta Record: 10-20%). Geze would remain the second player in
      this segment, with a share of supply of 10-20%, followed by Dormakaba (10-20%)
      and Manusa (10-20%). The Commission considers that the combined entity would
      face competition in this segment from a number of players and that there is no risk
      of foreclosing non-integrated suppliers.
(403) Contrary to Agta Record’s limited presence at the OEM-level overall market, the
      competitive constraint exerted by the remaining competitors is reflected in Assa
      Abloy’s internal documents for Portugal. In its 2020 business plan, Assa Abloy
      considered Geze as ‘[Assa Abloy’s business plan]’, Manusa as being ‘[Assa
      Abloy’s business plan]’, Dormakaba as having ‘[Assa Abloy’s business plan] and
      GU as being ‘[Assa Abloy’s business plan]’.367
      (A.ii)    Conclusion
(404) In light of the considerations in paragraphs (398) to (403) above, as well as all
      evidence available to it, the Commission concludes that in the Portuguese market
      for sliding doors, the Transaction does not raise serious doubts as to its
      compatibility with the internal market or the functioning of the EEA Agreement
      due to horizontal non-coordinated effects given (i) the limited increment brought
      by Agta Record of 5-10%; (ii) the presence of a large number of additional sizeable
      competitors; and (iii) the limited size of the overall market and the sharp variations
      in market shares across the time.
363
      Form CO, Annex 7.
364
      Form CO, Annex 7.
365
      Form CO, paragraph 837.
366
      Form CO, paragraph 840.
367
      Request for information 11 of 20 January 2020, AA.1.2.39, slide 4. In the 2019 business plan, Assa
      Abloy considered that ‘Geze [had been] [Assa Abloy’s business plan] ’ (Request for information 11
      of 20 January 2020, AA.1.2.20, slide 11).
                                                   86
 ---pagebreak---  ---pagebreak--- (410)     The Parties’ internal documents reflect their overall strong position in the
          Slovenian market for sliding doors. Assa Abloy considers itself as being ‘number
          1’ for ‘new sales’ of sliding doors in Slovenia.368 In turn, Agta Record reflects in its
          ordinary course of business documents the ‘[data from internal document regarding
          competitors' market expansion strategies]’.369
          (A.ii)    Conclusion
(411)     In light of the considerations in paragraphs (407) to (410) above, as well as all
          evidence available to it, the Commission concludes that in the Slovenian market for
          sliding doors, the Transaction raises serious doubts as to its compatibility with the
          internal market or the functioning of the EEA Agreement due to horizontal non-
          coordinated effects given (i) the Parties’ position of leadership; (ii) the fact that the
          markets are already concentrated pre-Transaction; (iii) the strong scale effects and
          the high barriers to entry; (iv) the close competition between the Parties; and (v)
          the insufficient countervailing buyer power. The Commission moreover notes that
          the Transaction would involve a reduction in the number of effective competitors
          from four to three.
7.2.3.14. Sweden
          (A)       Swing doors
          (A.i)     Commission’s assessment
(412)     For the reasons set out below, the Transaction does not raise serious doubts as to its
          compatibility with the internal market with respect to swing doors in Sweden.
368
          Request for information 11 of 20 January 2020, AA.1.2.10, slide 7.
369
          RAVE FC19 & BU20 final.
                                                        88
 ---pagebreak---  ---pagebreak---  ---pagebreak---       When considering a segment comprising sales from OEMs-only to end-customers
      (i.e. excluding sales from non-integrated suppliers), the Parties would hold a
      combined share of supply of 20-30% (with an increment of 5-10%), behind
      Dormakaba with 30-40%.
      (A.ii)   Conclusion
(421) In light of the considerations in paragraphs (418) to (420) above, as well as all
      evidence available to it, the Commission concludes that in the United Kingdom
      market for swing doors, the Transaction raises serious doubts as to its compatibility
      with the internal market or the functioning of the EEA Agreement due to horizontal
      non-coordinated effects given (i) the Parties’ position of leadership, at more than
      20 points of difference from its immediate competitors; (ii) the fact that the markets
      are already concentrated pre-Transaction; (iii) the strong scale effects and the high
      barriers to entry; (iv) the close competition between the Parties; and (v) the
      insufficient countervailing buyer power.
      (B)      Sliding doors
      (B.i)    Commission’s assessment
(422) For the reasons set out below, the Transaction raises serious doubts as to its
      compatibility with the internal market with respect to automatic sliding doors in the
      United Kingdom.
                                              91
 ---pagebreak---  ---pagebreak---           (B.ii)    Conclusion
(426)     In light of the considerations in paragraphs (423) to (425) above, as well as all
          evidence available to it, the Commission concludes that in the United Kingdom
          market for sliding doors, the Transaction raises serious doubts as to its
          compatibility with the internal market or the functioning of the EEA Agreement
          due to horizontal non-coordinated effects given (i) the Parties’ position of
          leadership, at more than 20 points of difference from its immediate competitors; (ii)
          the fact that the markets are already concentrated pre-Transaction; (iii) the strong
          scale effects and the high barriers to entry; (iv) the close competition between the
          Parties; and (v) the insufficient countervailing buyer power.
7.2.3.16. Conclusion on the assessment of potential horizontal non-coordinated effects on
          the national markets for the manufacture and supply of automatic pedestrian doors.
(427)     On the basis of Sections 7.2.3.1 to 7.2.3.15 above, the Commission concludes that
          the Transaction raises serious doubts as regards its compatibility with the internal
          market due to horizontal non-coordinated effects in the markets for automatic
          pedestrian doors in Austria (for automatic sliding and revolving doors), Czechia
          (for sliding doors), Finland (for automatic swing and sliding doors), France (for
          automatic sliding and revolving doors), Hungary(for automatic swing and sliding
          doors), Iceland (for automatic swing doors), the Netherlands (for automatic swing
          and sliding doors), Slovenia (for automatic sliding doors) and the United Kingdom
          (for automatic swing and sliding doors).
7.3.      After-sales for automatic pedestrian doors
7.3.1.    Interplay between horizontal and vertical effects for after-sales services
(428)     There is a direct connection between horizontal and vertical effects for after-sales
          services, as well as between after-sales and the manufacturing and supply of
          automatic pedestrian doors. Similarly to the markets for the manufacture and
          supply of automatic pedestrian doors (see Section 7.2.2.4), there appears to be
          significant scale effects in the markets for after-sales services, as will be discussed
          in Section 7.3.2.1(B.i) below.
(429)     As has been discussed in Section 7.2 (paragraph (281)), the market shares in
          automatic pedestrian doors are used as a proxy for the installed base of automatic
          pedestrian doors in each country. An important installed base of automatic
          pedestrian doors and a widespread servicing network for automatic pedestrian
          doors constitute a competitive advantage in providing after-sales services. Hence,
          where the Parties will have a large installed base and servicing network (as will be
          assessed in Section 7.3.3.2(B) below) their incentive to supply spare parts to third
          party after-sales service suppliers may decrease as a result of the Transaction. This
          is also because, as will be further explained, margins for after-sales services are
          higher than for sales of automatic doors, and hence the Parties have the incentive to
          expand in the after-sales services market.
(430)     Therefore, in order to effectively assess the effects of the Transaction vertically it is
          important to take into consideration the size of the installed base of automatic
          pedestrian doors of the Parties.
(431)     Given that spare parts constitute a critical input for after-sales services and given
          the interplay between horizontal and vertical effects in relation to spare parts and
                                                   93
 ---pagebreak---          after-sales services, the competitive analysis of both horizontal and vertical effects
         for the supply of after-sales services for automatic pedestrian doors will also take
         into account spare parts, irrespective of the fact that spare parts and after-sales
         services have been defined as distinct product markets.
7.3.2.   Assessment of potential horizontal non-coordinated effects on the national markets
         for the supply of after-sales services for automatic pedestrian doors
7.3.2.1. Supply of after-sales services for automatic pedestrian doors – overview of market
         dynamics across different national markets in the EEA
(432)    Competition in the provision of after-sales services has a strong national element.
         However, certain features affecting the competitive assessment in each relevant
         market in after sales services for automatic pedestrian doors are similar across all
         relevant markets within the EEA. These features include: (i) strong scale effects;
         (ii) lock-in effects; and (iii) limited buyer power.
(433)    Given the similarity in the way competition takes place in each Member State, the
         Commission will first describe the common features that currently affect
         competitive conditions across the EEA for after-sales services for automatic
         pedestrian doors (Section 7.3.2.1).
(434)    The Commission will then assess the impact on competition of the Transaction in
         the affected markets in Section (466) below.
         (A)        Notifying Party’s arguments
(435)    The Notifying Party submits that there is a multitude of active suppliers of after-
         sales services for automatic pedestrian doors, and considers that market shares have
         low relevance as a measure of competition and market power given the very
         competitive nature of the market.370
(436)    The Notifying Party argues that expansion is easy, as switching costs are low and
         there are no material capacity constraints. It also argues that there are many
         potential entrants, as well as greenfield entries.371
(437)    The Notifying Party considers that smaller after-sales service providers can
         compete effectively with larger providers, by focusing on a limited geographic area
         (e.g. one particular city).372
(438)    Further, the Notifying Party submits that customers face no relevant switching
         costs, and that technicians can and commonly do provide service for all brands.373
(439)    Lastly, the Notifying Party submits that key account customers (such as retail
         chains, gas stations, airports facility management companies) have strong
370
         Form CO, paragraphs 919, 945-949.
371
         Form CO, paragraph 957.
372
         Form CO, paragraph 280.
373
         Form CO, paragraph 932.
                                                    94
 ---pagebreak---       bargaining power and can split their purchases of after-sales services into multiple
      parts based on geography or other criteria.374
      (B)       Commission’s assessment
      (B.i)     Strong scale effects
(440) The results of the market investigation indicate that the market shares may not give
      a full account as a measure of competition and market power, but for different
      reasons than the ones argued by the Notifying Party. In particular, there appears to
      be significant scale effects in the supply of after-sales services due to the
      importance of the size of the installed base of automatic pedestrian doors and the
      importance of the size of the servicing network. These scale effects also create
      discrepancies in the competitive strength of after-sales service providers, while
      generally the original OEM appears better placed to service its own installed basis.
      In turn, scale effects constitute barriers to entry and expansion. Because of these
      scale effects, market shares may also not fully capture the potential for expansion
      and growth of the Parties. Conversely, the Transaction may raise concerns despite
      relatively modest levels of market shares, as there is an exponential potential for
      growth and expansion.
(441) Regarding the importance of the size of the installed base of automatic pedestrian
      doors, the vast majority of competitors and non-integrated suppliers who expressed
      an opinion on this point consider it an advantage to capture new after-sales
      business opportunities.375 A competing OEM expressed that: ‘[t]he number of
      installations of a specific OEM in a territory is the best market where [to] pick up
      after-sales opportunities’.376 A non-integrated supplier expressed that: ‘The bigger
      the installed base, the bigger is usually also the sales force, technicians, etc. Also,
      brand awareness will be higher. All of this may lead customers to choose an OEM
      for [the] supply of after-sales service[s]’.377
(442) Assa Abloy’s earning calls with its investors also reflect the importance of having a
      large installed base in the market, hinting at a high retention rate which translates
      into good aftermarket revenues: ‘We have also, by far, the largest installed base in
      the market […] an installed base that is also rather sticky, so giving you a good
      aftermarket revenue’.378
(443) Regarding the importance of the size of the servicing network, all the competing
      OEMs and the vast majority of non-integrated suppliers who expressed an opinion
      on this point consider that the overall size of an OEM’s servicing network is an
      advantage to capture new after-sales business opportunities379 Further, OEMs tend
      to charge higher prices for spare parts to third party after-sales services suppliers
      than internally, which puts the original OEMs at an advantage versus third party
374
      Form CO, paragraph 961.
375
      Questionnaire 1 to competitors, question 65; Questionnaire 3 to non-integrated suppliers, question
      76.
376
      Questionnaire 1 to competitors, question 65.1.
377
      Questionnaire 3 to non-integrated suppliers, question 76.1.
378
      ASSA ABLOY AB (publ) – Analyst_Investor Day, slide 6.
379
      Questionnaire 1 to competitors, question 66; Questionnaire 3 to non-integrated suppliers, question
      77.
                                                     95
 ---pagebreak---       after-sales services providers.380 Further, most smaller independent after-sales
      services suppliers do not have a large network. Several competing OEM expressed
      that: ‘[i]f the after-sales service network is very capillar[y], the opportunities are
      more because service in specific environments like airports, large retail shops,
      hospitals, etc. is most of [the time] time based and so distance matters’, ‘[i]t gives
      geographic coverage and credibility’, ‘[g]eographical coverage and response
      times are important’. 381 Non-integrated suppliers expressed that: ‘[d]ensity is key
      for good service and consumer satisfaction’, ‘[l]arger companies with a high level
      of field staff and access to low cost replacement parts and operators is a huge
      advantage for any OEM’.382
(444) The majority of end-customers consider the size of the servicing network is a
      relevant consideration when deciding on the provider of after-sales services.383
      Several end-customers expressed that: ‘[c]apability and capacity [are] a key
      consideration when procuring a service contract’, 384 ‘[t]he size of the service
      network is often responsible for the response time, and therefore also for the speed
      of the problem solving’. 385
(445) Regarding competition of third-party after-sales service providers on equal footing,
      contrary to what the Notifying Party argues, the market investigation results
      indicate that third-party after-sales services suppliers cannot compete on equal
      footing with the original OEMs. For instance, and as has been mentioned in Section
      5.4.2, many end-customers consider it important that after-sales service providers
      have national coverage, which may be harder to achieve for smaller independent
      after-sales services providers that have less vans or technicians available. Smaller
      independent after-sales services providers will have more difficulties to cover the
      same national territory with the same response time (and less means) than larger
      OEMs. This is especially important as the results of the market investigation
      indicate that response time is key for customers.386
(446) Moreover, to be able to provide after-sales services to the original OEMs’
      automatic pedestrian doors, after-sales service providers need input from OEMs,
      notably spare parts (including branded spare parts), servicing tools and technical
      information. A vast majority of competing OEMs who have expressed an opinion
      on this point consider that, very frequently, third-party suppliers experience
      difficulties servicing other OEMs automatic pedestrian doors. Most of these
      difficulties relate to sourcing of spare parts (in a timely and affordable manner). 387
      Several competing OEMs expressed that some difficulties include: ‘lack of
380
      A competing OEM expressed that: ‘[a]ccess to third-party spare parts is not easy, both in terms of
      sourcing and of pricing. Certain companies are not helpful or friendly when asked to provide their
      spare parts. Assa Abloy is known to be the most defensive competitor, whose spare parts are most
      difficult to access.’ Minutes of a call with a competitor of 14 August 2019, paragraph 19.
381
      Questionnaire 1 to competitors, question 66.1.
382
      Questionnaire 3 to non-integrated suppliers, question 75.1
383
      Questionnaire 2 to end-customers, question 59.
384
      Questionnaire 2 to end-customers, question 59.1.
385
      Questionnaire 2 to end-customers, question 59.1. Translation from the German original: ‘Der
      Umfang des Servicenetzes ist oftmals für die Reaktionszeit verantwortlich, somit auch für die
      Schnelligkeit der Problemlösung’.
386
      Questionnaire 2 to customers, questions 50 to 58.
387
      Questionnaire 1 to competitors, question 67.
                                                        96
 ---pagebreak---       technical knowledge; bad response times to spare parts deliveries; missing setting
      devices (service tools) for the door drives’, ‘Spare parts procurement is not easy
      and you need some manufacturers, including Record and Assa Abloy’s own
      programming devices’.388 Further, several respondents list the Parties as being
      particularly problematic in this respect.389
(447) Another competing OEM expressed that: ‘both [Assa Abloy] and Record supply
      their products to many independent installer[s], unless they move away from this
      market they must continue to support it. They may however choose to control who
      they support’.390
(448) Regarding barriers to entry and expansion, these come primarily from the
      significant scale effects from which the original OEMs benefit. These scale effects
      include the importance of the size of both the installed base and the servicing
      network. Barriers to entry or expansion also result from difficulties in sourcing
      spare parts and accessing technical information and servicing tools and, generally,
      in servicing third-party automatic pedestrian doors.
(449) Barriers to entry and expansion are also a consequence of the difficulties to access
      the inputs necessary to perform the after-sales services. A non-integrated supplier
      expressed that: ‘there are brands that do not give their handbooks or enough
      information to be able to service the doors. Each brand uses different methods to
      program or reset its machines and it is in its handbooks where this is explained. If
      the brands do not give the handbooks or if they price spare parts expensively, it
      makes it difficult for independent installers to repair the breakdowns’.391
(450) Further, according to the majority of the competitors and non-integrated suppliers
      who expressed an opinion in this point, these concerns are likely to worsen post-
      Transaction, due to price increases and limitations in the availability of spare
      parts.392
      (B.ii)      Lock-in effects
(451) The results of the market investigation indicate that the market for after-sales
      services for automatic pedestrian doors also displays lock-in effects, notably for the
      following reasons: (i) customers tend to be ‘sticky’ and not particularly
      sophisticated; (ii) projects can involve the ‘packaging’ of the supply of doors and
388
      Questionnaire 1 to competitors, question 67.1. The second quote is a translation from the German
      original: ‘Ersatzteilbeschaffung ist nicht einfach und man benötigt bei einigen Herstellern, darunter
      auch Record und Assa Abloy eigene Programiergeräte’.
389
      Questionnaire 1 to competitors, question 68.
390
      Questionnaire 1 to competitors, question 72.2.
391
      Questionnaire 3 to non-integrated suppliers, question 63.1. Original quote in Spanish: ‘Hay marcas
      que no proporcionan los manuales ni suficiente información para poder reparar las puertas. Cada
      Marca utiliza diferentes métodos para programar o resetear sus máquinas y en sus manuales es
      donde se explica. Si las marcas no facilitan los manuales o ponen muy caros los recambios, hacen
      difícil que instaladores autónomo[s] puedan reparar dichas averías.’
392
      Questionnaire 1 to competitors, question 72; Questionnaire 3 to non-integrated suppliers, question
      83.
                                                       97
 ---pagebreak---       after-sales services; (iii) margins are higher in after-sales services than for the sale
      of automatic pedestrian doors.393
(452) The results of the market investigation indicate that end-customers of after-sales
      services for automatic pedestrian doors are, to a certain degree, ‘sticky’. This
      means that they will have a certain inertia to turn towards the OEM of their
      automatic pedestrian doors if they are in need of after-sales services. The majority
      of competitors and a significant number of end-customers and non-integrated
      suppliers consider it either very common or frequent for final end-customers to
      contact the OEM of their automatic pedestrian doors when requiring after-sales
      services.394 As a competing OEM indicated: ‘[end customers] will probably contact
      the brand name, if there is no other information provided or available.395
(453) The Parties’ perform most of their after-sales services on their own doors, as
      opposed to on competitors’ doors. In 2018, the proportion of the Parties’ after sales
      service contracts that cover their own doors in the markets where the Parties’
      activities overlap was, on average, [percentage of contracts covering own doors]%
      for both Assa Abloy (going up to [percentage of contracts covering own doors]%)
      and Agta Record (going up to [percentage of contracts covering own doors]%).396
(454) Retention rate is also high in terms of the proportion of the Parties’ automatic
      pedestrian door sales that result in an after-sales service contract. For both Parties,
      their proportion of door sales that result in an after-sales contract grows from the
      first to the third year after the sale in the vast majority of countries. For Assa
      Abloy, it goes over [60-70]% for several countries in the third year.397
(455) As has just been explained, while a majority of competitors and non-integrated
      suppliers seek after-sales business opportunities irrespective of the OEM or
      installer of the door in question, a significant number of competitors estimate the
      percentage of doors serviced by them that are their own brand to be 80%, and those
      of third party OEMs to be 20%.398 This points again at the existence of lock-in
      effects of customers regarding after-sales services.
(456) The majority of end-customers and non-integrated suppliers consider it either
      common or frequent to offer after-sales services contracts together with automatic
      pedestrian doors as a package.399 As an example of the duration of these contracts,
      a non-integrated supplier indicated that OEMs (notably, the Parties) sometimes
      ‘sell their doors with a tied 3-4 year maintenance contract (the door can be less
393
      For the sake of completeness, any possible non-horizontal effects (also including conglomerate) that
      might arise as a result from the Transaction would be addressed by the commitments offered.
394
      Questionnaire 1 to competitors, question 61; Questionnaire 2 to end-customers, question 57;
      Questionnaire 3 to non-integrated suppliers, question 73.
395
      Questionnaire 1 to competitors, question 61.1.
396
      Form CO, Table B.2.2.2.2.1.
397
      Form CO, Table D.6.4(1) and (2). It must be noted that the remaining door sales that do not come
      with an after-sales contract with the Parties, do not necessarily engage in after-sales contracts with
      third party after-sales services suppliers. Some customers decide to not have a maintenance contract
      and rely on ‘one-off’ transactions or service calls if their doors break or need maintenance.
398
      Questionnaire 1 to competitors, questions 62 and; Questionnaire 3 to non-integrated suppliers,
      question 74.
399
      Questionnaire 2 to end-customers, question 52; Questionnaire 3 to non-integrated suppliers,
      question 66.
                                                       98
 ---pagebreak---       expensive but then maintenance is more expensive)’.400 A customer indicated that
      they ‘concluded a contract with each of the Parties in 2016/2017, and both
      contracts are still in place’.401 A majority of competitors consider that they also
      provide after-sales services (after expiration of any guarantee) to more than 40% of
      the automatic pedestrian doors of which they are the original OEMs.402
(457) A non-integrated supplier expressed that: ‘Large manufacturers such as Manusa,
      AssaAbloy, Geze, Dorma etc… condition the sale of the product to a maintenance
      contract, making installation cheaper in favour of after-sales. But this does not
      happen with smaller installers, it is something that is decided afterwards and in
      many occasions does not happen.’403 Another non-integrated supplier expressed
      that: ‘Once the door is installed, OEM's tend to rise margins. The customer is tied
      to them as long as there are a lot of doors from the OEM than no one can repair
      cheaper that the OEM. I've seen 1200€ bills from OEM's that, for example,
      changing a belt that the cost of the belt is less than 100€.’404
(458) A competing OEM expressed that: ‘the bundling power will reduce access to
      customers such as facility managers or large housing companies who will probably
      be locked in by long running service contracts. The high market shares in the OEM
      will provide for perfect opportunities to leverage this market power to the after
      sales business’.405
(459) However, the results of the market investigation are inconclusive as regards
      whether the decision to purchase doors and after-sales services is taken at the same
      time or at different times.
(460) Assa Abloy’s earning calls with its investors reflect the importance of after-sales
      services, their profitability, and implies a high retention rate of clients:
      (a)    ‘You also see around the 2 circles a nice, thick skin. That is service. It’s a
             nice, thick skin because, one, it protects your hardware business. It makes it
             much more sticky. But it’s also nice because it’s very good, profitable
             business as we know.’406
      (b)    ‘2/3 of our sales come from aftermarket and 1/3 from new construction. And I
             would say when times are tougher, it’s probably even ¾ that come from
             aftermarket and ¼ from new construction. So really, it’s about the
             aftermarket and the stickiness of the installed base’.407
400
      Minutes of a call with a non-integrated supplier, 5 September 2019, paragraph 21.
401
      Minutes of a call with a customer, 3 September 2019, paragraph 4.
402
      Questionnaire 1 to competitors, question 61.5.
403
      Questionnaire 3 to non-integrated suppliers, question 65.1. Original quote in Spanish: ‘Los grandes
      fabricantes como Manusa, AssaAbloy, Geze, Dorma etc... condicionan la venta del producto a un
      contrato de Mantenimiento, abaratando la instalación a favor de la Post-venta. Pero en el pequeño
      instalador no sucede así es algo que se decide despues y en muchas ocasiones no lo hacen.’
404
      Questionnaire 3 to non-integrated suppliers, question 82.1.
405
      Questionnaire 1 to competitors, question 73.
406
      ASSA ABLOY AB (publ) – Analyst_Investor Day, slide 5.
407
      ASSA ABLOY AB (publ) – Analyst_Investor Day, slide 7.
                                                      99
 ---pagebreak---          (c)     ‘Positive thing here in Entrance Systems […] is definitely the accelerated
                growth for service, and that also helped us on maintaining our operating
                margin and even improving […] We have a stable volume leverage’.408
(461)    Further, when referring to the general business climate of automatic pedestrian
         doors, Assa Abloy’s internal documents evidence the close competition between
         the Parties in after-sales services with express reference to Agta Record being
         ‘aggressive on Service’.409
    Figure 7: Assa Abloy’s internal documents mentioning aggressive pricing for larger
        projects and closely following Agta Record’s strategy for after-sales services
[Assa Abloy’s internal market report for PDS mentioning “Aggressive pricing for larger
projects” and “Record remains aggressive on Service”.]
                     Source: Form CO, Annex AA98 PDS BR2 Jan 2019, slide 9.
         (B.iii)   Limited buyer power
(462)    The very high margins in after-sales services evidence that end-customers do not
         have much countervailing buyer power. The margins are high as OEMs leverage
         their installed base to charge customers for maintenance, repairs and overhaul of
         their installations.
(463)    Assa Abloy had contribution margins for after-sales services in 2018 of between
         [Assa Abloy’s profit margin] depending on the country, with an average of [Assa
         Abloy’s profit margin]. Agta Record had margins of between [agta record’s profit
         margin], depending on the country, with an average of [agta record’s profit
         margin].410
408
         ASSA ABLOY AB (publ) – Q2 2019 Earnings Call, Jul 17, 2019, slide 6.
409
         Form CO, AA98, slide 9. Despite the reference to the US in this slide, this document refers to the
         general course of business worldwide, and addresses issues related to European countries, for
         example, in slides 4-6, it explains the different technicians’ injuries in Portugal, France, Austria, and
         the Netherlands.
410
         Form CO, Annex 8.1.1 (1) – Margins for Automatic Pedestrian Doors.
                                                           100
 ---pagebreak---  ---pagebreak--- (464)    The results of the market investigation echo this finding. A non-integrated supplier
         expressed that: ‘normal[l]y customer[s] do not discuss the price but wants (sic) to
         solve the problem’.411
(465)     A non-integrated supplier links the lock-in effects with the high-margins of the
         industry: ‘Once the door is installed, OEM's tend to rise margins. The customer is
         tied to them as long as there are a lot of doors from the OEM than no one can
         repair cheaper that the OEM. I've seen 1200€ bills from OEM's that, for example,
         changing a belt that the cost of the belt is less than 100€.’412
(466)    Further, the results of the market investigation indicate that customers are generally
         not particularly sophisticated in their procurement strategy. In particular, the
         majority of competitors and non-integrated suppliers that expressed an opinion on
         this point consider that customers of automatic pedestrian doors do not factor the
         overall life-cycle costs of the automatic pedestrian doors they purchase.413 This
         means that they do not (or not fully or accurately) factor in the costs of after-sales
         services, whereas these may be significant. In fact, as a respondent indicated, while
         they may offer cheap prices for the sale of automatic pedestrian doors, suppliers
         can charge ‘whatever they want’ for after-sales services.414
7.3.2.2. Assessment of potential horizontal non-coordinated effects on the national markets
         for the supply of after-sales services for automatic pedestrian doors.
(467)    The Parties’ activities in the national markets for the supply of after-sales services
         for automatic pedestrian doors overlap in 17 EEA countries, as indicated in the
         table below.
411
         Questionnaire 1 to competitors, question 71.
412
         Questionnaire 3 to non-integrated suppliers, question 82.1.
413
         Questionnaire 1 to competitors, question 35; Questionnaire 3 to non-integrated suppliers, question
         46.
414
         Questionnaire 1 to competitors, question 35.1. Original in Dutch: ‘bij aanschaf de laagste prijs, bij
         onderhoud doet het er niet meer toe, en kan de leverancier rekenen wat hij wil. In deze branche is
         service de moneymaker:-)’
                                                        102
 ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---          (J)       Conclusion
(498)    Ultimately, the question of whether serious doubts arise in the supply of after-sales
         services for automatic pedestrian doors in Austria, Belgium, Czechia, Denmark,
         France, Hungary, the Netherlands, Slovenia and Sweden can be left open as the
         commitments offered by the Notifying Party include either (i) structural
         commitments in the EEA countries for which the Commission has raised serious
         doubts as to its compatibility with the internal market or the functioning of the
         EEA Agreement for the manufacture and supply of automatic pedestrian doors; or
         (ii) behavioural commitments for all other horizontally affected markets.
7.3.3.   Assessment of potential vertical non-coordinated effects on the upstream supply of
         branded spare parts for automatic doors and the downstream supply of after-sales
         services
7.3.3.1. Notifying Party’s arguments
(499)    Concerning after-sales services, the Notifying Party submits that the Transaction
         will not lead to anti-competitive effects since the Parties would not be able to
         leverage their combined position on the markets. The Notifying Party submits four
         reasons for this:
         (a)    Customers are often not the same, as those of automatic pedestrian doors are
                often contractors or integrators and customers of after-sales services are often
                end-users or facility management companies;
         (b)    Automatic pedestrian doors and after-sales services contracts are very rarely
                sold at the same time;
         (c)    Even if the customer for both the door and after-sales services, the decision to
                purchase both are made at different levels, departments or time;
         (d)    Competing suppliers of both automatic pedestrian doors and after-sales
                services would be able to defeat a leveraging by offering price reductions or
                similar bundles.428
         (e)    Further, the Notifying Party argues that third party service providers are
                always able to replace the operator’s drive system with a replacement kit
                from another OEM, which will lessen the dependency on brand-specific
                parts.429
(500)    With regards to spare parts, the Notifying Party considers that the Transaction
         would not lead to foreclosure concerns as:
         (a)    Regarding input foreclosure, there are alternative sources of supply of spare
                parts, and if the Parties refuse to supply its brand-specific spare parts or
                increase prices post-Transaction they would, as a result, likely lose
                customers; and
428
         Form CO, paragraph 2163.
429
         Form CO, paragraph 2102.
                                                  114
 ---pagebreak---          (b)    Regarding customer foreclosure, the Parties only represent a limited part of
                the customer base for spare parts.430
7.3.3.2. Commission’s assessment
(501)    The Commission disagrees with a number of arguments put forward by the
         Notifying Party. Notably, for the ability of third party after-sales service providers
         to offer price reductions on their services is inherently limited if they are dependent
         on highly priced brand-specific spare parts and on technical knowledge and
         servicing tools that can only be sourced from the original OEMs (or upon license).
         The results of the market investigation have indicated that third-party after-sales
         service suppliers have experienced difficulties accessing third party OEMs service
         tools necessary for undertaking after-sales services on that OEM’s door, as well as
         spare parts at reasonable cost.431 Moreover, a competing OEM expressed that:
         ‘Access to third-party spare parts is not easy, both in terms of sourcing and of
         pricing. Certain companies are not helpful or friendly when asked to provide their
         spare parts. Assa Abloy is known to be the most defensive competitor, whose spare
         parts are most difficult to access.’432 Another competing OEM explained that:
         ‘Assa Abloy offers spare parts for high prices, meaning that it is sometimes
         cheaper to replace the entire operator’.433 A third competing OEM considers that:
         ‘an OEM can harm its competitors by stopping, delaying or increasing prices for
         the supply of spare parts.’434
(502)    Further, and even though the largest OEMs have developed replacement kits, not
         all third party after-sales service providers have developed them (especially
         independent service providers). In any case, the reliance on these replacement kits
         has a cost, which is passed on to the end-customers.
(503)    The Commission will now analyse the ability, incentive and effects of a potential
         strategy of input foreclosure carried out by the merged entity post-Transaction.
(504)    The Commission considers that input foreclosure is more likely to occur in those
         countries where the Parties have a sufficiently important installed base. These
         countries were identified as the ones where market shares in the supply of any of
         the types of automatic pedestrian doors (i.e. swing, sliding and/or revolving) lead to
         an affected market (i.e. over 20%). They are the following: Austria, Belgium,
         Cyprus, Czechia, Denmark, Finland, France, Greece, Germany, Hungary, Iceland,
         Italy, Latvia, Lithuania, Luxemburg, Malta, the Netherlands, Poland, Portugal,
         Romania, Slovenia, Spain, Sweden and the United Kingdom.
         (A)       Ability
(505)    Following its market investigation, the Commission considers that post-
         Transaction, the merged entity would have the ability to engage in input
         foreclosure of the Parties' spare parts, technical information and servicing tools
         necessary to perform after-sales services. This input foreclosure would entail either
430
         Form CO, paragraph 2088.
431
         Questionnaire 1 to competitors, questions 67.2 and 68.
432
         Minutes of a call with a competitor of 14 August 2019, paragraph 19.
433
         Minutes of a call with a competitor of 30 October 2019, paragraph 18.
434
         Minutes of a call with a competitor of 13 September 2019, paragraph 20.
                                                        115
 ---pagebreak---       not providing spare parts, technical information and/or servicing tools, or providing
      them at high prices and/or with long lead-times. The Commission considers that
      this conduct could in principle be implemented readily.
(506) These risks are supported by the results of the market investigation. As an end-
      customer indicated: ‘OEMs will usually control the availability of spare parts’.435
      A competing OEM mentioned that: ‘In [the competing OEM]’s experience, Agta
      and Assa Abloy are most restrictive in giving access to the software required to
      provide after-sales service[s]’.436 Another competing OEM mentioned that:
      ‘Whenever [the competing OEM] has not been able to source the spare parts
      required, it discusses with the customer with a view of excluding the maintenance
      or repairing of the competitors’ products. While it is rare, it has happened in the
      past that [the competing OEM] has needed to request a customer to exclude doors
      from a maintenance contract due to the inability of [the competing OEM] to
      acquire the required spare parts at reasonable terms’.437
(507) Therefore, the Commission considers that the Parties already have the ability to
      engage in input foreclosure of their spare parts, technical information and servicing
      tools necessary to perform after-sales services.
(508) Moreover, brand-specific spare parts are by nature ‘captive’ (and therefore the
      Parties have a significant degree of market power in this market),438 whereas both
      spare parts, technical information and servicing tools are crucial for performing
      after-sales services on the Parties' doors. Further, at least one of the primary
      markets for the manufacture and supply of automatic swing, sliding and/or
      revolving doors are affected in the countries for which these vertical effects are
      being assessed. These markets are closely related to the after-sales markets, and
      have been used as a proxy to determine the Parties’ installed base, as an advantage
      to capture new after-sales business opportunities.
(509) Further, site visits have revealed that accessing the control unit of operators for
      servicing purposes requires specific pieces of software and hardware only available
      to the original OEM or upon license.
(510)  While third-party after-sales service suppliers could try to develop solutions (such
      as replacement kits) to circumvent this, these come at a cost that is passed-on to the
      end-customer. A competing OEM expressed that: ‘[the competing OEM] is not
      always able to service its competitors’ doors for technical reasons. In order to
      service a door, access to the software of an operator is required, which not all
      OEMs give. This means that, sometimes, [the competing OEM] needs to replace
      the operator of an automatic pedestrian door instead of repairing it. In [the
      competing OEM]’s experience, Agta limits access to its devices in order to service
      them.’439
435
      Questionnaire 2 to end-customers, question 57.
436
      Minutes of a call with a competitor of 30 October 2019, paragraph 16.
437
      Minutes of a call with a competitor of 14 August 2019, paragraph 20.
438
      This is irrespective of the fact that, according to the Parties, some parts might in theory be copyable,
      such as carriages, casings, frames and profiles, or batteries. (Form CO, paragraph 315).
439
      Minutes of a call with a competitor, 30 October 2019, paragraph 15.
                                                        116
 ---pagebreak---      Figure 8: Tablet that grants access to the Parties’ operator for servicing purposes
           Source: Site visit to Assa Abloy’s showroom in Houthalen, 10 October 2019.
(511)   For the reasons set out above in paragraphs (505) to (510), the Commission
        believes that the Parties have the ability to effectively engage in input foreclosure
        of their spare parts, technical information and servicing tools necessary to perform
        after-sales services.
        (B)       Incentive
(512)   The Commission has assessed the potential incentives of the Parties to engage in
        input foreclosure post-Transaction. The Commission considers likely that the
        Parties may engage in such foreclosure because of the following reasons: (i) the
        margins on after-sales services are significantly higher than on new sales of
        automatic pedestrian doors; (ii) there are significant cross-sales effects, that would
        be strengthened post-Transaction; (iii) the trade-off incentive of selling spare parts
        to competing OEMs in exchange for them selling their spare parts to the Parties
        may decrease post-Transaction.
(513)   Firstly, it must be noted that the Parties have market power in the upstream market
        for spare parts, as these markets are captive, but also in the downstream markets
        where the Parties have a large installed base, defined as those markets affected for
        the manufacture and supply of automatic pedestrian doors, either swing, sliding or
        revolving.
(514)   Regarding margins, as discussed in Section 7.3.2.1(B.iii), the Parties’ margins for
        after-sales services are significantly higher than those for the sale of automatic
        pedestrian doors. This finding is further evidenced in Assa Abloy's earning calls
        with its investors, as shown in paragraph (460) above. These documents argue the
        importance of after-sales services, its high margins, and ties this with a certain
        stickiness and captive base of clients.
(515)   Regarding cross-sales effects, these are significant in the automatic door industry:
        OEMs will try to sell additional products or services (including their own spare
        parts and after-sales services) to existing customers, and it is likely that these
                                                   117
 ---pagebreak---       effects may strengthen for the Parties post-Transaction. According to a vast
      majority of competitors, cross selling of new equipment to after-sales services
      customers is either significant or very significant.440 Moreover, post-Transaction,
      the Parties may thus be less willing to provide their spare parts to third-party
      suppliers, so as to enhance their ability to cross-sell after-sales services with new
      doors, and vice-versa. As a competing OEM expressed: ‘In [the competing OEM]’s
      experience, Agta limits access to its devices in order to service them.’441
(516) As mentioned in Section 7.3.2.1(B.i), the results from the market investigation also
      indicate that the overall size of both an OEM’s installed base of automatic
      pedestrian doors and its servicing network are advantages to capture new after-
      sales business opportunities. Post-Transaction, the merged entity will have a larger
      installed base and servicing network, and therefore, their incentive to cross-sell will
      be higher. This may translate into an incentive to not supply with the necessary
      tools, spare parts and information to third-party after-sales service providers, so the
      merged entity can service its installed base of automatic pedestrian doors. Further,
      and as margins for after-sales services are higher than for sales of new doors, with
      a larger installed base the Parties may be incentivised to capture all the after-sales
      services for that base. Again, this may translate into an incentive to not supply
      spare parts to third party after-sales service providers, to try to prevent them from
      capturing after-sales service opportunities on the Parties’ doors.
(517) Currently, OEMs (including the Parties) have the incentive of selling spare parts to
      competing OEMs, with the trade-off of the competing OEMs selling spare parts
      back, so doors from other OEMs can be serviced. In this line, a competing OEM
      expressed that: ‘When [the competing OEM] tries to source competitors’ spare
      parts, and their price is too high, it takes a series of steps to mitigate this. First, the
      Company tries to negotiate with the competitor in question (for example,
      negotiating with the access to the Company’s own spare parts for when the
      competitor needs them).’442
(518) However, two competing OEMs hinted at a direct link between market share level
      and incentive to supply technical information to third party after-sales service
      suppliers.443 One of them expressed that: ‘Problems with accessing spare parts at
      reasonable conditions are typically the more severe the higher the market share of
      the door OEM from whom spare parts would need to be sourced in a particular
      territory’.444 With increased market shares, the incentives of the merged entity of
      selling its spare parts decline, as they will have a large installed base and a
      possibility to service all those doors.
(519) The majority of competitors and non-integrated suppliers who expressed an
      opinion on this point consider that post-Transaction, the availability of spare parts
      will decrease.445 Consequently, the majority of competitors and non-integrated
440
      Questionnaire 1 to competitors, question 37.2.
441
      Minutes of a call with a competitor, 30 October 2019, paragraph 15.
442
      Minutes of a call with a competitor of 14 August 2019, paragraph 20.
443
      Minutes of a call with a competitor of 30 October 2019, paragraph 16, minutes of a call with a
      competitor of 13 September 2019, paragraph 20.
444
      Minutes of a call with a competitor of 13 September 2019, paragraph 20.
445
      Questionnaire 1 to competitors, question 72; Questionnaire 3 to non-integrated suppliers, question
      83.
                                                     118
 ---pagebreak---       suppliers who expressed an opinion on this point consider that the ability of third-
      party after-sales service providers to service the Parties’ doors will decrease. 446 As
      a result, the majority of competitors and non-integrated suppliers who expressed an
      opinion on this point consider that the prices for after-sales services post-
      Transaction will increase.447
(520) A competing OEM expressed that: ‘With the merger, Assa Abloy and Agta Record
      would have the opportunity to increase the price in the market due to the size of the
      market share. We assume that the merged companies will initiate a strategy to limit
      third-party after sales activities by cutting the supply of spare parts to the service
      Providers and using its overall market share to bundle the OEM deliveries with
      service contracts for the full product portfolio of the merged companies. Since the
      merged companies are dominating several key components for the service business,
      there is a strong incentive to foreclose output in there by increased price levels for
      after sales services’.448
(521) For the reasons set out above in paragraphs (512) to (520), the Commission
      believes that the Parties may have the incentives to engage in input foreclosure in
      relation to the supply of their spare parts, technical information and servicing tools
      necessary to perform after-sales services.
      (C)       Effects
(522) The potential effects of this input foreclosure are fourfold: (i) a decrease in the
      availability of the Parties' spare parts, technical information and servicing tools; (ii)
      an increase in the prices of the Parties’ spare parts; (iii) an increase in the difficulty
      of third-party after-sales service providers to service the Parties' doors; and (iv) an
      increase in the prices of after-sales services, as a consequence of these previous
      three potential effects.
(523) As explained in Section 7.3.3.2(B) above, respondents to the market investigation
      consider that these effects are likely to take place post-Transaction. Respondents
      consider that performing after-sales services on the Parties’ automatic pedestrian
      doors will become increasingly difficult, as there will be less availability of spare
      parts, technical information and servicing tools. Consequently, the servicing of the
      Parties’ doors will increase in price, which will be ultimately passed on to the end-
      customer.449
(524) As a non-integrated supplier indicated: ‘considering that product suppliers tend to
      service their own doors, [the non-integrated supplier] considers it difficult for a
      third party after-sales service supplier to survive in the market’.450
446
      Questionnaire 1 to competitors, question 72; Questionnaire 3 to non-integrated suppliers, question
      83.
447
      Questionnaire 1 to competitors, question 72; Questionnaire 3 to non-integrated suppliers, question
      83.
448
      Questionnaire 1 to competitors, question 72.1.
449
      Questionnaire 1 to competitors, question 72; Questionnaire 3 to non-integrated suppliers, question
      83.
450
      Minutes of a call with a non-integrated supplier of 14 August 2019, paragraph 22.
                                                     119
 ---pagebreak---  ---pagebreak---          2018 respectively); and (ii) all high-speed doors sold by Agta Record in the EEA
         are manufactured in its French facility in Crémieu452, the Section below is limited
         to the competitive assessment of the market for high-speed doors in France.
7.4.1.1. High-speed doors in France
(529)    The Transaction gives rise to a horizontal overlap between the Parties’ offerings of
         high-speed doors in France. Assa Abloy is active in the manufacturing and sale of
         high-speed doors through its subsidiaries AAES France and Nergeco and supplies
         the French market from its production facility and logistics hub in Lyon (France),
         as well as from its production facility in Plzen (Czechia). 453 Agta Record supplies
         the French and EEA markets with high-speed doors produced by its subsidiary
         record industry in Crémieu (France).
         (A)        Notifying Party’s arguments
(530)    The Notifying Party submits that the Transaction will not give rise to non-
         coordinated effects in the market for high-speed doors in France.454
(531)    The Notifying Party submits in this regard that (i) the French market is not
         particularly concentrated and that there is a large number of alternative active
         suppliers455; (ii) the Parties are not closer competitors to each other than the other
         players in the market and their products are not particularly similar456; (iii) there are
         no relevant capacity constraints for competitors to increase their output in case of
         an attempted price increase457; (iv) switching costs are low458; (v) customers have
         strong countervailing power459; and (vi) competitors are likely to expand in case of
         price increase460. Moreover, the Notifying Party submits that entry to the French
         market of high-speed doors is easy and, as such, that some larger European
         manufacturers not yet present may enter the market.461
452
         Reply of the Notifying Party to Request for information 7 of 13 December 2019, question 5.
453
         Form CO, paragraph 1903.
454
         Form CO, paragraph 1837.
455
         Form CO, paragraphs 1913 to 1916.
456
         Form CO, paragraph 1917.
457
         Form CO, paragraph 1918.
458
         Form CO, paragraph 1919.
459
         Form CO, paragraph 1920.
460
         Form CO, paragraphs 1921 to 1924.
461
         Form CO, paragraphs 1925 to 1931.
                                                        121
 ---pagebreak---  ---pagebreak---  ---pagebreak---       of companies467. In fact, four out of the five main suppliers of high-speed doors in
      France identified by the market report would belong either to Assa Abloy
      (Nergeco, Entrematic and Albany) or to Agta Record.468
(537) There is moreover a limited number of OEMs in the French market for high-speed
      doors. When considering a segment comprising sales from OEMs-only to end-
      customers (i.e. excluding sales from non-integrated suppliers), the combined entity
      would hold a share of supply of [60-70]%.469 The remaining OEMs would be
      placed at great distance from the Parties: Hörmann ([20-30]%), BA2I ([5-10] %),
      Safir ([0-5] %), Armor Rapids Doors ([0-5] %) and Butzbach ([0-5]%).
(538) Contrary to the Notifying Party’s arguments, the Parties appear to compete closely
      with each other in the French market for high-speed doors. A majority of OEMs
      and end-customers having expressed an opinion in the market investigation
      submitted that Assa Abloy is the closest competitor to Agta Record in the
      market.470 Furthermore, a majority of OEMs and non-integrated suppliers having
      expressed an opinion in the market investigation, as well as a vast majority of end-
      customers, submitted that the Parties offer comparable high-speed doors from a
      technical perspective.471 In this regard, an end-customer expressed that the Parties’
      products serve the same needs with only minimal technical differences in their
      products.472
(539) The Commission notes that rivalry between Assa Abloy and Agta Record appears
      to have been an important source of competition on the market for high-speed
      doors prior to the Transaction. In this regard, the French market report notes that
      Agta Record is the only ‘challenger’ to Assa Abloy and Hörmann. 473 The market
      report moreover remarks that Agta Record had been experiencing an ‘important
      development over the recent years’ given its ‘aggressive pricing policy and its
      implantation in the distribution sector’.474
(540) A majority of OEMs and end-customers considers that barriers to entry to the
      French market of high-speed doors are ‘important’, while a majority of non-
467
      Marché des portes industrielles, commerciales et piétonnes en France’, February 2017, page 98.
      Original quote in French: ‘[l]’essentiel des parts de marché est détenu par un nombre réduit de
      spécialistes’.
468
      ‘Marché des portes industrielles, commerciales et piétonnes en France’, February 2017, table 42.
469
      Form CO, Annex 7.
470
      Questionnaire 4 to competitors of industrial doors, question 21; and Questionnaire 5 to customers of
      industrial doors, question 21.
471
      Questionnaire 4 to competitors of industrial doors, question 23.3; and Questionnaire 5 to customers
      of industrial doors, question 22.3.
472
      Questionnaire 5 to customers of industrial doors, question 22.3. Original quote in French: ‘unité de
      besoin identique, seul la technique est légèrement différente’.
473
      Marché des portes industrielles, commerciales et piétonnes en France’, February 2017, page 98.
      The market report refers to two other ‘challengers’ in addition to Agta Record, namely Albany and
      Entrematic. These two companies belong to the Assa Abloy group since 2012.
474
      Marché des portes industrielles, commerciales et piétonnes en France’, February 2017, page 98.
      Original quote in French: ‘[à] noter le développement important de Record ces dernières années, à
      la faveur d’une politique tarifaire agressive et d’une solide implantation dans le secteur de la
      Distribution’.
                                                     124
 ---pagebreak---       integrated suppliers considers that these barriers are ‘very important’.475 These
      barriers appear to be due to large scale effects. In this regard, an OEM submitted
      that the competitors require having an ‘extremely large portfolio’ to address the
      needs of large customers.476 Moreover, an end-customer indicated that barriers to
      entry may be of legislative, qualitative or brand-awareness nature477, while other
      pointed towards the need of having a sales and after-sales network.478
(541) Contrary to the Notifying Party’s submission, it appears that there are at least some
      constraints for competitors to increase their output in case of an attempted price
      increase by the combined entity. In this regard, only two OEMs representing a very
      limited part of the market (with a combined market share of less than 4%) indicated
      that they would be able to significantly increase their production of high-speed
      doors without incurring into important investments.479 Conversely, the main
      competitor to the Parties in the market submitted that it would need to incur into
      significant investments in order to increase their production.480
(542) A number of respondents expressed concerns as regards the impact of the
      Transaction in the French market for high-speed doors. An OEM indicated that the
      prices for high-speed doors may be reduced at first in order to eliminate
      competitors and increase prices once the ‘monopoly has become complete’.481 A
      non-integrated suppliers submitted being ‘very worried about the concentration
      and, above all, very pessimistic’482, while other indicated that Assa Abloy can
      eliminate competitors ‘at its own will’, given its financial capabilities483.
      (C)        Conclusion
(543) In light of the considerations in paragraphs (532) to (542) above as well as all
      evidence available to it, the Commission concludes that in the French market for
      high-speed doors, the Transaction raises to serious doubts as to its compatibility
      with the internal market or the functioning of the EEA Agreement due to horizontal
      non-coordinated effects given (i) the significant combined market shares of the
      Parties (above 50%), well ahead of its only other sizeable competitor; (ii) the pre-
      existing high concentration level in the market; (iii) the close competition between
      the Parties; and (iv) the existence of high barriers to entry.
475
      Questionnaire 4 to competitors of industrial doors, question 37.2; and Questionnaire 5 to customers
      of industrial doors, question 39.2.
476
      Questionnaire 4 to competitors of industrial doors, question 37.2.1. Original quote in French: ‘[l]a
      concentration du marché rend l’implantation compliqué car il faut avoir une gamme extrèmement
      large pour répondre aux grands comptes’.
477
      Questionnaire 5 to customers of industrial doors, question 39.2.1. Original quote in French:
      ‘[p]rincipalement législatives, qualitatives et la réputation jouent également beaucoup’.
478
      Questionnaire 5 to customers of industrial doors, question 39.2.1. Original quote in French:
      ‘[r]éseau commercial, réseau Service Après Vente’.
479
      Questionnaire 4 to competitors of industrial doors, question 27.
480
      Questionnaire 4 to competitors of industrial doors, question 27.
481
      Questionnaire 4 to competitors of industrial doors, question 38.1. Original quote in French: ‘[p]our
      faire disparaitre les concurrents, apres concentration il y a baisse des prix, les concurrents ne
      peuvent pas suivre et disparaissent. Le monopole devient total et les prix flambent’.
482
      Questionnaire 5 to customers of industrial doors, question 41. Original quote in French: ‘Je suis très
      inquiet par ce rapprochement et surtout très pessimiste’.
483
      Questionnaire 5 to customers of industrial doors, question 41. Original quote in French: ‘ASSA
      ABLOY est capable de tuer des concurrents à souhait, ils en ont les capacités financières’.
                                                       125
 ---pagebreak--- 7.4.2.   After-sales services for industrial doors
7.4.2.1. Interplay between horizontal and vertical effects for after-sales services for
         industrial doors
(544)    As is the case in automatic pedestrian doors, there is a direct connection between
         horizontal and vertical effects for after-sales services for industrial doors, as well as
         between after-sales and the manufacturing and supply of (the different types of)
         industrial doors. There are also significant scale effects in both the markets for the
         manufacture and supply of (the different types of) industrial doors discussed in
         Section 7.4.1, and for after-sales services for industrial doors, as will be discussed
         in Section (547) below.
(545)    As discussed in Section 7.2., the market shares in automatic pedestrian doors are
         used a proxy for the installed base of automatic pedestrian doors in each country.
         The same proxy will be used for industrial doors. This means that when the size of
         both the installed base and the servicing network of industrial doors is important,
         there is a competitive advantage to capture new sales (also for after-sales services).
         Post-Transaction, whenever the Parties have a larger installed base and servicing
         network, (as will be assessed in Section 7.4.2.1(B) below) their incentive to supply
         spare parts to third party after-sales services suppliers may decrease.
(546)    Therefore, to assess effectively the effects of the Transaction vertically it is
         important to take into consideration the size of the Parties’ installed base of
         industrial doors, as denoted by the shares in the market for the manufacture and
         supply of industrial doors.
(547)    Given that spare parts are a fundamental input for after-sales services and given the
         interplay between horizontal and vertical effects in relation to spare parts and after-
         sales services, the competitive analysis of both horizontal and vertical effects for
         the supply of after-sales services for industrial doors will also take into account
         Assessment of potential horizontal non-coordinated effects on the national markets
         for the supply of after-sales services for industrial doors (including spare parts)
         (A)       Notifying Party’s arguments
(548)     The Notifying Party argues that, although technically affected, the increase in the
         supply share resulting from the Transaction is de minimis on the market for the
         provision of after-sales services for industrial doors in Belgium. According to the
         Parties’ estimates, Assa Abloy has a market share of [20-30]%, whereas Agta
         Record’s market share amounts to less than [0-5]%. There are no other horizontal
         overlaps leading to affected markets the provision of after-sales services for
         industrial doors. As reflected in Table 41, there are a number of other horizontal
         overlaps, but those do not lead to affected markets.
                                                   126
 ---pagebreak---  ---pagebreak---       service providers have to face the price of the spare parts, and therefore cannot
      compete effectively with OEMs.486
(553) Further, all the competitors who expressed an opinion on this point consider that
      larger clients tend to go to OEMs first for their after-sales needs for industrial
      doors, and the vast majority of non-integrated suppliers consider that larger
      projects tend to go to OEMs for after-sales.487
(554) Moreover, the results of the market investigation have shown that there are high
      barriers to entry and expansion. A competing OEM expressed that: ‘Manufacturers
      such as Assa Abloy make it practically impossible to buy their spare parts or
      service their doors with materials exclusively from them, creating barriers to entry
      to repair their products. They put an expiration date to its parts (programmed
      obsolence) to force their substitution and only them can substitute them, at very
      high prices’.488
(555) However, the market investigation results indicate that customers of industrial
      doors seems to be more sophisticated than customers of automatic pedestrian
      doors. The vast majority of competitors and end-customers, and all non-integrated
      suppliers who expressed an opinion on this point consider that clients take into
      account the overall life cycle of industrial doors when purchasing them.489
(556) The very high margins in after-sales services for industrial doors evidence that end-
      customers do not have much countervailing buyer power. The margins are high as
      OEMs leverage their installed base to charge customers for maintenance, repairs
      and overhaul of their installations. For 2018, Agta Record’s gross margin for after-
      sales services in France was [Assa Abloy’s/Agta Record’s profit margins], and
      Assa Abloy’s contribution margin [Assa Abloy’s/Agta Record’s profit margins].
      Assa Abloy’s gross average margin across the EEA for 2018 was [Assa
      Abloy’s/Agta Record’s profit margins].490
486
      Questionnaire 4 to competitors of industrial doors, question 36.
487
      Questionnaire 4 to competitors of industrial doors, question 36.2; Questionnaire 5 to customers of
      industrial doors, question 38.2.
488
      Questionnaire 4 to competitors of industrial doors, question 34.3. Original quote in Spanish:
      ‘Fabricantes como Asa Abloy hacen prácticamente imposible comprar sus repuestos o hacer el
      mantenimiento en sus puertas con materiales exclusivos de ellos, creando barreras de entrada para
      realizar reparaciones de sus productos. Ponen caducidad a sus piezas (obsolescencia programada)
      para obligar a sustituirlas y solo las pueden sustituir ellos a unos precios muy elevados’.
489
      Questionnaire 4 to competitors of industrial doors, question 30; Questionnaire 5 to customers of
      industrial doors, question 29.
490
      Form CO, Annex 8.1.1 (2).
                                                       128
 ---pagebreak---  ---pagebreak---          give rise to serious doubts as to its compatibility with the internal market or the
         functioning of the EEA Agreement.
7.4.2.2. Assessment of potential vertical non-coordinated effects on the upstream supply of
         branded spare parts for industrial doors and the downstream supply of after-sales
         services
(561)    The assessment of potential vertical non-coordinated effects on the upstream
         supply of branded spare parts for industrial doors and the downstream supply of
         after-sales services will focus on France, the only country affected for the supply of
         a type of industrial doors (high-speed doors).
         (A)       Notifying Party’s arguments
(562)    Concerning after-sales services for industrial doors, the Notifying Party submits the
         same arguments as for after-sales services for automatic pedestrian doors (see
         Section 7.3.3.1).
(563)    With regards to spare parts, the Notifying Party considers that the Transaction
         would not lead to foreclosure concerns as:
         (a)    Regarding input foreclosure, there are alternative sources of supply of spare
                parts, and if the Parties refuse to supply its brand-specific spare parts or
                increase prices post-Transaction they would, as a result, likely lose
                customers; and
         (b)    Regarding customer foreclosure, the Parties only represent a limited part of
                the customer base for spare parts.491
         (B)       Commission’s assessment
         (B.i)     Ability
(564)    Following its market investigation, the Commission considers that post-
         Transaction, the merged entity would have the ability to engage in input
         foreclosure of the Parties' spare parts, technical information and servicing tools
         necessary to perform after-sales services for industrial doors. This input foreclosure
         would entail either not providing spare parts, technical information and/or servicing
         tools, or providing them at an expensive price and with long lead-times. The
         Commission considers that this conduct could in principle be implemented readily.
(565)    Moreover, brand-specific spare parts are captive (and therefore the Parties have a
         significant degree of market power in this market) and both spare parts, technical
         information and servicing tools are critical for performing after-sales services on
         the Parties' industrial doors. Further, the Parties have a very high market share in
         the related market for the manufacture and supply of high-speed doors in France
         ([50-60]%). This market is closely related to the after-sales market, and has been
         used as a proxy to determine the Parties’ installed base, as an advantage to capture
         new after-sales business opportunities.
491
         Form CO, paragraph 2088.
                                                  130
 ---pagebreak--- (566) Further, the majority of the respondents to the market investigation that expressed
      an opinion on this point indicate that there have sometimes experienced difficulties
      servicing doors supplied by a third party, notably because of the prices and lead-
      time of spare parts.492 The sourcing of spare parts at reasonable costs has also
      proven a difficulty for the majority of competitors and all non-integrated suppliers
      who expressed an opinion on this point.493
(567) An end-customer expressed that: ‘The concentration in the door market with two
      major actors in France may be prejudicial to the competitive landscape in this
      market with a risk of increasing prices upstream, servicing and repairs’.494 A non-
      integrated supplier expressed that: ‘Assa Abloy will be in a very strong position and
      will compulsorily seek to have a return over its buying investments. Assa Abloy’s
      management is known for being very hard and oriented on the hyper profitability at
      the expense of humans’.495
(568) Further, site visits have revealed that accessing the control unit of operators for
      servicing purposes requires specific pieces of software and hardware only available
      to the original OEM or upon license.
      (B.ii)     Incentive
(569) The Commission has assessed the potential incentives of the Parties to engage in
      input foreclosure post-Transaction. The Commission considers likely that the
      Parties may engage in such foreclosure because of the following reasons: (i) the
      margins on after-sales services are significantly higher than on new sales of
      automatic pedestrian doors; (ii) there are significant cross-sales effects, that may be
      strengthened post-Transaction; (iii) the trade-off incentive of selling spare parts to
      competing OEMs in exchange for them selling their spare parts to the Parties may
      decrease post-Transaction.
(570) Firstly, it must be noted that the Parties have market power in the upstream market,
      as these markets are captive, but also in the downstream market for high-speed
      doors in France,496 where the Parties have a large installed base.
(571) As discussed in Section 7.4.2.1(B), the Parties’ margins for after-sales services are
      significantly higher than those for the sale of automatic pedestrian doors. This
492
      Questionnaire 4 to competitors of industrial doors, question 33; Questionnaire 5 to customers of
      industrial doors, question 32.
493
      Questionnaire 4 to competitors of industrial doors, question 34; Questionnaire 5 to customers of
      industrial doors, question 33.
494
      Questionnaire 5 to customers of industrial doors, question 33.3. Original quote in French:
      ‘Concentration du marché de la porte avec deux acteurs majeurs en France peut être préjudiciable à
      l'univers concurrentiel sur ce marché avec un risque de faire monter les prix en achat, maintenance
      et réparation.’
495
      Questionnaire 5 to customers of industrial doors, question 33.3. Original quote in French: ‘Assa
      Abloy va être en position très forte et va obligatoirement chercher à avoir un retour sur les
      investissements d'acquisition. Le management d'Assa Abloy est connu pour être très dur et orienté
      sur l'hyper rentabilité au détriment de l'humain.’
496
      As has been mentioned in the horizontal assessment for after-sales for automatic pedestrian doors
      for Sweden and France, the market shares for after-sales services for industrial doors include other
      players than OEMs, for example facility management companies. Therefore, these players dilute the
      Parties’ estimates of after-sales services for industrial doors if compared to the manufacture and
      supply of industrial doors.
                                                      131
 ---pagebreak---       finding is further evidenced by Assa Abloy's earning calls with its investors, as
      shown in paragraph (460) above. These statements display the importance of after-
      sales services, its high margins, and ties this with a certain stickiness and captive
      base of clients. Given that after-sales services are more profitable than new sales of
      doors, an increase in the installed base of the Parties post-Transaction may
      incentivise them to expand in the supply of after-sales services for their installed
      base. For that reason, the Parties might want to position themselves as the only
      ones able to supply their spare parts (necessary for servicing their doors), and
      therefore will increase their incentives to stop supplying third party after-sales
      service providers.
(572) There already are significant cross-sales effects in the automatic door industry:
      OEMs will try to sell additional products or services to existing customers, and
      these effects may strengthen for the Parties post-Transaction.
(573) As mentioned in Section 7.4.2.1(B), the results from the market investigation
      indicate that the overall size of both an OEM’s installed base of industrial doors
      and its servicing network are advantages to capture new after-sales business
      opportunities. Post-Transaction, the merged entity will have a larger size of
      installed base and servicing network, and therefore, their incentive to cross-sale
      may be higher. This may in turn translate into an incentive to not supply with the
      necessary tools, spare parts and information to third-party after-sales service
      providers, so the merged entity can service its installed base of industrial doors.
(574) Currently, OEMs (including the Parties) have the incentive of selling spare parts to
      competing OEMs, with the trade-off of the competing OEMs selling spare parts
      back, so doors from these OEMs can be serviced. With increased market shares,
      the incentives of the merged entity of selling its spare parts may decline, as they
      will have a large installed base and a possibility to service all those doors.
      (B.iii)   Effects
(575) The potential effects of this input foreclosure are threefold: (i) a decrease in the
      availability of the Parties' spare parts, technical information and servicing tools; (ii)
      an increase in the prices of the Parties’ spare parts; (iii) an increase in the difficulty
      of third-party after-sales service providers to service the Parties' doors; and (iv) an
      increase in the prices of after-sales services, as a consequence of these previous
      three potential effects.
(576) As explained in Section 7.4.2.1(B), the results of the market investigation echoed
      the likelihood of these effects taking place post-Transaction.
(577) In light of the considerations in paragraphs (564) to (576) above as well as all
      evidence available to it, the Commission concludes that the question of whether
      serious doubts arise in relation to the potential vertical non-coordinated effects on
      the upstream supply of industrial doors and the downstream supply of after-sales
      services for industrial doors can be left open as the commitments include structural
      commitments in the EEA country for which the Commission has raised serious
      doubts as to its compatibility with the internal market for the manufacture and
      supply of high-speed doors.
                                                 132
 ---pagebreak--- 7.5.   Access control systems and components
(578)  Among the Parties, only Assa Abloy is active in the manufacture and supply of
       access control systems and components. Moreover, access control systems and
       components do not constitute direct or important input into the manufacture and
       supply of automatic doors, or vice-versa. The Transaction may therefore only give
       rise to potential non-coordinated conglomerate effects in relation to the supply of
       access control systems and components, as discussed below.
7.5.1. Notifying Party’s arguments
(579)  The Notifying Party submits that the Transaction would not have any
       anti-competitive effects with respect to the supply of access control systems and
       components from a conglomerate perspective.497
(580)  According to the Notifying Party, electronic access control systems and
       components, on the one hand, and automatic pedestrian doors, on the other hand,
       are sourced from different channels and at different times. Consequently, they are
       also installed separately. In addition, the Notifying Party submits that OEMs of
       automatic doors represent an insignificant customer segment for suppliers of
       electronic access control systems and components. Moreover, post-Transaction,
       there will remain many suppliers of access control systems and components.
       Finally, the Notifying Party puts forward arguments on interoperability, claiming
       that the Parties’ automatic doors use an open interface that can be connected with
       any electronic access control system and that there are no specific hardware
       constraints for seamless interaction between automatic doors and pre-installed
       electronic access control systems.
7.5.2. Commission’s assessment
(581)  During the course of the Phase I market investigation, the Commission received a
       complaint from a market participant relating to anti-competitive effects arising
       from the bundling of electronic access control systems and automatic pedestrian
       doors.498
(582)  However, the claims made by the complainant were not fully corroborated by the
       results of the market investigation. In particular, respondents to the market
       investigation support the Notifying Party’s claim that the choice of automatic
       pedestrian doors typically does not take place at the same time as the choice of
       access control system (or components) used to manage the external access to the
       building in question.499 In addition, according to the qualitative feedback provided
       by certain competing OEMs, access control systems are chosen before automatic
       pedestrian doors.500
(583)  The outcome of the market investigation does not either substantiate a risk of
       technical tying between access control systems and automatic pedestrian doors, as
497
       Form CO, Section D.5.1., paragraph 2131 and Section D.5.5.
498
       Non-confidential version of the complaint of a market participant, 19 February 2020.
499
       Questionnaire 1 to competitors, question 99; Questionnaire 2 to end-customers, question 86;
       Questionnaire 3 to non-integrated suppliers, question 109.
500
       Questionnaire 1 to competitors, question 99.1.
                                                      133
 ---pagebreak---       the majority of OEMs state that access control systems and components generally
      communicate with and operate with any automatic pedestrian door, by means of an
      open interface.501
(584) Nevertheless, according to the results of the market investigation, Assa Abloy is
      considered a significant supplier of access control systems and components in the
      EEA by the majority of respondents.502 Moreover, the industry at hand is
      characterised by strong portfolio effects. In fact, the majority of competing OEMs
      consider that it is a significant competitive advantage for suppliers of automatic
      pedestrian doors to be also able to supply access control systems and/or
      components as well as for suppliers of access control systems and/or components
      to be also able to supply automatic pedestrian doors.503
(585) In practice, while the results of the market investigation are inconclusive as to
      whether it is a frequent practice for suppliers to offer together as a discounted
      bundle access control systems and/or components with automatic pedestrian doors,
      the majority of competing OEMs and half of direct customers consider that such
      bundled offers are likely to become more common in the future.504
(586) Finally, the majority of competing OEMs and non-integrated suppliers consider
      that the Transaction, inasmuch as Assa Abloy is also a supplier of access control
      systems and components, may affect negatively their position as suppliers of
      automatic pedestrian doors.505
(587) In light of the above considerations, the Commission concludes that while serious
      doubts with regard to non-coordinated conglomerate effects in the supply of access
      control systems and components cannot be excluded, these are effectively
      addressed by the proposed commitments (see Section 9).
(588) In fact, Agta Record is not active in the supply of access control systems and
      components whereas Assa Abloy is already active both in the supply of automatic
      pedestrian doors and of access control systems and components. Hence, in the
      present case, conglomerate effects would arise as a result of the combination of the
      Parties’ activities in the supply of automatic pedestrian doors. However, the
      proposed commitments address the Commission’s concerns relating to increased
      concentration in the supply of automatic pedestrian doors arising from the
      Transaction. As a result, the Commission finds that, on balance, the Transaction is
      unlikely to give the combined entity an increased ability or increased incentives to
      engage in successful conglomerate strategies, at least to a material extent,
      compared to the Notifying Party today.
501
      Questionnaire 1 to competitors, question 93.
502
      Questionnaire 1 to competitors, questions 89 and 90; Questionnaire 2 to end-customers, questions
      76 and 77; Questionnaire 3 for non-integrated suppliers, questions 100 and 101.
503
      Questionnaire 1 for competitors, questions 88.2.1. and 88.2.2.
504
      Questionnaire 1 for competitors, questions 100 and 100.2; Questionnaire 2 to end-customers,
      questions 87 and 87.2;
505
      Questionnaire 1 for competitors, question 99; Questionnaire 3 for non-integrated suppliers, question
      113.
                                                    134
 ---pagebreak--- 7.6.     Locking devices
(589)    Locking devices constitute an input for automatic pedestrian doors. Among the
         Parties, only Assa Abloy is active in the manufacture and supply of locking
         devices. The Transaction may therefore only give rise to potential non-coordinated
         vertical effects in relation to the supply of locking devices, as discussed below.
7.6.1.   Locks
7.6.1.1. Notifying Party’s arguments
(590)    The Notifying Party submits that the Transaction would not have any
         anti-competitive effects as any input or customer foreclosure strategies would be
         ineffective.506
(591)    With regard to any possible input foreclosure strategy,507 the Notifying Party
         claims that there are many alternative lock suppliers on the market. Moreover, it
         points to the fact that the majority of automatic doors are sold without a lock, as
         most doors are equipped with an intrinsic locking mechanisms. The Notifying
         Party further claims that even when a lock is required, it is delivered and installed
         separately from the doors. According to the Notifying Party, locks in any case do
         not constitute an important input, as especially mechanical but also
         electromechanical locks represent only a minor part of the price of automatic
         pedestrian doors.508
(592)    With regard to any possible customer foreclosure strategy,509 the Notifying Party
         submits that the merged entity would not have the ability to increase upstream
         competitors’ costs or restrict access to a significant customer base. First, the Parties
         account for a small proportion of the demand for locks, with the majority of sales
         by lock suppliers made to other categories of customers such as OEMs of manual
         doors, non-integrated suppliers and locksmiths. According to the Notifying Party,
         there are numerous other customers for the supply of locks, including other OEMs
         of automatic doors but also OEMs of manual doors and windows.
7.6.1.2. Commission’s assessment
(593)    The Commission has assessed a risk of Assa Abloy engaging in foreclosure
         strategies in Assa Abloy/Cardo.510 Similarly to the present case, that decision
         concerned the acquisition by Assa Abloy of a company that was not active in the
         manufacturing of mechanical locks. In that decision, the Commission found that
         the merged entity was unlikely to engage in foreclosure in relation to locks and
         industrial or residential garage doors.511
506
         Form CO, Section D.1.1., paragraph 1994.
507
         Form CO, Section D.1.1., paragraph 1994 and Section D.1.6.2.
508
         Form CO, Section D.1.4., paragraph 2023.
509
         Form CO, Section D.1.1., paragraph 1994 and Section D.1.6.3.
510
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, paragraphs 38-
         42.
511
         Commission decision of 9 March 2011 in Case COMP/M.6117 – Assa Abloy/Cardo, paragraph 42.
                                                     135
 ---pagebreak--- (594) In the present case, the Commission focuses its assessment on vertical links
      between locks and automatic pedestrian doors because, according to the Notifying
      Party, locks are rarely used in high-speed doors, either for internal and for external
      applications. 512
      (A)        Affected markets
(595) As stated in paragraph (176), the Commission leaves open the geographic
      definition of the market for the supply of locks. If the market was to be defined as
      EEA-wide, it would not be affected, as the Parties’ combined market shares on the
      market for the supply of mechanical locks513 to OEMs of doors and windows are
      approximatively [10-20]% (by value) and [20-30]% (by volume).514 However,
      under a narrower market definition, national markets of several Member States
      would be considered affected. The Notifying Party has an upstream market share of
      30% or more in nine countries based on value (Denmark, Estonia, Finland, Latvia,
      Norway, Romania, Slovenia, Spain, and Sweden) and ten countries based on
      volume (Bulgaria, Denmark, Estonia, Finland, Latvia, Norway, Poland, Romania,
      Spain, and Sweden).515
      (B)        Input foreclosure for locks
      (B.i)      Ability
(596) According to the results of the market investigation, Assa Abloy is indeed one of
      the main suppliers of locks for automatic pedestrian doors in the EEA.516 However,
      at the EEA-level, as stated in paragraph (595), the merged entity would not have a
      sufficiently strong presence upstream to have the ability to engage in input
      foreclosure for locks. Only at national level, in the countries listed in paragraph
      (595), could the Notifying Party’s strong presence upstream support an ability to
      engage in a foreclosure strategy.
(597) However, the results of the market investigation support the Notifying Party’s
      claim that automatic pedestrian doors are typically sold without locks. When asked
      about the percentage of automatic pedestrian doors supplied by their company that
      are equipped with standalone locks (as opposed to the intrinsic locking
      mechanism), half of competing OEMs state that it is between 0-5% for swing doors
      and the majority states it is also 0-5% for both sliding doors and revolving doors.517
(598) Moreover, the overwhelming majority of respondents consider locks supplied by
      Assa Abloy for automatic pedestrian doors in the EEA to be comparable to locks of
      other suppliers.518 This result confirms the Notifying Party’s claims as to the simple
512
      Reply of the Notifying Party to question 5 of a request for information 11, 20 January 2020.
513
      The Notifying Party did not submit in the Form CO market shares for the supply of
      electromechanical locks, explaining in the reply to Question 4 of request for information 8 of 19
      December that ‘where automatic doors are sold with an integrated lock, it is in almost all cases a
      mechanical lock’.
514
      Form CO, Section D.1.6.1., paragraph 2032.
515
      Form CO, Table D.1.6.1.
516
      Questionnaire 1 for competitors, question 112; Questionnaire 3 for non-integrated suppliers,
      question 121.
517
      Questionnaire 1 for competitors, question 105.2.
518
      Questionnaire 1 for competitors, question 114.2; Questionnaire 3 for non-integrated suppliers,
      question 123.2.
                                                     136
 ---pagebreak---       and standardised character of locks, both mechanical and electromechanical, as
      well as the possibility to source these products from a broad range of lock
      manufacturers, wholesalers or locksmiths.519
      (B.ii)     Incentive
(599) Considering a narrow geographic market definition at national level, as mentioned
      in paragraph (595), the combined entity would have a significant presence both
      upstream and downstream (on the market for supply of at least one type of
      automatic pedestrian doors) in only a few countries.520
(600) Thus, in spite of the Notifying Party’s significant upstream market position (in the
      supply of locks), no incentive to engage in input foreclosure strategies arise from
      the Transaction due to the lack of Agta Record’s downstream activity (in the
      supply of automatic pedestrian doors). This is the case for the supply of all types of
      automatic pedestrian doors in Estonia and for the supply of revolving doors in
      Finland, Norway, Poland, Slovenia and Sweden. There may therefore be no
      incentive or any material change in the incentive to engage in foreclosure strategies
      on these markets.
(601) With respect to other countries where the Notifying Party holds a significant
      upstream market position (see paragraph (595), and in particular in Denmark (for
      sliding, swing and revolving doors), Latvia (for sliding and swing doors), Norway
      (for sliding and swing doors), Poland (for sliding and swing doors), Romania (for
      sliding and swing doors), Slovenia (for swing doors) and Spain (for sliding and
      swing doors), the downstream presence of the merged entity would remain below
      30%.521 Thus, an incentive to engage into any input foreclosure strategy (as well as
      an overall impact of such strategy) with regard to these markets would be limited.
(602) Furthermore, for several downstream markets where the Parties’ combined market
      shares are higher ([30-40]% for sliding doors in Finland, [50-60] % for revolving
      doors in Romania, [30-40]% for sliding and [30-40]% for swing doors in Sweden),
      the increments are not significant (respectively [0-5], [0-5], [0-5] and [0-5]
      percentage points). 522 With regard to revolving doors in Latvia, the relatively high
      increment of [10-20] percentage points relates to the sale of [0-5] doors.523 As a
      result, any change in the incentive to engage in a foreclosure strategy is unlikely to
      be material.
(603) Finally, concerns of increased concentration in downstream affected markets in
      Finland (swing doors with a combined market share of [30-40]% and an increment
      of [5-10] percentage points) and Slovenia (sliding doors with a combined market
519
      Form CO, Section D.1.4., paragraph 2024 and reply of the Notifying Party to question 2 of the
      request for information 15, 21 February 2020.
520
      The Parties’ market shares used in this section were submitted as Annex 7.2. to the Form CO.
521
      Combined market shares from the Commission’s market reconstruction: Denmark: [20-30]% for
      sliding doors, [10-20]% for swing doors and [20-30]% for revolving doors; Latvia: [10-20]% for
      sliding doors, [5-10]% for swing doors; Norway: [5-10]% for sliding doors, [20-30]% for swing
      doors, Poland: [20-30]% for sliding doors, [5-10]% for swing doors; Romania: [20-30]% for sliding
      doors, [10-20]% for swing doors; Slovenia: [10-20]% for swing doors; Spain: [10-20]% for sliding
      doors and [20-30]% for swing doors.
522
      Commission’s market reconstruction.
523
      Commission’s market reconstruction.
                                                      137
 ---pagebreak---       share of [30-40]% with an increment of [10-20] percentage points)524 are
      sufficiently addressed by the proposed commitments (see Section 9).
(604) In addition, while locks are considered an essential input for automatic pedestrian
      doors by the majority of competing OEMs and a predominant number of non-
      integrated suppliers,525 the majority of respondents do not consider them as a
      significant cost factor relative to the overall production costs of automatic
      pedestrian doors.526
(605) The majority of respondents to the market investigation also state that in the event
      of a significant price increase or difficulty to procure locks from Assa Abloy, they
      would have sufficient alternative suppliers to procure locks for automatic
      pedestrian doors at competitive market conditions.527
(606) Overall, the Commission finds that even if an ability could potentially be sustained
      on the basis of a narrow definition of the geographic market at national level, the
      merged entity would have a limited increased incentive to engage in input
      foreclosure strategies post-Transaction.
      (B.iii)   Overall impact
(607) As very few automatic pedestrian doors appear to be supplied with locks (see
      paragraph (597)), according to the results of the market investigation, the overall
      impact of a related input foreclosure strategy would be limited.
      (B.iv)    Conclusion on input foreclosure
(608) According to the results of the market investigation, the majority of respondents do
      not consider that the Transaction may affect their ability to procure locks for
      automatic pedestrian doors at competitive market conditions.528
(609) While the Commission finds appropriate to leave the relevant geographic market
      definition open in the present case, it finds that the merged entity would have no
      ability to engage in any successful input foreclosure strategy if the market was to
      be defined as EEA-wide. If the market was to be defined at national level, the
      merge entity would have limited, if any, incentive to implement such conduct. In
      any event, the overall impact of any input foreclosure strategy is unlikely to be
      material given the very limited volumes of automatic doors supplied with locks.
(610) On this basis, the Commission finds that the Transaction does not give rise to
      serious doubts of anticompetitive effects arising from input foreclosure strategies in
      relation to the supply of locks.
524
      Commission’s market reconstruction.
525
      Questionnaire 1 for competitors, question 115; Questionnaire 3 for non-integrated suppliers,
      question 124.
526
      Questionnaire 1 for competitors, question 116; Questionnaire 3 for non-integrated suppliers,
      question 125.
527
      Questionnaire 1 for competitors, question 117; Questionnaire 3 for non-integrated suppliers,
      question 126.
528
      Questionnaire 1 for competitors, question 118; Questionnaire 3 for non-integrated suppliers,
      question 127.
                                                138
 ---pagebreak---       (B.v)      Input foreclosure for electromechanical (also known as electrical or
                 electric) locks
(611) Over the course of the merger review process, the Commission received a
      complaint from a competing automatic pedestrian door OEM invoking the ‘[c]lear
      ability and incentives of the merged entity to engage in input foreclosure’ with
      regard to electric locks.529
(612) The complainant stresses that electric locks constitute an important part of the total
      value of automatic swing doors. It also submits that, post-Transaction, the merged
      entity is likely to reduce capacity and will have no incentive to supply its
      competitors at a competitive price level.
(613) According to the complainant, the merged entity’s ability to engage in input
      foreclosure stems from its significant market position in the supply of automatic
      pedestrian doors and a lack of alternative lock suppliers, in particular in view of the
      applicable switching time and costs. The complainant further states that the merged
      entity would have an incentive to engage in such behaviour to further weaken the
      remaining competing OEMs of automatic pedestrian doors.
(614) The Commission does not find the complainant’s concerns likely to materialise.
(615) Firstly, since the Commission’s market investigation related to locks in general,
      thus covering both mechanical and electromechanical locks, the conclusions drawn
      in the previous section can be applied to the present assessment.
(616) Secondly, whereas the Notifying Party submits that alternative suppliers are
      available, the complainant already multi-sources electrical locks from at least two
      suppliers.530
(617) Thirdly, the Parties do not supply their automatic pedestrian doors equipped with
      locks in general and with electromechanical locks in particular. The Notifying Part
      submits that the Parties are not aware of any cases where they have supplied an
      electromechanical lock together with either a swing door, a sliding door or a
      revolving door.531 Thus, the complainant’s concerns over capacity reduction and
      captive use of these locks by the merged entity do not seem likely to materialise.532
(618) Finally, the complainant’s arguments on the lengthy period necessary to qualify an
      alternative supplier and significant costs related to switching have not been
      substantiated.533 Moreover, these arguments are difficult to reconcile with the
      Notifying Party’s submission pointing to a lack of switching costs and barriers to
      entry.534
529
      Non-confidential version of the complaint submitted to the Commission by a competing OEM of
      automatic pedestrian doors on 5 February 2020.
530
      Reply of the complainant to question 4 of the request for information, 10 February 2020.
531
      Reply of the Notifying Party to question 2 of the request for information 15, 21 February 2020.
532
      Non-confidential version of the complaint submitted to the Commission by a competing OEM of
      automatic pedestrian doors on 5 February 2020.
533
      Reply of the complainant to question 3 of the request for information, 10 February 2020.
534
      Reply of the Notifying Party to question 2 of the request for information 15, 21 February 2020.
                                                      139
 ---pagebreak--- (619) On balance, the Commission finds no ground to sustain serious doubts that the
      merged entity is likely to have the ability or incentives to engage in an input
      foreclosure strategy with respect to electrical locks. In any event, the Commission
      takes note of the Notifying Party’s irrevocable offer to continue delivering the
      complainant for a period of eight years with the products delivered to it over the
      last three years, including electrical locks, in accordance with past volumes and at
      commercial terms in line with current supply conditions, thereby addressing the
      complainant’s concerns.
      (C)       Customer foreclosure for locks
      (C.i)     Ability
(620) According to the results of the market investigation, a large number of competing
      OEMs consider that suppliers of automatic pedestrian doors represent an
      insignificant share of the procurement of locks in the EEA.535 One respondent
      states that ‘[a]utomatic pedestrian doors represent a small percentage of the
      overall number of doors that are equipped with locks’536 and another one estimates
      the proportion of sales of (relevant types of) locks made to suppliers of automatic
      pedestrian doors to be 1%.537
(621) Thus, the Commission finds that the merged entity would have a limited ability to
      engage in customer foreclosure.
      (C.ii)    Incentive
(622) In view of the findings presented in paragraph (621) above, a customer foreclosure
      strategy is unlikely to increase upstream competitors’ costs and upstream prices to
      the benefit of the merged entity. Thus, the merged entity would have a limited
      incentive to engage in such conduct.
      (C.iii)   Overall impact
(623) In view of the findings presented in paragraph (621) and considering the limited
      ability and incentive for the merged entity to engage in customer foreclosure, such
      conduct is unlikely to have an overall impact on effective competition.
      (C.iv)    Conclusion on customer foreclosure
(624) On this basis, the Commission finds that the Transaction does not give rise to
      serious doubts of anticompetitive effects arising from customer foreclosure
      strategies in relation to the supply of locks.
535
      Questionnaire 1 for competitors, question 113.
536
      Questionnaire 1 for competitors, question 113.1.
537
      Questionnaire 1 for competitors, question 113.2.
                                                     140
 ---pagebreak--- 7.6.2.   Electric strikes
7.6.2.1. Notifying Party’s arguments
(625)    The Notifying Party describes electric strikes are ‘simple and accessible’
         products,538 and submits that its own electric strikes can be used with manual or
         automatic swing doors of any brand. Furthermore, it argues that electric strikes
         with the same functions can be sourced from other manufacturers, wholesalers,
         locksmiths and security specialists.
(626)    According to the Notifying Party, OEMs of automatic pedestrian doors have
         numerous alternative suppliers from whom they can source electric strikes of both
         Assa Abloy but also other manufacturers.539 In addition, the Notifying Party
         submits that there are no significant barriers to entry, considering the simple
         character of the technology and moderate costs (in particular for manufacturers of
         electromechanical locks), and that there are no switching costs.540
(627)    According to the Notifying Party’s submission, electric strikes represent less than
         5% of the overall cost of a swing door and do not constitute an important input for
         the downstream product market.541
(628)    The Notifying Party further submits that its sales of electric strikes directly to
         automatic door OEMs are ‘insignificant’.542 It also states that electric strikes are
         typically not supplied by automatic door suppliers but by, e.g., customers or
         suppliers of other automatic door hardware such as locksmiths.543
7.6.2.2. Commission’s assessment
(629)    Over the course of its market investigation, the Commission received a complaint
         regarding a risk of input foreclosure for electric strikes. The complaint insists on
         the complainant’s absolute reliance on the Notifying Party for the supply of electric
         strikes and argues that the latter are a key input for its automatic swing doors,
         constituting also a significant cost factor.
         (A)        Ability
(630)    According to its estimates, the Notifying Party’s share of supply of electric strikes
         to OEMs of automatic pedestrian doors both at the EEA-level and at national level
         within the EEA was below 20% in 2018, and is unlikely to have materially changed
         in 2019.544
(631)    Moreover, when asked about alternative suppliers, the complainant submits that
         while it could potentially source electric strikes from Dormakaba, there is a risk of
         the latter also engaging in input foreclosure due to its vertical integration into the
538
         Reply of the Notifying Party to question 2 the request for information 14, 11 February 2020.
539
         Reply of the Notifying Party to question 1 the request for information 14, 11 February 2020.
540
         Reply of the Notifying Party to question 1 the request for information 15, 21 February 2020.
541
         Reply of the Notifying Party to question 1 the request for information 14, 11 February 2020.
542
         Reply of the Notifying Party to question 3 of the request for information 14, 11 February 2020.
543
         Reply of the Notifying Party to question 1 of the request for information 14, 11 February 2020.
544
         Reply of the Notifying Party to question 1 the request for information 15, 21 February 2020.
                                                         141
 ---pagebreak---        supply of automatic pedestrian doors.545 However, the Notifying Party submits that,
       in addition to intermediaries, there are various other alternative suppliers of electric
       strikes in the EEA other than Dormakaba, e.g. Step lock, Dorcas, Nadal Badal (JIS
       Brand), Openers & Closers, BIRA and Fuhr. 546
(632)  The Commission therefore finds that the merged entity is unlikely to have the
       ability to engage in an input foreclosure strategy with respect to the supply of
       electric strikes.
       (B)        Incentive
(633)  Considering its limited share of supply and the availability of alternative suppliers
       (see paragraph (631)), the merged entity would also have limited incentive to
       engage in an input foreclosure strategy.
       (C)        Overall impact
(634)  According to the Notifying Party’s submission, electric strikes are generally not
       supplied by automatic door suppliers but by, e.g., customers or suppliers of other
       automatic door hardware such as locksmiths (see paragraph (628)). As a result the
       overall impact of any input foreclosure strategy initiated by the merged entity
       would be limited.
       (D)        Conclusion on input foreclosure
(635)  On balance, the Commission finds no ground to sustain serious doubts that the
       merged entity is likely to have the ability or incentive to engage in an input
       foreclosure strategy with respect to electric strikes, or that any such strategy could
       have a material impact. In any event, the Commission takes note of the Notifying
       Party’s irrevocable offer to continue delivering the complainant for a period of
       eight years with the products delivered to it over the last three years, including
       electric strikes, in accordance with past volumes and at commercial terms in line
       with current supply conditions, thereby addressing the complainant’s concerns.
7.7.   Sensors
(636)  Sensors constitute an input for automatic pedestrian doors. Among the Parties, only
       Assa Abloy is active in the supply of sensors. The Transaction may therefore only
       give rise to potential non-coordinated vertical effects in relation to the supply of
       sensors.
7.7.1. Notifying Party’s arguments
(637)  The Notifying Party submits that the Transaction would not lead to any foreclosure
       concerns.547
(638)  In particular, it puts forwards that there will be no risk of input foreclosure. 548 First,
       the Notifying Party considers its subsidiary Cedes to be a relatively small supplier
545
       Reply of the complainant to question 5 of the request for information, 10 February 2020.
546
       Reply of the Notifying Party to question 4 the request for information 14, 11 February 2020.
547
       Form CO, Section D.2.1., paragraph 2050.
548
       Form CO, Section D.2.4.1.
                                                       142
 ---pagebreak---        of sensors, without any significant market power. It also submits that there are
       many suppliers of sensors to whom OEMs could switch in case of any foreclosure
       attempts.
(639)  Moreover, the Notifying Party further claims that customer foreclosure will not
       materialise either.549 First, the Notifying Party argues that there is no risk of
       merger-specific customer foreclosure as the Parties cannot easily and swiftly
       switch to self-sourcing due to limited compatibility of Cedes’ sensors with both
       Agta Record’s and Assa Abloy’s automatic pedestrian doors as well as lack of
       compatibility of Agta Record’s sensors and Assa Abloy’s automatic pedestrian
       doors. Second, the Notifying Party insists on its small share of the customer base
       for sensors in the EEA. As Parties’ sourcing is partitioned among several sensor
       suppliers, they do not represent an important customer for any of the latter.
7.7.2. Commission’s assessment
(640)  According to the estimates provided in the Form CO, at the EEA level, shares of
       Cedes are [0-5]% for the supply of sensors for automatic doors in general and,
       respectively, [0-5]% for the supply of sensors for automatic pedestrian doors and
       [5-10]% for the supply sensors for industrial doors.550 As a result, the combined
       entity is unlikely to have the ability and incentive to engage in any successful input
       foreclosure strategy in relation to the supply of sensors.
(641)  The combined entity is unlikely to have the ability to engage in customer
       foreclosure strategies due to the lack of full compatibility between the Parties’
       respective sensors and automatic pedestrian doors (see paragraph (639)). Moreover,
       considering that the relevant geographic product market for sensors is at least EEA-
       wide, one can take the Parties’ combined market shares at the EEA-level for
       different types of automatic pedestrian doors (i.e. [10-20]% for swing, [20-30]%
       for sliding and [10-20]% for revolving doors)551 as a proxy for their share of the
       demand for sensors. This proxy has to be further adjusted to account for the fact
       that Agta Record sources only around [40-50]% of its sensors externally.552 On this
       basis, and considering that the Parties’ sourcing is partitioned between different
       external suppliers, it can be concluded that the Parties do not constitute an
       important customer for any specific sensor manufacturer.553
(642)  As a result, the Commission finds that the Transaction does not give rise to serious
       doubts of anticompetitive effects arising from vertical foreclosure strategies in
       relation to the supply of sensors.
549
       Form CO, Section D.2.4.2.
550
       Form CO, Tables D.2.4.1.(1), D.2.4.1.(2) and D.2.4.1.(3).
551
       Form CO, Annex 7.2.
552
       Form CO, Section D.2.4.2., paragraph 2082.
553
       Form CO, Section D.2.4.2., paragraph 2083.
                                                    143
 ---pagebreak--- 8.    COMPETITIVE ASSESSMENT: COORDINATED EFFECTS
8.1.  Notifying Party’s arguments
(643) The Notifying Party argues that no coordinated effects would arise as a result of the
      Transaction in the supply of swing and sliding doors to non-integrated suppliers
      because: (i) the market conditions are not conducive to coordination as there are no
      common reference points around which terms of coordination can be reached and
      the markets are non-transparent; and (ii) the large number of market participants of
      varying size makes coordination impossible and easily defeated by competitors and
      customers.554
(644) Furthermore, the Notifying Party submits that no coordinated effects would arise as
      a result of the Transaction in the supply of swing, sliding and revolving doors to
      end-customers because: (i) the market conditions are not conducive to coordination
      as there are no common reference points around which terms of coordination can
      be reached and the market is non-transparent; and (ii)the large number of market
      participants of varying size active in both the direct and indirect channels makes
      coordination impossible and easily defeated by competitors and customers.555
8.2.  Commission’s assessment
(645) Overall, the Commission’s market investigation confirms the Notifying Party’s
      argument on the existence of a significant number of players of different sizes
      active in the direct and indirect sale channels in different national markets. First, as
      described in Section 7.2., the relative market position of OEMs differ across
      national markets and product categories, and there are different OEMs active
      predominantly in one or a limited number of national markets. Secondly, whereas
      the Commission considers that players in the indirect sales channel do not exercise
      the same level of competitive constraint on the Parties as other OEMs, the presence
      of these indirect sales players is such as to hinder the ability of companies to reach
      a common understanding on the terms of coordination.
(646) Furthermore, the different market position of the different OEMs across countries
      and product categories also reflects differentiated positioning in terms of size and
      cost structures across these different countries. This asymmetry is also such as to
      make it harder for companies to reach a common understanding on the terms of
      coordination.
(647) The market investigation also revealed that, although Assa Abloy is often viewed
      as the industry leader at the level of the EEA, market leaders differ from country to
      country and across product categories.556 The variations in market positions across
      countries and product categories corroborate this point. In addition, a majority of
      competitors consider that other suppliers do not tend to follow the price increase of
      the market leader.557 Generally, the outcome of the market investigation reveals
554
      Form CO, paragraph 603.
555
      Form CO, paragraph 943.
556
      Questionnaire 1 for competitors, question 23; questionnaire 3 for non-integrated suppliers, question
      31.5.
557
      Questionnaire 1 for competitors, question 23.4. See also questionnaire 3 for non-integrated
      suppliers, question 31.4.
                                                    144
 ---pagebreak---       that there is no consistent pattern of price adjustment in the industry or a common
      understanding of the frequency and modalities of price increases. 558 Respondents
      indicated that pricing depends on a broad range of variables (size, feature,
      servicing, etc.), which renders any price comparison or the identification of a
      market price difficult.
(648) In addition, the Notifying Party’s argument on the lack of market transparency is
      corroborated by discrepancies between the Notifying Party’s estimates of
      competitors’ market shares and the market reconstruction conducted by the
      Commission. In particular, there seems to be no well-known and widely used
      industry reports ensuring market transparency to a level capable of enabling firms
      to monitor deviations from coordination and to stabilise coordinated behaviour.
(649) On balance, the Commission finds that the Transaction does not give rise to serious
      doubts of coordinate effects. In any event, the commitments submitted by the
      Notifying Party address concerns of increased concentration arising from the
      Transaction and thereby also address the risk that the Transaction may facilitate or
      strengthen coordination in the relevant markets.
9.    COMMITMENTS
9.1.  Introduction
(650) Where a concentration raises serious doubts as regards its compatibility with the
      internal market, the Parties may undertake to modify the concentration so as to
      remove the grounds for the serious doubts identified by the Commission. Pursuant
      to Article 6(2) of the Merger Regulation, where the Commission finds that,
      following modification by the undertakings concerned, a notified concentration no
      longer raises serious doubts, it shall declare the concentration compatible with the
      internal market pursuant to Article 6(1)(b) of the Merger Regulation.
(651) As set out in the Commission’s Remedies Notice,559 commitments have to
      eliminate the competition concerns entirely, and have to be comprehensive and
      effective from all points of view.560
(652) In the first phase of the Commission's investigation of a concentration (‘Phase I’),
      commitments offered by the Parties can only be accepted where the competition
      concerns are readily identifiable and can easily be remedied. The competition
      concerns therefore need to be straightforward and the remedies clear-cut and
      sufficient to clearly rule out ‘serious doubts’ within the meaning of Article 6(1)(c)
      of the Merger Regulation, so that it is not necessary to enter into an in-depth
      (‘Phase II’) investigation. Where the assessment confirms that the proposed
558
      Questionnaire 1 for competitors, questions 23.5 and 24, questionnaire 3 for non-integrated suppliers,
      question 31.3 and 31.4.
559
      Commission Notice on remedies acceptable under Council Regulation (EC) No 139/2004 and under
      Commission Regulation (EC) No 802/2004 (OJ C 267, 22.10.2008, pages 1 to 27) (‘the Remedies
      Notice’).
560
      Remedies Notice, paragraphs 9 and 61.
                                                    145
 ---pagebreak---        commitments remove the grounds for serious doubts on this basis, the Commission
       clears the concentration in Phase I.561
(653)  In assessing whether commitments will maintain effective competition, the
       Commission considers all relevant factors, including the type, scale, and scope of
       the proposed commitments, with reference to the structure and particular
       characteristics of the market in which the concentration is likely to significantly
       impede effective competition, including the position of the Parties and other
       participants on the market.562
(654)  In order for commitments to comply with those principles, they must be capable of
       being implemented effectively within a short period of time. Concerning the form
       of acceptable commitments, the Merger Regulation gives discretion to the
       Commission as long as the commitments meet the requisite standard. Structural
       commitments will meet the conditions set out above only in so far as the
       Commission is able to conclude with the requisite degree of certainty, at the time of
       its Decision, that it will be possible to implement them and that it will be likely that
       the new commercial structures resulting from them will be sufficiently workable
       and lasting to ensure that effective competition will be maintained. 563 Divestiture
       commitments are normally the best way to eliminate competition concerns
       resulting from horizontal overlaps.
9.2.   Procedure
(655)  In order to render the Transaction compatible with the internal market, the Parties
       submitted a set of commitments under Article 6(2) of the Merger Regulation on 6
       February 2020 (the ‘Initial Commitments’). The Commission market tested the
       Initial Commitments in order to assess whether they are sufficient and suitable to
       remedy the serious doubts identified in Section 7 of this Decision. Following the
       feedback received during the market test, the Initial Commitments were refined and
       improved. The Parties submitted amended commitments on 24 February 2020 (the
       ‘Final Commitments’). The Final Commitments are annexed to this Decision and
       form an integral part thereof.
9.3.   Initial Commitments
9.3.1. Description of the Initial Commitments
(656)  On 6 February 2020, the Notifying Party proposed as ‘Initial Commitments’ to
       divest a Divestment Business composed of: (i) Agta Record’s automatic pedestrian
       door business (final assembly, sales, distribution, installation and after-sales
       services) in the Netherlands, Austria, Hungary and Slovenia; (ii) Assa Abloy’s
       automatic pedestrian door business (sales, distribution, installation and after-sales
       services) in France and the United Kingdom; (iii) an exclusive licence to market
       and sell Agta Record’s automatic pedestrian door products in Czechia, Finland and
       Iceland for 5 years; and (iv) Agta Record’s high-speed door business
       (manufacturing assets, IP and production and sales people) located in France.
561
       Remedies Notice, paragraph 81.
562
       Remedies Notice, paragraph 12.
563
              Remedies Notice, paragraph 10.
                                                  146
 ---pagebreak--- (657)  The Divestment Business included, at the option of the purchaser, the transitional
       benefit of arrangements under which the Parties supply products and services to the
       Divestment Business, including: (i) three year supply of Agta Record and Assa
       Abloy’s products, spare parts and related services at cost (five years for the
       exclusive licence in Czechia, Finland and Iceland); (ii) three year royalty-free
       licence of all of Agta record and Assa Abloy’s trademarks, brands, trade names,
       product lines and know-how, followed by a two-year blackout period; and (iii)
       supply of technical information and after-sales and installation configuration tools
       and software (at cost) for the lifetime of the Agta Record and Assa Abloy products
       in operation in the relevant countries and those to be installed by the purchaser over
       the first three years after closing.
(658)  In addition, the Initial Commitments included behavioural commitments to supply
       standard brand-specific spare parts, technical information and after-sales and
       installation configuration tools and software from the Parties to third-party service
       providers in Belgium, Bulgaria, Cyprus, Denmark, Germany, Greece, Italy, Latvia,
       Malta, Poland, Portugal, Romania, Spain and Sweden on fair and reasonable terms
       for a period of five years, including by means of an online marketplace.
(659)  The Initial Commitments included all assets and staff that contribute to the current
       operations or are necessary to ensure the viability and competitiveness of the
       Divestment Business. These are mainly: (i) tangible assets such as premises,
       machinery and equipment, vehicles and stock; (ii) personnel; (iii) intangible assets
       such as intellectual property rights; (iv) permits, licences and authorisations; (v)
       customer agreements and relationships as well as supply agreements; and (vi)
       customer, credit and other records.
(660)  Moreover, the Initial Commitments provided for special suitability criteria
       applicable to the potential purchaser of the Divestment Business. Accordingly, in
       addition to standard criteria, the purchaser must (i) be an original equipment
       manufacturer (OEM) of automatic pedestrian doors and components to such doors (or
       a supplier of industrial doors for the high-speed industrial door business), owning
       proprietary designs and operating adequate manufacturing facilities; and (ii) have a
       significant footprint in the EEA complementary to that of the Divestment Business.
(661)  Furthermore, the Notifying Party committed not to implement the Transaction before
       it, or the Divestiture Trustee, has entered into a final binding sale and purchase
       agreement for the sale of the Divestment Business and the Commission has approved
       the Purchaser and the terms of sale in accordance with the procedure set out in the
       Initial Commitments.
(662)  Finally, the Notifying Party made related commitments, inter alia regarding the
       separation of the Divestment Business from the retained business, the preservation of
       the viability, marketability and competitiveness of the Divestment Business, including
       the appointment of a monitoring trustee and, if necessary, a divestiture trustee.
9.3.2. Results of the market test
(663)  The Commission launched a market test of the First Commitments on 10 February
       2020, which was addressed to competitors, non-integrated suppliers and end-
       customers.
                                                147
 ---pagebreak--- (664) Overall, a majority of respondents to the market test considered that the proposed
      commitments were appropriate to eliminate the competition concerns raised by the
      Transaction.564 However, some respondents to the market test identified areas for
      improvement.
(665) With respect to the divestiture of the Parties’ automatic pedestrian doors
      operations, respondents indicated that:
      (a)     The three-year duration of the transitional supply arrangements and
              ancillary brand licenses was insufficient.565 A majority of respondents
              indicated that five years would be acceptable;
      (b)     The exclusivity of the brand licences should be clarified to avoid
              circumvention and customer non-solicitation covenants should be
              included;566
      (c)     The duration of the transitional arrangement for access to spare parts,
              technical information and servicing tools should extend to the life time of
              the automatic doors in operation in the relevant countries;567 and
      (d)     The Divestment Business should also include a technology transfer and the
              divestiture of brands (i.e., not only a transitory licence), with a view to
              strengthening the long-term competitiveness of the Divestment Business.
(666) With respect to the divestiture of Agta Record’s industrial high-speed door
      business, respondents indicated that:
      (a)     Brands should also be divested;568
      (b)     The 3-year duration of the transitional supply arrangements and ancillary
              brand licenses was insufficient;569
      (c)     The exclusion of a steel cutting machine and a steel trimming machine
              could negatively impact the viability of the Divestment Business;
      (d)     Additional measures to facilitate the transfer of the divested assets to a
              separate location in the vicinity of the current plant should be foreseen;570
      (e)     The inclusion of other doors within the portfolio of the industrial high-speed
              door business would improve the viability of the Divestment Business; and
      (f)     The high-speed industrial door business should be structured as a separate
              divestment business that could be offered to a distinct purchaser, active in
              industrial doors.
564
      Market test questionnaire, question 1.
565
      Market test questionnaire, questions 12 to 16.
566
      Market test questionnaire, question 2.2.
567
      Market test questionnaire, questions 14 and 15.
568
      Market test questionnaire, question 24.1.
569
      Market test questionnaire, question 36.
570
      Market test questionnaire, question 30.
                                                     148
 ---pagebreak--- (667)  In relation to the behavioural commitments, respondents indicated that:
       (a)       The five-year duration of the behavioural commitments was insufficient in
                 comparison with the life cycle of automatic pedestrian doors. Respondents
                 converged around ten years as an acceptable duration;571
       (b)       The ‘fair and reasonable’ terms governing the pricing of the supply
                 obligation should be clarified;572 and
       (c)       A neutral forum for dispute resolution should be set up instead of,
                 ultimately, Stockholm (i.e., the seat of Assa Abloy).573
(668)  Two complainants opposed the design and modalities of the Initial Commitments
       as part of the market test and, in particular, claimed that automatic pedestrian door
       manufacturing assets should be part of the Divestment Business.574 One of these
       complainants further submitted that the Initial Commitments were insufficient as
       (i) they were not ‘clear cut’; (ii) consisted in a ‘complex mix-and-match solution of
       assets’; (iii) lacked scale in view of the overlaps between the Parties’ activities; and
       (iv) raised doubts as to whether a suitable purchaser could be found.575
9.3.3. Commission’s assessment of the Initial Commitments
(669)  The Commission notes that the Initial Commitments removed the overlap between
       the Parties’ activities in those national markets where the Transaction would have
       raised serious doubts as to its compatibility with the internal market and the EEA-
       agreement. In addition, the Initial Commitments were capable of removing all other
       competition concerns raised by the Transaction, as discussed in Section 7,
       including those of a vertical and conglomerate nature.576 Thus, the Commission
       considers that the Initial Commitments were in principle sufficient to address the
       identified competition concerns, and thus could be subject to market test.
(670)  In addition, while the Initial Commitments included the divestiture of both Agta
       Record’s and Assa Abloy’s operations at national level (namely Agta Record’s
       automatic pedestrian door business in the Netherlands, Austria, Hungary and
       Slovenia and Assa Abloy’s automatic pedestrian door business in France and the
       United Kingdom), the Commission notes that (i) the Initial Commitments did not
571
       Market test questionnaire, question 41.
572
       Market test questionnaire, question 42.
573
       Market test questionnaire, question 2.2.
574
       Market test questionnaire, question 2.1.
575
       Market test questionnaire, question 2.1.
576
       As stated in Section 7.5.1.2., the risk of conglomerate effects in relation to the supply of access
       control systems and components is addressed by the proposed commitments. In effect, Agta Record
       is not active in the supply of access control systems and components whereas Assa Abloy is already
       active both in the supply of automatic pedestrian doors and of access control systems and
       components. Hence, in the present case, conglomerate effects would arise as a result of the
       combination of the Parties’ activities in the supply of automatic pedestrian doors. However, the
       proposed commitments address the Commission’s concerns relating to increased concentration in
       the supply of automatic pedestrian doors arising from the Transaction. As a result, the Commission
       finds that, on balance, the Transaction is unlikely to give the combined entity an increased ability or
       increased incentives to engage in successful conglomerate strategies, at least to a material extent,
       compared to the Notifying Party today.
                                                        149
 ---pagebreak---        entail a mix-and-match of assets at national level, or otherwise; and (ii) each
       business to be divested at national level each constitutes a stand-alone business.
       Indeed, the Initial Commitments include all the relevant assets which the national
       businesses currently use to operate in the relevant national markets.
(671)  In addition, the Initial Commitments included, for a transitional period, the
       guaranteed supply of the products and services currently sold or used in the day-to-
       day operation of the various national businesses to be divested. Hence, the Initial
       Commitments ensured the seamless continued operation of the Divestment
       Business. The Initial Commitments were designed in such a way, notably by
       specifying specific purchaser criteria, that over time these products and services
       would be provided by the purchaser, including from its own manufacturing
       facilities. In turn, the fact that the Divestment Business did not include own
       manufacturing assets, beyond final assembly, was not such as to render the Initial
       Commitments improper in view of the integrated structure of the supply chains in
       the industry, the fact that manufacturing takes place largely by manual assembly of
       various components, and that capacity is not constrained and can be scaled with
       limited investments and time.
(672)  Moreover, the Commission undertook to verify the profitability of the Divestment
       Business based on profit and loss data submitted by the Parties, and concluded that
       it was profitable.
(673)  Accordingly, the Commission concluded that the Divestment Business was a stand-
       alone business and that Initial Commitments were in principle sufficiently clear-cut
       to address the serious doubts arising from the Transaction.
(674)  In response to the market test, a number of companies active as OEMs of automatic
       pedestrian doors expressed a general interest in the acquisition of the Divestment
       Business.577 Of these, none made their interest conditional on the inclusion of
       manufacturing assets. Some additional respondents indicated the interest in parts of
       the Divestment Business.578 The Commission therefore considers that there is
       sufficient credible interest for the acquisition of the Divestment Business by
       potential purchasers.
(675)  The Commission moreover notes the Notifying Party's commitment not to
       implement the Transaction before the Commission approves the Purchaser, limits
       the risk related to not finding a suitable purchaser.
9.3.4. Conclusion on the Initial Commitments
(676)  On the basis of the above, the Commission concludes that the Initial Commitments
       were generally suitable to address the competition concerns and serious doubts
       identified by the Commission in Section 7. However, as explained in Section 9.3.2,
       the market test pointed towards some shortcoming in the Initial Commitments,
       which could negatively impact the viability and competitiveness of the Divestment
       Business. The Initial Commitments were subsequently refined and improved to
       address these shortcomings.
577
       Market test questionnaire, question 49.
578
       Market test questionnaire, question 49.3.
                                                 150
 ---pagebreak--- 9.4.   Final Commitments
9.4.1. Description of the Final Commitments
(677)  On 20 February 2020, the Notifying Party submitted modifications to the Initial
       Commitments (the ‘Final Commitments’).
(678)  The main modifications are as follows:
       (a)    the addition of an EEA-wide non-exclusive licence to the entirety of Agta
              Record’s automatic pedestrian door technology (including patents, designs,
              copyrights, trade secrets, know-how and data used in connection with the
              manufacturing of its automatic pedestrian doors, along with access to all
              relevant project notebooks, design history files, drawings, product
              specifications,     manufacturing       process     descriptions,     validation
              documentation, packaging specifications and quality control standards);
       (b)    the addition of the transfer, at the option of the purchaser, of a number of
              brands (formerly) used by the Parties in the marketing and supply of either
              automatic pedestrian doors or industrial doors;
       (c)    the extension of the transitional arrangements for the supply of products and
              service to the Divestment Business from three to five years;
       (d)    the clarification that access to spare parts, technical information and
              servicing tools is granted for the life span of the products in operation in the
              relevant countries (including for the three export countries, namely Czechia,
              Finland and Iceland);
       (e)    the inclusion of a customer non-solicitation clause of five years;
       (f)    the extension of the scope of the Divestment Business pertaining to The
              Netherlands so as to include Belgium;
       (g)    for high-speed industrial doors, the inclusion of additional
              servicing/installation personnel, of steel cutting and steel trimming
              machines, and of a transitory supply arrangement for the purchaser to
              procure at cost complementary products (known as overhead sectional
              doors), as well as an extension of the duration of transitional arrangements
              for the supply of products and services from three to five years and
              additional measures to facilitate the transfer of the business to nearby
              premises;
       (h)    the definition of the ‘fair and reasonable terms’ under the behavioural
              commitments in reference to indexed historical realised prices; and
       (i)    the extension of the duration of behavioural commitments from five to ten
              years with an option for further extension.
(679)  The Final Commitments also separate the initial Divestment Business into an
       automatic pedestrian door business (‘Divestment Business APD’) and an industrial
       high-speed door business (‘Divestment Business HSD’), and clarifies the
       possibility that these two businesses could be sold to different purchasers.
                                               151
 ---pagebreak--- 9.4.2. Commission’s assessment of the Final Commitments
(680)  The Commission considers that the Final Commitments effectively address the
       shortcomings of the Initial Commitments set out in Section 9.3.2, as revealed by
       the market test.
(681)  In particular, the Final Commitments include a broad technology transfer that
       ensures that the purchaser of the Divestment Business will be able to develop a
       portfolio of products at least equivalent to that of Agta Record. In addition, transfer
       of the ownership over a number of brands, including brands used in the supply of
       industrial doors, is such as to facilitate the long-term competitiveness of the
       Divestment Business. The duration of transitional arrangements and of the
       behavioural commitments have also been extended in line with the market test
       feedback. The terms of transitional arrangements have also been clarified, notably
       with respect to the availability of spare parts, in order to give the purchaser the
       ability to service the installed base of the Divestment Business over an extended
       period of time. The addition of a five-year customer non-solicitation clause will
       preserve the viability of the Divestment Business and contribute to create stable
       conditions for the transitioning and integration therefor with the purchaser. The
       scope and viability of the Divestment Business in relation to industrial high-speed
       doors is also strengthened, notably to guarantee its attractiveness, facilitate its
       relocation and ensure its competitiveness over time.
(682)  The Commission notes that, in response to the market test, two complainants
       referred to the need to include manufacturing assets as part of the Divestment
       Business, which has not been made part of the Final Commitments.579 One of the
       complainant is not currently an OEM of automatic pedestrian doors and thus does
       not operate its own manufacturing assets, as required under the purchaser
       suitability criteria. The other complainant expressed concerns that, by retaining the
       manufacturing capabilities of Agta Record, Assa Abloy would still be able to
       realise part of the scale and cost efficiencies associated with the Transaction.580
       That complainant otherwise indicated a possible interest for the Divestment
       Business, as proposed by the Notifying Party.
(683)  The Commission considers that the non-inclusion of manufacturing assets would
       not render the Final Commitments inappropriate to eliminate the competition
       concerns and serious doubts raised by the Transaction.
(684)  In this regard, the Commission notes that, in addition to the considerations spelled
       out in the assessment of the Initial Commitments, the Divestment Business is made
       of several separate national businesses with all of their relevant assets, including
       the necessary supply of inputs upstream, and no respondent to the market test
       interested in purchasing the Divestment Business made this interest conditional on
       the inclusion of manufacturing assets. To the contrary, certain respondents to the
       market test expressly indicated that including manufacturing assets was not
       necessary,581 notably as it could result in efficiency losses for the purchaser if it
       was to operate different manufacturing facilities in different locations.
579
       Market test questionnaire, question 2.1.
580
       See also minutes of a call with the complainant on 18 February 2020.
581
       See also minutes of a call with a competing OEM on 18 February 2020.
                                                      152
 ---pagebreak--- (685)   Moreover, according to the special criteria laid down in the Final Commitments,
        the purchaser must (i) be an original equipment manufacturer (OEM) of automatic
        pedestrian doors and components to such doors, owning proprietary designs and
        operating adequate manufacturing facilities; and (ii) have a significant footprint in
        the EEA complementary to that of the Divestment Business. This will ensure that
        the Divestment Business will still be supplied with the required inputs to continue
        operating as a viable and competitive business on a lasting basis.
(686)   Overall, the Final Commitments are designed to enable the purchaser to acquire a
        significant operational presence and scale in a number of EEA countries, i.e., in all
        countries and for all product categories in relation to which serious doubts arise, to
        service the installed base of the Divestment Business over the life span of the
        relevant products and to develop a comprehensive product portfolio, while limiting
        any impact on its own supply chain.
9.4.3. Conclusion on the Final Commitments
(687)   For the reasons outlined above, the Final Commitments offered by the Notifying
        Party are sufficient to fully eliminate the Commission’s serious doubts as to the
        compatibility of the Transaction with the internal market and the functioning of the
        EEA Agreement, as identified in Section 7, and complies with the clear-cut
        standard applicable to Phase I remedies.
10.    CONDITIONS AND OBLIGATIONS
(688)   Under the first sentence of the second subparagraph of Article 6(2) of the Merger
        Regulation, the Commission may attach to its decision conditions and obligations
        intended to ensure that the undertakings concerned comply with the commitments
        they have entered vis-à-vis the Commission with a view to rendering the
        concentration compatible with the internal market
(689)   The fulfilment of the measures that gives rise to the structural change of the market
        is a condition, whereas the implementing steps that are necessary to achieve this
        result are generally obligations on the parties. Where a condition is not fulfilled, the
        Commission's decision declaring the concentration compatible with the internal
        market is no longer applicable. Where the undertakings concerned commit a breach
        of an obligation, the Commission may revoke the clearance decision in accordance
        with Article 6(3) of the Merger Regulation. The undertakings concerned may also
        be subject to fines and periodic penalty payments under Articles 14(2) and 15(1) of
        the Merger Regulation.
(690)   In accordance with the basic distinction between conditions and obligations
        described in the preceding paragraph, the commitments set forth in Sections B, D,
        F and G of the Final Commitments, and the respective Schedules 1 to 8 and their
        annexes, constitute conditions attached to this decision, as only through full
        compliance therewith can the structural changes in the relevant markets be
        achieved. The other commitments set out in the Annex constitute obligations, as
        they concern the implementing steps which are necessary to achieve the
        modifications sought in a manner compatible with the internal market and the
        functioning of the EEA Agreements.
                                                 153
 ---pagebreak--- (691) The full text of the Final Commitments, together with Schedules 1 to 8 and annexes
      to these Schedules, is attached as the Annex to this Decision and forms an integral
      part of it.
11.   CONCLUSION
(692) For the above reasons, the Commission has decided not to oppose the notified
      operation as modified by the Final Commitments and to declare it compatible with
      the internal market and with the functioning of the EEA Agreement, subject to full
      compliance with the conditions set out in Sections B, D, F and G of the Final
      Commitments, and the respective Schedules 1 to 8 and their annexes, as annexed to
      this decision and with the obligations contained in the other sections of the said
      Final Commitments. This decision is adopted in application of Article 6(1)(b) in
      conjunction with Article 6(2) of the Merger Regulation and Article 57 of the EEA
      Agreement.
                                                  For the Commission
                                                  (Signed)
                                                  Margrethe VESTAGER
                                                  Executive Vice-President
                                              154
 ---pagebreak---                                           […]
                                                                                    20th February 2020
   COMMITMENTS TO THE EUROPEAN COMMISSION
   CASE M.9408 – ASSA ABLOY / AGTA RECORD
   Pursuant to Article 6(2) of Council Regulation (EC) No 139/2004 (the “Merger
   Regulation”), ASSA ABLOY Holding AB, reg. no. 559180-8646, a subsidiary of ASSA
   ABLOY AB (publ), reg. no. 556059-3575 (ASSA ABLOY AB (publ) and its subsidiaries
   are hereinafter referred to as the “Notifying Party” or “ASSA ABLOY”) hereby enters into
   the following commitments (the “Commitments”) vis-à-vis the European Commission (the
   “Commission”) with a view to rendering the acquisition of sole control within the meaning
   of Article 3(1)(b) of the Merger Regulation of agta record ag, reg. no. CHE-101.395.724,
   and its direct and indirect subsidiaries (“agta record”) by ASSA ABLOY (the
   “Concentration”) compatible with the internal market and the functioning of the EEA
   Agreement.
   This text shall be interpreted in light of the Commission’s decision pursuant to Article
   6(1)(b) of the Merger Regulation to declare the Concentration compatible with the internal
   market and the functioning of the EEA Agreement (the “Decision”), in the general
   framework of European Union law, in particular in light of the Merger Regulation, and by
   reference to the Commission Notice on remedies acceptable under Council Regulation
   (EC) No 139/2004 and under Commission Regulation (EC) No 802/2004 (the “Remedies
   Notice”).
   SECTION A. DEFINITIONS
1. For the purpose of the Commitments, the following terms shall have the following
   meaning:
   agta record: agta record ag, reg. no CHE-101.395.724, incorporated under the laws of
   Switzerland, with its registered office at Allmendstrasse 24, 8320 Fehraltorf, Switzerland,
   and its subsidiaries.
   Affiliated Undertakings: undertakings controlled by the Parties and/or by the ultimate
   parents of the Parties, whereby the notion of control shall be interpreted pursuant to Article
   3 of the Merger Regulation and in light of the Commission Consolidated Jurisdictional
   Notice under Council Regulation (EC) No 139/2004 on the control of concentrations
   between undertakings (the "Consolidated Jurisdictional Notice").
   ASSA ABLOY: ASSA ABLOY AB (publ), reg. no. 556059-3575, incorporated under the
   laws of Sweden, with its registered office at Box 70340, SE-10723 Stockholm, Sweden,
   and its subsidiaries.
   Assets: all assets that contribute to the current operations or are necessary to ensure the
   viability and competitiveness of the Divestment Business APD and the Divestment
 ---pagebreak---                                                                                     2
Business HSD as indicated in Section B, paragraph 8(a), (b) and (c) and described more in
detail in the Schedules.
Automatic pedestrian doors: Swing, sliding and revolving doors, as well a certain
specialty automatic pedestrian door products (including hermetic doors) provided by the
Parties.
Closing: the transfer of the legal title to the Divestment Business APD and the Divestment
Business HSD to the Purchaser.
Closing Period: the period of 3 months from the approval of the Purchaser and the terms
of sale by the Commission.
Concentration: the acquisition of agta record by ASSA ABLOY.
Confidential Information: any business secrets, know-how, commercial information, or
any other information of a proprietary nature that is not in the public domain.
Conflict of Interest: any conflict of interest that impairs the Trustee's objectivity and
independence in discharging its duties under the Commitments.
Divestment Business APD: the automatic pedestrian door businesses defined in paragraph
6 of these Commitments and in Schedules 1 to 6, which the Notifying Party commits to
divest.
Divestment Business HSD: the industrial high-speed door business defined in paragraph 7
of these Commitments and in Schedule 7, which the Notifying Party commits to divest.
Divestiture Trustee: one or more natural or legal person(s) who is/are approved by the
Commission and appointed by ASSA ABLOY and who has/have received from ASSA
ABLOY the exclusive Trustee Mandate to sell the Divestment Business APD and the
Divestment Business HSD to a Purchaser at no minimum price.
Effective Date: the date of adoption of the Decision.
Fair and reasonable terms: price not exceeding the average country-specific per-unit
realised price at which either ASSA ABLOY or agta record, depending on the origin of the
product in question, supplied the said product during the period of either the last 12-months
or the last three years prior to the closing of the Concentration, whichever is more
favourable for the customer, as adjusted at the end of each consecutive period of twelve
(12) months based on an objective and customary industry index (reflecting, e.g.,
developments in the cost of raw materials, inflation, currency fluctuation). The prices
calculated according to the above factors, including subsequent adjustments, shall be
submitted to the Monitoring Trustee for approval, in consultation with the Commission,
prior to being implemented. The Notifying Party shall disclose to the Monitoring Trustee
all necessary information to enable an assessment of the compliance of the proposed fair
and reasonable terms with the Commitments.
First Divestiture Period: the period of [Duration] from the Effective Date.
Hold Separate Manager: the person appointed by ASSA ABLOY for the Divestment
Business APD and the Divestment Business HSD to manage the day-to-day business under
the supervision of the Monitoring Trustee.
 ---pagebreak---                                                                                    3
Key Personnel: all personnel necessary to maintain the viability and competitiveness of
the Divestment Business APD and the Divestment Business HSD, as listed in the
Schedules, including the Hold Separate Manager.
Monitoring Trustee: one or more natural or legal person(s) who is/are approved by the
Commission and appointed by ASSA ABLOY and who has/have the duty to monitor
ASSA ABLOY’s compliance with the conditions and obligations attached to the Decision.
Parties: ASSA ABLOY and agta record.
Personnel: all staff currently employed by the Divestment Business APD and the
Divestment Business HSD, including staff seconded to the Divestment Business APD and
the Divestment Business HSD, shared personnel as well as the additional personnel listed
in the Schedules.
Purchaser: the entity approved by the Commission as acquirer of the Divestment Business
APD and/or of the Divestment Business HSD, in accordance with the criteria set out in
Section D.
Purchaser Criteria: the criteria laid down in paragraph 22 of these Commitments that the
Purchaser must fulfil in order to be approved by the Commission.
Schedules: schedule 1-8 to these Commitments, describing more in detail the Divestment
Business APD and the Divestment Business HSD.
Standard brand-specific spare parts: spare parts specific for ASSA ABLOY’s and agta
record’s automatic pedestrian door products (including the motor, the drive unit and the
control board), not including spare parts that are made-to-order for a specific customer (for
example an operator casing with a specific length).
Trustee(s): the Monitoring Trustee and/or the Divestiture Trustee as the case may be.
Trustee Divestiture Period: the period of [Duration] from the end of the First Divestiture
Period.
 ---pagebreak---                                                                                       4
   SECTION B. THE COMMITMENT TO DIVEST AND THE DIVESTMENT
   BUSINESSES
   Commitment to divest
2. In order to maintain effective competition, ASSA ABLOY commits to divest or procure
   the divestiture of the Divestment Business APD and the Divestment Business HSD by the
   end of the Trustee Divestiture Period as a going concern to a purchaser and on terms of
   sale approved by the Commission in accordance with the procedure described in paragraph
   23 of these Commitments. To carry out the divestiture, ASSA ABLOY commits to find a
   purchaser and to enter into a final binding sale and purchase agreement for the sale of the
   Divestment Business APD and the Divestment Business HSD within the First Divestiture
   Period. If ASSA ABLOY has not entered into such an agreement at the end of the First
   Divestiture Period, ASSA ABLOY shall grant the Divestiture Trustee an exclusive
   mandate to sell the Divestment Business APD and the Divestment Business HSD in
   accordance with the procedure described in paragraph 35 in the Trustee Divestiture Period.
3. The proposed concentration shall not be implemented before ASSA ABLOY or the
   Divestiture Trustee has entered into a final binding sale and purchase agreement for the
   sale of the Divestment Business APD and the Divestment Business HSD and the
   Commission has approved the purchaser(s) and the terms of sale in accordance with
   paragraph 23.
4. ASSA ABLOY shall be deemed to have complied with this commitment if:
   (a)      by the end of the Trustee Divestiture Period, ASSA ABLOY or the Divestiture
            Trustee has entered into a final binding sale and purchase agreement and the
            Commission approves the proposed purchaser and the terms of sale as being
            consistent with the Commitments in accordance with the procedure described in
            paragraph 23; and
   (b)      the Closing of the sale of the Divestment Business APD and the Divestment
            Business HSD to the Purchaser takes place within the Closing Period.
5. In order to maintain the structural effect of the Commitments, the Notifying Party shall, for
   a period of 10 years after Closing, not acquire, whether directly or indirectly, the
   possibility of exercising influence (as defined in paragraph 43 of the Remedies Notice,
   footnote 3) over the whole or part of the Divestment Business APD and the Divestment
   Business HSD, unless, following the submission of a reasoned request from the Notifying
   Party showing good cause and accompanied by a report from the Monitoring Trustee (as
   provided in paragraph 64 of these Commitments), the Commission finds that the structure
   of the market has changed to such an extent that the absence of influence over the
   Divestment Business APD or the Divestment Business HSD is no longer necessary to
   render the proposed concentration compatible with the internal market.
   Structure and definition of the Divestment Business
6. The Divestment Business APD consists of the following businesses active in the sales,
   distribution, installation and after-sales services of Automatic pedestrian doors:
   (a)      The Netherlands: agta record’s entire business in the Netherlands, record
            Automatische Deuren B.V. and record Holding Nederland B.V (“Divestment
            Business APD Netherlands”), as further described in Schedule 1;
 ---pagebreak---                                                                                         5
    (b)      Austria: agta record’s entire business in Austria, record Austria GmbH
             (“Divestment Business APD Austria”), as further described in Schedule 2;
    (c)      Hungary: agta record’s entire business in Hungary, Record Ajtó-automatizálási Kft
             (“Divestment Business APD Hungary”), as further described in Schedule 3;
    (d)      Slovenia: agta record’s entire business in Slovenia, record avtomatska vrata d.o.o.
             (“Divestment Business APD Slovenia”), as further described in Schedule 4;
    (e)      France: ASSA ABLOY’s entire automatic pedestrian door business in the France,
             ASSA ABLOY Entrance Systems Piétonnes SAS (“Divestment Business APD
             France”), as further described in Schedule 5.
    (f)      The United Kingdom: ASSA ABLOY’s entire automatic pedestrian door business
             in the United Kingdom, ASSA ABLOY Entrance Systems Ltd, not including
             assets relating to the industrial door organization or the Republic of Ireland
             (“Divestment Business APD United Kingdom”), as further described in
             Schedule 6.
7.  The Divestment Business HSD consists in agta record’s business active in the
    manufacturing, sales, distribution, installation and after-sales services of high-speed doors,
    as further described in Schedule 7.
8.  The legal and functional structure of the Divestment Business APD and the Divestment
    Business HSD as operated to date is described in the Schedules. The Divestment Business
    APD and the Divestment Business HSD, described in more detail in the Schedules, include
    all assets and staff that contribute to the current operations or are necessary to ensure the
    viability and competitiveness of the Divestment Business, in particular:
    (a)      all tangible and intangible assets (including intellectual property rights), unless
             excluded in the Schedules;
    (b)      all licences, permits and authorisations issued by any governmental organisation
             for the benefit of the Divestment Business, unless excluded in the Schedules;
    (c)      all contracts, leases, commitments and customer orders and all customer, credit
             and other records of the Divestment Business, unless excluded in the Schedules;
             and
    (d)      the Personnel, unless excluded in the Schedules.
9.  Management and support functions in the Divestment Business APD and the Divestment
    Business HSD are performed on a national level, which means that the national businesses
    are independent and self-sufficient entities. However, at the option of the purchaser, the
    Divestment Business APD and the Divestment Business HSD will include a group
    management and support organisation.
10. At the option of the purchaser, the Parties will transfer as part of the Divestment Business
    APD ownership of:
    12. (i)        any and all rights that agta record may have to the brand “Vercor”. In return,
         the Purchaser shall grant to the Parties an exclusive, irrevocable and royalty free
 ---pagebreak---                                                                                          6
         license to market and sell Automatic pedestrian doors in France under the brand
         “Vercor” for a period of 2 years after Closing;
    13. (ii)       any and all rights that ASSA ABLOY may have on up to three (3) of the
         brands previously used for Automatic pedestrian doors, as listed in Schedule 8.
11. At the option of the purchaser, the Parties will also transfer as part of the Divestment
    Business HSD ownership of any and all rights that ASSA ABLOY may have on up to three
    (3) of the brands used previously for industrial doors, as listed in Schedule 8.
12. In addition, the Divestment Business APD and the Divestment Business HSD include the
    benefit, for a transitional period after Closing, of arrangements under which the Parties or
    its Affiliated Undertakings supply products or services to the Divestment Business APD or
    the Divestment Business HSD, as detailed in the Schedules, unless otherwise agreed with
    the Purchaser. Strict firewall procedures will be adopted so as to ensure that any
    competitively sensitive information related to, or arising from such supply arrangements
    (for example, product roadmaps) will not be shared with, or passed on to, anyone outside
    the relevant division providing the products/services to the Divestment Business APD or
    the Divestment Business HSD.
    SECTION C. RELATED COMMITMENTS
    Preservation of viability, marketability and competitiveness
13. From the Effective Date until Closing, the Notifying Party shall preserve or procure the
    preservation of the economic viability, marketability and competitiveness of the
    Divestment Business APD and the Divestment Business HSD, in accordance with good
    business practice, and shall minimise as far as possible any risk of loss of competitive
    potential of the Divestment Business APD and the Divestment Business HSD. In particular
    ASSA ABLOY undertakes:
    (a)      not to carry out any action that might have a significant adverse impact on the
             value, management or competitiveness of the Divestment Business APD and the
             Divestment Business HSD or that might alter the nature and scope of activity, or
             the industrial or commercial strategy or the investment policy of the Divestment
             Business APD and the Divestment Business HSD;
    (b)      to make available, or procure to make available, sufficient resources for the
             development of the Divestment Business APD and the Divestment Business HSD,
             on the basis and continuation of the existing business plans;
    (c)      to take all reasonable steps, or procure that all reasonable steps are being taken,
             including appropriate incentive schemes (based on industry practice), to encourage
             all Key Personnel to remain with the Divestment Business APD and the
             Divestment Business HSD, and not to solicit or move any Personnel to ASSA
             ABLOY’s remaining business. Where, nevertheless, individual members of the
             Key Personnel exceptionally leave the Divestment Business APD and the
             Divestment Business HSD, ASSA ABLOY shall provide a reasoned proposal to
             replace the person or persons concerned to the Commission and the Monitoring
             Trustee. ASSA ABLOY must be able to demonstrate to the Commission that the
             replacement is well suited to carry out the functions exercised by those individual
 ---pagebreak---                                                                                         7
             members of the Key Personnel. The replacement shall take place under the
             supervision of the Monitoring Trustee, who shall report to the Commission.
    Hold-separate obligations
14. The Notifying Party commits, from the Effective Date until Closing, to procure that the
    Divestment Business APD and the Divestment Business HSD is kept separate from the
    businesses that the Notifying Party will be retaining and, after closing of the notified
    transaction to keep the Divestment Business separate from the business that the Notifying
    Party is retaining and to ensure that unless explicitly permitted under these Commitments:
    (i) management and staff of the businesses retained by ASSA ABLOY have no
    involvement in the Divestment Business APD and the Divestment Business HSD; (ii) the
    Key Personnel and Personnel of the Divestment Business APD and the Divestment
    Business HSD have no involvement in any business retained by ASSA ABLOY and do not
    report to any individual outside the Divestment Business APD and the Divestment
    Business HSD.
15. Until Closing, ASSA ABLOY shall assist the Monitoring Trustee in ensuring that the
    Divestment Business APD and the Divestment Business HSD are managed as a distinct
    and saleable entity separate from the business which ASSA ABLOY is retaining.
    Immediately after the adoption of the Decision, ASSA ABLOY shall appoint a Hold
    Separate Manager. The Hold Separate Manager, who shall be part of the Key Personnel,
    shall manage the Divestment Business APD and the Divestment Business HSD
    independently and in the best interest of the business with a view to ensuring its continued
    economic viability, marketability and competitiveness and its independence from the
    businesses retained by ASSA ABLOY. The Hold Separate Manager shall closely cooperate
    with and report to the Monitoring Trustee and, if applicable, the Divestiture Trustee. Any
    replacement of the Hold Separate Manager shall be subject to the procedure laid down in
    paragraph 13(c) of these Commitments. The Commission may, after having heard ASSA
    ABLOY, require ASSA ABLOY to replace the Hold Separate Manager.
    Ring-fencing
16. ASSA ABLOY shall implement, or procure to implement, all necessary measures to ensure
    that it does not, after the Effective Date, obtain any Confidential Information relating to the
    Divestment Business APD and the Divestment Business HSD and that any such
    Confidential Information obtained by ASSA ABLOY before the Effective Date will be
    eliminated and not be used by ASSA ABLOY. This includes measures vis-à-vis ASSA
    ABLOY’s appointees on the supervisory board and/or board of directors of the Divestment
    Business APD and the Divestment Business HSD. In particular, the participation of the
    Divestment Business APD and the Divestment Business HSD in any central information
    technology network shall be severed to the extent possible, without compromising the
    viability of the Divestment Business. ASSA ABLOY may obtain or keep information
    relating to the Divestment Business APD and the Divestment Business HSD which is
    reasonably necessary for the divestiture of the Divestment Business APD and the
    Divestment Business HSD or the disclosure of which to ASSA ABLOY is required by law.
    Non-solicitation clause
17. The Parties undertake, subject to customary limitations, not to solicit, and to procure that
    Affiliated Undertakings do not solicit, the Key Personnel transferred with the Divestment
    Business APD and the Divestment Business HSD for a period of three years after Closing.
 ---pagebreak---                                                                                          8
18. The Parties undertake not to solicit, and to procure that Affiliated Undertakings do not
    solicit, existing customers of the Divestment Business APD and the Divestment Business
    HSD at the time of Closing, for a period of five years after Closing. For the avoidance of
    doubt, the Parties are not restricted to continue ongoing business relationships with their
    own existing customers that are also customers to the Divestment Business
    APD/Divestment Business HSD at the time of Closing. The Parties are also not obligated
    to refuse to supply customers with Automatic pedestrian doors or high-speed doors
    (including after-sales services), respectively, in case the customers contact the Parties
    directly. Furthermore, there shall be no restriction related to any other product than
    Automatic pedestrian doors or high-speed doors within the Parties’ product portfolio.
    Due diligence
19. In order to enable potential purchasers to carry out a reasonable due diligence of the
    Divestment Business APD and the Divestment Business HSD, ASSA ABLOY shall,
    subject to customary confidentiality assurances and dependent on the stage of the
    divestiture process:
    (a)       provide to potential purchasers sufficient information as regards the Divestment
              Business APD and the Divestment Business HSD;
    (b)       provide to potential purchasers sufficient information relating to the Personnel and
              allow them reasonable access to the Personnel.
    Reporting
20. ASSA ABLOY shall submit written reports in English on potential purchasers of the
    Divestment Business APD and the Divestment Business HSD and developments in the
    negotiations with such potential purchasers to the Commission and the Monitoring Trustee
    no later than 10 days after the end of every month following the Effective Date (or
    otherwise at the Commission’s request). ASSA ABLOY shall submit a list of all potential
    purchasers having expressed interest in acquiring the Divestment Business APD and the
    Divestment Business HSD to the Commission at each and every stage of the divestiture
    process, as well as a copy of all the offers made by potential purchasers within five days of
    their receipt.
21. ASSA ABLOY shall inform the Commission and the Monitoring Trustee on the
    preparation of the data room documentation and the due diligence procedure and shall
    submit a copy of any information memorandum to the Commission and the Monitoring
    Trustee before sending the memorandum out to potential purchasers.
    SECTION D. THE PURCHASER
22. In order to be approved by the Commission, the Purchaser must fulfil the following
    criteria:
    (a)       The Purchaser shall be an original equipment manufacturer (OEM) of automatic
              pedestrian doors and components to such doors, owning proprietary designs and
              operating adequate manufacturing facilities.
    (b)       The Purchaser shall have a significant presence in the EEA complementary to that
              of the Divestment Business.
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      (c)     The Purchaser shall be independent of and unconnected to the Notifying Party and
              its Affiliated Undertakings (this being assessed having regard to the situation
              following the divestiture).
      (d)     The Purchaser shall have the financial resources, proven expertise and incentive to
              maintain and develop the Divestment Business as a viable and active competitive
              force in competition with the Parties and other competitors.
      (e)     The acquisition of the Divestment Business by the Purchaser must neither be likely
              to create, in light of the information available to the Commission, prima facie
              competition concerns nor give rise to a risk that the implementation of the
              Commitments will be delayed. In particular, the Purchaser must reasonably be
              expected to obtain all necessary approvals from the relevant regulatory authorities
              for the acquisition of the Divestment Business.
 14. The Notifying Party shall undertake to offer the Divestment Business APD and the
      Divestment Business HSD for sale to the same potential purchasers. However, the
      Notifying Party may enter into an agreement for the sale of the Divestment Business APD,
      on the one hand, and the Divestment Business HSD, on the other hand, with different
      purchasers. In that situation, , the purchaser of the Divested Business HSD may, contrary
      to what is required in criteria (a), also be a supplier of industrial doors.
23.   The final binding sale and purchase agreement (as well as ancillary agreements) relating to
      the divestment of the Divestment Business APD and the Divestment Business HSD shall
      be conditional on the Commission’s approval. When ASSA ABLOY has reached an
      agreement with a purchaser, it shall submit a fully documented and reasoned proposal,
      including a copy of the final agreement(s), within one week to the Commission and the
      Monitoring Trustee. ASSA ABLOY must be able to demonstrate to the Commission that
      the purchaser fulfils the Purchaser Criteria and that the Divestment Business APD and the
      Divestment Business HSD are being sold in a manner consistent with the Commission's
      Decision and the Commitments. For the approval, the Commission shall verify that the
      purchaser fulfils the Purchaser Criteria and that the Divestment Business APD and the
      Divestment Business HSD are being sold in a manner consistent with the Commitments
      including their objective to bring about a lasting structural change in the market. The
      Commission may approve the sale of the Divestment Business APD and the Divestment
      Business HSD without one or more Assets or parts of the Personnel, or by substituting one
      or more Assets or parts of the Personnel with one or more different assets or different
      personnel, if this does not affect the viability and competitiveness of the Divestment
      Business APD and the Divestment Business HSD after the sale, taking account of the
      proposed purchaser.
      SECTION E. TRUSTEE
          I.  Appointment procedure
24.   ASSA ABLOY shall appoint a Monitoring Trustee to carry out the functions specified in
      these Commitments for a Monitoring Trustee. The Notifying Party commits not to close
      the Concentration before the appointment of a Monitoring Trustee.
25.   If ASSA ABLOY has not entered into a binding sale and purchase agreement regarding the
      Divestment Business APD and the Divestment Business HSD one month before the end of
      the First Divestiture Period or if the Commission has rejected a purchaser proposed by
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    ASSA ABLOY at that time or thereafter, ASSA ABLOY shall appoint a Divestiture
    Trustee. The appointment of the Divestiture Trustee shall take effect upon the
    commencement of the Trustee Divestiture Period.
26. The Trustee shall:
    (a)       at the time of appointment, be independent of the Notifying Party and its Affiliated
              Undertakings;
    (b)       possess the necessary qualifications to carry out its mandate, for example have
              sufficient relevant experience as an investment banker or consultant or auditor; and
    (c)       neither have nor become exposed to a Conflict of Interest.
27. The Trustee shall be remunerated by the Notifying Party in a way that does not impede the
    independent and effective fulfilment of its mandate. In particular, where the remuneration
    package of a Divestiture Trustee includes a success premium linked to the final sale value
    of the Divestment Business APD and the Divestment Business HSD, such success
    premium may only be earned if the divestiture takes place within the Trustee Divestiture
    Period.
    Proposal by ASSA ABLOY
28. No later than two weeks after the Effective Date, ASSA ABLOY shall submit the name or
    names of one or more natural or legal persons whom ASSA ABLOY proposes to appoint
    as the Monitoring Trustee to the Commission for approval. No later than one month before
    the end of the First Divestiture Period or on request by the Commission, ASSA ABLOY
    shall submit a list of one or more persons whom ASSA ABLOY proposes to appoint as
    Divestiture Trustee to the Commission for approval. The proposal shall contain sufficient
    information for the Commission to verify that the person or persons proposed as Trustee
    fulfil the requirements set out in paragraph 26 and shall include:
    (a)       the full terms of the proposed mandate, which shall include all provisions
              necessary to enable the Trustee to fulfil its duties under these Commitments;
    (b)       the outline of a work plan which describes how the Trustee intends to carry out its
              assigned tasks; and
    (c)       an indication whether the proposed Trustee is to act as both Monitoring Trustee
              and Divestiture Trustee or whether different trustees are proposed for the two
              functions.
    Approval or rejection by the Commission
29. The Commission shall have the discretion to approve or reject the proposed Trustee(s) and
    to approve the proposed mandate subject to any modifications it deems necessary for the
    Trustee to fulfil its obligations. If only one name is approved, ASSA ABLOY shall appoint
    or cause to be appointed the person or persons concerned as Trustee, in accordance with
    the mandate approved by the Commission. If more than one name is approved, ASSA
    ABLOY shall be free to choose the Trustee to be appointed from among the names
    approved. The Trustee shall be appointed within one week of the Commission’s approval,
    in accordance with the mandate approved by the Commission.
 ---pagebreak---                                                                                         11
    New proposal by ASSA ABLOY
30. If all the proposed Trustees are rejected, ASSA ABLOY shall submit the names of at least
    two more natural or legal persons within one week of being informed of the rejection, in
    accordance with paragraphs 24 and 29 of these Commitments.
    Trustee nominated by the Commission
31. If all further proposed Trustees are rejected by the Commission, the Commission shall
    nominate a Trustee, whom ASSA ABLOY shall appoint, or cause to be appointed, in
    accordance with a trustee mandate approved by the Commission.
    II. Functions of the Trustee
32. The Trustee shall assume its specified duties and obligations in order to ensure compliance
    with the Commitments. The Commission may, on its own initiative or at the request of the
    Trustee or ASSA ABLOY, give any orders or instructions to the Trustee in order to ensure
    compliance with the conditions and obligations attached to the Decision.
    Duties and obligations of the Monitoring Trustee
33. The Monitoring Trustee shall:
    (a)       propose in its first report to the Commission a detailed work plan describing how it
              intends to monitor compliance with the obligations and conditions attached to the
              Decision.
    (b)       oversee, in close co-operation with the Hold Separate Manager, the on-going
              management of the Divestment Business APD and the Divestment Business HSD
              with a view to ensuring its continued economic viability, marketability and
              competitiveness and monitor compliance by ASSA ABLOY with the conditions
              and obligations attached to the Decision. To that end the Monitoring Trustee shall:
                  i.   monitor the preservation of the economic viability, marketability and
                       competitiveness of the Divestment Business APD and the Divestment
                       Business HSD, and the keeping separate of the Divestment Business APD
                       and the Divestment Business HSD from the business retained by the
                       Parties, in accordance with paragraphs 13 and 14 of these Commitments;
                 ii.   supervise the management of the Divestment Business APD and the
                       Divestment Business HSD as distinct and saleable entities, in accordance
                       with paragraph 15 of these Commitments;
                iii.   with respect to Confidential Information:
                       determine all necessary measures to ensure that ASSA ABLOY does not
                        after the Effective Date obtain any Confidential Information relating to
                        the Divestment Business APD and the Divestment Business HSD,
                       in particular strive for the severing of the Divestment Business APD and
                        the Divestment Business HSD’ participation in a central information
                        technology network to the extent possible, without compromising the
 ---pagebreak---                                                                                12
              viability of the Divestment Business APD and the Divestment Business
              HSD,
             make sure that any Confidential Information relating to the Divestment
              Business APD and the Divestment Business HSD obtained by ASSA
              ABLOY before the Effective Date is eliminated and will not be used by
              ASSA ABLOY and
             decide whether such information may be disclosed to or kept by ASSA
              ABLOY as the disclosure is reasonably necessary to allow ASSA
              ABLOY to carry out the divestiture or as the disclosure is required by
              law;
      iv.    monitor the splitting of assets and the allocation of Personnel between the
             Divestment Business APD and the Divestment Business HSD, on the one
             hand, and ASSA ABLOY or Affiliated Undertakings, on the other hand;
(c) propose to ASSA ABLOY such measures as the Monitoring Trustee considers
    necessary to ensure ASSA ABLOY’s compliance with the conditions and
    obligations attached to the Decision, in particular the maintenance of the full
    economic viability, marketability or competitiveness of the Divestment Business
    APD and the Divestment Business HSD, the holding separate of the Divestment
    Business APD and the Divestment Business HSD, and the non-disclosure of
    competitively sensitive information;
(d) review and assess potential purchasers as well as the progress of the divestiture
    process and verify that, dependent on the stage of the divestiture process:
        i.   potential purchasers receive sufficient and correct information relating to
             the Divestment Business APD and the Divestment Business HSD and the
             Personnel in particular by reviewing, if available, the data room
             documentation, the information memorandum and the due diligence
             process, and
       ii.   potential purchasers are granted reasonable access to the Personnel;
(e) act as a contact point for any requests by third parties, in particular potential
    purchasers, in relation to the Commitments;
(f) provide to the Commission, sending ASSA ABLOY a non-confidential copy at the
    same time, a written report within 15 days after the end of every month that shall
    cover the operation and management of the Divestment Business APD and the
    Divestment Business HSD, as well as the splitting of assets and the allocation of
    Personnel so that the Commission can assess whether the business is held in a
    manner consistent with the Commitments and the progress of the divestiture
    process as well as potential purchasers;
(g) promptly report in writing to the Commission, sending ASSA ABLOY a non-
    confidential copy at the same time, if it concludes on reasonable grounds that
    ASSA ABLOY is failing to comply with these Commitments;
(h) within one week after receipt of the documented proposal referred to in paragraph
    23 of these Commitments, submit to the Commission, sending ASSA ABLOY a
 ---pagebreak---                                                                                         13
             non-confidential copy at the same time, a reasoned opinion as to the suitability and
             independence of the proposed purchaser and the viability of the Divestment
             Business after the Sale and as to whether the Divestment Business APD and the
             Divestment Business HSD are sold in a manner consistent with the conditions and
             obligations attached to the Decision, in particular, if relevant, whether the Sale of
             the Divestment Business APD and the Divestment Business HSD without one or
             more Assets or not all of the Personnel affects the viability of the Divestment
             Business after the sale, taking account of the proposed purchaser; and
    (i)      assume the other functions assigned to the Monitoring Trustee under the conditions
             and obligations attached to the Decision.
34. If the Monitoring Trustee and Divestiture Trustee are not the same (legal or natural)
    persons, the Monitoring Trustee and the Divestiture Trustee shall cooperate closely with
    each other during and for the purpose of the preparation of the Trustee Divestiture Period
    in order to facilitate each other's tasks.
    Duties and obligations of the Divestiture Trustee
35. Within the Trustee Divestiture Period, the Divestiture Trustee shall sell at no minimum
    price the Divestment Business APD and the Divestment Business HSD to a purchaser,
    provided that the Commission has approved both the purchaser and the final binding sale
    and purchase agreement (and ancillary agreements) as in line with the Commission's
    Decision and the Commitments in accordance with paragraphs 22 and 23 of these
    Commitments. The Divestiture Trustee shall include in the sale and purchase agreement (as
    well as in any ancillary agreements) such terms and conditions as it considers appropriate
    for an expedient sale in the Trustee Divestiture Period. In particular, the Divestiture
    Trustee may include in the sale and purchase agreement such customary representations
    and warranties and indemnities as are reasonably required to effect the sale. The
    Divestiture Trustee shall protect the legitimate financial interests of ASSA ABLOY,
    subject to the Notifying Party’s unconditional obligation to divest at no minimum price in
    the Trustee Divestiture Period.
36. In the Trustee Divestiture Period (or otherwise at the Commission’s request), the
    Divestiture Trustee shall provide the Commission with a comprehensive monthly report
    written in English on the progress of the divestiture process. Such reports shall be
    submitted within 15 days after the end of every month with a simultaneous copy to the
    Monitoring Trustee and a non-confidential copy to the Notifying Party.
    III. Duties and obligations of the Parties
37. ASSA ABLOY shall provide and shall cause its advisors to provide the Trustee with all
    such co-operation, assistance and information as the Trustee may reasonably require to
    perform its tasks. The Trustee shall have full and complete access to any of ASSA
    ABLOY’s or the Divestment Business APD and the Divestment Business HSD’ books,
    records, documents, management or other personnel, facilities, sites and technical
    information necessary for fulfilling its duties under the Commitments and ASSA ABLOY
    and the Divestment Business APD and the Divestment Business HSD shall provide the
    Trustee upon request with copies of any document. ASSA ABLOY and the Divestment
    Business APD and the Divestment Business HSD shall make available to the Trustee one
    or more offices on their premises and shall be available for meetings in order to provide the
    Trustee with all information necessary for the performance of its tasks.
 ---pagebreak---                                                                                          14
38. ASSA ABLOY shall provide the Monitoring Trustee with all managerial and
    administrative support that it may reasonably request on behalf of the management of the
    Divestment Business APD and the Divestment Business HSD. This shall include all
    administrative support functions relating to the Divestment Business APD and the
    Divestment Business HSD which are currently carried out at headquarters level. ASSA
    ABLOY shall provide and shall cause its advisors to provide the Monitoring Trustee, on
    request, with the information submitted to potential purchasers, in particular give the
    Monitoring Trustee access to the data room documentation and all other information
    granted to potential purchasers in the due diligence procedure. ASSA ABLOY shall inform
    the Monitoring Trustee on possible purchasers, submit lists of potential purchasers at each
    stage of the selection process, including the offers made by potential purchasers at those
    stages, and keep the Monitoring Trustee informed of all developments in the divestiture
    process.
39. ASSA ABLOY shall grant or procure Affiliated Undertakings to grant comprehensive
    powers of attorney, duly executed, to the Divestiture Trustee to effect the sale (including
    ancillary agreements), the Closing and all actions and declarations which the Divestiture
    Trustee considers necessary or appropriate to achieve the sale and the Closing, including
    the appointment of advisors to assist with the sale process. Upon request of the Divestiture
    Trustee, ASSA ABLOY shall cause the documents required for effecting the sale and the
    Closing to be duly executed.
40. ASSA ABLOY shall indemnify the Trustee and its employees and agents (each an
    “Indemnified Party”) and hold each Indemnified Party harmless against, and hereby agrees
    that an Indemnified Party shall have no liability to ASSA ABLOY for, any liabilities
    arising out of the performance of the Trustee’s duties under the Commitments, except to
    the extent that such liabilities result from the wilful default, recklessness, gross negligence
    or bad faith of the Trustee, its employees, agents or advisors.
41. At the expense of ASSA ABLOY, the Trustee may appoint advisors (in particular for
    corporate finance or legal advice), subject to ASSA ABLOY’s approval (this approval not
    to be unreasonably withheld or delayed) if the Trustee considers the appointment of such
    advisors necessary or appropriate for the performance of its duties and obligations under
    the Mandate, provided that any fees and other expenses incurred by the Trustee are
    reasonable. Should ASSA ABLOY refuse to approve the advisors proposed by the Trustee
    the Commission may approve the appointment of such advisors instead, after having heard
    ASSA ABLOY. Only the Trustee shall be entitled to issue instructions to the advisors.
    Paragraph 40 of these Commitments shall apply mutatis mutandis. In the Trustee
    Divestiture Period, the Divestiture Trustee may use advisors who served ASSA ABLOY
    during the Divestiture Period if the Divestiture Trustee considers this in the best interest of
    an expedient sale.
42. ASSA ABLOY agrees that the Commission may share Confidential Information
    proprietary to ASSA ABLOY with the Trustee. The Trustee shall not disclose such
    information and the principles contained in Article 17 (1) and (2) of the Merger Regulation
    apply mutatis mutandis.
43. The Notifying Party agrees that the contact details of the Monitoring Trustee are published
    on the website of the Commission's Directorate-General for Competition and they shall
    inform interested third parties, in particular any potential purchasers, of the identity and the
    tasks of the Monitoring Trustee.
 ---pagebreak---                                                                                       15
44. For a period of 10 years from the Effective Date the Commission may request all
    information from the Parties that is reasonably necessary to monitor the effective
    implementation of these Commitments.
    IV. Replacement, discharge and reappointment of the Trustee
45. If the Trustee ceases to perform its functions under the Commitments or for any other good
    cause, including the exposure of the Trustee to a Conflict of Interest:
    (a)      the Commission may, after hearing the Trustee and ASSA ABLOY, require ASSA
             ABLOY to replace the Trustee; or
    (b)      ASSA ABLOY may, with the prior approval of the Commission, replace the
             Trustee.
46. If the Trustee is removed according to paragraph 45 of these Commitments, the Trustee
    may be required to continue in its function until a new Trustee is in place to whom the
    Trustee has effected a full hand over of all relevant information. The new Trustee shall be
    appointed in accordance with the procedure referred to in paragraphs 24–31 of these
    Commitments.
47. Unless removed according to paragraph 45 of these Commitments, the Trustee shall cease
    to act as Trustee only after the Commission has discharged it from its duties after all the
    Commitments with which the Trustee has been entrusted have been implemented.
    However, the Commission may at any time require the reappointment of the Monitoring
    Trustee if it subsequently appears that the relevant remedies might not have been fully and
    properly implemented.
    SECTION F. LICENSES
    Exclusive license relating to the Czech Republic, Finland and Iceland
48. ASSA ABLOY commits to grant to the Purchaser an exclusive, irrevocable and royalty
    free license to market and sell in each of the Czech Republic, Finland and Iceland
    automatic pedestrian door products offered by agta record, under the brands and
    trademarks owned by agta record, including the right to use the trademarks and brands in
    conjunction with the Purchaser’s own trademarks and brands, for a period of five years
    after Closing (the “Licensed Business”). After the end of that period, neither the Purchaser
    nor ASSA ABLOY (including agta record) shall use the agta record trademarks or brands
    in Czech Republic, Finland and Iceland for a period of two years. In addition, ASSA
    ABLOY commits to make agta record’s customer lists for sales to the Czech Republic,
    Finland and Iceland, during the last five years, available to the Purchaser.
    In addition, ASSA ABLOY commits to:
    (i)    supply at variable cost and without quantity limitations the automatic pedestrian door
           products (including components and parts thereof) and related services offered by
           agta record in the Czech Republic, Finland and Iceland, respectively, at the time of
           or before, Closing, or any products substituting such products, to the Purchaser for a
 ---pagebreak---                                                                                         16
           period of five years after Closing. The delivery of such products will be made on a
           priority basis within the standard lead times applicable prior to Closing.
    (ii)   supply at variable cost and without quantity limitations all spare parts and
           repair/replacement kits, including related services, necessary for the provision of
           after-sales services of agta record automatic pedestrian doors, for the life-span of all
           agta record automatic pedestrian door products in operation in the Czech Republic,
           Finland and Iceland at Closing and for the life-span of the products sold by the
           Licensed Business under the first five years after Closing;
    (iii)  grant a non-exclusive, irrevocable and fully paid-up license of all technical
           information necessary for the provision of after-sales services of agta record
           automatic pedestrian doors, for the life-span of all agta record automatic pedestrian
           door products in operation in the Czech Republic, Finland and Iceland at Closing
           and for the life-span of products sold by the Licensed Business under the first five
           years after Closing;
    (iv)   grant a non-exclusive and irrevocable license to access, at variable cost, agta
           record’s after-sales and installation configuration tools and software necessary for
           the provision of installation and after-sales services of agta record automatic
           pedestrian doors, for the life-span of all agta record automatic pedestrian door
           products in operation in the Czech Republic, Finland and Iceland at Closing, and for
           the life-span of all products sold by the Licensed Business under the first five years
           after Closing. The license will also cover any new or updated after-sales and
           installation configuration tools and software;
    (v)    the benefit of technical assistance from record group as necessary for the operation
           and future viability and competitiveness of the Licensed Business.
    Non-exclusive license relating agta record’s technology
49. ASSA ABLOY commits to grant to the Purchaser a perpetual, irrevocable, non-exclusive
    and fully paid-up EEA-wide license of all patents, designs, copyrights, trade secrets,
    know-how and data used in connection with the production of agta record’s Automatic
    pedestrian doors at the time of Closing and generated by agta record’s past and ongoing
    R&D projects, as well as a perpetual, irrevocable, non-exclusive and fully paid-up EEA-
    wide license of any background patents and know-how of agta record that are required in
    order to implement an innovation generated by the Divestment Business APD. For the
    avoidance of doubt, this license does not include a right to sub-license such patents,
    background patents, designs, copyrights, know-how, trade secrets and data to third parties.
    Conversely, the license includes access to all relevant project notebooks, design history
    files, drawings, product specifications, manufacturing process descriptions, validation
    documentation, packaging specifications and quality control standards.
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    SECTION G. BEHAVIOURAL COMMITMENTS
    Behavioural commitment in relation to Standard brand-specific spare parts
50. For after-sales services of automatic pedestrian doors in Belgium, Cyprus, Denmark,
    Germany, Greece, Italy, Latvia, Lithuania, Luxembourg, Malta, Poland, Portugal,
    Romania, Spain and Sweden, ASSA ABLOY commits to supply to undertakings with
    activities in the EEA Standard brand-specific spare parts for automatic pedestrian doors
    and technical information of ASSA ABLOY and agta record’s Automatic pedestrian doors,
    on fair and reasonable terms for a period of ten years as from closing of the Concentration.
    At the end of the initial ten-year period, the Commission will decide in consultation with
    the Monitoring Trustee and in view of relevant market developments, with consideration of
    the principle of proportionality, whether an extension of the behavioural commitment is
    required.
    Behavioural commitment in relation to after-sales and installation tool/software
51. For after-sales services and installation of automatic pedestrian doors in Belgium, Cyprus,
    Denmark, Germany, Greece, Italy, Latvia, Lithuania, Luxembourg, Malta, Poland,
    Portugal, Romania, Spain and Sweden, ASSA ABLOY commits to supply or license after-
    sales and installation configuration tools and software of ASSA ABLOY and agta record’s
    Automatic pedestrian doors on fair and reasonable terms for a period of ten years as from
    closing of the Concentration, to undertakings with activities in the EEA. At the end of the
    initial ten-year period, the Commission will decide in consultation with the Monitoring
    Trustee and in view of relevant market developments, with consideration of the principle
    of proportionality, whether an extension of the behavioural commitment is required.
    Implementation of behavioural commitments
52. For the purpose of implementing the commitments referred to in paragraphs 50 and 51,
    ASSA ABLOY undertakes to make Standard brand-specific spare parts, technical
    information, and after-sales and installation configuration tools and software available, or
    procure that such spare parts and technical information are made available, including
    through an online web shop. Orders shall be shipped within 2 working days from the
    placement of the order, provided that the relevant spare parts are in stock. If the spare parts
    are out of stock, as the case may be, the shipment shall be made within 2 working days
    from when the spare parts are back in stock. ASSA ABLOY undertakes to exercise best
    efforts to stock in relation to the demand of the relevant spare parts and to facilitate
    ordering through the online web shop.
    Enforcement of the commitments
53. In the event that a third party claims that ASSA ABLOY or any Affiliated Undertaking is
    failing to comply with the requirements of the Commitments vis-a-vis that third party, the
    third party may choose to utilise the fast track dispute resolution procedure as described
    herein.
54. Any third party who wishes to avail itself of the fast track dispute resolution procedure (a
    "Requesting Party") shall send a written request to ASSA ABLOY (to be forwarded by
    ASSA ABLOY to the Monitoring Trustee) setting out in detail the reasons leading that
    party to believe that ASSA ABLOY is failing to comply with the requirements of these
    Commitments. ASSA ABLOY will undertake that such written request can be submitted
    through the online web shop to be set up in accordance with paragraph 48. The Requesting
 ---pagebreak---                                                                                          18
    Party and ASSA ABLOY will use their best efforts to resolve all differences of opinion
    and to settle all disputes that may arise through cooperation and consultation within a
    reasonable period of time not exceeding five (5) working days after receipt of the request.
55. Should the Requesting Party and ASSA ABLOY (together the "Parties to the
    Arbitration") fail to resolve their differences of opinion within the five (5) days from the
    day that the Requesting Party sent the written request to ASSA ABLOY, the Requesting
    Party will be informed of the possibility to submit its claim for review to the Monitoring
    Trustee. Upon application from the Requesting Party, the Monitoring Trustee shall present
    its own proposal (the "Trustee Proposal") for resolving the dispute within five (5)
    working days, specifying in writing the action, if any, to be taken by ASSA ABLOY in
    order to ensure compliance with the Commitments vis-a-vis the Requesting Party, and be
    prepared, if requested, to facilitate the settlement of the dispute, in consultation with the
    Commission.
56. In case of remaining disagreement, the Requesting Party may serve a Request for
    Arbitration, to the Arbitration Institute of the International Chamber of Commerce, with a
    copy of such Request for Arbitration to ASSA ABLOY. The Request for Arbitration shall,
    in addition to what is set out in the Arbitration Rules of the Arbitration Institute of the
    International Chamber of Commerce (the "Rules") also contain a detailed description of
    the action to be undertaken by ASSA ABLOY and the Trustee Proposal, including a
    comment as to its appropriateness.
57. ASSA ABLOY shall, when submitting its answer to the Request for Arbitration, in
    addition to what is set out in the Rules, if appropriate, also submit a detailed description of
    the action which ASSA ABLOY proposes to undertake vis-à-vis the Requesting Party and
    the Trustee Proposal (if not already submitted), including a comment as to its
    appropriateness.
58. Any dispute, controversy or claim related to the subject matter of the Request for
    Arbitration shall be finally settled by arbitration in accordance with the Rules. The seat of
    arbitration shall be Paris and the arbitration shall be conducted in the English language.
    The Parties to the Arbitration shall each appoint one arbitrator and the chairman shall be
    appointed by the Board of the Arbitration Institute of the International Chamber of
    Commerce.
59. The rules relating to emergency arbitration under the Rules shall govern the arbitration
    procedure. The Arbitral Tribunal, and an Emergency Arbitrator appointed under the Rules
    is entitled to ask for assistance by the Monitoring Trustee in all stages of the procedure and
    may seek the Commission’s interpretation of the Commitments before finding in favour of
    any party to the arbitration and shall be bound by the Commission’s interpretation. The
    Commitments shall be construed in accordance with the Merger Regulation, EU law and
    general principles of law common to the legal orders of the Member States without a
    requirement to apply a particular national system.
60. The Commission shall be allowed and enabled to participate in all stages of the procedure
    by receiving written submissions, orders, interim and final awards, having the opportunity
    to file amicus curiae briefs and being present at any potential hearings.
61. The above fast track dispute resolution procedure shall also be available to the
    Purchaser(s), in relation to the transitional arrangements, as further detailed in the
    Schedules, and in relation to the Licensed Business.
 ---pagebreak---                                                                                      19
62.  For the avoidance of doubt, nothing in the above procedure shall affect the powers of the
     Commission to take decisions in relation to the Commitments in accordance with its
     powers under the Merger Regulation and the Treaty on the Functioning of the European
     Union.
     SECTION H. THE REVIEW CLAUSE
63.  The Commission may extend the time periods foreseen in the Commitments in response to
     a request from ASSA ABLOY or, in appropriate cases, on its own initiative. Where ASSA
     ABLOY requests an extension of a time period, it shall submit a reasoned request to the
     Commission no later than one month before the expiry of that period, showing good cause.
     This request shall be accompanied by a report from the Monitoring Trustee, who shall, at
     the same time send a non-confidential copy of the report to the Notifying Party. Only in
     exceptional circumstances shall ASSA ABLOY be entitled to request an extension within
     the last month of any period.
64.  The Commission may further, in response to a reasoned request from the Notifying Parties
     showing good cause waive, modify or substitute, in exceptional circumstances, one or
     more of the undertakings in these Commitments. This request shall be accompanied by a
     report from the Monitoring Trustee, who shall, at the same time send a non-confidential
     copy of the report to the Notifying Party. The request shall not have the effect of
     suspending the application of the undertaking and, in particular, of suspending the expiry
     of any time period in which the undertaking has to be complied with.
     SECTION I. ENTRY INTO FORCE
65.  The Commitments shall take effect upon the date of adoption of the Decision.
     ________________________
     […]
     Duly authorised and on behalf of
     ASSA ABLOY AB (publ)
    ________________________
    […]
    Duly authorised and on behalf of
    agta record ag
 ---pagebreak---                                                          […]
                  SCHEDULE 1 – DIVESTMENT BUSINESS APD/NETHERLANDS
1.           The Divestment Business APD/Netherlands includes agta record’s entire business in the
             Netherlands, under the ownership of Record Automatische Deuren B.V., and record
             Holding Nederland B.V. (together ”record NL” or the “Company”).1
             All agta record’s business activities in the Netherlands are carried out through record NL.2
             record NL is active in the sale, distribution and installation of Automatic pedestrian doors
             and the provision of after-sales services (maintenance and repair) for such doors. record NL
             also operates as a FAAC distributor of traffic gates and barriers (but not of FAAC’s
             automatic door products) in the Netherlands. Apart from the FAAC products, products and
             services are provided under the record brand.
             record NL’s headquarters are located in Doorwerth, while smaller offices exist in
             Zevenhuizen, Oosterhout and Maartensdijk. record NL’s production takes place in
             Doorwerth and Maartensdijk. record NL also has logistic hubs in Drachten and Weert.
             Apart from the product supply as described below, record NL is a stand-alone company
             encompassing, in addition to sales, production, installation and after-sales services, all
             necessary back-bone departments such as finance, administration, IT and HR.
             agtatec ag (“agtatec”) in Switzerland supplies semi-assembled swing and sliding door
             operators to the Company. In record NL’s two production facilities, the operators are
             finalised, aluminium is cut and the doors are assembled with frames and glass. The
             Doorwerth facility supplies the north, east and south of the country and the Maartensdijk
             facility supplies the west. Powder coating is done entirely through local third party
             suppliers. The Company sources glass, fire door leaves and a small number of sensors
             locally. The assembled doors (or door operators, as the case may be) are temporarily stored
             in Doorwerth, Maartensdijk, Zevenhuizen and Oosterhout before they are picked up by
             record NL’s installers (in some instances outsourced installers) who then install at the
             customer’s premises. In order to shorten driving time of installers, in some cases the
             products are sent to one of record NL’s two logistics hubs, situated in Drachten and Weert.
             The revolving doors sold (and installed) by record NL are produced and sent directly to the
             end-user from BLASI GmbH in Mahlberg, Germany.
             The hermetic doors sold (and installed) by record NL are produced and sent directly to the
             end-user from KOS Spezialtüren GmbH in Schermbeck, Germany.
             The company offers after-sales services of all types of Automatic pedestrian doors.
1
  Record Automatische Deuren B.V., is 100% owned by Record Holding Nederland B.V., which in turn is 100%
owned by agta record ltd, Fehraltorf, Switzerland. For corporate information on record NL, see Annex A.
2
  In addition, record NL is also, to a minor extent, active in Belgium and in Dutch overseas territories.
 ---pagebreak---  ---pagebreak---                                                                               22
    (ii)     all supply agreements (excluding what is set out below under 3 in this
             Schedule), for a list of all main supply agreements, please see Annex F);
    (iii)    the distribution agreement with FAAC;
    (iv)     all lease agreements related to the premises in Zevenhuizen, Oosterhout
             Maartensdijk, Weert and Drachten, please see Annex B; and
    (v)      all lease agreements related to other equipment (e.g. vehicles), please see
             Annex G.
(e) the following customer, credit and other records of record NL:
    All customer, credit and other records held by record NL, whether maintained in
    the ERP system or separately.
(f) the following Personnel of record NL:
    all personnel employed by record NL (as defined above) except for the personnel
    indicated under 3 in this Schedule.
(g) the following Key Personnel of record NL:
    (i)      MD – currently not assigned.
    (ii)     […], Deputy MD
    (iii)    […], Sales Manager West
    (iv)     […], Sales Manager North-East-South
    (v)      […], Human Resources
    (vi)     […], Service & Maintenance Manager
    (vii)    7 Sales (field) FTEs
    (viii)   Service & Maintenance Engineers – Team leaders/coordination functions
    [Organization chart with names of employees]
(h) At the option of the Purchaser, the arrangements for the supply of the following
    products or services by the Affiliated Undertakings:
    (i)      all automatic pedestrian door products (including components and parts
             thereof) and related services (including building information modelling –
             BIM references and tools) made available to record NL at the time of, or
             before, Closing, or any products substituting such products, for a
             transitional period of up to five years after Closing, at variable cost and
             without quantity limitations. This includes the full range of KOS hermetic
             doors, the full range of BLASI revolving doors and the full range of
             agtatec semi-assembled operators as well as spare parts to the above. The
             delivery of such products will be made on a priority basis, within the
             standard lead times applicable prior to Closing;
 ---pagebreak---                                                                           23
(ii)   an exclusive, irrevocable and royalty free license of all brands, trademarks,
       trade names, product lines and know-how owned or used by agta record to
       market, sell and service automatic pedestrian door products in the
       Netherlands and Belgium, including the right to use the trademarks and
       brands in conjunction with the Purchaser’s own trademarks and brands, for
       a period of up to five years. For the avoidance of doubt, during this period,
       ASSA ABLOY will not market and sell Automatic pedestrian doors of
       agta record under such brands, trademarks and trade names or otherwise in
       the Netherlands and Belgium, either directly to end-users or through non-
       integrated suppliers. After the end of the exclusivity period of five years,
       neither the Divestment Business APD/Netherlands nor ASSA ABLOY
       (including agta record) shall use the agta record trademarks or brands for
       automatic pedestrian door products in the Netherlands and Belgium for a
       period of two years;
(iii)  all spare parts and repair/replacement kits, including related services,
       necessary for the provision of after-sales services of agta record automatic
       pedestrian doors, for the life-span of all agta record automatic pedestrian
       door products in operation in the Netherlands and Belgium at Closing and
       for the life-span of products sold by the Divestment Business
       APD/Netherlands under the first five years after Closing, at variable cost
       and without quantity limitations;
(iv)   a non-exclusive, irrevocable and fully paid-up license of all technical
       information necessary for the provision of after-sales services of agta
       record automatic pedestrian doors, for the life-span of all agta record
       automatic pedestrian door products in operation in the Netherlands and
       Belgium at Closing and for the life-span of products sold by the
       Divestment Business APD/Netherlands under the first five years after
       Closing;
(v)    a non-exclusive and irrevocable license to access, at variable cost, agta
       record’s after-sales and installation configuration tools and software,
       including the service software ASTEA (off-the-shelf software governing
       the after-sales service process and available on tablets,
       https://www.astea.com), necessary for the provision of installation and
       after-sales services of agta record automatic pedestrian doors, for the life-
       span of all agta record automatic pedestrian door products in operation in
       the Netherlands and Belgium at Closing, and for the life-span of all
       products sold by the Divestment Business APD/Netherlands under the first
       five years after Closing. The license will also cover any new or updated
       after-sales and installation configuration tools and software;
(vi)   the benefit of technical assistance from record group as necessary for the
       continued operation and future viability and competitiveness of the
       Divestment Business APD/Netherlands;
(vii)  the website infrastructure used by record NL for a period up to 12 months
       after Closing (https://www.recordbv.nl, currently part of the same
       infrastructure as the website of the rest of agta record group); and
(viii) the use of the e-mail server and addresses currently used by record NL for
       a period up to 12 months after Closing.
 ---pagebreak---                                                                                     24
3. The Divestment Business APD/Netherlands shall not include:
            (i)    Personnel: […], who has a contract with record NL for technical reasons,
                   but reports to, works for and is cross-charged to record group IT.
            (ii)   the Distribution Agreement between agtatec and record NL dated 1 August
                   2012 covering the supply of products, inter alia semi-assembled operators
                   (replaced by the supply arrangement foreseen under section 2.h.i of this
                   Schedule), please see Annex H;
            (iii)  the 1 January 2003 Service Agreement between agta record ltd and record
                   NL, last updated on 1 January 2016, covering advisory provided by record
                   group headquarters (replaced by the technical assistance foreseen under
                   section 2.h.vi of this Schedule), please see Annex I.
4. If there is any asset or personnel, in the Divestment Business APD/Netherlands or any
   Affiliated Undertaking, which is not covered by paragraph 2 of this Schedule but which is
   both used (exclusively or not) in the Divestment Business APD/Netherlands and necessary
   for the continued viability and competitiveness of the Divestment Business
   APD/Netherlands, that asset or adequate substitute will be offered to potential purchasers.
 ---pagebreak---                                                     […]
                     SCHEDULE 2 – DIVESTMENT BUSINESS APD/AUSTRIA
1.          The Divestment Business APD/Austria includes agta record’s entire business in Austria,
            under the ownership of record Austria GmbH (”record AT ” or the “Company”).1
            All agta record’s business activities in Austria are carried out through record AT. record
            AT is active in the sale, distribution and installation of Automatic pedestrian doors and the
            provision of after-sales services (maintenance and repair) for such doors. Products and
            services are provided under the record brand.
            record AT’s headquarters are located in Perchtoldsdorf near Vienna, while smaller offices
            exist in Kirchberg an der Raab and Leonding. record AT’s production takes place in
            Perchtoldsdorf. record AT also has logistic hubs in Kirchberg an der Raab, Leonding,
            Salzburg, Kaprun and Klagenfurt. Apart from the product supply as described below,
            record AT is a stand-alone company encompassing, in addition to sales, production,
            installation and after-sales services, all necessary back-bone departments such as finance,
            administration, IT and HR.
            agtatec ag (“agtatec”) in Switzerland supplies semi-assembled swing and sliding door
            operators, as well as aluminium, to the Company. In record AT’s production facility, the
            operators are finalised, aluminium is cut and the doors are assembled with frames and
            glass. Powder coating services are sourced from WK Pulverbeschichtung. Glass is sourced
            from C. Bergmann. Fire door leaves are sourced from Karo Metall, Peneder, Sturm. 2 The
            assembled doors (or door operators, as the case may be) are temporarily stored in
            Perchtoldsdorf before they are picked up by record AT’s installers (in some instances
            outsourced installers) who then install at the customer’s premises. In order to shorten
            driving time of installers, in some cases the products are sent to one of record AT’s
            logistics hubs, situated in Kirchberg an der Raab, Leonding, Salzburg, Kaprun and
            Klagenfurt. Record AT outsources the transport of material from Perchtoldsdorf to the
            hubs.
            The revolving doors sold (and installed) by record AT are produced and sent directly to the
            end-user from BLASI GmbH in Mahlberg, Germany.
            The hermetic doors sold (and installed) by record AT are produced and sent directly to the
            end-user or to Perchtoldsdorf from KOS Spezialtüren GmbH in Schermbeck, Germany.
            The roller shutters sold (and installed) by record AT are produced and sent to
            Perchtoldsdorf from ISEA SAS in Noyarey, France.
1
  For corporate information on record AT, see Annex A.
2
  A small number of sensors are sourced from BEA in Belgium.
 ---pagebreak---  ---pagebreak---  ---pagebreak---                                                                          28
      agtatec semi-assembled operators as well as spare parts to the above. The
      delivery of such products will be made on a priority basis, within the
      standard lead times applicable prior to Closing;
(ii)  an exclusive, irrevocable and royalty free license of all brands, trademarks,
      trade names, product lines and know-how owned or used by agta record to
      market, sell and service automatic pedestrian door products in Austria,
      including the right to use the trademarks and brands in conjunction with
      the Purchaser’s own trademarks and brands, for a period of up to five
      years. For the avoidance of doubt, during this period, ASSA ABLOY will
      not market and sell Automatic pedestrian doors of agta record under such
      brands, trademarks and trade names or otherwise in Austria, either directly
      to end-users or through non-integrated suppliers. After the end the
      exclusivity period of five years, neither the Divestment Business
      APD/Austria nor ASSA ABLOY (including agta record) shall use the agta
      record trademarks or brands for automatic pedestrian door products in
      Austria for a period of two years;
(iii) all spare parts and repair/replacement kits, including related services,
      necessary for the provision of after-sales services of agta record automatic
      pedestrian doors, for the life-span of all agta record automatic pedestrian
      door products in operation in Austria at Closing and for the life-span of
      products sold by the Divestment Business APD/Austria under the first five
      years after Closing, at variable cost and without quantity limitations;
(iv)  a non-exclusive, irrevocable and fully paid-up license of all technical
      information necessary for the provision of after-sales services of agta
      record automatic pedestrian doors, for the life-span of all agta record
      automatic pedestrian door products in operation in Austria at Closing, and
      for the life-span of products sold by the Divestment Business APD/Austria
      under the first five years after Closing;
(v)   a non-exclusive and irrevocable license to access, at variable cost, agta
      record’s after-sales and installation configuration tools and software,
      including the service software ASTEA (off-the-shelf software governing
      the after-sales service process and available on tablets,
      https://www.astea.com), necessary for the provision of installation and
      after-sales services of agta record automatic pedestrian doors, for the life-
      span of all agta record automatic pedestrian door products in operation in
      Austria at Closing, and for the life-span of all products sold by the
      Divestment Business APD/Austria under the first five years after Closing.
      The license will also cover any new or updated after-sales and installation
      configuration tools and software;
(vi)  the benefit of technical assistance from record group as necessary for the
      continued operation and future viability and competitiveness of the
      Divestment Business APD/Austria;
(vii) the website infrastructure used by record AT for a period up to 12 months
      after Closing (https://www.record.co.at/de/home, currently part of the
      same infrastructure as the website of the rest of agta record group); and
 ---pagebreak---                                                                                    29
            (viii) the use of the e-mail server and addresses currently used by record AT for
                   a period up to 12 months after Closing.
3. The Divestment Business APD/Austria shall not include:
            (i)    the Distribution Agreement between agtatec and record AT covering the
                   supply of products, inter alia semi-assembled operators, (replaced by the
                   supply arrangement foreseen under section 2.h.i of this Schedule), please
                   see Annex H; and
            (ii)   the Service Agreement between agta record ltd and record AT, covering
                   advisory provided by record group headquarters (replaced by the technical
                   assistance foreseen under section 2.h.vi of this Schedule), please see
                   Annex I.
4. If there is any asset or personnel, in the Divestment Business APD/Austria or any
   Affiliated Undertaking, which is not covered by paragraph 2 of this Schedule but which is
   both used (exclusively or not) in the Divestment Business APD/Austria and necessary for
   the continued viability and competitiveness of the Divestment Business APD/Austria, that
   asset or adequate substitute will be offered to potential purchasers.
 ---pagebreak---                                                     […]
                    SCHEDULE 3 – DIVESTMENT BUSINESS APD/HUNGARY
1.          The Divestment Business APD/Hungary includes agta record’s entire business in Hungary,
            under the ownership of Record Ajtó-automatizálási Kft (”record HU” or the “Company”).1
            All agta record’s business activities in Hungary are carried out through record HU. record
            HU is active in the sale, distribution and installation of Automatic pedestrian doors and the
            provision of after-sales services (maintenance and repair) for such doors. Products and
            services are provided under the record brand.
            record HU’s headquarters, offices and production are located in Szigetszentmiklós. record
            HU also has logistic “hubs” (workers) in Miskolc, Debrecen, Orosháza, Kiskunhalas. Apart
            from supply of products and components, record HU is a stand-alone company
            encompassing, in addition to sales, production, installation and after-sales services,
            necessary back-bone departments such as finance, administration, IT (outsourced). record
            HU does not have an HR function.
            agtatec ag (“agtatec”) in Switzerland supplies semi-assembled swing and sliding door
            operators, as well as, aluminium, to the Company. In record HU’s production facility, the
            operators are finalised, aluminium is cut and the doors are assembled with frames and
            glass. Powder coating is done entirely through local third-party suppliers. The Company
            sources glass, fire door leaves and a small number of sensors locally. The assembled doors
            (or door operators, as the case may be) are temporarily stored in Szigetszentmiklós before
            they are picked up by record HU’s installers (in some instances outsourced installers) who
            then install at the customer’s premises.
            The revolving doors sold (and installed) by record HU are produced and sent directly to the
            end-user from BLASI GmbH in Mahlberg, Germany. However, no revolving doors have
            been sold so far.
            The hermetic doors sold (and installed) by record HU are produced and sent directly to the
            end-user from KOS Spezialtüren GmbH in Schermbeck, Germany.
            record HU offers after-sales services of all types of automatic pedestrian doors, i.e. swing,
            sliding and revolving doors.
            record HU’s workforce currently accounts to 53 FTEs (39 FTEs employed plus 14 FTEs
            outsourced):
1
  For corporate information on record HU, see Annex A.
 ---pagebreak---  ---pagebreak---                                                                                 32
    (iii)    all lease agreements related to other equipment (e.g. vehicles), please see
             Annex F.
(e) the following customer, credit and other records of record HU:
    All customer, credit and other records held by record HU, whether maintained in
    the ERP system or separately.
(f) the following Personnel of record HU:
    all personnel employed by record HU.
(g) the following Key Personnel of record HU:
    (i)      […] – Managing director
    (ii)     […]– Sales leader
    (iii)    […]– Business developer
    (iv)     […] – Service leader
    (v)      […]– Technical leader
    (vi)     […]– Production leader
    (vii)    Sales (field) FTEs
    (viii)   Service & Maintenance Engineers – Team leaders/coordination functions
(h) At the option of the Purchaser, the arrangements for the supply of the following
    products or services by the Affiliated Undertakings:
    (i)      all automatic pedestrian door products (including components and parts
             thereof) and related services (including building information modelling –
             BIM references and tools) made available to record HU at the time of, or
             before, Closing, or any products substituting such products, for a
             transitional period of up to five years after Closing, at variable cost and
             without quantity limitations. This includes the full range of KOS hermetic
             doors, the full range of BLASI revolving doors and the full range of
             agtatec semi-assembled operators as well as spare parts to the above. The
             delivery of such products will be made on a priority basis, within the
             standard lead times applicable prior to Closing;
    (ii)     an exclusive, irrevocable and royalty free license of all brands, trademarks,
             trade names, product lines and know-how owned or used by agta record to
             market, sell and service automatic pedestrian door products in Hungary,
             including the right to use the trademarks and brands in conjunction with
             the Purchaser’s own trademarks and brands, for a period of up to five
             years. For the avoidance of doubt, during this period, ASSA ABLOY will
             not market and sell Automatic pedestrian doors of agta record under such
             brands, trademarks and trade names or otherwise in Hungary, either
             directly to end-users or through non-integrated suppliers. After the end of
             the exclusivity period of five years, neither the Divestment Business
 ---pagebreak---                                                                                      33
                  APD/Hungary nor ASSA ABLOY (including agta record) shall use the
                  agta record trademarks or brands for automatic pedestrian door products in
                  Hungary for a period of two years;
          (iii)   all spare parts and repair/replacement kits, including related services,
                  necessary for the provision of after-sales services of agta record automatic
                  pedestrian doors, for the life-span of all agta record automatic pedestrian
                  door products in operation in Hungary at Closing and for the life-span of
                  products sold by the Divestment Business APD/Hungary under the first
                  five years after Closing, at variable cost and without quantity limitations;
          (iv)    a non-exclusive, irrevocable and fully paid-up license of all technical
                  information necessary for the provision of after-sales services of agta
                  record automatic pedestrian doors for the life-span of all agta record
                  automatic pedestrian door products in operation in Hungary at Closing,
                  and for the life-span of products sold by the Divestment Business
                  APD/Hungary under the first five years after Closing;
          (v)     a non-exclusive and irrevocable license to access, at variable cost, agta
                  record’s after-sales and installation configuration tools and software,
                  including the service software ASTEA (off-the-shelf software governing
                  the after-sales service process and available on tablets,
                  https://www.astea.com), necessary for the provision of installation and
                  after-sales services of agta record automatic pedestrian doors, for the life-
                  span of all agta record automatic pedestrian door products in operation in
                  Hungary at Closing, and for the life-span of the products sold by the
                  Divestment Business APD/Hungary under the first five years after
                  Closing. The license will also cover any new or updated after-sales and
                  installation configuration tools and software;
          (vi)    the benefit of technical assistance from record group as necessary for the
                  continued operation and future viability and competitiveness of the
                  Divestment Business APD/Hungary;
          (vii)   the website infrastructure used by record HU for a period up to 12 months
                  after Closing (https://www.record.hu/hu/home currently part of the same
                  infrastructure as the website of the rest of agta record group); and
          (viii)  the use of the e-mail server and addresses currently used by record HU for
                  a period up to 12 months after Closing.
3. The Divestment Business APD/Hungary shall not include:
          (i)     the Distribution Agreement between agtatec and record HU dated 1
                  August 2012 covering the supply of products, inter alia semi-assembled
                  operators (replaced by the supply arrangement foreseen under section 2.h.i
                  of this Schedule), please see Annex G;
          (ii)    the 1 January 2003 Service Agreement between agta record ltd and record
                  HU, last updated on 1 January 2015, covering advisory provided by record
                  group headquarters (replaced by the technical assistance foreseen under
                  section 2.h.vi of this Schedule), please see Annex H.
 ---pagebreak---                                                                                   34
4. If there is any asset or personnel, in the Divestment Business APD/Hungary or any
   Affiliated Undertaking, which is not covered by paragraph 2 of this Schedule but which is
   both used (exclusively or not) in the Divestment Business APD/Hungary and necessary for
   the continued viability and competitiveness of the Divestment Business APD/Hungary, that
   asset or adequate substitute will be offered to potential purchasers.
 ---pagebreak---                                                          […]
                     SCHEDULE 4 – DIVESTMENT BUSINESS APD/SLOVENIA
1.           The Divestment Business APD/Slovenia includes agta record’s entire business in Slovenia,
             under the ownership of Record avtomatska vrata d.o.o. (”record SL” or the “Company”).1
             All agta record’s business activities in Slovenia are carried out through record SL. 2 record
             SL is active in the sale, distribution and installation of Automatic pedestrian doors and the
             provision of after-sales services (maintenance and repair) for such doors. Products and
             services are provided under the record brand.
             record SL’s headquarters and production are located in Šenčur. Apart from the product
             supply as described below, record SL is a stand-alone company encompassing, in addition
             to sales, production, installation and after-sales services, all necessary back-bone
             departments such as finance (outsourced), administration, IT (outsourced) and HR
             (outsourced).
             agtatec ag (“agtatec”) in Switzerland supplies semi-assembled swing and sliding door
             operators, as well as aluminium, to the Company. In record SL’s production facility, the
             operators are finalised, aluminium is cut and the doors are assembled with frames and
             glass.
             Powder coating is done entirely through local third party suppliers. The Company sources
             glass, fire door leaves and a small number of sensors locally. The assembled doors (or door
             operators, as the case may be) are temporarily stored in Šenčur before they are picked up
             by record SL’s installers (in some instances outsourced installers) who then install at the
             customer’s premises.
             The revolving doors sold (and installed) by record SL are produced and sent directly to the
             end-user from BLASI GmbH in Mahlberg, Germany.
             The hermetic doors sold (and installed) by record SL are produced and sent to the
             Slovenian headquarters.
             The company offers after-sales services of all types of Automatic pedestrian doors.
             record SL currently employs 9 FTEs:
1
  For corporate information on record SL, see Annex A.
2
  In addition, record Slovenia also has sales to Croatia, Bosnia and Albania.
 ---pagebreak---  ---pagebreak---                                                                                 37
(e) the following customer, credit and other records of record SL:
    All customer, credit and other records held by record SL, whether maintained in
    the ERP system or separately.
(f) the following Personnel of record SL:
    all personnel employed by record SL (as defined above).
(g) the following Key Personnel of record SL:
    (i)      […] (MD)
    (ii)     […] (production)
    (iii)    […] (administration)
    (iv)     […] (Sales)
    (v)      […] (Sales)
    [Organization chart with names of employees]
(h) At the option of the Purchaser, the arrangements for the supply of the following
    products or services by the Affiliated Undertakings:
    (i)      all automatic pedestrian door products (including components and parts
             thereof) and related services (including building information modelling –
             BIM references and tools) made available to record SL at the time of, or
             before, Closing, or any products substituting such products, for a
             transitional period of up to five years after Closing, at variable cost and
             without quantity limitations. This includes the full range of KOS hermetic
             doors, the full range of BLASI revolving doors and the full range of
             agtatec semi-assembled operators as well as spare parts to the above. The
             delivery of such products will be made on a priority basis, within the
             standard lead times applicable prior to Closing;
    (ii)     an exclusive, irrevocable and royalty free license of all brands, trademarks,
             trade names, product lines and know-how owned or used by agta record to
             market, sell and service automatic pedestrian door products in Slovenia,
             including the right to use the trademarks and brands in conjunction with
             the Purchaser’s own trademarks and brands, for a period of up to five
             years. For the avoidance of doubt, during this period, ASSA ABLOY will
             not market and sell Automatic pedestrian doors of agta record under such
             brands, trademarks and trade names or otherwise in Slovenia, either
             directly to end-users or through non-integrated suppliers. After the
             exclusivity period of five years, neither the Divestment Business
             APD/Slovenia nor ASSA ABLOY (including agta record) shall use the
             agta record trademarks or brands for automatic pedestrian door products in
             Slovenia for a period of two years;
    (iii)    all spare parts and repair/replacement kits, including related services,
             necessary for the provision of after-sales services of agta record automatic
             pedestrian doors, for the life-span of all agta record automatic pedestrian
 ---pagebreak---                                                                                       38
                   door products in operation in Slovenia at Closing and for the life-span of
                   products sold by the Divestment Business APD/Slovenia under the first
                   five years after Closing, at variable cost and without quantity limitations;
            (iv)   a non-exclusive, irrevocable and fully paid-up license of all technical
                   information necessary for the provision of after-sales services of agta
                   record automatic pedestrian doors, for the life-span of all agta record
                   automatic pedestrian door products in operation in Slovenia at Closing,
                   and for the life-span of products sold by the Divestment Business
                   APD/Slovenia under the first five years after Closing;
            (v)    a non-exclusive and irrevocable license to access, at variable cost, agta
                   record’s after-sales and installation configuration tools and software,
                   including the service software ASTEA (off-the-shelf software governing
                   the after-sales service process and available on tablets,
                   https://www.astea.com), necessary for the provision of installation and
                   after-sales services of agta record automatic pedestrian doors, for the life-
                   span of all agta record automatic pedestrian door products in operation in
                   Slovenia at Closing, and for the life-span of the products sold by the
                   Divestment Business APD/Slovenia under the first five years after
                   Closing. The license will also cover any new or updated after-sales and
                   installation configuration tools and software;
            (vi)   the benefit of technical assistance from record group as necessary for the
                   continued operation and future viability and competitiveness of the
                   Divestment Business APD/Slovenia;
            (vii)  the website infrastructure used by record SL for a period up to 12 months
                   after Closing (https://www.record.si/sl/home currently part of the same
                   infrastructure as the website of the rest of agta record group); and
            (viii) the use of the e-mail server and addresses currently used by record SL for
                   a period up to 12 months after Closing.
3. The Divestment Business APD/Slovenia shall not include:
            (i)    the Distribution Agreement between agtatec and record SL dated 1 August
                   2012 covering the supply of products, inter alia semi-assembled operators
                   (replaced by the supply arrangement foreseen under section 2.h.i of this
                   Schedule), please see Annex G;
            (ii)   the 1 January 2003 Service Agreement between agta record ltd and record
                   SL, last updated on 1 January 2016, covering advisory provided by record
                   group headquarters (replaced by the technical assistance foreseen under
                   section 2.h.vi of this Schedule), please see Annex H.
4. If there is any asset or personnel, in the Divestment Business APD/Slovenia or any
   Affiliated Undertaking, which is not covered by paragraph 2 of this Schedule but which is
   both used (exclusively or not) in the Divestment Business APD/Slovenia and necessary for
   the continued viability and competitiveness of the Divestment Business APD/Slovenia, that
   asset or adequate substitute will be offered to potential purchasers.
 ---pagebreak---                                                       […]
                     SCHEDULE 5 – DIVESTMENT BUSINESS APD/FRANCE
1.          The Divestment Business APD/France includes ASSA ABLOY’s automatic pedestrian
            doors business in France, under the ownership of ASSA ABLOY Entrance Systems
            Piétonnes SAS (”AAES FR” or the “Company”).1
            AAES FR is active in the sale and installation of Automatic pedestrian doors and the
            provision of after-sales services (maintenance and repair) for such doors in France. Both
            products and services are provided under the “ASSA ABLOY” brand and, to a lesser
            extent, the “Besam” brand.
            AAES FR’s headquarters is located in Lieusaint, outside of Paris. The office space is
            shared with the industrial doors business. The industrial door business, which is a separate
            legal entity, is the tenant to the lease agreement in Lieusaint, from which AAES FR sublets
            its part of the premises.
            As in other European countries, ASSA ABLOY supplies the French automatic pedestrian
            door markets with equipment from its assembly plant in Ostrov, Czech Republic. Products
            are sent from Ostrov directly to the end users’ premises where they are installed either by
            AAES FR’s in-house installation technicians or by (sub-contracted) third party installers.
            AAES FR does not have any local assembly or storage facilities beyond a warehouse where
            a small stock of spare parts is stored.
            Due to local French regulation, the assembly plant in Ostrov integrates a rubber band into
            the operators of all of its escape route sliding doors destined for the French market. AAES
            FR occasionally sources hermetic door leaves from Tané and fire doors from various local
            suppliers such as Crouzille, Ploojer and Robert.
            Apart from the product supply, AAES FR is a stand-alone company encompassing, in
            addition to sales, installation and after-sales services, necessary administrative functions
            such as finance, HR and administration.
            The company offers after-sales services of all types of Automatic pedestrian doors.
            AAES FR currently employs around 98 FTEs:
1
  For corporate information on ASSA ABLOY Entrance Systems Piétonnes SAS, see Annex A.
 ---pagebreak---  ---pagebreak---                                                                                41
    (v)      all lease agreements related to other equipment (e.g. vehicles). For a list,
             please see Annex F.
(e) the following customer, credit and other records of AAES FR:
    All customer, credit and other records held by AAES FR.
(f) the following Personnel of AAES FR:
    All personnel employed by AAES FR. For a list of personnel employed by AAES
    FR, see Annex G.
(g) the following Key Personnel of AAES FR:
    (i)      MD, […]
    (ii)     Installation manager, […]
    (iii)    Finance manager, […]
    (iv)     Service manager, […]
    (v)      All sales (field) FTEs
    (vi)     Service & Maintenance Engineers – Team leaders/coordination functions
(h) At the option of the Purchaser, the arrangements for the supply of the following
    products or services by the Affiliated Undertakings:
    (i)      all automatic pedestrian door products (including components and parts
             thereof) and related services (including building information modelling –
             BIM references and tools) made available to AAES FR at the time of, or
             before, Closing, or any products substituting such products, for a
             transitional period of up to five years after Closing, at variable cost and
             without quantity limitations. This includes the full range of Automatic
             pedestrian doors, as well as spare parts to the above. The delivery of such
             products will be made on a priority basis, within the standard lead times
             applicable prior to Closing;
    (ii)     an exclusive, irrevocable and royalty free license of all brands, trademarks,
             trade names, product lines and know-how owned or used by AAES FR to
             market, sell and service automatic pedestrian door products in France,
             (e.g., the “ASSA ABLOY” and “BESAM” brands), including the right to
             use the trademarks and brands in conjunction with the Purchaser’s own
             brands, for a period of up to five years after Closing. For the avoidance of
             doubt, during this period, ASSA ABLOY will not market and sell
             Automatic pedestrian doors of ASSA ABLOY under such brands,
             trademarks and trade names or otherwise in France, either directly to end-
             users or through non-integrated suppliers. After the exclusivity period of
             five years, neither the Divestment Business APD/France nor ASSA
             ABLOY (including agta record) shall use the brands and trademarks in
             question (including “ASSA ABLOY” and “BESAM”) in the marketing
             and sales of automatic pedestrian door products in France for a period of
             two years. For the avoidance of doubt, ASSA ABLOY will also refrain
 ---pagebreak---                                                                                       42
                   from selling Automatic pedestrian doors in France under the Ditec and
                   Entrematic brands for a duration of five years after Closing and will refer
                   customer inquiries to the Divestment Business APD/France over that
                   period;
          (iii)    all spare parts and repair/replacement kits, including related services,
                   necessary for the provision of after-sales services of ASSA ABLOY
                   automatic pedestrian doors, for the life-span of all ASSA ABLOY
                   automatic pedestrian door products in operation in France at Closing and
                   for the life-span of products sold by the Divestment Business APD/France
                   under the first five years after Closing, at variable cost and without
                   quantity limitations;
          (iv)     a non-exclusive, irrevocable and fully paid-up license to access all
                   technical information necessary for the provision of after-sales services of
                   ASSA ABLOY automatic pedestrian doors, for the life-span of all ASSA
                   ABLOY automatic pedestrian door products in operation in France at
                   Closing, and for the life-span of products sold by the Divestment Business
                   APD/France under the first five years after Closing;
          (v)      a non-exclusive and irrevocable license to access, at variable cost, ASSA
                   ABLOY’s after-sales and installation configuration tools and software,
                   necessary for the provision of installation and after-sales services of ASSA
                   ABLOY automatic pedestrian doors, for the life-span of ASSA ABLOY
                   automatic pedestrian door products in operation in France at Closing, and
                   for the life-span of products sold by the Divestment Business APD/France
                   under the first five years after Closing. The license will also cover any new
                   or updated after-sales and installation configuration tools and software;
          (vi)     the benefit of technical assistance from ASSA ABLOY as necessary for
                   the continued operation and future viability and competitiveness of the
                   Divestment Business APD/France;
          (vii)    access to the IT-systems used by AAES FR for a period of up to 12
                   months after Closing;
          (viii)   access to functions in relation to payroll, pensions and benefits, for a
                   period of up to 12 months after Closing;
          (ix)     the website infrastructure used by AAES FR for a period up to 12 months
                   after Closing; and
          (x)      the use of the e-mail server and addresses currently used by AAES FR for
                   a period up to 12 months after Closing.
3. The Divestment Business APD/France shall not include:
   Not applicable.
 ---pagebreak---                                                                                   43
4. If there is any asset or personnel, in the Divestment Business APD/France or any Affiliated
   Undertaking, which is not covered by paragraph 2 of this Schedule but which is both used
   (exclusively or not) in the Divestment Business APD/France and necessary for the
   continued viability and competitiveness of the Divestment Business APD/France, that asset
   or adequate substitute will be offered to potential purchasers.
 ---pagebreak---                                                    […]
              SCHEDULE 6 – DIVESTMENT BUSINESS APD/UNITED KINGDOM
1.          The Divestment Business APD/United Kingdom includes ASSA ABLOY’s automatic
            pedestrian doors business in the UK, under the ownership of ASSA ABLOY Entrance
            Systems Ltd. (“AAES UK” or the “Company”).1
            AAES UK is active in the sale and installation of Automatic pedestrian doors and the
            provision of after-sales services (maintenance and repair) for such doors in the United
            Kingdom and in the Republic of Ireland (“Ireland”). Both products and services are
            provided under the “ASSA ABLOY” brand and, to a lesser extent, the “Besam” brand.
            AAES UK also has a separate operational department active in industrial doors.
            The automatic pedestrian door operations in Ireland and the separate operations active in
            industrial doors will be carved out prior to AAES UK being divested.
            AAES UK’s headquarters for the automatic pedestrian door business is located in Sunbury
            on Thames, Middlesex. AAES UK’s automatic pedestrian door business also has a
            warehouse in Rotherham, outside of Sheffield.
            As in other European countries, ASSA ABLOY supplies the UK markets with equipment
            from its assembly plant in Ostrov, Czech Republic. Products are sent from Ostrov directly
            to the end users’ premises where they are installed either by AAES UK’s in-house
            installation technicians or by (sub-contracted) third-party installers. AAES UK does not
            have any local assembly or storage facilities beyond a warehouse where a small stock of
            spare parts is stored.
            Apart from the product supply as described above, AAES UK is a stand-alone company
            encompassing, in addition to sales, installation and after-sales services, all necessary back-
            bone departments such as finance, administration and HR.
            The company offers after-sales services of all types of Automatic pedestrian doors.
            AAES UK currently employs around 126 FTEs:
1
  For corporate information on ASSA ABLOY Entrance Systems Ltd., see Annex A.
 ---pagebreak---  ---pagebreak---                                                                                46
    (iv)     all lease agreements related to other equipment (e.g. vehicles) excluding
             what is set out below under 3. For a list, please see Annex F.
(e) the following customer, credit and other records of AAES UK:
    All customer, credit and other records held by AAES UK excluding what is set out
    below under 3.
(f) the following Personnel of AAES UK excluding what is set out below under 3:
    all personnel employed by AAES UK excluding what is set out below under 3, see
    Annex G.
(g) the following Key Personnel of AAES UK:
    (i)      MD, […].
    (ii)     HR and QSHE, […]
    (iii)    Finance, […]
    (iv)     Equipment sales, […]
    (v)      Equipment Key account sales, […]
    (vi)     Equipment back office and Field Ops, […]
    (vii)    Service sales and Field Ops, […]
    (viii)   All sales FTEs
    (ix)     Service & Maintenance Engineers – Team leaders/coordination functions
(h) At the option of the Purchaser, the arrangements for the supply of the following
    products or services by the Affiliated Undertakings:
    (i)      all automatic pedestrian door products (including components and parts
             thereof) and related services (including building information modelling –
             BIM references and tools) made available to AAES UK at the time of, or
             before, Closing, or any products substituting such products, for a
             transitional period of up to five years after Closing, at variable cost and
             without quantity limitations. This includes the full range of Automatic
             pedestrian doors, as well as spare parts to the above. The delivery of such
             products will be made on a priority basis, within the standard lead times
             applicable prior to Closing. ASSA ABLOY also undertakes to ensure that
             the applicable supply conditions will enable the Divestment Business
             APD/United Kingdom to remain competitive irrespective of any adverse
             conditions resulting from the consequences of the exit of the United
             Kingdom from the European Union;
    (ii)     an exclusive, irrevocable and royalty free license of all brands, trademarks,
             trade names, product lines and know-how owned or used by AAES UK to
             market, sell and service automatic pedestrian door products in the United
             Kingdom (e.g., the “ASSA ABLOY“ and “BESAM” brands), including
 ---pagebreak---                                                                          47
       the right to use the trademarks and brands in conjunction with the
       Purchaser’s own brands, for a period of up to five years after Closing. For
       the avoidance of doubt, during this period, ASSA ABLOY, will not
       market and sell Automatic pedestrian doors of ASSA ABLOY under such
       brands, trademarks and trade names or otherwise in the United Kingdom,
       either directly to end-users or through non-integrated suppliers. After the
       exclusivity period of five years, neither the Divestment Business
       APD/United Kingdom nor ASSA ABLOY (including agta record) shall
       use the brands and trademarks in question (including “ASSA ABLOY”
       and “BESAM”) in the marketing and sales of automatic pedestrian door
       products in the United Kingdom for a period of two years. For the
       avoidance of doubt, ASSA ABLOY will also refrain from selling
       Automatic pedestrian doors in the United Kingdom under the Ditec and
       Entrematic brands for a period of five years after Closing and will refer
       customer inquiries to the Divestment Business APD/United Kingdom over
       that period;
(iii)  all spare parts and repair/replacement kits, including related services,
       necessary for the provision of after-sales services of ASSA ABLOY
       automatic pedestrian doors, for the life-span of all ASSA ABLOY
       automatic pedestrian door products in operation in the United Kingdom at
       Closing and for the life-span of products sold by the Divestment Business
       APD/United Kingdom under the first five years after Closing, at variable
       cost and without quantity limitations;
(iv)   a non-exclusive, irrevocable and fully paid-up license to access all
       technical information necessary for the provision of after-sales services of
       ASSA ABLOY automatic pedestrian doors, for the life-span of all ASSA
       ABLOY automatic pedestrian door products in operation in the UK at
       Closing, and for the life-span of products sold by the Divestment Business
       APD/United Kingdom under the first five years after Closing;
(v)    a non-exclusive and irrevocable license to access, at variable cost, ASSA
       ABLOY’s after-sales and installation configuration tools and software,
       necessary for the provision of installation and after-sales services of ASSA
       ABLOY automatic pedestrian doors, for the life-span of ASSA ABLOY
       automatic pedestrian door products in operation in the United Kingdom at
       Closing, and for the life-span of products sold by the Divestment Business
       APD/United Kingdom under the first five years after Closing. The license
       will also cover any new or updated after-sales and installation
       configuration tools and software;
(vi)   the benefit of technical assistance from ASSA ABLOY as necessary for
       the continued operation and future viability and competitiveness of the
       Divestment Business APD/United Kingdom;
(vii)  access to the IT-systems used by AAES UK for a period of up to 12
       months after Closing;
(viii) access to functions in relation to payroll, pensions and benefits, for a
       period of up to 12 months after Closing;
 ---pagebreak---                                                                                                   48
                      (ix)     the website infrastructure used by AAES UK for a period up to 12 months
                               after Closing; and
                      (x)      the use of the e-mail server and addresses currently used by AAES UK for
                               a period up to 12 months after Closing.
3.           AAES UK’s industrial door business and automatic pedestrian door business in Ireland
             will be carved out prior to the divestment of the Divestment Business APD/United
             Kingdom.2 The automatic pedestrian door business and the industrial door business were
             merged into one legal entity in 2013 but has been operating on a standalone basis
             operationally within the same legal entity since then. Thus, the Divestment Business
             APD/United Kingdom shall not include:
             (a)      the following tangible assets of AAES UK:
                      (i)      the assets used in the industrial door business or the automatic pedestrian
                               door business in Ireland, please see Annex H,
                      (ii)     the stock relating to the industrial door business or the automatic
                               pedestrian door business in Ireland as per the day of closing.
             (b)      the following main intangible assets of AAES UK:
                      Intangible assets of the industrial door business or the automatic pedestrian door
                      business relating to Ireland.
             (c)      the following main licences, permits and authorisations of AAES UK:
                      Licences permits and authorisations pertaining to the industrial door business or
                      the automatic pedestrian door business in Ireland.
             (d)      the following main contracts, agreements, leases, commitments and understandings
                      of AAES UK:
                      (i)      all customer agreements of the industrial door business or the automatic
                               pedestrian door business in Ireland;
                      (ii)     all supply agreements of the industrial door business or the automatic
                               pedestrian door business in Ireland;
                      (iii)    all lease agreements of the industrial door business or the automatic
                               pedestrian door business in Ireland; and
                      (iv)     all lease agreements related to other equipment (e.g. vehicles) of the
                               industrial door business or the automatic pedestrian door business in
                               Ireland. For a list.
             (e)      the following customer, credit and other records of AAES UK:
2
  It should also be noted that AAES UK has a very limited gate automation business, which is in the process of
  being wound up. Thus, this part of AAES UK will not be transferred to the Divestment Business APD United
  Kingdom.
 ---pagebreak---                                                                                      49
            All customer, credit and other records held by AAES UK and pertaining to the
            industrial door business or the automatic pedestrian door business in Ireland.
   (f)      the following personnel of AAES UK:
            all personnel pertaining to the industrial door business or the automatic pedestrian
            door business in Ireland, please see Annex I.
4. If there is any asset or personnel, in the Divestment Business APD/United Kingdom or any
   Affiliated Undertaking, which is not covered by paragraph 2 of this Schedule but which is
   both used (exclusively or not) in the Divestment Business APD/United Kingdom and
   necessary for the continued viability and competitiveness of the Divestment Business
   APD/United Kingdom, that asset or adequate substitute will be offered to potential
   purchasers.
 ---pagebreak---                                                       […]
                            SCHEDULE 7 – DIVESTMENT BUSINESS HSD
1.           The Divestment Business HSD consists of agta record’s high-speed door business located
             in France and comprises assets and staff of record Industry SAS (“record Industry”) and
             staff from record Portes Automatiques SAS.
             The Divestment Business HSD
             record Industry is mainly active in production of automatic pedestrian door products, and
             only to a relatively limited extent in the production of high-speed doors. Sectional doors
             are produced by ISEA SAS.
             agta record’s production activities (mainly assembly) for high-speed doors are carried out
             through record Industry, while sales and servicing are performed by other agta record
             entities mainly active in supply of other products than high-speed doors.1 agta record does
             not currently have staff dedicated only to sales and servicing of high-speed doors. The
             high-speed door products are provided under the record brand.
             record Industry’s high-speed doors production facility is located in Crémieu, in France,
             sharing the premises with record Portes Automatiques SAS automatic pedestrian door
             production facility. The main part of the production facility in Crémieu relates to the
             assembly of automatic pedestrian doors. The minor part of the production facility relating
             to the production of high-speed doors, and the equipment relating to that production, can
             easily be separated within the existing facility or moved to a different premises, suitable for
             assembly of high-speed doors, in the adjacent area.
             agta record’s limited R&D activities related to high-speed doors are performed in the high-
             speed doors part of the record Industry production facility and will continue in the
             Divestment Business HSD.
             The high-speed door production is mainly supplied with components from third-party
             suppliers, but also partly (for the Speedcord high-speed door model) from agtatec ag in
             Switzerland.
             agta record’s high-speed door business does not have any integration or links to agta
             record’s remaining industrial door business, other than limited indirect sales by ISEA SAS.
1
  Sales of the high-speed doors produced by record Industry are mainly made by record Portes Automatiques
  SAS (direct sales) and, to a limited extent, ISEA SAS (indirect sales). In addition, there are some minor sales
  in “export markets” by local sales organizations.
 ---pagebreak---  ---pagebreak---                                                                                52
(b) the following main intangible assets:
    (i)      all the intellectual property rights, including patents, designs, copyrights,
             trademarks, brands, trade names, and product lines, as well as know-how,
             trade secrets and other data and information, owned by agta record that are
             or have been previously used solely or predominantly by the Divestment
             Business HSD, in connection with the production, marketing, sales and
             servicing of high-speed door products. The Purchaser will grant perpetual,
             irrevocable, non-exclusive, fully paid-up worldwide licences to ASSA
             ABLOY for the use of these intellectual property rights in so far they are
             necessary to continue running the business retained by ASSA ABLOY.
             For the avoidance of doubt, intellectual property rights that are solely or
             predominantly used by the business retained by ASSA ABLOY will
             remain in the ownership of ASSA ABLOY, which will grant perpetual,
             irrevocable, non-exclusive, fully paid-up worldwide licences for the
             intellectual property rights that the Divestment Business HSD uses in
             connection with the production, marketing, sales and servicing of high-
             speed doors, and in so far they are necessary to continue running the
             Divestment Business HSD. For the avoidance of doubt, the licenses do not
             include a right to sub-license the intellectual property rights, including
             know-how, trade secrets and other data and information, to third parties.
             ASSA ABLOY and the Purchaser will also seek to enter into an agreement
             for the use of the brand ‘record’ in the marketing and sales of high-speed
             doors after a period of five years from Closing.
    (ii)     Swiss trademark – no. 596437 "SPEEDCORD”.
    To the Parties’ knowledge, there are no other transferable intangible assets
    specifically related to the high-speed doors business.
(c) The following main licences, permits and authorisations:
    Not applicable. To the Parties’ knowledge, there are no licences, permits or
    authorizations required for the Divestment Business HSD.
(d) the following       main     contracts,  agreements,    leases,   commitments     and
    understandings:
    (i)      at the option of the Purchaser, a lease agreement for premises of
             approximately 2,300 square meters and 100 square meters office space,
             adjacent to the premises in Crémieu and on standard market terms, where
             all machines and equipment of the high-speed door business will be moved
             by and at the expenses of ASSA ABLOY. ASSA ABLOY will also bear
             the costs of the lease fee for a duration of eighteen (18) months after
             Closing;
    (ii)     all customer relationships exclusively related to the high-speed door
             business (for a list of the main customer relationships/agreements, please
             see Annex D). In addition, the Parties commit to procure that all material
             customer agreements/relationships shared between the Divestment
             Business HSD and other agta record entities will be transferred to the
             Divestment Business HSD to the extent the agreements relate to high-
 ---pagebreak---  ---pagebreak---                                                                                   54
          (vi)    […]
          (vii)   […] (sales)
          (viii)  […] (sales)
          (ix)    […] (sales)
          (x)     The servicing/installation team
          [Organization chart with names of employees]
   (h)    At the option of the Purchaser, the arrangements for the supply of the following
          products or services by the Affiliated Undertakings:
          (i)     all high-speed door products (including components and spare parts)
                  manufactured by or on behalf of agtatec ag, at the time of, or before,
                  Closing, or any components substituting such components, for a
                  transitional period of up to five years after Closing, at variable cost and
                  without quantity limitations. The delivery of such components will be
                  made on a priority basis, within the standard lead times applicable prior to
                  Closing;
          (ii)    all overhead sectional door products (including components, spare parts
                  technical information and after-sales and installation configuration tools
                  and software) and related services produced and supplied by ISEA SAS in
                  France at the time of, or before, closing or any products substituting such
                  products, for a transitional period of up to five years after Closing, at
                  variable cost and without quantity limitations. The delivery of such
                  products will be made on a priority basis, within the standard lead times
                  applicable prior to Closing;
          (iii)   relevant content from agta record’s French website, and a reference to the
                  Divestment Business HSD’s website on the website of agta record’s
                  French organisation (https://www.record.fr/), for a period up to 12 months
                  after Closing;
          (iv)    access to the IT-systems used by record Industry for a period of up to 12
                  months after Closing; and
          (v)     the use of the e-mail server and addresses currently used by record
                  Industry for a period up to 12 months after Closing.
3. The Divestment Business shall not include:
          (i)     Steel cutting machine (to a minor extent used by the Divestment Business
                  HSD, but predominantly used by record Portes Automatiques for
                  production of automatic pedestrian doors); and
          (ii)    Steel trimming machine (to a minor extent used by the Divestment
                  Business HSD, but predominantly used by record Portes Automatiques for
                  production of automatic pedestrian doors).
 ---pagebreak---                                                                                 55
4. If there is any asset or personnel, in the Divestment Business HSD or any Affiliated
   Undertaking, which is not covered by paragraph 2 of this Schedule but which is both used
   (exclusively or not) in the Divestment Business HSD and necessary for the continued
   viability and competitiveness of the Divestment Business HSD, that asset or adequate
   substitute will be offered to the Purchaser.
 ---pagebreak---                                            […]
                                   Schedule 8 – Brands
Previously used for Automatic pedestrian doors
       Port Automatica
       Rotomatic
       Benovatic
Previously used for industrial doors
       Akator
       Nomafa
       Schieffer
       Faltec
       Claver
       Amber
       Combosa
                                             *
ASSA ABLOY represents that the above brands have previously been used by ASSA
ABLOY for Automatic pedestrian door products and industrial door products,
respectively, and that it is not aware of any past or ongoing dispute about the validity
and/or use of these brands. However, ASSA ABLOY is not able to guarantee that the
said brands currently benefit from any protected rights, and ASSA ABLOY will not
accept any liability (including claims by third parties) in relation to the transfer of these
brands.
 ---pagebreak--- ANNEX A-H – DIVESTMENT BUSINESS APD NETHERLANDS
[…]
ANNEX A-H – DIVESTMENT BUSINESS APD AUSTRIA
[…]
ANNEX A-H – DIVESTMENT BUSINESS APD HUNGARY
[…]
ANNEX A-H – DIVESTMENT BUSINESS APD SLOVENIA
[…]
ANNEX A-G – DIVESTMENT BUSINESS APD FRANCE
[…]
ANNEX A-I – DIVESTMENT BUSINESS APD UNITED KINGDOM
[…]
ANNEX A-F – DIVESTMENT BUSINESS HSD
[…]