CELEX: 32019M9475
Language: en
Date: 2019-10-22 00:00:00
Title: Commission Decision of 22/10/2019 declaring a concentration to be compatible with the common market (Case No COMP/M.9475 - TDR / BCA) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                Brussels, 22.10.2019
                                                                C(2019) 7695 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                                                                 information omitted has been replaced by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
Subject:            Case M.9475 – TDR / BCA
                    Commission decision pursuant to Article 6(1)(b) of Council Regulation
                    No 139/20041 and Article 57 of the Agreement on the European Economic
                    Area2
Dear Sir or Madam,
(1)       On 17 September 2019, the European Commission received notification of a
          proposed concentration pursuant to Article 4 of the Merger Regulation by which
          TDR Capital LLP (“TDR”, of the United Kingdom) acquires within the meaning of
          Article 3(1)(b) of the Merger Regulation sole control of the whole of BCA
          Marketplace plc, (“BCA”, of the United Kingdom), by way of purchase of shares
          (the “Transaction”).3 TDR is designated hereinafter as the “Notifying party”. TDR
          and BCA are referred to together as the “Parties”.
1    OJ L 24, 29.1.2004, p. 1 (the “Merger Regulation”). With effect from 1 December 2009, the Treaty on the
     Functioning of the European Union (“TFEU”) has 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 320, 24.9.2019, p. 8.
Commission européenne, DG COMP MERGER REGISTRY, 1049 Bruxelles, BELGIQUE
Europese Commissie, DG COMP MERGER REGISTRY, 1049 Brussel, BELGIË
Tel: +32 229-91111. Fax: +32 229-64301. E-mail: COMP-MERGER-REGISTRY@ec.europa.eu.
 ---pagebreak---     1. THE PARTIES
(2)     TDR is a private equity firm investing in a variety of sectors including motor fuels
        retail, gyms and health clubs, conveyor car washes, fleet leasing and management,
        vacant property services, modular construction, pubs and restaurants, debt
        purchasing, logistic pallet return, coastal transport, life insurance and apparel and
        homeware products.
(3)     TDR has an indirect minority interest in and control over LeasePlan Corporation
        N.V. (“LeasePlan”). LeasePlan’s core business is the provision of full fleet leasing
        and management services for vehicles. After leasing its vehicles to its customers,
        LeasePlan sells its vehicles, via its CarNext division, in the second life cycle through
        two primary disposal channels: (i) directly to consumers via its own consumer
        targeted remarketing platform and (ii) to trade buyers via its own online auction
        platform.
(4)     BCA provides used vehicle remarketing services (principally at physical auction
        sites) and related value-added services to facilitate the sale of used vehicles by
        vendors to predominantly trade buyers in the UK (and certain other Member States).
        In addition, it owns We Buy Any Car, a UK business that purchases used cars
        predominantly from individual consumers in the UK and disposes of them through
        the UK Vehicle Remarketing division of BCA. In continental Europe it trades under
        the CarTrade2B brand which purchases vehicles (predominantly batches of vehicles
        from corporates) to provide auction inventory to the International Vehicle
        Remarketing division of BCA.
    2. THE OPERATION AND THE CONCENTRATION
(5)     BBD Bidco Limited, a newly incorporated company controlled by TDR on behalf of
        funds it manages, will acquire the entire issued share capital of BCA. TDR will
        become BCA’s sole shareholder and will be able solely to exercise decisive
        influence over BCA’s strategic decisions. TDR will therefore acquire sole control
        over BCA within the meaning of Article 3(1)(b) of the EU Merger Regulation.
(6)     Therefore, the Transaction constitutes a concentration pursuant to Article 3(1)(b) of
        the Merger Regulation.
    3. EU DIMENSION
(7)     The undertakings concerned have a combined aggregate world-wide turnover of
        more than EUR 5 000 million.4 Each of them has an EU-wide turnover in excess of
        EUR 250 million, but they do not achieve more than two-thirds of their aggregate
        EU-wide turnover within one and the same Member State. The notified operation
        therefore has an EU dimension.
4   Turnover calculated in accordance with Article 5 of the Merger Regulation.
                                                          2
 ---pagebreak---      4. COMPETITIVE ASSESSMENT
    4.1. Introduction
(8)      The Transaction concerns the used vehicles sector and, particularly, the wholesale
         supply of used vehicles (downstream) and the wholesale provision of used vehicles
         remarketing services (upstream).5
(9)      The used vehicle sector is made up of different players at different levels. The
         following diagram illustrates the channels through which used vehicles are disposed
         of.6
(10)     As the above diagram shows, used vehicles are purchased by wholesalers (i.e.
         vehicle purchasing companies, which specialise in purchasing used vehicles from
         private consumers for resale, and dealers, which purchase both from private
         consumers and businesses) from different sources including private consumers,
         leasing companies and corporate fleets. Wholesalers7 subsequently dispose of their
5    The Commission had previously characterised the used vehicle market as being upstream of the
     remarketing services market in COMP/M.6958 CD&R/We Buy Any Car, of 8 August 2013. However, the
     Commission agrees with the argument raised by the Notifying Party that in this case it is more accurate to
     describe vendors of used vehicles as*, and auction providers as providers of an input (i.e. remarketing
     services) to wholesale suppliers of used vehicles. This reflects the fact that remarketing service providers
     typically do not acquire title to vehicles, which remain with the seller.
6    Sales of used vehicles made between private users are neither part of the wholesale nor of the retail
     segments of the used vehicle sector, however accounting for the majority of the total sales of used
     vehicles.
7    Some wholesalers also act as retail dealers, as shown in the diagram, and sell directly to consumers.
*    Should read: “buyers of remarketing services”
                                                             3
 ---pagebreak---         stock through either dealer–to–dealer sales or via auction, using the services offered
        by wholesale remarketing services providers (i.e. auction houses). Auction houses
        operate as an intermediary between sellers and purchasers of used vehicles, offering
        physical and online auction services to their customers, but do not acquire title to the
        vehicles. The used vehicles sold through auctions are primarily sold to dealers
        operating at retail level who, in turn, sell them to the final purchaser (private
        customers).
(11)    Both LeasePlan and BCA operate at both the downstream and upstream levels,
        acting as used vehicle wholesalers and as providers of auction services.
(12)    LeasePlan provides full fleet leasing and management services (to corporate
        customers) for passenger cars and light commercial vehicles. After leasing its
        vehicles to its customers, LeasePlan (via its CarNext division) sells them through
        two primary disposal channels: (i) directly to consumers via its consumer targeted
        (i.e. B2C) remarketing platform and physical stores and (ii) to trade buyers via its
        online auction platform (i.e. B2B).
(13)     While these platforms act primarily as a disposal channel for LeasePlan’s own used
        fleet vehicles, LeasePlan also remarkets [amount] vehicles on behalf of third parties
        (approximately [proportion] of its total B2B volumes across Europe in 2018). […].
(14)    BCA offers only wholesale (i.e. B2B) auction services for used vehicles. These
        auctions are conducted at physical locations, online, or through “hybrid” auctions
        which allow remote online access to physical auctions. As an auction house, BCA
        provides wholesale used vehicle remarketing services to facilitate the sale of used
        vehicles by a diverse pool of vendors predominantly to trade buyers through its UK
        and International Vehicle Remarketing Divisions.
(15)    In addition, BCA owns We Buy Any Car, a UK business that purchases used cars
        predominantly from individual consumers in the UK and disposes of them through
        BCA’s UK Vehicle Remarketing division. In continental Europe, it trades under the
        CarTrade2B brand which purchases vehicles (predominantly batches of vehicles
        from corporates) to provide auction inventory to BCA’s International Vehicle
        Remarketing division.
   4.2. Relevant product and geographic markets
4.2.1. The provision of wholesale used vehicle remarketing services
        Commission precedents
(16)    The Commission considered the provision of wholesale used vehicle remarketing
        services on one previous occasion.8 Although the Commission left the market
        definition open, it considered whether there was a separate product market for the
        provision of wholesale used vehicle remarketing services distinct from the market
        for the wholesale supply of used vehicles. It also considered whether that market
        could be further segmented between physical and online auction services. The
        Commission has not previously considered whether wholesale used vehicle
8   COMP/M.6958 CD&R/We Buy Any Car, of 8 August 2013.
                                                  4
 ---pagebreak---         remarketing services could belong to a broader market for B2B used vehicle
        remarketing. This potential broader market includes all used vehicle remarketing
        channels (i.e. including exchanges/auction houses; OEM platforms; dealerships and
        dealer-to-dealer platforms; and corporate platforms).
(17)    In its previous decision the Commission considered that the geographic markets for
        the provision of wholesale used vehicle remarketing services could be national in
        scope, at least regarding the UK. The Commission found that the nature of the used
        vehicles sold in the UK (i.e. vehicles with right-hand drive) meant they could not
        easily be sold outside of the UK. However, the Commission left the precise
        delineation of the geographic market open.
        Notifying Party’s views
(18)    The Notifying Party submits that the market for the provision of wholesale used
        vehicle remarketing services should be analysed by taking into account all used
        vehicle remarketing channels (i.e. including exchanges/auction houses; OEM
        platforms; dealerships and dealer-to-dealer platforms; and corporate platforms). It
        also considers that no distinction should be made based on the nature (including
        physical or online-only) of the remarketing channel, or the type of vendors / buyers
        that the channel attracts (including private consumers). In any event, the Notifying
        Party has presented data on the basis of the provision of wholesale auction services,
        distinguishing between online and physical auctions (with hybrid auctions being
        counted as online auctions).
(19)    During the Commission’s market investigation, a majority of respondents considered
        that online and physical auction services for the sale of used vehicles can be
        considered substitutable.9 However, some respondents also explain that they do not
        consider online auctions to be perfectly substitutable with physical auctions, as the
        latter allow buyers better opportunities to examine the vehicle before bidding.
        Among sellers of cars, a majority considered online and physical auctions as
        interchangeable.
(20)    As to the geographic scope of a market for the provision of wholesale used vehicle
        remarketing services, the Notifying Party submits that the wholesale used vehicle
        remarketing services market is at least national in scope. As regards the UK, it
        considers that the market would not be wider than national, given that vehicles sold
        in the UK are right hand drive and not readily substitutable with vehicles in the rest
        of the EEA10. As regards continental Europe, it considers that the geographic market
        for wholesale used vehicle remarketing services may be broader than national in
        some cases, as vehicles may be purchased and sold across borders.
9  See responses to the Commission’s questionnaire to competitors and the Commission’s questionnaire to
   buyers.
10 Although in Ireland cars are also right-hand drive, the parties activities do not overlap in Ireland as BCA
   is not active there.
                                                         5
 ---pagebreak---         Commission’s assessment
        Product market definition
(21)    The Commission considers that wholesale used vehicle remarketing services (i.e.
        physical and online auctions) are unlikely to belong to the same product market as
        other channels for remarketing used vehicles (i.e. OEM platforms; dealerships and
        dealer-to-dealer platforms; and corporate platforms). The provision of auction
        services is distinct, in that it involves a third party intermediary providing a service
        to a seller of used vehicles without taking title to the vehicle. Other types of
        platforms mentioned by the Notifying Party are managed by the vendors of used cars
        themselves, and therefore do not involve the provision of services by a third party.
(22)    As regards the distinction between online and physical auctions, the Commission’s
        market investigation supported the Parties’ claim that there is supply-side
        substitutability between the two. A majority of auction service providers indicated
        that they considered online and physical auctions to be equivalent, and that any
        differentiation between the two was diminishing as more and more physical auctions
        were incorporating online features, such as the possibility for buyers to participate
        remotely.11 Among buyers of used cars however, a majority of respondents indicated
        that the two types of auctions could not meet their requirements in the same way:
        one buyer explained that physical auctions allow buyers to conduct a closer
        examination of vehicles before purchase, and another that online auctions allowed
        them to purchase cars from any location.12
(23)    However, the precise delineation of the relevant product market for the provision of
        wholesale used vehicle remarketing services can be left open, given that the
        Transaction does not raise serious doubts as to its compatibility with the internal
        market, regardless of the precise product market definition retained.
        Geographic market definition
(24)    The Commission's market investigation supported the Parties' claim that the nature
        of the used vehicles sold in the UK (i.e. right-hand drive), serves as a geographic
        constraint on the ability of used vehicle remarketing service providers to sell these to
        customers outside the UK.
(25)    The Competition and Markets Authority has previously considered possible local
        markets within the UK for physical auctions. In this case, however, LeasePlan is not
        active in the provision of physical B2B auction services. Therefore, the Parties’
        activities do not overlap in the supply of physical auction services, but only in the
        supply of B2B online auction services and B2B combined physical and online
        auction services. For this reason, local markets will only be considered in this
        Decision where there are vertical links between BCA’s provision of physical
        auctions and LeasePlan’s supply of used vehicles.13
11 See responses to the Commission’s questionnaire to competitors.
12 See responses to Question 9 of the Commission’s questionnaire to buyers.
13 For combined physical and online auctions, there is also no need to consider possible local markets, given
   the competitive pressures from national online auctions explained in the competitive assessment below. If
                                                         6
 ---pagebreak--- (26)    For continental Europe, respondents indicated that few buyers of used cars purchase
        in auctions organized outside their own country.14
(27)    In view of the above and for the purpose of this decision, the Commission considers
        that the UK constitutes a separate geographic market. Therefore, as regards the EEA,
        the geographic market would not be broader than the EEA excluding the UK.
(28)    The competitive assessment below takes account of the plausible relevant product
        and geographic markets on which the Parties’ activities would overlap or in respect
        of which a vertical relationship would arise as a result of the Parties’ presence on the
        downstream market for the wholesale supply of used vehicles. These are the
        potential relevant markets in the EEA (excluding the UK), France, Germany, the
        Netherlands, Portugal, Spain, Sweden, the UK*:
        (a)       the provision of wholesale used vehicles remarketing services through
                  physical auctions;
        (b)       the provision of wholesale used vehicles remarketing services through online
                  auctions;
        (c)       the provision of wholesale used vehicles remarketing services, combining
                  physical and online auctions; and
        (d)       B2B used vehicle remarketing (representing all channel options available to
                  vendors).
4.2.2. The wholesale supply of used vehicles
        Commission precedents
(29)    The Commission has previously found that the wholesale supply of used vehicles
        constitutes a sub-segment of the market for wholesale supply of vehicles.15 The
        Commission has further determined the wholesale supply of used vehicles to be a
        separate market to the retail supply of used vehicles.
(30)    The Commission has previously left open whether the geographic market for these
        activities is Europe-wide or national, but has concluded that the UK market would
        not be wider than national given that vehicles sold in the UK are right-hand drive
        and not readily substitutable with vehicles in the rest of the EEA.
    online auctions (which are at least national in scope) compete on the same market as physical auctions,
    then the relevant geographic market would be at least national in scope.
14 See responses to the Commission’s questionnaire to competitors and the Commission’s questionnaire to
    buyers.
15 COMP/M.3352 VW / Hahn + Lang, of 16 February 2004; COMP/M.3388 Ford Motor Company Ltd /
    Polar Motor Group Ltd, of 30 April 2004; COMP/M.5347 Mapfre / Salvador Caetano / JV's, of 20 April
    2009; COMP/M.6718 Toyota Tsusho Corporation / CFAO, of 13 November 2012. A similar distinction
    was previously considered in respect of trucks and buses, given the differentiated product characteristics
    as well as market participants: COMP/M.6763 VWFS / Pon Holdings B.V. / Pon Equipment Rental &
    Lease, of 27 March 2013.
* Should read: “(and as regards (a), certain local markets) for
                                                          7
 ---pagebreak---         Notifying Party’s view
(31)    The Notifying Party agrees with the Commission’s precedents that the wholesale
        supply of used vehicles constitutes a separate market to the retail supply of used
        vehicles.
        Commission’s assessment
(32)    The Commission’s market investigation has shown that few buyers of used cars
        purchase in auctions outside their own country. Respondents indicated that there are
        regulatory differences – in particular arising from taxation – across Member States
        that make the cross-border sale of used vehicles difficult.
(33)    However, the precise delineation of the relevant product and geographic markets for
        the supply of used vehicles can be left open, given that the Transaction does not raise
        serious doubts as to its compatibility with the internal market, regardless of the
        precise market definition retained.
(34)    Accordingly, the competitive assessment below takes account of the plausible
        relevant product and geographic markets on which the Parties’ activities would
        overlap or in respect of which a vertical relationship would arise as a result of the
        Parties’ presence on the upstream market for the provision of wholesale used vehicle
        remarketing services. These are the potential relevant markets for the wholesale
        supply of used vehicles in the EEA and in certain Member States.
   4.3. Assessment of horizontal and vertical relationships
(35)    The Transaction gives rise to horizontal overlaps in the markets for B2B used
        vehicle remarketing, the provision of wholesale used vehicle remarketing services,
        and the possible sub-market for the provision of wholesale used vehicle remarketing
        services through online auctions.16 Moreover, the Transaction gives rise to vertical
        relationships given the Parties’ activities in the downstream wholesale supply of
        used vehicles and the upstream provision of physical or online auction services for
        the wholesale supply of used vehicles or in the upstream market for B2B used
        vehicle remarketing. These horizontal overlaps and vertical relationships will be
        analysed below.
  4.3.1. Horizontal overlaps in the provision of wholesale used vehicle remarketing services
        Market shares and competitive landscape
(36)    BCA and LeasePlan both operate B2B online auction platforms. However, unlike the
        BCA platforms, the LeasePlan platforms are focused on the disposal of LeasePlan’s
        own off-fleet vehicles. […]. Therefore, whereas BCA primarily provides a service to
        third party vendors looking to dispose of used vehicles, LeasePlan operates its
        auctions to dispose of its own vehicles and […].
16  The Transaction also leads to horizontal overlaps with regard to the market for the wholesale supply of
    used vehicles in the EEA and in certain Member States. However, those horizontal overlaps do not lead to
    any horizontally affected markets under any plausible product or geographic market definition and will
    not be analysed further in this decision.
                                                        8
 ---pagebreak--- (37)   On this basis, the Notifying Party provided market share data reflecting the Parties’
       position on the market for wholesale used vehicle remarketing services (i.e. the
       provision of remarketing services to third party vehicle wholesalers looking to
       dispose of vehicles to trade buyers), distinguishing between physical auctions and
       online platforms. This excludes the sales made by Parties of vehicles which they
       themselves own (as no services are provided to third parties).17
(38)   Based on this data, the Transaction leads to horizontally affected markets in the
       provision of wholesale used cars remarketing services (combined online and
       physical auctions or online only) in several Member States. In the plausible EEA-
       wide (excluding the UK) market for the provision of wholesale used vehicle
       remarketing services and the plausible EEA-wide (excluding the UK) sub-market for
       the provision of wholesale used vehicle remarketing services through online
       auctions, the combined market shares would be at most [20-30]% and [20-30]%,
       respectively. However, the increment would be insignificant and in any case below
       [0-5]%.18 In Spain, France, the UK, Sweden and Germany, the increment brought
       about by the Transaction is insignificant, i.e. below [0-5]%. Only in the Netherlands
       and Portugal, is the increment material, although in any event below [5-10]% (except
       in Portugal, in the potential sub-market limited to online auctions). The market
       shares and increments are set out in Table 1:
17 The Notifying Party also submitted market shares for the plausible broader product markets for B2B used
   vehicle remarketing (representing all used vehicles available to trade buyers and all channel options
   available to vendors). With regard to this plausible market, an affected market only arises in the UK,
   where the Parties achieve a market share of [30-40]% with an increment of [0-5]% brought about by
   LeasePlan. The analysis carried out in this section regarding horizontal overlaps in the provision of
   wholesale used vehicle remarketing services applies mutatis mutandis to horizontal overlaps in B2B used
   vehicle remarketing.
18 The Notifying Party only provided data for the countries where the Parties are active in within the EEA.
   Therefore, these figures are likely to be overestimated.
                                                          9
 ---pagebreak---         Table 1: Combined market shares in the horizontally affected markets for the
        provision of wholesale used vehicle remarketing services in 2018 (in volume)
                                     Online auctions only       Combined online and physical
                                                                           auctions
                                 Combined           Increment19  Combined          Increment
                               market share                     market share
           Netherlands            [30-40]%             [0-5]%     [40-50]%            [0-5]%
             Portugal             [30-40]%            [10-20]%    [40-50]%           [5-10]%
               Spain                 n/a20                n/a     [20-30]%          [0-5]%21
              France              [40-50]%            [0-5]%22    [20-30]%            [0-5]%
             The UK                   n/a                 n/a     [30-40]%          [0-5]%23
             Sweden               [50-60]%            [0-5]%24    [30-40]%            [0-5]%
            Germany                   n/a                 n/a     [20-30]%          [0-5]%25
               EEA                [20-30]%             [0-5]%     [20-30]%            [0-5]%
         (excluding the
                UK)
        Source: Form CO.
(39)    In all the countries where the Transaction leads to horizontally affected markets
        there exist a number of other companies providing wholesale used vehicle
        remarketing services.26
        (a)       In the Netherlands, CarsontheWeb/Adesa has market shares of [20-30]%
                  (online auctions) and [10-20]% (combining both online and physical
                  auctions), followed by Biddo ([10-20]% and [5-10], respectively), Autorola
                  ([10-20]% and [5-10]%, respectively) and AutoVeiling ([10-20]% and [5-
                  10]%, respectively).
        (b)       In Portugal, Manheim has market shares of [40-50]% (online auctions) and
                  [20-30]% (combining both online and physical auctions), […]* and Leilocar
                  ([0-5]% combining both online and physical auctions).
19 In all cases the increment is brought about by LeasePlan.
20 These markets are not affected.
21 […].
22 […].
23 […].
24 […].
25 […].
26 International players such as Manheim, Auto1, VP Auto, Autorola and Aston Barclay are active in
   different countries in the EEA.
*  Should read: “Autorola ([10-20]% and [5-10]%, respectively)”
                                                         10
 ---pagebreak---      (c)     In Spain, Auto 1 is the market leader with a market share of [30-40]%
             combining both online and physical auctions, followed by Manheim ([20-
             30]%), Leilocar ([10-20]%) and Autorola ([5-10]%).
     (d)     In France, Auto 1 has a market share of [30-40]% (online auctions) and [20-
             30]% (combining both online and physical auctions), followed by VP Auto
             ([10-20]% and [10-20]%, respectively), Alcopa ([10-20]% combining both
             online and physical auctions) and TEA ([0-5]% and [5-10]%, respectively).
     (e)     In the UK, Manheim has a market share of [20-30]% (combining both online
             and physical auctions), followed by Wilsons ([5-10]%), Aston Barclay ([5-
             10]%) and Enterprise ([0-5]%).
     (f)     In Sweden, KVD Bil AB is the only provider of physical auction services and
             is the market leader in the plausible market for the provision of both online
             and physical auctions ([30-40]%). Aston Barclay has market shares of [10-
             20]% (online auctions) and [10-20]% (combining both online and physical
             auctions), followed by Netbil ([10-20]% and [5-10]%, respectively) and
             Autorola ([5-10]% and [0-5]%, respectively).
     (g)     In Germany, Auto 1 has a market share of [40-50]% (combining both online
             and     physical    auctions),    followed     by    Autobid      ([10-20]%),
             CarsontheWeb/Adesa ([5-10]%) and Autorola ([0-5]%).
     Notifying Party’s view
     Closeness of competition
(40) The Notifying Party submits that the Parties are not close competitors given that
     CarNext is primarily a proprietary platform for the disposal of LeasePlan vehicles,
     while BCA focuses on providing remarketing services to third party vendors.
     Entry
(41) The Notifying Party submits that there are no significant barriers to entry or
     expansion in the wholesale used vehicle remarketing market. More generally, it
     considers it likely that: (i) smaller online platforms will expand and capture
     additional volumes; (ii) existing platforms which are currently closed to third party
     vendors (e.g. proprietary platforms) will commence remarketing third party vehicles
     in addition to self-supplied vehicles; and (iii) new players will enter the market by
     establishing online remarketing platforms.
     Switching and multi-sourcing
(42) The Notifying Party submits that vendors and buyers can quickly and easily switch
     between alternative remarketing channels since they are able to list on different
     platforms simultaneously.
                                               11
 ---pagebreak---        Commission’s assessment
       Closeness of competition
(43)   None of the customers (vendors or buyers) who replied to the market investigation
       indicated that they used the wholesale used vehicles remarketing services of both
       Parties in 2018.27 Moreover, no respondent indicated that the Parties were each
       other’s close competitor.28 On this basis, it appears that the Parties are not
       particularly close competitors.
       Entry
(44)   The market investigation showed that, although investment costs may be high, there
       are no other major barriers to entry into the market for the provision of wholesale
       used vehicle remarketing services.29 Moreover, the market investigation indicated
       that several companies have entered the market in all the countries concerned in the
       last three years. In the Netherlands, Auto 1 (an international player active in several
       countries across the EU) entered the market in 2016. In addition, some competitors
       that replied to the market investigation foresee some new entries in the short term. In
       particular, competitors confirmed that they plan to enter the Portuguese market in the
       next years.30
       Switching and multi-sourcing
(45)   During the market investigation, the majority of vendors and buyers indicated that it
       is not difficult to switch providers of wholesale used vehicles remarketing services.31
(46)   Moreover, the majority of vendors indicated that they multisource.32 Furthermore,
       the vast majority of the vendors that replied to the market investigation stated that
       they would have sufficient alternative providers for their entire demand should the
       Parties stop providing them with wholesale used vehicles remarketing services or
       provide them at significantly worse conditions post-Transaction.33 As confirmed
       during the market investigation, in all the countries concerned there are significant
       alternative providers of wholesale used vehicle remarketing services, as indicated in
       the list at paragraph (39)above. These are a mix of big international and strong local
       suppliers that would be likely to continue to constrain the merged entity post-
       Transaction.
(47)   In addition, the vast majority of vendors and buyers that replied to the market
       investigation indicated that the transaction would not be likely to have an impact on
27 See responses to question 15 of the Commission’s questionnaire to vendors and to question 16 of the
   Commission’s questionnaire to buyers.
28 See responses to question 16 of the Commission’s questionnaire to vendors and to question 17 of the
   Commission’s questionnaire to buyers.
29 See responses to questions 20, 29, 38, 47 and 56 of the Commission’s questionnaire to competitors.
30 See responses to questions 19, 28, 37, 46 and 55 of the Commission’s questionnaire to competitors.
31 See responses to question 20 of the Commission’s questionnaire to vendors and to question 21 of the
   Commission’s questionnaire to buyers.
32 See responses to question 18 of the Commission’s questionnaire to vendors.
33 See responses to question 19 of the Commission’s questionnaire to vendors.
                                                         12
 ---pagebreak---         their own businesses.34 During the market investigation, no market participants
        raised concerns with regard to the horizontal overlap in the provision of wholesale
        used vehicle remarketing services with the exception of one vendor. However, its
        concerns were unsubstantiated.35 The vast majority of vendors also submitted that
        they do not expect prices to increase post-Transaction.36
        Conclusion
(48)    As regards Spain, France, the UK, Sweden and Germany, and in the EEA (excluding
        the UK) as a whole, despite the Parties’ in some cases high combined market shares,
        the Commission considers that, in light of the factors analysed above, and in
        particular the insignificant increment brought about by the Transaction and the
        market investigation results, the Transaction would not give rise to anti-competitive
        horizontal effects.
(49)    As regards the Netherlands and Portugal, despite the Parties’ relatively high
        combined market shares, in light of the factors analysed above, and in particular the
        number of strong suppliers already active in the market, the recent and future
        entrants and the market investigation results, the Commission considers that the
        Transaction would not give rise to anti-competitive horizontal effects.
(50)    Therefore, the Commission considers that the Transaction does not raise serious
        doubts as to its compatibility with the internal market with regard to potential
        horizontal effects in the markets for the provision of wholesale used vehicle
        remarketing services and the possible sub-market for the provision of wholesale used
        vehicle remarketing services through online auctions in the EEA (excluding the UK)
        as a whole, Spain, France, the UK, Sweden, Germany, the Netherlands and Portugal.
  4.3.2. Vertical relationships – wholesale used vehicle remarketing services (upstream) /
        wholesale supply of used vehicles (downstream)
        Market shares
(51)    On the basis of the relevant product and geographic markets set out above, the
        Transaction would give rise to vertically affected markets given the Parties’
        activities in the downstream wholesale supply of used vehicles in Denmark, France,
        Germany, Italy, the Netherlands, Portugal, Spain, Sweden, and the UK, and the
        upstream provision of physical or online auction services for the wholesale supply of
        used vehicles in those countries.
34  See responses to question 25 of the Commission’s questionnaire to vendors and to question 26 of the
    Commission’s questionnaire to buyers.
35 The claims of the Portuguese vendor were unsubstantiated since they were not related to online auctions.
    In Portugal, CarNext is not active in the provision of physical auctions and there are other providers of
    online and hybrid auctions such as Manheim (with a market share of [20-30]% in the market for both
    online and physical auctions), Autorola ([5-10]%) and Leilocar ([0-5]%).
36 See responses to question 24 of the Commission’s questionnaire to vendors.
                                                         13
 ---pagebreak--- (52)   According to the information submitted by the Notifying Party:37
       (a)      in Denmark, LeasePlan has a market share of [0-5]% on the market for the
                wholesale supply of used vehicles, and BCA of [0-5]%, while BCA holds a
                share of [70-80]% on the market for the provision of physical auction
                services;
       (b)      In France, LeasePlan has a market share of [0-5]% on the market for the
                wholesale supply of used vehicles, on which BCA is not active, while BCA
                holds a share of [40-50]% on the market for the provision of online auction
                services, and [30-40]% on the combined physical and online market
                (LeasePlan’s market share on either upstream market is below [0-5]%);
       (c)      in Germany, LeasePlan has a market share of [0-5]% on the market for the
                wholesale supply of used vehicles, and BCA of [0-5]%, while BCA holds a
                share of [50-60]% on the market for the provision of physical auction
                services (where LeasePlan is not active);
       (d)      in Italy, LeasePlan has a market share of [0-5]% on the market for the
                wholesale supply of used vehicles, on which BCA is not active, while BCA is
                the only known player on the market for the provision of physical auction
                services;
       (e)      in the Netherlands, LeasePlan has a market share of [0-5]% on the market for
                the wholesale supply of used vehicles, on which BCA has a market share
                below [0-5]%, while BCA holds a share of [80-90]% on the market for the
                provision of physical auction services. On the online segment of the market,
                the Parties’ combined share post transaction would be [30-40]%, and on a
                combined market including physical and online auctions, it would be [40-
                50]%;
       (f)      in Portugal, LeasePlan has a market share of [0-5]% on the market for the
                wholesale supply of used vehicles, on which BCA has a market share below
                [0-5]%, while BCA holds a share of [40-50]% on the market for the provision
                of physical auction services. On the online segment of the market, the
                Parties’ combined share post transaction would be [30-40]%, and on a
                combined market including physical and online auctions, it would be [40-
                50]%;
       (g)      in Spain, LeasePlan has a market share of [0-5]% on the market for the
                wholesale supply of used vehicles, on which BCA is not active, while BCA
                holds a share of [30-40]% on the market for the provision of physical auction
                services;
       (h)      in Sweden, LeasePlan has a market share of [0-5]% on the market for the
                wholesale supply of used vehicles, and BCA of [0-5]%, while BCA holds a
                share of [50-60]% on the market for the provision of online auction services.
                On a combined market including both physical and online auctions, the
                Parties would have a combined market share post transaction of [30-40]%;
37 The figures provided below reflect the Parties’ market shares by volume in 2018. Share by value would
   not be materially different.
                                                       14
 ---pagebreak---         (i)      in the UK, LeasePlan has a market share of [0-5]% on the market for the
                 wholesale supply of used vehicles, and BCA of [5-10]%, while BCA holds a
                 share of [40-50]% on the market for the provision of physical auction
                 services. On a combined market including both physical and online auctions,
                 the Parties would have a combined market share post transaction of [30-
                 40]%;38
(53)    As mentioned in section 4.2.1, the UK’s Competition and Markets Authority has
        previously considered possible local markets for physical auctions (on which the
        Parties’ activities do not overlap as LeasePlan does not organize physical auctions).
        For the UK, the Notifying Party has identified catchment areas around BCA’s
        physical auction sites within which 80% of customers utilizing that site are located.
        For other countries, the Notifying Party has estimated that the relevant catchment
        area around their physical auction sites would be approximately 150km.
(54)    The Notifying Party have used a fascia method – identifying all competing auction
        sites within the radius, and assuming that all sites exercise the same amount of
        competitive pressure. Using this method, the Notifying Party assumed that BCA’s
        physical auction share is likely to exceed 30% if there are no more than two
        competing sites within a catchment area. For the UK, this assessment is based on
        site-specific information collected for the purposes of the Competition and Markets
        Authority’s previous inquiry into the acquisition by BCA of SMA Vehicle
        Remarketing Limited in 2016. To the Notifying Party’s best knowledge, the number
        of competing sites around each BCA site have not reduced since. For other European
        countries, the Notifying Party have assumed that each BCA site competes locally
        with no more than the number of competitors identified nationally. The market
        shares in such local markets are assumed to be at least as high as BCA’s market
        shares at a national level.39
(55)    Based on this, the Notifying Party submits that they have market shares above 30%
        in a number of local markets in Denmark, Germany, Italy, the Netherlands, Portugal,
        Spain, and the UK.40
(56)    The Commission’s Non-Horizontal Merger Guidelines41 (the “Non-Horizontal
        Merger Guidelines”) explain that a merger between companies active in vertically
        related markets may significantly impede effective competition when the merger
        might give rise to foreclosure. A merger may result in foreclosure where actual or
38 The Notifying Party also submitted market shares for the plausible broader product markets for B2B used
   vehicle remarketing (representing all used vehicles available to trade buyers and all channel options
   available to vendors). With regard to this plausible market, a vertically affected market only arises in the
   UK, where the Parties achieve a market share of [30-40]% with an increment of [0-5]% brought about by
   LeasePlan. The analysis carried out in this section regarding vertical relationships in the provision of
   wholesale used vehicle remarketing services applies mutatis mutandis to B2B used vehicle remarketing.
39 I.e. [70-80]% in Denmark, [90-100]% in Italy, [50-60]% in Germany, [80-90]% in the Netherlands, [40-
   50]% in Portugal, [30-40]% in Spain, and [40-50]% in the UK.
40 These correspond to the catchment areas around the following sites: Vejle in Denmark;
   Berlin/Hoppegarten, Groß-Gerau, Hamburg/Ellerau, Heidenheim, and Neuss in Germany; BCA Lodi -
   Montanaso Lombardo in Italy; BCA Barneveld – Barneveld in the Netherlands; BCA Lisboa – Mem
   Martins, BCA Pombal – Pombal, and BCA Porto – Mindelo in Portugal; Alicante, Azuqueca, Bellvei, and
   La Luisiana in Spain; Edinburgh, Glasgow, Kinross, and Newcastle in the United Kingdom.
41 Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control of
   concentrations between undertakings, OJ C265/6 of 18.10.2008, p.6.
                                                         15
 ---pagebreak---      potential rivals' access to supplies or markets is hampered or eliminated as a result of
     the merger, thereby reducing these companies' ability and incentive to compete.
     Such foreclosure is regarded as anticompetitive where, as a result of the merger, the
     merging companies, and possibly also some of its competitors, are able to profitably
     increase the price charged to consumers.
(57) 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.
(58) When assessing the likelihood of such an anticompetitive foreclosure scenario, the
     Commission examines whether the merged entity would have the ability post-merger
     to foreclose access, whether it would have the incentive to do so, and whether a
     foreclosure strategy would have a significant detrimental effect in the downstream
     market.
     No possible customer foreclosure
     Notifying Party’s view
(59) The Notifying Party submits that the Parties currently face – and will continue to
     face post-merger – competitive pressure from significant competitors at both levels
     of the used vehicle supply chain.
(60) The Notifying Party submits that the volume of used vehicles for which LeasePlan
     could require remarketing services (i.e. the volumes which could theoretically be
     foreclosed post transaction) represent only a de minimis proportion of the total used
     vehicles supplied on the wholesale market. Furthermore, as LeasePlan is already
     vertically integrated, any hypothetical ability and incentive for it to foreclose rival
     remarketing service providers would already be in place in the absence of the
     Transaction, which would therefore only bring about a small increment to this
     hypothetical ability and incentive to foreclose.
(61) The Notifying Party further submits that as TDR has only a minority interest in
     LeasePlan, the latter would have no incentive to favour BCA as part of a strategy to
     foreclose BCA’s rivals. LeasePlan and its investors would not be willing to receive
     lower returns on vehicle disposals in the hope that this would allow BCA to achieve
     higher returns.
     Commission’s assessment
(62) LeasePlan is a current or potential user of BCA’s wholesale used vehicle
     remarketing services, depending on the country. However, in most countries in
     which both are active, LeasePlan uses its own remarketing platform to dispose of its
     vehicles. In Germany, France, Portugal and the Netherlands, volumes disposed of
     via third-party remarketing channels amount to fewer than [amount] vehicles per
     annum, representing less than [proportion] of vehicles disposed of by LeasePlan in
     these countries. In Spain and Italy, [proportion] of LeasePlan’s volumes are disposed
     of through its own remarketing platform. In Denmark, Sweden and the UK in 2018
     [proportion] of LeasePlan’s volumes of used cars were disposed of via third party
                                                16
 ---pagebreak---        remarketing services. Of those volumes disposed of through third party remarketing
       services in 2018 (which represent [0-5]%, [0-5]% and [0-5]% of the market,
       respectively), [proportion] were sold through BCA.
(63)   Two respondents to the Commission’s market investigation raised concerns that
       LeasePlan would exclusively sell its volumes of used cars via BCA.42 These
       respondents suggested that over time, this would increase BCA’s market share and
       that given the existence of network effects on the markets for auction services, there
       is a risk of the market “tipping”. Both respondents believed that by becoming
       LeasePlan’s exclusive partner, BCA’s operations would become more efficient
       allowing BCA to offer lower fees and to gain market share. This would allow BCA
       to achieve a dominant position, after which it would significantly increase its prices.
(64)   However, as mentioned above, the volumes sold by LeasePlan account only for [0-
       5]% of cars sold on the wholesale used vehicle market in Denmark, [0-5]% in
       France, [0-5]% in Germany, [0-5]% in Italy, [0-5]% in the Netherlands, [0-5]% in
       Portugal, [0-5]% in Spain, [0-5]% in Sweden and [0-5]% in the UK. The merged
       entity would not have the ability to foreclose competitors’ access to the downstream
       market, given that the Parties only account for a very limited portion of the potential
       demand for vehicle remarketing services. There would also be several large
       alternative purchasers of remarketing services remaining on the market, such as
       Alphabet, and vehicle-leasing companies belonging to large Original Equipment
       Manufacturers such as Mercedes-Benz, Volkswagen, PSA, and BMW.
(65)   Moreover, LeasePlan already sells [proportion] of its used vehicles using either its
       own or BCA’s auctions services. As such, the Transaction would […]. Therefore, the
       Transaction is unlikely to have an impact in this regard and, as a result, to deprive
       upstream competitors of significant customer volumes compared to the pre-
       Transaction situation.
(66)   In light of the above, the Transaction is unlikely to confer upon the Parties the ability
       and the incentive to engage in customer foreclosure given that LeasePlan is not an
       important customer of remarketing services providers. The Transaction will
       therefore not deny rival providers of wholesale remarketing services access to a
       significant customer base or reduce their ability to compete in the foreseeable future.
       No possible input foreclosure
       Notifying Party’s view
(67)   The Notifying Party submits that it would not have the ability to foreclose
       LeasePlan’s competitors on the downstream market for wholesale used vehicles.
       They identify numerous alternative providers of wholesale used vehicle remarketing
       services:
       (a)     In Denmark, PB Car Trading ([10-20]%), and Sjællands Bilauktionaellan ([5-
               10]%) are alternative providers of physical auction services. On a combined
               physical and online market, Autoproff ([40-50]%) and Autorola ([20-30]%)
               would also be alternative providers;
42 See responses to the Commission’s questionnaire to competitors.
                                                       17
 ---pagebreak--- (b) In France, Auto1 ([20-30]%), Alcopa ([20-30]%), VP Auto ([10-20]%), and
    TEA ([5-10]%) are alternative providers of wholesale used vehicle
    remarketing services (physical and online combined). On the online segment
    of the market, alternative providers include Auto1 ([30-40]%), VP Auto ([10-
    20]%) and TEA ([0-5]%);
(c) In Germany, Autobid ([40-50]%) is the second largest provider of physical
    auction services. On a combined physical and online market, Auto1 ([40-
    50]%) is the largest provider, and there are other alternative providers such as
    Autobid ([10-20]%) and ADESA ([5-10]%);
(d) In Italy, BCA is the only provider of physical auction services of which the
    Parties were aware. On a combined physical and online market however,
    Auto1 ([40-50]%) is the largest provider, and there are other alternative
    providers such as ADESA ([10-20]%), Autorola ([5-10]%) and Manheim ([5-
    10]%);
(e) In the Netherlands, ADESA ([10-20]%), Biddo ([10-20]%) AutoVeiling ([10-
    20]%), Autorola ([10-20]%) and BVA Auctions ([5-10]%) are alternative
    providers of wholesale used vehicle remarketing services (physical and
    online combined). On the physical segment, other providers have [20-30]%
    of the market. On the online segment alternative providers include ADESA
    ([20-30]%), Biddo ([10-20]%) Autorola ([10-20]%) and Auto Veiling ([10-
    20]%);
(f) In Portugal, Manheim ([20-30]%), Autorola ([5-10]%) and Leilocar ([0-5]%)
    are alternative providers of wholesale used vehicle remarketing services
    (physical and online combined). On the online segment of the market,
    Manheim ([40-50]%) is the biggest provider. On the physical segment of the
    market, Manheim ([10-20]%) and Leilocar ([5-10]%) are alternative
    providers, and the Notifying Party estimates that other providers account for
    [30-40]% of the market;
(g) In Spain, Auto1 ([30-40]%), Manheim ([20-30]%), Leilocar ([10-20]%) and
    Autorola ([5-10]%) are alternative providers of wholesale used vehicle
    remarketing services (physical and online combined). On the physical
    segment of the market, alternative providers include Manheim ([30-40]%)
    and Leilocar ([20-30]%);
(h) In Sweden KVD Bil AB ([30-40]%), Aston Barclay ([10-20]%), Netbil ([5-
    10]%), Autorola ([5-10]%) and Trading Solutions AB ([5-10]%) are
    alternative providers of wholesale used vehicle remarketing services
    (physical and online combined). On the online segment, alternative providers
    include Aston Barclay ([20-30]%), Netbil ([10-20]%), Autorola ([5-10]%)
    and Trading Solutions AB ([5-10]%);
(i) In the UK, Manheim Auctions ([20-30]%), Wilsons Auctions ([5-10]%),
    Aston Barclay ([5-10]%), Enterprise ([0-5]%) and Epyx 1link ([0-5]%) are
    alternative providers of wholesale used vehicle remarketing services
    (physical and online combined). In the physical segment, alternative
    providers include Manheim ([20-30]%), Wilsons ([5-10]%) and Aston
    Barclay ((5-10]%).
                                      18
 ---pagebreak--- (68) The Notifying Party submits that third party remarketing services are not an essential
     input, as companies can dispose of their vehicles directly to purchasers without using
     third-party remarketing services. Many vehicle-leasing companies, including
     LeasePlan, currently dispose of used vehicles via their own proprietary platforms. A
     fortiori, parties can choose to dispose of their vehicles via online auctions if they are
     denied access to physical auction services. BCA could not reasonably foreclose
     LeasePlan’s competitors from access to an essential input as those companies have
     numerous alternative vehicle disposal options (in addition to BCA's existing
     competitors).
(69) The Notifying Party also submits that it would have no incentive to foreclose
     LeasePlan’s competitors.
(70) First, it argues that its customer base is highly fragmented and that its business
     model is built on attracting growing volumes of used vehicle trades. This is because
     auctions have important network effects as purchasers are attracted to auctions with
     the largest volumes of traded vehicles, and sellers are attracted to auctions having
     more potential bidders. For sellers, the participation of the highest number of
     potential bidders increases the likelihood that the reserve price set for the vehicle
     will be met. BCA’s business model is thereby reliant on attracting increasing
     volumes of used vehicles in order to generate more revenue and reduce overall costs.
     As such, BCA would have no incentive to refuse to accept used car volumes in an
     effort to potentially harm LeasePlan’s competitors.
(71) Second, the Notifying Party submits that if BCA ceased supplying remarketing
     services to LeasePlan’s rivals, increased its prices or reduced its service levels, it
     would immediately lose a significant portion of its turnover. This loss in turnover
     would not be offset to any material extent by the increased volumes being directed to
     BCA from LeasePlan. This reflects that such a foreclosure strategy would not have a
     material impact on LeasePlan’s vehicle volumes given this is driven by the size of its
     fleet leasing business (and not the demand for wholesale used vehicles). This is
     particularly so as LeasePlan’s fleet leasing competitors would continue to have
     access to alternative remarketing options and thus their business is unlikely to be
     materially impacted. Such a strategy would thus lead to a direct loss of business for
     BCA with no likelihood of recoupment through greater fleet leasing (or even used
     vehicle sales) volumes from LeasePlan.
(72) Finally, as TDR has only a minority equity interest in LeasePlan, any potential
     incentive for BCA to foreclose LeasePlan’s rivals would be further reduced by the
     fact that TDR would not recoup via LeasePlan the full value of any lost revenue
     subsequently captured by LeasePlan but rather only a partial return.
(73) BCA would have no incentive to refuse to provide its services to other sellers of
     used cars. Were it to do so, it would lose a significant portion of its turnover, which
     would not be offset by the increased volumes which LeasePlan would direct to it.
     Commission’s assessment
(74) As explained in section 4.3.1 above, the Parties have high or relatively high
     combined market shares in some of the upstream markets for wholesale used vehicle
     remarketing services. However, the Commission considers that the merged entity
     will not have the ability and the incentive to foreclose downstream competitors in
                                                19
 ---pagebreak---        the wholesale supply of used vehicles, and any such strategy would not have an
       effect on the markets, for the following reasons.
(75)   First, the investigation did not show that remarketing services were an important
       input for the sale of used vehicles. They are not a significant cost factor, as
       remarketing fees do not amount to a substantial proportion of the cost of a used
       vehicle. Nor are auction services a critical component in the sale of used cars, as
       vehicles can be sold directly to trade buyers without the need for an intermediary
       (LeasePlan for instance currently sells most of its used car volumes directly).
       Finally, auction services do not represent a significant source of product
       differentiation for used vehicles. Any attempt at foreclosure would result in a loss of
       the majority of its business for the merged entity were it to pursue this strategy, and
       would not offer its downstream operation any material benefit.
(76)   Second, as the Notifying Party has explained, there are numerous alternative
       remarketing providers who offer wholesale used vehicle remarketing services. These
       include Adesa, Manheim, Autorola, Auto1 and VP AutoVP, who all have significant
       market shares in multiple countries.
(77)   Even if the merged entity had the ability to engage in input foreclosure, it would
       have no incentive to do so. As explained in paragraph (52) the volumes of used
       vehicles remarketed by LeasePlan amount to a very small proportion of the overall
       market for the wholesale supply of used vehicles, on which auction providers
       compete to offer their services, with market shares below [5-10]% in all the markets
       concerned. As BCA’s business model is based on attracting large volumes of
       vehicles to its auctions, it would have no incentive to deny auction services to
       LeasePlan’s competitors. The volumes which BCA could resell on behalf of
       LeasePlan would not be sufficient to compensate for the volumes lost by refusing to
       offer remarketing services to other potential customers.
(78)   Finally, the Commission observes that pre-Transaction, BCA possesses a [5-10]%
       market share in the downstream market for the wholesale supply of used vehicles in
       the UK, and a [40-50]% market share in the upstream market for the provision of
       wholesale physical auction services (on a national basis). However, the
       Commission’s market investigation did not reveal that BCA had sought to carry out
       an input foreclosure strategy in that country. This indicates that post-Transaction, the
       merged entity’s market shares in the downstream markets (which would be [10-20]%
       in the UK and below [0-5]% elsewhere) would be too low to create incentives for the
       merged entity to engage in input foreclosure.
(79)   In Italy the absence of alternative providers of physical auctions could possibly give
       BCA the ability to foreclose.43 As noted at paragraph (54) above there also exist
       local markets for wholesale physical auctions on which the merged entity would
       have high market shares. On such markets however, even if the merged entity had
       the ability to engage in input foreclosure, it would have no incentive to do so. This is
       for the following reasons:
43 BCA also has high market shares in other countries, i.e. [70-80]% in Denmark, [50-60]% in Germany,
   [80-90]% in the Netherlands, [40-50]% in Portugal, [30-40]% in Spain, and [40-50]% in the UK.
                                                       20
 ---pagebreak--- (80)   BCA’s loss in revenue from the provision of remarketing services would not be
       compensated by increased volumes from downstream operations. This reflects the
       fact that such a foreclosure strategy would not have a material impact on LeasePlan’s
       (relatively limited) vehicle volumes given that this is driven by the size of its fleet
       leasing business (and not the demand for wholesale used vehicles).
(81)   Therefore, the volumes which BCA could resell on behalf of LeasePlan would not be
       sufficient to compensate for the volumes lost by refusing to offer remarketing
       services to other potential customers. BCA’s customer base is highly fragmented and
       a foreclosure of LeasePlan’s competitors would result in a direct loss of the majority
       of BCA’s turnover.44 Generally, auction markets present significant network effects,
       and it is in the interest of auction providers to attract the highest number of vendors
       and buyers.
(82)   In light of the above, the Transaction is unlikely to confer upon the Parties the ability
       and the incentive to engage in input foreclosure. The Transaction will therefore not
       deny rival wholesalers of used cars access to auction services or reduce their ability
       to compete in the foreseeable future.
       Conclusion
(83)   Therefore, the Commission considers that the Transaction does not raise serious
       doubts as to its compatibility with the internal market with regard to potential
       vertical effects in the markets for wholesale used vehicle remarketing services via
       physical auctions, wholesale used vehicle remarketing services via online auctions
       and wholesale used vehicle remarketing services via combined online and physical
       auctions upstream and the wholesale supply of used vehicles downstream in
       Denmark, France, Germany, Italy, the Netherlands, Portugal, Spain, Sweden, and the
       UK, both at national and (for physical auctions) local level.
    5. CONCLUSION
(84)   For the above reasons, the European Commission has decided not to oppose the
       notified operation and to declare it compatible with the internal market and with the
       EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the
       Merger Regulation and Article 57 of the EEA Agreement.
                                                          For the Commission
                                                          (Signed)
                                                          Margrethe VESTAGER
                                                          Member of the Commission
44 This was the basis on which the Commission concluded that a previous concentration involving BCA did
   not raise vertical foreclosure concerns, in COMP/M.6958 CD&R/We Buy Any Car, of 8 August 2013,
   para. 35.
                                                     21