CELEX: 32020M9796
Language: en
Date: 2020-07-29 00:00:00
Title: Commission Decision of 29/07/2020 declaring a concentration to be compatible with the common market (Case No COMP/M.9796 - UNIQA / AXA (INSURANCE, ASSET MANAGEMENT AND PENSIONS - CZECHIA, POLAND AND SLOVAKIA)) according to Council Regulation (EC) No 139/2004 (Only the English text is authentic)

EUROPEAN COMMISSION
                                                                 Brussels, 29.7.2020
                                                                 C(2020) 5340 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                                                                  information omitted has been replaced by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.9796 –UNIQA / AXA (INSURANCE, ASSET MANAGEMENT
                AND PENSIONS - CZECHIA, POLAND AND SLOVAKIA)
                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 23 June 2020, the European Commission received notification of a proposed
          concentration pursuant to Article 4 of the Merger Regulation by which Uniqa
          Österreich Versicherungen AG, Austria (“Uniqa” or the “Notifying Party”) would
          acquire within the meaning of Article 3(1)(b) of the Merger Regulation sole control
          of insurance (life and non-life), asset management and pension business operations
          of AXA S.A. ("AXA") in the Czech Republic, Poland and Slovakia (the “Target”)
          (“the Transaction”)3. Uniqa and the Target are together referred to 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 216, 30.6.2020, p. 21.
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)     Uniqa is an Austrian insurance company, part of a group which provides insurance
        products and services primarily in Austria, Central and Eastern Europe. Uniqa is
        jointly controlled by (i) Uniqa Versicherungsverein Privatstiftung (“Uniqa PS”), a
        private foundation, whose exclusive beneficiaries are policyholders of Uniqa, and
        (ii) Raiffeisen Bank International (“RBI”), an Austrian banking group.
(3)     The Target comprises the insurance (life and non-life), asset management and
        pension businesses in the Czech Republic, Slovakia and Poland of AXA, where the
        primary focus of its activities is on insurance.
2.      THE OPERATION
(4)     The Transaction is structured as a share purchase. Pursuant to the share purchase
        agreement, entered into on 7 February 2020, all shares in the Target and each right
        attached to these shares shall be acquired by Uniqa.
(5)     As such, following completion of the Transaction, the entire share capital in the
        Target will be held by Uniqa and Uniqa will acquire sole control of the Target. The
        Transaction is therefore a concentration within the meaning of Article 3(1)(b) of the
        EU Merger Regulation.
3.      EU DIMENSION
(6)     The undertakings concerned have a combined aggregate worldwide turnover of more
        than EUR 5 000 million (Uniqa EUR 5 300 million; Target: […]).4 Each of them has
        an EU-wide turnover in excess of EUR 250 million (Uniqa: […]; Target: […]), 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.      COMPETITIVE ASSESSMENT
4.1.    Market Definition
4.1.1. Insurance products
(7)     In previous decisions relating to the insurance sector, the Commission distinguished
        three categories of insurance products (life insurance, non-life insurance, and
        reinsurance), as well as a downstream market for insurance distribution.5 In the
        present case, only life and non-life insurance products are relevant for the
        competitive assessment of the Transaction.
4   Turnover calculated in accordance with Article 5 of the Merger Regulation.
5   See M.9432 - Allianz Holdings / Legal and General Insurance, para 7 and cases cited.
                                                          2
 ---pagebreak--- 4.1.1.1. Previous decisional practice
(8)      As regards the product market definition for life insurance products, the Commission
         distinguished between: (i) pure risk protection products; (ii) pension products; and
         (iii) savings/investment products (sometimes grouping the two latter).6 In certain
         decisions, the Commission also distinguished between life insurance for individuals
         and group/corporate customers, or between products based on the type of risk
         covered. The Commission ultimately left open the precise product market definition
         for life insurance products for all plausible segmentations mentioned above.7
(9)      As regards product market definition for non-life insurance products, the
         Commission’s consistent approach is to consider that relevant product markets can
         be divided into the types of risks to insure. Precedents typically distinguish the
         following non-life insurance segments: (i) accident and sickness, (ii) motor vehicle,
         (iii) property, (iv) liability, (v) marine, aviation and transport (“MAT”), (vi) credit
         and suretyship and (vii) travel insurance.8 In certain decisions, the Commission also
         distinguished fire insurance, and legal assistance. The Commission also considered
         several additional segmentations of the non-life insurance market, including based
         on national insurance classification9 or between individual and group (i.e.
         corporate/institutional) customers. The Commission ultimately left open the precise
         product market definition for non-life insurance products for all plausible
         segmentations mentioned above.
(10)     As regards geographic market definition, in previous decisions, the Commission
         typically considered that the markets for life and non-life insurance products and
         their respective sub-segments are likely to be national in scope, and potentially wider
         than national for certain risk classes of non-life insurance.10
4.1.1.2. Notifying Party’s view
(11)     Regarding non-life insurance, the Notifying Party indicates that there is supply side
         substitutability between the different segments of non-life insurance and, thus,
         different types of non-life insurance could form part of the same product market. The
         Notifying Party further indicates that, in the relevant Member States (including
         Poland and Slovakia where plausible affected markets arise), the classification of
6   See M.8837 Blackstone/Thomson Reuters F&R Business, para 29; M.8257 NN Group/Delta Lloyd, para
    12; M.7478 Aviva/Friends Life/Telenet, para 13; M.6743 Talanx International/Meiji Yasuda Life
    Insurance Company/HDI Poland, para 19.
7   See M.8837 - Blackstone / Thomson Reuters F&R Business, para 29; M.8257 - NN Group / Delta Lloyd,
    para 12; M.7478 Aviva / Friends Life / Telenet, para 13, and cases cited.
8   See M.9432 Allianz Holdings/Legal and General Insurance, para 8; COMP/M.9056 Generali CEE/AS,
    para 12; COMP/M.8257 NN Group/Delta Lloyd, para 73; COMP/M.4844 Fortis/ABN Amro Assets, para
    72.
9   Specifically regarding Poland for instance, the Commission considered a potential segmentation according
    to risk classes defined by the Polish Insurance Act. See M.6743 Talanx International / Meiji Yasuda Life
    Insurance Company / Hdi Poland, paras 22 et seq. Such classes include group accident insurance (class 1)
    sickness insurance (class 2) and (iii) CASCO insurance of rail vehicles (class 4), which are potentially
    affected markets in the present case.
10  See M.8257 - NN Group / Delta Lloyd, para. 16 and cases cited (for life insurance); M.9531 -
    Assicurazioni Generali / Seguradoras Unidas / AdvanceCare, para. 13 and cases cited (for non-life
    insurance). For certain non-life insurance products, including MAT insurance and generally large risk
    insurance, the Commission have considered the market to be potentially wider than national in scope. See
    M.9056 - Generali CEE/AS, para. 16 and cases cited.
                                                          3
 ---pagebreak---         insurance into group or individual insurance often stems from reporting
        technicalities under the national regulatory framework, rather than reflecting
        different competitive dynamics that would justify identifying separate markets.11
(12)    Regarding life insurance, the Notifying Party indicates in particular that the
        classification under the regulatory framework of Slovakia (where a plausible
        affected market arises) does not strictly distinguish between pure risk protection,
        pension insurance and saving/investment insurance products.12
(13)    The Notifying Party provided information at national level, but indicates that the
        geographic scope of insurance markets can be left open as the Transaction does not
        raise potential competitive concerns under any plausible market definition.13
4.1.1.3. Commission’s assessment
(14)    With respect to Poland, a potential product market segmentation of the non-life
        insurance market by risk classes provided by the Polish Insurance Act would lead to
        a number of plausible affected markets, including separated markets of non-life
        insurance for (i) sickness and (ii) accident as well as CASCO insurance of rail
        vehicles.14
(15)    With respect to Slovakia, a potential segmentation of the life insurance market by
        risk classes could be made based on Directive 2009/138/EC of the European
        Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of
        the business of Insurance and Reinsurance (“Solvency II”), which would lead to a
        plausible affected market for index-linked and unit-linked life insurance.15
(16)    For the purpose of the present decision, the exact product and geographic market
        definition for the provision of life and non-life insurance can be left open as the
        Transaction does not raise serious doubts as to its compatibility with the internal
        market under any plausible market definition identified in paragraphs (8) to (10).
4.1.2. Voluntary retirement saving products
(17)    Pension systems in the EU typically distinguish between three different pillars of
        support for retirees. Similarly, the Slovak pension system distinguishes between
        three different pillars, the first pillar ("p1") which is the publicly managed pension
        system with mandatory participation, the second pillar ("p2") which is the privately
        managed mandatory savings system operated by pension fund management
        companies (Dôchodková správcovská spoločnosť, "DSS"), and the third pillar (“p3”)
        which is a voluntary retirement saving product.16
(18)    Pension fund products offered under p3 in Slovakia are offered by companies known
        as Doplnková dôchodková spoločnosť (“DDS”), funded by individuals to enhance
        retirement income. These DDS pension fund products have in particular the
11  See Form CO, para 100.
12  See Form CO, para 109.
13  See Form CO, para 112.
14  See Form CO, Annex 12.
15  See Form CO, paras 269 and 346.
16  For voluntary retirement savings products an affected market only arises in Slovakia.
                                                          4
 ---pagebreak---         following features: they are typically purely market-based, are voluntary and private,
        with defined contributions, additional contributions from an employer and tax
        benefits, but provide no certainty of benefits.17
4.1.2.1. Previous decisional practice
(19)    In its previous decisional practice, the Commission has not discussed the product
        market definition for voluntary retirement saving products in Slovakia, and in
        particular not whether DDS pension fund products belong to a wider market
        encompassing other voluntary retirement saving products. However, concerning
        Poland, the Commission found in case COMP/M.4950 Aviva/Bank Zachodni that p1
        and p2 products fall within a different product market than p3 products, since,
        among other differences, the first two pillars (in the Polish pension system) were
        based upon mandatory contributions from wages whereas the p3 system was
        voluntary.18 Furthermore, regarding saving for retirement in case M.8257 NN
        Group/Delta Lloyd concerning insurance based saving / investment products and
        banking saving products, the market investigation indicated that there can be a
        certain degree of substitutability between insurance based saving / investment
        products and banking saving products which are designed to serve the same purpose
        as the saving / investment insurance products (life), depending on the national
        legislative framework.19 However, the Commission also pointed to differences in the
        products.20
(20)    Regarding the geographic scope, the Commission considered previously that the
        market for pension products for Poland is national in scope, citing a specific national
        regulation, but left the final market definition open.21
4.1.2.2. Notifying Party’s view
(21)    The Notifying Party is of the opinion that the relevant product market is a wider
        voluntary retirement saving market that includes not only DDS pension fund
        products but also other voluntary retirement saving products aimed at allowing
        individuals to accumulate savings to supplement their income in retirement, such as
        mutual funds, pension insurance (life), etc.22 This is because the main factor that
        matters to the individual when making a choice on how to save for retirement is that
        the selected product pays out the needed additional funds in the future. Thus,
        relevant parameters for an individual wishing to save for retirement are contributions
        in the pre-retirement phase, pay-outs during retirement and flexibility with respect to
        contributions and pay-outs.
(22)    Therefore, according to the Notifying Party p3 products form a separate market from
        p2 and p1 products with their respective roles in the Slovak pension system. p3
        encompasses all voluntary retirement saving products, regardless whether they are
        state designed or not. This includes notably, pension insurance (life), (retail) mutual
        funds and DDS pension fund products.
17  See Form CO, para 142 and 618.
18
    See M..4950 Aviva/Bank Zachodni, para 21.
19
    See M.8257 NN Group/Delta Lloyd, paras 48 et seq.
20
    See M.8257 NN Group/Delta Lloyd, para 53.
21
    See M.4950 Aviva/Bank Zachodni, para 24.
22
    See Form CO, para 198 et seq. and 209.
                                                      5
 ---pagebreak--- (23)    Regarding the geographic scope, the Notifying Party does not contradict the
        Commission, that considered in its previous decisional practice that the market for
        pension products for Poland is national in scope.
4.1.2.3. The Commission’s assessment
(24)    According to the Commission’s market investigation, DDS pension fund products
        should be considered a separate and standalone market, distinctly from other
        voluntary retirement savings products.
(25)    According to the Notifying Party`s competitors in the retirement saving market,
        consumers do not view DDS pension fund products as interchangeable with other
        voluntary retirement saving products such as mutual funds and pension (life)
        insurance products, mainly because the key criterion for consumers when choosing a
        financial product for retirement is the employer’s contribution, which is specific to
        DDS pension fund products and a specific regulatory framework applicable to DDS
        pension fund products.23 In direct comparison of DDS pension fund products with
        mutual funds and pension (life) insurance products it was also pointed out that DDS
        pension fund products profit from favourable tax treatment.24 Competitors also were
        of the opinion, that there are no specific categories of consumers that would
        particularly consider DDS pension fund products as suitable alternative to other
        voluntary retirement saving products such as mutual funds and pension (life)
        insurance products. The market investigation furthermore revealed, that competitors
        believe that Slovak consumers would not move their savings from DDS pension
        fund products to mutual funds (or pension life insurance products) if fees for these
        two products were to decrease permanently by e.g. 5-10%.25 One competitor
        explicitly stated that “only DDS out of these three product is real pension saving
        product, remaining two are more investment and risk insurance products”.26
        Another competitor stated that Slovak consumers do not use mutual funds for long-
        term pension savings purposes in large extent. A third competitor stated that no
        switch of products would take place “because the original purpose of the investment
        was different”. If consumers decided to save money for retirement purposes, they
        will not change products, even if more attractive from the fees perspective. The
        result is similar when asking for fund flows in the other direction. Competitors are
        also of the opinion, that Slovak consumers would not move their savings from
        mutual funds or pension life insurance products to DDS pension fund products if
        management fees for DDS pension fund products were to decrease from 1.2% to
        1%.27
(26)    According to brokers of voluntary retirement financial products in Slovakia,
        consumers would not clearly rule out interchangeability between DDS pension fund
        products and other voluntary retirement saving products such as mutual funds and
        pension (life) insurance products. However, brokers also state that there will be no
        flow of savings from DDS pension fund products on the one hand to mutual funds or
        pension life insurance products on the other hand if fees for the latter two product
23
    See response to question 5 of Questionnaire Q1.
24
    See response to question 5.1 and 8 of Questionnaire Q1.
25
    See response to question 10 of Questionnaire Q1.
26
    See response to question 9 of Questionnaire Q1.
27
    See response to question 11 of Questionnaire Q1.
                                                         6
 ---pagebreak---         groups were to decrease permanently by e.g. 5-10%.28 Neither do brokers expect a
        flow of savings into the other direction to DDS pension fund products, if fees for
        DDS pension fund products were to decrease from 1.2% to 1%.29
(27)    Also in the opinion of the National Bank of Slovakia, “insurance products or other
        mutual funds offered by asset managers are not substantive competitor for DDS
        products”. The reason is that, in majority, these products “are not primarily created
        with the intention to save for retirement and the payment to clients is not conditioned
        by this purpose.” Moreover, “insurance products and funds offered by asset
        managers don´t provide any tax benefits neither for the employer nor for employees
        and the client generally takes the investment risk (if there in one).”30
(28)    Additionally, the market investigation confirmed the differing characteristics of the
        three pillars of the Slovak pension system. According to the National Bank of
        Slovakia, the first pillar is a mandatory pension insurance defined by benefits and
        funded on an ongoing basis and administered by the Social Insurance Agency. The
        second pillar is also mandatory and defined by contributions and capital funded
        insurance administered by pension fund management companies. The third pillar is a
        privately managed voluntary personal pension plan administered by specialized
        DDS.31 Moreover, it was confirmed that DDS pension fund products are governed
        by separate legislation.32 Therefore, as in case COMP/M.4950 Aviva/Bank Zachodni
        the Commission considers that a distinction can be made between the mandatory p1
        and p2 products and the voluntary DDS pension fund products.
(29)    The market investigation revealed no indication that the market is wider than
        national in scope and it was repeatedly pointed out, that DDS pension fund products
        are subject to national legislation.33
(30)    For the purpose of this decision, the exact product and geographic market definition
        for the provision of DDS pension fund products and the question of whether they are
        part of a wider market for voluntary retirement saving products such as mutual funds
        and pension (life) insurance products can be left open as the Transaction does not
        raise serious doubts as to its compatibility with the internal market under any
        plausible market definition identified in paragraphs (24) to (29).
4.1.3. Distribution of voluntary retirement saving products
(31)    Voluntary retirement saving products are distributed either indirectly via retail
        banks, insurance companies and brokerage houses, or directly by the providers of
        these products.34
28
    See response to question 12 of Questionnaire Q2.
29
    See response to question 13 of Questionnaire Q2.
30
    See reply to an email questionnaire received on 24. April 2020.
31
    See reply to an email questionnaire to the National Bank of Slovakia, received on 24. April 2020.
32
    See reply to an email questionnaire to the National Bank of Slovakia, received on 24. April 2020 and
    response to question 5.1 and 9 of Questionnaire Q1.
33
    See response to question 9 of Questionnaire Q1 and reply to an email questionnaire to the National Bank
    of Slovakia received on 24. April 2020.
34
    See Form CO, para 218.
                                                          7
 ---pagebreak--- 4.1.3.1. Previous decisional practice
(32)    In past decisions, the Commission has considered the existence of a distinct product
        market for the distribution of pension products in the Netherlands, without
        concluding on the exact product or geographic market definition.35 In other cases,
        the Commission has suggested the existence of a market for the distribution of
        pension or related products, without discussing the precise definition of such a
        market but ultimately left open the precise product market definition.36
4.1.3.2. The Notifying Party’s view
(33)    The Notifying Party does not dispute the potential existence of a separate market for
        the distribution of voluntary retirement saving products, but did not provide further
        arguments regarding its product or geographic definition.37
4.1.3.3. The Commission’s assessment
(34)    The Commission notes that a variety of products would generally be suitable to
        accumulate savings for the retirement age. This would include, for example, mutual
        funds, for which a separate distribution market exists in the context of asset
        management. The existence of a further distinct product market for the distribution
        of specific voluntary saving products may therefore depend on the availability of
        such products in the Member State in question. In the present case, a potential
        distinct product market for DDS pension fund products may exist in Slovakia38, as
        discussed in paragraphs (17) to (30). Consequently, a distinct product market for the
        distribution of such products may also exist. The Commission notes that, for the
        purpose of this decision, the exact definition of such a market can be left open, as no
        competition concerns are raised under any plausible market definition. The
        Commission further notes that a potential separate product market for the
        distribution for voluntary retirement saving products, and specifically DDS pension
        fund products, would likely be national in scope, due to the high relevance of
        national regulation.
4.1.4. Asset management
(35)    Asset management concerns the creation, establishment and marketing of funds
        mainly to retail clients on an “off-the-shelf” basis and the provision of portfolio
        management services for institutional investors.39
4.1.4.1. Previous decisional practice
(36)    In previous cases, the Commission has considered a relevant product market for
        asset management overall. Furthermore, the Commission has considered, but
35  See M.8257 NN Group / Delta Lloyd, paras 98, 102.
36  See M.4950 Acica / Bank Zachodni, para 31.
37  See Form CO, para 220, 221.
38  Affected distribution of voluntary retirement saving product markets only arise in Slovakia.
39  See M.8359 Amundi / Credit Agricole / Pioneer Investments, para 16.
                                                          8
 ---pagebreak---         ultimately left open, a further segmentation between retail and institutional clients
        (such as pension funds, banks or insurance companies).40
(37)    Within the potential segment of institutional clients, the Commission has considered
        in previous cases a further segmentation between active and passive asset
        management. In active asset management, an asset manager aims at outperforming a
        benchmark such as an index, whereas in passive asset management, the asset
        manager aims at replicating the performance of an index.41 Regarding retail clients,
        the Commission has previously considered a segmentation between open retail
        funds, with no restriction on the number of investors, and closed retail funds, which
        are tailor-made for a small group of investors.42 For all these plausible
        segmentations, the Commission ultimately left open the precise product market
        definition.
(38)    Apart from that, the Commission has in previous cases considered, but left open, a
        separate segment for mutual funds, and within mutual funds a further sub-segment of
        money market funds. Money market funds are short-term investments used by
        investors to optimise working capital.43
(39)    As regards the geographic market definition, the Commission has previously
        considered the market for asset management to be national or wider than national in
        scope. With respect to asset management for institutional clients, the Commission
        has previously considered a geographic market wider than national, whereas the
        market for open retail mutual funds and money market funds was considered to be
        national in scope.44
4.1.4.2. The Notifying Party’s view
(40)    The Notifying Party does not submit that the Commission should depart from its
        decisional practice for the assessment of the present case.
4.1.4.3. The Commission’s assessment
(41)    For the purpose of this decision, the exact product and geographic market definition
        for the provision of asset management services can be left open as the Transaction
        does not raise serious doubts as to its compatibility with the internal market under
        any plausible market definition.
4.1.5. Distribution of asset management products
(42)    This market relates to the distribution of retail funds, either indirectly via the retail
        networks of banks, insurance companies and brokerage houses, or directly via online
40
    See M.8359 Amundi / Credit Agricole / Pioneer Investments, para 17; M.6812 SFPI / Dexia, para 31.
41
    See M.8359 Amundi / Credit Agricole / Pioneer Investments, para 18; M.5728 Credit Agricole / Societe
    Generale Asset Management, para 35, COMP/M.5580 Blackrock / Barclays Global Investors UK
    Holdings, para 10.
42
    See M.8359 Amundi / Credit Agricole / Pioneer Investments, para 19; M.5728 Credit Agricole / Societe
    Generale Asset Management, paras 68, 69.
43
    See M.8359 Amundi / Credit Agricole / Pioneer Investments, para 20; M.3894 Unicredito / HVB, para 35.
44
    See M.8359 Amundi / Credit Agricole / Pioneer Investments, para 28; M.8257 NN Group / Delta Lloyd,
    para 112; M.6812 SFPI / Dexia, para 32.
                                                       9
 ---pagebreak---         channels.45 The Transaction affects the market of distribution of asset management
        services due to the banking operations of Tatra Banka downstream to the asset
        management activities of the Parties, which include asset management for retail
        customers.
4.1.5.1. Previous decisional practice
(43)    In the past, the Commission considered a relevant market comprising all retail
        banking products as well as the possibility of segmenting the retail banking market
        according to offered products (personal current accounts, savings accounts,
        consumer loans, mortgages and distribution of mutual funds). However, the exact
        product market definition was left open.46
(44)    In previous decisions, the Commission concluded the market for retail banking,
        including the distribution of mutual funds, to be national in scope.47
4.1.5.2. The Notifying Party’s view
(45)    The Notifying Party does not argue that the Commission should deviate from its
        previous decisional practice.48
4.1.5.3. Commission’s assessment
(46)    The exact product market definition can be left open for the present case, as the
        Transaction does not raise serious doubts as to its compatibility with the internal
        market under any plausible definition. Regarding the geographic scope, there is no
        element to deviate from the Commission’s previous decisional practice.
4.1.6. Custody and depositary services
(47)    The provision of custody and depositary services is significantly influenced by
        national regulation. Custody services alone typically comprise the safekeeping of the
        securities of the customer’s clients. A custodian therefore is the trustee of the
        securities of the client. Depositary services go beyond that, comprising also the
        monitoring and auditing of the fund and its transactions. In Slovakia, such services
        are provided to DDS companies, DSS companies, and asset management
        companies.49
4.1.6.1. Previous decisional practice
(48)    In past decisions, the Commission has considered custody services as a potential
        narrower market within asset management services, but left this product market
        definition open.50 Furthermore, the Commission has considered depositary services
        as part of fund administration services, which was defined as one product market
45  See M.8359 Amundi / Credit Agricole / Pioneer Investments, para 32.
46  See M.9359 Amundi / Credit Agricole / Pioneer Investments, para 33, M.5384 BNP Paribas / Fortis, para
    10.
47  M.5384 BNP Paribas / Fortis, para 86.
48  See Form CO, paras 135, 137.
49  See minutes call with a competitor, 1 July 2020, para 3.
50  See M.8257 NN Group / Delta Llyod, para 110.
                                                          10
 ---pagebreak---         with no further segmentation.51 In later decisions, the exact product market definition
        of fund administration was left open.52 Depositary services for mutual and pension
        funds were also considered to be potentially a distinct product market in the area of
        custody services or asset management, and ultimately left the market definition
        open.53 The Commission thereby noted that depositary services would largely
        include custody services, but would further comprise certain control functions
        prescribed by national law.
(49)    As for the geographic market with respect to custody services, the Commission
        considered that some services might be global in scope (provided to investment
        institutions regardless of their location), while others would be provided on domestic
        level.54 Regarding a potential market for depositary services, the Commission did
        not conclude on a geographic scope, but referred to the national regulatory
        framework of such services.55
4.1.6.2. The Notifying Party’s view
(50)    The Notifying Party expresses doubts as to whether depositary services would
        indeed form a separated market from custody services, first because there are
        synergies between the provision of both services, and second because Slovak law
        would require the DSS and DDS pension fund companies to source both of these
        services from one supplier.56 Regarding the geographic scope of a custody and
        depositary service market, the Notifying Party points to the significant relevance of
        national regulations.
(51)    The Notifying Party argues that identifying a separate product market for fund
        administration (including establishing and pursuing an investment strategy, keeping
        records and analysing performance), would not be appropriate as Tatra Banka would
        only provide these services [description of sales channels] and has no market
        offering. However, Tatra Banka does offer custody and depositary services to third
        parties in Slovakia.57
4.1.6.3. The Commission’s assessment
(52)    The Commission notes that there is a high relevance of national regulation for the
        provision of custody and depositary services in Slovakia.58 Feedback from the
        market suggests some degree of substitutability between the provision of custody
        and depositary services from a supply side point of view in Slovakia.59 One
        respondent described depositary services to be typically an “add-on service” to
        custody service. This would be an argument that custody and depositary services in
        Slovakia belong to the same or a closely related product market. On the other hand,
        both types of services differ in the sense that depositary services in Slovakia
51  See M.3781, Crédit Agricole / Caisse d' Epargne / JV, para 20.
52  See M.8359 Amundi / Credit Agricole / Pioneer Investments, para 39.
53  See M.3894 Unicredito / HVB, para 37.
54  See M.8359 Amundi / Credit Agricole / Pioneer Investments, para 35.
55  See M.3894 Unicredito / HVB, para 37.
56  See Form CO, paras 229, 230.
57  See Form CO, paras 534 and 541.
58  See Minutes of a phone call with a competitor, 1 July 2020, paragraph 7.
59  Affected custody and depositary markets arise only in Slovakia.
                                                         11
 ---pagebreak---         comprise the supervision, examination, inspection and compliance checks with
        respect to the applicable national laws for each transaction.60 This would suggest to
        treat custody and depositary services in Slovakia as separate product markets. The
        Commission further notes that the strong impact of national regulation of the
        provision for depositary services in Slovakia suggests the geographic market is
        national in scope.
(53)    For the present case, the exact product and geographic market definition of custody
        and depositary services can be left open, as no competition concerns would arise
        under any plausible market definition.
4.2.    Competitive assessment
(54)    The Transaction gives rise to horizontally-affected markets in:
        (a)     Asset management in Slovakia, including in retail asset management in
                Slovakia;
        (b)     Voluntary retirement saving products in Slovakia, including in DDS pension
                fund products in Slovakia;
        (c)     Life-insurance products in Slovakia, specifically in index-linked and unit-
                linked life;
        (d)     Non-life insurance products in Poland, specifically in (i) group accident
                insurance; (ii) group sickness insurance; and (iii) CASCO insurance of rail
                vehicles.
(55)    The Transaction gives rise to vertically-affected markets in:
        (a)     DDS pension fund products (upstream) and the distribution of voluntary
                retirement saving products (downstream) in Slovakia;
        (b)     Custody and depositary services (upstream) and DDS pension fund products
                (downstream) in Slovakia;
        (c)     Asset management (upstream) and the distribution of asset management
                products (downstream) in Slovakia; and
        (d)     Asset management (upstream) and DDS pension fund products (downstream)
                in Slovakia.
4.2.1. Horizontal effects
(56)    Article 2 of the Merger Regulation requires the Commission to examine whether
        notified concentrations are compatible with the internal market, by assessing whether
        they 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.
60  See Minutes of a phone call with a competitor, 1 July 2020, paras 3 and 8.
                                                         12
 ---pagebreak--- (57)    The Commission Guidelines on the assessment of horizontal mergers under the
        Merger Regulation (the "Horizontal Merger Guidelines") distinguish between two
        main ways in which mergers between actual or potential competitors on the same
        relevant market may significantly impede effective competition, namely non-
        coordinated effects and coordinated effects.
(58)    Non-coordinated effects may significantly impede effective competition by
        eliminating the competitive constraint imposed by each merging party on the other,
        as a result of which the merged entity would have increased market power without
        resorting to coordinated behaviour. The Horizontal Merger Guidelines list a number
        of factors61 which may influence whether or not significant non-coordinated effects
        are likely to result from a merger, such as the large market shares of the merging
        firms, the fact that the merging firms are close competitors, the limited possibilities
        for customers to switch suppliers, or the fact that the merger would eliminate an
        important competitive force. Not all of these factors need to be present for
        significant non-coordinated effects to be likely. The list of factors, any one of which
        is not necessarily decisive, is also not an exhaustive list.
4.2.1.1. Voluntary retirement saving products in Slovakia
        (A)       Notifying Party’s view
(59)    The Notifying Party is of the opinion that the Transaction will not lead to a
        significant impediment to effective competition.62 It states that the relevant market is
        the market for voluntary retirement saving products, with a combined market share
        of the Parties of below 30 % and a multitude of alternative suppliers. Furthermore,
        the Parties claim that market share estimates do not consider cross-border sales, and
        therefore overstate the market shares. The market share level of the Parties and
        increment resulting from the Transaction would therefore be limited for such a
        market.
(60)    But even on a narrower market for pension funds in the third pillar in Slovakia the
        Transaction will not lead to a significant impediment to effective competition
        according to the Notifying Party. DDS pension fund products are and will remain
        competitively restrained not only by the other voluntary retirement saving products,
        but by any product which allows an individual to save money and to earn a return for
        later use at retirement.
(61)    Furthermore, the Notifying Party argues that, post-Transaction, the Parties will be
        unable to increase prices to the detriment of consumers for third pillar products. This
        is due to the regulatory environment in Slovakia. DDS are highly regulated, in
        particular regarding their fees, which leads to the absence of price competition. Fees
        are capped and have steadily been reduced in the past, to now 1.2% of assets under
        management (“AuM”) annually. All DDS providers factually charge management
        fees at this cap. Furthermore, regulation imposes significant restrictions on the
        distribution of contributions among asset classes to ensure diversification.
61  Horizontal Merger Guidelines, paras 24 et seqq.
62  See Form CO, para 20.
                                                    13
 ---pagebreak--- (62)   The Notifying Party argues that it is also not plausible that competition will be
       reduced on any other parameter of competition. The Transaction will not reduce the
       incentive for the DDS providers to seek optimising the performance of their pension
       fund products. Moreover, concerning DDS pension fund products, the Parties are not
       competitors. Uniqa does not directly offer DDS pension fund products. It is only a
       subsidiary of Uniqa`s jointly controlling parent company, RBI, which provides DDS
       pension fund products in Slovakia via its subsidiary TB DDS. But the Uniqa`s
       jointly controlling parent company has only a 10.9% stake in Uniqa. Therefore, there
       is no incentive for harmful conduct post-Transaction.
(63)   Furthermore, according to the Notifying Party, DDS providers use different
       distribution channels that prevent customers from switching between providers. For
       TB DDS, DDS pension fund products are primarily sold to [description of
       customers]. Stabilita DDS relies predominantly on its relationships with employers,
       whose employees are eligible for DDS pension fund products. The Target and NN,
       make use of [description of sales channels] to acquire customers.
(64)   Additionally, the Notifying Party argues that pan-European Personal Pension
       Products (“PEPP”) will soon be introduced. The Parties expect this to allow cross-
       border business and the opening of the local pension markets for other players.63
(65)   For these reasons, the Notifying Party argues that the high combined market shares
       [40-50]% do not adequately reflect competition in the market post-Transaction.
       (B)        Commission`s assessment
(66)   The Transaction would give rise to an affected market for voluntary retirement
       saving products in Slovakia, encompassing pension insurance (life), (retail) mutual
       funds, and DDS pension fund products. The Parties have a combined market share of
       [20-30]% in 2019 based on AuM. The increment provided by the Target is [5-
       10]%.64
(67)   The Transaction would also give rise to an affected market for the narrower potential
       market of DDS pension fund products in Slovakia. As shown in the following table,
       in a potential market for DDS pension fund products in Slovakia, the Parties’
       combined market share would be [40-50]% post-Transaction with an increment of
       [10-20]% from the Target (“AXA DDS”) and a [30-40]% market share by a
       subsidiary of one of Uniqa’s controlling parents, namely RBI which controls Tatra
       Banka, a banking group which operates its own DDS in Slovakia (“TB DDS”).65
63 See Regulation (EU) 2019/1238 of the European Parliament and of the Council of 20 June 2019 on a pan-
   European Personal Pension Product.
64 Source: The Parties’ estimates.
65 RBI holds 78.8 % of the shares in Tatra Banka. TB DDS is a fully owned subsidiary of Tatra Banka.
                                                      14
 ---pagebreak---  ---pagebreak---         Parties are not considered particularly aggressive either in the provision of DDS
        pension fund products, nor in enrolling intermediaries to offer their products. This is
        supported by the investigation`s outcome, that one of the two most important key
        criteria for individuals to choose one specific DDS rather than another one is an
        existing customer relationship with the DDS (or the group of companies it belongs
        to).71 The other one is the provider`s representation (local offices etc.). This points to
        an importance of the distribution channel for DDS pension fund products. However,
        the results as to whether and how, the distribution channels (e.g. brokers, bank
        agencies etc.) influence the choice of consumers to select one specific DDS rather
        than another is inconclusive. Respondents to the market investigation pointed out
        that consumers might be influenced by their employers that make a "prechoice" of
        specific DDS for their employees. Furthermore, it was stated that easy access to a
        provider`s representation could play a role as well as the payed commission to a
        distributor or the distributor`s affiliation to the DDS provider.72
(72)    The lack of closeness of competition among the Parties is supported by the market
        investigation also, insofar as the majority of competitors is of the opinion that
        customers of DDS pension fund products do not regularly switch between DDS.73
        However, none of the competitors pointed to barriers of switching, such as fees.
        Brokers supported that view, also with a majority stating that customers of DDS
        pension fund products only rarely switch between DDS.74
(73)    Asked about the Transaction`s impact on the market, an overwhelming majority of
        competitors, brokers, and institutional clients do not expect any impact from the
        Transaction on the DDS pension fund product market in Slovakia.75 Most of
        responding competitors in the overall voluntary retirement saving market expect the
        Transaction to have no impact on DDS pension fund products, including on fees and
        quality or choice. The two other providers of DDS pension fund products expect no
        impact on fees.76 Neither do competitors expect any impact on fees, quality or choice
        of voluntary retirement saving products (including DDS, mutual funds and pension
        life insurance products). All responding brokers supported this view and state that
        the Transaction will likely not have an impact on fees or quality or choice regarding
        both DDS pension fund products in particular or voluntary retirement saving
        products in general, although one broker acknowledged, that there will be one
        competitor less to choose from.77 Employers also do not expect the transaction to
        have any negative effect neither on the DDS market nor for employers that offer
        DDS pension fund products for their employees to save for retirement age.
71
   See response to question 16 of Questionnaire Q1. Respondents were asked to choose among the following
   options Additional products offered by the DDS company (e.g. insurance or banking products), Brand
   recognition, Employer preference, Existing customer relationship with the DDS (or the group of
   companies it belongs to), Expected return on investment, Information provided by the provider, Level of
   fees, Marketing campaigns, Provider representation (local offices etc.), Safety profile of the investment,
   Other.
72 See response to question 18 of Questionnaire Q1.
73 See response to question 21 of Questionnaire Q1.
74 See response to question 21 of Questionnaire Q2.
75 See response to question 25 of Questionnaire Q1; response to question 25 of Questionnaire Q2; response
   to question 18 of Questionnaire Q3.
76 See response to questions 25 of Questionnaire Q1
77 See response to question 25.1 of Questionnaire Q2.
                                                       16
 ---pagebreak--- (74)    The two competing DDS pension fund providers expressed concerns during pre-
        notification contacts and in the market investigation.78 These concerns raised in
        relation to the Transaction include the ability of the Parties to improve the quality of
        products or better adapt to lower fee requirements and thus to gain market share
        post-Transaction.79 They also expressed concerns in relation to the Parties increased
        ability to distribute their DDS pension fund products post-Transaction. While the
        Commission notes that these effects may actually be pro-competitive, it also notes
        that these concerns were not confirmed in the market investigation, which revealed
        that the Transaction will likely have no impact, in particular on fees.
(75)    Concerning the likely impact of the introduction of PEPP, the results of the market
        investigation were inconclusive80. However, in light of the overall results of the
        market investigation it can be left open, whether PEPP will have a significant impact
        on the market for voluntary retirement saving products or DDS in Slovakia, since
        even without new PEPP products there are no competition concerns. The same holds
        true for the Notifying Party`s argument that incentives for harmful conduct post-
        Transaction are not aligned between the Uniqa and the Target, because of the fact
        that the acquirer’s jointly controlling parent company holds only a 10.9 % stake in
        the acquirer. Even if this argument is disregarded, no competition concerns arise.
(76)    Based on the considerations above, the Commission considers that the Transaction
        does not raise serious doubts as to its compatibility with the internal market in
        relation to the market of DDS pension fund products or voluntary retirement saving
        products in Slovakia, due to horizontal non-coordinated effects.
4.2.1.2. Asset management in Slovakia
        (A)        Notifying Party’s view
(77)    The Notifying Party submits that the Transaction would not raise competition
        concerns, as the Target is only a minor player in the Slovak market for asset
        management, and provides most of its services captively. Furthermore, a number of
        competitors in the market would continue to exercise competitive pressure on the
        merged entity. 81
        (B)        Commission’s assessment
(78)    The Transaction would give rise to an affected market for overall asset management
        in Slovakia, as well as for as a potential sub-segment of asset management for retail
        clients. Both Uniqa’s parent company RBI, through its subsidiaries, as well as the
        Target offer asset management services.
78  See response to question 25.5 of Questionnaire Q1.
79  See Minutes of a phone call with a competitor, 8 April 2020, paragraph 20.
80  See response to question 22 of Questionnaire Q1; response to question 24 of Questionnaire Q2; response
    to question 17 of Questionnaire Q3.
81  Form CO, paras 388, 398, 399.
                                                         17
 ---pagebreak---  ---pagebreak---  ---pagebreak---  ---pagebreak---         presumed to not impede effective competition.89 In sickness insurance for group
        customers, the market share of the combined entity post-Transaction remains
        moderate (below 30%) and the increment brought about by Uniqa is inconsequential
        (around [0-5]%).90 In CASCO insurance of rail vehicles the market share of the
        combined entity post-Transaction also remains moderate (below 30%).
(94)    The combined entity would also face an important number of competitors post-
        Transaction on all markets, including at least three competitors with market shares
        around or exceeding the increment brought about by the Transaction. Therefore,
        post-Transaction a sufficient number of suppliers would remain present in the
        market.
(95)    In addition, no respondent to the market investigation raised substantiated concerns
        in relation to the impact of the Transaction on non-life insurance markets in Poland,
        highlighting instead the complementarity of the Parties’ portfolio and the fact that
        with respect to non-life insurance overall, they will remain significantly smaller than
        current Polish insurance market leaders (PZU, ERGO Hestia and Warta/Talanx)
        post-Transaction.91
(96)    Based on the considerations above, the Commission considers that the Transaction
        does not raise serious doubts as to its compatibility with the internal market in
        relation to the potential market for non-life insurance in Poland, including for (i)
        group accident insurance; (ii) group sickness insurance; and (iii) CASCO insurance
        of rail vehicles.
4.2.2. Non-horizontal effects
4.2.2.1. Introduction
(97)    The Commission’s Guidelines on the assessment of non-horizontal mergers under
        the Merger Regulation (the "Non-Horizontal Merger Guidelines") distinguish
        between two main ways in which vertical mergers may significantly impede
        effective competition, namely input foreclosure and customer foreclosure.92
(98)    For a merger to raise input foreclosure competition concerns, the merged entity must
        have a significant degree of market power upstream.93 In assessing the likelihood of
        an anticompetitive input foreclosure strategy, the Commission has to examine
        whether (i) the merged entity would have the ability to substantially foreclose access
        to inputs; (ii) whether it would have the incentive to do so; and (iii) whether a
89  See Horizontal Merger Guidelines, para. 18.
90  See Horizontal Merger Guidelines, para. 18.
91  See response to questions sent to Polish insurance competitors; see response to questions sent to Polish
    insurance brokers. One respondent indicates that the two companies compete closely in motors insurance,
    but based on available data, their combined market share on this segment does not exceed 10% in any
    plausible market (including when looking at individual insurance classes for third party liability or hull
    motor insurance).
92  OJ L 24, 29.1.2004, p. 1.
93  Non-horizontal Merger Guidelines, paragraph 35.
                                                         21
 ---pagebreak---  ---pagebreak---         Table 1, two alternative providers of DDS pension fund products remain in the
        market, that offer a largely similar product as the merged entity. Second,
        downstream competitors supply customers with a portfolio of products, which may
        include other pension products, mutual funds or insurance products, Therefore, DDS
        pension fund products of the merged entity are not a crucial product for companies
        active in the downstream market. The Commission therefore considers that the
        merged entity would lack the ability to engage in any input foreclosure strategy.
(104) Incentive to foreclose: Additionally, the Commission considers that the merged
        entity would not have the incentive to foreclose downstream competitors post-
        Transaction. The Parties’ distribution channels are rather complementary, as TB
        DDS distributes more than [70-80]% of its products [through group entities], while
        AXA DDS uses […] a network of agents and brokers. The Commission therefore
        considers that the merged entity has no clear incentive to switch the distribution of
        the Target’s DDS pension fund products mainly to Tatra Banka, because Tatra
        Banka already offers a comparable product of TB DDS. Moving the Target’s DDS
        operation to the distribution network of Tatra Banka would come at the cost of
        limiting the merged entity’s ability to reach customers via brokers and agents with
        DDS pension fund products, and is therefore unlikely to be profitable. Consequently,
        the merged entity lacks an incentive to foreclose.
(105) Impact of foreclosure: The Commission considers that the Transaction is unlikely
        to have an impact on competition in the market for distribution of DDS pension fund
        products or distribution of voluntary retirement saving products in general.
        Downstream competitors do not rely on the input of the merged entity, which would
        therefore not be in a position to raise downstream prices. This is confirmed by
        results of he market investigation, as the overwhelming majority of responding
        brokers stated that the Transaction would have no impact on the distribution of DDS
        pension fund products in Slovakia.98
(106) Based on the considerations above, the Commission considers that the Transaction
        does not raise serious doubts as to its compatibility with the internal market in
        relation to the vertical link between the market of DDS pension fund products and
        the market of distribution of DDS pension fund products in Slovakia.
4.2.2.3. Custody and depositary service (upstream) / DDS pension fund products
          (downstream) in Slovakia
(107) In Slovakia, there is a limited customer base for depositary services alone. National
        regulation requires suppliers of DSS pension fund products, DDS pension fund
        products and asset managers to source such services.99 Custody services, in turn,
        have a significantly broader customer base, as they can also be sourced for instance
        by insurance companies.100 Markets become affected as the combined market shares
        of the merged entity in the downstream market for DDS pension fund products
        exceed 30%, a product that requires depositary services. In addition, the merged
98  Form CO, para 534.
99  Form CO, para 549.
100 The customer base for custody services by AuM would be around EUR 60,000 million, while the
    customer base of depositary services alone by AuM would be around EUR 20,000 million, see Form CO,
    para 536, and Form CO, footnote 212.
                                                      23
 ---pagebreak---  ---pagebreak---         for companies, even if depositary services were ultimately considered to be a product
        market separate from custody services. This also limits the effect that a potential
        foreclosure to depositary customers by the merged entity has on the ability of
        upstream competitors to operate efficiently since rival’s costs would not be driven up
        for custody services, which rely on the same assets and personnel.
(111) Incentive to foreclose: Moreover, the Commission considers that the merged entity
        lacks a clear incentive to foreclose upstream competitors by moving the Target’s
        demand for depositary services to Tatra Banka. First, the Commission notes that the
        Target has been relying on the same provider of such depositary services since 2004.
        The Notifying Party currently does not source all demand for depositary services in-
        house, as TB DDS sources depositary services from a competitor, and there is no
        clear argument why this would change post-transaction.106 Second, the merged entity
        would be unable to enjoy higher price levels downstream as a result of the regulatory
        framework applicable to DDS products, for the reasons laid out in Section 4.2.1.1.
(112) Impact of foreclosure: The Transaction is unlikely to have an impact on prices in
        the upstream market of depositary services. Apart from Tatra Banka, five other
        suppliers of depositary services are active in Slovakia, three of which the Parties
        currently does not source from, and that therefore cannot be foreclosed.107 Raising
        prices for the provision of depositary services is indeed not a concern for
        downstream companies. During the market investigation, the overwhelming majority
        of responding voluntary retirement saving competitors (who typically also procure
        depositary and/or custody services) considered the Transaction would not have an
        impact on the market for the provision of these services.108
(113) Based on the considerations above, the Commission considers that the Transaction
        does not raise serious doubts as to its compatibility with the internal market in
        relation to the vertical link between the market of custody and depositary services
        and the market of the provision of DDS pension fund products in Slovakia, even if a
        separate product market for depositary services was defined.
4.2.2.4. Asset management (upstream) / DDS pension fund products (downstream) in
          Slovakia
(114) The link between asset management and the provision of DDS pension fund
        products leads to affected markets due to the considerable market share of the
        merged entity in the downstream market. Both the Notifying Party and the Target are
        present in asset management and the provision of DDS pension fund products in
        Slovakia.
        (A)        Notifying Party’s view
(115) The Notifying Party argues that the Target offers only captive institutional asset
        management services. The Target’s downstream operations would source its demand
        for asset management services entirely in-house. Therefore, the Transaction would
106 Form CO, Table 20.
107 Form CO, para Table 20.
108 See response to question 27 of Questionnaire Q1; the only respondent who does consider the Transaction
    to have an impact stated that it would lead to a “higher concentration in depository services providers”
    which is factually inacurrate as the Target does not offer such services.
                                                           25
 ---pagebreak---  ---pagebreak---         downstream of asset management in Slovakia.112 The overwhelming majority of
        responding asset managers also considered the Transaction to have no negative
        impact on the asset management market in Slovakia, while none of the participants
        expressed the view that the Transaction would affect any sub-segments of asset
        management.113 One of the two competitors in DDS pension fund products stated
        that the Transaction would have an impact on asset management in Slovakia, while
        none of the responding suppliers of other voluntary saving products such as pension
        insurance or mutual funds considered the Transaction to have such an impact.114
(120) Consequently, the Commission considers customer foreclosure by the merged entity
        unlikely to have in impact on effective competition on the upstream market.
(121) Based on the considerations above, the Commission considers that the Transaction
        does not raise serious doubts as to its compatibility with the internal market in
        relation to the vertical link between the market of asset management and the market
        of the provision of DDS pension fund products in Slovakia.
4.2.2.5. Asset management (upstream) / Distribution of asset management (downstream) in
          Slovakia
(122) This affected market stems from the fact that Tatra Banka’s market share in asset
        management distribution exceeds 30% for the distribution of mutual funds, as well
        as in the potential sub-segment of distribution of retail mutual funds in Slovakia. The
        Target is active in asset management services in Slovakia, but does not have an
        integrated downstream business.
        (A)        Notifying Party’s view
(123) The Notifying Party provides that the main asset managers in Slovakia are integrated
        into banking groups and therefore would not be affected by foreclosure by the
        merged entity. Moreover, Tatra Banka predominantly distributes products of its own
        upstream entity TAM, which further reduces the potential for customer foreclosure,
        as competitors currently do not rely on Tatra Banka as distribution channel.
        (B)        Commission’s assessment
(124) The merged entity’s market shares barely exceed 30% in the downstream market.
        The relevant potential concern with respect to the vertical link between asset
        management and the distribution of asset management via the banking activities of
        the Notifying Party is therefore customer foreclosure. Market shares of the merged
        entity are presented in the Table below:
112 See responses to question 9 of Questionnaire Q4; the company that considered the Transaction to have an
    impact on upstream or downstream markets did not specify its assessment, and explained only that the
    Transaction would lead to “lower competition”.
113 See responses to questions 7 and 9 of Questionnaire Q4.
114 See responses to question 26 of Questionnaire Q1; the one competitor that expects the Transaction to have
    an impact on asset management provides that “DDS Tatrabaka (sic) and Uniqua (sic) [would have the]
    majority in the DDS market”.
                                                         27
 ---pagebreak---  ---pagebreak---         management in Slovakia.119. Therefore, the Commission considers customer
        foreclosure by the merged entity unlikely to have in impact on effective competition
        on the upstream market.
(128) Based on the considerations above, the Commission considers that the Transaction
        does not raise serious doubts as to its compatibility with the internal market in
        relation to the vertical link between the market of asset management and the market
        of distribution of asset management in Slovakia.
5.      CONCLUSION
(129) For the above reasons, the European Commission has decided not to oppose the
        notified operation and to declare it compatible with the internal market and with the
        EEA Agreement. This decision is adopted in application of Article 6(1)(b) of the
        Merger Regulation and Article 57 of the EEA Agreement.
                                                             For the Commission
                                                             (Signed)
                                                             Margrethe VESTAGER
                                                             Executive Vice-President
119 See responses to question 9 of Questionnaire Q4; the company that considered the Transaction to have an
    impact on upstream or downstream markets did not specify its assessment, and explained only that the
    Transaction would lead to “lower competition”.
                                                        29