Brussels, 25 June 2014
Mergers: Commission continues investigation of Liberty Global / Ziggo merger without referral to the Netherlands
The European Commission has decided not to refer the planned acquisition of Ziggo by Liberty Global to the Dutch competition authority for assessment under Dutch competition law. Although under the EU Merger Regulation, the Commission has jurisdiction to examine this proposed transaction, the Dutch competition authority (ACM) had submitted a request to review it instead. The Commission concluded that the Dutch competition authority was not better placed to examine the transaction because of the Commission's experience in assessing many mergers in the converging media and telecommunications sectors, the presence of Liberty Global in 12 countries of the European Economic Area (EEA), and the need for a consistent application of the merger control rules. The Commission will therefore continue its investigation and has until 17 October 2014 to take a final decision.
On 14 March 2014, Liberty Global notified its plans to acquire sole control of Ziggo to the Commission, since the transaction meets the criteria for review by the Commission set out in the EU Merger Regulation. On 25 March 2014, the Dutch Authority for Consumers and Markets (ACM) submitted a referral request under Article 9(2)(a) of the EU Merger Regulation. This provision allows a Member State to request the Commission to refer all or part of the assessment of a case to it, provided that the competitive effects are restricted to purely national or smaller than national markets. The Commission can then decide whether it shall itself deal with the case or refer whole or part of it for assessment under the requesting Member State's national competition law.
In deciding whether to refer a case to a Member State under Article 9(2)(a), the Commission particularly takes into account which authority is better placed to deal with the case at hand. In this case, the Commission considered that it has extensive experience in the application of its merger control rules across the converging media and telecommunications sectors1, including in national markets, that Liberty Global is an international operator present in a majority of EEA countries, and that it must ensure consistency in the application of the merger control rules in the EEA. Further, the Commission found it could not be excluded that the transaction might have effects outside the territory of the Netherlands, such as the linguistically homogeneous Flemish part of Belgium.
Under these circumstances the Commission concluded that there were no compelling reasons to depart from the Commission's original jurisdiction and refer the case back to the Netherlands. The Commission will now continue its in-depth investigation opened on 8 May 2014 (see IP/14/540) and throughout the process, it will also continue to cooperate closely with the Dutch ACM.
Companies and products
Liberty Global is active in the EEA in the telecommunications sector, operating cable networks in 12 countries. Ziggo is active in the telecommunications sector in the Netherlands and especially in the markets for the retail provision of TV, fixed internet access and fixed telephony services.
Merger control rules and procedures
The Commission has the duty to assess mergers and acquisitions involving companies with a turnover above certain thresholds (see Article 1 of the Merger Regulation) and to prevent concentrations that would significantly impede effective competition in the EEA or any substantial part of it.
The vast majority of notified mergers do not pose competition problems and are cleared after a routine review. From the moment a transaction is notified, the Commission generally has a total of 25 working days to decide whether to grant approval (Phase I) or to start an in-depth investigation (Phase II).
There are currently three other on-going phase II merger investigations. The first one concerns the proposed acquisition of E-Plus by Telefónica Deutschland (see IP/13/1304 and IP/14/95) with a deadline for the final decision on 10 July 2014. The second one concerns the proposed acquisition of titanium dioxide assets of Rockwood by Huntsman (see IP/14/220). The deadline for a decision in this case is 18 September 2014. The third one concerns the acquisition of certain cement and other construction materials' assets of Holcim by Cemex (see IP/14/472). The deadline for a decision in this case is 5 September 2014.
The Commission has assessed many merger cases in the media and telecommunications sector, for instance in the Netherlands (see IP/07/1238IP/11/1593), Belgium (see IP/07/248), Austria (see IP/12/1361), the UK (see IP/10/208, IP/12/938, IP/13/326), Ireland (see IP/14/607), Germany IP/08/1012, IP/10/49, IP/13/853) and is currently assessing Telefonica's proposed acquisition of E-Plus in Germany (see IP/13/1304) and Vodafone's proposed acquisition of the cable operator ONO is Spain (case M.7231).