Court of Justice of the European Communities (including Court of First Instance Decisions)

JUDGMENT OF THE GENERAL COURT (Eighth Chamber)

23 May 2019 (*)

(Competition — Concentrations — Netherlands market for television services and telecommunications services — Full-function joint venture — Decision declaring the concentration compatible with the internal market and the EEA Agreement — Commitments — Relevant market — Vertical effects — Manifest error of assessment — Duty to state reasons)

In Case T‑370/17,

KPN BV, established in The Hague (Netherlands), represented by P. van Ginneken and G. Béquet, lawyers,

applicant,

v

European Commission, represented by H. van Vliet, G. Conte, J. Szczodrowski and F. van Schaik, acting as Agents,

defendant,

supported by

VodafoneZiggo Group Holding BV, established in Amsterdam (Netherlands),

Vodafone Group plc, established in Newbury (United Kingdom),

and

Liberty Global Europe Holding BV, established in Amsterdam,

represented by W. Knibbeler, E. Raedts and A. Pliego Selie, lawyers,

interveners,

APPLICATION pursuant to Article 263 TFEU for the annulment of Commission Decision C(2016) 5165 final of 3 August 2016 declaring the concentration involving the acquisition by Vodafone Group and Liberty Global Europe Holding of joint control of a full-function joint venture to be compatible with the internal market and the EEA Agreement (Case COMP/M. 7978 — Vodafone — Liberty Global — Dutch JV),

THE GENERAL COURT (Eighth Chamber),

composed of A.M. Collins (Rapporteur), President, M. Kancheva and R. Barents, Judges,

Registrar: N. Schall, Administrator,

having regard to the written part of the procedure and further to the hearing on 29 November 2018,

gives the following

Judgment

 Background to the dispute

 The entities concerned

1        The applicant, KPN BV, is active in the sector of cable networks for television, broadband Internet, fixed telephony and mobile telecommunications services in the Netherlands.

2        Vodafone Group plc is an international telecommunications group active in the mobile telecommunications services sector in the Netherlands through Vodafone Libertel BV (‘Vodafone’). Moreover, Vodafone is also active in the sector of television services, broadband Internet and fixed telephony via the applicant’s network.

3        Liberty Global Europe Holding BV (‘Liberty Global’), which is part of the international group Liberty Global plc, is a cable operator which owns and operates cable networks offering television, broadband Internet and fixed telephony services in the Netherlands. It also offers mobile telecommunications services to its fixed customers via Vodafone’s network.

 Administrative procedure

4        On 14 June 2016, pursuant to Article 4(1) of Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (OJ 2004 L 24, p. 1), Vodafone and Liberty Global (‘the notifying parties’) notified to the European Commission a proposed concentration consisting of the acquisition of joint control of a newly-created full-function joint venture, to which the notifying parties would transfer their business activities in the Netherlands. After the concentration, the notifying parties would each hold 50% of the shares in the joint venture and would have equal voting rights and equal rights to appoint directors to the supervisory board.

5        In order to eliminate the serious doubts identified by the Commission during the initial examination, on 12 July 2016 the notifying parties proposed commitments under Article 6(2) of Regulation No 139/2004.

6        Those initial commitments were market-tested by the Commission. In the light of the outcome of that market test and of the Commission’s analysis of the proposed commitments, the notifying parties proposed their final commitments on 26 July 2016.

 Contested decision

7        On 3 August 2016, the Commission adopted Decision C(2016) 5165 final declaring the concentration involving the acquisition by Vodafone and Liberty Global of joint control of a full-function joint venture to be compatible with the internal market and the EEA Agreement (Case COMP/M.7978 — Vodafone — Liberty Global — Dutch JV) (‘the contested decision’).

 Definition of the relevant markets

8        According to the contested decision, the proposed transaction would combine the notifying parties’ activities in the Netherlands. It is apparent from that decision that the Commission took the view that the proposed transaction gave rise to certain horizontal overlaps and vertical relationships between the parties’ activities in a number of markets along the chain for the distribution of television content and the provision of telecommunications services (fixed and mobile telephony and broadband Internet) in the Netherlands.

9        For the purpose of defining the relevant markets, the Commission made a distinction between the following markets relating to television services, all of which it regarded as being of national geographic scope:

–        the market for the licensing and acquisition of broadcasting rights for television content;

–        the market for the wholesale supply and acquisition of television channels; and

–        the market for the retail supply of television services.

10      First, as regards the market for the licensing and acquisition of broadcasting rights for television content, the Commission considered that it could be further segmented, namely, into free-to-air rights and pay TV rights, linear and non-linear broadcasting rights, and also segmented by exhibition window, premium and non-premium content, and by type of content, namely, films, sport, etc.

11      Second, as regards the market for the wholesale supply and acquisition of television channels, the Commission likewise considered it could be further segmented, namely, into free-to-air and pay TV channels, basic pay TV channels and premium pay TV channels, premium pay TV film channels and premium pay TV sports channels, and according to distribution infrastructure. However, as regards those other segmentations, and, in particular, the segmentation between premium pay TV film channels and premium pay TV sports channels, the Commission considered that the question whether the market could be further segmented could be left open, since the proposed transaction did not raise competition concerns however the market might be segmented. In particular, as regards premium pay TV sports channels, the Commission observed, in recital 176 of the contested decision, that, according to some of the respondents to the market investigation carried out by the Commission, the channels Ziggo Sport Totaal and Fox Sports were competing for similar content and customer bases and were increasingly becoming substitutable. A distinction was made between Ziggo Sport Totaal and Ziggo Sport, a channel which broadcasts less sports content than Ziggo Sport Totaal and is offered by Liberty Global only to its subscribers, free of charge.

12      Third, as regards the market for the retail supply of television services, the Commission considered that the question of further segmentation into free-to-air television services and pay TV services, and into linear pay TV services and non-linear pay TV services could be left open, since the assessment of the proposed transaction would remain the same. As regards possible segmentation according to the type of distribution technology used, the Commission noted that there were some indications that the retail supply of television services via mobile technologies (3G and 4G) was not substitutable with other distribution technologies, namely terrestrial analogue television, cable, Internet Protocol television (or ‘IPTV’) and satellite. However, it considered that that question could be left open, as the assessment of the proposed transaction would remain the same.

13      Moreover, the Commission set out a series of considerations concerning the markets for the retail supply of fixed telephony, mobile telephony and Internet access services, as well as other neighbouring markets, which are irrelevant to the present dispute.

14      Last, in the contested decision, the Commission examined whether ‘multiple play’ bundles supplied on a retail basis to end users, that is, bundles comprising two or more types of services (mobile telecommunications services, fixed telephony, Internet access or television services), constitute, in themselves, markets which are distinct from each of the underlying services. The Commission noted that ‘multiple play’ services were very popular, with the fixed services ‘triple play’ bundle, comprising fixed telephony, internet access and television services, being the most popular. However, the Commission considered that the question of the precise definition of the market could be left open since, in any event, the proposed transaction raised serious doubts.

 The effects of the concentration on competition

15      So far as concerns the analysis of the effects of the proposed transaction on competition, the Commission examined the horizontal, vertical and conglomerate effects on competition, together with the coordinated effects.

–       Horizontal effects

16      In its analysis of the horizontal effects on competition as regards, first, the market for the licensing and acquisition of broadcasting rights for television content, the Commission noted in the contested decision that only Liberty Global was active on the demand side of that market as a buyer, whereas Vodafone did not purchase or hold any content directly. Therefore, according to the Commission, the proposed transaction would not give rise to any increase in buyer power.

17      Second, as regards the market for the wholesale supply and acquisition of television channels, the contested decision noted that only Liberty Global was active on the supply side of that market, that it had a market share below 40% under all possible market segmentations and, in particular, a market share below 10% in the market for the wholesale supply of premium pay TV sports channels. Given that Vodafone was not active as a wholesale supplier of pay TV channels, the proposed transaction did not give rise to any horizontal overlap.

18      On the demand side of the market for the wholesale supply and acquisition of television channels, the Commission found that the notifying parties were active as buyers of channels for inclusion in their retail television services. In that regard, the Commission noted that Vodafone had a small presence, with a market share below 5%, and that Liberty Global had a market share of between 40 and 60% depending on the market segmentation. In particular, the Commission noted in the contested decision that the merged entity would have a market share of between 40 and 50% in the possible market for the wholesale acquisition of premium pay TV sports channels. Despite the existence of a horizontal overlap, the Commission considered that, because Vodafone’s market share was minimal, there would be no increase in buyer power as a result of the proposed transaction. Therefore, the Commission concluded that the proposed transaction did not raise any competition concerns on that market.

19      Third, the Commission considered that the proposed transaction raised serious doubts in the possible markets for the provision of fixed and fixed-mobile ‘multiple play’ bundles, in particular because of the elimination of Vodafone, an important competitor in those concentrated markets.

–       Vertical effects

20      In its analysis of the vertical effects, the Commission examined whether the proposed transaction was likely to lead to either input foreclosure or client foreclosure.

21      As regards the risk of input foreclosure in the market for the wholesale supply and acquisition of pay TV channels, the Commission examined (i) whether the proposed transaction would change the ability of the merged entity to engage in a foreclosure strategy concerning Ziggo Sport Totaal, (ii) its incentive to do so, and (iii) whether that would have negative effects on competition, particularly in the downstream market for the retail supply of fixed-mobile ‘multiple play’ bundles. In that regard, the Commission noted that Liberty Global controlled Ziggo Sport Totaal prior to the transaction and that, therefore, the only change resulting from it would be the addition of the mobile network and of Vodafone’s customer base (primarily comprising mobile customers), given the divesture of Vodafone’s fixed business in the Netherlands under the commitments. For that reason, the Commission focused its analysis on the risk of foreclosing access to Ziggo Sport Totaal over mobile networks.

22      First, as regards the ability to foreclose, which requires a significant degree of market power in the upstream market, the Commission noted that Liberty Global’s market share, by revenue, in the market for the wholesale supply of TV channels was below 10%, even under the narrowest possible market segmentation, notably in the possible market for the supply of premium pay TV sports channels. In that regard, the Commission noted that customers had access to a number of alternative premium channels, such as Fox Sports, and that a certain competitive pressure was also exercised by other channels, such as BBC One HD, RTL, Veronica HD and Eurosport. According to the majority of respondents to the market investigation, Ziggo Sport Totaal broadcasts ‘must-have’ content for retail television service providers, even though it was not the only channel to do so. Moreover, according to those respondents, the attractiveness of the content offered by Fox Sports is equal to or greater than that of Ziggo Sport Totaal, demonstrated by the fact that, even though it is more expensive than Ziggo Sport Totaal, Fox Sports has a significantly higher number of subscribers. Furthermore, according to the contested decision, the majority of investigation respondents considered that it was essential for retail television service providers to offer at least one premium pay TV sports channel, while only a minority considered that it was necessary for them to offer all premium pay TV sports channels available in the Netherlands.

23      On the basis of those findings, and taking into account the minimal number of subscribers to Ziggo Sport Totaal, namely approximately 3% of the total subscribers to pay TV channels in the Netherlands, the Commission called into question whether that channel could be regarded as must-have in order to compete effectively on the downstream market for the supply of retail television services. Therefore, it concluded that the merged entity would lack the ability to engage in a foreclosure strategy with regard to Ziggo Sport Totaal.

24      Second, the Commission observed that the incentive to engage in a foreclosure strategy with regard to Ziggo Sport Totaal depended on whether such a strategy would be profitable from a financial point of view. In particular, the reduction in revenue resulting from loss of sales of Ziggo Sport Totaal to competing upstream providers would have to be offset by increased subscription sales in the downstream market. According to the Commission, that scenario was implausible as there was no indication of there being a sufficient number of customers for whom the availability of Ziggo Sport Totaal on their mobile device was so important that they might switch supplier.

25      Third, in the contested decision, the Commission regarded it as unlikely that any foreclosure strategy could have significant negative effects on competition in the downstream market on account of the availability of other premium pay TV sports channels, such as Fox Sports, offering attractive content. In addition, in the contested decision, the Commission noted that around 3% of customers of pay TV services subscribed to Ziggo Sport Totaal. Last, it noted that, although the consumption of audiovisual content on mobile devices had increased in recent years, Vodafone’s internal documents showed that such consumption was still minor — less than 3% of the total consumption of television services — particularly when one considered the consumption of live TV and, specifically, live sports events. Indeed, only 12% of consumers using a mobile device to access audio-visual content watched live TV. Moreover, according to an independent study, in the last quarter of 2015, only 4% of subscribers to Ziggo Sport Totaal watched that channel on their mobile device.

26      In the light of those considerations, the Commission concluded, in the contested decision, that an input foreclosure strategy that would have significant negative effects on competition was unlikely.

27      Last, in the contested decision, the Commission considered that a client foreclosure strategy was also unlikely for reasons irrelevant to the present dispute.

–       Conglomerate effects and coordinated effects

28      In the contested decision, the Commission concluded that the proposed transaction would not have anti-competitive conglomerate effects. In reality, consumers would benefit from increased competition between the merged entity and the applicant in the market for fixed-mobile bundles.

29      As regards the analysis of coordinated effects resulting from the transaction, the Commission found that the proposed transaction did not give rise to serious doubts.

 Efficiency gains, commitments and conclusion

30      In the contested decision, the Commission considered that the supposed efficiencies claimed by the notifying parties were not sufficient to eliminate its serious doubts as to the compatibility of the proposed transaction.

31      Notwithstanding the foregoing, the Commission concluded that the final commitments submitted by the notifying parties were sufficient to eliminate the competition concerns identified. In essence, the notifying parties committed to divest Vodafone’s fixed activities in the Netherlands in order to replicate the competitive pressure exerted by those activities in the possible markets for the provision of fixed and fixed-mobile ‘multiple play’ bundles. Those structural commitments would completely eliminate any horizontal overlaps between the notifying parties’ activities in those possible markets.

32      In the light of the foregoing, the Commission decided, pursuant to Article 6(1)(b) and (2) of Regulation No 139/2004, to declare the proposed concentration to be compatible with the internal market and the European Economic Area (EEA) Agreement, subject to full compliance with the commitments given.

 Procedure and forms of order sought

33      By application lodged at the Registry of the General Court on 12 June 2017, the applicant brought the present action.

34      By document lodged at the Court Registry on 11 September 2017, VodafoneZiggo Group Holding, Vodafone and Liberty Global applied to intervene in the present proceedings in support of the form of order sought by the Commission.

35      By order of 19 October 2017, the President of the Eighth Chamber of the General Court granted that application. The interveners lodged their statement in intervention and the applicant lodged its observations on that statement within the prescribed periods.

36      The parties presented oral argument and replied to the Court’s oral questions at the hearing on 29 November 2011. At the hearing, the parties withdrew the requests for confidential treatment of information in the file before the Court.

37      The applicant claims that the Court should:

–        annul the contested decision;

–        order the Commission to pay the costs.

38      The Commission contends that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

39      The interveners contend that the Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

 Law

40      In support of the action, the applicant raises three pleas in law, alleging (i) a manifest error of assessment regarding the definition of the relevant market, (ii) a manifest error of assessment regarding the vertical effects of the concentration on the market for the wholesale supply and acquisition of premium pay TV sports channels and the downstream market for the retail supply of fixed-mobile ‘multiple play’ bundles and (iii) breach of the duty to state reasons.

 The first plea in law, alleging a manifest error of assessment regarding the definition of the relevant market

41      By the first plea, the applicant submits that the contested decision is vitiated by a manifest error of assessment regarding the definition of the relevant market.

42      As a preliminary point, the applicant notes the importance of sports content in attracting customers in the market for the retail supply of television services, which explains why the battle for exclusive broadcasting rights is intensifying.

43      The applicant claims that, in the Netherlands, there are only two operators active on the supply side of the market for the wholesale provision of premium pay TV sports channels, namely, Liberty Global with Ziggo Sport Totaal and Fox with Fox Sports, although it acknowledges that the Eurosport channel, which belongs to the Discovery group, also offers general basic sports content. According to the applicant, Ziggo Sport Totaal and Fox Sports possess unique and exclusive content which is a major driver of subscriptions. Certain content is essential for consumers and cannot be substituted by other content. For example, for a fan of those sports, Formula 1 and football are not substitutable. In that regard, the applicant submits that the most watched sports in the Netherlands are the Netherlands football championship (Eredivisie), the main national and international football competitions (the Champions League, the English Premier League and the Spanish Liga) and Formula 1. According to the applicant, that type of content must be deemed must-have content for television service providers, in addition to major international sports events such as the Olympic Games, the FIFA World Cup, the European Football Championship and, for cycle racing, the Tour de France and the Giro d’Italia. For that content, a further market segmentation should therefore be identified.

44      Consequently, there is no substitutability between the premium pay TV sports channels Ziggo Sport Totaal and Fox Sports because the sports content is not substitutable. According to the applicant, the channels are complementary and are each essential inputs for retail television service providers in order for them to compete effectively on the downstream market.

45      Therefore, according to the applicant, retail television service providers that are unable to provide both channels will be perceived by consumers as offering a less attractive package and will run the risk of losing a substantial number of subscribers. That argument is confirmed by a series of documents appended to the application. Moreover, it is apparent from the Commission’s decision-making practice that there is no substitutability between sports, and that regular football events are important drivers of subscriptions.

46      The applicant states that, if a channel broadcasts a must-have sports competition, that channel becomes essential in order to compete. The fact that other channels also have attractive sports content does not mean that the first channel is not a must-have, according to the applicant.

47      The applicant submits that the fact, recognised by the Commission in the contested decision, that Fox Sports is more expensive than Ziggo Sport Totaal confirms that those channels are not substitutable.

48      Moreover, in its observations on the statement in intervention, the applicant claims that, during a merger control procedure before the Netherlands competition authority in 2012, UPC, an operator belonging to the Liberty Global group, stated that the Netherlands football championship (Eredivisie) was must-have content for a retail television service provider.

49      In the reply, the applicant submits that, if it did not refer in the application to the recitals vitiated by the error of assessment regarding the definition of the relevant market, it is because an assessment of the market for sports content is almost entirely lacking from the contested decision. In any event, under the first plea raised in the application, the applicant explicitly referred to a series of recitals from the section of the contested decision relating to competitive assessment.

50      Furthermore, the manifest error of assessment vitiating the definition of the relevant market in the contested decision had consequences for the assessment of the concentration’s effects on competition in the downstream market.

51      Last, at the hearing, the applicant stated that, in its view, each of the premium pay TV sports channels Ziggo Sport Totaal and Fox Sports constituted a separate market.

52      The Commission, supported by the interveners, disputes the applicant’s arguments.

53      As a preliminary point, it should be recalled that, according to Article 76(d) of the Rules of Procedure of the General Court, the application is to contain the pleas in law and arguments relied on and a summary of those pleas.

54      According to settled case-law, irrespective of any question of terminology, that summary must be sufficiently clear and precise as to enable the defendant to prepare its defence and the Court to rule on the action, even without having to request further information. It is necessary, for an action to be admissible, that the basic legal and factual particulars relied on be indicated, at least in summary form, coherently and intelligibly in the application itself, so as to guarantee legal certainty and sound administration of justice (see judgment of 6 October 2015 in Corporación Empresarial de Materiales de Construcción v Commission, T‑250/12, EU:T:2015:749, paragraph 101 and the case-law cited).

55      In the case at hand, the applicant submits, in essence, that the Commission committed a manifest error of assessment in considering that Ziggo Sport Totaal and Fox Sports were active in the same market, namely, the market for the wholesale supply and acquisition of premium pay TV sports channels, as the sports content they offer was not substitutable. That follows, inter alia, from paragraph 28 of the application. It is moreover confirmed by paragraph 29 of the reply, in which the applicant clarifies that its criticism concerns the absence of a further segmentation of that market.

56      Consequently, it must be concluded that the application satisfies the minimum requirements of Article 76(d) of the Rules of Procedure for the purposes of the case-law cited in paragraph 54 above. Furthermore, it must be held that the Commission was able to identify the arguments put forward by the applicant in order to challenge them in its pleadings. Accordingly, the objections raised by the Commission concerning the admissibility of the first plea must be dismissed.

57      As regards the examination of the merits of the first plea, it must be recalled that, with regard to the application of the rules on the control of concentrations, a proper definition of the relevant market is a necessary precondition for the assessment of the effects of the concentration on competition (judgments of 31 March 1998, France and Others v Commission, C‑68/94 and C‑30/95, EU:C:1998:148, paragraph 143; of 6 June 2002, Airtours v Commission, T‑342/99, EU:T:2002:146, paragraph 19; and of 7 May 2009, NVV and Others v Commission, T‑151/05, EU:T:2009:144, paragraph 51).

58      According to settled case-law, the basic rules on control of concentrations and, in particular, those concerning the assessment of concentrations such as those laid down in Article 2 of Regulation No 139/2004, confer on the Commission a measure of discretion, especially for assessments of an economic nature. Consequently, review by the EU judicature of the exercise of that discretion, which is essential for defining the rules on concentrations, must take account of the discretionary margin implicit in the provisions of an economic nature which form part of the rules on concentrations (judgments of 31 March 1998, France and Others v Commission, C‑68/94 and C‑30/95, EU:C:1998:148, paragraphs 223 and 224; of 6 June 2002, Airtours v Commission, T‑342/99, EU:T:2002:146, paragraph 64; and of 7 May 2009, NVV and Others v Commission, T‑151/05, EU:T:2009:144, paragraph 53).

59      In particular, in so far as the definition of the relevant market involves complex economic assessments on the Commission’s part, it is subject to limited review only by the EU judicature (judgments of 17 September 2007, Microsoft v Commission, T‑201/04, EU:T:2007:289, paragraph 482, and of 7 May 2009, NVV and Others v Commission, T‑151/05, EU:T:2009:144, paragraph 53).

60      However, although the Commission has a measure of discretion with regard to economic matters, that does not mean that the EU judicature must refrain from reviewing the Commission’s interpretation of information of an economic nature. The EU judicature must not only establish whether the evidence put forward is factually accurate, reliable and consistent but must also determine whether that evidence contains all the relevant data that must be taken into consideration in appraising a complex situation and whether it is capable of substantiating the conclusions drawn from it (judgments of 17 September 2007, Microsoft v Commission, T‑201/04, EU:T:2007:289, paragraph 482, and of 7 May 2009, NVV and Others v Commission, T‑151/05, EU:T:2009:144, paragraph 54).

61      According to section 6 of Form CO relating to the notification of a concentration pursuant to the Merger Regulation, set out in Annex I to Commission Regulation (EC) No 802/2004 of 7 April 2004 implementing [the Merger Regulation] (OJ 2004 L 133, p. 1), which refers to the Commission Notice on the definition of relevant market for the purposes of Community competition law (OJ 1997 C 372, p. 5; ‘Notice on the definition of relevant market’), the relevant product market comprises all those products and/or services which are regarded as interchangeable or substitutable by the consumer, by reason of their characteristics, their prices and their intended use.

62      It is apparent from point 15 of the Notice on the definition of the relevant market that the assessment of demand substitution entails a determination of the range of products that the consumer views as substitutes.

63      According to point 17 of the Notice, the question to be answered is whether the parties’ customers would switch to readily available substitutes or to suppliers located elsewhere in response to a hypothetical small — in the range of 5 to 10% — but permanent, relative price increase in the products and areas being considered.

64      It is in the light of those considerations that the applicant’s arguments under the first plea must be examined.

65      As is apparent from paragraph 55 above, the applicant essentially criticises the lack of further segmentation of the market for the wholesale supply and acquisition of premium pay TV sports channels. In its view, the channels Ziggo Sport Totaal and Fox Sports are not substitutable due to the lack of substitutability of the sports content they provide and therefore should be regarded as constituting separate markets. In reality, each of those channels itself constitutes a separate market.

66      In that regard, it should be recalled that, according to recitals 158 to 163 of the contested decision, the market for the wholesale supply and acquisition of premium pay TV sports channels comprises, on the supply side, TV channel suppliers which acquire or produce audio-visual content and package it into TV channels and, on the demand side, providers of retail TV services which acquire rights over channels in order to broadcast them to end users.

67      It is apparent from recital 162 of the contested decision that Liberty Global is active on that market both on the supply side, in making Ziggo Sport Totaal available to third parties, and on the demand side, in acquiring rights over channels in order to include them in its retail TV services. As for Vodafone, according to recital 163 of the contested decision, it is active on that market on the demand side only.

68      As indicated in paragraphs 61 and 63 above, the question whether two products or services are part of the same market involves determining whether they are regarded as interchangeable or substitutable by reason of their characteristics, their prices and intended use, primarily from the customer’s point of view.

69      In the case at hand, as regards the market for the wholesale supply and acquisition of premium pay TV sports channels, the demand or, in other words, the customer base, is made up of retail TV service providers, which incorporate them into their offer to end consumers, as stated in paragraph 66 above.

70      It should be noted that, according to recital 176 of the contested decision, a number of respondents to the market investigation stated that the channels Ziggo Sport Totaal and Fox Sports competed for similar content and customer bases and were increasingly becoming substitutable. In addition, according to recital 500 of the contested decision, the Commission observed that customers, namely retail suppliers, had access to a number of premium pay TV sports channels, in particular Fox Sports, as an alternative to Ziggo Sport Totaal. In addition, it is apparent from recital 502 of the contested decision that the majority of respondents to the market investigation considered that Fox Sports has a content offer as attractive as Ziggo Sport Totaal — or even more so — evidenced by the significantly higher number of subscribers to Fox Sports despite its higher price. Furthermore, it follows from recital 504 of the contested decision that the majority of respondents to the investigation considered that it was essential for retail TV service providers to offer at least one premium pay TV sports channel, while only a minority considered that it was necessary for them to offer all premium pay TV sports channels available in the Netherlands.

71      It follows from those considerations that, in the contested decision, the Commission did not commit a manifest error of assessment by not further segmenting the market for the wholesale supply and acquisition of premium pay TV sports channels, given the substitutability of channels on the demand side, in particular Ziggo Sport Totaal and Fox Sports from the point of view of retail TV service providers.

72      None of the arguments put forward by the applicant can cast doubt on that finding.

73      First, it must be noted that, although the applicant maintains that Ziggo Sport Totaal and Fox Sports should belong to separate markets and although it argued at the hearing that each of those channels constitutes a separate market in itself, it does not clearly indicate what other market definition of the relevant market it proposes in general should be used, including its name and features. It appears that, according to the applicant, each premium pay TV sports channel which broadcasts premium or must-have content, such as the Netherlands football championship, the main national and international football competitions and Formula 1, should belong to a separate market. The reason is that, for a sports fan, those different types of content are not substitutable.

74      As stated in paragraphs 70 and 71 above, however, what is decisive is the substitutability of these channels on the demand side in that market, consisting of retail TV service providers.

75      Moreover, regarding the downstream market, even assuming that, as the applicant claims, for the final consumer, sports content is not wholly interchangeable, it must be borne in mind that, according to recitals 55 and 56 of the contested decision, the relevant market is possibly that of the retail supply of pay TV services and not that of the retail supply of pay TV sports content, even less that of the supply of pay TV football content. The sports content broadcast by channels Ziggo Sport Totaal and Fox Sports is part of an overall package of TV services offered to end consumers comprising various elements, of which sports content is but one component, even if it may be important for attracting customers. Therefore, from the perspective of the average end consumer of TV services in general, there is no indication that an overall package of TV services incorporating the channel Ziggo Sport Totaal is not comparable to an overall package of TV services incorporating the channel Fox Sports, despite the fact that the sports content of those two channels is not identical. Furthermore, even though it may be desirable from a commercial point of view for a retail TV services provider to be able to offer its subscribers the Ziggo Sport Totaal and Fox Sports channels, it should be recalled that, according to recital 504 of the contested decision, only a small minority of respondents to the market investigation believed that it was necessary to offer all of the premium pay TV sports channels available in the Netherlands.

76      Second, as regards the argument concerning the difference in price between Fox Sports and Ziggo Sport Totaal, it must be pointed out that, as stated in paragraph 61 above, price is among the factors relevant to assessing whether two products are substitutable. For products to be considered demand-side substitutes, however, it is not necessary that they be offered at the same price. A low quality product or service sold at a low price could well be an effective substitute to a higher quality product sold at a higher price. What is important is the likely responses of consumers following a relative price increase (see, by analogy, Commission guidelines on market analysis and the assessment of significant market power under the Community regulatory framework for electronic communications networks and services (OJ 2002 C 165, p. 6, paragraph 46)).

77      Moreover, it should be noted that paragraphs 17 and 18 of the Notice on the definition of the relevant market, cited by the applicant, describe the application of the SSNIP (small but significant and non-transitory increase in price) test. This seeks to examine the reaction of customers to an increase in the price of the product in question, all other factors remaining constant, including the price of the candidate product included in the same relevant market. In the present case the applicant limits itself to noting an undetermined difference in price between the Fox Sports and Ziggo Sport Totaal channels. In the light of paragraphs 17 and 18 of the Notice on the definition of the relevant market, that element is not in itself sufficient to call into question the conclusion of the contested decision that those two channels are substitutable.

78      Third, as regards the observations submitted by UPC, an operator currently belonging to the Liberty Global group, in the context of merger control procedure before the Netherlands competition authority, it should be observed that statements made by an operator 4 years earlier in a different procedure cannot bind the Commission or of themselves call into question the legality of a Commission decision based upon its own set of considerations and evidence, including that set out in paragraph 70 above. In addition, the statements in question merely confirm that the Netherlands football championship is part of the so-called ‘must-have’ content typically broadcast by premium pay TV sports channels, which the contested decision does not call into question.

79      Fourth, it must be held that the applicant’s argument that the definition of the relevant markets in the present case is inconsistent with certain earlier Commission decisions cannot succeed. According to the case-law, the Commission is required to carry out an individual appraisal of the circumstances of each case, without being bound by previous decisions concerning other undertakings, other product and service markets or other geographic markets at different times. Thus, the applicant is not entitled to call the Commission’s findings into question on the ground that they differ from those made previously in a different case, even where the markets at issue in the two cases are similar or identical (judgment of 25 March 2015 in Slovenská pošta v Commission, T‑556/08, not published, EU:T:2015:189, paragraphs 196 and 197).

80      Even on the assumption that that argument could be classified instead as an allegation of a breach of the principle of the protection of legitimate expectations, economic operators have no grounds for a legitimate expectation that an earlier decision-making practice that is capable of being varied will be maintained (see, to that effect, 13 May 2015, Niki Luftfahrt v Commission, T‑162/10, EU:T:2015:283, paragraph 143).

81      In any event, the Commission decisions that the applicant relies upon cannot support its line of argument since it is based on a misinterpretation of those decisions. It is apparent from a reading of the paragraphs and recitals cited by the applicant that those decisions relate to demand-side substitutability on the upstream market for the licensing and acquisition of broadcasting rights for television content, whereas the first plea relates to the definition of the downstream market for the wholesale supply and acquisition of premium pay TV sports channels (decisions of 13 November 2001 in Case No COMP/M.2483 — Group Canal +/RTL/GJCD/JV, paragraph 19, and of 2 April 2003 in Case COMP/M.2876 — Newscorp/Telepiù, paragraph 66).

82      Fifth, it must be held that the documents annexed to the application are not such as to invalidate the conclusion in the contested decision that the Fox Sports and Ziggo Sport Totaal channels constitute alternatives for retail TV service providers. In particular, the document contained in Annex 10 to the application does not take into account the availability of Fox Sports and, therefore, does not enable conclusions to be drawn as to the substitutability of Fox Sports and Ziggo Sport Totaal.

83      The same is true of the TelecomPaper study of 17 February 2016, contained in Annex 11 to the application, which does not mention Fox Sports and, moreover, pertains not to Ziggo Sport Totaal, but to Ziggo Sport. In addition, that study merely indicates that that channel is one of the reasons 14% of its subscribers remain with Liberty Global, which suggests that it is neither the main reason for those persons nor among the reasons a majority of its subscribers remain with it.

84      In the same way, the press release contained in Annex 12 of the application merely states that Ziggo Sport, not Ziggo Sport Totaal, is one of the reasons to subscribe to Liberty Global for almost 20% of subscribers, without ruling out the substitutability of Fox Sports and Ziggo Sport Totaal and without it meaning that it is the primary reason for a majority of subscribers.

85      As regards the annual accounts of the merged entity for the year 2016 set out in Annex 13 to the application, it should be noted that that document appears to refer to Ziggo Sport rather than to Ziggo Sport Totaal. In any event, as has been stated, given that it does not mention Fox Sports, it does not rule out the substitutability of that channel and Ziggo Sport Totaal.

86      As regards the study conducted by the Netherlands media authority in Annex 14 to the application, it is sufficient to note that it merely states that the content of the TV services offer, in other words the content of the package, is among the reasons for the customers’ choice of the provider, the first reason being price. As has been stated, however, it does not rule out the substitutability of Fox Sports and Ziggo Sport Totaal, nor do the data on the percentages of viewers who watch Ziggo Sport Totaal and Fox Sports occasionally and daily provide any indication as to the substitutability of the two channels.

87      The same conclusion applies to the study contained in Annex 15 to the application, which does not contain any consideration such as to call into question the substitutability of Ziggo Sport Totaal and Fox Sports and is limited to highlighting the importance of sports content as a commercial strategy of retail TV service providers.

88      Similarly, the consultation paper prepared by the Netherlands competition authority, set out in Annex 9 to the application, merely states, in the passage cited by the applicant, that retail suppliers attempt to distinguish themselves from their competitors by the contents of their offer, which does not call into question the substitutability of Ziggo Sport Totaal and Fox Sports.

89      Last, it should be held that, to the extent that the study set out in Annex 16 to the application merely indicates that consumers attach a certain importance to the prospect of accessing certain content, including sports content, it does not contain any consideration supporting the applicant’s argument that Ziggo Sport Totaal and Fox Sports are not substitutable.

90      In the light of the foregoing, the first plea must be rejected as unfounded.

 The second plea in law, alleging a manifest error of assessment regarding the vertical effects

91      By the second plea, the applicant submits that the contested decision is vitiated by a manifest error of assessment regarding the vertical effects of the merger, in particular the input foreclosure effect on the market for the wholesale supply and acquisition of premium pay TV sports channels.

92      As a preliminary point, the applicant submits that it was wrong for the Commission to examine in the contested decision the effects of the input foreclosure of Ziggo Sport Totaal in respect of mobile networks only. In that regard, it notes that the merged entity would be capable of offering access to Ziggo Sport Totaal via fixed-mobile ‘multiple play’ bundles.

93      The applicant submits that the merged entity would have both the ability to engage in an input foreclosure strategy and the incentive to do so, and that that strategy would have significant negative effects on competition.

94      First, as regards the ability to engage in an input foreclosure strategy, the applicant argues that, even before the proposed merger, Liberty Global’s share of the market for the provision of ‘multiple play’ bundles exceeded 50%. Therefore, with the activities in the market for mobile services following the proposed transaction, the merged entity would have the ability to extend the foreclosure to new markets, including the markets for the provision of fixed-mobile ‘multiple play’ bundles.

95      In its reply, the applicant maintains that the assessment, in the contested decision, of the merged entity’s ability to engage in a foreclosure strategy is wrong, since Ziggo Sport Totaal and Fox Sports should not have been included in the same relevant market. According to the applicant, recital 501 of the contested decision confirms that those channels belong to separate markets, since each of them offers must-have content. In addition, the fact that Fox Sports had significantly more subscribers than Ziggo Sport Totaal, despite the fact that Fox Sports was more expensive, as indicated in recital 502 of the contested decision, confirms that they are not substitutable.

96      The applicant moreover objects to what it regards as an ‘unacceptable alteration’ to the contested decision where the Commission pointed out, in the context of the present dispute, a supposed clerical error in recital 500 of the contested decision concerning the data on market shares.

97      It relies on the judgment of 26 October 2017, KPN v Commission (T‑394/15, not published, EU:T:2017:756), according to which the presence of a strong competitor on the market, like Fox Sports, is insufficient to conclude that another operator has no market power.

98      The applicant submits that recital 504 of the contested decision, according to which a majority of respondents to the market investigation considers it essential for television service providers to offer at least one premium pay TV sports channel, does not exclude that several channels would be necessary in order to compete effectively. Moreover, it submits that the question asked by the Commission in the market investigation was ambiguous.

99      Therefore, as a result of its market power, the merged entity would have the ability to foreclose access to a must-have input to its competitors.

100    Second, as regards the incentive to engage in a foreclosure strategy, the applicant submits that the merged entity would be able to obtain a competitive advantage on the downstream market.

101    Third, as regards the possible effects of the foreclosure strategy on competition in the market for the provision of fixed-mobile ‘multiple play’ bundles, the applicant submits that the Commission did not correctly examine the negative effects because of its failure to take into account the importance of sports content.

102    The Commission, supported by the interveners, disputes the applicant’s arguments.

103    By the second plea, the applicant claims, in essence, that the Commission committed a manifest error of assessment in not taking the view that the proposed merger raised vertical competition concerns on the market for the wholesale supply and acquisition of premium pay TV sports channels, in particular concerns of input foreclosure as regards Ziggo Sport Totaal.

104    According to Article 2(2) of Regulation No 139/2004, a concentration that would not significantly impede effective competition in the internal market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position, is to be declared compatible with the internal market. Meanwhile, according to Article 2(3) of the same regulation, a concentration which would significantly impede effective competition, in the internal market or in a substantial part of it, in particular as a result of the creation or strengthening of a dominant position, is to be declared incompatible with the internal market.

105    Moreover, according to Article 8(2) of Regulation No 139/2004, where the Commission finds that, following modification by the undertakings concerned, a notified concentration fulfils the criterion laid down in Article 2(2) of that regulation, it is to issue a decision declaring the concentration compatible with the internal market.

106    As stated in paragraph 58 above, according to settled case-law, the basic rules on control of mergers, and, in particular, those concerning the assessment of concentrations such as those laid down in Article 2 of Regulation No 139/2004, confer on the Commission a measure of discretion, especially for assessments of an economic nature. Consequently, review by the EU judicature of the exercise of that discretion, which is essential for defining the rules on concentrations, must take account of the discretionary margin implicit in provisions of an economic nature that form part of the rules on mergers.

107    In particular, it is not for the Court to substitute its own economic assessment for that of the Commission (see, to that effect, judgments of 9 July 2007, Sun Chemical Group and Others v Commission, T‑282/06, EU:T:2007:203, paragraph 60, and of 7 June 2013, Spar Österreichische Warenhandels v Commission, T‑405/08, not published, EU:T:2013:306, paragraph 51).

108    However, as indicated in paragraph 60 above, although the Commission has a margin of discretion with regard to economic matters, that does not mean that the EU judicature must refrain from reviewing the Commission’s interpretation of information of an economic nature. Not only must the EU judicature, inter alia, establish whether the evidence relied on is factually accurate, reliable and consistent, but also whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it.

109    Merger review therefore calls for a prospective analysis which consists in an examination of how a merger might alter the factors determining the state of competition on a given market in order to establish whether it would give rise to a serious impediment to effective competition. Such an analysis makes it necessary to envisage various chains of cause and effect with a view to ascertaining which of them are the most likely (judgments of 19 June 2009, Qualcomm v Commission, T‑48/04, EU:T:2009:212, paragraph 88, and of 9 March 2015, Deutsche Börse v Commission, T‑175/12, not published, EU:T:2015:148, paragraph 62; see also, to that effect, judgment of 15 February 2005, Commission v Tetra Laval, C‑12/03 P, EU:C:2005:87, paragraph 43).

110    It is therefore for the Commission to show, with a sufficient degree of probability, in its decision declaring a merger compatible with the internal market that the merger, as modified by the commitments proposed by the parties thereto, will not significantly impede effective competition in the internal market or in a substantial part of it. Interested third parties who bring an action seeking the annulment of a decision declaring a merger to which commitments are attached compatible with the internal market must show that the Commission erred in its assessment of those commitments in such a way that the compatibility of the merger with the common market is called into question (see, to that effect, judgment of 19 June 2009, Qualcomm v Commission, T‑48/04, EU:T:2009:212, paragraphs 89 and 90).

111    The second plea must be examined in the light of those considerations.

112    As a preliminary point, the applicant claims that in the contested decision the Commission examined the effects of input foreclosure in relation to mobile networks only.

113    In that regard, it should be recalled that, according to the case-law, when examining the compatibility of a merger with the internal market, the Commission is required to assess the competitive effects of the merger on the markets on which there is an overlap between the activities of the parties thereto. It follows that if one of the parties was already in a dominant position on the relevant market before the merger, that situation by definition escapes the analysis of the competitive effects of the merger. On the other hand, that does not apply when the dominant position on a relevant market results from or is strengthened by the merger (see, to that effect, judgment of 13 May 2015, Niki Luftfahrt v Commission, T‑162/10, EU:T:2015:283, paragraphs 248 and 249).

114    Thus, as noted in paragraph 109 above, it follows from the case-law that merger review calls for a prospective analysis which consists in an examination of how a merger might alter the factors determining the state of competition on a given market.

115    In addition, it is apparent from paragraph 20 of the Guidelines on the assessment of non-horizontal mergers under the Council Regulation on the control of concentrations between undertakings (OJ 2008 C 265, p. 6; ‘the Guidelines on non-horizontal mergers’) that, in assessing the competitive effects of a merger, the Commission compares the competitive conditions that would result from the notified merger with the conditions that would have prevailed without the merger.

116    In the case at hand, it is apparent from recital 498 of the contested decision that the Commission focused its analysis on the changes brought about by the merger. Following the commitments, the only specific change resulting from the merger was the addition of the mobile network and primarily mobile customer base of Vodafone. Therefore, it is without committing a manifest error of assessment that the Commission could confine its analysis, as it did, to the risk of foreclosing access to the channel Ziggo Sport Totaal affecting markets with a mobile component, in particular the market for the retail supply of fixed-mobile ‘multiple play’ bundles. Indeed, it is apparent from recitals 499 to 522 of the contested decision that the Commission carried out such an analysis, contrary to what the applicant seems to suggest, focusing on the possible foreclosure of access to the Ziggo Sport Totaal channel affecting in particular the mobile component of fixed-mobile ‘multiple play’ bundles.

117    Accordingly, the applicant’s preliminary point must be rejected.

118    It is apparent from paragraph 31 of the Guidelines on non-horizontal mergers that input foreclosure arises where, post-merger, the new entity would be likely to restrict access to the products or services that it would have otherwise supplied had the merger not taken place. According to point 32 of those guidelines, in assessing the likelihood of an anti-competitive foreclosure scenario, the Commission examines, first, whether the merged entity would have, post-merger, the ability to foreclose access to inputs substantially, second, whether it would have the incentive to do so, and third, whether a foreclosure strategy would have a significant detrimental effect on competition downstream. It follows from recitals 497 to 522 to the contested decision that the Commission examined those three conditions in the present case, without that approach being criticised by the applicant.

119    It should be noted, as the Commission submits in the defence without the applicant contradicting it on the point, that those three conditions are cumulative, so that the absence of any of them is sufficient to rule out the likelihood of anti-competitive input foreclosure.

120    As regards the first of those conditions, namely, the ability to engage in an input foreclosure strategy, it is apparent from paragraph 35 of the Guidelines on non-horizontal mergers and recital 499 of the contested decision that the vertically integrated firm resulting from the merger must have a significant degree of market power in the upstream market, namely, the market for the wholesale supply of premium pay TV sports channels in the present case.

121    Under recitals 409 and 500 of the contested decision, the combined entity had a market share below 10% by revenue in the possible market for the wholesale supply and acquisition of premium pay TV sports channels, which was the narrowest market segmentation possible. Moreover, according to recital 502 of the contested decision, Ziggo Sport Totaal had a significantly smaller number of subscribers than Fox Sports, despite the higher price charged by the latter. In addition, under recital 517 of the contested decision, Ziggo Sport Totaal accounted for fewer than 5% of the total subscribers to pay TV in the Netherlands. Furthermore, according to recitals 518 and 519 of the contested decision, the consumption of audiovisual content on mobile devices was less than 3% of the total television consumption, and only 12% of customers using a mobile device to access audiovisual content watched live television, in particular sporting events. More specifically, according to an independent study, in the last quarter of 2015, only 4% of subscribers to Ziggo Sport Totaal watched that channel on their mobile devices, which indicates that only a minimal part of the 3% of pay TV subscribers who subscribe to Ziggo Sport Totaal are interested in having access to that channel on their mobile devices.

122    It follows from the foregoing that it is without committing a manifest error of assessment that the Commission concluded in the contested decision that the merged entity would not have the ability to engage in an input foreclosure strategy with regard to, inter alia, Ziggo Sport Totaal on the market for the supply of fixed-mobile ‘multiple play’ bundles.

123    None of the arguments put forward by the applicant is capable of undermining that conclusion.

124    In the first place, it is necessary to reject the argument concerning the position of the merged entity on the market for ‘multiple play’ bundles as ineffective and, in any event, as unfounded. On the one hand, as stated in paragraph 121 above, what counts in assessing the ability to engage in an input foreclosure strategy is the position on the upstream market, not the position on the downstream market. On the other hand, and in any event, it is apparent from Table 11 set out in recital 364 of the contested decision that the market share of the merged entity on the market for the supply of fixed-mobile ‘multiple play’ bundles would be less than 20%, whereas the applicant’s market share was higher than 80%.

125    In that regard, it should be highlighted that, as the Commission notes, the data provided by the applicant, according to which the merged entity would have a market share of more than 50% on the market for fixed-mobile ‘multiple play’ bundles, concern all the markets for bundles, whereas, for the reasons given in paragraphs 112 to 117 above, only the market for bundles with a mobile component is relevant for the purposes of the present analysis. Therefore, the document prepared by the Netherlands competition authority, set out in Annex 20 to the application, does not support the applicant’s argument, since the market share estimates contained in it concern all the ‘multiple play’ bundles.

126    In the second place, it is necessary to reject the argument according to which Ziggo Sport Totaal and Fox Sports should not be included in the same relevant market in order to assess the ability of the merged entity to engage in an input foreclosure strategy for the reasons stated in paragraphs 65 to 71 above.

127    In the third place, the argument concerning an alleged amendment of the contested decision by the Commission in the context of the present case must also be rejected. Beyond the Commission’s explanations that recital 500 of the non-confidential version of the contested decision contained a mere clerical error, it is sufficient to point out that footnote 269, inserted in recital 409 of the contested decision, contained a range with the correct figures. As the Commission has explained, the apparent contradiction between those two recitals of the contested decision arises from a mere clerical error in recital 500 of the non-confidential version of the contested decision.

128    In the fourth place, the applicant misinterprets the judgment of 26 October 2017, KPN v Commission (T‑394/15, not published, EU:T:2017:756). In that judgment, the Court did not consider that an operator could have market power, even in the presence of a much larger competitor on the market. It merely observed that the presence of two operators on a market did not in itself rule out the possibility that one of them might have market power, absent any analysis of their market position.

129    In the fifth place, the applicant also misreads recital 504 of the contested decision. Contrary to what it suggests, the majority of respondents to the market investigation noted that it was not essential to offer all premium pay TV sports channels, namely, Ziggo Sport Totaal and Fox Sports. Moreover, contrary to what the applicant claims, it is apparent from a reading of the question raised by the Commission during the market investigation that it was sufficiently clear on that point.

130    In the sixth place, it should be noted that the documents annexed to the application are not such as to invalidate the conclusion on the lack of ability to engage in an input foreclosure strategy with regard to Ziggo Sport Totaal.

131    In particular, the TelecomPaper article, reproduced in Annex 17 to the application, which refers to a promotion involving Ziggo Sport, does not contain any consideration such as to call into question the lack of upstream market power of the merged entity. The same is true of the article reproduced in Annex 18 to the application, which does not support the existence of upstream market power resulting from Ziggo Sport Totaal, since that article does not refer to that channel.

132    As regards the extract from the merged entity’s website, contained in Annex 19 to the application, informing its final customers of a price increase justified by an increase of its own costs, it should be noted that it is not certain that that supports the existence of a risk of vertical effects. In particular, that document does not support the claim that the merged entity would have upstream market power resulting from Ziggo Sport Totaal, which is a prerequisite for the existence of a risk of input foreclosure.

133    The first part of the second plea must therefore be rejected. Given the cumulative nature of the three conditions relating to the existence of a risk of input foreclosure, which, moreover, the applicant does not dispute, there is no need to examine the second and third parts of the second plea. In the light of the foregoing, the second plea must be rejected as unfounded.

 The third plea in law, alleging breach of the duty to state reasons

134    Under the third plea, the applicant submits that, in the contested decision, the Commission breached the duty to state reasons as regards the definition of the relevant market and the absence of risk of input foreclosure with regard to competitors in the market for fixed-mobile ‘multiple play’ bundles.

135    In particular, in the contested decision, the Commission did not provide proof that Fox Sports and Eurosport are attractive alternatives to Ziggo Sport Totaal, nor did it explain why there is substitutability between the different sports content, for example, between football and Formula 1. Moreover, in the contested decision, the Commission did not consider the importance of content in its assessment of the effects of the concentration on the market for fixed-mobile ‘multiple play’ bundles. According to the applicant, the Commission also did not state the reasons why, in its view, it was implausible that any increase in profits resulting from new subscribers would offset the loss of revenue from licensing Ziggo Sport Totaal to other operators.

136    In its reply, the applicant submits that the Commission should have provided reasons why it did not consider that the market for premium pay TV sports channels ought to be further segmented by sports content. As the applicant put forward those arguments during the administrative procedure, the Commission should have examined them.

137    The Commission, supported by the interveners, disputes the applicant’s arguments.

138    It is clear from settled case-law that the statement of reasons required by Article 296 TFEU must be appropriate to the measure at issue and must disclose in a clear and unequivocal fashion the reasoning followed by the institution which adopted the measure in question in such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the competent EU Court to exercise its power of review. The requirements to be satisfied by the statement of reasons depend on the circumstances of each case, in particular the content of the measure in question, the nature of the reasons given and the interest which the addressees of the measure, or other parties to whom it is of direct and individual concern, may have in obtaining explanations. It is not necessary for the reasoning to go into all the relevant facts and points of law, since the question whether the statement of reasons meets the requirements of Article 296 TFEU must be assessed with regard not only to its wording but also to its context and to all the legal rules governing the matter in question (see judgment of 10 July 2008, Bertelsmann and Sony Corporation of America v Impala, C‑413/06 P, EU:C:2008:392, paragraph 166 and the case-law cited).

139    The institution which adopted the measure is not required, however, to define its position on matters which are plainly of secondary importance or to anticipate potential objections. Moreover, the degree of precision of the statement of the reasons for a decision must be weighed against practical realities and the time and technical facilities available for making the decision. Thus, the Commission does not breach its duty to state reasons if, when exercising its power to examine concentrations, it does not include precise reasoning in its decision as to the appraisal of a number of aspects of the concentration which appear to it to be manifestly irrelevant or insignificant or plainly of secondary importance to the appraisal of the concentration. Such a requirement would be difficult to reconcile with the need for speed and the short timescales which the Commission is bound to observe when exercising its power to examine concentrations and which form part of the particular circumstances of proceedings for control of those concentrations (judgment of 10 July 2008, Bertelsmann and Sony Corporation of America v Impala, C‑413/06 P, EU:C:2008:392, paragraph 167).

140    In that regard, while it is true that the Commission is not obliged, in the statement of reasons for decisions adopted under the Regulation, to take a position on all the information and arguments relied on before it, including those which are plainly of secondary importance to the appraisal it is required to undertake, it nonetheless remains the case that it is required to set out the facts and the legal considerations having decisive importance in the context of the decision. The reasoning must in addition be logical and must not disclose any internal contradictions (judgment of 10 July 2008, Bertelsmann and Sony Corporation of America v Impala, C‑413/06 P, EU:C:2008:392, paragraph 169).

141    Furthermore, it is clear from the case-law that a claim that there is no, or only an inadequate, statement of reasons constitutes a plea of infringement of an essential procedural requirement, which, as such, is different from a plea that the grounds of the decision are inaccurate, the latter being a matter for the Court to review when it examines the substance of that decision (judgment of 19 June 2009, Qualcomm v Commission, T‑48/04, EU:T:2009:212, paragraph 175).

142    It is in the light of those considerations that the third plea put forward by the applicant must be examined.

143    First, the applicant submits that the contested decision breaches the duty to state reasons so far as the definition of the relevant market is concerned. In particular, the contested decision does not explain why Fox Sports is an attractive alternative to Ziggo Sport Totaal and why there is substitutability between the different sports content. The Commission should therefore have given reasons why its decision did not consider that the market for premium pay TV sports channels ought to be further segmented by sports content.

144    Those arguments cannot be accepted.

145    As is apparent in particular from paragraphs 70 and 71 above, in the contested decision, the Commission based its conclusion relating to the definition of the relevant market on the following considerations. First, a number of respondents to the market investigation stated that the Ziggo Sport Totaal and Fox Sports channels competed for similar content and customer bases and were increasingly becoming substitutable. In addition, the Commission observed that customers, namely retail suppliers, had access to a number of premium pay TV sports channels, in particular Fox Sports, as an alternative to Ziggo Sport Totaal. Moreover, the majority of respondents to the market investigation stated that Fox Sports had a content offer as attractive as Ziggo Sport Totaal, or even more so. Furthermore, the majority of respondents to the investigation considered that it was essential for retail TV service providers to offer at least one premium pay TV sports channel, while only a minority considered that it was necessary to offer all premium pay TV sports channels available in the Netherlands.

146    In the light of those considerations and given the substitutability of channels on the demand side from the point of view of retail TV service providers, in particular Ziggo Sport Totaal and Fox Sports, the contested decision cannot be criticised for not stating reasons for not further segmenting the market for the wholesale supply and acquisition of premium pay TV sports channels.

147    Second, the applicant claims that the contested decision disregards the duty to state reasons in not considering the importance of content in its assessment of the effects of the concentration on the market for fixed-mobile ‘multiple play’ bundles.

148    That argument cannot be accepted.

149    As is apparent in particular from recitals 502, 504 and 507 of the contested decision, the Commission’s conclusion as regards the absence of risk of anti-competitive input foreclosure was based in particular on the existence of an alternative to Ziggo Sport Totaal with equally attractive or more attractive content, such as Fox Sports, available for the downstream competitors of the merged entity.

150    Last, to the extent the arguments put forward by the applicant under the third plea can be understood as in fact challenging the substantive assessment carried out by the Commission in the contested decision, as the Commission contends, those arguments must be rejected for the reasons set out in the analysis of the first and second pleas in paragraphs 57 to 90 and 118 to 133 above.

151    In the light of the foregoing, the third plea must be rejected as unfounded.

152    In the light of all the foregoing considerations, the action must be dismissed in its entirety.

 Costs

153    Under Article 134(1) of the Rules of Procedure, the unsuccessful party is to be ordered to pay the costs if they have been applied for in the successful party’s pleadings. Since the applicant has been unsuccessful, and since the Commission and the interveners have applied for costs, the applicant must be ordered to pay the costs.

154    Accordingly, the applicant shall, in addition to bearing its own costs, pay those incurred by the Commission and the interveners.

On those grounds,

THE GENERAL COURT (Eighth Chamber)

hereby:

1.      Dismisses the action;

2.      Orders KPN BV to bear its own costs and to pay those incurred by the European Commission, VodafoneZiggo Group Holding BV, Vodafone Group plc and Liberty Global Europe Holding BV.

Delivered in open court in Luxembourg on 23 May 2019.

*      Language of the case: English.

© European Union
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