JUDGMENT OF THE GENERAL COURT (Third Chamber)

27 January 2021 (*)

(Competition – Concentrations – Netherlands market for television services and telecommunications services – Decision declaring the concentration compatible with the internal market and the EEA Agreement – Relevant market – Vertical effects – Manifest error of assessment – Obligation to state reasons)

In Case T‑691/18,

KPN BV, established in Rotterdam (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, A. Pliego Selie and I. Lulof, lawyers,

interveners,

APPLICATION pursuant to Article 263 TFEU for annulment of Commission Decision C(2018) 3569 final of 30 May 2018 declaring the concentration involving the acquisition by Liberty Global of sole control over Ziggo NV to be compatible with the internal market and the Agreement on the European Economic Area (EEA) (Case COMP/M.7000 – Liberty Global/Ziggo),

THE GENERAL COURT (Third Chamber),

composed of A.M. Collins (Rapporteur), President, V. Kreuschitz and Z. Csehi, Judges,

Registrar: P. Cullen, Administrator,

having regard to the written part of the procedure and further to the hearing on 15 September 2020,

gives the following

Judgment

 Background to the dispute

 The entities concerned and the administrative procedure

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        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.

3        Ziggo NV owned and operated a broadband cable network in the Netherlands. It provided digital and analogue cable video, broadband internet, mobile telecommunications and digital telephony services.

4        On 14 March 2014, in accordance with 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), Liberty Global notified to the European Commission a proposed concentration consisting of the acquisition of sole control over Ziggo, of which it already held 28.5% of the capital.

5        On 10 October 2014, the Commission adopted Decision C(2014) 7241 final declaring the concentration involving the acquisition by Liberty Global of sole control over Ziggo to be compatible with the internal market and the Agreement on the European Economic Area (EEA), in the light of the final commitments submitted by the parties (Case COMP/M.7000 – Liberty Global/Ziggo), a summary of which was published in the Official Journal of the European Union (OJ 2015 C 145, p. 7) (‘the 2014 Liberty Global/Ziggo decision’). In particular, given that Ziggo and HBO Inc. each owned 50% of HBO Nederland, a premium pay TV film channel, Liberty Global gave a commitment to divest Film1, the only other premium pay TV film channel in the Netherlands, in order to eliminate the horizontal overlap between the parties’ activities in that market.

6        On 21 November 2014, following the 2014 Liberty Global/Ziggo decision, the proposed transaction was completed.

7        By its judgment of 26 October 2017, KPN v Commission (T‑394/15, not published, EU:T:2017:756), the General Court annulled the 2014 Liberty Global/Ziggo decision for failure to state reasons concerning the absence of vertical effects on the possible market for the wholesale supply and acquisition of premium pay TV sports channels.

8        On 4 April 2018, following the General Court’s annulment of the 2014 Liberty Global/Ziggo decision, Liberty Global and Vodafone Group plc, the notifying parties, lodged a supplementary notification with the Commission, providing additional information on the transaction and the changes in market conditions since that decision.

9        It should also be noted that, 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, subject to compliance with the commitments given (Case COMP/M.7978 – Vodafone – Liberty Global – Dutch JV) (‘the Vodafone/Liberty Global decision’). By means of that transaction, Vodafone and Liberty Global combined their activities in the Netherlands, affecting 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 that country. Liberty Global contributed Ziggo to the full-function joint venture.

10      By judgment of 23 May 2019, KPN v Commission (T‑370/17, EU:T:2019:354), the General Court dismissed the action brought against the Vodafone/Liberty Global decision.

 The contested decision

11      On 30 May 2018, following the supplementary notification referred to in paragraph 8 above, the Commission adopted Decision C(2018) 3569 final declaring the concentration involving the acquisition by Liberty Global of sole control over Ziggo to be compatible with the internal market and the EEA Agreement (Case COMP/M.7000 – Liberty Global/Ziggo) (‘the contested decision’).

 Definition of the relevant markets

12      It is apparent from the contested decision that the Commission considered that the proposed transaction gave rise to certain horizontal overlaps and vertical relationships between the parties’ activities in a number of relevant markets along the chain for the distribution of audiovisual television content and the provision of telecommunications services (fixed and mobile telephony and broadband internet) in the Netherlands.

13      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;

–        the market for the retail supply of television services.

14      First, as regards the market for the licensing and acquisition of broadcasting rights for television content, the Commission, in recital 79 of the contested decision, further segmented that market into broadcasting rights for sports content, films and series, and any other content. The question as to whether those markets should be further segmented, particularly as regards free-to-air rights and pay TV rights, linear and non-linear broadcasting rights, premium and non-premium content, and also segmented by exhibition window (subscription video-on-demand, transactional video-on-demand, pay-per-view, first pay TV window, second pay TV window and free-to-air television), was left open because the proposed transaction did not raise any competition concerns irrespective of how the market might have been segmented (see also recital 79 of the contested decision).

15      Second, as regards the market for the wholesale supply and acquisition of television channels, the Commission considered, in recitals 112 and 115 of the contested decision, that that market could be further segmented, namely, first, into basic and premium pay TV channels and, second, within the latter, into premium pay TV film channels and premium pay TV sports channels. However, as regards another possible segmentation, in particular between free-to-air television channels and pay TV channels, the Commission considered that the question could be left open since the proposed transaction did not raise any competition concerns irrespective of how the market might have been segmented (recitals 111 and 115 of the contested decision). Last, as far as a possible segmentation according to distribution infrastructure is concerned, the Commission concluded, in recitals 114 and 115 of the contested decision, that at the very least cable, Internet Protocol TV over very high bit-rate Digital Subscriber Line (IPTV over DSL), fibre optic and possibly satellite were interchangeable.

16      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 and pay TV services, or into linear and non-linear pay TV services, could be left open since the proposed transaction did not raise any competition concerns, irrespective of how the market might have been defined. As regards in particular linear and non-linear television (with its various forms of video-on-demand), the Commission took the view, in recital 135 of the contested decision, that these were complements rather than substitutes. In addition, in recitals 136 and 137 of the contested decision, it considered that segmentation according to distribution technology was inappropriate because of demand-side substitutability.

17      The Commission also set out a series of considerations concerning the markets for fixed telephony and internet access services, mobile telephony services and ‘multiple play’ services (bundles normally comprising three or four types of services including mobile telephony, fixed telephony, internet access and television services), which are irrelevant to the present dispute.

 The effects of the concentration on competition

18      As far as the competition analysis of the proposed transaction is concerned, the Commission examined the horizontal and vertical effects, as well as the coordinated effects on competition.

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

19      As regards the market for the licensing and acquisition of broadcasting rights for television content, in recitals 256 to 262 of the contested decision, the Commission pointed out that the majority of content owners had stated during the market investigation that they did not consider that the merged entity would be in a better negotiating position after the transaction. Furthermore, the Commission noted that most owners of film content and premium series were large Hollywood (California, United States) studios whose negotiating position vis-à-vis the merged entity would not be weakened by the transaction. The Commission added that the acquisition of films and series for video-on-demand distribution was a very competitive segment, given, inter alia, the entry into the market of new operators such as Apple, YouTube, Google Play and Pathé Thuis. As for rights over sports events, the Commission observed that these were regularly the subject of tendering procedures and that the merged entity faced effective competition from numerous television channels and major providers of ‘over-the-top’ services (‘OTT services’), namely non-linear audiovisual services provided over the internet, such as Amazon and Facebook. The Commission therefore concluded that the transaction did not raise any competition concerns as regards the market for the licensing and acquisition of broadcasting rights for television content in the Netherlands.

–       The market for the wholesale supply and acquisition of premium pay TV film channels (supply side)

20      As regards the horizontal effects on the market for the wholesale supply and acquisition of premium pay TV film channels (supply side), the Commission stated, in recitals 290 to 292 of the contested decision, that, on account of the divestment of Film1 to Sony as a result of the commitments given in the 2014 Liberty Global/Ziggo decision (see paragraph 5 above) and the winding-up of the full-function joint venture HBO Nederland, the notifying parties were no longer active in that market. Accordingly, the transaction had no horizontal effect on that market. In order to maintain the structural effects of the divestment of Film1 to Sony, the notifying parties re-committed to not acquiring Film1 directly or indirectly for the remainder of the 10-year period after the 2014 Liberty Global/Ziggo decision (that is, until October 2024).

21      As regards the vertical effects on the market for the wholesale supply and acquisition of premium pay TV film channels (supply side), the Commission stated, in recitals 293 to 298 of the contested decision, that the merged entity must have a significant degree of market power in the upstream market in order for it to be able to foreclose its competitors from the downstream market. In the light of the divestment of Film1 and the winding-up of HBO Nederland, the Commission observed that the notifying parties were no longer active in the upstream market as wholesale suppliers of premium pay TV film channels. In addition, the Commission examined the reasons that led to the winding-up of HBO Nederland and the subsequent conclusion of the exclusive licensing agreement for the distribution of HBO content via the ‘Movies & Series’ video-on-demand service of VodafoneZiggo Group Holding BV (‘VodafoneZiggo’). The Commission noted that, according to the notifying parties, the reasons were essentially as follows: HBO Nederland was not economically viable, the acquisition of sole control over Ziggo by Liberty Global following the 2014 Liberty Global/Ziggo decision enabled HBO to exercise a put option contained in the joint venture agreement and, against that background, the parties negotiated an agreement to wind up HBO Nederland; subsequently, HBO and VodafoneZiggo negotiated an exclusive licensing agreement for the distribution of HBO content, which was mutually advantageous. The Commission was satisfied with those explanations.

22      Despite finding that the notifying parties were no longer active in the upstream market as wholesale suppliers of premium pay TV film channels, the Commission examined, in recitals 299 and 300 of the contested decision, whether the merged entity would have the ability to foreclose its downstream competitors as a result of the exclusive distribution of HBO content via its ‘Movies & Series’ video-on-demand service. According to the Commission, that service was not a sufficiently important input to foreclose downstream competitors for several reasons.

23      First, in recitals 301 to 303 of the contested decision, the Commission noted that the market for video-on-demand services in the Netherlands was not concentrated and that the ‘Movies & Series’ service had a market share of less than 30% in terms of revenue and subscribers in that segment. Furthermore, even though retail television service providers may offer some video-on-demand services with their pay TV subscriptions, the Commission observed that video-on-demand services were generally offered on a standalone basis. Therefore, customers may supplement their subscription with the video-on-demand service provider of their choice, irrespective of their pay TV provider. In that context, a number of non-vertically integrated providers were available, such as Netflix, Videoland or Film1 (which also offered video-on-demand services in addition to its premium pay TV film channel).

24      Second, the Commission noted, in recital 304 of the contested decision, that new providers of video-on-demand services were continuing to enter the Netherlands market, such as Amazon Prime.

25      Third, it is apparent from recitals 305 and 306 of the contested decision that the market for the licensing and acquisition of broadcasting rights for television content was highly competitive and that the merged entity had a market share of less than 20% in the acquisition of content for video-on-demand services. Moreover, beyond HBO content, the merged entity has little exclusive content for distribution in ‘Movies & Series’. In addition, respondents to the market investigation referred mainly to the popularity of one HBO series, Game of Thrones, whose final season was scheduled for 2019.

26      In the light of the foregoing considerations, the Commission concluded, in recital 312 of the contested decision, that the proposed transaction did not give rise to any vertical competition concerns in the market for the retail supply of pay TV services on account of any input foreclosure concerning HBO content broadcast via the ‘Movies & Series’ video-on-demand service.

–       The market for the wholesale supply and acquisition of premium pay TV sports channels (supply side)

27      As regards the market for the wholesale supply and acquisition of premium pay TV sports channels (supply side), it is apparent from recitals 321, 325 and 345 of the contested decision that the Commission found that there were no horizontal effects because the notifying parties’ activities did not overlap, given that Sport1 (which became Ziggo Sport Totaal in 2015) already belonged to Liberty Global before the proposed transaction.

28      As regards the vertical effects on that market, the Commission considered, in recitals 344 and 345 of the contested decision, whether the merged entity would have the ability and the incentive to engage in input foreclosure by refusing to provide access to its competitors in the downstream retail market, and whether such foreclosure could have significant negative effects for competition in the downstream market. The Commission observed in that respect that the only change brought about by the transaction was the addition of Ziggo’s downstream customer base to that of Vodafone/Liberty Global.

29      First, although the notifying parties had the technical ability to foreclose access to Ziggo Sport Totaal from the downstream competitors of the merged entity, the Commission concluded, in recitals 348 to 389 of the contested decision, that they would not have the ability to engage in foreclosure since they did not have any upstream market power. The Commission considered that Ziggo Sport Totaal was not an essential input in view, in particular, of its low number of subscribers, accounting for 20 to 30% on the market for premium pay TV sports channels, compared to Fox Sports’ market share of 70 to 80%. Furthermore, Ziggo Sport Totaal accounted for only 5 to 10% of the total number of pay TV subscribers in the Netherlands. The Commission also noted that the content offered by Fox Sports was just as attractive as that offered by Ziggo Sport Totaal, if not more so. In addition, the notifying parties faced pressure from sports rights holders to ensure that those events received the greatest possible exposure. Therefore, a foreclosure strategy could adversely affect the notifying parties’ ability to acquire those rights again in the future. Finally, the Commission found that the notifying parties’ position on the market for the acquisition of broadcasting rights for sports content was contestable, as evidenced by the fact that numerous television broadcasting rights had changed hands in recent years.

30      Second, as regards the incentive to engage in a foreclosure strategy, the Commission observed, in recitals 390 to 398 of the contested decision, that the concentration extended the downstream geographic footprint of the merged entity, which would increase the profitability of a foreclosure strategy with regard to Ziggo Sport Totaal. Although the notifying parties continued to provide access to Ziggo Sport Totaal to the competitors of the merged entity, the Commission noted that they had carried out an internal assessment of the impact of foreclosure in the context of their negotiations with the applicant. The Commission observed that, according to that internal assessment, a foreclosure strategy would be economically profitable but would also entail a number of risks for their reputation and their relations with owners of sports content, as well as regulatory risks. The Commission found that it could not be ruled out that the merged entity might have an incentive to engage in a foreclosure strategy.

31      Third, in recitals 399 to 405 of the contested decision, the Commission concluded that, in the light of the considerations that led to its finding that the merged entity would not have the ability to engage in a foreclosure strategy, such a strategy could not have a significant negative impact and would have very limited effects on downstream competition. In particular, the Commission found that, according to a report commissioned by the applicant, only 1.5% of pay TV subscribers in the Netherlands would switch to another provider if Ziggo Sport Totaal was no longer available from their usual provider, and only 2.5% of pay TV subscribers would not consider a television offer that did not include Ziggo Sport Totaal.

32      In the light of the inability to engage in a total foreclosure strategy, in recitals 406 to 425 of the contested decision the Commission considered that the merged entity would also lack the ability to engage in a partial foreclosure strategy (either by increasing the wholesale supply price or by lowering the quality of the input supplied). In response to the arguments put forward by a number of respondents to the market investigation, first, the Commission considered that the increase in the wholesale price for the supply of Ziggo Sport Totaal was due to the increase in the content price and the increased range of the content offered. Second, the Commission noted that customers of all retail television service providers could obtain the Ziggo Sport Totaal Go app directly from the notifying parties. In addition, all retail television service providers could offer that app as part of their subscription. Third, the Commission observed that the notifying parties offered Ziggo Sport Basic to their subscribers with the basic package, at no additional cost. However, Ziggo Sport Basic was the only channel that offered part of the content available on Ziggo Sport Totaal’s six channels, in other words less content but also less attractive content than Ziggo Sport Totaal. Accordingly, the Commission concluded that since the merged entity lacked the ability to engage in a foreclosure strategy with regard to Ziggo Sport Totaal, it would be even less able to do so with regard to Ziggo Sport Basic.

–       The market for the wholesale supply and acquisition of basic and premium pay TV sports channels (demand side)

33      Concerning the market for the wholesale supply and acquisition of basic and premium pay TV sports channels (demand side), the Commission considered, in recital 427 et seq. of the contested decision, whether the transaction would increase the merged entity’s buyer power and significantly reduce competition. In that respect, it pointed out that the proposed transaction would combine the retail distribution activities of the two main cable operators in the Netherlands. The merged entity would have a market share of 50 to 60% in the market for the acquisition of pay TV channels. Moreover, in the downstream market for the retail distribution of television services, the merged parties would have a market share by value and by number of subscribers of 50 to 60%. Against that background, the Commission found, as it had done in the 2014 Liberty Global/Ziggo decision, that the proposed transaction would be likely to significantly impede effective competition on the market for the wholesale acquisition of pay TV channels and on the downstream market for the retail supply of pay TV services, as well as on the hypothetical downstream market for the retail supply of multiple play services. In particular, as the Commission had found in the 2014 Liberty Global/Ziggo decision, the merged entity would have the ability and the incentive to restrict the ability of television broadcasters to offer content in a non-linear fashion over the internet by means of OTT services.

34      Notwithstanding the foregoing, the Commission concluded, in recitals 809 to 839 of the contested decision, that the final commitments submitted by the parties to the concentration eliminated the competition concerns identified in paragraph 33 above, in particular in so far as the parties undertook not to restrict – by contractual or technical means – the ability of television broadcasters to offer their content via OTT services.

35      The contested decision also contains a series of assessments of the effects of the transaction on competition on a number of markets which are irrelevant for the purposes of the present dispute.

36      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 EEA Agreement, subject to full compliance with the commitments given.

 Procedure and forms of order sought

37      By application lodged at the General Court Registry on 22 November 2018, the applicant brought the present action.

38      By document lodged at the General Court Registry on 6 February 2019, Eredivisie Media & Marketing CV applied for leave to intervene in the present proceedings in support of the form of order sought by the Commission.

39      By order of 6 May 2019, KPN v Commission (T‑691/18, not published, EU:T:2019:321), the President of the Eighth Chamber of the General Court dismissed that application.

40      By document lodged at the General Court Registry on 15 February 2019, VodafoneZiggo, Vodafone and Liberty Global applied for leave to intervene in the present proceedings in support of the form of order sought by the Commission.

41      By order of 8 April 2019, the President of the Eighth Chamber of the General Court granted leave to intervene. The interveners lodged their statement in intervention and the applicant lodged its observations on that statement within the prescribed periods.

42      As a result of changes in the composition of the chambers of the General Court pursuant to Article 27(5) of the Rules of Procedure of the General Court, the Judge-Rapporteur was assigned to the Third Chamber, to which the present case was accordingly allocated.

43      The parties presented oral argument and replied to the General Court’s oral questions at the hearing on 15 September 2020.

44      The applicant claims that the General Court should:

–        annul the contested decision;

–        order the Commission to pay the costs.

45      The Commission contends that the General Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

46      The interveners contend that the General Court should:

–        dismiss the action;

–        order the applicant to pay the costs.

 Law

47      In support of the action, the applicant essentially raises four pleas in law: (i) manifest error of assessment regarding the definition of the relevant market; (ii) 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; (iii) manifest error of assessment regarding the vertical effects of the concentration related to HBO content; and (iv) infringement of the obligation to state reasons.

 Manifest error of assessment regarding the definition of the relevant market

48      By its first plea in law, the applicant claims that the contested decision is vitiated by a manifest error of assessment regarding the definition of the relevant market for the wholesale supply and acquisition of premium pay TV sports channels, on the one hand, and of the relevant market for the wholesale supply and acquisition of premium pay TV film channels, on the other. Accordingly the first plea is divided into two parts.

49      In the first place, as regards the market for the wholesale supply and acquisition of premium pay TV sports channels, the applicant notes, as a preliminary point, the importance of sports content for attracting customers on the market for the retail supply of television services.

50      The applicant submits that there are only two premium pay TV sports channels in the Netherlands, namely Ziggo Sport Totaal, which belongs to VodafoneZiggo, and Fox Sports, which belongs to Fox. 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 customers and other content cannot be substituted for it. For example, Formula 1 and football are not substitutable for fans of those sports.

51      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, those channels are complementary and are essential inputs for retail television service providers since customers wish to be able to subscribe to those two channels and are prepared to switch to a provider that offers them. The applicant claims that, because broadcasting rights for sports events often change from one channel to another, retail television service providers are required to offer both channels in order to remain competitive.

52      The applicant states that, as indicated in recital 374 of the contested decision, according to all the pay TV service providers that responded to the market investigation, Ziggo Sport Totaal was an essential input for effective competition on the market for the retail supply of television services.

53      Therefore, the applicant maintains that each of the premium pay TV sports channels, Ziggo Sport Totaal and Fox Sports, constituted a separate market.

54      In the second place, as regards the wholesale market for the supply and acquisition of premium pay TV film channels, the applicant alleges that the Commission did not define the market for HBO content as a separate product market.

55      In its observations on the statement in intervention, the applicant submits that the reason for its rather brief claim that the Commission made a manifest error of assessment regarding the definition of that market is that the contested decision does not contain an adequate statement of reasons in that respect.

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

57      Furthermore, the Commission, supported by the interveners, maintains that, in so far as it is suggested in passing in the application that the contested decision is vitiated by a manifest error of assessment inasmuch as HBO content is not considered to be a separate market, that complaint must be rejected as inadmissible under Article 76 of the Rules of Procedure. The complaint is not developed, which prevents the Commission from defending itself. In any event, it should be dismissed as unfounded.

58      The General Court considers it appropriate to begin by examining the second part of the first plea in law, alleging a manifest error of assessment regarding the definition of the market for the supply and acquisition of premium pay TV film channels.

59      In that regard, it should be recalled as a preliminary point that, according to Article 76(d) of the Rules of Procedure, the application must contain the pleas in law and arguments put forward and a summary of the pleas concerned.

60      In accordance with settled case-law, irrespective of any question of terminology, that summary must be sufficiently clear and precise to enable the defendant to prepare its defence and the Court to rule on the application, even without 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. Any plea which is not adequately articulated in the application initiating the proceedings must be held inadmissible. Similar requirements apply where a submission is made in support of a plea in law (see judgment of 6 October 2015, Corporación Empresarial de Materiales de Construcción v Commission, T‑250/12, EU:T:2015:749, paragraph 101 and the case-law cited).

61      It must be held that, as the Commission and the interveners correctly note, although the applicant announces a complaint alleging a manifest error of assessment regarding the definition of the market for the wholesale supply and acquisition of premium pay TV film channels, it does not develop any arguments to challenge the substance of that definition. As the applicant indicates in its observations on the statement in intervention, it regards the inadequacy of the statement of reasons in the contested decision on that point as preventing it from developing arguments to challenge its substance.

62      Therefore, without prejudice to the assessment of the complaint alleging a failure to state reasons in that respect, the second part of the first plea in law must be rejected as inadmissible, since it does not satisfy the minimum requirements of Article 76(d) of the Rules of Procedure, as referred to in the case-law cited in paragraph 60 above.

63      As regards the examination of the merits of the first part 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).

64      According to settled case-law, the substantive 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 13 May 2015, Niki Luftfahrt v Commission, T‑162/10, EU:T:2015:283, paragraph 85).

65      In particular, in so far as the definition of the relevant market involves complex economic assessments on the part of the Commission, it is subject to only limited review 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).

66      However, although the Commission has a measure of discretion with regard to economic matters, this does not prevent the EU judicature from examining the Commission’s assessment of economic data. Not only must the EU judicature, inter alia, establish whether the evidence relied on is factually accurate, reliable and consistent, it 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).

67      According to Section 6 of Form CO relating to the notification of a concentration pursuant to Regulation No 139/2004, set out in Annex I to Commission Regulation (EC) No 802/2004 of 7 April 2004 implementing Regulation No 139/2004 (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; ‘the 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 the products’ characteristics, their prices and their intended use’.

68      It is apparent from point 15 of the Notice on the definition of relevant market that the assessment of demand substitution entails a determination of the range of products which are viewed as substitutes by the consumer.

69      According to point 17 of the Notice on the definition of relevant market, 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.

70      It is in the light of these considerations that the General Court must examine the arguments advanced by the applicant in connection with the first part of the first plea in law, regarding the definition of the market for the wholesale supply and acquisition of premium pay TV sports channels.

71      As is apparent from paragraph 53 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 considered to constitute separate markets. In fact, each of those channels constitutes in itself a separate market, as the applicant expressly stated at the hearing in reply to questions put by the General Court.

72      In that regard, it should be recalled that, according to recitals 36 and 99 to 115 of the contested decision, the market for the wholesale supply and acquisition of premium pay TV sports channels comprises, on the supply side, television channel suppliers which acquire or produce audiovisual content and package it into television channels and, on the demand side, providers of retail television services that acquire rights over channels in order to broadcast them to end consumers.

73      It is apparent from recitals 125 and 126 of the contested decision that the merged entity is active in 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 offer of retail television services.

74      As indicated in paragraphs 67 to 69 above, the question whether two products or services are part of the same market involves a determination as to whether they are regarded as interchangeable or substitutable by reason of their characteristics, their prices and their intended use, first of all from the customer’s point of view.

75      In the present case, the demand or, in other words, the customer base, in the market for the wholesale supply and acquisition of premium pay TV sports channels, is made up of retail television service providers, which incorporate those channels into their offer to end consumers, as is apparent from paragraph 72 above.

76      In recital 112 of the contested decision, the Commission concluded that the market for the wholesale supply and acquisition of premium pay TV sports channels did not need to be further segmented in order to isolate certain ‘essential’ channels. It must be noted that the respondents to the market investigation indicated that they found a number of premium pay TV sports channels equally attractive, which must be understood as a reference inter alia to Ziggo Sport Totaal and Fox Sports, the only two channels of that kind in the Netherlands (see footnote 47 to recital 112 of the contested decision). According to that recital of the contested decision, even if those channels can attract subscribers and generate revenue, the various premium pay TV sports channels are alternatives for retail television service providers, which can differentiate their offers by other means. At the hearing, the Commission and the interveners emphasised that those considerations were based on the interchangeability of Ziggo Sport Totaal and Fox Sports, without prejudice to the fact that other channels which were not part of the relevant market also broadcast certain attractive sports content.

77      In that regard, it must be noted that the applicant does not dispute that, as is apparent, in particular, from recital 112, read in conjunction with recitals 353 and 361 of the contested decision, Ziggo Sport Totaal and Fox Sports are premium pay TV channels offering sports content and, therefore, offers which are at least similar from the perspective of retail television service providers.

78      Nor does the applicant call in question the fact that, as is apparent from recital 380 of the contested decision, those two channels compete for the acquisition of rights over sports events, as is demonstrated by the fact that sports broadcasting rights have changed hands a number of times over the past few years, passing from one to the other. Consequently, their content, which has varied over time, was comparable.

79      In essence, it is apparent in particular from recitals 361, 374 and 380 of the contested decision that the acquisition by those channels of exclusive rights over certain sports events necessarily implies that they are not offering identical sports content on the downstream market, but sports content that is substitutable from the point of view of retail television service providers. That is so, a fortiori, in so far as Ziggo Sport Totaal and Fox Sports do not merely broadcast one sport in particular but a variety of sports events according to the broadcasting rights they acquire.

80      The contested decision also stated, in recital 361, that customers had an attractive alternative to Ziggo Sport Totaal, namely Fox Sport, to which at least some of them would switch if Ziggo Sport Totaal were no longer available. Furthermore, it was recalled in the same recital that those findings were in line with the results of the market investigation in the context of the Vodafone/Liberty Global decision, which reveal that, according to the majority of respondents, Fox Sports had equally or more attractive content offers than Ziggo Sport Totaal.

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

82      The arguments advanced by the applicant cannot invalidate the conclusion referred to in paragraph 81 above.

83      First, 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 since, for a sports fan, those different types of content are not substitutable.

84      However, as stated in paragraphs 76 to 81 above, what is decisive is the substitutability of those channels on the demand side in that market, consisting of retail television service providers. Moreover, even assuming that, as the applicant claims, sports content is not wholly interchangeable for the final consumer, it must be borne in mind that, according to recitals 135 to 137 of the contested decision, the relevant downstream market is that of the retail supply of pay TV services and not that of the retail supply of pay TV services with sports content, even less that of the supply of pay TV services with football content. The sports content broadcast by channels such as Ziggo Sport Totaal and Fox Sports is part of an overall package of television services offered to end consumers comprising various elements, of which sports content is but one of several components for attracting customers. In that regard, it must be noted that, according to recital 373 of the contested decision, in general, the main drivers for the average end consumer’s choice are price and the speed of the internet connection (for multiple play packages), rather than the sports content offered. Therefore, from the perspective of the average end consumer of television services in general, there is nothing to indicate that an overall package of television services incorporating the channel Ziggo Sport Totaal is not substitutable for an overall package of television services incorporating the channel Fox Sports, despite the difference in sports content of those two channels.

85      Furthermore, even though it may be desirable from a commercial point of view for a retail television services provider to be able to offer its subscribers the Ziggo Sport Totaal and Fox Sports channels in parallel, it is apparent from footnote 47 to recital 112 of the contested decision that respondents to the market investigation, that is to say, television channel wholesale suppliers and retail television service providers, considered those premium pay TV sports channels to be equally attractive (see paragraph 76 above). It follows from this that the Commission was fully entitled to consider Ziggo Sport Totaal and Fox Sports to be interchangeable for the purposes of the definition of the relevant market.

86      Second, the applicant maintains that it is apparent from recital 374 of the contested decision that all retail pay TV providers indicated that Ziggo Sport Totaal was a ‘must-have’ in order for them to compete effectively on the television services market. In that respect, it must be noted that the considerations to which the applicant refers actually relate to the question whether Ziggo Sport Totaal is an essential input for downstream competitors rather than the question of the definition of the relevant upstream market. As the Commission pointed out in its written pleadings and in response to the questions put by the General Court at the hearing, the question put in the questionnaire was worded as follows: ‘Do you consider that Ziggo Sport Totaal is a “must-have” for retail suppliers of TV services in order to be competitive with an attractive offer for viewers?’ It is also in that context that the statement in recital 374 of the contested decision must be interpreted, that statement being to the effect that the majority of those who responded to the market investigation indicated that Fox Sports was complementary to Ziggo Sport Totaal as the premium sports content offered by the former was not the same as that of the latter. In that regard, the Commission observed in recital 375 of the contested decision that it was not necessary to further segment the relevant market for the reasons indicated in essence in paragraph 76 above. Therefore, it must be held that the applicant’s argument concerning the definition of the relevant market is based on a misreading of recital 374 of the contested decision.

87      Having regard to the foregoing, the first plea in law must be rejected as being in part inadmissible and in part unfounded.

 Manifest error of assessment regarding the vertical effects relating to the wholesale supply of premium pay TV sports channels

88      By the second plea in law, the applicant claims a manifest error of assessment regarding the vertical effects of the merger resulting from input foreclosure on the market for the wholesale supply and acquisition of premium pay TV sports channels. The applicant’s arguments in support of the second plea can be divided into two parts.

89      In the context of the first part, the applicant maintains that the merged entity would have the ability to engage in an input foreclosure strategy. It states, moreover, that it is recognised in the contested decision itself that the merged entity has the technical ability and incentive to engage in such a strategy. In the context of the second part, the applicant claims that the latter would have significant negative effects on competition.

90      As regards the first part, concerning the ability to engage in an input foreclosure strategy, the applicant argues that the contested decision is contradictory in so far as it finds that the merged entity would have the financial incentive, but not the economic ability, to engage in such a strategy.

91      Furthermore, the applicant submits that, according to the case-law, the mere presence of a major competitor on the market does not in itself rule out the possibility that another operator may have upstream market power in the segment in question (judgment of 26 October 2017, KPN v Commission, T‑394/15, not published, EU:T:2017:756, paragraph 64). Therefore, according to the applicant, the fact that Fox Sports has a larger market share than Ziggo Sport Totaal does not preclude the latter from having market power. In addition, the applicant stresses that Fox Sports and Ziggo Sport Totaal are complementary rather than substitutable.

92      The Commission had overlooked the fact that Fox Sports had to be made available to retail pay TV service providers under the commitments submitted to the Netherlands competition authority in the context of the Fox/Eredivisie Media & Marketing merger, while the merged entity is not subject to such an obligation. Furthermore, the merged entity is vertically integrated and is present throughout the territory of the Netherlands, enabling it to engage in a foreclosure strategy and to take advantage of it without risk.

93      The applicant also claims that the Commission’s own market investigation shows that Ziggo Sport Totaal is an essential input if providers are to compete effectively on the downstream market for the provision of retail television services, as is apparent from recital 374 of the contested decision.

94      The applicant states that retail providers must offer Ziggo Sport Totaal and Fox Sports since subscribers choose the most comprehensive package of television services, given that it is not easy to switch provider on a regular basis. Consequently, the fact that rights to broadcast sports content regularly change hands supports the applicant’s argument.

95      The applicant challenges the idea set out in recital 366 of the contested decision that counter-strategies are available to retail pay TV service providers in order to deal with a possible foreclosure strategy, such as acquiring sports content themselves. In the applicant’s view, modest operators like the applicant itself have very weak bargaining power vis-à-vis sports rights holders.

96      The applicant submits that the Commission seeks to play down the importance of Ziggo Sport Totaal when it states that the latter’s market share is 20 to 30% in terms of subscribers to premium pay TV sports channels, in so far as it disregards the effect of Ziggo Sport Basic, which is viewed by 65% of subscribers to VodafoneZiggo.

97      As regards the second part, concerning the significant negative effects on competition of any foreclosure strategy, the applicant maintains that, even assuming that only 1.5% of subscribers to pay TV services were prepared to switch to another provider if Ziggo Sport Totaal was no longer available from their provider, that would entail annual losses in revenue for the applicant of at least EUR 36 million in respect of subscriptions to multiple play services, a not insignificant amount.

98      The applicant argues that the Commission erred in assessing the negative effects of the foreclosure strategy on all subscribers to pay TV services, instead of confining its analysis to subscribers to premium pay TV sports channels or, more specifically, to subscribers to Ziggo Sport Totaal. It states that, according to a report, approximately 40% of viewers of Ziggo Sport Totaal would not readily contemplate an offer of television services which did not include that channel. In addition, 26% of viewers of Ziggo Sport Totaal indicated that they would switch to another provider if their usual provider no longer offered that channel. Those percentages are significantly higher than the rate of 1.5% taken into account by the Commission. Besides, according to the report in question, 60% of all viewers consider the offer of sports channels to be an important or decisive factor when choosing television services (more precisely, it is a decisive factor for 17% of viewers and an important factor for 43%). Given that viewers can include specific sports channels in their subscription and exclude them from it every month, the absence of Ziggo Sport Totaal in the choice of channels to which they are able to subscribe is likely to have an impact beyond the viewers who already subscribe to that channel.

99      The applicant adds that the findings relating to the effects of a foreclosure strategy set out in the contested decision are at odds with those set out in the 2014 Liberty Global/Ziggo decision relating to premium pay TV film channels, which are relevant by analogy. In particular, the applicant argues that it follows from this that a foreclosure strategy would have negative effects on downstream competition.

100    In its observations on the statement in intervention, the applicant notes that VodafoneZiggo unilaterally terminated the agreement with the applicant for the distribution of Ziggo Sport Totaal with effect from 31 December 2019.

101    The Commission, supported by the interveners, contends that the applicant’s arguments should be rejected.

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

103    According to Article 2(2) of Regulation No 139/2004, a concentration which 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. Conversely, 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.

104    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 satisfies 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.

105    As stated in paragraph 64 above, according to settled case-law, the substantive 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 provisions of an economic nature which form part of the rules on concentrations.

106    In particular, it is not for the General Court to substitute its own economic assessment for that of the Commission (judgment of 7 June 2013, Spar Österreichische Warenhandels v Commission, T‑405/08, not published, EU:T:2013:306, paragraph 51).

107    However, as indicated in paragraph 66 above, although the Commission has a measure of discretion with regard to economic matters, this does not prevent the EU judicature from examining the Commission’s assessment of economic data. Not only must the EU judicature, inter alia, establish whether the evidence relied on is factually accurate, reliable and consistent, it 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.

108    The Commission’s review of concentrations calls for a prospective analysis which consists in an examination of how a concentration 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).

109    It is therefore for the Commission to show, with a sufficient degree of probability, in its decision declaring a concentration compatible with the internal market that the concentration, 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. It is therefore for interested third parties whose action seeks annulment of a decision declaring a concentration to which commitments are attached to be compatible with the internal market to show that the Commission erred in its assessment of the concentration in such a way that its compatibility with the internal market is called in question (see, to that effect, judgment of 19 June 2009, Qualcomm v Commission, T‑48/04, EU:T:2009:212, paragraphs 89 and 90).

110    Furthermore, 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.

111    According to paragraph 31 of the Guidelines on non-horizontal mergers, input foreclosure arises where, post-merger, the new entity would be likely to restrict access to the products or services that it would have otherwise supplied absent the merger. According to paragraph 32 of those guidelines, in assessing the likelihood of an anticompetitive input foreclosure scenario, the Commission examines, first, whether the merged entity would have, post-merger, the ability to substantially foreclose access to inputs, 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.

112    It should be noted, as the Commission correctly submits, that those three conditions are cumulative, so that the absence of any of them is sufficient to rule out the likelihood of anticompetitive input foreclosure (judgment of 23 May 2019, KPN v Commission, T‑370/17, EU:T:2019:354, paragraph 119).

113    It is apparent from recitals 343 to 426 of the contested decision that the Commission examined those three conditions in the present case, and that approach was not criticised by the applicant.

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

115    As a preliminary point, the General Court must reject the applicant’s argument to the effect that the errors in defining the relevant market necessarily entail manifest errors of assessment regarding the vertical effects relating to the wholesale supply of premium pay TV sports channels. It is sufficient to recall in that regard that the first part of the first plea has been rejected for the reasons indicated in paragraphs 63 to 87 above.

116    As regards the first of the conditions mentioned in paragraph 111 above, 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 352 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, that is, the market for the wholesale supply of premium pay TV sports channels in the present case.

117    According to recitals 353 to 356 of the contested decision, the merged entity had a market share of 20 to 30% in terms of total subscribers to Ziggo Sport Totaal (and 10 to 20% if only wholesale subscribers to that channel, that is to say, on third-party platforms, were taken into account), whereas Fox Sports, its only other competitor, had a market share of 70 to 80% in terms of total subscribers (and 80 to 90% if only wholesale subscribers were taken into account). Therefore, the Commission observed that Fox Sports was by far the largest player in the possible market for premium pay TV sports channels, which was the narrowest market segmentation possible, with a market share that was more than twice as large in terms of total number of subscribers. The Commission noted, moreover, that Ziggo Sport Totaal’s market share had been decreasing since 2014.

118    Furthermore, according to recital 357 of the contested decision, a very large percentage of viewers who watch Ziggo Sport Totaal via VodafoneZiggo’s network receive that channel free of charge as part of their multiple play package of services, which suggests that at least some of those viewers would not necessarily be willing to pay for that channel if it were not offered free of charge. Consequently, that finding suggests that Ziggo Sport Totaal’s position on the market could in fact be even less significant than its 20 to 30% market share in terms of total number of subscribers would indicate.

119    In recital 358 of the contested decision, the Commission adds that Ziggo Sport Totaal had low market penetration in the Netherlands, in view of its low number of subscribers (5 to 10% of total pay TV subscribers), whereas Fox Sports had a market penetration of 16%. In recital 361 of the contested decision, the Commission noted that the content offered by Fox Sports was equally attractive or more attractive than that offered by Ziggo Sport Totaal.

120    Last, in addition to these considerations relating to the competitive relationship between Ziggo Sport Totaal and Fox Sports, the Commission relied on a number of additional factors, such as the fact that the notifying parties faced pressure from sports rights holders to ensure that these events received the greatest possible exposure, that the position of the notifying parties on the market for the acquisition of broadcasting rights in respect of sports content was contestable, since numerous broadcasting rights had changed hands in recent years, that retail television service providers had certain counter-strategies to make their offering attractive (acquisition of sports content, competition on price, packages of services and faster internet connection speeds), as well as the fact that a certain number of basic pay TV sports channels and general-interest channels were broadcasting attractive sports content.

121    It follows from the foregoing that the Commission did not make a manifest error of assessment when it concluded in the contested decision that the merged entity would not have the ability to engage in an input foreclosure strategy with regard to Ziggo Sport Totaal.

122    None of the arguments put forward by the applicant in the first part of the second plea is capable of invalidating that conclusion.

123    In the first place, it must be noted that there is no contradiction in the contested decision in the conclusion that the merged entity might have a financial incentive to engage in a foreclosure strategy while it did not have the ability to engage in such a strategy (see recitals 389 and 397 of the contested decision). As is apparent from paragraphs 111 and 112 above, these are distinct conditions, even though the same point may often be relevant for the purposes of examining several of the necessary conditions. In principle, there is nothing to preclude an entity from having an incentive to engage in a foreclosure strategy without, however, having the ability to do so because of its lack of upstream market power. Furthermore, as the Commission correctly notes, in the present case, the contested decision merely found, in recital 397, that it could not be excluded that the merged entity would have the incentive to engage in a foreclosure strategy, without, however, concluding that it had that incentive since the strategy also entailed risks, in particular reputational risks and relational and regulatory risks.

124    In the second place, it must be held that the applicant has misread the judgment of 26 October 2017, KPN v Commission (T‑394/15, not published, EU:T:2017:756, paragraph 64). Contrary to the applicant’s contention, that judgment does not establish that an operator may have upstream market power even though there is a competitor with a much larger market share on the relevant market. In fact, the judgment in question actually suggests the contrary when it indicates that the operators’ respective competitive positions on the market should be analysed. According to that judgment, it cannot be ruled out that an operator may have market power despite the presence of a competitor on the same market, for example where the first operator has a market share of 70%.

125    In the third place, the General Court must reject the argument that the Commission overlooked the fact that the merged entity was not subject to any obligation to provide Ziggo Sport Totaal, unlike Fox Sports which was required to be provided on a non-discriminatory basis under the commitments submitted in the context of the Fox/Eredivisie Media & Marketing merger. However, it is precisely because the merged entity could decide to stop providing Ziggo Sport Totaal to its downstream competitors that the Commission examined whether there were risks of input foreclosure. In its analysis, contrary to the applicant’s contention, the Commission took into account the fact that the merged entity was vertically integrated and had a downstream network throughout the territory of the Netherlands.

126    In the fourth place, as regards the argument relating to recital 374 of the contested decision to the effect that retail television service providers had indicated that Ziggo Sport Totaal was an essential input, it should be recalled that, as is apparent from paragraph 86 above, the question put by the Commission was formulated as follows: ‘Do you consider that Ziggo Sport Totaal is a “must-have” for retail suppliers of TV services in order to be competitive with an attractive offer for viewers?’ In that context, having taken note of the response of retail television service providers, the Commission concluded, in recital 376 of the contested decision, that while Ziggo Sport Totaal might be important, it was not sufficiently important to compete effectively on the downstream market for a series of reasons set out in recital 377 et seq. of the contested decision. Those reasons include, in particular, the low market penetration rate of Ziggo Sport Totaal, the pressure from sports rights holders to ensure that sports events receive the greatest possible exposure and the contestable nature of the notifying parties’ position on the market for the acquisition of broadcasting rights for sports content, as the broadcasting rights have changed hands a number of times in recent years (see paragraphs 117 to 120 above). In that regard, it must be added that the fact that rights to broadcast sports content regularly change hands actually undermines the applicant’s argument. It shows that Ziggo Sport Totaal does not have market power, since other operators can regularly acquire the content in question.

127    In the fifth place, as regards the alleged difficulties of retail television service providers in developing counter-strategies, such as the possibility of acquiring sports content themselves, it should be noted that the acquisition of sports content is only one of the counter-strategies mentioned by the Commission, in recitals 366 to 373 of the contested decision, such as pricing or packages of services offers, possibly with faster internet connection speeds.

128    In the sixth place, the General Court must reject the argument that the Commission tried to diminish the importance of Ziggo Sport Totaal when it stated that the latter’s market share was 20 to 30% in so far as it had disregarded the fact that 65% of VodafoneZiggo subscribers watch Ziggo Sport Basic. In that regard, it is sufficient to note that Ziggo Sport Basic is not a premium pay TV sports channel and is not, therefore, relevant when determining whether the merged entity has market power on the market for the wholesale supply and acquisition of premium pay TV sports channels.

129    In the seventh place, in reply to the questions put by the General Court at the hearing, the applicant argued that it could not be ruled out that the merged entity has substantial power on the upstream market with market shares of 20 to 30%. That assertion, which is not substantiated in any way, must be rejected. It is helpful to recall, by analogy, that, according to Article 2(1) and Article 3(1) of Commission Regulation (EU) No 330/2010 of 20 April 2010 on the application of Article 101(3) [TFEU] to categories of vertical agreements and concerted practices (OJ 2010 L 102, p. 1), competition restrictions contained in vertical agreements are exempt if ‘the market share held by the supplier does not exceed 30% of the relevant market on which it sells the contract goods or services’. Furthermore, it is apparent from recital 23 of the Guidelines on Vertical Restraints (OJ 2010 C 130, p. 1) that that market share threshold is based on the presumption that an undertaking with a market share of 30% or less does not in principle have substantial market power.

130    In the eighth place, in reply to the questions put by the General Court at the hearing, the applicant disputed the findings in paragraph 118 above. In particular, it submitted that it cannot be ruled out that all the viewers who watch Ziggo Sport Totaal free of charge as part of a VodafoneZiggo multiple play package of services decided to subscribe to that package precisely in order to be able to watch that channel free of charge. Apart from the fact that that assertion is not substantiated and seems implausible, it is sufficient to note that, even if it is true, the merged entity would not appear to have substantial market power with market shares of 20 to 30% for the reasons set out above.

131    Therefore, the first part of the second plea in law, concerning the ability to engage in an input foreclosure strategy with regard to Ziggo Sport Totaal, must be rejected.

132    Consequently, in view of the cumulative nature of the three conditions for the existence of a risk of input foreclosure, the second plea in law must be rejected as being unfounded.

133    Accordingly, it is for the sake of completeness only that the General Court examines below the second part of the second plea in law, relating to the effects of the foreclosure strategy.

134    As regards the third condition, concerning the possible effects of the foreclosure strategy, it is apparent from paragraph 47 of the Guidelines on non-horizontal mergers that a merger will raise competition concerns because of input foreclosure when it would significantly impede effective competition in the downstream market.

135    In the present case, according to recital 400 of the contested decision, any foreclosure strategy would have limited effect on downstream competition, including on the market for the provision of retail television services, in particular because of the fact that Ziggo Sport Totaal was not a sufficiently important input. In that regard, the contested decision recalls in recital 402 that Ziggo Sport Totaal had a market penetration rate of 5 to 10% of the total number of pay TV subscribers in the Netherlands. In addition, recital 403 states that only a part of Ziggo Sport Totaal subscribers would be likely to switch provider if that channel was no longer available from their usual provider, because there were alternatives such as Fox Sports and because retail television service providers had counter-strategies for attracting customers. Although the Commission has reservations about the reliability of the report commissioned by the applicant, recital 404 of the contested decision notes that the results of the report indicate that, first, only 1.5% of pay TV subscribers would be prepared to switch to another provider if Ziggo Sport Totaal was no longer available from their usual provider and, second, only 2.5% of pay TV subscribers would not consider an offer that did not include Ziggo Sport Totaal.

136    Therefore, it follows from the foregoing that the Commission did not make an error of assessment when it concluded in the contested decision that any foreclosure strategy would not have significant negative effects on downstream competition.

137    None of the arguments put forward by the applicant is capable of invalidating that conclusion.

138    In the first place, as regards the estimated annual losses in revenue for the applicant of EUR 36 million in respect of multiple play subscriptions, as a result of any foreclosure strategy, it should be noted that it is the effects on effective downstream competition, not the hypothetical financial damage sustained by the applicant, that are relevant for the purposes of analysing the effects of foreclosure. The fact remains that, according to the data provided by the report commissioned by the applicant, any foreclosure strategy in relation to Ziggo Sport Totaal would be likely to affect only 1.5% of subscribers to the applicant’s television services, irrespective of the financial impact in absolute terms.

139    In the second place, the General Court must reject the argument that the Commission erred in assessing the negative effects of the foreclosure strategy on all subscribers to pay TV services, instead of confining its analysis to subscribers to premium pay TV sports channels or even to Ziggo Sport Totaal subscribers. It is useful to bear in mind that, according to the report commissioned by the applicant, 26% of the total number of Ziggo Sport Totaal subscribers would be prepared to switch provider. In that regard, it must be noted that the effects of foreclosure on competition must be assessed on the downstream market, that is the market for the retail provision of television services, where foreclosure would appear to affect only 1.5% of the total number of subscribers, in view of the 5 to 10% penetration rate of Ziggo Sport Totaal. In any event, even if the analysis of the effects was confined to subscribers to premium pay TV sports channels, as the applicant maintains, the effects of foreclosure would also be limited in so far as Ziggo Sport Totaal has a market share of between 20 and 30% of subscribers, which means that the effects of foreclosure would affect between 5 and 8% of the total number of subscribers to premium pay TV sports channels. Consequently, those effects would still be very limited. Last, it must be added that the effects of foreclosure must not be assessed in the light of Ziggo Sport Totaal subscribers only, as that channel does not constitute a separate market.

140    In the third place, the 2014 Liberty Global/Ziggo decision does not support the applicant’s case. The passages cited by the applicant concern the market for premium pay TV film channels, not the market for premium pay TV sports channels. Further, the situation examined in that decision, where the merged entity would control the only two channels operating on the market in question, namely Film1 and HBO Nederland, is different from that of the present case, in which the merged entity is faced with a competitor whose market share is significantly larger than its own.

141    In the fourth place, irrespective of the reasons that may have led VodafoneZiggo to terminate the agreement concluded with the applicant for the distribution of Ziggo Sport Totaal from 31 December 2019 and which do not necessarily have to be anticompetitive, according to settled case-law, the legality of a decision concerning competition is to be assessed in the light of the information available to the Commission when the decision was adopted (see, to that effect, judgment of 22 December 2008, Régie Networks, C‑333/07, EU:C:2008:764, paragraph 81 and the case-law cited). Accordingly, events subsequent to the adoption of the contested decision are irrelevant for the purposes of assessing the legality of that decision. Furthermore, it must be noted that at the hearing the interveners disputed the fact that VodafoneZiggo had terminated the distribution agreement and confirmed that VodafoneZiggo was continuing to supply its Ziggo Sport Totaal channel to the applicant. Consequently, the argument put forward by the applicant must be rejected.

142    In the light of the foregoing, the second plea in law must be rejected as unfounded.

 Manifest error of assessment regarding the vertical effects relating to the wholesale supply of premium pay TV film channels

143    By its third plea in law, the applicant claims a manifest error of assessment regarding the vertical effects of the merger resulting from input foreclosure on the market for the wholesale supply and acquisition of premium pay TV film channels. The applicant suggests that the refusal of the merged entity to supply its premium pay TV film channel is likely to place its downstream competitors at a significant disadvantage. It observes that, according to the Commission, HBO’s withdrawal was specifically linked to the merger.

144    In particular, the applicant disputes the fact that the merged entity does not have upstream market power. Although the contested decision merely states that the merged entity had a market share of less than 30%, without however specifying the precise percentage, the applicant argues that the figure of 30% represents a significant market share for the purposes of the analysis of vertical effects. Moreover, the alternatives mentioned in recitals 301 and 304 of the contested decision were not really alternatives to HBO, since their content concerned mainly niche productions more than mainstream productions, they had a limited number of subscribers and they did not target the Netherlands market (in particular Amazon Prime). In addition, the purported alternative to the series Game of Thrones mentioned in recital 305 of the contested decision, namely the series Brussel produced by the applicant, was not a genuine alternative given its limited duration in terms of airtime and the fact that it mainly attracts a Dutch-speaking audience.

145    The Commission, supported by the interveners, contends that the applicant’s arguments should be rejected.

146    By its third plea, the applicant claims a manifest error of assessment regarding the vertical effects of the merger resulting from input foreclosure in relation to the wholesale supply and acquisition of premium pay TV film channels, particularly in relation to HBO content.

147    In view of the fact that this plea also concerns the vertical effects of the transaction, it must be examined in the light of the principles recalled in particular in paragraphs 103 to 116 above.

148    As a preliminary point, it should be noted that the merged entity is no longer active in the market for the wholesale supply and acquisition of premium pay TV sports channels since, as indicated in paragraph 20 above, HBO Nederland was wound up following the 2014 Liberty Global/Ziggo decision. In recitals 294 and 295 of the contested decision, the Commission sets out the reasons that led to the winding-up of HBO Nederland and to the subsequent conclusion of an agreement for the exclusive distribution of HBO content by VodafoneZiggo, without raising any objections in that respect.

149    In view of those findings, the merger would in principle be unlikely to give rise to vertical effects resulting from input foreclosure concerning the wholesale supply and acquisition of premium pay TV film channels, since the merged entity is no longer active in that market.

150    Notwithstanding the above, it must be noted that, in recitals 299 to 312 of the contested decision, the Commission examined the effects of the refusal to supply the ‘Movies & Series’ video-on-demand service, which offered HBO content on an exclusive basis, on downstream competition on the market for the retail supply of pay TV services and multiple play services. Having examined in particular whether the merged entity had upstream market power on account of its ‘Movies & Series’ video-on-demand service, the Commission concluded that it did not. It observed that the market for video-on-demand services in the Netherlands was not concentrated and that the ‘Movies & Series’ service had a market share of less than 30% in terms of revenue and subscribers. According to the contested decision, there are many different non-vertically integrated providers of video-on-demand services, such as Netflix, Videoland, Film1 (which provides video-on-demand services in addition to its premium pay TV film channel) and Pathé Thuis. The Commission also noted that new entrants were continuing to enter the Netherlands market, such as Amazon Prime. Last, it found that the market for the licensing and acquisition of broadcasting rights for television content was highly competitive and that the merged entity had a market share of less than 20% in the acquisition of content for video-on-demand services. In addition, the Commission observed that respondents to the market investigation had referred mainly to one popular HBO series, Game of Thrones, the final season of which was scheduled for 2019.

151    It follows from the foregoing that the Commission did not make an error of assessment when it concluded in the contested decision that any foreclosure strategy would not have significant negative effects on downstream competition.

152    None of the arguments put forward by the applicant is capable of invalidating that conclusion.

153    In the first place, it should be noted that the applicant’s assertion that a market share of 30% is significant for the purposes of analysing the vertical effects resulting from the merger is not substantiated in any way. Further, for the reasons set out in paragraph 129 above, it cannot be accepted that a market share not exceeding 30% can in principle indicate substantial upstream market power capable of giving rise to significant negative vertical effects on downstream competition.

154    In the second place, the General Court must reject the applicant’s argument that the alternatives mentioned in the contested decision were not genuine alternatives, as the providers mentioned offered only niche productions, had few subscribers or were not targeting the Netherlands market. It is not clear how those objections apply to Netflix. Furthermore, the Commission contended in its written pleadings, without being contradicted by the applicant, that Amazon Prime was available in the Netherlands via a Dutch app. Last, the applicant has misinterpreted the contested decision, which does not claim that the HBO series Game of Thrones is an alternative that is comparable to the series Brussel, produced by the applicant, but merely found that operators could also launch their own video-on-demand services by obtaining broadcasting rights for content or by producing their own content, such as, for example, the applicant’s popular series Brussel.

155    In the light of the foregoing, the third plea in law must be rejected as unfounded.

 Infringement of the obligation to state reasons

156    In the context of its fourth plea in law, the applicant submits that, in the contested decision, the Commission infringed the obligation to state reasons concerning the definition of the relevant market and the absence of risk of input foreclosure concerning Ziggo Sport Totaal and HBO content vis-à-vis its competitors in the downstream market. It submits, in essence, three complaints.

157    First, according to the applicant, the contested decision does not explain why the Commission did not define the markets for the wholesale supply and acquisition of premium pay TV film and sports channels more narrowly. As regards sports channels, the applicant maintains that the Commission’s conclusion that Ziggo Sport Totaal and Fox Sports were substitutable called for detailed explanations, since that conclusion is contrary to the results of the market investigation, to the Commission’s earlier practice in taking decisions and to common sense. As far as film and series channels are concerned, the applicant argues that the contested decision contains no statement of reasons whatsoever.

158    Second, the applicant submits that the contested decision does not contain an adequate statement of reasons regarding the absence of risk of input foreclosure concerning Ziggo Sport Totaal vis-à-vis the merged entity’s competitors in the downstream market. In particular, the applicant notes that the market investigation conducted by the Commission showed that Ziggo Sport Totaal had to be regarded as an essential input, whereas the contested decision (recital 375) merely rejected that argument without providing an adequate explanation.

159    Third, the applicant argues that the statement of reasons for the contested decision is inadequate as regards the ability of the merged entity to foreclose access to HBO content, in so far as it does not explain why the different types of content are substitutable or why further segmentation of the relevant market was not appropriate.

160    The Commission, supported by the interveners, contends that the applicant’s arguments should be rejected.

161    It is 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 such a way as to enable the persons concerned to ascertain the reasons for the measure and to enable the court having jurisdiction 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).

162    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 infringe 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).

163    In that regard, while it is true that the Commission is not obliged, in the statement of reasons for decisions adopted under Regulation No 139/2004, 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).

164    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 plea being a matter to be reviewed by the Court 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).

165    The fourth plea in law put forward by the applicant must be examined in the light of those considerations.

166    First, the applicant claims that the contested decision infringes the obligation to state reasons in that it does not explain why it did not define the markets for the wholesale supply and acquisition of premium pay TV film and sports channels more narrowly.

167    That argument cannot be accepted.

168    As is apparent in particular from paragraphs 72 to 80 above, in the contested decision, the Commission based its conclusion in relation to the definition of the wholesale market for the supply and acquisition of premium pay TV sports channels on various considerations. First of all, the respondents to the market investigation indicated that there were a number of premium pay TV sports channels that they regarded as being equally attractive. It is apparent from the contested decision that these were Ziggo Sport Totaal and Fox Sports, the only two channels of that kind in the Netherlands. Those channels were alternatives for retail providers of television services, who could differentiate their offers in other ways. Those findings were also consistent with the results of the market investigation in the context of the Vodafone/Liberty Global decision. Ziggo Sport Totaal and Fox Sports were, moreover, competing for similar content.

169    It should be added that, contrary to the applicant’s contention, the Commission did not fail to fulfil its obligation to state reasons by failing to indicate why it did not simply accept all the responses to the market investigation. Irrespective of the fact that recital 374 of the contested decision actually concerns the allegedly ‘must-have’ nature of Ziggo Sport Totaal, not the market definition, as has been noted in paragraph 86 above, it must be stated that the Commission indicates in recital 375 that further segmentation of the market is not necessary, for the reasons already explained in the contested decision, in particular the fact that Ziggo Sport Totaal and Fox Sports are alternatives.

170    In the light of those considerations, the contested decision cannot be criticised for failing to state reasons by failing to explain why it did not further segment the market for the wholesale supply and acquisition of premium pay TV sports channels, given the sufficiency of the statement of reasons described in paragraphs 168 and 169 above, in particular the substitutability of the Ziggo Sport Totaal and Fox Sports channels on the demand side from the point of view of retail television service providers.

171    Moreover, as regards the definition of the market for the wholesale supply and acquisition of premium pay TV film channels, it must be noted first of all that, as the Commission submits, the applicant did not argue during the administrative procedure that that market had to be further segmented. In those circumstances, the Commission was not obliged to provide specific reasons in relation to that point. Further, it must be noted that HBO Nederland no longer exists and that the only premium pay TV film channel in the Netherlands is now Film1, divested to Sony. Consequently, the alternative, narrower, definition of the relevant market, as proposed by the applicant and in respect of which the Commission allegedly failed to fulfil its obligation to state reasons, is far from clear.

172    In the light of the foregoing, the first complaint must be rejected.

173    Second, the complaint regarding an alleged failure to state reasons in relation to the absence of risk of input foreclosure concerning Ziggo Sport Totaal must be rejected. The applicant seems to repeat its criticisms regarding the lack of a statement of reasons in relation to the definition of the relevant market, which must be rejected for the reasons indicated in paragraphs 168 to 170 above. Moreover, and in any event, it must be held that the contested decision satisfies the requirements for the statement of reasons in that it explains the absence of vertical effects by the lack of upstream market power of the merged entity and by the absence of significant negative effects on downstream competition, as is apparent from paragraphs 117 to 120 and 135 above, respectively.

174    Third, the complaint regarding an alleged failure to state reasons in relation to the absence of risk of input foreclosure concerning HBO content must be rejected. The applicant seems to repeat its criticisms regarding the lack of a statement of reasons concerning the definition of the relevant market, which must be rejected for the reasons indicated in paragraph 171 above. Moreover, it must be held that the contested decision satisfies the requirements for the statement of reasons in that it explains the absence of vertical effects, in particular by the lack of upstream market power of the merged entity, as is apparent from paragraph 150 above.

175    Last, in view of the foregoing, it must be held that the grounds of the contested decision have enabled the applicant to challenge it substantively, and the General Court, to exercise its power of review in respect of the first, second and third pleas in law, as is apparent from paragraphs 48 to 155 above. Accordingly, for that reason also, the statement of reasons for the contested decision complies with the requirements of the case-law recalled in paragraphs 161 to 164 above.

176    Consequently, the fourth plea in law must be rejected as unfounded.

177    In accordance with all the foregoing considerations, the action must be dismissed in its entirety.

 Costs

178    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, it must be ordered to pay the costs, in accordance with the form of order sought by the Commission and the interveners.

On those grounds,

THE GENERAL COURT (Third Chamber)

hereby:

1.      Dismisses the action;

2.      Orders KPN BV to pay the costs.

Collins Kreuschitz Csehi

Delivered in open court in Luxembourg on 27 January 2021.

E. Coulon        M. van der Woude

Registrar President

*      Language of the case: English.