On May 23, 2019, the General Court rejected KPN’s attempt to annul the Commission’s conditional approval of Vodafone’s and Liberty Global’s joint venture in the Netherlands.[1]

In May 2016 the Commission approved the formation of a joint venture (the “JV”) between Vodafone and Liberty Global that would combine their respective Dutch telecommunications businesses.[2] To address concerns that the JV’s formation would reduce competition in the markets for the provision of fixed line and fixed mobile multiple-play services in the Netherlands, the parties offered to divest Vodafone’s retail consumer fixed line business. The Commission also considered whether the JV’s formation would lead to any anticompetitive vertical effects, but concluded that anticompetitive foreclosure was unlikely.

In 2017, KPN appealed the Commission’s decision, arguing that the Commission made a manifest error of assessment regarding (i) the definition of the relevant market, and (ii) the transaction’s vertical foreclosure effects. In addition, KPN claimed that the Commission failed to give sufficient reasons in support of its conclusions. The General Court rejected all of KPN’s grounds of appeal.

As regards market definition, the General Court held that the Commission did not commit a manifest error of assessment by failing to sub- segment the market for the wholesale supply and acquisition of premium pay TV sports channels. The court specifically pointed to evidence from the Commission’s market investigation confirming demand-side substitutability between premium pay TV sports channels, in particular as between Ziggo Sport Totaal and Fox Sports. As regards the Commission’s vertical assessment, the General Court noted that KPN’s arguments called for an assessment of vertical foreclosure in markets that were not impacted by the JV’s formation, and further held that the Commission did not commit a manifest error of assessment by concluding that the parties would not have the ability to engage in an input foreclosure strategy in the affected markets.

This is the second judgment handed down by the General Court in a series of appeals brought by KPN against Commission merger clearance decisions. Less than two years ago, KPN successfully overturned the Commission’s decision approving Liberty Global’s acquisition of Ziggo on the grounds that the Commission failed to adequately assess the effects of the transaction on the market for the wholesale supply and acquisition of premium pay TV sports channels.[3] In order to comply with the General Court’s judgment, the Commission reassessed the transaction this time including an assessment of all the affected markets.[4] KPN, however, also appealed the new approval decision. This appeal is still pending.[5]

[1]      KPN BV v. Commission (Case T-370/17), EU:T:2019:354.

[2]      Vodafone/Liberty Global/Dutch JV (Case COMP/M.7978), Commission decision of August 3, 2016.

[3]      KPN BV v. Commission (Case T-394/15), EU:T:2017:756.

[4]      Liberty Global/Ziggo (Case COMP/M.7000), Commission decision of May 30, 2018.

[5]      KPN BV v. Commission (Case T-691/18), appeal pending.