The Danish Competition Council has approved the merger between GlobalConnect A/S and Nianet A/S subject to commitments

30. May 2018

On 13 November 2017 the Danish Competition and Consumer Authority (hereinafter “DCCA”) received a complete notification of GlobalConnect A/S’ (hereinafter “GlobalConnect”) acquisition of sole control of Nianet A/S (hereinafter “Nianet”).

GlobalConnect offers wholesale and retail supply of broadband connections via fibre optic infrastructure. These services are primarily supplied to corporate customers and public entities. Furthermore, GlobalConnect operates data centers, from where colocation services and affiliated services are offered to corporate customers. GlobalConnect also offers hosting, cloud and other IT services. The majority of GlobalConnect’s data centers are located in the vicinity of Copenhagen and Aarhus.

In the same way, Nianet offers wholesale and retail supply of broadband connections via fibre optic infrastructure. These services are primarily supplied to corporate customers and public entities in Denmark. Moreover, Nianet operates data centers, from where colocation services and affiliated services are offered to corporate customers. Nianet also offers hosting, cloud and other IT services. The majority of Nianet’s data centers are located in the vicinity of Copenhagen and Aarhus.

Within Denmark GlobalConnect and Nianet are active on the markets for:

  • wholesale leased lines and wholesale internet access services;
  • retail supply of fixed broadband connections;
  • provision of colocation services;
  • provision of hosting, cloud, and other IT services.

Mergers with horizontal overlaps may significantly impede effective competition through unilateral effects.

The DCCA’s investigation found that GlobalConnect and Nianet are currently both important suppliers of colocation services in the Aarhus area. The Aarhus area is defined as the area within a 50 km radius from the city center of Aarhus.

On the basis of an overall assessment the DCCA considered that the merger would give rise to unilateral effects in the market for provision of colocation services in the Aarhus area. This would in particular be in the form of higher prices of colocation services in the area, because the transaction would unite the largest providers of colocation services in the Aarhus area.

As regards the other markets, the DCCA found that the merger would not result in a significant impediment of effective competition through unilateral effects. The DCCA found that the merger would not give rise to coordinated effects either.

Overall the DCCA considered that the merger would significantly impede effective competition in the market for provision of colocation services in the Aarhus area.

GlobalConnect offered commitments in order to address the concerns of the DCCA. GlobalConnect committed to divest both of Nianet’s data centers in the Aarhus area (located in Skanderborg and Aarhus, respectively). The acquisition of these data centers by a new or an existing competitor will ensure that competition in the market for colocation services in the Aarhus area is not reduced as a result of the merger.

Therefore, the Danish Competition Council assessed that the commitments were sufficient to address the unilateral effects identified by the DCCA.

On 30 May 2018 the Danish Competition Council approved the merger with commitments.