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The Danish Competition Council has approved the merger between SE a.m.b.a and Eniig a.m.b.a. subject to remedies

25. June 2019

On 21 December 2018 the Danish Competition and Consumer Authority (hereinafter “DCCA”) received a complete notification of the merger between SE a.m.b.a. (hereinafter “SE”) and Eniig a.m.b.a. (hereinafter “Eniig”). The merger was approved subject to remedies on 25 June 2019.

SE is an energy and natural gas supply company, which in addition offers retail and wholesale supply of fixed broadband connections and retail provision of TV services via fibre optic infrastructure, coaxial cable infrastructure and via DTT (airborn signal). The majority of SE’s power- and data infrastructure is located in Southern Jutland.

Eniig is also an energy and natural gas supply company, which also offers retail and wholesale supply of fixed broadband connections and retail provision of TV services via fibre optic infrastructure. Prior to the merger, Eniig supplies TV services via the company Waoo A/S, which is a joint venture between a number of Danish energy supply companies. Eniig does not by itself own the rights to distribute TV-channels, as these rights are acquired through Waoo A/S. Eniig’s power and data infrastructure is located in Central and Northern Jutland.

Within Denmark SE and Eniig are both active in the following markets:

  • Wholesale of fixed broadband connections (internet access).
  • Retail supply of fixed broadband connections.
  • Acquisition of TV channels.
  • Retail provision of TV services.
  • Generation and wholesale supply of electricity.
  • Distribution of electricity.
  • Retail supply of electricity.
  • Wholesale of natural gas.
  • Retail supply of natural gas.

Mergers with horizontal and/or vertical overlaps may significantly impede effective competition through unilateral effects.

The DCCA’s investigations showed that prior to the merger, Eniig had incentive to provide retail suppliers of broadband connections and TV services with access to Eniigs fibre optic infrastructure and Eniig had implemented a technical platform to that end. SE on the other hand, had been more reluctant to provide access to SE’s fibre optic infrastructure, given SE’s ownership of large retail suppliers of fixed broadband connections and TV services.

The DCCA found that fixed broadband connections based on copper infrastructure (xDSL) did not belong to the same relevant market as high speed broadband connections based on fibre optic- or coaxial cables, neither on the wholesale nor the retail level. The market investigation thus showed that consumers increasingly demand broadband connections with capacities and speed that cannot be delivered on xDSL-infrastructure in Denmark. Furthermore consumers are generally unwilling to purchase broadband connections with lower capacities or speed as a result of increases in the price of high-speed connections.

Based on an overall assessment the DCCA considered that the merger would give rise to unilateral, vertical effects on the market for wholesale internet access services. The DCCA found that these effects would significantly impede effective competition on the markets for retail provision of TV services and fixed broadband connections in the areas where SE and Eniig have deployed fibre optic infrastructure. The significant impediment of effective competition would result from competitors being foreclosed from access to the parties’ fibre internet access products, because the intended opening of Eniig’s fibre optic infrastructure would likely be subject to delay, limitations, higher prices and/or the terms offered would be impaired.

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

In conclusion, the DCCA considered that the merger would significantly impede effective competition in the market for wholesale internet access services in the areas where SE and Eniig have deployed fibre optic infrastructure

SE and Eniig offered commitments in order to address the concerns of the DCCA. The merging parties offered to ensure the opening of Eniig’s fibre optic infrastructure and offer wholesale internet access services to service providers on reasonable and non-discriminatory terms. Compliance with these commitments are ensured through an audit- and arbitration model, which interested parties will have access to at a reduced cost. The merging parties also offered certain behavioural commitments regarding their participation in the infrastructure wholesale company OpenNet A/S.

The Danish Competition Council assessed that the remedies offered were sufficient to address the unilateral effects identified by the DCCA.

On 25 June 2019, the Danish Competition Council approved the merger subject to remedies.