4.12.2007 Official Journal of the European Union L 316/57 () COMMISSION DECISION of 18 July 2007 declaring a concentration to be compatible with the common market and the functioning of the EEA Agreement (Case COMP/M.4504 — SFR/Télé 2 France) (notified under document number C(2007) 3443) (Only the French version is authentic) (Text with EEA relevance) (2007/784[EC) On 18 July 2007 the Commission adopted a Decision in a merger case under Council Regulation (EC) No 139/2004 of 20 January 2004 on the control of concentrations between undertakings (1), and in particular Article 8(2) of that Regulation. A non-confidential version of the full Decision can be found in the authentic language of the case and in the working languages of the Commission on the website of the Directorate-General for Competition, at the following address: http://ec.europa.eu/comm/ competition/index_en.html SUMMARY On 28 November 2006 the Commission received a noti- fication, pursuant to Article 4 of Council Regulation (EC) No 139/2004 (the Merger Regulation), of a proposed concentration by which SFR S.A. (SR, France), an undertaking jointly controlled by Vivendi S.A. (Vivendi, France) and Vodafone Group plc (Vodafone, UK), acquires, within the meaning of Article 3(1)(b) of the Merger Regulation, sole control of the Internet access and fixed telephony business of the undertaking Télé 2 France (Télé 2, France, a subsidiary of the Télé 2 group) by way of a purchase of shares. The transaction does not concern Télé 2’s business in mobile telephony services. SFR is a French company operating in the mobile telephony sector in France. It is controlled by Vivendi and Vodafone. Vivendi is the parent company of a French group engaged in the media and telecommunications sectors. The Vivendi group is chiefly engaged in the pay-TV (via the Canal+ group), cinema, music, interactive games and telecommunications sectors. Vodafone is the parent company of a British group which is active as an operator of mobile telephony networks and provider of other telecommunications services in various EU Member States and non-EU countries. Télé 2 France (Télé 2) is the French subsidiary of the Télé 2 group. It is engaged in the sectors of fixed telephony, () O] L 24, 29.1.2004, p. 1. Internet access provision, and also pay-TV since DSL (?) television services were launched in June 2006. Télé 2 is also engaged in the mobile telephony sector. The market survey showed that the transaction as notified is liable to weaken significantly the competitive pressure exercised by DSL operators on all the pay-TV markets in France and thus, in the longer term, to raise the prices and lower the quality of supply. There are therefore serious concerns that the transaction as notified might significantly impede effective competition in the common market or in a substantial part of it. SFR and Vivendi have, however, proposed appropriate remedies which overcome these concerns. 1. MARKET DEFINITIONS Introduction The transaction at hand concerns the pay-TV sector in France. This sector is organised essentially as follows. Upstream are the holders of rights to broadcast programmes (films, series, sports events, etc.). At the intermediate level, channel producers produce their own programmes internally andfor acquire the broad- casting rights for the programmes (films, series, sports events, etc.) that are to constitute the channel content. Downstream, distributors purchase from producers the right to broadcast their channels and offer subscription- based pay-TV channel packages. Pay-TV offerings can be delivered to final consumers by various means, the main ones in France being cable, satellite, DSL and terrestrial (analogue and digital). (%) Digital Subscriber Line. DSL technology makes it possible to signifi- cantly increase the speed of normal telephone lines. The most common DSL technology is ADSL (Asymmetric Digital Subscriber Line).