L 253/20 Official Journal of the European Union 16.9.2006 G) (Acts whose publication is not obligatory) COMMISSION COMMISSION DECISION of 21 December 2005 declaring a concentration compatible with the common market and the functioning of the EEA Agreement (Case COMP/M.3696 — E.ON/MOL) (notified under document number C(2005) 5593) (Only the English text is authentic) (Text with EEA relevance) (2006/622[EC) On 21 December 2005 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 (the EC Merger Regulation) (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/competiton/index_en.html I. SUMMARY This case concerns the acquisition by E.ON (Germany) of two subsidiaries of MOL, an integrated Hungarian oil and gas company, which are active in the wholesale, marketing and trading of gas, and the storage of gas. MOL also has a put option for two years to sell its gas transmission subsidiary to E.ON. MOL already has, prior to the transaction, an almost exclusive control over the access to gas resources and gas infrastructures in Hungary. MOL owns the gas trans- mission network, all Hungarian gas storage facilities and has a quasi-monopoly position on the gas wholesale markets. MOL is already today the ‘gatekeeper for gas resources (both imports and domestic production) and gas infrastructure. This gatekeeper position will now be taken over by E.ON. The essential change brought by the proposed transaction is that E.ON, unlike MOL, has strong market positions in () O] L 24, 29.1.2004, p. 1. the retail supply of gas and electricity in Hungary. Therefore, except for the transmission and gas production businesses of MOL, the current transaction will create a vertically integrated entity along the gas and electricity supply chains in Hungary. The Commission’s market investigation has established that, owing to the new entity’s nearly exclusive control over gas resources (mostly of Russian origin) available in Hungary and its vertical integration in the gas and elec- tricity markets, the transaction would lead to a serious risk of foreclosure of competitors on the downstream gas and electricity markets. As mentioned, contrary to MOL, E.ON is active downstream of the gas wholesale market, in the retail and distribution of gas and electricity (through its control of two out of six regional gas distri- bution companies and of three out of six regional elec- tricity distribution companies) as well as in the generation of electricity. This would lead to a change of incentives of the new entity vis-a-vis its downstream competitors. The new entity would thus have both the ability and the incentive to discriminate against its competitors in the downstream markets both in the gas and in the electricity sectors.