18.2.

2004 EN Official Journal of the European Union C 42/11

Final report of the Hearing Officer in case COMP/M.2220 — GE/Honeywell

(pursuant to Article 15 and modified under Article 16(2) of Commission Decision 2001/462/EC,
ECSC of 23 May 2001 on the terms of reference of Hearing Officers in certain competition
procedures (OJ L 162, 19.6.2001, p. 21))
(2004/C 42/05)

(Text with EEA relevance)

The draft decision submitted to the Commission gives rise to
the following observations regarding the right to be heard:
1. The parties to the envisaged merger (hereafter referred to as
‘the parties’) complained about the time limit which the
Commission had imposed on them for responding to the
statement of objections. Pursuant to Article 21 of
Commission Regulation (EC) No 447/89 of 1 March 1998
on the notifications, time limits and hearings provided for
in Council Regulation (EEC) No 4064/89 on the control of
concentrations between undertakings (OJ L 61, 2.3.1998, p.
1), the Commission, when setting such deadlines, takes into
account both the time necessary for the preparation of the
submission and the urgency of the case. In the present case
the Commission had fixed an initial time limit of two weeks
and one day, which thereafter was extended by one further
day. Given the complex nature of the case, this time limit
was short, but it was still appropriate within the narrow
time frame provided for Commission decisions under the
Merger Control Regulation. Moreover, during the oral
hearing the parties were granted the opportunity of
completing their written statements orally in a full day
session. My conclusion therefore is that the rights of
defence have been respected in this regard.
3. The parties also claimed that they were not given proper
access to the submissions by several airlines that had
complained about the merger, except for an anonymous
summary of all the complaints. Given the sensitivity of
their position vis-à-vis the parties to the proposed merger,
the airlines had requested the outmost confidentiality and
anonymity for their statements. By drafting and releasing
the anonymous summary, the Commission has correctly
fulfilled its obligation both to safeguard business secrets
and other confidential information, such as the identity of
the aforementioned complainants, and to ensure that the
parties had sufficient knowledge of the complaints. The
way in which this matter was handled is in line with the
case law of the Court of First Instance.
4. The parties moreover accused the Commission of not
having proceeded in an objective manner. They maintain
that facts were used in a highly selective fashion or
simply disregarded when they did not suit the Commission's
case. However, the text of the draft decision shows that
such reproach is unjustified as it deals with all of the
relevant facts and arguments, irrespective of whether they
are unfavourable or favourable to the parties.

2. The parties took the view that the Commission had not
granted them full access to the case file because an
economic model which the Commission used in the
statement of objections to quantify the effect of the
envisaged merger on the remaining competitors had not
been fully released to the parties. The reason for this was
that the model had been implemented by data provided by
a third party (Rolls Royce) which constituted sensitive
commercial information. Upon the request of the Hearing
Officer, the undertaking concerned disclosed parts of its
information to the parties' economic advisers on the basis
of a confidentiality agreement, but it was not willing to
grant a full waiver. The question is whether the Commission
has struck a fair balance between the parties' rights of
defence and third parties' right to have their business
secrets and other confidential information protected from
disclosure and, furthermore, to what extent the information
provided by Rolls Royce may be used to support objections
against the parties. This question can however remain
undecided, as the Commission no longer relies on the
economic model referred to above in its draft decision.
5. The parties finally expressed doubts about the impartiality
of the enquiry which the Commission conducted in order to
assess the competition impact of the proposed package of
commitments. In this context it should be stressed that from
the outset the Commission rejected undertakings of a
merely behavioural nature. The proposed structural under-
takings were examined in depth and considered as insuf-
ficient to address the major competition problems regarding
the markets of engines for large commercial aircraft, of
avionics and of non-avionics. However, given the fact that
the parties still had the possibility to improve the proposed
commitments, the Commission initiated a technical market
test of all structural undertakings to assess whether, in case
of a significant improvement of the package so far offered
by the parties, the proposed undertakings could already
form the basis for a final settlement. This enquiry, with a
C 42/12 EN Official Journal of the European Union 18.2.2004

limited scope and purpose, which for the reasons explained 6. The draft decision only contains objections in respect of
in the draft decision led to a negative result, meets the which the parties have been afforded the opportunity of
standards of objectivity required by EC competition law. making known their views.
The latter is true both with regard to the methodology
used and the selection of the respondents who were
chosen in a non-discriminatory manner amongst Done at Brussels, 28 June 2001.
competitors and customers having actively participated in
the proceedings and with an adequate knowledge of the Helmuth SCHRÖTER
industry to provide technical information to the
Commission.

Opinion of the Advisory Committee on Concentrations given at its 99th meeting on 13 September
2001 concerning a preliminary draft decision relating to case COMP/M.2434 — Grupo Villar
Mir/ENBW/Hidroeléctrica del Cantábrico
(2004/C 42/06)

(Text with EEA relevance)

1. The Advisory Committee agrees with the Commission that the notified operation constitutes a concen-
tration within the meaning of Article 3(1)(b) of the Merger Regulation, and that the notified operation
has a Community dimension as defined by Article 1(2) of the Merger Regulation.

2. The Advisory Committee agrees with the Commission that the relevant product market in this case is
the wholesale market for electricity (the pool and bilateral contracts between eligible customers and
generators).

3. The Advisory Committee agrees with the Commission that the relevant geographic market is the
Spanish mainland.

4. The Advisory Committee agrees with the Commission that the concentration leads to a strengthening of
an existing oligopolistic dominant position on the wholesale market for electricity in Spain, as a result
of which effective competition would be significantly impeded within the Common Market.

5. A majority of the Advisory Committee agrees with the Commission that the commitments submitted
by EDF and EDF/RTE concerning an increase in interconnecting capacity between Spain and France will
remove all the competitive concerns identified by the Commission. A minority disagrees.

6. A majority of the Advisory Committee agrees with the Commission that, subject to the full compliance
of the submitted commitments, the notified concentration should be declared compatible with the
Common Market. A minority disagrees.

7. The Advisory Committee asks the Commission to take into account all the comments made in the
discussion, in particular with regard to the implementation and monitoring of the commitments.

8. The Advisory Committee recommends the publication of its opinion in the Official Journal of the
European Union.