Thursday, February 28, 2013

EU stops Merger of Tencel and Lenzing Lyocell - Part 4 (2001)

This extract continues on from the last post.  There are two distinct monopolies being created: one in the sale of lyocell products (fibres, filaments films etc) and another in the sale of lyocell production technology and plants.

121. The Commission, having considered these arguments, maintains its definition of a separate product market for the production and processing technology for lyocell (including both staple fibres and filament yarn). 

Firstly, it should be noted that, contrary to the parties [CVC/Lenzing] Reply, the definition of a separate market for technology is in line with consistent Commission practice and cannot therefore be regarded as highly unusual.

122. Secondly, the Commission considers the current activity in this area sufficient for it to form a separate market. Indeed, there appears to be a significant degree of 
demand by potential lyocell producers for lyocell production and processing technology; the parties themselves provide a series of examples in their Reply and also point out that Zimmer AG has been marketing its technology for the last two years.  Moreover, a certain number of licences have already been granted by the parties themselves; the circumstances under which these licenses have been granted (wholly exceptional) and the purpose for which they are being used (do not relate to lyocell fibre production) cannot be decisive for the definition of product markets. On the contrary, the very fact that licences were granted under exceptional circumstances which were not related to lyocell fibre production proves, in the Commission's view, that lyocell production and processing technology on the one hand and lyocell fibre production on the other hand are not inextricably linked with each other and deserve to be assessed separately.

123. Thirdly, not all of the companies and institutes which develop lyocell production and processing technology are at the same time active in lyocell production. As has been stated above (see paragraph 119) and confirmed by the parties in their Reply, the German undertaking Zimmer AG is active in the development and sale of lyocell technology but not in lyocell production; so is the research institute Thuringisches Institut for Textil- und Kunststoff-Forschung e.V. (TITK). The fact that different players are active in the lyocell production area and in the field of lyocell production and processing technology strongly militates in favour of the existence of a separate technology market.

124. The Commission therefore concludes that there is a technology market for lyocell production and processing which is distinct from the downstream market for the production and sale of lyocell.



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