Germany: New Antitrust Act In Germany

Germany has a new Antitrust Act (Gesetz gegen Wettbewerbsbeschränkungen, GWB), effective June 30, 2013. The new GWB brings about important changes, in particular for merger control and antitrust fines.

The Government started the process to amend the GWB in August 2011. The principal purpose of the amendment was to align German merger control with the EU, to make the various GWB provisions on unilateral conduct more transparent and user-friendly, and to increase the overall efficiency of the German antitrust system. The Government published the GWB amendment on June 29, 2013. It entered into force on the first day following publication. Key changes are listed below.

Merger control

- Substantive test

  1. SIEC. In the past, German merger control uses a "dominance" test. The German antitrust authority (Bundeskartellamt,BKartA) prohibited transactions that were likely to create or strengthen a dominant market position. This test has been in place in German merger control since 1973. Under the new GWB, the BKartA prohibits transactions that "significantly impede effective competition" (SIEC). The dominance survives as an example of SIEC. The new standard obviously mirrors the SIEC test that has been in place at EU level since 2004. The new test requires more economic expertise than BKartA staff needed in the past. In recent times, however, the BKartA has been willing to absorb a more economic approach including in merger control matters. The change is also said to be necessary in order for the BKartA to be able to prohibit certain situations which it was not able to prohibit in the past (such as unilateral effects of oligopolies). The BKartA is likely to use the new test to step up its enforcement level.

- Filing criteria

  1. De minimis markets. In the past, transactions involving only markets that have existed for at least five years and in which total industry sales did not exceed €15 million were exempt from merger control. Now such transactions must be filed for the BKartA's review. However, the BKartA does not have the power to prohibit those transactions. In other words, it is for the BKartA (and not for the parties to the transaction) to decide if the de minimis exception applies.
  2. Consecutive transactions. Under the new GWB, transactions between the same businesses that take place within two years are treated as one transaction. The last step in this overall transaction triggers the clearance requirement.
  3. Partial acquisitions. Under German law, the acquisition of 25% of the shares or veto rights in another business is one of the four types of transactions than can be reportable. The new GWB specifically states that the revenues of the seller count towards the notification thresholds if the seller continues to own more than 25% of the target (or continues to control it).

- Proceedings

  1. Tender offers. The German bar to closing while clearance by the BKartA is pending no longer applies to public bids or series of transactions in traded securities if the acquired voting rights are not exercised and the transaction is notified without undue delay.
  2. Remedies. The BKartA's phase II review period in the future automatically extends by one month when remedies are submitted to the BKartA for the first time.
  3. Post-closing filings. If the parties close their transaction despite it being subject to merger control and the BKartA has not granted clearance, the transaction is not legally enforceable. Following a post-closing filing, the BKartA assesses the transaction in divestiture proceedings, where no deadlines apply, and may impose fines. The new GWB does not change this system but adds an important detail. In the future, if the BKartA closes its books on a transaction after closing, the transaction becomes legally enforceable.

Unilateral conduct

- Presumption of dominance

  1. Prohibitions restated. The GWB amendment revamped the structure of the rules on abuse of dominance, while it maintained almost all of its provisions. The definition of dominance is now neatly separated from the prohibitions of abuse of market power.
  2. Presumption of dominance. The dominance test remains a centerpiece of the GWB. In merger control, despite the change to the SIEC test, the new GWB lists dominance as an example of SIEC. Outside of merger control, the dominance test continues to be the benchmark for the GWB's prohibitions on certain unilateral conduct. In the past, the GWB presumed that a business is dominant if it had a market share of one third or more. The new GWB increases the threshold to 40%. The presumption of dominance by several businesses (oligopolies) has not changed. Oligopolies of two or three businesses are presumed to be dominant if they have a combined market share of 50% (two thirds, if the oligopoly comprises five or fewer businesses). These presumptions can be rebutted.

- Specific prohibitions

  1. Protection of small companies. The GWB contained specific prohibitions on abuse of market power that were set to expire year end 2013. Most are carried over into the new law. Businesses with superior power in relation to small and medium-sized competitors must not offer food and animal feed products below cost price; must not offer other products or services below cost, unless they make such sales only occasionally; and must not charge prices in downstream markets that are higher than the price they offer in such markets, if they compete with their customer in the downstream market (margin squeeze).

Enforcement powers

  1. Overcharge. The BKartA has the power to skim off the overcharge that infringers obtained through their violation of the German and EU competition rules. The new GWB explicitly states that the BKartA may also order that the infringer reimburses its customers.
  2. Legal succession. In the past, it was possible to restructure a company such that it was no longer liable for antitrust infringements committed by its predecessors. In a benchmark decision of August 2011, the German Federal Court of Justice confirmed this interpretation of the law but also suggested that the law be amended to close this gap. As part of the GWB amendment, Parliament also amended the Act On Administrative Infringements (Ordnungswidrigkeitengesetz, OWiG). In the future, businesses cannot escape their liability for fines if they are restructured by way of mergers, spin-offs or divestitures.

Print and press

  1. New thresholds. For transactions in the press sector, special notification criteria apply. In particular, the revenue thresholds are lower for mergers of companies active in newspapers and magazines. The new GWB raises these (lower) thresholds to combined worldwide revenues of €62.5 million, while one party must have German sales of more than €3.1 million and one other party must have German sales of more than €0.6 million. The BKartA estimates that this will reduce the number of merger requirements in the press sector by 20%.
  2. Distribution. Agreements between associations of newspaper publishers and wholesalers are now exempt from the German prohibition on restraints of trade.
  3. Failing firm defense. The BKartA does no longer have the power to prohibit transactions by which a business, active in newspapers or magazines, acquires a small or medium-sized competitor if the target is insolvent and would likely disappear from the market absent the transaction, and if there were no alternative investors that would have allowed a solution that would have been less restrictive of competition.

Antitrust litigation for damages

  1. Consumer associations. Consumer associations now have standing to litigate for cease and desist orders based on antitrust infringements. Although consumer associations were lobbying for additional rights in private antitrust enforcement, this was the only privilege that Parliament was willing to give. In particular, consumer associations do not have standing to litigate for antitrust damages.

A German version of the amended and restated GWB is available here:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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