On 30 June 2013, the Eighth Amendment to the German Act Against Restraints of Competition has entered into force. It had been planned initially to implement the reform already by 1 January 2013 (see VBB on Competition Law Volume 2011, No. 12, and Volume 2012, No. 4, available at www.vbb.com) but several controversial issues, in particular whether or not statutory health insurance funds and concentrations between public institutions and businesses as part of municipal territorial reforms should be subject to the German merger control rules and whether fees charged by public water suppliers should be subject to the rules on abusive behaviour, delayed the legislative process until publication of the reform in Germany's Federal Law Gazette on 29 June 2013.
The reform's main objectives are, amongst others, the reduction of existing differences between German and EU merger control regimes, the simplification of the existing rules on abusive behaviour and the involvement of consumer protection associations in private competition law enforcement.
As far as changes to the German merger control rules are concerned, the reform alters the substantive analysis test for mergers. Whereas the German Act Against Restraints of Competition ("GWB") provided so far for the application of the market dominance test, the reform has introduced the European Commission's SIEC test ("Significant Impediment to Effective Competition") into the GWB (Section 36(1) GWB). Also, in line with Article 5(2), second subparagraph, of the EU Merger Regulation, the acquisition of shares in several transactions will from now on be treated as one transaction if the acquisitions take place within two years (Section 38(5) GWB). However, certain German specificities remain, such as, for instance, the German Federal Cartel Office's ("FCO") right to examine the acquisition of minority shares that do not allow effective control but nevertheless convey a competitively relevant influence over the target company.
As regards changes to the rules on abusive behaviour, the previously applicable provision on the prohibition of margin squeeze practices that lapsed on 31 December 2012 has been reintroduced and is now codified for an unlimited period (Section 20(3), no 3 GWB). Furthermore, the reform raised the threshold for the presumption of dominance of an undertaking from 33% to 40% (Section 18(4) GWB). The threshold for the presumption of an oligopoly, however, has remained unchanged (Section 18(6) GWB). Finally, the FCO's right to investigate not only dominant undertakings but also undertakings with superior market power in relation to small and medium-sized competitors is maintained (Section 20(1) and (2) GWB).
The reform further provides for the standing of consumer protection associations in actions against companies that have breached competition law to obtain an injunction or an order to surrender the economic benefits achieved from the infringement to the federal budget (Section 33(2), no 2 (b) GWB). A genuine class actions system has however not been introduced in Germany.
As to the issues causing the delay in the legislative process, concentrations between statutory health insurance funds have become after all subject to the German merger control regime. However, if the FCO intends to prohibit a proposed concentration, it has to consult the statutory health insurance funds' supervisory body first and consider its opinion. Notwithstanding the general competence of the Higher Regional Court of Düsseldorf to review the FCO's merger decisions, the competence to review concentrations between statutory health insurance funds will be with the social security courts. Concentrations between public institutions and businesses as part of municipal territorial reforms remain outside the scope of German competition law. While the possibility of proceedings in case of abuse of dominance by water supply companies was introduced into the GWB (Section 31b(5) GWB), public water companies remain outside the scope of German rules on abusive behaviour.
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