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.
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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