Answer ... Transactions that violate the standstill obligation are deemed invalid under German law. Further, the Federal Cartel Office (FCO) may impose significant fines on the undertakings concerned and, in certain cases, also on the seller. Fines of up to 10% of an undertaking’s total worldwide group turnover can be imposed on undertakings and fines of up to €1 million on individuals. Whether the FCO imposes a fine is subject to its discretion. Relevant factors include whether the parties acted deliberately or negligently, whether they are repeat offenders and whether the transaction has significant effects in Germany. If the FCO decides to impose a fine, the amount of the fine will be set on the basis of the FCO’s guidelines on calculating fines.
The partial implementation of a transaction before clearance may also violate this prohibition. In November 2017, a decision of the Federal Supreme Court in the Edeka/Tengelmann case confirmed that measures or conduct which does not meet the requirements of a notifiable type of transaction but occurs in connection with such a transaction, and which is suitable to at least partially realise the effects of such a transaction, in particular on the market, may also violate the standstill obligation. The decision concerned a joint purchasing cooperation within the context of a framework agreement between the merging parties.
The FCO may issue an administrative order to prevent parties from violating the standstill obligation. If a transaction has been consummated without clearance, the FCO may initiate a divestiture proceeding and order the dissolution of the transaction, provided that the preconditions for a prohibition are met.
The FCO regularly imposes fines for closing notifiable transactions prior to clearance. The highest fine imposed so far was €4.5 million.
Answer ... The sanctions for closing a transaction while review is ongoing are the same as those for failure to notify (see question 7.1). The standstill obligation applies to both kinds of situations. However, the risk of a fine may be higher if the transaction closes while review is ongoing. Since the parties in such cases know that there is a filing obligation, and consequently also a standstill obligation, it is more likely that the FCO will consider that they violated the prohibition deliberately.
Answer ... The FCO monitors compliance with remedies. The parties have reporting obligations with regard to the FCO. In addition, monitoring or divestiture trustees can play an important role. Such trustees are appointed by the parties, subject to prior approval of the FCO. They report to the FCO and are bound by the FCO’s instructions. If remedies are not complied with, the clearance decision may not be effective or may be revoked.