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Christian Krohs advises clients on all aspects of antitrust and competition law, including antitrust litigation, as well as compliance matters. Christian has extensive experience in all areas of EU and German antitrust and competition law, particularly in relation to cartel investigations, cartel damages claims, abuse of dominance proceedings and both national and international merger control projects. He has also advised numerous clients regarding antitrust and anticorruption compliance as well as internal investigations. Read Christian Krohs' full bio.

As reported previously, German competition law was recently amended. The amendments included with the introduction of a “size of transaction”-threshold a notable change with respect to German merger control. The following is a reminder of five important features of German merger control which you should be aware of:

The jurisdictional thresholds of German merger control are easily triggered

German merger control applies if the parties to a transaction (usually the acquirer and the target) exceeded, in the last financial year, certain turnover thresholds. In an interna­tional context, these thresholds are relatively low and easily triggered:

  • Joint worldwide turnover of all parties > € 500 million, and
  • German turnover of at least one party > € 25 million, and
  • German turnover of another party > € 5 million.

There is a new “size of transaction”-threshold

Since June 2017, German merger control can also be triggered if a newly introduced “size of transaction”-threshold is exceeded:

  • Joint worldwide turnover of all parties > € 500 million, and
  • German turnover of at least one party > € 25 million, and
  • “value of compensation” > € 400 million, and
  • The target company has “significant business activities” in Germany (which may be activities with revenues < € 5 million).

The “value of compensation” includes the purchase price and all other assets and non-cash benefits, as well as liabilities assumed by the purchaser.

Acquisition of minority shareholdings may be notifiable

Similar to the HSR Act, but different to European Union merger control and most European jurisdictions, German merger control is not limited to the “acquisition of control”. Additional triggering events are

  • The acquisition of 25% or more of the shares in a company, and
  • The acquisition of a shareholding below 25% if this, combined with other factors (e.g. the right to appoint one out of five members of the board), may have an im­pact on competition (“acquisition of ability to exercise competitively significant influ­ence”).

Review of joint venture situations

German merger control may apply in joint venture situations that are often not covered by other merger control laws:

  •  German merger control may apply to the setting up of a joint venture company, even if the joint venture will have no activities in Germany. The jurisdictional thresholds may be satisfied by the parent companies alone. While there is an exemption for transactions with “no effect in Germany”, it is interpreted very narrowly and applies only in exceptional circumstances.
  • German merger control applies to all joint venture situations where two or more par­ties acquire or continue to hold a shareholding of 25% or more. Examples:
    – A and B set up a 50/50 production joint venture.
    – A acquires sole control and a 70% shareholding, and B acquires a non-control­ling 30% shareholding.
    – A sells 75% of a fully owned subsidiary to B, and retains only a 25% minority shareholding.
    – A, B and C each own 1/3 in a joint venture company. C divests his share­holding to A and B.

In each of these examples, the turnover of both A and B (and possibly the tar­get/joint venture company) will have to be taken into account for assessing the juris­dictional thresholds.

The bright side: The process is usually quick, efficient and relatively inexpensive

The number of transactions requiring a merger control notification to the German Federal Cartel Office (“FCO”) is, compared to most other jurisdictions, relatively high. On the plus side, the notification process is, in most cases, quick, efficient and, in cases without true com­petition issues, relatively inexpensive.

  • The large majority of transactions notified to the FCO are cleared in Phase 1.
  • The maximum duration of Phase 1 is one month; fairly often, the FCO clears trans­actions within two or three weeks after notification.
  • In straightforward cases, the amount of formal information that needs to be pro­vided is limited, and the notification can be drafted relatively quickly.
  • The fee imposed by the FCO in non-complex matters usually ranges between € 5,000 and € 15,000.

A number of amendments to the German competition law (Amendment) entered into force on 9 June 2017. The key changes are:

  • Merger control: Introduction of a new “size of transaction”-threshold
  • Sanctions for antitrust law infringements: Rules of liability aligned to EU concept, in particular with respect to “parental liability”
  • Private enforcement: Implementation of EU Cartel Damage Claims Directive.

Continue Reading Reform of German Competition Law

The first European citizen to be extradited from Europe to the United States for criminal antitrust conduct recently succeeded in having a Berlin court refer the matter of his extradition to the Court of Justice of the European Union (CJEU) in the context of his damages action with regard to his extradition, after a series of multiple setbacks and a 24-month period of imprisonment.

Continue Reading CJEU to Rule on Extradition of EU Citizens in Criminal Antitrust Proceedings