Under certain conditions mergers between companies are subject to merger control by the Bundeskartellamt. In such cases, they may be implemented only after they have been cleared by the Bundeskartellamt. The purpose of merger control is to prevent companies from becoming too powerful by taking over competitors or acquiring stakes in other companies, with the result of adversely affecting competition. Which mergers have to be notified? What are the criteria based on which the Bundeskartellamt makes its decision, and how are such proceedings conducted?
A concentration between two or more companies.
To prevent companies from gaining too much power in a market and in this way impeding competition.
A merger which would significantly impede effective competition is to be prohibited. In particular, this is the case if the merger creates or strengthens a dominant position. Otherwise, the merger is cleared with or without obligations.
This depends on whether the merger actually constitutes a concentration within the meaning of the German Competition Act (Gesetz gegen Wettbewerbsbeschränkungen – GWB). In addition, the companies involved must be of a certain size, which is measured based on turnover thresholds.
Failure to notify a merger can result in heavy fines. The obligation to notify a merger carries with it the prohibition to implement a proposed concentration without clearance. Mergers which have not been notified can subsequently be broken up again by the Bundeskartellamt.
In addition, a concentration may be declared invalid under civil law for failure to comply with the prohibition to implement the merger project without clearance.
Mergers with a “Community dimension” are examined by the European Commission and not the Bundeskartellamt. As a rule of thumb, concentrations are examined in Brussels if the combined turnover of all companies involved is higher than five billion euros. The exact thresholds are set out in the EC Merger Regulation.
