Bundeskartellamt refines the concept of “merger” in German law

20 January 2005

Georg Terhorst

For the first time the Bundeskartellamt decided that the new introduction of a product under a licensed trade mark may be considered a merger (“concentration”) subject to notification. As a result, the acquisition of an intangible right can constitute a merger under German law.

The Bundeskartellamt prohibited the publisher ‘Gruner + Jahr’ from purchasing a licence to publish the German edition of the US-magazine “National Geographic”. In 1998 Gruner + Jahr notified the establishment of a joint venture with a Spanish enterprise. However, it failed to indicate the intention to purchase the licence. The authority only gained knowledge about the purchase of the licence in 2003 when Gruner + Jahr enquired about the possibility of assuming sole control over the joint venture.

Although the German edition of National Geographic was not published prior to the purchase of the licence, the authority ruled that the purchase nevertheless constituted a concentration, because the US-edition of the “National Geographic” already had a market presence in Germany, on which Gruner + Jahr could build when publishing their first German edition.

Because of the high market share (Gruner + Jahr already had a share of over 60 % on the relevant market for scientific magazines), the significant increase of this share, the wide gap to its competitors, high market entry barriers and the inclusion of Gruner + Jahr in the financially strong and established Bertelsmann media group, the authority considered the requirements of a prohibition to be fulfilled.

With this decision the Bundeskartellamt affirms its resistance against further concentrations in the press and publishing sector. It remains to be seen whether Gruner + Jahr’s appeal against the authority’s decision confirms this refinement.

Source: Press release of the Bundeskartellamt, found here, 9 August 2004