German Parliament Adopts Amendment to German Competition Law

06 February 2013

Dr. Jörg Witting, Fabian von Busse

The German Federal Parliament (Bundestag) has adopted the 8th Amendment to the German Act against Restraints of Competition (ARC). The reform brings about a number of changes which, inter alia, include an alignment of merger control rules with the EU regime, a restructuring of comtrols of abuse of dominance as well as changes in the press and health care sectors. The Amendment was expected to enter into force on 1 January 2013 but is delayed due to unresolved issues regarding the health care sector. The Mediation Committee (Vermittlungsausschuss), a joint Bundestag and Bundesrat (Federal Council) representing German constituent states, is to reconvene later this January.

In the merger control rules, the Significant Impediment to Effective Competition (SIEC) test, reflecting the EU Merger Regulation (EUMR), will replace the dominance criterion for the competitive assessment of the concentration. Besides the alignment with the EUMR, the adoption of the SIEC test aims to close a perceived enforcement gap for mergers that do not lead to market dominance but nevertheless may impede competition, e.g. on oligopolistic markets. However, dominance will still remain the main statutory example for a significant impediment to effective competition.

Regarding the obligation to notify a merger with the FCO, the current de minimis exemption will be moved to the criteria for the competitive assessment of the merger. Under the current de minimis rule, mergers which only concern markets with a volume of less than EUR 15 million are exempted from a notification obligation to the FCO. In the future, such mergers must be notified but will be cleared if the FCO holds that the de minimis criterion is fulfilled

As regards abuse control, the market share threshold for the legal presumption of dominance, which is also relevant in merger control, will be increased from one third to 40%. Also the numbering of the sections governing the abuse control in the ARC will be changed, however without significant changes in substance. Compared to EU law, Germany thereby maintains its individual approach and will link competition law sanctions not only to abuses of market dominance but also to abuses of relative market power and superior market power in relation to small and medium-sized competitors. 

In the press sector, the turnover thresholds for a notification obligation were increased, in order to exclude small projects from merger control. In the future, merging companies active in the press sector with a worldwide combined turnover below EUR 62.5 million are in any case exempted from a notification obligation. Furthermore, the amendment provides that agreements between associations of newspaper publishers and press wholesalers are exempted from the cartel prohibition in order to ensure a comprehensive and non-discriminatory supply of newspapers and journals.

For the health care sector the amendment expressly provides that competition law shall apply mutatis mutandis to statutory health insurance funds. German lawmakers considered such a measure necessary after a number of such insurers recently successfully defended themselves before the courts against FCO measures regarding the joint introduction of additional insurance fees. As a consequence, the FCO also stopped the merger control of statutory health insurances as it saw no sufficient legal basis for this. However, the application of competition law on statutory health funds remains highly controversial; one cannot therefore exclude the possibility that the entry into force of the amendment is further delayed due to objections by the German Federal Council (Bundesrat).

Other articles related to the EU & Competition Law Bulletin for February 2013: 

> European Commission imposes biggest ever fine on members of screen component cartel

> Court of Justice upholds AstraZeneca abuse of dominance decision

> Statement of Objections in Samsung standard-essential patent case

> Commission conditionally approves acquisition of Orange Austria by Hutchison 3G

> NCAs may take action against anti-competitive agreements which do not meet the thresholds in the Commission’s de minimis notice

> New guidelines in place for assessing State aid for the deployment of broadband

> European Commission accepts commitments in three investigations: Thomas Reuters, RioTinto Alcan, e-book publishers (and Apple)

> Federal Cartel Office prohibits chemicals traders joint venture previously cleared in merger control

> OFT issues guidance on Competition Act procedures and extends trial of Procedural Adjudicator role

> OFT clears Vodafone/Telefonica site sharing agreement

> OFT concludes that there are no grounds for action in respect of Cathay Pacific/Virgin Atlantic information exchange

> Health and Social Care Act: Competition Law Regime

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