In 2018, the German Federal Cartel Office (FCO) celebrated its 60th anniversary. The FCO was founded in 1958 and began its work with 53 members of staff. Its task in the beginning was the prosecution of cartels and abuses of market power. Much – but not everything – has changed since then. The authority now has a staff of around 350 and has gained further competences, in particular in the area of merger control, which was added to its 'portfolio' in 1973, as well as public procurement law. Since 2017, the FCO can also carry out sector inquiries into consumer protection issues – a competence that the authority has already put into practice twice.
i Prioritisation and resource allocation of enforcement authorities
The year 2018 proved again that the FCO is an extremely active enforcer. A key area of activity of the authority's work was and is the digital economy. This applies not only as regards the enforcement activities of the FCO. Rather, the authority also actively contributes to the development of policy and administrative practice in this area. For example, in June 2018, the FCO launched a joint project together with the French Autorité de la Concurrence which aims at analysing the challenges raised by algorithms.2 This project follows the joint paper of both authorities on 'Competition Law and Data' that had been published in May 2016.
In a press release, Andreas Mundt, the President of the FCO, pointed out: 'Our key focus is on protecting competition in the digital economy. We have two key objectives when it comes to the major internet companies. Our task is to keep markets open to ensure they remain contestable and companies continue to have the opportunity to be successful with new ideas. We also need to make sure consumers can select the products and services matching their requirements in a transparent and fair environment.'3 Following this approach, the FCO pursued a number of cases in the digital economy. In particular, the FCO initiated proceedings against Amazon to examine its terms and business practices towards sellers4 and in February 2019 closed its investigation against Facebook by prohibiting the company from combining user data from different sources.5 The authority also launched a sector inquiry into market conditions in the online advertising sector.6
ii Enforcement agenda
The enforcement activities of the FCO in the area of cartels remained strong in 2018, encompassing, inter alia, seven dawn raids at 51 companies. Moreover, 2018 saw a significant increase in the amount of fines imposed by the FCO compared to the previous year: in 2017, the FCO imposed fines totalling 'only' approximately €66 million, whereas in 2018 fines in cartel proceedings totalled approximately €376 million. According to the authority, the higher level of fines in 2018 was mainly due to the fact that in the middle of 2017 the so-called 'sausage gap' in German law, which enabled companies to escape a fine of the FCO through internal restructuring measures, was finally closed. The FCO took up a number of new cases after the law was amended.7
In the area of merger review, there was no such downward trend. In 2018, the FCO received approximately 1,300 merger control notifications.8 In 12 of the cases filed in 2018, the FCO opened an in-depth investigation (i.e., the Phase II review). One of these cases was prohibited, while three were cleared by the FCO without conditions. In four cases, the parties abandoned their planned merger projects and withdrew their notifications. In four cases, the proceedings were still pending at the end of January 2019.
Horizontal and vertical restrictive agreements
The FCO's enforcement agenda as regards horizontal and vertical restrictive agreements covered both the old and the new: the authority not only dealt with cases in the digital sphere, such as the setting up of online trading platforms, but also with some 'classic' competition law problems, in particular the work of trade associations.
One of the most publicly visible enforcement matters of the FCO continued throughout 2018: the investigation into terms and conditions used by Facebook to establish whether these breached German data protection rules. The FCO started 2019 with a 'bang', by imposing far-reaching restrictions as regards the processing of user data on the company.9
i Significant cases
In 2018 the FCO imposed fines of around €376 million on 22 companies and trade associations as well as 20 individuals. The cases concerned a number of different sectors, in detail:
- In July 2018, the FCO imposed fines totalling approximately €205 million on six special steel companies, a trade association and 10 individuals for concluding price-fixing agreements and exchanging competitively sensitive information.10 The proceedings were initiated in November 2015 with a sector-wide dawn raid triggered by a leniency application. The leniency applicant escaped a fine. The companies fined admitted to the accusations and agreed to a settlement. Moreover, four of the companies had also cooperated with the FCO during the investigation, which was taken into account in the calculation of the fine. Investigations into four other companies and a trade association are still ongoing. The special steel products that were the subject of the agreements were generally sold based on a price model which essentially consisted of a so-called base price and surcharges for certain inputs, especially scrap and alloys. According to the findings of the authority, the steel producers had jointly agreed on and implemented a uniform method for calculating the scrap and alloy surcharges. There was also a basic agreement between the companies that the surcharges were supposed to be passed on to the customers on a 1:1 basis. The agreements were in place at least from 2004 until at the latest the dawn raid in November 2015. The FCO found that trade associations played a decisive role in the agreements: association meetings were used as a platform for implementing the cartel. Moreover, they also played an active role by processing and providing the companies involved with data for coordinating the scrap and alloy surcharges.
- In February 2018, the FCO imposed another fine on a harbour towage service provider for agreeing on quota cartels for several German ports.11 Other cartelists had already been fined at the end of 2017. In total, the FCO imposed fines of approximately €17.5 million on four companies and their representatives. All companies had agreed on a settlement. Furthermore, three of the fined companies had cooperated with the FCO. The leniency applicant was not fined.
- Also in February 2018, the FCO imposed a fine on another wholesaler for sanitary equipment – thereby concluding its investigation as regards a coordination with respect to the calculation of gross price lists and sales prices by wholesalers of sanitary, heating and air conditioning products over several years.12 Nine other companies had already been fined in 2015 and 2016. The fines imposed on the 10 companies and one individual amounted to approximately €23 million.
- Fines amounting to a total of €16 million were imposed on the newspaper publishing company DuMont, an individual responsible as well as – a rather unusual occurrence – a lawyer.13 In late 2000, DuMont and another newspaper publishing company agreed not to attack the other party's market shares. The agreement was flanked by a plan to establish cross-holdings between the two company groups as well as purchase and pre-emption rights for DuMont. The parties assumed that the cross-holdings would ensure that they would not 'ruin the markets' for each other. In order to 'formalise' this arrangement, the parties entered into an agreement that also included an allocation of circulation areas. This agreement was concluded at a notary in Switzerland in December 2000. As the parties were aware that the agreement would not be legally binding, they entered into a similar contract – only covering the proposed cross-holdings and pre-emption right but excluding the market allocation – at a notary in Germany at the same time. In March 2004, the parties notified the FCO of the proposed acquisition of 18 per cent of the shares by DuMont in the other publishing company. Owing to concerns raised by the FCO, the percentage of shares to be acquired was reduced to 9 per cent during the proceedings. Moreover, the parties also abandoned the pre-emption right that had originally been agreed upon. Nonetheless, the FCO prohibited the proposed acquisition. The parties challenged the prohibition decision before the Higher Regional Court in Düsseldorf. The court reversed the FCO's decision – in particular taking into consideration that the parties had abandoned the proposed pre-emption right. Following the decision of the court, DuMont acquired 9 per cent of the shares in its 'rival'. Shortly thereafter, the parties again agreed on a new pre-emption right for DuMont. The contract was again concluded at a notary in Switzerland and – not surprisingly – without informing the FCO. Moreover, a couple of months later DuMont increased its shareholding to the originally planned 18 per cent. The increase was discussed with the FCO – however, again without disclosing the pre-emption right. The contractual arrangements as well as the communication with the FCO were effected via a lawyer who advised DuMont group during the entire period and was actively involved in the operations. The parties eventually terminated their agreements in December 2016 and one of the companies filed a leniency application with the FCO. The authority conducted a dawn raid at DuMont's head offices and also at the law firm in which the lawyer involved is active. The leniency applicant in the case was not fined. Moreover, DuMont group and the individual responsible agreed to a settlement. In its press release as well as in the case summary, the FCO stressed the fact that the cooperation between DuMont and the other party to the agreement were not covered by the exemption for the press sector in Section 30(2b) of the German Act against Restraints of Competition (ARC) that was introduced in summer 2017. While this provision allows for cooperations between publishers to strengthen their economic basis for intermedia competition, the provision does not apply to price-fixing, territorial and customer allocation agreements.
- Fines of €13.2 million in total were imposed on two potato and onion packaging companies for fixing prices as regards their supplies to the Metro group.14 The proceedings against the two companies were initiated in May 2013 with a sector-wide dawn raid following a leniency application. According to the findings of the FCO, at least since early 2003 until the start of the proceedings, persons responsible at the companies involved had been in regular telephone contact with one another, especially in the run-up to the weekly offer for packed potatoes and onions. In their calls the company representatives informed one another of their purchase prices for potatoes and onions and agreed to use the same raw product price as the basis for their internal calculation of offer prices as well as the same or approximately the same amounts for other cost items.
- The last fining decision of 2018 concerned asphalt. The FCO imposed a fine of €1.43 million on a manufacturer of asphalt mixes for participating in a cartel involving prices, sales areas, customers and quotas for the supply of construction companies in the Rhine-Main area between 2005 and 2013. The cartel took the form of supplier consortia. The proceedings were initiated by a leniency application and the leniency applicant escaped a fine. The proceedings against another company – or rather its legal successor – were discontinued as the company had taken restructuring measures in order to make use of the so-called 'sausage gap'. The FCO pointed out that the companies involved in the cartel had been forming supplier consortia for years even though in most cases one company could have met the demand alone. Thus, the consortia mostly served to steady the market (i.e., to avoid competition for prices and bids among the participating undertakings). The fined manufacturer admitted to the accusations and agreed to a settlement.
ii Trends, developments and strategies
As in previous years, the track record of the FCO in 2018 illustrates the importance of leniency applications and other tip-offs to uncover competition law infringements. Furthermore, the trend of reaching settlements with the undertakings involved in a cartel remains unbroken. However, there is a significant downward trend when it comes to leniency applications: from 59 in 2016 to 37 in 2017 to only 21 in 2018. Whether this is due to a reduction in cartel activity – as a result of greater awareness of such issues and increased compliance activities in many companies – or based on the ever-increasing risk and impact of follow-on damage claims remains to be seen.
Another noteworthy development in the area of cartel enforcement concerned the investigation into metal packaging manufacturers. The FCO had initiated cartel proceedings against the manufacturers in spring 2015 on the basis of an anonymous tip-off. However, in April 2018 the authority referred the ongoing proceedings to the European Commission.15 While the FCO explained that it had uncovered evidence that the alleged offences were not limited to Germany but affected a number of other EU member states as well, there seems to have been another and more important motive for the referral: during the proceedings of the FCO, some of the companies under investigation carried out corporate restructuring measures as a result of which the FCO might not have been able to impose a fine on such companies owing to the 'sausage gap'. The European Commission faces no such difficulties. The FCO had warned companies for years that it might refer cases to the European Commission to make sure that the cartel members would not profit from the loophole in German law. With this referral the FCO demonstrated that the warnings were indeed not only empty threats.
Irrespective of the downward trend in terms of leniency applications, uncovering and investigating cartels was again a key area of the FCO's activity throughout 2018 and can be expected to remain so in years to come. However, the FCO may have to resort to other tools and techniques in order to detect cartels outside of its leniency programme.
III ANTITRUST: RESTRICTIVE AGREEMENTS AND DOMINANCE
i Significant cases
According to the FCO, the authority received an increasing number of enquiries from the engineering sector and the metal industry concerning cooperations between producers and their business customers or suppliers. The focus of these cooperations was often on platform models designed to improve digital networking for market participants. One of the projects the FCO dealt with in 2018 was the launch of a business-to-business online trading platform for steel products which was allowed by the authority subject to certain modifications of the original plans.16 In particular, the FCO had been concerned that the platform would increase transparency. Therefore, the platform had to be designed in such a way that there would be no anticompetitive exchange of information on prices and product availability. In particular, prices should only be visible to customers logged in on the platform and any new customer would have to identify itself with their VAT number. Moreover, there had to be organisational separation between the operator of the platform and its corporate group in order to make sure that there would not be a flow of sensitive information.
Another case in the steel industry concerned the reorganisation of a trade association. After several cartel proceedings in the industry, the German Steel Federation decided to take measurers in order to reduce the risks of competition law infringements within the association's framework.17 In particular, the association decided to limit the committee work to topics that are essential for representing the political interests of the German steel industry. Furthermore, the association installed an internal clearing centre and reorganised its activities in the area of collecting data and publishing statistics.
In October 2018, the FCO announced that it would be reviewing the cooperation between the pay-television provider Sky Deutschland and the operator of the DAZN streaming service Perform as regards the broadcasting of the Champions League in Germany.18 Sky had acquired the broadcasting rights for all matches between 2018 and 2021 in a tender. Following such tender, Sky and DAZN divided the rights among themselves. The FCO is concerned that the agreement could contribute to a further consolidation of Sky's market position and will examine whether the cooperation may restrict competition by object or effect.
Another proceeding that the FCO initiated in 2018 concerns Germany's largest furniture purchasing cooperation.19 The proceedings were triggered because an additional retailer intended to join the cooperation. The FCO – while acknowledging that joint purchasing cooperations can be beneficial in particular for smaller furniture retailers – stressed the fact that it wants to make sure that the buying power of purchasing cooperations does not increase to an extent that it raises concerns with regard to the furniture manufacturing landscape as a whole, which is mostly characterised by small and medium-sized manufacturers. The authority is concerned that 'if manufacturers are unable to compete in the long run because they cannot cope with the pressure raised by the retailers' conditions and disappear from the market as a result, there will be less variety on the market and prices will increase, putting consumers at a disadvantage'.
The year 2018 started as 2017 had ended: with a success for the FCO in court. In a decision of 12 December 2017, which was published on 19 January 2018, the Federal Court of Justice confirmed the FCO's decision in the ASICS case.20 According to the decision, ASICS may not forbid its dealers from using price comparison engines as such per se prohibitions which are not tied to quality requirements were inadmissible hardcore restrictions.
On 28 February 2018, the Higher Regional Court of Düsseldorf increased the fine that had been imposed on drugstore chain Rossman for vertical price fixing as regards the sale of roasted coffee more than fivefold – from €5.25 million that had been imposed by the FCO to €30 million.21 The court fully confirmed the findings of the FCO. When setting the fine, it took into account that the case concerned a vertical infringement of competition law with nationwide horizontal effects in the sale of a major consumer good.
Outside of these two court cases, 2018 appears to be a somewhat 'slower' year when it comes decisions of the FCO in the vertical sphere with only one notable case: in early 2018, the FCO closed a sample investigation it had conducted against the purchasing conditions for raw milk of Deutsche Milchkontor eG (DMK), Germany's largest dairy. Long-term exclusive supply agreements locked farmers into the relationship with a single customer whose ability to unilaterally retroactively set prices could lead to market foreclosure. While the changes DMK made to its agreements did not completely remove the FCO's concerns, they were considered an encouraging first step in the right direction and sufficient to close its investigation for the time being.22
Abuse of dominance
In 2018, the FCO conducted a number of abuse of dominance proceedings. However, the year started with a victory of the FCO before the Federal Court of Justice. In a decision of 23 January 2018, the Federal Court of Justice confirmed key elements of a decision of the FCO against the German retailer EDEKA from 2014.23 After its takeover of the stores of rival retailer 'Plus' in 2008, EDEKA had unilaterally demanded certain favourable conditions from its suppliers. These conditions were often referred to as 'wedding rebates' (Hochzeitsrabatte). The FCO started an investigation as regards EDEKA's demands in relation to the suppliers of sparkling wines as an example and found that such demands constituted an abuse of a dominant position. On appeal by EDEKA, the Higher Regional Court of Düsseldorf annulled the FCO's decision. The FCO in turn appealed against the decision of the Higher Regional Court in three key points and the Federal Court of Justice confirmed the position of the authority in this regard: (1) it found that EDEKA's demands for an alignment of conditions to individual, more beneficial conditions that had been granted to Plus constituted an abuse of bargaining power; (2) the Court also regarded EDEKA's demand for its own payment terms to be adjusted per se to those of Plus as abusive; and (3) finally, it held that EDEKA's request on suppliers to share the costs for the refurbishments of outlets was an abuse of bargaining power.
In a similar case in the furniture sector, the FCO objected to a demand by furniture retailer XXXLutz that conditions it enjoyed should also retroactively be applied to purchases made by another retailer it had acquired.24 The FCO pointed out that it saw no objective justification for demanding such benefits and that the fact that suppliers complied to such demands without objections could be a sign of their dependency on the retailer. Given the intervention of the authority, XXXLutz decided to abandon its demands for retroactive adjustments of the purchase conditions.
In May 2018, the FCO informed the public that it would not initiate abuse of dominance proceedings against German airline Lufthansa.25 After the insolvency of rival airline Air Berlin in 2017, Lufthansa held a monopoly position on several German domestic routes. A random analysis of price data showed that the prices of flights on connections that had become a monopoly were on average approximately 25 to 30 per cent higher than in the previous year when Air Berlin had still been operating. In individual cases the price increases were even higher. However, the FCO found that the price increases were only short term. From January 2018, British airline easyJet started offering flight connections on several of the previous 'monopoly routes'. The FCO found that in February 2018 the prices on these routes fell by on average 25 to 30 per cent compared to the prices in autumn 2017 (i.e., after the market exit of Air Berlin). Thus, the prices ended up at roughly the same level as before. In its press release and case summary regarding the case, the FCO highlighted that the question as to whether the price increases were the result of a price algorithm or human intervention was of no significance for the investigation and its outcome. In any event, the use of an algorithm for pricing would not relieve a company of its responsibility. While letting Lufthansa 'off the hook' for the time being, the FCO ended its report by stressing that it will keep an eye on the industry: 'The Bundeskartellamt will continue to closely observe developments on the German domestic flight markets. If it receives tip-offs about abusively excessive prices it will again consider whether to initiate proceedings.'
Online retailer Amazon had no such luck and did not escape with a simple 'warning'. Rather, in November 2018 the FCO initiated abuse of dominance proceedings against the company with the aim of examining Amazon's terms of business and practices towards sellers on its German marketplace amazon.de.26 According to the FCO, the terms of business and practices that might be considered as abusive are liability provisions to the disadvantage of sellers in combination with choice of law and jurisdiction clauses, rules on product reviews, the non-transparent termination and blocking of sellers' accounts, withholding or delaying payment, clauses assigning rights to use the information material that a seller has to provide with regard to the products offered and terms of business on pan-European despatch. The proceedings were triggered by numerous complaints the FCO had received from sellers. In contrast to the investigation of the European Commission, the FCO in its proceedings will not focus on Amazon's use of data to the disadvantage of marketplace sellers.
The year 2019 started with another milestone in the area of abuse of dominance proceedings: on 6 February 2019, the FCO issued its decision against Facebook and imposed far-reaching restrictions as regards the processing of user data on the company.27
ii Trends, developments and strategies
The fact that there were not many decisions of the FCO as regards vertical restrictions in 2018 by no means implies that the authority has lost its interest in this regard. Rather, it can be expected that vertical restrictions both in the digital as well as in the 'brick and mortar' sphere will remain a high priority on the FCO's enforcement agenda. This is illustrated by the fact that 2019 started with fines totalling €13.4 million on a bicycle wholesaler, its representatives and 47 retailers for vertical price fixing.28
The FCO is actively involved in the ongoing debate in Germany and other jurisdictions as to whether the competition law regime is well suited to deal with all the challenges brought about by the digital economy or whether it needs to be 'modernised' to avoid an enforcement gap. At any rate, the authority has not shied away from taking up cases in the digital sphere with its existing tools, even if that meant entering into uncharted legal waters.
IV SECTORAL COMPETITION: MARKET INVESTIGATIONS AND REGULATED INDUSTRIES
i Significant cases
In February 2018, the FCO opened a sector inquiry into the online advertising sector.29 Pointing to the growth of the sector and its economic relevance for advertisers and content providers active on the internet the authority feels a need to better understand the highly technical nature of this business, the possible access to and processing of data, and the role played by large companies 'with considerable market relevance' that other players claim have been able to set up closed systems (also referred to as 'walled gardens').
With regard to the sector inquiry into online comparison websites in the areas of travel, energy, insurance, telecommunications and financial services, the FCO presented its findings in December 2018.30 According to the authority, the inquiry confirmed the initial suspicions of consumer rights violations. In particular, consumers were apparently often not informed about the details of the ranking criteria for their search results and the comparison website's recommendations. This was considered as misleading.
In March 2018, the FCO published its latest annual report on the work of the Market Transparency Unit for Fuels – which incidentally celebrated its fifth anniversary in 2018.31 Some of the key findings of the report include the fact there are still significant price differences – of up to 30 cents/litre within one town – in the course of each day.
In the telecommunications sector, the FCO provided comments to the Federal Network Agency as regards the allocation of frequencies in mobile communications.32 In its press release, the FCO indicated that the authority had received several complaints from third-party providers about a lack of access to the mobile communications network in Germany. Given the paramount importance of mobile communications, the FCO pointed out that it would be desirable if a fourth network operator were to enter the market during the upcoming auction for mobile frequencies. Moreover, the authority stressed that it would be highly relevant for competition that service providers and mobile network operators be granted or retain their claim to appropriate non-discriminatory access to mobile communications networks.
ii Trends, developments and strategies
In addition to energy, fuel retailing and telecommunications which the FCO has been monitoring for years, the new competences of the authority in the area of consumer protection have opened new industries to the scrutiny of the FCO. It can be expected that the FCO will not only keep up but rather increase its activities in the consumer protection sphere and the authority also seems to be lobbying for additional competences in this regard.
In December 2017, the FCO launched a sector inquiry into smart TVs to clarify whether and to what extent smart TV manufacturers collect, pass on, and commercially use personal data, and whether consumers are being appropriately informed. 33 The FCO has continued its inquiry throughout 2018. A first report on the findings is expected in 2019.
VI MERGER REVIEW
i Significant cases
In 2018, the FCO opened an in-depth investigation in only 12 out of approximately 1,300 concentrations that were notified. Thus, more than 99 per cent of cases were cleared during the preliminary investigation. The cases that raised competition concerns covered various industries, such as hospitals and nursing homes, folding machines, office supplies, container services and bearings. In the majority of cases the concerns of the authority were based on horizontal relations between the parties. However, the authority also addressed vertical issues such as foreclosure. In detail:
- In February 2018, the agricultural cooperatives RWZ and Langard abandoned their plans to set up a joint venture after the FCO had issued a statement of objections.34 After conducting intensive inquires, the FCO concluded that the proposed transaction would have resulted in market shares of up to 50 per cent on regional markets (1) for plant pots and packaging used in the horticultural industry and (2) for the entire range of horticultural supplies. Direct purchases from manufacturers or from online distributors were not considered as a viable alternative source of supply.
- The acquisition of rail wagon leasing company CIT by its competitor VTG was only cleared subject to a condition precedent.35 The FCO found that VTG was already the largest supplier in Europe and that CIT, one of the last few remaining medium-sized players, was a close competitor. Since VTG had already acquired several competitors in recent years, the FCO expected that the acquisition of CIT would lead to the creation of a dominant position. In order to obtain clearance, the parties agreed to sell the entire business of CIT's German and Luxemburg subsidiaries and a certain number of additional freight cars to an independent third party before implementing the proposed transaction.
- In June 2018, Horizon and Brink withdrew their merger notification following a statement of objections issued by the FCO.36 Both companies are manufacturers of towbars for cars and light utility vehicles. Horizon, the largest supplier and market leader as regards towbars, had wanted to acquire Brink, the third-largest supplier. The FCO raised concerns as the transaction would have eliminated Brink as a close competitor of Horizon, the market share of the merged entity would have been more than 50 per cent and there were only few alternative suppliers. Finally, the merged entity would also have had a clear technological lead.
- Another transaction that was abandoned in June 2018 after the FCO had expressed concerns was the planned acquisition of NWB by Reinplus.37 According to the findings of the authority, the transaction would have reduced the number of providers of refuelling (or bunkering) services to shipping vessels in the German part of the river Rhine from three to two. Moreover, in contrast to the one remaining competitor the merged entity would also have been vertically integrated in the upstream fuel trading markets.
- In July 2018, the FCO cleared the acquisition of 40 per cent of the shares in and sole control of Deutsche Gießdraht by Aurubis.38 Deutsche Gießdraht was a joint venture between Aurubis and Coldelco and the transaction increased Aurubis' participation to 100 per cent. Deutsche Gießdraht produced continuous cast copper rods exclusively for its parent companies, which then sold such rods to industrial processors and traders in competition with one another. Thus, as a result of the transaction Codelco would disappear from the market and no longer be a competitor of Aurubis as regards the sale of copper rods. The FCO, however, found that customers after the concentration would still have the possibility to switch to alternative suppliers as there were several domestic and foreign producers in Europe supplying rods of comparable quality.
- After conducting an in-depth investigation, the FCO cleared the acquisition of the marine cargo handling business of TTS by Cargotec. This case is noteworthy as the authority could not prohibit the transaction even though the parties apparently had a strong market position as regards the manufacture of technical ship supplies, such as ship cranes, hatch covers, winches as well as ramps, outer doors, etc. This was due to the fact that demand for such products in Germany was weak. Therefore, the FCO had to apply the 'minor markets clause', according to which the FCO shall not prohibit a concentration if the impediment to effective competition concerns one or more markets that had a sales volume of less than €15 million in the last calendar year.39
- The FCO also conducted an in-depth review as regards the acquisition of Helene Müntefering-Gockeln, a waste management company operating in the Ruhr area, by Remondis, Germany's largest waste management company.40 The authority was concerned, inter alia, about the strong position of Remondis in the waste management markets in the Ruhr area. The FCO also examined whether the transaction could lead to a foreclosure of competitors with regard to access to sorting facilities. In this regard, it found that competitors already had sufficient capacities for sorting waste or were planning to build large enough facilities to prevent Remondis from foreclosure. In the end, after a review of around five months, in December 2018 the transaction was cleared unconditionally – in particular taking into consideration the large number of smaller competitors. The authority pointed out, however, that 'any further acquisitions may . . . have to be very closely examined'.
- In January 2019, the FCO prohibited the launch of a joint venture between the two bearing manufacturers Miba and Zollern.41 The authority found that the parties had a very strong position as regards the supply of plain bearings for large bore engines. The joint venture would have meant the loss of a supplier in an already highly concentrated market.
- In a case regarding hospitals and nursing homes in the Cologne area the parties withdrew their notification in December 2018 after the FCO raised competition concerns.
- Another case in which the parties withdrew their notification in January 2019 concerned the proposed acquisition of licences from National Geographic Partners by German publishing company Gruner + Jahr.
ii Trends, developments and strategies
In July 2018, the FCO together with the Austrian Federal Competition Authority published their hotly anticipated joint guidance on the new transaction value thresholds that were introduced into the ARC in 2017. According to such new threshold, transactions will need to be notified to the FCO if (1) the combined worldwide turnover of all companies exceeds €500 million; (2) one of the parties has a turnover in Germany of more than €25 million; (3) neither the target nor any other undertaking concerned has a turnover in Germany of more than €5 million; (4) the value of the consideration for the transaction exceeds €400 million; and (5) the target is active in Germany to a considerable extent. The guidance provides an overview of the definition of the consideration as well as further guidance as to what is considered as substantial domestic operations.
The digital economy is likely to continue to be of particular interest to the FCO – also in the area of merger control. The transaction value threshold mentioned above was actually introduced in order to enable the FCO to review acquisitions of digital companies or start-ups with a high market value but low turnover, such as the acquisition of WhatsApp by Facebook in 2014, which did not meet the thresholds for a merger control filing in Germany. Another sector that is expected to come under closer scrutiny due to the new thresholds is the pharmaceutical sector. However, so far experience with the transaction value threshold and whether it actually catches the cases the authority would like to review is limited.
The FCO continues to be an extremely active enforcer and is not afraid to take on cases or topics even if they are controversial or involve untested concepts. This applies in particular to the enforcement of competition law in the internet economy – an area in which the authority can rightfully be described as a pioneer.
1 Evelyn Niitväli and Marc Reysen are partners at RCAA.
2 Joint press release of the FCO and the Autorité de la Concurrence of 19 June 2018. The FCO's press releases, case summaries and decisions are available at the FCO's website: www.bundeskartellamt.de. Some are available in English.
3 See FCO press release of 27 August 2018 – '2017 Annual Report of the Bundeskartellamt'.
4 See FCO press release of ۲۹ November ۲۰۱۸.
5 See FCO press release of 7 February 2019.
6 See FCO press release of 1 February 2018.
7 See FCO press release of 20 December 2018.
8 See FCO press release of 20 December 2018.
9 See FCO press release of 7 February 2019 and case summary of 15 February 2019.
10 See FCO press release of 12 July 2018.
11 See FCO case summary of 26 February 2018.
12 See FCO case summary of 16 March 2018.
13 See FCO press release of 4 September 2018 as well as case summary of 20 September 2018.
14 See FCO press release of 3 May 2018 and case summary of 29 May 2018.
15 See FCO press release of 27 April 2018.
16 See FCO press release of 28 February 2018 and case summary of 27 March 2018.
17 See FCO case summary of 17 September 2018.
18 See FCO press release of 16 October 2018.
19 See FCO press release of 24 October 2018.
20 See Federal Supreme Court, decision of 12 December 2017, KVZ 41/17 (at http://juris.
Aktuell&Sort=12288&nr=80673&pos=25&anz=515) and FCO press release of 25 January 2019.
21 See FCO press release of 1 March 2018.
22 See FCO press release of 9 January 2018.
23 See Federal Court of Justice, decision of 23 January 2018 – Az. KVR 3/17.
24 See FCO press release of 11 January 2018.
25 See FCO press release of 29 May 2018 and case summary of 29 May 2018.
26 See FCO press release of 29 November 2018.
27 See FCO press release of 7 February 2019 and case summary of 15 February 2019.
28 See FCO press release of 29 January 2018.
29 See FCO press release of 1 February 2018.
30 See FCO press release of 12 December 2018 as well as the paper 'Consumer rights and comparison websites: Need for action' which is available on the website of the FCO at https://www.bundeskartellamt.de/SharedDocs/Publikation/EN/Schriftenreihe_Digitales_V.pdf?__blob=publicationFile&v=2.
31 See FCO press release of 16 March 2018 and of 30 November 2018.
32 See FCO press release of 24 August 2018.
33 See FCO press release of 13 December 2017.
34 See FCO press release of 23 February 2018.
35 See FCO press release of 21 March 2018.
36 See FCO press release of 18 June 2018.
37 See FCO press release of 20 June 2018.
38 See FCO press release of 13 July 2018.
39 See FCO press release of 6 November 2018 and case summary of 14 November 2018.
40 See FCO press release of 13 December 2018.
41 See FCO press release of 17 January 2019.