The Merger Control Review: Germany


While the general turnover thresholds that trigger a merger filing requirement in Germany were, until recently, some of the lowest across the continent, the German legislator has increased these thresholds appreciably through the tenth amendment (the 10th Amendment) to the German Act against Restraints of Competition (ARC), which entered into force on 19 January 2021. Namely, the two national turnover thresholds were raised from €25 million to €50 million and from €5 million to €17.5 million. According to estimates of the German Federal Cartel Office (FCO), this will reduce the yearly case load by 30 per cent to 40 per cent. However, as the FCO received around 1,200 filings in 2020, its total case load will still remain significantly higher than in most other countries since the turnover thresholds continue to be below average considering the size of Germany's economy.

Despite this adjustment of the general turnover thresholds towards a more balanced level, German merger control continues to stand out. This is particularly true when it comes to the types of transactions that are caught by the regime, which goes significantly beyond the usual 'acquisition of control' (i.e., the applicable test in the vast majority of European jurisdictions (along with the EC Merger Regulation2 (ECMR) itself)). In addition, the 10th Amendment also introduced an entirely new set of thresholds based on which individual companies can, under certain conditions, be ordered by the FCO to notify any transaction in specified business sectors for a period of three years if the target company has a turnover exceeding as little as €2 million with more than two-thirds of its turnover being generated within Germany. While the FCO expects only very few cases arising from this new provision, this marks a new chapter in German merger control as it enables the FCO to single out individual companies and subject them to a much stricter set of rules. Finally, the 10th Amendment introduced a new exemption for certain types of hospital mergers to incentivise a consolidation of the German hospital market.

Although the FCO is a very experienced authority that never shies away from taking a hard line if a transaction raises serious competition concerns, its approach is generally pragmatic and cooperative. The FCO's divisions are each responsible for certain industries. Thus, parties can generally expect decision makers with sector-specific knowledge and experience. Also, the formal requirements for submitting a complete notification in unproblematic cases are less burdensome than in many other jurisdictions.

In cases that raise serious competition concerns, the FCO's approach tends to be more legalistic and focused on documentary and empirical evidence than in other major jurisdictions where economic theories increasingly appear to dominate merger reviews. Even if this is only a subtle difference – the FCO certainly employs economic theories and involves its chief economist team – it can make investigations less data-intense. On the other hand, it can also lead to parties fearing that the authority does not sufficiently understand commercial realities.

All in all, the German merger control regime, although differing in many respects from regimes in other countries, strikes a strong working balance between an unusually wide scope of applicability on the one hand and a flexible and practical review on the other.

Regarding its industry focus, the FCO continues to show an active interest in the numerous aspects of e-commerce and online markets, big data, platform markets, network effects, online marketing and others. Companies involved in transactions that require merger clearance in Germany are well advised to consider the implications of German merger control at an early stage of their contemplated transactions.

Year in review

Despite the coronavirus pandemic and its temporary worldwide impact on mergers and acquisitions in general, 2020 saw an average level of merger control enforcement in Germany when compared to previous years. With the total number of merger filings submitted to the FCO decreasing from approximately 1,400 in 2019 to around 1,200 in 2020,3 the FCO issued five decisions following in-depth Phase II reviews in 2020. While three Phase II mergers were cleared unconditionally, two mergers were only cleared subject to remedies. No mergers were prohibited. In another case, a merger filing was withdrawn by the parties after the FCO informed them about its competition concerns during the merger review. In cases that may raise serious competition concerns, the FCO continues to be prepared to engage in detailed pre-filing consultations (see Section IV). The following overview highlights some recent key cases and developments in German merger control.

Online platforms and big data

E-commerce and online content, including online platforms, continued to be an important focus of the FCO's merger reviews.


In October 2020, the FCO cleared the proposed acquisition by Allianz Group, one of the leading providers of car insurance in Germany, of ControlExpert, a leading provider of automated IT-based services to settle motor vehicle claims in Germany, only after having conducted an in-depth Phase II review despite the lack of horizontal overlaps.4 It particularly focused its review on potential vertical foreclosure concerns with an interest in whether innovations of ControlExpert would be made exclusively available to Allianz.

ProSiebenSat.1/The Meet Group

In July 2020, the FCO cleared the acquisition of The Meet Group, an operator of online dating platforms including Lovoo, which is a prominent player in Germany, by Germany's leading player of online dating platforms, Parship ElitePartner.5 The acquisition was cleared in Phase I, however, under the extended statutory deadline of two months (instead of one month) due to the impacts of the coronavirus pandemic.


In April 2020, the FCO cleared the acquisition of Germany-based Vossloh by Chinese state-owned CRRC,6 both active in the market for the manufacture of shunting locomotives. The decision raised the following noteworthy points: first, the FCO reviewed market share statistics for the past five years, instead of only the highest actual market shares in the year prior to the merger, to capture the volatility of the shunting locomotives market; second, it also increased the time period taken into account for its market prognosis from the usual three to five years to five to 10 years; and third, it analysed in detail whether and to what extent the fact that the acquirer is owned by a state with a centrally planned economy can have an impact on the merger control assessment (e.g., size of acquirer's group, possibility to systematically employ low-price strategies based on state financing and subsidies). Against the background of the European Commission's proposal to introduce a specific merger control regime for non-EU purchasers that have received foreign subsidies and the globally increasing activities in foreign investment control, it will be particularly interesting to see how the FCO will deal with comparable cases in the future.

The merger control regime

i Jurisdiction

The German merger control regime provides for a mandatory pre-merger filing requirement if:

  1. the transaction constitutes a concentration pursuant to Section 37 of the ARC; and
  2. one of the following occurs:
    • the turnover thresholds of Section 35(1) of the ARC are met;
    • the turnover and transaction value thresholds of Section 35(1a) of the ARC are met; or
    • the acquirer is subject to a Section 39a ARC order and the target meets the turnover thresholds of Section 39a(2) of the ARC.


Unlike in many other jurisdictions, German merger control not only covers the acquisition of control7 (solely or jointly), but also:

  1. the mere acquisition of at least 25 per cent of either the capital or voting rights in another company, irrespective of whether or not the shareholding will confer control or a significant influence over the target (all existing shareholdings of all entities of the purchaser's group have to be taken into account); and
  2. the acquisition of shares or voting rights even below the threshold of 25 per cent if the transaction results in the acquisition of a 'competitively significant influence'. Competitively significant influence is less than control but generally requires the acquisition of significant influence through additional rights (plus factors) such as (1) information rights in respect of the operative business of the target, (2) the right to nominate members of the management board, the board of directors or the supervisory board, or (3) de facto blocking minority on annual shareholder meetings. Such influence is competitively significant if the purchaser is or controls a competitor of the target, or if the purchaser or any of its group companies is party to a significant vertical supply relationship with the target.

Turnover thresholds

The turnover thresholds8 (referring to the previous full business year) are as follows:

  1. the combined worldwide turnover of all undertakings concerned exceeded €500 million;
  2. one undertaking concerned had a turnover exceeding €50 million within Germany; and
  3. at least one further undertaking concerned had a turnover in Germany exceeding €17.5 million.

Transaction value threshold

The transaction value threshold is structured similarly to the size-of-transaction test under US merger control law and will be triggered if the transaction value exceeds €400 million and the target has 'significant' business activities in Germany (local nexus). It is, however, combined with turnover thresholds and will apply if:

  1. the combined worldwide turnover of all undertakings concerned exceeded €500 million;
  2. in Germany:
    • one of the undertakings concerned had turnover of more than €50 million; and
    • neither the target nor any other undertaking concerned had turnover of more than €17.5 million;
  3. the value of the consideration paid in return for the transaction is more than €400 million; and
  4. the target has significant activities in Germany.

The FCO and the Austrian Federal Competition Authority issued the joint 'Guidance on Transaction Value Thresholds for Mandatory Pre-merger Notification (Section 35(1a) of the ARC and Section 9(4) of the Austrian Cartel Act)' in July 2018.9 While the FCO does not often resort to the transaction value threshold to assume its jurisdiction, it did so in the 2020 Paypal/Honey case concerning a free browser extension that automatically finds and applies promotional and discount codes in online shops.10

Application of reduced turnover thresholds based on FCO injunction

The 10th Amendment provided the FCO with a tool to temporarily lower the turnover thresholds for individual undertakings in individual economic sectors to be determined by the FCO by way of an 'injunction to notify future mergers' (injunction). Once this injunction is imposed on an undertaking, the undertaking has to submit a merger filing for any concentration over a period of three years in which it acquires a target with a German turnover exceeding as little as €2 million with more than two-thirds of its total turnover being generated in Germany.

An injunction can be imposed on a company if the following criteria are met:

  1. the FCO has conducted a market investigation in the economic sector or sectors in which it would like to impose an injunction on an undertaking;
  2. the worldwide turnover of the undertaking addressed by the injunction exceeded €500 million in the previous business year;
  3. there is an indication that future mergers involving the undertaking addressed by the injunction would restrict competition in Germany in the economic sectors determined in the injunction; and
  4. in the economic sectors determined in the injunction, the undertaking has a share of at least 15 per cent in the supply or demand of products or services in Germany.

According to the legislative documentation, an indication according to (c) can, for example, be deduced (1) from sector inquiry findings or from the fact that (2) a dominant undertaking has formed a pattern of consecutively acquiring smaller competitors, (3) an undertaking in a sensitive economic sector or an already concentrated market acquires a potentially threatening newcomer or (4) there are complaints by competitors, customers or consumers. According to the FCO, it does not expect to impose more than one or two injunctions per year, so it remains to be seen whether and to what extent this new tool will have an impact on German merger control.


If the same parties enter into two or more transactions concerning the acquisition of parts of a company within a two-year period, these transactions will be treated as a single concentration. The thresholds will apply to the transaction as a whole, to ensure that parties do not circumvent a notification obligation by slicing a deal into staged transactions, each falling below the relevant threshold.

If the transaction also exceeds the turnover thresholds of the ECMR (see the EU Merger Control chapter), a notification has to be made to the European Commission only, without the need for an additional review in Germany (the 'one-stop shop' principle). However, if a transaction meets the ECMR turnover thresholds but does not qualify as a concentration under the ECMR (e.g., in the case of a non-controlling interest above 25 per cent or a non-full-function joint venture), German merger control remains applicable.


The ARC provides for two exemptions. A filing will not be required if:

  1. the concentration has no 'domestic effects' or, in other words, no impact on the German market. Given that the German merger control regime requires at least two undertakings concerned generating turnover in Germany, this exemption only plays a role in joint venture cases where both joint venture partners, but not the joint venture itself, generate turnover in Germany; or
  2. the concentration concerns the merger of hospitals or individual specialties of hospitals across different geographic locations and additional formal requirements are met. While such concentrations do not require clearance, they do require a formal notification post-consummation of the merger.

Even though it is not an exemption from the formal filing requirement but rather a restriction of the FCO's scope for assessing competition concerns, there is still an exemption when assessing mergers affecting de minimis markets (i.e., markets in existence for more than five years, with total turnover of less than €20 million in Germany in the previous calendar year).11 Mergers meeting the exemption criteria need to be notified if they meet the relevant thresholds but cannot be blocked to the extent that de minimis markets are affected.

ii Consequences of completion without merger clearance

Concentrations that are subject to merger clearance in Germany must not be completed prior to having obtained clearance.12 The consequences of infringing the filing obligation are threefold.

A transaction that is completed before having obtained clearance is deemed to be invalid as far as Germany is affected. In particular, the acquisition of shares in German companies and the acquisition of assets located in Germany are invalid until clearance is obtained. In addition, intellectual property rights of the target are unenforceable in Germany. To remedy a legally defective acquisition and to obtain retroactive effect, the parties are required to submit a post-completion notice containing all details required in a pre-merger notification. The FCO will then assess the competitive issues triggered by the proposed transaction directly as part of a 'merger dissolution procedure' without any statutory deadlines running.

The parties are subject to fines that can theoretically range to up to 10 per cent of the parties' worldwide group turnover in the previous business year. In practice, the fines have been well below this threshold, but can still be significant depending on the circumstances.

Finally, infringing the filing obligation can – if detected – seriously affect the parties' relationship with the authority, which will make future filings much more difficult.

iii Procedure

There is no filing deadline. The filing can be made as soon as the parties to the concentration can show a good faith intention to complete the transaction.

There is also no official filing form that needs to be completed. Instead, German notifications are submitted in the form of a letter that has to include certain information required by law and can, since the implementation of the 10th Amendment, be submitted online (by German attorneys).

The fact that a filing has been received (including the names of the parties and a brief description of the affected markets) will be published on the FCO's website shortly after the submission of the filing.

The German merger control regime also provides for a potential stop-the-clock, with an automatic extension of the deadlines, upon submission of a remedy proposal, similar to that which occurs under the EU merger control regime. Once notified, the vast majority of cases are cleared after a Phase I inquiry lasting a maximum of one month. In straightforward cases, the FCO is generally prepared to clear the transaction even well before expiry of the Phase I one-month waiting period. Although this is entirely within the discretion of the FCO and also depends on the workload of the case handler, it is not uncommon to receive early clearance after two or three weeks, or even earlier.

The maximum time frame for an in-depth review, encompassing Phase I and Phase II, was extended through the 10th Amendment, from four months to five months from the time of receipt of the complete notification to take into account the increasing complexity and required economic scrutiny of mergers in today's world. The five-month period is extended by one month, to six months, if remedies are offered. With the parties' consent, the time frame can be extended further without any given limit.

In cases that give rise to competition concerns, the FCO must inform the notifying parties within one month of receipt of the complete notification that it is initiating an in-depth investigation of the proposed transaction. In the absence of such communication prior to the end of Phase I, the proposed merger is deemed to be cleared by time lapse (which never occurs in practice). Phase I clearances are communicated by standard clearance letters merely informing the parties that the requirements for a prohibition are not met without containing any substantive reasons or competitive assessment. A reasoned decision will only be issued following an in-depth Phase II investigation. As opposed to Phase I decisions, Phase II decisions are published by the FCO (in confidential versions agreed upon with the parties) and can be appealed before the Higher Regional Court of Düsseldorf.

In the case of a prohibition decision, the parties also have the option to apply for an overruling approval by the Federal Minister for Economic Affairs and Energy if the negative effects of the merger on competition are outweighed by benefits to the economy as a whole or if the merger is justified by an overriding public interest. The ministerial decision may include conditions imposed on the parties. Following the EDEKA/Kaiser's Tengelmann ministerial authorisation and the dispute about the lack of transparency, the ninth amendment provided for a faster and more transparent procedure.

Third parties, such as competitors, suppliers and customers of the merging parties, generally have the opportunity to comment on a proposed merger in the context of information requests issued by the FCO in the course of its investigation, or to submit unsolicited comments and concerns.

Additionally, third parties whose economic interests will be substantially affected by a decision of the FCO may formally intervene in the proceedings upon application and admission by the authority. Once admitted, third-party interveners have the right to be heard, to submit comments on the proceeding and to have access to the non-confidential part of the authority's file. They also have the right to appeal the FCO's decision.

The FCO is among the most active authorities in the EU's referral system: Article 4(4) and 4(5) of the ECMR provide for the possibility of pre-notification referrals at the initiative of the notifying parties, while Articles 9 and 22 provide for the (often problematic) possibility of post-notification referrals triggered by Member States – an option used by the FCO on a regular basis.

iv Substantive assessment

The FCO principally applies the same substantive test as the European Commission; that is, whether the proposed transaction would lead to a significant impediment of effective competition (SIEC); in particular, by means of the 'creation or strengthening of a dominant position'.

According to its Guidance on Substantive Merger Control of March 2012, the FCO first distinguishes between three broad categories of mergers: horizontal, vertical and conglomerate. For each of these three categories, in line with the European Commission's Horizontal and Non-Horizontal Guidelines, the German competition authority distinguishes again between single and collective dominance.

For a finding of single and collective dominance, the German merger control regime provides for the following – rebuttable – presumptions: a single undertaking has a share of at least 40 per cent of the market; three or fewer undertakings possess an aggregate share of at least 50 per cent of the market; or five or fewer companies hold a combined market share of at least two-thirds.

However, in the FCO's decision practice, these presumptions play a very limited role, with the authority reviewing the competitive effects brought about by the proposed merger in their overall context. In practice, the presumptions primarily provide an indication as to whether a deal requires closer scrutiny.

The cooperative aspects of joint ventures will, in addition, be examined under the rules relating to anticompetitive agreements (Section 1 of the ARC).

A merger that leads to an SIEC will not be prohibited if the requirements of the balancing clause are met (i.e., if the companies show pro-competitive effects in a different market that outweigh the negative effects on the affected market). For the pro-competitive effects presented by the parties to be taken into account, they must be of a structural nature. When the FCO reaches the preliminary conclusion that a concentration raises competition concerns, the parties can offer commitments in Phase II to secure conditional approval. Conditions precedent (i.e., conditions that must be satisfied before the actual merger may be implemented, such as upfront buyer solutions) are generally preferred by the FCO.

The type of remedy most likely to be accepted by the FCO is a structural remedy, namely a divestiture that removes the competition concerns. Even in cases where such structural remedy is not possible, the parties will likely face resistance from the authority in accepting any other remedy solution. While behavioural remedies are not generally impermissible, they are only (reluctantly) accepted if they are equivalent to divestitures in their effects and do not require constant monitoring by the FCO. Not surprisingly, it therefore continues to be difficult to convince the authority not to insist on structural remedies as a condition precedent. In addition, certain transactions may not only require clearance by the FCO but also other regulatory approvals based on special rules for – among others – foreign investments, telecommunications or media. These rules apply in addition to the general merger control regime, are administered by special agencies and authorities, and can impose suspensory clearance requirements as well.

Other strategic considerations

The wide concept of reportable transactions under the German merger control regime, which also covers non-controlling minority interests below 50 per cent and in certain cases even below 25 per cent, regularly results in companies being required to notify transactions in Germany even though no other competition authorities are competent to review the transaction. Despite the far-reaching German merger control regime, there is still room for transaction structures that do not trigger a German merger filing requirement. For example, it may be a suitable strategy to first merge new businesses before they are acquired by an investor if only the investor would trigger the relevant merger control thresholds.

While pre-filing contacts are neither mandatory nor generally expected by the FCO, they can be very helpful in addressing and overcoming potential competition issues early on or in securing a Phase I clearance where otherwise the FCO would have to open a Phase II review simply to have enough time to assess the transaction. Such pre-filing contacts are handled by the FCO on a strictly confidential basis and are only shared with other competition authorities upon the parties' approval.

The FCO has a close involvement with, and a leading role in, both the European Competition Network and the International Competition Network, whose chair is Andreas Mundt, the president of the FCO. The close communications between the authorities require a coherent and consistent merger filing strategy by the parties in cases that are subject to merger filings in multiple jurisdictions.

Empirical and documentary evidence play an important role in German merger control. While the German merger control rules do not provide for a mandatory submission of internal documents prepared in connection with a transaction, such documents can be requested in an information request and reviewed by the FCO during the course of the merger review. Thus, utmost care is required when drafting internal documents in preparation for the transaction and presenting it to either boards or investors; in particular, when it comes to the expected effects of the transaction. In transactions that might give rise to competition concerns, all relevant draft documentation should be thoroughly prepared by involving operations and management and should, ideally, be reviewed by in-house or external antitrust counsel before finalisation to avoid any negative impact on obtaining merger clearance.

The FCO acts independently and free from political influence. Attempts to lobby or even to exercise political influence almost always prove to be counterproductive.

As third-party interveners can play a strong role in merger proceedings, it can be an attractive proposition to become an intervener to challenge (certain parts of) the transaction, resulting in remedies that may form attractive acquisition opportunities.

Outlook and conclusions

The 10th Amendment has intensified the FCO's already prevailing focus on internet, online and big data issues. This can be seen not only from its title, 'Digitisation Law', and its explicitly stated efforts to tackle challenges particularly arising from digitisation and digital platforms, but also from its prominent cases against Facebook and Amazon in 2019. Even though the corresponding amendments to the ARC and the Facebook and Amazon cases relate to the abuse of dominance, they send a clear message on the FCO's focus of attention in its overall work, including merger control. Additionally, after having completed sector reviews on comparison portals in April 2019, smart TVs in July 2020 and user ratings in October 2020, and after publishing a joint study with the French Competition Authority on algorithms and competition in November 2019, the FCO is currently conducting a sector review on online advertising. Transactions involving online businesses should, therefore, be thoroughly prepared in regard to the assessment of relevant customer data, network effects and innovations. Confidential pre-filing contacts may be recommendable to avoid surprises during the actual review process.

The FCO will remain active in requesting referrals back from the European Commission to national level if the main effects of the transaction are to be expected in Germany.

As regards substantive reviews, while the role of economists will continue to grow (considering the extension of the Phase II deadline from four months to five months), it is also likely that it will remain less relevant than in other jurisdictions, with documentary and empirical evidence remaining important factors in investigations.


1 Alexander Rinne is a partner and Alexander Zyrewitz is an associate at Milbank LLP.

2 Council Regulation (EC) No. 139/2004.

3 This number is expected to decrease by approximately 40 per cent through the increase of the national turnover thresholds.

4 FCO, decision of 20 October 2020, B9-49/20 – Allianz/ControlExpert.

5 FCO, decision of 6 July 2020, B6-29/20 – ProSiebenSat.1/The Meet Group.

6 FCO, decision of 27 April 2020, B4-115/19 – CRRC/Vossloh.

7 The definition of control closely follows the definition contained in the EC Merger Regulation and the Consolidated Jurisdictional Notice under Council Regulation (EC) No. 139/2004 on the control of concentrations between undertakings.

8 Special rules apply for the calculation of the turnover of financial services providers, insurance companies, companies active in the media sector (television broadcasting, radio, newspapers and periodicals) and certain trading activities. Companies operating in the field of publication, production and distribution of newspapers and magazines are subject to a turnover multiplier.

11 Section 36(1), No. 2 of the ARC.

12 In line with the EU's merger control rules, the eighth amendment introduced an exception to the suspension obligation according to which public takeover bids or a series of transactions in securities may be implemented prior to clearance, provided that the transaction is notified to the FCO without delay and the acquirer does not exercise the voting rights attached to the securities in question or does so only on the basis of an exemption granted by the FCO.

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