Bundeskartellamt imposes for the first time fines for false information in merger notification case
05.10.2005
The Bundeskartellamt has imposed fines in merger control proceedings totalling 250,000 EUROS against INVISTA Resins & Fibers GmbH, Hattersheim, a subsidiary of the American Koch group based in Kansas, for submitting incorrect information in the notification of a merger in 2004. Company representatives responsible for notifying the merger had deliberately given incorrect information about market conditions.
The President of the Bundeskartellamt, Ulf Böge stated: “The Bundeskartellamt cannot allow the clearance of a merger project in preliminary examination proceedings on the basis of deliberately false information”.
In answer to critical comments from competitors the Bundeskartellamt had examined market conditions in closer detail in main examination proceedings and warned against the merger project. This led to the withdrawal of the notification. No evidence could be found of a wilful participation in the competition law offence on the part of the lawyers entrusted with the proceedings. The company has appealed against the order to impose the fine.
Although clearances of merger projects obtained on the bases of false information can be revoked by the Bundeskartellamt, in the case of merger control proceedings with time limits correct and complete information is indispensable for their orderly processing in order to gauge from the beginning of the examination period what further investigations are necessary in the matter. Otherwise there is the possibility that the Bundeskartellamt could be restricted in its decision-making and would have to revoke the clearance on the knowledge of the submission of false information. The legislator has therefore made such conduct an explicitly punishable offence.
As the competition law offence in question was committed in 2004 the fine levels in the Act against Restraints of Competition as published on 26.08.1998 had to be taken as a basis for calculating the fine, which provided for fines of up to 500,000 EUROS. From 1 July 2005 fines of up to 1 million EURO can be imposed in such cases.