New Draft Guidance on Substantive Merger Control
Today the Bundeskartellamt has published its “Draft Guidance on Substantive Merger Control” for public consultation.
The document is intended to provide important guidance to companies. On its basis they can better predict which issues the Bundeskartellamt will be likely to focus on in its investigation of merger cases. The guidance document is a substantial overhaul of the previous document which was published in 2000 under the title “Principles of Interpretation of Market Dominance”. The 2000 document will be replaced by the new text once it is finalized on the basis of the consultation.
Every year the Bundeskartellamt has to decide on around 1,000 merger projects. In merger control proceedings it examines whether a merger will create or strengthen a dominant position. The guidance document explains which criteria the Bundeskartellamt uses to decide whether a project can be cleared or whether it raises competition concerns.
In contrast to the previous text, the new document places greater emphasis on the necessary appraisal of all relevant conditions in the market. It does not employ a checklist approach. Instead, the focus of the examination is to determine how the merger will change market conditions and whether this will be harmful to competition. The guidance document also builds on the economic concepts underlying the respective theories of competitive harm.
The President of the Bundeskartellamt, Andreas Mundt, stated:
“There has been a continual development in the merger control practice of the Bundeskartellamt in recent years. Sharper focus has been given to economic findings and concepts and their integration in its decision-making. This development is now documented in our new Guidance on Substantive Merger Control”.
In the context of the upcoming amendment of the Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, GWB), a particular focus of the discussion is whether the prohibition criterion in German merger control should be harmonized with the European merger control regulation. This would mean that the SIEC test (“significant impediment to effective competition”) would replace the dominance test. The current revision of the guidance document is timely because it sums up the current state of the Bundeskartellamt’s practice in this area and contributes to the discussion surrounding the upcoming revision of German competition law. Whether a merger would create or strengthen a dominant position would still remain a standard example for the SIEC test.
The Bundeskartellamt will publish the final version of its guidance document on its website in autumn after consultation and further review.
The draft text is available at: www.bundeskartellamt.de.
Comments on the guidance document can be submitted until 21 September 2011 to firstname.lastname@example.org.