The German Supreme Court has delivered its long-awaited judgment on one of the jurisdictional thresholds of German merger review. German merger control is characterized by very low thresholds, which renders many acquisitions by large multinationals notifiable in Germany, even in cases where the target firm has only limited sales in Germany. Under the so-called de minimis market clause, a transaction is not notifiable (or cannot be prohibited) if it affects a market that has been in existence for at least five years and in which, during the financial year prior to the merger, the turnover of all goods or services did not exceed €15 million. The law does not provide, however, whether this threshold applies only as regards the German market or whether the potentially larger economic market (e.g. EU-wide) must be taken into consideration. Germany’s competition authority, the Federal Cartel Office (FCO) took the latter view, thereby extending its jurisdiction considerably. The Supreme Court, however, considered that a jurisdictional rule must be limited to Germany. It consequently overruled the FCO and supported an earlier court decision that had annulled a previous FCO decision.
For industries such as the chemical industry, where a narrow market definition may lead to high market shares of individual companies, this judgment may have a significant impact on risks or delays associated with proposed acquisitions.