On 30 June 2013, the Eighth Amendment to the Act Against Restraints of Competition ("ARC") came into force in Germany. This reform introduces important changes to German merger control law and to the regulation of abuse of dominance. Business should take careful note of these changes for their M&A transactions and for their antitrust compliance programmes.

The principal changes are as follows.

Merger control

The amendments in relation to merger control concern both substantive and procedural provisions of the law. Their aim is to reduce the differences between German and EU merger control and to enable a largely identical assessment of transactions at German and EU level. However, some of the particularities of German merger control remain unchanged, such as the requirement to notify the acquisition of minority interests and the acquisition of a competitively significant influence.

SIEC-Test

The amendments have introduced the so-called SIEC-Test (significant impediment to effective competition) to the assessment of transactions under German merger control law, which brings it into line with EU merger control law. The Federal Cartel Office will investigate whether mergers significantly impede effective competition and therefore require prohibition. The previous test, which considered whether a dominant market position had been created or strengthened, will remain a prime example of how a merger can significantly impede effective competition.

The majority of mergers will not be affected by this change. It is to be expected that the Federal Cartel Office will continue to base its decisions primarily on the market dominance test. Of more significance for the decision making practice going forward is the fact that in future market dominance will be presumed if the market share is 40 % or more (previously 33 %).

De minimis markets

Up to now, transactions which affected "de minimis markets" of minor macroeconomic importance did not have to be notified. This exception has now been made a material part of the merger control rules. In future, transactions, even if they affect minor markets will require notification, and the Federal Cartel Office will investigate whether the requirements of the de minimis market clause are fulfilled and the planned transaction can therefore be approved – without an examination of the competitive impact.

Press/statutory health insurance funds/mergers in the context of local district reforms

Mergers in the press sector will be facilitated by the Eighth Amendment. As the specific multiplier for the turnover calculation in the press sector is going to be reduced from 20 to 8, the turnover thresholds are now significantly higher.

In addition, the Eighth Amendment provides that, by way of exemption, certain mergers in the press sector cannot be prohibited if they involve a failing company.

In future, voluntary associations of health insurance funds will also be subject to merger control.

Mergers of public institutions which occur under local district reforms are on the other hand explicitly excluded from merger control.

Procedural reforms

In order to prevent companies avoiding a merger control filing by splitting larger transactions into several smaller staggered acquisitions, an aggregation rule has, similar to that under EU merger control law, been introduced. Under this rule, if two or more acquisitions take place between the same companies within a two-year period, they will be treated as a single merger if by so doing the turnover thresholds are met for the first time.

A clearance decision can now have behavioural remedies attached to it, as is the case under EU merger control law, provided that they are as suitable and effective as divestitures for eliminating the competition problem which has been identified. However, the condition remains that this procedure should not result in a permanent monitoring of conduct.

Further, the Eighth Amendment now makes it explicitly clear that a post-merger filing can lead to a rectification of the invalidity of implementation acts under civil law thus eliminating any legal uncertainties which existed so far.

A further alignment with EU merger control is the planned relaxation of the standstill obligation on the acquisition of shares by way of public bid, providing voting rights are not exercised. This makes German merger control more compatible with takeover bids and their special deadline regime.

Other changes

The rules relating to abuse of dominance remain unchanged. The concept of fixed market share thresholds for the presumption of market dominance has been retained. However, as is the case in the field of merger control, the threshold has been increased to 40 %.

The revised version of the regulations on abuse of dominance should make the regulations simpler, user-friendlier and clearer. The substantive content of the regulations remains unchanged.

The provisional ban on so-called margin squeezes is permanently embedded in law.

The ban on the occasional sale of goods below cost price will be extended by a further five years for food.

The special price abuse regulation for dominant electricity and gas companies will also be prolonged.

With regard to procedural norms and powers it is worth noting that, in the context of the termination of an infringement, it is now regulated by law that the cartel authorities can intervene in the company assets (so-called structural measures) if the ban on cartels or abusive behaviour is infringed.

Furthermore, when the cartel authorities issue their order to terminate an infringement, they can also order the reimbursement of profit made as a result of anti-competitive behaviour.

The Eighth Amendment strengthens the position of consumer protection organisations which are granted standing and might be able to bring private antitrust litigation (except damages claims).

Finally, there are also some changes regarding fining proceedings.

The reform aims to close an enforcement gap on the question of legal succession in the Administrative Offences Act with a new rule in this Act. The rule makes it possible to impose a fine on the legal successor in the case that a company which has been fined undergoes certain prescribed changes of legal form.

In addition, a company's right to refuse testimony with regard to certain business or market related facts, which are of relevance when determining fines, has been limited.

Finally, the level of fines has been increased for legal entities and associations in cases involving a criminal law offence.