Germany about to pass law amending standard test, minor markets exemption, behavioral remedies
- The German Congress is currently reviewing a bill which brings a few changes to its merger review process.
- The main, substantive change in the German merger review process will be the introduction of the Significant Impediment of Effective Competition (« SIEC ») test in place of the traditional dominance test. This means that mergers which do not lead to market dominance but yet may impede effective competition (eg. on oligopolistic markets) will be subject to stronger scrutiny.
- Another major jurisdictional change is the end of the de minimis market exemption from the filing requirement: from now on, the transactions which occur on a market with total sales of 15m € or less and which exists for at least 5 years will have to be notified (but will be cleared even if they meet the SIEC test).
- With respect to remedies allowing the transaction to get through, commitment decisions subjecting the company to continued control (equivalent to divesture in their effects) are no longer prohibited.
- Also, the German Competition Authority will now appraise together series of transactions which do not individually meet the notification threshold, meaning those transactions are now potentially subject to notification.
- The reform (initially set to apply as of 1 January 2013) shall enter into force shortly (14 days after the publication of the law).
Italy amends merger filing thresholds and abolishes filing fee
- As of 1 January 2013, the former alternative turnover threshold triggering the merger notification requirement has become a cumulative turnover threshold: transactions must now be notified if the parties’ combined turnover in Italy exceeds € 474 million and the target’s turnover in Italy exceeds € 47 million. This change, which will result in fewer transactions being subject to review in Italy, also means that the Italian Competition Authority will be able to better focus on those transactions still subject to review.
- For those transactions, another noticeable change is the abolition of the filing fee (1.2 percent of the value of the transaction, with a floor of € 3,000 and a cap of € 60,000). In lieu of this fee, the reform introduced a new annual fee of 0.08% per thousand euros of Italian turnover applicable to all companies registered in Italy with a turnover exceeding € 50 M (with a floor of € 4,000 and a cap of € 400,000), payable no later than 31 July 2013. It is worth noting that this new fee applies whether or not a transaction is notified.
- Mergers, acquisitions and changes of control of an undertaking are subject to EU merger control rules, irrespective of the parties’ nationality or presence in the EU, if they sell products or provide services in the EU.
- Depending upon the parties’ turnover and market shares, the filing and clearance of such transactions may be required in one or more EU Member-states or at the EU level.
- Breaches of EU or national merger control rules may result in fines of up to 10% of an undertaking’s group worldwide turnover.