GERMANY Law and Practice Contributed by: Daniela Seeliger, Christoph Barth, David-Julien dos Santos Goncalves and Kaan Gürer, Linklaters
on the same or upstream- and downstream markets to the target’s activities which take place in Germany. However, it is not explicitly required that the target company has a presence or assets in Germany for establishing these effects. 2.9 Market Share Jurisdictional Threshold There are no market share thresholds under German merger control law. 2.10 Joint Ventures The following joint ventures are subject to merger con - trol legislation: • the acquisition of joint control of another undertak - ing; • the acquisition of shares reaching 25% or 50% of the capital or the voting rights in a situation in which at least one other undertaking holds 25% or more of the shares; and • the acquisition of a competitively significant influ - ence in an undertaking controlled by a third party. In Germany, joint ventures generally have to be noti - fied if two or more acquirers gain joint control, or if each of them acquires at least 25% of the shares, or if they acquire a competitively significant influence on the target. Contrary to the EU merger control regime, this also includes non-full-function joint ventures. If a participating undertaking is jointly controlled by several undertakings, the full turnover of all parent companies is considered when the turnover thresh - olds are calculated. Likewise, in cases where a parent company is a participating undertaking in a transac - tion, the full turnover of the joint venture has to be considered for the turnover calculation, not only in the amount of the interest held. 2.11 Power of Authorities to Investigate a Transaction If a transaction does not meet the jurisdictional thresh - olds, the FCO does not have any competence to make further investigations or “call in” a transaction under the merger control rules. However, in view of the ECJ’s Towercast judgment, it cannot be ruled out that cer - tain transactions, albeit falling below the merger con -
trol thresholds, could be scrutinised under the rules regarding the abuse of a dominant position. 2.12 Requirement for Clearance Before Implementation The participating undertakings are prohibited from implementing the transaction prior to clearance. 2.13 Penalties for the Implementation of a Transaction Before Clearance If the participating undertakings infringe this suspen - sion obligation, they are subject to fines of up to 10% of the undertaking’s total group turnover in the pre - ceding business year. Individuals (eg, board members) who violate the suspension obligation are subject to fines of up to EUR1 million. Fines In the past, the FCO has issued fines in several cases where a concentration has been implemented prior to clearance and is certainly willing to continue this practice. The highest fines imposed on an undertaking at the time of writing amounted to EUR4.5 million in 2008 and EUR4.1 million in 2009 (which in the latter case, however, was revoked). In most cases, the FCO issues a press release indicating the penalty for gun jumping and the undertakings concerned. Based on publicly available information, the FCO has already imposed a fine of EUR40,000 on a board mem - ber for breaching the suspension obligation (however, this was later revoked by the courts). In practice, indi - vidual fines for gun jumping seem to be rare. Demerger Proceedings Legal acts (eg, the transfer of shares) that infringe the suspension obligation are void. However, legal inva - lidity resulting from gun jumping may be remedied. Remedying such actions requires notification of the implementation of the transaction to the FCO. The FCO then opens demerger proceedings, in the course of which it applies the same substantive test as in a standard merger control review. Demerger proceed - ings are not subject to any deadlines. Should the FCO be satisfied that the transaction does not meet the requirements for a prohibition (as it is or after removal of the relevant competition concerns
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