GERMANY Law and Practice Contributed by: Daniela Seeliger, Christoph Barth and David-Julien dos Santos Goncalves, Linklaters
ket positions in the relevant market and whether, and if so how, these positions change as a result of the transaction. In addition to market share and concentration levels in the relevant market, various market and company-related factors may be relevant for the assessment: capacities and capacity constraints, customer preferences and switching costs, IP rights and know-how, market phase, access to suppliers and custom - ers, corporate and personal links with other companies, financial resources, barriers to entry and countervailing buyer power. In cases of collective dominance, the FCO analy - ses whether the transaction enables the parties to co-ordinate their behaviour in the market or if the transaction facilitates existing co-ordination or makes it more stable. Vertical Mergers In the opinion of the FCO, vertical mergers are considered to have more indirect competitive effects. Still, the FCO is also increasingly assess - ing these mergers in detail. The FCO assesses in detail any foreclosure effects (input and customer foreclosure) on upstream and/or downstream markets taking into account pre-existing links between the merging companies, alternative supply sources for competitors and the degree of vertical inte - gration of other market players, etc. However, such effects may create competition concerns only if the parties additionally have the ability and the incentive to foreclose. A further concern may be that the vertically integrated company might gain access to the competitively sensitive information of its com - petitors.
In the case of collective dominance, the FCO assesses whether the vertical merger enhances co-ordination between the dominant companies. Conglomerate Mergers Conglomerate mergers are generally less likely to raise competition concerns than horizontal mergers because they do not entail the loss of direct competition between the merging firms. However, competition concerns may arise if the parties are active in economically related mar - kets; ie, their products are complementary or close to substitution. Typically, this requires that at least one of the parties already has a suffi - ciently strong market position in one of the rel - evant markets. As with vertical mergers, in the case of collec - tive dominance, the FCO will assess whether the conglomerate merger facilitates co-ordination between the dominant companies. 4.5 Economic Efficiencies The FCO will consider the countervailing ben - efits of a transaction. A concentration that would significantly impede effective competition may not be prohibited if the parties prove that the concentration will also have pro-competitive effects that outweigh the significant impediment to effective competition. 4.6 Non-Competition Issues The FCO does not consider factors other than competition issues in its decisions. The situation is different with regard to the pro - cedure for obtaining a ministerial authorisation ( Ministererlaubnis ) from the Federal Minister for Economic Affairs and Energy. The Minister can overrule the FCO on the basis of social or politi - cal considerations (if the concentration’s ben - efits for the economy as a whole outweigh the
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