GERMANY Law and Practice Contributed by: Daniela Seeliger, Christoph Barth and David-Julien dos Santos Goncalves, Linklaters
in the course of demerger proceedings after the completion of the transaction. 5.2 Parties’ Ability to Negotiate Remedies The FCO is legally obliged to consider whether an authorisation with remedies would alleviate the competition concerns. However, this does not create an obligation to accept any offer of remedies. The FCO only has to accept remedies that will remove the significant impediment to effective competition. In turn, the FCO must not impose remedies that the parties have not offered. It may propose remedies that it considers suitable, but it is not obliged to do so – it is ultimately up to the parties to develop and offer remedies. Typical Remedies Standard remedies are the divestiture of part(s) of the undertakings’ business or the granting of licences to third parties. However, the removal of structural or contractual links with competitors may be appropriate in certain situations – eg, in oligopolistic markets. In the past, the FCO has, among others, allowed the decommissioning of production plants as a suitable (behavioural) remedy, but has not accepted remedy propos - als aiming at organisational obligations or invest - ment controls. Further, it has already imposed a prohibition to co-operate in the area of purchasing on parents that were parties to a joint venture transaction as part of a remedy package. Behavioural rem - edies, such as granting licences for important technologies or granting customers special ter - mination rights for long-term contracts of the parties, may also be appropriate. The mere clo - sure of capacities or the use of “Chinese walls”
within merged entities, however, is not generally considered an effective behavioural remedy. 5.3 Legal Standard There is no binding legal standard for remedies. However, the FCO published a Guidance on Remedies in Merger Control in May 2017 that describes the most important types of remedies and explains the requirements that they must fulfil. 5.4 Negotiating Remedies With Authorities Commitments in general can be submitted at any stage of the procedure, during or even before the first phase of merger control. In order to achieve a successful solution, it is highly rec - ommended to co-operate with the FCO fully and at an early stage. Remedy negotiations usually start as a result of competition concerns that are expressed by the FCO, informally or formally. Procedurally, before prohibiting a transaction, the FCO informs the notifying parties of its competitive concerns and related objections to the transaction. It does this by sending a so-called statement of objections, usually in the form of a draft prohibition decision. The statement of objections may be issued at any time during Phase II. If remedy discussions start early and are suc - cessful, the statement of objections may never be formally issued. However, typically the FCO will send it out towards the end of Phase II. The parties can respond to the statement of objec - tions. In order to prepare this response, they can have access to the FCO file. Since the FCO is under a legal obligation to con - sider whether an authorisation with remedies (conditions and obligations) would alleviate the
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