On May 14, 2018, the competition authorities of Germany and Austria have published joint draft guidelines on the new transaction value merger thresholds for public consultation, see here.
Comments can be submitted by June 8, 2018. The draft concerns the new merger control thresholds introduced in 2017. These provide that a transaction may be notifiable if the value of the consideration for a transaction exceeds € 400 million in Germany or € 200 million in Austria, respectively, and the target has significant domestic activities, even if the other turnover-related thresholds are not met. The draft guidelines deal with interesting issues, such as determining the consideration value (including which point in time is relevant and how to determine the value in case of earn-out clauses or other conditional or future payments), when domestic activity is considered as significant, including in digital markets and concerning R&D activities, as well as other questions. Silke Heinz has published a blog on the draft guidelines on Kluwer Competition Law Blog, see here.
The Bundeskartellamt (“BKartA”)has for the first time referred an ongoing cartel investigation to the European Commission within the framework of the network of European Competition Authorities (“ECN”) on April 27, 2018 (see here). The BKartA had inspected several metal packaging manufacturers in Germany in March 2015 following an anonymous tip-off, and has since then pursued national proceedings. It is an unusual step to refer a case after such a long duration of proceedings at national level. Typically, the case allocation within the ECN takes place at the beginning of an investigation. The BKartA gave the following reasons: (i) increasing evidence that the cartel was not limited to Germany but also concerned other EU Member States, and (ii) that several companies subject to the proceedings undertook internal restructuring prior to the new legal regime that took effect in mid-2017. To these restructuring measures the former legal rules would still apply, which might render sanctioning these companies impossible. This point refers to the so-called sausage gap in German competition law, which made fining of legal successors difficult or sometimes impossible. The new law provides for group liability and full liability of the “economic” successor of a cartel participant (i.e. not limited to the value of the cartel participant’s assets). Interestingly, the BKartA now seems to confirm that the contingent liability rules aimed at covering the interim period between old and new law would not apply to restructuring measures carried out prior to mid-2017 when the new law took effect. In light of this, the BKartA has indeed followed its announcement to refer sausage-gap-like scenario cases to Brussels. Silke Heinz is quoted on this step in the Global Competition Review, (see here).
The Federal Cartel Office announced on February 1, 2018, to launch a sector inquiry into online advertising (here).
This in line with the FCO’s focus on competitive conditions in the digital economy and big data. The FCO follows the French competition authority that started a separate online advertising sector inquiry in 2016 and has recently published its results. Silke Heinz has published a blog on the FCO’s sector inquiry and its background on Kluwer Competition Law Blog (see here).
We have already reported on the Bundeskartellamt’s press release on its preliminary assessment in the Facebook probe, see previous news item. Silke Heinz has now published a post on this topic on Kluwer Competition Law Blog, see here.
On December 19, 2017, the FCO has published a press release (here) and a background paper (here), outlining the preliminary assessment in the Facebook proceedings: Facebook is considered dominant in the German social media network market and to abuse its position through collecting and combining user data from third-party sources in a very broad way.
The allegations focus on collecting user data from third-party websites or Apps with a Facebook like button, even if the user does not click on it. The FCO finds that this practice infringes data protection laws, and Facebook’s general t&cs therefore violate the legal principles on general terms and conditions, which in turn qualifies as an abuse of dominance.
The fact that the FCO publishes a background paper pending proceedings is unusual. It may be explained by the great public interest in these proceedings, in which the FCO explores new territory. In addition, the FCO thereby puts some public pressure on Facebook. The proceedings raise the question whether antitrust law is the proper tool to tackle data protection law infringements. Silke Heinz is quoted on this in Global Competition Review, see here.