German merger control – New powers of intervention and waiting for the federal elections

The 11th amendment to the German Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, “ARC”), which came into force at the end of 2023, gave Germany’s Federal Cartel Office (Bundeskartellamt) extended powers of intervention following sector inquiries (see our Noerr Insights and our Competition Outlook 2024). Since then, pursuant to section 32f ARC, targeted measures can be ordered under certain conditions following a sector inquiry in order to remedy identified distortions of competition. This reform continues to be at the centre of discussions about the role and effectiveness of German merger control.

Cautious application of new powers of intervention

The Federal Cartel Office recently conducted sector inquiries in the areas of municipal waste and e-charging infrastructure.

One of the reasons for the sector inquiry in the area of municipal waste was the risk that the increased turnover thresholds in section 35(1), no. 2 ARC would result in the uncontrolled takeover of numerous smaller companies by larger competitors in the waste disposal industry, which is characterised by small and medium-sized companies. The sector inquiry revealed that the German Rethmann Group is the market leader both nationwide and regionally with considerable market shares. With publication of the final report, the Federal Cartel Office announced that, after evaluating comments from interested business circles, it would examine whether Rethmann should be obliged to notify planned mergers pursuant to section 32f(2) ARC. The Federal Cartel Office would have at least until 28 June 2025 to issue such an order.

In the area of e-charging infrastructure, on the other hand, the criteria for issuing such orders are not fulfilled, as the Federal Cartel Office noted in its press release on the final report.

These two examples indicate that the Federal Cartel Office intends to apply its new powers of intervention with caution. However, the practical use of these powers is still in its infancy. Only future sector inquiries will provide a clearer picture of how cautiously or aggressively the Federal Cartel Office will apply its powers.

Future issues in German merger control

Even before the collapse of Germany’s 'traffic light' coalition, it was reported in government circles that the 12th amendment to the ARC planned for 2025 would probably not be introduced. Apparently, the coalition partners’ ideas were also too far apart in this area. However, the debate on how German merger control will evolve is set to continue. The direction and extent of possible legislative changes will not be assessable until we see the results of the federal elections scheduled for 23 February 2025 and it becomes clear which parties will form the next federal government.

It appears unlikely that the turnover thresholds of section 35 ARC will be generally lowered to also include acquisitions of smaller, innovative companies in German merger control. This would affect many otherwise non-problematic transactions and thus generally increase the administrative burden on companies. On the other hand, it would be conceivable to refine the transaction-value-based threshold in order to be able to better cover the acquisition of potentially highly competitive start-ups by large companies, known as killer acquisitions, and also other forms of cooperation such as the takeover of highly qualified personnel with special know-how, known as acqui-hires (more details on the Microsoft/Inflection case in our Noerr Insights).

This article is part of the Competition Outlook 2025. You can find all Competition Outlook articles here.