Merger Control rules in Germany

In Germany, the authority responsible for merger control is the Bundeskartellamt (Federal Cartel Office), which is based in Bonn. It is an independent federal authority operating under the auspices of the Federal Ministry for Economic Affairs and Climate Action, though it acts autonomously in its enforcement decisions. The Bundeskartellamt plays a central role in maintaining competitive market structures and is entrusted with the enforcement of both national and European competition law within Germany.

In the field of merger control, the Bundeskartellamt is responsible for reviewing mergers and acquisitions to determine whether they would significantly impede effective competition. This assessment is primarily based on whether a concentration would lead to the creation or strengthening of a dominant market position. The legal framework for this review is provided by §§ 35–43a of the Gesetz gegen Wettbewerbsbeschränkungen (GWB – Act against Restraints of Competition). Since the 9th amendment to the GWB in 2017, Germany also applies an additional transaction-value threshold, enabling the authority to examine acquisitions of high-value targets with relatively low turnover, particularly in the digital and start-up sectors.

The Bundeskartellamt’s review procedure is divided into two phases. In Phase I, the authority has one month from receipt of a complete notification to decide whether the transaction raises serious competition concerns. If such concerns exist, the case proceeds to Phase II, which allows up to four additional months for a more in-depth investigation. During this period, the authority may request extensive information from the parties and third-market participants. The outcome of the procedure can be an unconditional clearance, a prohibition, or an approval subject to structural or behavioural remedies designed to maintain competitive market conditions.

Beyond its decision-making powers, the Bundeskartellamt also cooperates with other competition authorities, including the European Commission and fellow members of the European Competition Network (ECN), particularly in cross-border cases. While the Bundeskartellamt only has jurisdiction if the turnover thresholds defined in the GWB are met and no exclusive competence lies with the European Commission under the EU Merger Regulation, it remains one of the most active and influential national competition authorities in Europe.

In Germany, a merger becomes subject to review by the Bundeskartellamt if specific jurisdictional thresholds defined in § 35 of the Gesetz gegen Wettbewerbsbeschränkungen (GWB) are met. These thresholds are primarily financial in nature and serve to determine whether the transaction is of sufficient economic relevance to warrant scrutiny under German merger control rules.

The traditional and most commonly applied threshold is based on the annual turnover of the undertakings involved. A transaction must be notified to the Bundeskartellamt if, in the last completed business year, the combined worldwide turnover of all participating undertakings exceeded 500 million euros, at least one of the undertakings concerned had turnover in Germany of more than 50 million euros, and another undertaking concerned had turnover in Germany of more than 17.5 million euros. These figures are cumulative, meaning that all conditions must be fulfilled for the obligation to notify to arise. The calculation includes all turnover of the corporate group to which the respective undertaking belongs, not just the entity directly involved in the transaction.

However, to address acquisitions involving targets with low turnover but high market relevance—such as tech start-ups or innovative digital platforms—a transaction-value threshold was introduced in 2017. Under § 35(1a) GWB, a merger must also be notified if the value of the consideration for the transaction exceeds 50 million euros and the target undertaking has a substantial domestic activity in Germany. This criterion of domestic activity is not defined by turnover alone and may instead refer to user numbers, local R&D presence, platform usage in Germany, or other indicators of significant market interaction. This rule aims to prevent so-called “killer acquisitions” that would otherwise escape scrutiny due to low or non-existent turnover figures.

In addition to these general rules, the Bundeskartellamt may also require notification under certain sector-specific rules or retroactive review provisions. For example, under § 39a GWB, the authority may compel notification in narrowly defined markets where competition is already weak and where acquisitions below the standard thresholds could further distort market dynamics.

Under German law, the types of transactions that are subject to merger control are broadly defined in § 37 of the Gesetz gegen Wettbewerbsbeschränkungen (GWB). The scope of merger control encompasses various forms of structural changes in the market that may affect competition. Specifically, the following categories of transactions are covered:

First, acquisitions of control are subject to merger control. This includes the direct or indirect acquisition of all or a substantial part of the assets of another undertaking, as well as the acquisition of shares that confer control over another undertaking. Control is generally understood in accordance with competition law principles and means the ability to exercise decisive influence over the strategic commercial behaviour of the target company, whether on a legal or de facto basis. The acquisition of a majority shareholding (i.e. over 50% of the voting rights) is typically regarded as conferring control. However, even acquisitions of smaller shareholdings may fall under merger control if they result in the acquiring party obtaining a controlling influence.

Second, transactions involving the acquisition of shares conferring a competitive influence are also subject to review. In particular, the acquisition of 25% or more or 50% or more of the shares or voting rights in another undertaking triggers notification requirements if the relevant thresholds under § 35 GWB are met. Importantly, this rule applies regardless of whether formal control is acquired — it is sufficient that the shareholding gives the acquirer significant influence over the target’s business strategy.

Third, the creation of joint ventures is considered a notifiable merger if the joint venture performs on a lasting basis all the functions of an autonomous economic entity (i.e. it is “full-function”). Such joint ventures must be notified even if they are newly established and not yet active, provided they are intended to become operational and compete independently in the market. In contrast, joint ventures limited to one specific function, such as R&D cooperation or production sharing, are generally not caught by merger control but may be reviewed under cartel or abuse provisions.

Additionally, asset deals can be subject to merger control if the transferred assets constitute a business operation or a market position that enables the acquiring party to assume a competitive role that previously belonged to the seller. This includes, for example, the acquisition of a production line, distribution network, or intellectual property rights that are functionally equivalent to acquiring a company or business unit.

Finally, the GWB also applies to certain internal group restructurings, provided that the undertakings involved are legally distinct entities and the transaction results in a shift of control or market power within the group that could have competitive implications. However, purely internal transfers within a fully integrated group (e.g. between wholly owned subsidiaries) are typically exempt.

In the context of German merger control, the concept of “control” is interpreted in line with European competition law principles and is defined in § 37(1) of the Gesetz gegen Wettbewerbsbeschränkungen (GWB). Control refers to the ability to exercise decisive influence over another undertaking’s strategic business decisions. This influence can be exerted on a legal basis (through rights or contracts) or de facto, based on the actual structure and economic reality of the transaction.

Control may be acquired in a variety of ways. The most straightforward case is the acquisition of a majority of voting rights, which typically confers sole control. However, control can also arise through minority shareholdings combined with additional rights or factual circumstances — such as veto rights over strategic decisions, rights to appoint key management, or long-term supply or financing arrangements that effectively subordinate the target’s business policy to the acquirer’s interests.

The Bundeskartellamt distinguishes between sole control and joint control. Sole control exists when one undertaking can unilaterally determine the strategic commercial conduct of another. Joint control arises when two or more undertakings must cooperate to reach key business decisions, typically in the context of joint ventures. In such cases, the parties must be able to block strategic decisions, such that no single party can act independently. Joint control may also exist even when one party has a larger stake, if the governance structure requires mutual agreement on key issues.

In addition to formal control rights, the Bundeskartellamt will assess de facto control, which may arise even in the absence of formal veto powers or majority shareholdings. This is the case, for example, when a minority shareholder regularly secures majority support at shareholder meetings due to dispersed ownership among the remaining shareholders, or when commercial dependence gives rise to a dominant influence. In such cases, control is inferred from the practical ability to shape corporate policy, even without formal legal mechanisms.

Moreover, under German merger control rules, certain threshold shareholdings — in particular the acquisition of 25% or more or 50% or more of the shares or voting rights — are treated as mergers even if they do not confer full control. This reflects the understanding that substantial minority interests may already allow the acquirer to exert “competitively significant influence”, especially if combined with additional rights or structural dependencies.

Ultimately, the Bundeskartellamt applies a substance-over-form approach, analysing each transaction in light of its actual economic and legal effects. The key question is whether the acquiring party gains the ability, alone or together with others, to materially influence the strategic decisions of the target undertaking on a lasting basis. This functional understanding of control ensures that merger control cannot be circumvented by avoiding formal majority acquisitions or by structuring deals in a nominally non-controlling way.

In summary, “control” under German merger control law encompasses both formal and factual elements and may arise from legal rights, governance arrangements, economic dependencies, or voting patterns. The Bundeskartellamt uses a broad and pragmatic approach to identify cases where the competitive structure of the market is likely to be altered through a shift in decisive influence over a market participant.

The duration of the merger review process in Germany is governed by the procedural rules set out in the Gesetz gegen Wettbewerbsbeschränkungen (GWB) and depends on whether the transaction raises competition concerns. The process is divided into two phases — a Phase I preliminary review and a Phase II in-depth investigation — with strict statutory time limits applicable to each.

In Phase I, the Bundeskartellamt has one month from the date of receipt of a complete notification to review the transaction. This phase is intended to allow for a swift assessment of transactions that are unlikely to raise significant competitive issues. The vast majority of merger cases in Germany — typically more than 90% — are cleared in this first phase. If the authority does not raise concerns or open a Phase II investigation within the one-month period, the transaction is deemed cleared by operation of law. 

However, if the Bundeskartellamt identifies serious competition concerns during Phase I, it initiates a Phase II investigation, which allows for a more detailed and extensive review. In Phase II, the authority has an additional four months (i.e. five months in total from the receipt of complete notification) to reach a final decision. This extended period enables the authority to gather more information, consult third parties such as competitors or customers, and assess proposed remedies or commitments from the parties. If the decision is not issued within this deadline, the transaction is again deemed cleared by operation of law.

During both phases, the review clock starts only once the notification is complete. If essential information is missing or incomplete, the authority may consider the filing invalid, and the timeline does not begin until all required information has been submitted. In practice, this means that companies should engage with the Bundeskartellamt early and ensure that their notification is both substantively and formally complete to avoid delays.

Germany also applies a suspensive effect to merger notifications. This means that the parties are prohibited from completing (closing) the transaction until either clearance is granted or the statutory review period expires without a prohibition decision. Closing the transaction before obtaining clearance — a practice known as gun-jumping — is a violation of § 41(1) GWB and may result in significant fines. Notably, the prohibition applies not only to full legal completion of the deal but also to partial or preparatory steps that amount to premature implementation, such as joint marketing or integration of business operations.

It is also important to note that the Bundeskartellamt does not offer pre-notification clearance or fast-track procedures as some jurisdictions do. However, informal consultations are possible and sometimes advisable for complex or borderline cases. Furthermore, in particularly complex or contentious cases, the authority may request remedies or commitments, which can extend the practical duration of the process if the negotiation of conditions or structural remedies requires additional time.

The merger review process conducted by the Bundeskartellamt under the German Gesetz gegen Wettbewerbsbeschränkungen (GWB) can result in several distinct outcomes, depending on the authority’s assessment of the transaction’s impact on competition in the relevant markets. The legal framework provides for both formal decisions and deemed clearance under certain circumstances, ensuring procedural transparency and legal certainty for the notifying parties.

The most straightforward outcome is an unconditional clearance decision. If, following its review, the Bundeskartellamt concludes that the transaction does not significantly impede effective competition — in particular, that it does not result in the creation or strengthening of a dominant position — the authority will issue a formal decision granting clearance. In Phase I proceedings, this occurs within one month of receiving a complete notification; in Phase II cases, within five months at the latest. Clearance permits the parties to proceed with the implementation of the transaction without restrictions under German merger control law.

Alternatively, if the authority does not issue a decision within the applicable time limits — one month for Phase I and five months for Phase II — and no extension has been agreed or granted by law, the transaction is deemed to be automatically cleared by lapse of time (“fiktive Freigabe”). This legal fiction ensures that the process cannot be delayed indefinitely and provides legal certainty for the parties.

In cases where the Bundeskartellamt identifies serious competition concerns, it may initiate a Phase II investigation and ultimately prohibit the transaction by issuing a formal prohibition decision. This outcome is relatively rare but occurs in cases where the transaction would significantly impede effective competition and no sufficient remedies have been proposed or accepted. The legal basis for prohibition is § 36 GWB, which focuses primarily on the creation or strengthening of market dominance. A prohibition bars the parties from implementing the merger and may also include an order to unwind partially implemented steps.

Between unconditional clearance and prohibition lies the possibility of a conditional clearance, also referred to as clearance subject to remedies or commitments. If the Bundeskartellamt believes that a transaction raises competition concerns but that these can be effectively resolved by appropriate measures, it may accept structural or behavioural remedies proposed by the parties. Typical remedies include divestitures of overlapping business units, access commitments, or behavioural obligations such as information firewalls or non-discrimination clauses. Conditional clearances are only granted if the proposed commitments are sufficient to eliminate the identified competition concerns and are both proportionate and practically enforceable.

Finally, although not a formal decision, the Bundeskartellamt may — during pre-notification contacts or informal guidance — indicate that a transaction does not fall within the scope of merger control or that the thresholds are not met. While such informal statements are not binding, they may provide helpful clarity for parties in uncertain cases and may be followed up with a negative clearance letter upon request.

In German merger control proceedings, the Bundeskartellamt may accept remedies or commitments offered by the notifying parties if these measures are sufficient to eliminate the authority’s concerns about the transaction’s potential anticompetitive effects. The legal basis for such conditional clearances is found in § 40(3) of the Gesetz gegen Wettbewerbsbeschränkungen (GWB). Remedies allow the authority to approve a merger that would otherwise be prohibited, provided that the parties implement structural or behavioural modifications to safeguard effective competition.

The preferred type of remedy in German practice is the structural remedy, typically a divestiture. This involves the sale of a business unit, production facility, brand, or customer base to an independent third party, thereby reducing horizontal overlaps or removing market dominance. The Bundeskartellamt considers structural remedies to be the most effective means of restoring or preserving competition, as they directly and permanently alter market structures. The authority places particular emphasis on ensuring that the divested assets constitute a viable, competitive business on a stand-alone basis and that the purchaser is both independent and capable of sustaining competitive pressure in the market.

Behavioural remedies, such as access obligations, licensing commitments, or firewalls to prevent the exchange of sensitive information, are generally regarded as less favourable and are only accepted in exceptional cases where structural remedies are not feasible. This reflects the authority’s view that behavioural commitments are harder to monitor and enforce, and often only address symptoms rather than root causes of competition concerns.

Timing is a critical aspect of remedy submission. Remedies may be proposed at any time during the Phase II investigation, but in practice, they are usually submitted once the Bundeskartellamt has communicated its competition concerns, either informally or through a statement of objections (Abmahnung). There is no fixed deadline for submitting remedies, but they must be proposed in time for the authority to fully assess and test their sufficiency within the statutory five-month decision period. The authority expects remedy proposals to be concrete, implementable, and tailored to the specific competition issues identified. Vague or incomplete proposals may be disregarded, and if no acceptable remedies are offered before the deadline expires, the authority is likely to prohibit the transaction.

Where remedies are accepted, the clearance decision will be subject to conditions or obligations (“Bedingungen oder Auflagen”), typically including implementation deadlines, approval of the purchaser by the Bundeskartellamt, and monitoring obligations. Non-compliance with these conditions may result in fines or even retroactive invalidation of the clearance.

Failure to comply with merger control obligations under German law can lead to significant legal and financial consequences. The relevant rules are set out primarily in § 41 and § 81 GWB and aim to deter both the failure to notify notifiable concentrations and the premature implementation of such transactions before clearance — a practice commonly referred to as gun-jumping.

If a merger that meets the jurisdictional thresholds under § 35 GWB is not notified to the Bundeskartellamt, and the parties proceed to implement the transaction, they are in violation of the suspensive effect provided for in § 41(1) GWB. This provision prohibits the parties from completing a notifiable transaction before receiving clearance or before the applicable review period has expired. In such cases, the implementation of the merger is legally invalid, meaning that any legal acts constituting the merger are deemed to have no effect under competition law. This includes the transfer of shares or assets, the exercise of voting rights, or the integration of business operations.

In addition to the civil law consequences, the Bundeskartellamt can impose administrative fines. Under § 81(2a) GWB, the authority may impose fines of up to 10% of the total worldwide turnover of the undertaking concerned in the preceding business year. The fine may be levied on each party responsible for the infringement, including both the acquiring and the acquired undertakings if they acted knowingly or negligently. The precise amount depends on various factors, including the gravity and duration of the infringement, the degree of fault, and the undertaking’s cooperation during the proceedings.

Gun-jumping may take many forms, including not only the full completion of the transaction without clearance but also partial implementation or preparatory conduct that results in de facto integration of the businesses. Examples include joint market activities, exchange of competitively sensitive information, or changes in strategic behaviour prior to clearance. The Bundeskartellamt takes a strict approach to such conduct and has imposed fines even for preparatory steps if they had the effect of merging the operations or undermining the standstill obligation.

Importantly, even if a transaction is ultimately cleared, the prior failure to notify or the early implementation may still be penalised. Clearance does not retrospectively legalise the infringement. Furthermore, the Bundeskartellamt may order reversal measures under § 41(3) GWB, requiring the parties to undo the merger if it has been implemented unlawfully and has not yet been cleared.

To reduce enforcement risk, parties are advised to conduct a thorough jurisdictional analysis before closing and to file a notification in any doubtful case. In complex transactions, pre-notification discussions with the Bundeskartellamt can provide clarity. Moreover, if timing is commercially critical, parties should explore the possibility of carve-out arrangements, where the German aspects of the transaction are excluded from closing until clearance is obtained.

Yes, the Bundeskartellamt maintains a high degree of transparency in its merger control practice and regularly publishes public announcements and decisions related to merger proceedings. These disclosures serve to inform the public, competitors, customers, and other market participants about ongoing or completed procedures and provide insight into the authority’s enforcement priorities and analytical approach.

One of the primary tools for public communication is the merger control database available on the Bundeskartellamt’s official website. This database includes notices of notified transactions, as well as summaries of clearance decisions, whether issued unconditionally or subject to remedies. The notifications typically include the names of the undertakings concerned, a brief description of the transaction, the relevant market(s), and the date of the decision. While the published content is anonymised in sensitive cases and does not include confidential business information, it provides a valuable record of the authority’s merger enforcement activity.

In addition, the Bundeskartellamt may publish press releases for cases of particular importance, such as transactions that raise novel legal questions, involve major market players, or are prohibited or cleared with significant remedies. These press releases often contain more detailed reasoning and contextual background and are intended to contribute to public debate and legal certainty.

Beyond individual case reporting, the Bundeskartellamt publishes an annual activity report, which includes statistics on merger filings, breakdowns by sector, average review times, and summaries of selected cases. The authority also contributes to policy development at the national and European level through position papers, guidelines, and consultation responses, all of which are accessible to the public.

Furthermore, under § 39(5) GWB, third parties such as competitors, suppliers, or customers may be invited to comment on a notified transaction if the Bundeskartellamt considers their input relevant. In practice, this occurs especially in Phase II investigations. While the third-party consultation process itself is not public, it reflects the authority’s commitment to informed and participatory enforcement.