Antitrust Alert: German Government Proposes New Cartel Act

The German government has published a draft bill that will amend the German Act on Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, GWB). According to the draft, the government believes that current version of the GWB has proved itself effective in practice and only minor modifications are required. In fact, however, the changes proposed in the draft bill are significant and will affect all businesses active in Germany.

Perhaps the most striking change relates to the standard for prohibiting mergers. Currently, German merger control uses a dominance test. The Federal Cartel Office (Bundeskartellamt, BKartA) must prohibit transactions that are likely to create or strengthen a dominant position.  Under the draft bill, the BKartA would prohibit transactions that "significantly impede effective competition" (SIEC).  The dominance test will survive only as an example of SIEC.