German and Austrian competition authorities publish updated joint guidance on transaction value thresholds

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The German Bundeskartellamt and the Austrian Bundeswettbewerbsbehörde have updated their joint guidance on the application of their respective transaction value thresholds for mandatory merger notifications (the "Guidelines") on December 23, 2021.1

The authorities initially published the Guidelines in July 2018 to help interpreting the, at the time, newly introduced transaction value thresholds under German2 and Austrian3 merger control law. As per these additional thresholds, transactions remaining below the primary turnover thresholds can still be notifiable in case the value of their consideration exceeds €400 million (Germany) or € 200 million (Austria), and where the target has substantial domestic operations.4

In addition to explaining how to determine the value of the consideration of a deal, the Guidelines provide guidance and examples on how to interpret the notion of "substantial domestic operations", which is typically the most difficult part of the assessment in practice.

While the Guidelines have generally been helpful to assess whether a transaction meets the German and Austrian transaction value thresholds, a number of questions and borderline scenarios have remained in practice. In (too) many cases, the assessment has remained far from straightforward. Consultations with the authorities were sometimes helpful, but there was still a slight tendency to interpret the thresholds broadly, and there is still substantial uncertainty and a need for judgment calls (e.g.: Is it sufficient to find a substantial local presence where the target has a German subsidiary or research facility, but its local sales are well below € 5 (or now € 17.5) million? How do you assess whether turnover adequately reflects the target company's market position and competitive potential where it is active in an "established" market? And how do you treat cases where the target is active in a young, fast-growing market, but the main reason why its German sales are low is because it had decided not to enter this market (yet)?5). In addition, the two authorities do not always apply the exact same principles despite the respective value thresholds being worded almost identically. For example, when assessing the significance of the target's domestic activities, the Austrian Bundeswettbewerbsbehörde primarily focuses on whether the target has a local presence (i.e., a site or subsidiary), whereas the German Bundeskartellamt rather looks at the industry in question, in particular whether a parties' turnover reliably reflects its market position in this industry. These different approaches have further contributed to the existing legal uncertainty.

Despite these well-known and openly discussed shortcomings, the update, remains very limited, and basically only brings the Guidelines in line with the increased German domestic turnover thresholds that came into force on January 19, 20216 and the new additional Austrian turnover limb that will be added to the existing threshold as of January 1, 20227. In addition, the updated Guidelines now contain references to a couple of major Austrian cases (in particular the much noticed Facebook / GIPHY gun-jumping decision):

  • In Germany, the domestic turnover thresholds under the traditional (non-transaction value related) merger requirements test have been increased significantly (from € 5 million to € 17.5 million for one party and from € 25 million to € 50 million for the other) in early 2021. As a consequence, the Guidelines now state that the German Bundeskartellamt will find that a target does not have substantial domestic operations if its German turnover remains below € 17.5 million (instead of the former threshold of € 5 million) if such turnover adequately reflects the target's market position and competitive potential. This change does not come as a surprise, as keeping the previous threshold of € 5 million would circumvent the legislator's intention of only capturing potential "killer acquisitions" / deals where the target's sales do not adequately reflect its market position and competitive potential, and at the same time excluding "no brainer" deals involving targets with German sales of less than € 17.5 million from having to be notified.
  • In the same vein, going forward, the Austrian Bundeswettbewerbsbehörde will find that there is no substantial domestic activity if the target's domestic turnover is below € 1 million (which is the new minimum domestic turnover threshold as of 2022 (instead of € 500,000 under the old Guidelines) provided this turnover adequately reflects the target's market position and competitive potential). In addition, the authority expressly references Austrian case law according to which it will assume significant domestic activity in case the target's market share in a "competitively relevant segment" in Austria exceeds 10%. Endorsing such case law and effectively adding a market share element to determine whether a deal is notifiable is quite remarkable and entirely new to Austrian merger control rules, and will hardly contribute to legal certainty for the involved parties; it is also not entirely clear what a "competitively relevant segment" is - a term that calls for comparison with the EC's similar vague notion of "plausible markets" for which parties must provide information in EU merger filings.
  • Lastly, the Austrian Bundeswettbewerbsbehörde provides further guidance on how to assess whether the target's activities have a sufficient local nexus in light of the Facebook / GIPHY fining decision. In this case, the Austrian Bundeswettbewerbsbehörde found that the target had significant activities in Austria not (only) because of the number of direct Austrian users of the target's (i.e., GIPHY) website and app, but also taking into account users of "other services, third-party websites, and apps that integrate GIPHY by using application programming interfaces (e.g. Facebook, Signal, Snapchat)". The view that indirectly using (digital) services can be a relevant factor in assessing the relevant local nexus was confirmed by the Austrian Cartel Court and is now also reflected in the Guidelines.


1 The updated Guidelines (in German); the old English version, but does not yet reflect the recent update. We expect an updated English version to be published in due course.
2 Introduced with the 9th amendment to the German Competition Act (Gesetz gegen Wettbewerbsbeschränkungen, GWB), effective as of June 9, 2017.
3 Introduced with the Austrian Cartel and Competition Law Amendment Act 2017 (Kartell- und Wettbewerbsrechts Änderungsgesetz 2017), effective as of May 1, 2017.
4 Notably, the European Commission has been reluctant to introduce comparable thresholds despite its increased focus on so-called "killer acquisitions"; instead, it has changed its policy under the existing referral system under which it accepts referrals of transactions that as such do not have a Union dimension from Member States under Article 22 of the European Merger Regulation, now encouraging national competition authorities to make such referrals in appropriate cases even if the deal does not meet the national merger control thresholds, see our alerts on this topic at 
Catch 22: European Commission keeps broadening merger control intervention powers 
Latest developments article 22 EUMR referral mechanism only thing that's certain 
The German Bundeskartellamt, however, is taking the view that it can only refer transactions that are notifiable in Germany in the first place (for this reason, Germany did not join the Austrian referral request of the Facebook/Kustomer deal – at the time, it was not clear yet whether the deal was notifiable in Germany).
Separately, the German Bundeskartellamt has stated publicly that it is not very likely to refer transactions to the Commission where its jurisdiction is only based on the transaction value threshold, which was introduced for the German Bundeskartellamt specifically to be able to look at these deals itself, and it is generally hesitant to refer. By contrast, the Austrian Bundeswettbewerbsbehörde has referred cases under Article 22 EUMR that did not meet the Austrian filing thresholds.
5 See, for example, PayPal/Honey, decision of December 17, 2019 (B6-86-19), where the German Bundeskartellamt took up some of these question and ultimately concluded that Honey's limited German turnover did not adequately reflect its market position, despite the fact that one of the reasons for the lack of substantial turnover was that Honey was only establishing its business in Germany (whereas it already had sales of around USD 100 million in other countries); an English case summary is available.
6 Introduced with the 10th amendment to the German Competition Act.
7 Introduced with the Austrian Cartel and Competition Law Amendment Act 2021 (Kartell- und Wettbewerbsrechts Änderungsgesetz 2021); the change applies to all deals that are implemented after this date; with the amendment, each of least two parties must have had turnover of more than € 1 million in Austria, in addition to their combined turnover in Austria exceeding € 30 million. The existing de minimis exemption and the existing transaction value threshold remain unchanged.
8 The new Guidelines cite the Cartel Court of Vienna's Salesforce / Tableau decision (judgement of April 22, 2021, 27 Kt 9/21g) here, where Salesforce was fined € 100,000 for failing to notify its acquisition of Tableau.
9 See Cartel Court of Vienna's Facebook / GIPHY decision (judgement of July 22, 2021, 28 Kt 6/21y); Facebook settled to pay a fine of € 9.6 million after the Austrian Bundeswettbewerbsbehörde had initiated proceedings for failing to notify Facebooks's acquisition of GIPHY and violating the standstill obligation, given that the Austrian Bundeswettbewerbsbehörde found that the deal met the transaction value threshold and GIPHY had significant domestic activities.


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