{"id":2076,"date":"2019-03-29T17:53:43","date_gmt":"2019-03-29T16:53:43","guid":{"rendered":"https:\/\/www.d-kart.de\/?p=2076"},"modified":"2019-03-29T19:58:17","modified_gmt":"2019-03-29T18:58:17","slug":"miba-zollern-neuauflage-der-ministererlaubnis","status":"publish","type":"post","link":"https:\/\/www.d-kart.de\/en\/blog\/2019\/03\/29\/miba-zollern-neuauflage-der-ministererlaubnis\/","title":{"rendered":"\ufeffMiba\/Zollern: The next ministerial authorisation of a banned merger?"},"content":{"rendered":"\n


<\/strong><\/p>\n\n\n\n

A few days ago, German media surprised\nus with the fact that they had found something in a somewhat older edition of\nthe Federal Gazette. An interesting discovery had been made: another\napplication for ministerial approval had been submitted to the Ministry of\nEconomics. This instrument of German antitrust law allows the Federal Minister\nof Economics to override a decision of the competition agency (Bundeskartellamt)\non reasons of the common good. This is exciting for every antitrust lawyer, especially\nfor the Minister himself. Maximilian Konrad takes a closer look at the matter.<\/em><\/p>\n\n\n\n

This text is available in German, too. Just click the flag!<\/em><\/p><\/blockquote>\n\n\n\n

It’s time again. Please welcome on stage: the \u201cMinistererlaubnis\u201d, the\nGerman ministerial authorisation. At irregular intervals, this tool appears\nlike a deus ex machina <\/em>on the stage\nof antitrust law. 2002 the energy merger of E.on\/Ruhrgas. 2002\/2003 the case of\nBerlin daily newspapers (Tagesspiegel\/Berliner Verlag), in 2016 Edeka\/Tengelmann<\/a>, a heavily\ndebated merger in retail. And now, in 2019, Miba\/Zollern<\/a>. The merger fits like a glove on\nthe eye to the \u201eNational Industrial Strategy 2030\u201c<\/a> of Peter Altmaier, the German Minister\nin charge of the economy. <\/p>\n\n\n\n

What happened? <\/h2>\n\n\n\n

Two medium-sized companies, the Austrian Miba AG and the\nBaden-W\u00fcrttemberg-based Zollern GmbH & Co. KG, want to merge their business\nareas for plain bearings. Combined annual turnover: 300 million euros. The\nBundeskartellamt prohibited the merger in January\n2019<\/a> as it saw a\nsignificant impediment to competition in the markets for hydrodynamic plain\nbearings for large engines in ships, locomotives and generating sets. In order\nto be able to implement the merger nevertheless, the two companies have now\napplied for ministerial authorisation under section 42 of the GWB (Act against\nRestraints on Competition) in order to override the decision of the\nBundeskartellamt. The \u201cMinistererlaubnis\u201d is rarely applied, yet it is always\ncontroversial. If the politician grants the special approval, this is a blow to\nthe Bundeskartellamt, an agency with an outstanding reputation in Germany and\nbeyond that decides autonomously in competition cases, admittedly only on\ngrounds of competition.<\/p>\n\n\n\n

What’s the next step?<\/h2>\n\n\n\n

Before Minister Altmaier decides the case under section 42 GWB, the German\nMonopolies Commission, an independent advisory body, must prepare a special\nreport by the end of April on whether macroeconomic advantages or an overriding\ninterest of the general public outweigh the adverse effects on competition. <\/p>\n\n\n\n

If the Minister wishes to deviate from the vote of the Monopolies\nCommission, he must explicitly justify this in accordance with section 42 (1)\nsentence 4 GWB, newly created in response to the problematic Edeka\/Tengelmann\nproceedings. <\/p>\n\n\n\n

Whether this will have a significant effect on his decision remains to\nbe seen. In the past, even without this rule, the Minister had no major\nproblems in disregarding the vote of the Monopolies Commission on his own\nreasons. <\/p>\n\n\n\n

After Edeka\/Tengelmann, a new guideline on the procedure for ministerial approval<\/a> was put in place that now has its first practical test. The Guidelines intend to speed up the procedure by introducing time limits and create transparency, in order to prevent the procedural errors that led to the formal illegality of ministerial authorisations in the past (E.on\/Ruhrgas, Edeka\/Tengelmann). In both cases, the competent Higher Regional Court of D\u00fcsseldorf had annulled the Minister\u2019s decision. The public will probably never know whether the new rules really prevent secret backroom conversations and political haggling that the other decisions had been criticised for. <\/p>\n\n\n\n

What does the Minister’s\ndecision depend on?<\/h2>\n\n\n\n

At the core of the whole thing is the \u201ccommon good\u201d. Ministerial\napproval must only be granted if macroeconomic advantages or an overriding\ninterest of the general public, in short the common good, outweigh the adverse\neffects on competition (section 42 (1) GWB). <\/p>\n\n\n\n

Mr. Altmaier (who is a high-calibre figure in the CDU) does not decide as\na politician according to political majority relations. Section 48 GWB requires\nhim to decide as a competition law authority solely according to the common\ngood. His decision is bound to legal rules, not to political opinions. This\nmeans: if the \u201ccommon good\u201d condition is met, he must grant permission and,\nconversely, the application must fail. He has no discretionary powers.<\/p>\n\n\n\n

The spectacular decision of the\nD\u00fcsseldorf Higher Regional Court<\/a> in the Edeka\/Tengelmann proceedings clarified that the legal interpretation\nof the common good as condition of the approval is subject to full judicial\nreview. <\/p>\n\n\n\n

But what is the common\ngood now?<\/h2>\n\n\n\n

That’s the problem. No one knows exactly what the common good is. And\nthis despite the fact that the Ministerial approval is the most serious and\nfar-reaching political intervention in the law of\nthe economy<\/a>, in which\nthe companies involved usually try to exert considerable influence on the government.\n<\/p>\n\n\n\n

The explanatory memorandum to the GWB leaves the reader at a loss. The \u201cstate,\neconomic or socio-political reasons\u201d (BT-Drs. VI\/2520<\/a>, p. 31) mentioned there are very much undefined.\nIt is rather difficult to imagine a reason that cannot be submitted under these\nheadings. <\/p>\n\n\n\n

The practice of the Monopolies Commission, the Federal Minister of\nEconomics and the antitrust literature are of little help. Here, too, there is\na lack of an abstract method for determining the common good.<\/p>\n\n\n\n

Essentially, it comes down to the case law of the past. The reasons\nrecognised in past decisions are extremely diverse: securing energy supplies,\npreserving jobs, protecting the climate and the environment, safeguarding\ntechnical know-how and medical care are just a few of them. However, the\nproblem with this line of cases is that it is inconsistent. What had once been\nrecognised was no longer valid the next time, just a few years later, and vice\nversa. <\/p>\n\n\n\n

A further fundamental problem is that there is no clarity as to the question\nof whether priority should be given to a particular \u201ccommon good\u201d or to the\nprotection of competition. The decisive question thus remains open and in\npractice, the weighing exercise is left to the discretion of the Federal\nMinister of Economics. <\/p>\n\n\n\n

This ambiguity is due to the nature of the concept of the common good.\nIn a democratic society, the common good is never given from outside, but is always\na task given up for determination in the public discourse. The authoritarian\ndefinition of the common good from a higher body is a characteristic of\nabsolutism and totalitarianism.<\/p>\n\n\n\n

In a democratic society, there is a multitude of completely different,\nbut fundamentally equal, common good ideas that are in competition with each\nother. It is only through a process of deliberation in society that there could\nbe an approximation to what the common good may mean in individual cases. <\/p>\n\n\n\n

For the ministerial approval, however, such a determination of the\ncommon good through public discourse is impracticable. The associated uncertainties\nare too big, the opportunities for abuse too manifold. <\/p>\n\n\n\n

The basic dilemma, therefore, is that the common good, while it is an\nimportant concept of state philosophy, is not an apt, legally certain and\nunambiguously determinable term. For now, however, the practice has to work\nwith it and therefore, the Minister will probably make reference to the cases\ndecided in the past. Still, how to balance objectives of the public interest\nand the competitive concerns remains completely in the dark. <\/p>\n\n\n\n

What do the applicants\nclaim?<\/h2>\n\n\n\n

The applicants claim that without the merger there is a threat of\ntechnology loss and a transfer of research and production knowledge to Asia.\nSales are, so they say, declining due to the weak shipping industry, while R&D\ncosts for new technologies such as wind turbines are rising. In order to be\nable to stand up to the competition from Asia, size matters. Without the\nmerger, jobs could be lost. This is the line of argument \u2013 as far as it has\ntranspired so far.<\/p>\n\n\n\n

\"Industrial
Does Peter Altmaier (left) override a prohibition decision of Andreas Mundt’s 5th decision division?<\/figcaption><\/figure>\n\n\n\n

This argument fits like a glove to the eye to the “National\nIndustrial Strategy 2030” of Peter Altmaier and his plans developed jointly\nwith France to create a ministerial approval at the European\nlevel<\/a>. This makes\nthe current case so interesting: It could be a blueprint for assessing the \u201cChina\ndefence\u201d in merger cases at a larger scale. In short, Altmaier and his French colleague\nBruno Le Maire had proposed an active industrial policy to create national and\nEuropean champions who can stand up to the otherwise overpowering competition\nfrom Asia. This idea has already been mentioned in section 42 (1) sentence 2 GWB,\nwhich explicitly mentions international competitiveness as a potential public\ngood.<\/p>\n\n\n\n

In its decision, however, the Bundeskartellamt has already taken into\naccount competition on a worldwide market if there is a worldwide market and\nnot just different regional markets. If the Ministry now focuses on an\ninternational competition that does not exist, innovation, efficiency and the\ninterests of consumers and customers may be sacrificed for an uncertain vision\nof the future. It is precisely competition that ensures innovation and ensures\nthat efficiency and price advantages are passed on to customers and consumers.\nApproval of the merger therefore threatens to pass on the costs of the loss of\ncompetition to the end consumers.<\/p>\n\n\n\n

It is therefore crucial that this constraint of competition is\noutweighed by other public interests, which leads back to the problem of the\ndefinition of common good. With regard to the job argument, it should be noted\nthat this has been used in every ministerial approval procedure, but never actually\ntakes effect: typically, a merger through rationalisation costs jobs and does\nnot secure them. It is also of particular concern that it is uncertain whether\nthe merger is at all suitable for promoting international competitiveness, as\nthe Bundeskartellamt must have apparently denied this. <\/p>\n\n\n\n

What about judicial review?<\/h2>\n\n\n\n

Let’s ask this frankly: Will there again be such a stir as in Edeka\/Tengelmann<\/a>, when the Higher Regional Court of\nD\u00fcsseldorf killed the ministerial approval with a very explicit reasoning?\nProbably not. <\/p>\n\n\n\n

In response to that case section 63 (2) sentence 2 GWB made the right to\nappeal against the ministerial approval dependent on the infringement of individual\nrights. Yet, equal opportunities in competition and the hope for a better\nmarket position do not convey any subjective rights. De facto<\/em> the judicial control of the ministerial decision seems to\nhave been abolished (cf. Podszun\/Kreifels in: Kersting\/Podszun, Die 9. GWB-Novelle,\n2017<\/a>, Chapter 14). This\nreveals a questionable relationship between the executive branch and the\nseparation of powers and the system of checks\nand balances<\/em>. <\/p>\n\n\n\n

It is possible, however, that the D\u00fcsseldorf Higher Regional Court will\nsucceed in affirming the right of competitors to lodge a complaint by means of\na broader interpretation of the law (if a competitor willing to file an action\nis found). In any event, judicial control would be desirable for the protection\nof competition against unlawful ministerial approval decisions. <\/p>\n\n\n\n

So…?<\/h2>\n\n\n\n

Let\u2019s wait and see. Given the de\nfacto<\/em> abolition of judicial review of the ministerial approval, I hope that\nthe Miba\/Zollern merger will receive sufficient public attention to allow a\nfull discussion of the advantages and disadvantages of the merger. If the\ncourts are no longer able and allowed to control the minister’s enormous leeway\nin decision-making, it is up to the media and the public to keep a watchful eye\non the common good and to act as a controlling authority. <\/p>\n\n\n\n

Anyone who wants to take the protection of competition, but also the\nconcept of the common good seriously, must be careful not to give in to an irrational fear<\/a> of an overpowering China, but to stick to the\nfacts.<\/p>\n\n\n\n

Dr. Maximilian Konrad, MSc (LSE) works\nas an Associate in a law firm in Karlsruhe specializing in civil law appeals.\nHe received his doctorate in 2018 under the supervision of Prof. Dr. Rupprecht\nPodszun at the Heinrich-Heine-University D\u00fcsseldorf on the topic “The\ncommon good, public opinion and the ministerial approval under merger\nlaw”. The dissertation will be published in autumn 2019 by Duncker &\nHumblot.  <\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

A few days ago, German media surprised us with the fact that they had found something in a somewhat older edition of the Federal Gazette. An interesting discovery had been made: another application for ministerial approval had been submitted to the Ministry of Economics. This instrument of German antitrust law allows the Federal Minister of Economics to override a decision of the competition agency (Bundeskartellamt) on reasons of the common good. This is exciting for every antitrust lawyer, especially for…<\/p>\n

Read More Read More<\/span><\/a><\/p>\n","protected":false},"author":9,"featured_media":2085,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[199,56,76],"class_list":["post-2076","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-allgemein","tag-altmaier","tag-fusionskontrolle","tag-ministererlaubnis"],"translation":{"provider":"WPGlobus","version":"3.0.0","language":"en","enabled_languages":["de","en"],"languages":{"de":{"title":true,"content":true,"excerpt":false},"en":{"title":true,"content":true,"excerpt":false}}},"_links":{"self":[{"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/posts\/2076","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/users\/9"}],"replies":[{"embeddable":true,"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/comments?post=2076"}],"version-history":[{"count":7,"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/posts\/2076\/revisions"}],"predecessor-version":[{"id":2089,"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/posts\/2076\/revisions\/2089"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/media\/2085"}],"wp:attachment":[{"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/media?parent=2076"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/categories?post=2076"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.d-kart.de\/en\/wp-json\/wp\/v2\/tags?post=2076"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}