Competition Agencies from Germany, the UK and Australia agree on Joint Merger Statement

Today, the Bundeskartellamt, the UK’s Competition and Markets Authority (CMA) and the Australian Competition and Consumer Commission (ACCC) have agreed on a joint statement on merger control. The joint statement reflects the common understanding of all three authorities that consistent merger enforcement is the key to preserve competition and diversity. The agency heads Andreas Mundt (President of the Bundeskartellamt), Andrea Coscelli (Chief Executive of the CMA) and Rod Sims (Chairman of the ACCC) met at a virtual conference to discuss joint challenges for merger control like the digital economy, globalisation and the impact of COVID-19.

Andreas Mundt: “Effective merger control is the most powerful instrument we have to prevent too much market power falling into the hands of only a few companies. We see particularly strong market concentration in the digital economy. Further takeovers and mergers can cause tipping in the market or create ecosystems which are almost incontestable for competitors. Stringent merger control is therefore indispensable.”

Andrea Coscelli: “As our countries emerge from the coronavirus pandemic, competition will have a crucial role to play in helping our economies grow. That’s why I am delighted to be standing with our counterparts in Australia and Germany on this timely statement.”

Rod Sims: “I am delighted to be releasing this joint statement with our UK and German counterpart authorities. We all recognise that competition is fundamental to the success of a market economy. Competition crucially depends on effective merger control.”

In their joint statement the three authorities express their agreement on the principles of effective merger control. As a tool to proactively keep markets open and preserve diversity, it allows competition authorities to prevent harm to consumers before it has been caused. Competition increases consumer trust in markets and drives the functioning of market economies and economic prosperity with low prices, choice, quality and innovation. At the same time, companies that face competition are more successful at home and abroad.

Read the full joint statement here.

Today, 10:00 – 11:00 CEST (Tuesday, 20 April 2021), you can join the live panel discussion with the three agency heads: http://ow.ly/eKqc50EiRnq

Andreas Mundt: “Where possible, imminent competition problems can be solved by imposing conditions. In this case structural remedies are clearly preferable since they permanently safeguard the competitive framework. There are good reasons why under German merger control it is not possible to impose conditions that subject the behaviour of the undertakings involved to continued control.
Abuse proceedings are difficult, lengthy, involve many economic and legal issues when it comes to Big Tech, and are merely aimed at a company’s specific conduct. If we do not rigorously apply merger control and prohibit anti-competitive mergers, the post-merger road that we subsequently have to take is a very difficult one.”

Andrea Coscelli: “The economic evidence consistently shows that competition is vital for innovation, productivity and sustainable long-term growth and jobs. I also hear directly from UK businesses who have found themselves in very difficult positions after problematic deals are cleared; some unable to survive because they can no longer compete. It’s important that we continue to thoroughly examine mergers on behalf of business and consumers – especially in dynamic markets like digital – and take strong action where needed.”

Rod Sims: “Companies have a clear incentive to merge with or acquire their competitors to increase their market power and raise prices. This is why effective merger control is so important, and why some mergers must be blocked by competition authorities.
We know that once market power is gained from a merger, it is very difficult to restore competition with our other competition enforcement tools, making it crucial for us to use merger control more effectively.
The focus of competition agencies, courts and tribunals must be on the importance of protecting competition and preventing anticompetitive mergers, otherwise there is a risk that merger control instead skews towards merger clearance and so damages our economy.”

In Germany, the Bundeskartellamt’s case practice shows that merger control proceedings follow very high standards and a high level of sophistication. Competition authorities around the world carry out differentiated economic analyses, use modern examination tools and continuously refine their methodical approaches. This also ensures that all the characteristics of dynamic markets, digital business models and globalisation are taken into account and properly assessed. The three agency heads therefore see merger control well equipped for the future.

Recently, the 10th amendment to the German Competition Act entered into force. It has raised the merger control thresholds. At the same time, the Bundeskartellamt can now oblige companies to notify mergers even below the general thresholds under certain conditions. The Bundeskartellamt welcomes these changes as more resources can be used to examine the really critical cases. This marks the way forward for stringent merger control in the future.