On January 17, 2019, the FCO prohibited the creation of a joint venture between Miba and Zollern in the market for the production of hydrodynamic plain bearings.[1] This particular type of bearings is needed for the production of large bore engines used, inter alia, in ships, locomotives and power generators. The FCO found that Miba and Zollern were the two major suppliers and close competitors in an already highly concentrated market. The joint venture would have exacerbated the high concentration in the market, in particular due to customers’ high switching costs caused by intense and lengthy tests of the new bearings which are typically customized for each machine. The FCO also considered it unlikely that new participants would enter the market in light of the high investments and extensive technical expertise it would require. The decision marks the FCO’s first prohibition decision since November 2017 (CTS Eventim/Four Artists)[2]. Miba and Zollern have applied for a ministerial authorization by the Federal Minister for Economic Affairs and Energy to overrule the FCO’s prohibition decision.

[1]              FCO Press Release, “Proceeding against whitelisting contract between Google and Eyeo terminated after amendments to the contract”, January 21, 2019, available in English here.

[2]              FCO Press Release, “Bundeskartellamt – Ticketing: Bundeskartellamt prohibits merger between CTS Eventim and Fourt Artists”, November 23, 2017, available in English here.