Around two years after the 11th Amendment of the German Act Against Restraints of Competition (ARC) came into force, the Federal Ministry of Economic Affairs and Energy (Ministry) published a proposal for a 12th revision of the law (the Draft Bill).[1] The Draft Bill seeks to implement the coalition agreement of the German government and is now subject to discussion and revisions in the legislative process. 

Proposed main changes:

  • Merger control:
    • Turnover thresholds to be raised:
    • Following the publication of the proposal, the FCO expressed concerns about raising the turnover thresholds, noting that they were already raised in 2021 and warning that raising them further risks creating enforcement gaps in merger control in particular in smaller and regional markets.[2]
    • Transaction value threshold to be expanded to capture acquisitions of targets that are “likely to develop significant activities in Germany” and introduction of a Phase 0.
  • Proposed new tool against bid-rigging: systematic screening of public-tender data.
  • Chair’s letter: Companies that have a “significant legal and economic interest” to obtain legal certainty can request a formal decision that there are no grounds for intervention re a vertical cooperation. This right is currently reserved for horizontal cooperations. 

Merger Control

(1) Transaction Value Threshold

The Draft Bill focuses on capturing ‘killer acquisitions’ – i.e. acquisitions of young, innovative companies in particular in the digital and pharma spaces or other innovation-intensive industries – to preserve their future competitive potential by expanding the scope of the transaction value threshold. Under the Draft Bill, the transaction value threshold would capture all deals meeting the worldwide and the domestic turnover threshold for company 1 if the deal value exceeds EUR 400 mio. and the target has significant activities in Germany or is likely to develop such activities. The main change is the new relevance of a prognosis as to whether a company will develop activities in Germany that it does not yet have. The explanations to the Draft Bill note that the relevant timeframe for the prognosis would usually be up to two years, in specific cases up to 5 years. 

The Draft Bill suggests that prognostic uncertainties are mitigated by requiring that future domestic activity is “appreciable”, not just hypothetical or marginal. It encourages the FCO to issue guidelines about the application practice.[3]

A similar proposal was included in a draft for the 9th amendment of the ARC around 10 years ago, but it did not see the light of the day at the time. The FCO also considered such an approach in a September 2025 background paper, but appeared ambivalent in light of expected problems of interpretation which would very likely lead to legal challenges requiring FCJ clarifications.[4] The Draft Bill now refers explicitly to newer cases such as Microsoft/OpenAI and Microsoft/Inflection which recently escaped the FCO’s jurisdiction, but shall be captured in the future.

In effect, the Draft Bill builds on a 2025 decision by the Federal Court of Justice (FCJ)[5]in which the FCJ took the view that the current transaction value threshold is broad in scope and all current activities with a link to Germany are to be assessed. The Draft Bill now expands the scope even further seeking to capture also all preparatory activities, such as research and development aimed at market entry in Germany.

The Draft Bill’s proposal leaves great room for interpretation and legal disputes but, on the bright side, it abstains from introducing an even more unpredictable call-in power. Nevertheless, it creates significant legal uncertainty.

The FCO generally endorses the reform, but suggests replacing the concept of “significant domestic activity” with a reference to “domestic effects” used in other context in the law.

(2) Bifurcation of Merger Control Proceedings

The Draft Bill proposes a bifurcation for proceedings that meet the turnover thresholds and transactions that meet the transaction value threshold. Transactions meeting the turnover thresholds continue to be formally notified at the FCO (typically without pre-notification) triggering a 1-month review period in Phase 1.

Phase 0. For transactions only meeting the transaction value threshold, the Draft Bill proposes that notifying parties file a “simplified notice”. The FCO would be obliged to determine within 2 weeks as of receipt of the notice whether a full-fledged notification is required, otherwise the transaction is cleared. This shall be the case if a Phase 2 investigation is “not obviously excluded”. It remains to be seen whether the FCO can make such a determination within 2 weeks.

Scope of information to provide in Phase 0. While some standard information, such as market share estimates, would not be required for a Phase 0 notice, the process envisaged in the Draft Bill would not be a light version of a Phase 1 filing as we currently know it. Instead, the requirements would be different and go beyond those currently required for a merger control filing. In particular, a Phase 0 notice would need to include a description of the strategic and economic rationale for the proposed transaction which would need to be supported by submitting internal documents. The submission of internal documents is currently mostly reserved for Phase 2 investigations. A Phase 0 notice would also need to explain all current or prospective activities giving rise to horizontal or vertical relationships between the parties, including all affiliated companies. In practice, it is therefore well possible that the preparation of a Phase 0 notice is not (significantly) alleviating the burden compared to a merger control filing as we currently know it. Whether the mechanism constitutes a relief of the burden on companies and a reduction of bureaucracy – as intended by the Draft Bill – will ultimately depend on its practical application and on how frequently the FCO clears transactions in Phase 0.

In practice, Phase 0 may save two weeks for no-issue transactions, while proposed transactions that are not filtered out in Phase 0 undergo an additional procedural step adding two weeks to the schedule. 

Following the publication of the Draft Bill, the FCO made a sensible proposal to avoid prolonged proceedings, suggesting that Phase 0 should be voluntary. This would enable notifying parties to choose whether to opt for a Phase 0 or to proceed directly with a formal Phase 1 notification. Such an approach would enhance legal certainty in borderline cases – where parties currently tend to engage in informal consultations with the FCO – without prolonging merger control proceedings for transactions that are more likely than not to be notifiable.

Proposed New Tool Against Bid-Rigging

The Draft Bill proposes the introduction of a tool empowering the FCO to systematically screen public procurement data to detect bid-rigging and other cartel conduct.[6] Authorities would be required to submit information regarding bidders, including identifying information and bid prices to the FCO.[7] The evaluation of all bidding data (including unsuccessful bids) would allow the FCO to uncover patterns that were difficult or impossible to capture before. Data can be stored for a maximum of five years, unless it becomes part of ongoing FCO proceedings. The proposal follows examples from other jurisdictions, including Spain and Denmark.

The new tool covers significant ground, considering the public procurement volume of over EUR 120 billion annually. The reform increases enforcement risk for companies active in public tenders. While businesses with robust compliance programs should have little to fear from the data-driven screening, the proposal underscores the growing importance of procurement compliance and internal monitoring procedures.

Chair’s Letter – Legality of Cooperations

In 2021, the 10th Amendment of the ARC introduced a right for companies cooperating with a competitor to request a formal decision that there are no grounds for the FCO to take action if they have a “significant legal and economic interest” to obtain legal certainty. The FCO shall decide within 6 months. This right is now extended to vertical agreements between companies that are not competing. 

The FCO, in its comments on the Draft Bill, opposes the proposed extension, noting that this extension would require significant additional resources at the FCO and considering that there is no need in light of the guidance provided by the Vertical Block Exemption Regulation and the European Commission’s Vertical Guidelines.

Other Noteworthy Changes

The Draft Bill contains a series of procedural reforms. These include a revision of the rules on the right to be heard,[8] a clarification that access to file may be limited for parties not affected by the proceedings,[9] introduction of mandatory electronic merger filings from 2028,[10] broader publication obligations for FCO decisions,[11] and a simplified access to appeal on points of law to the FCJ.[12] 

It further raises the possible maximum administrative fees to 750,000 in proceedings as per Sec. 19a ARC, EUR 100,000 for proceedings as per Sec. 32 ARC and EUR 100,000 for merger control proceedings. The average fees for merger control proceedings are raised from EUR 7,500 to EUR 10,000 and for Phase 2 from EUR 30,000 to EUR 50,000. In our experience, however, the fees for merger clearances in Phase 1 typically exceed EUR 10,000.

The Draft Bill also provides for an eight-year, non-renewable term for the President of the FCO.[13] The revision aligns with the rules applicable to EU practice, as well as the Federal Network Agency (BNetzA) and the Federal Financial Supervisory Authority (BaFin). 

Key Takeaways

The increase of merger control thresholds makes sense after years of economic growth and inflation. 

The Draft Bill has the ambition to deliver efficiencies and a reduction of regulatory burden. Whether it will deliver on these ambitions will largely depend on its application in practice (and clear guidance by the FCO considering these ambitions). 

The inclusion of an element of prognosis in the transaction value threshold that captures likely future activities in Germany creates significant legal uncertainty. While the proposal addresses legitimate concerns regarding acquisitions of innovative businesses, the inclusion of a prognosis element in the formal merger control thresholds, an area in which legal predictability is particularly important, is not desirable and will make foreign-to-foreign transactions even more difficult to assess. 

The introduction of a Phase 0 will only achieve the desired effects if the requirements are clear and the process is pragmatic. It will otherwise increase the burden on companies and prolong the review process in practice.

The procurement-screening tool is a powerful tool to strengthen enforcement. Given the economic harm associated with bid-rigging, stronger detection capabilities make sense and are broadly consistent with international enforcement trends. Companies participating in public tenders should expect closer scrutiny of bidding patterns and ensure that their compliance programs are fit for purpose.

[1] Entwurf eines Zwölften Gesetzes zur Änderung des Gesetzes gegen Wettbewerbsbeschränkungen (12. GWB-Novelle), as of June 4, 2026, only available in German here.

[2] Available only in German here.

[3] Draft Bill, p. 36f.

[4] Available only in German here.

[5] Meta/Kustomer (KVR 77/22), FCJ decision of June 17, 2025, available only in German here.

[6] Draft Bill, Proposed Section 32h.

[7] Draft Bill, Proposed Section 114 (4).

[8] Draft Bill, Proposed Sections 56 et seq.

[9] Draft Bill. Proposed Section 56b.

[10] Draft Bill, Proposed Sections 39(1), 187 (15).

[11] Draft Bill, Proposed Section 43 (4).

[12] Draft Bill, Proposed Section 77 (1).

[13] Draft Bill, Proposed Section 51a (1).