Following a petition by MEP J. Genzer and the response from the EU Commission end of May 2016, the Commission has now launched a public inquiry regarding the modification of the EU Merger Control as to new (threshold ) criteria in merger transactions involving ( among others) digital services.

Originally raised during the EU notification of Facebook’s acquisition of WhatsApp, and emphasized by the raising market power of digital economies in ( “apparently” ) small transactions carried out by economically strong companies, this proved to be necessary….

Under current EU Merger Regulation thresholds, acquisitions of target companies that do not ( ie at the date of the acquisition) generate significant turnover but that have a high market potential (reflected in a high purchase price) do not have to be notified to the EU Commission. This can happen/ has happened, in particular, in the digital services sector.

Over recent months, a debate has emerged on whether the system of turnover-based thresholds of the EU Merger Regulation allows it to capture all transactions which would merit control under its rules. In particular, in light of the growth of the digital economy and its particular features, including the importance of big data, a debate on a possible enforcement gap of EU merger control in this industry sector has been initiated.

Moreover, the European Parliament “[t]akes the view that in some economic sectors, first and foremost the digital economy, additional criteria should be applied that go above and beyond price-based approaches, market share, and turnover, since mergers [of this kind]can often entail market restrictions”.

The results of the public consultation will feed into the EU Commission’s evaluation of the relevant procedural and jurisdictional aspects of EU merger control. This evaluation will inform the Commission’s decision on possible future reforms in the field of EU merger control.

By way of example the German legislator has accounted for an appropriate modification in the 9th amendment of the its Cartel Law, the GWB. It took the US merger control as an example however not based on the value of the transaction but on the acquisition price.

The modification suggests that if the purchase price for the target was beyond EUR 350 Mio ( vs a small/ near to not existent turnover ) that could be an indication for a competition law concern of the merger, and should be notified.

The public consultation launched by the EU Commission will close on 13 January 2017.