Kick-off for the next German competition law reform: what’s in it for tech?

Last week, the Federal Ministry for Economic Affairs and Energy (BMWE) published its draft for the 12th Amendment to the German Competition Act (Referentenentwurf — the "Draft"). For tech companies, the Draft includes some significant changes in merger control enabling greater scrutiny of strategic deals — particularly those involving innovation, data and future market power. Here is what you need to know:

Merger control: Raising the bar but widening the net

Raising the bar - increased turnover thresholds

The Draft increases all three turnover thresholds triggering mandatory merger notification. The combined worldwide turnover threshold rises from EUR 500 million to EUR 750 million (50%), the first domestic German threshold from EUR 50 million to EUR 75 million (50%), and the second domestic threshold more modestly from EUR 17.5 million to EUR 20 million (14%). Overall, the BMWE estimates a reduction in mandatory notifications of approximately 13–14% per year, equivalent to around 120 fewer cases annually.

Wider net - recasting the transaction value test

However, the most significant development for tech companies lies in the overhaul of the transaction value threshold.

Recent globally significant, high-value tech transactions — most notably Microsoft/OpenAI and Microsoft/Inflection — have demonstrated the limits of German enforcement: these fell outside German merger control because they lacked sufficient domestic activity at the time. 

• While the transaction value remains at EUR 400 million, the scope of the threshold is widened: So far, the target undertaking needed to have substantial operations in Germany – now, a more forward-looking approach allows the Federal Cartel Office (FCO) to assess whether the target's business activity in Germany is expected to amount to substantial operations — typically within a two-year horizon (extending to 3-5 years in exceptional cases). This represents a meaningful change in risk allocation. 
   
• Mandatory pre-filing “Phase 0”: Rather than adopting general call-in powers (like in other EU jurisdictions), the Draft introduces a mandatory "Phase 0" pre-notification step for transactions caught exclusively by the transaction value threshold. Parties must submit key information — including current and anticipated activities, horizontal and vertical overlaps, and the strategic rationale with supporting internal documents — before the FCO decides whether a full filing is required. The FCO has two weeks to respond; silence equals clearance.
   
• Open questions & hurdles: 
  Procedure: Whilst described as a streamlined instrument, the information requirements — particularly the disclosure of internal strategic documents — mean the practical burden in complex cases may approach that of a full notification. Deal teams will need to factor this additional step into transaction timelines from the outset. For straightforward cases, it may enable rapid green-lighting. But for complex tech transactions — involving platform strategies, data integration or pipeline products — it is likely to function as a substantive preliminary review, requiring early mobilisation of internal teams and documentation.

Material questions: Although the Draft aims to resolve some uncertainties (e.g. those flagged by recent decisions by the Federal Court of Justice (FCJ) in Meta/Kustomer and the Higher Regional Court of Düsseldorf in Adobe) regarding the applicability of the transaction value threshold to so called “mature markets”. It also creates additional regulatory uncertainty by adding a more forward looking approach (review horizon subject to individual assessment) to an already loosely defined prerequisite of “substantial domestic activity”. 

• Updated Guidance expected: The transaction value threshold guidance by the FCO is outdated since the FCJ-Meta/Kustomer decision last year, hopefully the updated guidance – although it likely will take some time due to the proposed legislative changes – will shed some light.

Acquisitions of capabilities in the spotlight

Given that since the introduction of the transaction value threshold, 27% of mergers reviewed under this test involved the IT sector, the change is one to watch closely. For tech acquirers, it can pull earlier-stage, AI-driven and data-centric businesses into scope, even before revenues materialise locally. In practice, this increases the likelihood that acquisitions of capabilities — rather than businesses with established turnover — will attract scrutiny.

What else is (not) in the Draft? Some key amendments for digital and beyond

• New safe harbour for vertical agreements including data pools: The FCO's "no action" decision mechanism is extended to vertical agreements. The draft explicitly cites data pools between non-competitors as an example, making this particularly relevant for tech companies operating complex data-sharing structures provided they can demonstrate a significant legal and economic interest.
   
• Procurement screening: The FCO receives new powers to screen procurement data on a suspicion-free basis for bid-rigging and other antitrust violations.
   
• Significant increase in fee ceilings: Merger control fee ceilings double to EUR 100,000, while fee ceilings for proceedings targeting companies with paramount cross-market significance rise dramatically from EUR 25,000 to EUR 750,000. Companies – especially in the digital sector (see Section 19a Competition Act) - should factor in materially higher enforcement costs, although it should be noted that the fee is still set predominantly by reference to the economic significance of the transaction, not merely by administrative effort.
   
• No substantive changes to Section 19a Competition Act: The special abuse control provision targeting companies of paramount significance for competition across markets — nor to the interface between Section 19a Competition Act and the EU Digital Markets Act. Whether substantive digital topics will be addressed during the parliamentary process remains to be seen.

FCO going digital 

• Mandatory e-filing from 2028: From 1 January 2028, all merger notifications and transaction value related Phase 0 pre-notifications must be submitted exclusively through prescribed electronic channels. Paper filings will no longer be accepted, with a transitional period running until 31 December 2027.

• RFI-orders by E-Mail: An amendment to Section 59(5) Competition Act allows for the notification of certain orders and decisions with requests for information to be made by E-Mail. Formal service via a secure transmission channel is not strictly necessary for the notification of such orders and decisions.

Outlook

The Draft is now in the consultation process until 19 June 2026 and will then proceed through inter-ministerial consultation and parliamentary deliberation which will take several months. 

Companies with M&A pipelines, public procurement exposure, or novel business models involving vertical arrangements should begin assessing the implications now — before the law is on the books. Germany is sharpening the lens. And for tech companies, that lens is increasingly focused on where the market is going, not where it is today.