Hogan Lovells has successfully acted for the German Federal Cartel Office (FCO) in a EUR1.1 billion government liability damages claim brought by Danish group GN Store Nord, the world’s largest maker of headsets.
The Hogan Lovells team in Germany, led by competition partner Marc Schweda, alongside corporate partner Andreas H. Meyer and litigation partner Detlef Hass, were first instructed in 2011 to defend the FCO, Germany’s antitrust regulator, after it had prohibited the planned sale of GN Store Nord’s hearing-aid unit ReSound to Sonova Holding AG. GN Store Nord had sued the FDC, to claim damages it said were incurred by the regulator’s decision to veto the sale of its ReSound unit.
The company got the veto of the sale of ReSound overturned in Germany’s highest court in 2010. The Cartel Office said in 2007 that the purchase of ReSound would harm competition because Sonova, Danish competitor William Demant and Germany’s Siemens controlled about 80 per cent of the German market.
This decision was ultimately overruled by the Federal Supreme Court, which in turn led to the damages claim against the FCO for allegedly lost sales profits. This case is the first in Germany to try to hold the agency responsible for wrongfully blocking a transaction.
Hogan Lovells competition partner Marc Schweda said:
“This was the first litigation of this kind in Germany. For the FCO, the case is of the utmost importance since the outcome would have a significant impact on the FCO’s ability to scrutinise mergers. The case attracted a great deal of attention in the legal community since it concerned novel legal issues and was generally considered to be ground-breaking.”
