Risk of Recurrence
following to
merger
Risk of Recurrence
following to
merger
of
If a company acquires another company through a merger, and the acquired company is already the subject of an injunction proceeding for a competition law violation, does the acquiring company then automatically remain liable? And does it make a difference that the acquiring company continues the disputed business practice through the same website?
Two Contract Summaries and a Merger in the Middle of the Litigation
A telecommunications provider offered Internet, telephone, and television services through a single website. Customers could select an Internet and telephone plan as well as a separate television access service; both could be ordered together or independently of one another. For both services, the provider provided a separate contract summary as a PDF during the ordering process, rather than a combined summary for the package. It was only during this final step of the ordering process that customers learned which company they were actually entering into a contract with.
The Federal Association of Consumer Organizations considered this to be unfair and demanded that the practice be ceased. The Munich I Regional Court dismissed this motion in its judgment of May 14, 2024 (Case No. 33 O 8186/23), but granted a second motion—which is not the focus of this case—regarding another advertising practice. The Munich Higher Regional Court then ruled against the provider in its appellate decision of September 25, 2025 (Case No. 6 U 2074/24 e) regarding the separate contract summaries.
During the appeal proceedings—that is, the proceedings before the Federal Court of Justice, in which only legal issues are examined and no new facts are considered—the defendant company merged with another company within the same corporate group, effective November 13, 2025. The parties then mutually declared the second point of dispute to be settled. However, they continued to dispute the separate summaries of the contracts, now with the new company as the defendant.
Why does the merger in the middle of the proceedings change anything?
The Federal Court of Justice first had to clarify who was actually a party to the proceedings. If a company represented by a lawyer merges with another company during an ongoing legal dispute, the acquiring company, according to settled case law, enters the proceedings without interrupting them and is represented by the same attorney. The lawsuit against the new defendant was therefore admissible.
However, this only addresses the question of who can sue and be sued. It says nothing about the merits of the case itself.
Why doesn’t the legal successor automatically continue to be liable?
This is precisely where the crux of the Decision of the Federal Court of Justice dated June 3, 2026 – Case No. I ZR 213/25. The Federal Court of Justice dismissed the action against the current defendant because there is no so-called “risk of recurrence”—that is, the legally presumed risk that someone will commit a violation again after having committed it once. This risk is a prerequisite for a claim for injunctive relief. The Senate explains that, according to established case law, an infringement committed by officers or employees of a company that was later merged does not give rise to a risk of recurrence for the legal successor, regardless of whether the infringement was committed personally by the legal predecessor or by its employees. Nor does a so-called “risk of a first-time violation”—that is, concrete indications that a violation is about to occur for the first time—arise solely as a result of the merger.
The risk of recurrence is a factual circumstance that must be assessed based on the circumstances specific to the person against whom the claim is made.
The dissolved company could not, therefore, simply pass on its liability to the successor company. Consumer advocates had further argued that the new company was continuing the contested practice unchanged, but their argument was unsuccessful. The Federal Court of Justice deemed this to be a new, separate issue of dispute based on the new company’s own conduct, which cannot be raised for the first time before the Federal Court of Justice itself. Anyone wishing to allege misconduct on the part of the new company must assert this in a separate, new proceeding.
Does the question regarding the consolidation of contracts remain open?
Yes, and that is important for practical classification purposes. The Federal Court of Justice expressly did not rule on whether a bundled offer consisting of an Internet plan and a television access service actually requires a single contract summary, as provided for by the disclosure requirements under telecommunications law and a Europe-wide standard form template for such summaries. It states that it can be left open whether the appellate court was correct in affirming a claim in this regard. This question thus remains at the level of the Munich Higher Regional Court and is still unresolved by the highest court.
Conclusion
The decision upholds a long-established principle in competition law, according to which the risk of repetition remains tied to the identity of the infringer. This outcome comes as no surprise to those familiar with previous case law.
For companies planning a takeover or facing a takeover themselves, this is good news—but it’s not something they should rest on their laurels about. Those who continue the contested practice unchanged will quickly find themselves at risk of a repeat offense—only this time in a new proceeding involving a new point of contention.
From a consumer protection perspective, it remains an open question whether this outcome is in fact appropriate in rapidly changing corporate structures. If a corporate group promptly merges a subsidiary—against which an injunction proceeding is pending—into another group company, the plaintiff must effectively start from scratch, even if the practice in question has not changed. The Federal Court of Justice itself points to this possibility by expressly leaving open whether the new company has committed a separate violation, yet requiring a new proceeding in such cases.
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