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Germany

Competing fairly

Updated 09/2012

Litigation

Bussinesses can appeal against decisions taken by the cartel authorities to the relevant Higher Regional Court (The Higher Regional Court in Düsseldorf is responsible for decisions taken by the Federal Cartel Office; otherwise it is the Higher Regional Court with jurisdiction over the head office of the respective federal-state cartel authorities). Legal appeals against the decisions of the Higher Regional Courts can be made to the Federal Court of Justice (appeal). If appeals are lodged against anti-trust decisions in summary proceedings, the proceedings then move on to the Prosecutor’s Office of the relevant federal state.

Legal requirements

Alongside EU competition law, national rules also ensure that competition is sustainable and fair.

In Germany, these rules are contained in the Restraint of Competition Act (GWB) - also known as anti-trust code - and the Unfair Competition Act (UWG).

Anti-trust

Cartels, in which (competing) firms restrict competition through agreements, decisions, pacts or other coordinated practices, can take a variety of forms:

  • Price and condition cartels: competing firms mutually agree, for example, on selling prices, discounts, price increases, uniform delivery terms or other terms of business.
  • Regional and quota cartels: competing firms divide up specific markets or production and sales volumes between themselves and agree to suspend competition.

There are also rationalisation, export and bidding cartels.

Hardcore cartel, i.e. agreements on price, area and quotas, are in principle forbidden under the cartel law. On the other hand, condition, cooperation and specialisation cartels may be exempt from the cartel ban if the requirements of Section 2 GWB are met. Here, firms have to assess for themselves whether their conduct is eligible for exemption (principle of self-assessment). Breaches of the cartel ban are punishable by the Federal Cartel Office or federal-state cartel authorities on its behalf and may be subject to a fine.

Anti-trust control over dominant market positions

A variety of factors may result in a firm enjoying a dominant market position. Such a dominant position means that the firm is exposed to little or no competition pressure from other businesses.

The Restraint of Competition Act (GWB) does not prohibit market dominance as such. However, there is a danger that a firm dominating a market will impose its business targets largely as its sees fit.

The anti-trust control over dominant market positions and, in Germany as well, over firms with a strong market presence (i.e. a strong position in relation to their customers or suppliers) are designed to stop firms not sufficiently kept in check by competition from abusing their position of dominance to the detriment of competitors or customers/suppliers and against the general interest. The following are prohibited:

  • Unfair hindrance of competitors, i.e. a firm with a dominant market position denies, for example, a competing firm access to its networks and infrastructures, or attempts to oust a competitor from the market through an aggressive pricing strategy. This category also includes forced tie-ups (e.g. a product is sold only under an obligation to purchase spare parts from the same firm) and exclusivity provisions (a retailer is obliged to obtain specific products solely from the market-dominant producer).
  • Exploitative abuse, i.e. a firm demands inappropriate prices or conditions from its customers or suppliers.
  • Non-discrimination, i.e. competing firms may not be placed at a disadvantage or treated differently without material reason.

Unfair commercial practices

The Unfair Competition Act determines which unfair commercial practices against competitors, consumers or other market participants are improper.

National competition authorities

The Federal Cartel Office – together with the relevant cartel authorities in the federal states – is responsible for the protection of competition. Cartel decisions of the Federal Cartel Office’s legal departments are taken by industry-specific decision-making departments in a justice like proceeding.

The Centre for Protection against Unfair Competition (Competition Center) and the Federation of German Consumer Organisations are the two biggest national institutions in terms of implementing Germany’s laws on unfair competition. In addition, the law entitles competitors, fellow associations and Chambers of Industry and Commerce to pursue action on breaches of fair competition. The law on fair trading practices (Lauterkeitsrecht) is not implemented through official channels in relevant cases within Germany itself. The Federal Office of Consumer Protection and Food Safety (BVL) is responsible for cross-border legal violations.

Strict provisions govern company mergers

Help & advice

Help & advice

The Chambers of Industry and Commerce also intervene in certain cases to help avoid legal disputes.

E-mail a business organisation near you

The EU runs a network (Enterprise Europe Network) of local business organisations in most European countries that may be able to help you.

Choose your country and town and enter your enquiry below.

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