Between Ambition and Implementation – Competition and Antitrust Law in the Coalition Agreement

"Competitiveness" is one of the keywords in the new coalition agreement. However, concrete proposals for the further development of competition and antitrust law have been sought after for a long time.

The new coalition between the CDU/CSU and SPD intends to promote economic growth, innovative strength and Germany's attractiveness as an investment location. The coalition attaches particular importance to the energy, medical devices, pharmaceuticals, telecommunications and transport (including air transport) sectors. It wants to provide regulatory support for their digital and ecological transformation. The agreement states that competition law proceedings are to be made more efficient and effective. However, details on how this will be implemented remain vague. Much information will only become clear over the course of the legislative period. In our view, the following aspects are worth paying attention to:

1. Competition law, merger control, competitiveness

In terms of competition law, the new coalition wants to maintain a clear focus on digitalisation and procedural expediency, in particular the effective enforcement of the Digital Market Act. The coalition also wants to establish a "Competition and Artificial Intelligence" expert commission at the German Federal Ministry of Economic Affairs and Energy, which will develop strategic recommendations for regulating and promoting AI applications in line with competition.

The coalition is expressing its political will to reshape merger control in particular. Aspects of European sovereignty and security are expected to play a greater role here. How and on what legal basis the German Federal Cartel Office should implement this remains an open question. If the German Federal Cartel Office gives greater consideration to security interests (such as the prioritisation of European manufacturers in procurement policy for strategic sectors) when examining whether a merger significantly impedes effective competition (section 36 (1) German Act against Restraints of Competition (GWB)), there is a risk that merger control will become politicised. 

The coalition wants media competition law to dovetail more closely with media concentration law to enable effective control of mergers between media companies and operators of media-related infrastructure. An exemption from competition law is to be introduced to legally facilitate cooperation in public service broadcasting and between private media companies. According to case law of the German Federal Court of Justice, agreements between public broadcasters, for example, have been subject to approval from the competition authorities in the past. It is questionable whether a more lax application of the ban on cartels to public service broadcasting would strengthen its competitiveness.

The coalition is planning targeted measures to strengthen the competitiveness of the German and European security and defence industry. The focus is on the process of awarding long-term contracts, simplified access to capital and the development of resilient supply chains to increase autonomy of action in terms of security policy. The coalition also wants to remove barriers to civil-military research cooperation and dual-use research.

In key technologies, such as renewable energy sources, the coalition wants to reduce dependencies and improve the resilience of domestic production. In order to remain competitive, the coalition wants to permanently reduce energy costs for companies and consumers by at least five cents per kWh. An "industrial electricity price" is intended to provide relief for energy-intensive companies. The coalition wants to make authorisation procedures quicker for industrial plants by reducing bureaucracy.

For retailers, the goal is to establish a "level playing field" with third-country providers. Competition in trade should not be undermined by dumping prices from third countries. Companies from non-EU countries will be expected to comply with EU standards. Violations may result in online trading platforms being blocked.

2. Comparing the 2021 coalition agreement with the current coalition agreement

The discussion of competition law in the respective coalition agreements reveals clear differences between the previous Traffic-Light Coalition and the current coalition between the CDU/CSU and SPD. While digitalisation, in particular the enforcement of the Digital Markets Act (DMA), also played a significant role back in 2021, competition law under the government of the time was primarily in the context of innovation, sustainability, consumer protection and social justice. The aim was to expand the powers of the German Federal Cartel Office to allow consumer law and sustainability aspects to be more strictly enforced. In contrast, the current coalition is setting other priorities. The focus is on strengthening the competitiveness of the German economy and largely returning to a classic understanding of competition law as an instrument for regulating competition. The new coalition agreement makes no further mention of amending the German Act against Restraints of Competition (GWB). While ambitious reforms were sought and implemented in part in the previous legislative period, a further amendment of the German Act against Restraints of Competition (GWB) does not appear to have been a priority in the recent negotiations. Increasing the legal protection against ministerial authorisation proceedings also no longer seems to play a role. What has remained consistent, however, is the campaign against allegedly unfair pricing strategies in the retail sector. 

3. State aid law

In the area of state aid law, the coalition intends to work towards faster and leaner state aid procedures and the removal of hurdles in line with the mission letter to Commissioner Ribera, thereby driving forward the overall modernisation of state aid law. The coalition is endeavouring in particular to strengthen, simplify and accelerate the procedures within the framework of the Important Projects of Common European Interest (IPCEI). This is also in line with the IPCEI Design Support Hub recently announced by the Commission to support Member States with implementing IPCEI projects.

The coalition also plans to continue to provide extensive support in the form of state aid. The coalition agreement emphasises this in particular for energy prices and hydrogen. The agreement also provides for the continuation of major funding programmes such as the Carbon Contracts for Difference. The German government is calling for housing construction to be excluded from EU state aid law.

4. Conclusion: few concrete prospects for implementation despite clear ambitions

The new coalition is setting recognisable priorities, particularly in the areas of digitalisation, procedural expediency and putting greater focus on European sovereignty and security, especially in view of current geopolitical tensions. However, the concrete implementation of these plans remains elusive (How should competition law be enforced "effectively and efficiently"?). The ambitions expressed here leave important questions unanswered. Their actual scope therefore remains unclear, raising the question as to how far the ambitious coalition agreement goes beyond merely paying lip service.

* This article does not address the foreign trade law topics in the coalition agreement.