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The 10th amendment to the German Act against Restraints of Competition ("GWB Digitalisation Act") came into force today

20/01/2021

Comprehensive amendments to German competition law came into force today with the 10th amendment to the German Act against Restraints of Competition (GWB) in the form of the GWB Digitisation Act.1 This is the legislator's response to the fact that business models, markets and economic power relations are changing ever more rapidly as a result of digitalisation2. The GWB Digitisation Act tightens up the provisions dealing with the abuse of a dominant position in the field of the digital economy, mitigates the burden on companies in the area of merger control, makes it easier for the competition authorities to enforce competition law and simultaneously transposes EU law requirements.3

Tightening up provisions dealing with the anti-competitive abuse of a dominant posititon in the field of the digital economy

  • The most important amendment is a new intervention option for the German Federal Cartel Office offered by the newly introduced section 19a German Act against Restraints of Competition for cases where competition is put at risk by companies with paramount importance for competition across markets, in particular large digital groups. The German Federal Cartel Office can prohibit, even as a preventive measure, such companies from carrying out certain types of conduct, e.g. giving preference to the group's own services or obstructing access to the market by third parties by withholding certain data. 
  • What is special about it is the extraordinary reduction of the steps in the legal process for appeals against decisions of the German Federal Cartel Office on the basis of section 19a German Act against Restraints of Competition: appeals go directly to the German Federal Court of Justice.

Furthermore, the legislator has further specified the provisions of classic abuse of a dominant position and expanded them to include internet-specific criteria: 

  • When measuring market power, the law now explicitly provides for account to be taken of access to competitively significant data and the question of whether a platform has "intermediation power". 
  • The obstruction prohibition on companies with relative or superior market power is no longer limited to small and medium-sized enterprises, but now also extends to large companies.
  • It is now explicitly regulated by law for the benefit of dependent companies that market-dominant and market-strong companies must grant access to data, subject to certain preconditions in return for an appropriate fee (competition law data access claim).
  • There are also intervention options for the competition authorities for cases where a platform market is at risk of "tipping" in the direction of a large provider with superior market power.

Amendments in the area of merger control

  • In future, significantly fewer merger projects will be subject to notification. The domestic turnover thresholds are being increased significantly: in future, planned mergers will only be subject to merger control if, among other things, one of the companies involved has an annual turnover in Germany of at least EUR 50 million (previously EUR 25 million) and, in addition, another company has an annual turnover in Germany of at least EUR 17.5 million (previously EUR 5 million). As in the past, a notification is necessary if, among other things, the value of the consideration for the merger exceeds EUR 400 million.
  • Even where the turnover thresholds are not met the German Federal Cartel Office will also be able to require companies to notify mergers in certain economic sectors. For this, certain requirements, including thresholds, must be met and the German Federal Cartel Office must have first conducted a sector inquiry into one of the economic sectors concerned.   
  • In accordance with the "mini market clause", mergers will not be prohibited in the future if the requirements for prohibition are met exclusively on a market with a market volume in Germany of less than EUR 20 million (previously EUR 15 million) in the previous calendar year.

Tightening up of provisions concerning fine proceedings

  • In the course of transposition of the ECN+ Directive, the competences of the German Federal Cartel Office in competition law fine proceedings are being expanded. In particular, dawn raids by the German Federal Cartel Office will be conducted differently in future: the right of affected companies and their employees to remain silent is practically being abolished. In future companies and their employees will have a duty to provide information for the purpose of clarifying the facts.
  • The competition authority will also be the competent prosecuting authority in judicial fine proceedings in future even after an appeal against a fine decision has been filed, and the competition authority will have the same rights as the public prosecutor's office. 
  • The criteria for calculating fines have also been supplemented. In future, the gravity and duration of the infringement, the conduct after the infringement and, in particular, the turnover affected by the infringement will be explicitly taken into account when determining the amount of the fine.
  • Furthermore, the leniency programme has now been enshrined in law.

Acceleration and facilitation of administrative competition proceedings

  • The requirements for issuing interim measures by the German Federal Cartel Office are being lowered to allow for faster intervention. 
  • In administrative competition proceedings, hearings will also be able to be held orally in future.
  • The provisions concerning the inspection of the files by parties to proceedings and third parties have been specified further. 
  • The practice of what is known as the "chairperson's letter", whereby the competition authority informs the requesting companies that it is refraining from initiating proceedings due to its discretion in taking up cases, is now explicitly regulated by law.

Facilitating the enforcement of competition law damages claims

  • For the future, the law now explicitly provides for a rebuttable presumption that legal transactions by suppliers or customers of a cartel with companies participating in the cartel are affected by the cartel. This is the legislator's response to the case law of the German Federal Court of Justice.

Available at Federal Law Gazette (bgbl.de)

2 Press release Peter Altmaier, Federal Minister for Economic Affairs and Energy, on 09.09.2020, available at BMWi - Altmaier: Mit dem GWB-Digitalisierungsgesetz schaffen wir ein modernes Wettbewerbsrecht für das digitale Zeitalter (With the GWB Digitalisation Act we are creating a modern competition law for the digital age, only available in German)

3 Directive (EU) 2019/1 to empower the competition authorities of the Member States to be more effective enforcers and to ensure the proper functioning of the internal market, OJ L 11/3 of 19 January 2019


More informationen on the GWB Digitalisation Act

Digital Regulation
A new legal framework for the digital world
Competition - Digital Regulation
New legislation for the digital age
User Interface Providers - Digital Regulation
At the interface between innovation and digital regulation
Market Places - Digital Regulation
Digital innovations bring new requirements

Authors

Portrait ofHarald Kahlenberg
Dr. Harald Kahlenberg
Partner
Stuttgart
Portrait ofRolf Hempel
Dr. Rolf Hempel
Partner
Stuttgart
Portrait ofMichael Bauer
Dr. Michael Bauer
Partner
Brussels - EU Law Office
Portrait ofChristian Friedrich Haellmigk
Dr. Christian Friedrich Haellmigk, LL.M. (College of Europe)
Partner
Stuttgart
Portrait ofBjörn Herbers
Dr. Björn Herbers, M.B.L.
Partner
Brussels - EU Law Office
Portrait ofStefan Lehr
Stefan Lehr
Partner
Frankfurt
Portrait ofJens Neitzel
Dr. Jens Neitzel
Partner
Munich
Portrait ofKai Neuhaus
Kai Neuhaus, LL.M.
Partner
Brussels - EU Law Office
Portrait ofDietmar Rahlmeyer
Dr. Dietmar Rahlmeyer
Partner
Duesseldorf
Portrait ofTim Reher
Dr. Tim Reher, M.Jur. (Oxford)
Partner
Hamburg
Portrait ofMarkus Schöner
Dr. Markus Schöner, M.Jur. (Oxford)
Partner
Hamburg
Portrait ofChristoff Henrik Soltau
Christoff Henrik Soltau, LL.M. (King's College London)
Partner
Hamburg
Portrait ofPeter Giese
Peter Giese
Principal Counsel
Stuttgart
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