Global Competition Law is primarly a practitioner's guide presenting the most salient aspects of the major competition laws country by country, giving an overview of their structure and most charasteristic elements.
Global Competition Law also provides insight into possible future developments in the field.

Global Competition Law

There are two types of enforcement proceedings. One of them is administrative in nature: the adjudication procedure (Verwaltungsverfahren) set out in Sections 32 and 54 - 62 GWB and the fining procedure (Bußgeldverfahren) found in Section 81 GWB. Both provide for the imposition of administrative fines and are enforced by both the FCO and the Länder authorities. There is also a “civil procedure” (S …

Context

There are two types of enforcement proceedings. One of them is administrative in nature: the adjudication procedure (Verwaltungsverfahren) set out in Sections 32 and 54 - 62 GWB and the fining procedure (Bußgeldverfahren) found in Section 81 GWB. Both provide for the imposition of administrative fines and are enforced by both the FCO and the Länder authorities. There is also a “civil procedure” (Section 33 GWB), exclusively enforced by the courts.

  The GWB does not provide for criminal sanctions. However, in 1997, amendments were added to the Criminal Code that introduced provisions expressly addressing bid rigging.

Under Section 54 GWB, the FCO may institute proceedings ex officio or upon application. Thus, parties recognized as having a right to apply for an exemption for example, may start proceedings before the FCO. More generally, parties having a personal interest (subjektives Recht), in a matter arising under the Act, may apply to the FCO to instigate proceedings.

In carrying out investigations, the cartel authorities have vast powers of inquiry. The latter were significantly extended by the 10th Amendment by the introduction of far-reaching duties of cooperation in both administrative and sanction proceedings. According to Section 57 GWB, they may conduct any investigation and collect any evidence required, through inspection, recorded testimony of witnesses and questioning of experts, and, according to Section 58 GWB, they may seize items. Under Section 59 GWB, cartel authorities may require undertakings to provide information and documents which must be delivered within a reasonable period. Undertakings are obliged to cooperate in the event of a request for information. In addition, cartel authorities may make searches when authorized by order of the local court and seize objects of importance to the investigation (Section 59b GWB). Competition authorities may also enter the offices of undertakings, and inspect business documents on the premises of the undertaking during business hours (Section 59a GWB).

The 11th amendment to the Act against Restraints on Competition (GWB) , which came into force on 7 November 2023, strengthened the powers of the FCO. While the former national legislation already allowed the FCO to conduct a sector inquiry if it had reason to believe that competition in a certain segment of an industry was restricted or distorted, the new amendment gives the FCO new enforcement powers to remedy any “distortion of competition”. 

In the event of a “significant and perpetual” distortion of competition, existing in at least one national market or several markets, the FCO can order the necessary behavioral and structural remedies to eliminate or lessen the distortion of competition, against any company active in the sector. However, the FCO must have identified a distortion of competition that has existed continuously for at least three years, with no indication that the distortion will disappear within the following two years. 

These measures may consist of requirements for access to data, or commercial terms for the companies active in the sector, or demands for separate bookkeeping. As a last resort, the FCO can even require a company to divest certain assets to remedy a distortion of competition. 

German law guarantees the right to silence for suspected persons (in particular, where the disclosed information creates a risk of prosecution for a crime or administrative offense - Section 59 GWB), and protects, within certain limits attorney-client correspondence.

The final written decision of the cartel authorities must contain a statement of reasons (Section 61 GWB). Decisions are published in the federal official gazette, in either paper or electronic version.

Pursuant to Section 50 GWB, where the EU Commission wishes to carry out an investigation in Germany pursuant to its powers under Article 20 of Regulation No 1/2003, the FCO is the authority designated to assist it.

Furthermore, the 11th Amendment to the GWB extended the FCO's investigatory powers, as they exist for competition cases, to the Digital Markets Act (DMA): the FCO can raid company premises, request documents or question company representatives in the event of alleged or suspected breaches of the DMA (Section 32g). Section 33b also establishes the binding effect of European Commission decisions relating to the DMA in respect of subsequent private enforcement proceedings.

Complaints and investigations

Under Section 54(2) GWB, the recognized parties to proceedings before the FCO are:

- the party(ies) who have instituted the proceedings;

- cartels, undertakings, trade and industry associations or professional organizations against which the proceedings are directed;

- party(ies) whose interests may be substantially affected by the decision, including consumer associations;

- in the cases referred to in Section 37(1)(1) and 37(3), also the transferor.

Under Section 55, if a party considers that the FCO lacks jurisdiction, it can request a preliminary ruling on this question from the FCO itself. The issue of jurisdiction must be raised at this preliminary stage. A decision relating to jurisdiction may be contested on appeal concurrently with the decision on the merits. However, if jurisdiction has not been challenged before the FCO, it can no longer be accepted as grounds for appeal.

Pursuant to Section 56, parties to the action have the right to be heard and where appropriate representatives of interested business circles may also be given an opportunity to comment.

The FCO can accept commitments submitted by the parties or terminate proceedings by way of settlement if the parties admit their participation in the anticompetitive conduct. In return, the FCO may grant them a reduction of fine which can go up to 10%.

Proceedings before the FCO

Pursuant to Section 60 GWB, the FCO may issue a preliminary injunction to regulate matters on a temporary basis until a final decision is adopted. However, the power to issue injunctions is restricted to certain decisions as outlined in Section 60.

Interim relief

Private actions for damages and injunctive relief are covered by Section 33 GWB. Private party enforcement actions regarding discriminatory or restrictive practices, abuse of a dominant position or abuse of economic dependency can be brought without previously filing with the FCO. The 8th Amendment to the GWB of June 2013 amended Section 33 to allow some associations including consumer protection associations to bring civil damages claims against perpetrators of anticompetitive practices.

District courts (Landgerichte) have exclusive jurisdiction over actions for damages. However, pursuant to Section 90 GWB, the district courts must keep the FCO informed regarding such proceedings and the FCO may participate in the proceedings.

Associations of undertakings, associations of consumers and the FCO may also claim restitution of unlawful gains.

The 9th amendment to the GWB of March 2017 implements EU Directive No 2014/104 on damages actions for competition infringements in national law. The amendment modifies the existing presumption of harm arising from a cartel; whereas previously, such a presumption only applied in the case of price or output fixing cartels, it now covers any horizontal agreement. As in the past, the presumption is rebuttable by the infringing party and does not exempt the claimant of the proof of the extent of the alleged damage. The defendant will be able to raise the passing-on defense and in this regard may be helped by the possibility of requiring the disclosure of economic data by the claimant, if necessary through interim injunctions. However, under certain conditions, indirect purchasers will benefit from a presumption that the direct purchaser passed on the overcharge resulting from the cartel. The new rules relating to the disclosure of evidence, clearly designed to facilitate the bringing of damages actions, protect at the same time the requirements of public enforcement: the courts will not be allowed to grant access to leniency applications or settlements. The effects of the joint and several liability of the parties to a cartel will be limited for SMEs and leniency beneficiaries. Finally, the limitation period is extended from three to five years, with an absolute cap of ten years running from the end of the infringement.

In October 2023, Germany transposed EU Directive No 2020/1828 of 25 November 2020 on representative actions for the protection of the collective interests of consumers by means of the Representative Actions Directive Implementing Act (BGBl. 2023 I NR. 272). The scope of the act transposing the directive includes both competition law and the rules set out in the Digital Markets Act (DMA). Collective actions can therefore be brought in the event of breaches of competition law, as well as breaches of articles 5 to 7 of the DMA. 

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