New antitrust law entered into force: New instruments in the area of digital platforms, higher thresholds in merger control

The amendment to German Competition law, the Act against Restraints of Competition ("ARC"), entered into force last week following its publication in the Federal Law Gazette.

  The focus of the amendment can already be seen from its title. The "Act Amending the Act against Restraints of Competition for a Focused, Proactive and Digital Competition Law 4.0 and amending other competition law provisions (GWB Digitalisation Act)" regulates issues relating, in particular, to the steady advance of digitalization. It is essentially about the power of Internet platforms.
 
Other important amendments relate to the area of merger control. In the future, fewer mergers will have to be registered as the turnover thresholds have been raised. However, on the other hand, the German Federal Cartel Office (Bundeskartellamt, FCO) will be able to require companies in certain sectors to notify mergers for merger control even below the turnover thresholds.

Fieldfisher will be sending out a comprehensive briefing on this shortly and will also be offering a webinar on the new features in March.

In detail:
 

Control of abusive behaviour in the digital economy

In the context of adapting competition law to the ongoing digitalisation, the change that has probably attracted the most attention is the introduction of Section 19a of the ARC. This now enables the FCO to preventively prohibit certain types of conduct by companies with "overriding importance for competition across markets. This provision is aimed primarily at companies in the digital economy.

In order to take account of the fast pace of the digital economy, the Federal Court of Justice (BGH) will in future have direct jurisdiction for appeals against decisions of the FCO, based on Section 19a of the ARC.

Finally, it should be noted that regulations for companies with relative or superior market power now apply to all companies. The previously existing, so-called SME provision has been deleted. When measuring market power, the law now also provides that access to competition-relevant data and the question of whether a platform has so-called intermediation power are to be taken into account. Such a key position in the intermediation of services can establish a dependency relevant under antitrust law. Also, companies may now have a claim to access to data.
 

Amendment of merger control rules

In the future, mergers will only be subject to merger control if, among other things, one of the companies involved achieves annual sales of at least €50 million in Germany (previously €25 million) and another company involved achieves annual sales in Germany of at least €17.5 million, instead of the previous €5 million. In addition to an increase of the thresholds, which is intended to free up resources at the FCO and thus enable it to focus on the most important proceedings, companies in certain sectors of the economy can now be required to notify mergers even if they fall below the thresholds. This is intended to prevent a company with market power from taking over small competitors or a company in an already concentrated market from buying up newcomers that are potentially dangerous to its market position.
 

Setting of fines

In the context of the assessment of fines, the relevant criteria for an assessment are now specified in a (non-exhaustive) list and are thus intended to ensure greater legal certainty. Furthermore, it is worth noting in this context that compliance measures can now be taken into account as a mitigating factor. 
 

Liability of associations

Pursuant to Section 81c (4) of the ARC, in the event of a violation of antitrust law, associations may now be fined up to 10% of the sales of their members who were active on the market affected by the violation. The prerequisite for this is that the association's conduct must be related to the activities of its members. Compared to the previous limit (maximum fine of 10% of the association's total turnover) this represents a significant increase in the scope of fines.
 
In addition, pursuant to Section 81b (1) ARC, companies who are a member of the respective association will now be liable in the event of the association's insolvency. However, companies which were not involved in the infringement may be exempted from their payment obligation.
 

Procedural law - Implementation of the ECN+ Directive

In implementing the ECN+ Directive, the investigative powers of the antitrust authorities will be expanded. It is particularly worth mentioning that any natural person can now be obliged to provide information or surrender evidence, subject to a fine; there is therefore no longer a right for company representatives to refuse to provide information. Only in subsequent proceedings against the natural persons the use of evidence will be prohibited.
 

Links

Federal Law Gazette (bgbl.de) German Version only
German Federal Cartel Office - Amendment of the German Act against Restraints of Competition