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The German Federal Cartel Office provides guidance on B2B Internet Platforms - Launch of a digital agricultural platform approved

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Germany

The German Federal Cartel Office (FCO) has no objections to the launch of "Unamera", a digital trading platform for agricultural products. Unamera is intended to facilitate future trade, especially of grain and oilseeds, between agricultural trading companies and farmers and processors.
 
As explained below, the FCO gave some general comments in the competition law imnplicatiomns of digital platforms and then specifically referred to obligations where shareholders are active in the same market as the users of the platform, to market statistics published on these platforms and to the risk of price-fixings.
 
Guidance by the FCO for B2B Platforms and Competition Law Implications
The FCO pointed out that digital platforms in general may serve the efficiency of trade. They, however, must comply with competition law. That, according to the FCO, means in particular:
  • The platforms must not be used for price fixings between competitors.
  • The platforms must not have a discriminatory effect.
  • As far as more transparency is created, this transparency must not be excessive.
  • The FCO will pay particular attention to the type and scope of the exchange of information, in particular the erection of "Chinese Walls".
  • Any publication of market statistics must comply with the standards already established by the FCO.
Obligations where Shareholders are Active in the Same Market as the Users of the Platform
In the event that shareholders of the platform are active in the same market as users of the platform, the FCO clarified that these shareholders must not have access to relevant data from competitors. In order to ensure that there will be no such exchange of critical information, the platform has to operate separately from these shareholders in personnel, organizational, technical and information terms. Shareholders who are active in the same market may not exercise their general right to access such information.
 
Market Statistics
For the creation / publication of market statistics, the FCO referred to the general standards for tools such as benchmarking, i.e. average prices must be published which originate from at least five independent companies.
 
Prevent Price-Fixings
In order to protect the platform from being used for the purpose of price fixing, the prices are initially displayed anonymously before the identity of the contractual partner is disclosed in the last step before the contract is concluded.
 
Comments 
The proceedings are differently if the FCO investigates a merger as the authority is obliged to comply with deadlines in merger control. In the present case, the parties did not approach the FCO with a view to a merger, but to discuss the FCO's potential concerns with regard to the cartel prohibition. No deadlines apply in this scenario. The FCO is not even obliged to deal with such requests. Under certain circumstances, however, applications of this kind appear to be in the interest of the authority, especially if there is a connection with newer topics such as digital platforms. The President of the Federal Cartel Office stresses in a quote that companies often made use of this opportunity to discuss issues with the authority before implementing such platforms. 

In the recent past, the FCO published a case summary for the steel trading platform XOM-Metals in February 2018. Parties intending to start B2B platforms can find further guidance in this case summary (German only) as well as in the FCO's "Working Paper - Market Power of Platforms and Networks".
 

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