Sven Giegold

Done! German antitrust authority gets far reaching new powers

Dear friends,

it is done! Last Thursday evening, the Bundestag passed the reform of antitrust law that I launched a good year ago. We are responding to the increased power of global companies with additional power for our Federal Competition Authority (‘Bundeskartellamt’)! This will make it easier to enforce functioning competition.

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The Competition Act (GWB) is regarded as the constitution of the social market economy. Our reform of this law is the most fundamental since the legendary minister for economy Ludwig Erhard and contains the following elements: 

  1. After investigating an economic sector, the Competition Authority can decide on remedies that establish functioning competition. Bureaucratic and difficult proof of abuse of a dominant position is no longer necessary. Such remedies can include, for example, obligations to provide access for interfaces and data, the separation of divisions or the establishment of transparent standards. Small and new competitors thus gain access to markets that were previously closed for new entrants. 
  2. Ownership unbundling: as a last resort, the Federal Cartel Office can also order the unbundling of a company. In this way we are implementing what FDP Federal Minister of Economics Brüderle once failed to achieve.
  3. Skimming off illegitimate super profits: in the case of cartel law violations, the Competition Authority can more easily skim off unjustly obtained advantages. This provision already existed in the current cartel law, but could never be applied because of bureaucratic regulations. We are now sharpening it.
  4. Simplification of merger control: in future, the Competition Authority will be able to oblige companies to make mergers subject to control after a sector enquiry in a less bureaucratic way. Excessive corporate concentration will thus be prevented more effectively.
  5. Enforcement of the EU’s Digital Markets Act (DMA): We will create the legal basis for the Competition Authority to support the EU Commission in enforcing the DMA. We are also setting the framework for the judicial enforcement of the DMA (“private enforcement”).

This reform adds a new pillar to German competition law, which is already now internationally respected. 

The model here is the UK’s competition authority CMA. This will not only make the abuse of economic power sanctionable, but will also enable the competition authority to ensure a reasonable level of competition. This reform will benefit consumers as well as the vast majority of businesses, giving them new opportunities for market access.

Like all important reforms of competition policy and antitrust law, this one was fought over. After all, we are putting some very influential companies in their democratic place. That is also why the legislative process took a long time. But the search for a stable majority was worthwhile. The law has become better and clearer in many places as a result of the negotiations in the traffic light coalition of social democrats, liberals and greens. Among other things, it was made even clearer that our aim is not, of course, to siphon off profits from innovations or to have them sanctioned by the Competition Authority. Innovations should continue to be lucrative. However, if entire markets become encrusted, competition must be made possible again through state intervention.

The reform was passed in the Bundestag with the votes of the SPD, the Greens, the FDP and the Left Party. Thanks especially for the approval of the Left parliamentary group, which voted from the opposition with our government majority. Unfortunately, the CDU & CSU, together with the AfD, rejected this important reform for better markets.

A similar push to reform EU competition policy, the “New Competition Tool”, had failed a few years ago due to intensive lobbying by some corporations. After our success: in Europe, it is now time for a new attempt for the whole internal market! The ball is now in the EU Commission’s court! The topic is also suitable for the election programmes of all pro-European parties.

Personally, I am delighted that my idea of responding to the sometimes brazen price increases, e.g. for petrol, in the wake of the energy crisis with a reform of competition policy has prevailed. After all, that is part of my job as State Secretary in the Ministry of Economics!

But it was only possible thanks to the team of competition economists and lawyers at the BMWK under Robert Habeck, who have been working successfully for years. Thanks to Thorsten Käseberg and Philipp Steinberg! Thanks also to Anja Hajduk and Elga Bartsch for their great commitment in the negotiations!

Huge thanks also to our scientific advisors: Prof. Kühling & Prof. Tomaso Duso from the Monopolies Commission, Prof. Rupprecht Podszun, Prof. Monika Schnitzer, Prof. Heike Schweitzer, Prof. Achim Wambach, Prof. Justus Haucap, Prof. Jens-Uwe Franck and Prof. Daniel Zimmer!

Without the scientific expertise and the support of some business associations and non-governmental organisations, this success against some powerful lobbies would not have been possible. The success shows: The primacy of democracy applies and can prevail!

Of course, I remain committed to pursuing our BMWK – Agenda for Competition! Now we are working – as agreed in the coalition agreement – on strengthening the Competition Authority in consumer protection. The work for fair competition continues!

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With many happy greetings

Sven Giegold

Category: BMWK

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