60 years of commitment to competition
In 2018 the Bundeskartellamt celebrates its 60th Anniversary. On 1 January 1958 the German Act against Restraints of Competition (GWB) came into force and the Bundeskartellamt began its work in Berlin with 53 members of staff. Sixty years later, around 350 staff in Bonn are pursuing the ambitious aim to maintain effective competition across all sectors of the economy even in an age of globalisation and digital transformation.
Andreas Mundt, President of the Bundeskartellamt:
"Ludwig Erhard described the Act against Restraints of Competition as the "basic law of the social market economy". And that is exactly what it is. Competition ensures that not too much economic power lies in the hands of only a few. Competing companies have to try to attract customers by offering better prices, higher quality and through innovations. Competition acts as a stimulus for the economy, for new ideas, new business models and, ultimately, progress. So the best way to protect the consumer is by protecting competition."
The establishment of the Bundeskartellamt was preceded by a long struggle fought by the then Economics Minister and later Federal Chancellor Ludwig Erhard. The German economy was traditionally dominated by cartels. The Economics Minister's plans therefore met with strong resistance. Ludwig Erhard already saw that there was a close link between competition and consumer protection. In his book "Prosperity for all" Erhard wrote: "The State must not decide who should be victorious in the market, nor should an industrial organisation such as a cartel; it must be the consumer alone."
The Bundeskartellamt's major challenge in its early years was to communicate to companies the benefits of a competitively organised economy. Over the years the authority gained increasing recognition and was assigned further tasks. In 1973, in addition to cartel prosecution and abuse control, its traditional areas of activity, merger control was added as a third important area with the aim to limit the market power of individual companies. Since 1999 the Bundeskartellamt also has competences in the area of public procurement law and, if an application for review is filed, can review tender procedures carried out by the Federal Republic of Germany. In 2013 the Market Transparency Unit for Fuels established within the Bundeskartellamt began its work, offering motorists the possibility to compare fuel prices. Since 2017 the authority can also carry out sector inquiries into consumer protection issues. A Competition Register is also to be established by 2020 which will enable contracting authorities to check whether a bidding company has committed any relevant infringements of law.
In addition to these new tasks the Bundeskartellamt has continued to intensify its work in cartel prosecution, in particular, in the recent past. The introduction of a key witness programme, the so-called Leniency Programme, in 2000, the installation of three specialised decision divisions dedicated to cartel prosecution and a Special Unit for Combating Cartels (SKK), as well as the launch of an anonymous whistle-blowing system on the authority's website, have helped to significantly increase the number of cartel proceedings since the turn of the millennium.
"Illegal agreements with competitors are not trivial offences. Intensifying our cartel prosecution activities has created a greater awareness of this issue in many companies. This can be seen from the fact that numerous companies are setting up compliance departments in an effort to avoid competition law violations."
Over its long history the Bundeskartellamt has always had to keep pace with new developments in the economy. Globalisation in the 1990s led, for example, to international networking between competition authorities, a development which exists in few other public sector areas. The digital economy has also raised many new competition law issues. The Bundeskartellamt has reacted quickly and with its Think Tank has carried out intensive groundwork in this area. In numerous cases relating to the Internet and platforms the authority has set new guiding principles of competition law and thus assumed a pioneer role in developing international standards. With its new investigative powers in the area of consumer protection the Bundeskartellamt also aims to provide valuable assistance where the well-established private enforcement of consumer protection reaches its limits, in order to identify problems and indicate possible solutions.
"Our traditional cartel and abuse proceedings often deal with price-fixing agreements or excessive prices. These proceedings are still important. However we have to come up with new concepts for the digital economy where data are often traded as currency. We are now looking closely at several cases to find out how companies collect and use consumer data. This is an issue on which we will certainly have to focus even more in future."
The Bundeskartellamt is planning to commemorate its 60th Anniversary with a festive ceremony in Bonn on 22 February 2018. Many high-ranking national and international representatives from politics, authorities, industry, the legal profession and academia are expected to attend the event.