Apart from merger control, the control of abusive practices by dominant companies and providing legal protection in award procedures for public contracts, enforcing the ban on cartels is another task of the Bundeskartellamt and the competition authorities of the Länder and has been an integral element of Section 1 of the Act Against Restraints of Competition (ARC) since the Act came into force in 1958. In the case of cross-border cartels European competition law provides for a ban on cartels in Article 81 of the EC Treaty. In principle, the Bundeskartellamt and the competition authorities of the Länder can also apply the provisions of the European ban on cartels.

If a cartel has a substantial effect on competition in several Member States of the European Union, it will generally be prosecuted by the European Commission. However, if a restraint of competition has its focus in a certain Member State of the European Union, it will be prosecuted by the national competition authorities.

Whether the Bundeskartellamt or the relevant Land competition authority is responsible for enforcing the ban on cartels within Germany generally depends on whether the effect of a competition restraint extends beyond the territory of a federal Land (in this case the Bundeskartellamt is generally the competent authority) or not (in this case the competition authorities of the Länder are generally responsible).

In combating cartels the Bundeskartellamt mainly focuses on so-called hardcore cartels, i.e. serious restraints of competition, in particular price and quota agreements and market sharing agreements between competitors. As these agreements hinder companies’ freedom of economic activity and generally result in higher prices for the consumer, they are highly damaging to the economy and society. The Bundeskartellamt generally imposes substantial fines on persons and companies who participate in such illegal cartels. Fines imposed on individual persons can amount to a maximum of € 1 million; in addition to this companies can be fined up to a maximum of 10% of the total turnover they achieved in the last business year. In this respect the Bundeskartellamt published guidelines on the setting of fines.

To intensify the prosecution of cartels and further increase the rate of uncovered cartel agreements, the Bundeskartellamt has recently set up two Decision Divisions which deal exclusively with cartels and conduct fine proceedings on a cross-sector basis. The Special Unit for Combating Cartels (Sonderkommission Kartellbekämpfung, SKK), which was founded in 2002, supports these two Decision Divisions in particular. Furthermore, the SKK is the central contact for the Leniency Programme. The Leniency Programme allows the Bundeskartellamt to exempt individual persons and companies involved in an illegal agreement entirely or partly from a fine if they make a decisive contribution to uncovering a cartel or proving its existence and cease their anti-competitive behaviour. The SKK staff are available for confidential discussions about the Bundeskartellamt’s Leniency Programme (contact person: Mr Töllner; phone: 0228-9499-386).

 

The ban on cartels not only applies to hardcore cartels, but also to other types of agreements that restrict competition. These can be agreements between competitors or contracts between suppliers and customers (so-called vertical agreements).

To a certain extent cooperations between competing undertakings do not give cause for competition law concerns. This applies if cooperation is essential in order to achieve advantages from which consumers can benefit as well. Under these conditions an agreement between competitors may be exempted from the prohibition of cartels in an exceptional case. This applies e.g. to joint purchasing agreements, agreements on reciprocal specialisation, joint production or joint research and development. The preconditions for an exemption from the ban on cartels are laid down in Sections 2 and 3 of the Act against Restraints of Competition and, under European competition law, in Article 81 (3) of the EC Treaty.

Vertical agreements are agreements between companies operating at different levels of the market. One example are distribution agreements. Vertical agreeements, except for certain serious restraints of competition such as resale price maintenance, are automatically exempted from the ban on cartels if the supplier’s market share does not exceed 30%. Such exemptions are provided for in the so-called Vertical Block Exemption Regulation which also applies to German cartel law (Commission Regulation (EC) No 2790/1999 on the application of Article 81(3) of the Treaty to categories of vertical agreements and concerted practices).

It is left to the companies themselves to assess whether their conduct or an agreement is compatible with or exempted from the ban on cartels. The Bundeskartellamt is under no obligation to exempt an agreement.

The competition authorities can stop violations of the ban on cartels by obliging the companies concerned to discontinue the infringement. Furthermore, fines can also be imposed on persons and companies who participate in such illegal cartels within the scope of administrative offence proceedings (for details see above “Cartel prosecution in fine proceedings and Leniency Programme”).

Further information on the ban on cartels, the Bundeskartellamt’s method of procedure and practical case examples can be found in the Bundeskartellamt’s Information Brochure and its biennial Activity Reports.

The enforcement of the ban on cartels is based on the following provisions and information leaflets:

• Act against Restraints of Competition
• the Bundeskartellamt’s Guidelines on the setting of fines
• the Bundeskartellamt’s Leniency Programme
• the Bundeskartellamt’s Information leaflet on cooperation possibilities for small and medium-sized enterprises
• Article 81 of the EC Treaty
• the European regulation implementing the rules on competition (Council Regulation (EC) No. 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty)
• the Vertical Block Exemption Regulation

The Bundeskartellamt undertakes no guarantee that the content of the legal provisions linked to its website is up-to-date.