Apart from enforcing the ban on cartels, merger control and providing legal protection in award procedures, another task of the Bundeskartellamt and the competition authorities of the Länder is to enforce the ban on abusive practices under competition law, which is laid down in several provisions of the Act against Restraints of Competition (ARC) (see below). In the case of cross-border cartels the European antitrust law provides for a ban on cartels in Article 82 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 abusive practices.

If an abuse case 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 main effect 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 prohibition of abusive practices depends on whether the effect of a competition restraint extends beyond the territory of a federal Land (in this case the Bundeskartellamt is, in principle, the competent authority) or not (in this case the competition authorities of the Länder are, in principle, responsible).

The economic power of companies is usually limited by competitors and the possibility of the opposite side of the market to switch to alternative choices. Some companies, however, are not subject to sufficient competitive pressure and therefore possess a larger scope for action vis-à-vis competitors, suppliers and customers. While it is not prohibited to achieve or hold such a position of economic power, it is the task of competition law and the competition authorities to control its exploitation and prevent any abusive practices.

German and European competition law both prohibit the abusive exploitation of a dominant market position. Market dominance is assumed where a company has a paramount market position in relation to its competitors in the market affected. Whether a company holds such a paramount market position is determined in an overall appraisal of all competition-relevant facts.

Abusive practices are practices that a dominant company can only pursue because of its market power and that hinder or discriminate other companies or their customers in a way that would not be possible if effective competition existed.

There are two types of abusive practices, the so-called exclusionary abuse and the so-called exploitative abuse. Exclusionary abuse exists e.g. where a dominant company tries to squeeze its competitors out of the market by systematically employing cut price strategies; exploitative abuse can be established where, for example, a dominant company charges its customers or suppliers unreasonable prices.

In addition, the German law provides for behavioural rules for those companies on which other companies depend. In particular, the following behaviour is prohibited:

• abusing a dominant market position (Article 82 EC Treaty, Section 19 (1) (4) and Section 29 ARC);
• hindering or discriminating against suppliers and purchasers (Section 20 (1), (2) and (6) ARC);
• inviting dependent companies to grant advantages (Section 20 (3) ARC);
• hindering small and medium-sized competitors in an unfair manner (Section 20 (4) ARC).

Irrespective of their market position all companies are prohibited under certain circumstances from inducing other companies to engage in anti-competitive conduct (Section 21 (2) ARC). Calls for a boycott with the intention of unfairly harming certain companies are also prohibited (Section 21 (1) ARC).

The competition authorities can stop violations of the prohibition of abusive practices under competition law by obliging the companies concerned to discontinue the infringement. Furthermore, fines can also be imposed in administrative offense proceedings on persons and companies who participate in such illegal abusive practices. 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 preceding business year. The Bundeskartellamt has published guidelines on the setting of fines on this issue.

At the beginning of 2008 the Bundeskartellamt set up a special decision division to combat the abuse of dominant market positions by suppliers of gas and electricity. Its task is to enforce Section 29 of the ARC, which came into force at the end of 2007. The provision is limited in time and will expire at the end of 2012; it tightens the competition authorities’ control of the prices charged by dominant electricity and gas suppliers until effective competition is achieved in the markets concerned.

Some network-based markets are subject to specific regulation by regulatory authorities, mainly the Federal Network Agency for Electricity, Gas, Telecommunications, Post and Railway. This is to compensate for the lack of effective competition in the markets concerned. The regulatory authorities have special powers to combat abusive or discriminatory practices in the regulated areas (such as the electricity or gas supply networks). These powers are laid down in special laws, such as the Energy Industry Act or the Telecommunications Act. In cases of abusive practices within the regulated sectors, the competition authorities may intervene in parallel with the regulatory authorities, but only to enforce the European prohibition of abusive practices laid down in Article 82 EC Treaty, not on the basis of the ARC’s ban on abusive practices.

Further information on the prohibition of abusive practices under competition law, 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 prohibition of abusive practices is based on the following provisions and information leaflets:

• Act against Restraints of Competition
• the Bundeskartellamt’s Guidelines on the setting of fines
• Notice on the application of Section 20 (4), sentence 2 ARC (offer below cost price)
  Note: The notice does not take into account the amendment of Section 20 (4) which came into force on 22 December 2007. (only available in German)
• Article 82 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 Bundeskartellamt undertakes no guarantee that the content of the legal provisions linked to its website is up-to-date.