Bundeskartellamt – Review of 2019

27.12.2019

In 2019 the Bundeskartellamt imposed fines in cartel proceedings totalling approx. 848 million euros, examined around 1,400 notified mergers, received 104 applications for review in public procurement cases and conducted numerous abuse of dominance proceedings. Of key importance are the authority's decision against Facebook’s collection and use of data, which is currently pending at the Federal Court of Justice, and the extensive changes to Amazon’s business terms obtained by the Bundeskartellamt. With its competencies in the area of consumer protection the Bundeskartellamt has uncovered a whole range of consumer-unfriendly practices of comparison websites.

Cartel prosecution

In 2019 the Bundeskartellamt imposed fines of around 848 million euros on 23 companies or trade associations and 12 individuals. The sectors concerned included bicycle wholesale, building service providers, magazines, industrial batteries, purchase of steel for the automotive industry and steel production. In 2019 the Bundeskartellamt again received many tip-offs about competition law infringements. 16 companies informed the authority about infringements in their sector by making use of the authority's leniency programme. Numerous tip-offs were also received from other sources. The Bundeskartellamt carried out five dawn raids at 32 companies.

Andreas Mundt, President of the Bundeskartellamt: “We invest many resources in cartel prosecution. This includes uncovering cartels, dawn raids, evaluating what is now mostly electronic evidence, hearing witnesses, assessing the facts of the cases and often subsequent extensive court proceedings. Cartel prosecution remains a key area of focus of our work because cartels harm the economy and consumers because of artificially increased prices, inferior quality and restrained innovation.”

Merger control

The Bundeskartellamt examined around 1,400 notified mergers. Of these, 14 were closely examined in the so-called second phase: In four cases (Miba/Zollern, Heidelberger Druckmaschinen/MBO, Remondis/DSD, Loomis/Ziemann) the proceedings ended in prohibition. In five second phase proceedings the parties withdrew their projects. One case was cleared without conditions and obligations. In four cases the second phase proceedings are ongoing.

Andreas Mundt: “Merger control is hugely important both at European level and in the Member States themselves because it is the only preventive tool we can use to limit concentration in the markets. With merger control competition authorities ensure that customers and consumers can still choose between different suppliers in the future.”

Digital economy

The digital economy was again a key area of the Bundeskartellamt’s work in 2019. Due to the authority's concerns, Amazon improved important aspects of its general terms of business worldwide for sellers active on its marketplaces. In an abuse of dominance proceeding against Facebook the authority imposed restrictions in the processing of user data. After the Facebook Group successfully appealed the authority’s decision to the Düsseldorf Higher Regional Court, the Bundeskartellamt lodged an appeal on points of law with the Federal Court of Justice in order to clarify key legal issues. In a joint project with the French competition authority, Autorité de la concurrence, the Bundeskartellamt examined the effects of algorithms on competition.

Andreas Mundt: “As a competition authority we have to keep pace with changes in companies brought about by the digital economy. Our proceedings prove that we are well equipped for this. In response to our competition concerns Amazon has amended its terms of business for sellers on Amazon’s online marketplaces. With our Facebook case we have reached the very engine room of the data-driven economy. In our view the extent to which Facebook collects, merges and uses data in user accounts without the users’ consent constitutes an abuse of a dominant position. We therefore intervened. It is now up to the Federal Court of Justice to clarify the important legal issues in this case. With our proceedings we gain a deeper insight into new business models and the specific characteristics of the digital economy. In keeping with this we published a joint study this year with the French competition authority on “Algorithms and Competition”. The special knowledge we gained from this will help us with our work in future. This also goes for the upcoming amendment to the German Competition Act (GWB) which is intended to strengthen abuse control in the digital economy.”

Consumer protection

With its competencies in the area of consumer protection the Bundeskartellamt concluded its sector inquiry into comparison websites in April 2019 and uncovered several consumer-unfriendly practices.

Andreas Mundt: “Our extensive and in-depth investigations confirmed that on internet platforms, in particular, consumer rights violations can occur which cannot be effectively tackled with private enforcement. At the moment we can only raise an awareness in the consumer for pitfalls in the use of online offers which we have come across in our sector inquiries.”

In May 2019 the Bundeskartellamt launched a third sector inquiry which will take a closer look at the collection, examination and presentation of online user reviews. This sector inquiry is to be concluded in the coming year, along with the ongoing sector inquiry into smart TVs. Through its involvement in various civil law disputes the Bundeskartellamt made use of its possibility to comment on important issues in civil consumer protection actions (so-called amicus curiae).

Public Procurement Tribunals and Competition Register

In 2019, 104 applications were filed with the Federal Public Procurement Tribunals for the initiation of review proceedings. Around half of the cases concerned the award of contracts for public supplies and services, followed by construction contracts. Another key area of review were contracts for employment services and the award of contracts in the areas of defence and security.

The Bundeskartellamt is pushing ahead with the launch of the Federal Competition Register for Public Procurement. Companies which commit serious economic offences should not benefit from public contracts and concessions. The Competition Register will enable contracting authorities in future to check in a single nationwide electronic search whether a company has committed relevant violations of law. The electronic register is due to be operational by the end of 2020.

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