After public consultation, Germany’s BMWK to consider 12th amendment to the Act for Restraints against Competition

On 4 December 2023, the public consultation closed on a 12th amendment to the German Act for Restraints against Competition (GWB). The consultation had been initiated by the Federal Ministry of Economic Affairs and Climate Action (BMWK) on 6 November, the date when the 11th amendment of the GWB had been promulgated in the Federal Gazette and went into force the day after. While the 11th amendment sharpens German cartel law by strengthening the powers of the German competition authority, the Federal Cartel Office, for the consultation the BMWK urged all concerned organisations, undertakings, associations and interested citizens to participate in the online consultation and make their voices heard regarding the vision of BMWK to improve the German competition regulatory framework. Based on the responses to this consultation, the BMWK will shape a proposal of a 12th amendment to the GWB.

12th amendment to the GWB

With the consultation concluded, the Ministry stated that it will take the responses into account for the further implementation of its agenda, which defines competition policy objectives until the year 2025. The BMWK may well use what it learned from the consultation as a foundation for the 12th amendment to the GWB. With the aim of further strengthening competition while supporting and providing relief to the German economy, the BMWK is looking for strategies to reduce unnecessary bureaucracy in competitive proceedings. Moreover, the Ministry hopes that the consultation provided broad public opinion on the GWB and therefore touched upon all areas of German Competition Law. 
In its consultation, the BMWK placed the following areas of German Competition Law in the spotlight: 

1.    Merger Control

The BMWK put into question whether in accordance with the regulatory framework of merger control all competitively relevant mergers are subject to a notification requirement, and whether notified mergers are being examined on the basis of suitable criteria.

The Ministry strives for a more efficient and legally secure German merger control regime, which is capable of covering anti-competitive transactions in the digital economy. Thus, the consultation specifically inquired about the turnover thresholds, the value of the transaction threshold and the prohibition criteria (SIEC-Test).

2.    Ministerial Approval

The BMWK did not ignore persistent criticism regarding the Ministerial Approval according to § 42 GWB. Ministerial Approval allows a balancing of competitive interests against non-competitive interests in the form of macroeconomic benefits. The existing remedies for Ministerial Approval are at the focus of this criticism and as a result an amendment of the Ministerial Approval Procedure is being planned. Due to its limited practical significance, however, it is unlikely that the emphasis of a 12th amendment to the GWB will be Ministerial Approval.

3.    Sustainability

Sustainable competition as the cornerstone of social-ecological market economy is the motto of the competition policy agenda of the BMWK. On these grounds, sustainability agreements between competitors are to be granted a more legally secure ground for action. The consultation especially raises the question whether sustainable benefits should be considered when assessing the exemption from the cartel ban. In addition, the Ministry aims to encounter and reduce the risk of greenwashing within the competition consideration of sustainable benefits. The consultation provides the opportunity for German Competition Law to follow suite in a 12th amendment to the GWB after the European Commission took this position on sustainability agreements in the revised version of the Horizontal Guidelines.

4.    Consumer Protection / Fair Competition

The BMWK takes into consideration a strengthening of the Federal Cartel Office in its approach to infringements against consumer law.

The Federal Cartel Office is entitled to investigate infringements of consumer law exclusively within the context of sector inquiries since the entry into force of the 9th amendment to the GWB in 2017. In any other case, concerned consumers must enforce infringements of consumer law on their own or turn to consumer protection associations. Previously, this has been justified with the principles of privity of contract and the state's obligation to neutrality. The governing parties, however, committed themselves in the coalition agreement, which includes improving the general conditions for fair competition and thereby incorporating the requirements of consumer protection. The BMWK therefore consults with interested circles on granting the Federal Cartel Office the power of investigation and cessation in the area of consumer protection. This would follow the model of other jurisdictions, such as the US Federal Trade Commission, which has the task of both consumer protection and the protection of competition

5.    Competition Damages Law

After the German legislator passed the 7th amendment to the GWB in 2005, and – while implementing the EU-directive on Competition damages – passed the 9th amendment to the GWB in 2017, the BMWK now intends to develop a more efficient enforcement of private competition damages claims. In the consultation, the Ministry offered for discussion the involvement of the Federal Cartel Office and the statutory presumption in the area of the amount of damages. Furthermore, based on feedback, it is reconsidering the concentration of legal jurisdiction for competition damages proceedings and is questioning the existing statutory possibilities for cartel victims to claim damages in case of widespread (but small) harm.

6.    Other areas in need of reform

Besides these five primary areas of German Competition Law, the BMWK made the following topics subjects for the public consultation:

• bureaucracy reduction related to the application of competition laws in all areas of German Competition Law;
• amendment of § 19a GWB;
• further strengthening of the Federal Cartel Office in its role of advising undertakings with regards to competition law; and 
• amendment of the supervision over of public law forms of fees and charges.

By undertaking this public consultation, the BMWK gave the starting signal to a 12th amendment to the GWB. It remains to be seen, however, if the modernisation and revision of German Competition Law will find its way through an ineffective regulatory framework on the one hand and an over-enforcement on the other. In the best case, its journey will end with more legal certainty for undertakings when applying German Competition Law provisions.

For more details on the 11th GWB amendment, a possible 12th amendment and the recent public consultation, contact your CMS client partner or these CMS experts.