24.01.2020

Draft Bill for the 10th Amendment to the German Competition Act Now Officially Published

The Federal Ministry for Economic Affairs (“BMWi”) today published the draft bill for the 10th amendment to the German Competition Act (“GWB”) (“GWB Digitalisation Act”). The draft bill contains some changes compared to the most recent “unofficial” draft version of 7 October 2019, which had already been leaked last year. However, the new provisions for the digital economy and changes in the legal provisions regarding fines, damage claims and merger control continue to be the key points of the amendment.

Background

The aim of the draft bill is to bring German antitrust law in line with the challenges of a digital and globalised age. The basis for this is, amongst other things, the expert opinion “Modernising the law on abuse of market power” (2019), which was commissioned by the BMWi, and a report issued in 2019 by the so-called "Commission Competition Law 4.0" (Kommission Wettbewerbsrecht 4.0) - an expert advisory board established by the German government in 2018. The GWB Digitalisation Act additionally serves to implement the European ECN+ Directive (Directive 2019/1), which inter alia entails an expansion of the rights of antitrust authorities. The draft is based in particular on the basic idea that data (and access to data) as a value-adding factor can have a significant influence on competition.

Contents

One of the goals of the 10th amendment to the German Competition Act is stricter control of abuse of market power in the digital economy (especially with regard to large platforms), which is to be achieved by, for example:

  • Introducing the concept of “intermediary power” for the platform economy as a criterion for determining a dominant position
  • Making adjustments to the “essential facilities doctrine” by adopting rules regarding open access to certain data
  • Giving the authority the power to intervene vis-à-vis platform companies that are “of outstanding importance across markets” for competition
  • Introducing provisions prohibiting certain measures with a view to ensuring competition on platforms
  • Authorising the Federal Cartel Office to take preliminary action

The draft bill also contains substantial amendments regarding merger control:

  • Raising the threshold for triggering merger control – now the annual domestic turnover of all companies involved must amount to at least EUR 10 million (previously: EUR 5 million)
  • Defining an increased turnover threshold of EUR 20 million (previously: EUR 15 million) for the minor market clause – mergers on smaller markets cannot be prohibited by the Federal Cartel Office
  • New right to start merger review proceedings – unlike in the old draft bill, the plan is now that the Federal Cartel Office shall be able in future to proactively request companies to notify proposed mergers under certain circumstances (this provision aims at the waste management industry but also at so-called “killer acquisitions” in the digital economy).

Further important changes include the right for companies to ask the Federal Cartel Office for an antitrust assessment of cooperation projects. Moreover, the draft bill provides for comprehensive changes in the areas of procedural law (e.g. rights to information, preliminary injunctions) and the law governing administrative fines (e.g. new regulatory offences leading to fines, leniency rules, provisions on lapse of time). Compared to the previous version, the new draft bill also contains changes to the criteria for calculating fines, the leniency rules and investigative powers.

It remains to be seen which of the changes will ultimately find their way into the government draft and, after the further legislative procedure, into the German Competition Act. It can be expected, however, that there will be significant changes in the area of antitrust law for the digital economy. Moreover, also all other industries will have to prepare themselves for substantial changes in the legal provisions regarding fines, damage claims, and merger control.

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