Berlin First blockade, then marathon negotiations, then agreement. The model for laws of the traffic light coalition also applies to competition law. Shortly before 2 a.m. on the night of Saturday to Sunday, the agreement was reached that the SPD, Greens and FDP factions officially announced on Monday: the fundamental upheaval in antitrust law will be completed. Green parliamentary group leader Andreas Audretsch speaks of the “biggest reform since Ludwig Erhard”. The renewed competition law is to be passed in the Bundestag this week.
This means that the Federal Cartel Office will in future be able to intervene in markets where there is no real competition, for example when no new companies can enter the market. There it can enforce measures, from the disclosure of data, specifications for the contract design of companies to the breaking up of corporations as a last resort.
So far, the authorities could only intervene if they found illegal behavior such as price fixing. The first applications could be the cement industry, the furniture trade and the refinery sector. In the latter case, intervention by the cartel office would have a major impact on fuel prices.
State Secretary for Economic Affairs Sven Giegold speaks of a new standard for Europe that will ensure more competition in powerless markets. “Now it’s the EU Commission’s turn to follow the British and German example,” Giegold told Handelsblatt.
The FDP in particular had long struggled with the project from the house of Federal Minister of Economics Robert Habeck (Greens). Among the liberals, there were opposing wings that feared an encroaching state as a result of the reform and those that approved of better-functioning markets through more competition.
Recent changes affect SMEs
Habeck had already been negotiating the law with Finance Minister Christian Lindner and Justice Minister Marco Buschmann for six months, and the cabinet decision followed in April. In the Bundestag, the law was then again on the brink. Some FDP politicians wanted to discuss the core of the law again, which caused the talks to be broken off in the meantime. However, this did not happen, the parliamentary group leaders now ensured the agreement.
According to information from the Handelsblatt, the FDP has made a few changes. If a company disrupts competition, that alone is not enough for an intervention. It must also make a significant contribution to ensuring that consumers are at a disadvantage as a result, such as higher prices. Therefore, it was made clear that before intervening, the Cartel Office must check whether the company is of significant importance for the market.
The revised law shows that the following wording has been adapted: “Addressees of measures can be companies that contribute significantly to the disruption of competition through their behavior and their importance for the market structure.”
FDP economic politician Gerald Ullrich says: “It is therefore unlikely that medium-sized companies will be affected by measures taken by the Cartel Office.” In addition, the law adds that objections to measures taken by the Cartel Office have a suspensive effect. Any intervention in the market must first be subject to judicial review.
“We are making the so-called sector inquiry by the Federal Cartel Office an effective competition law instrument.”
(Photo: Imago Images)
The criteria in the law also apply to mergers of companies, but only above a certain size. The coalition partners have adjusted the applicable threshold: companies only fall under the regulations if they have generated sales of more than one million euros in the past financial year. Previously, 500,000 euros were planned.
Despite the changes, the Cartel Office’s new options for intervention create an “effective competition law instrument,” says SPD economic politician Sebastian Roloff.
>> Read here: How the FDP wrestled with Habeck about the new competition policy – and with itself
The law was inspired by the businesses of the oil companies. In early summer 2022, after the start of the Ukraine war, fuel prices continued to rise – although oil prices fell again. A lack of competition between gas stations and refineries made this possible.
The Cartel Office was unable to intervene because there was no evidence of illegal price fixing. In order to change that, Habeck presented his draft law in September. He had already considered the new pillar in antitrust law for the economy in general. The opportunity presented itself with the discussion about fuel prices.
Fire letter from the industry lobby: “Destructive signal for Germany”
The proposal had triggered massive protests from business associations. However, the departments of the federal government only gradually accepted this. Justice Minister Buschmann obtained a few changes before the cabinet decision, raising the hurdles for intervention by the Cartel Office. But the core of the law remained.
At the end of June, the Federation of German Industries (BDI) made a final attempt. The powerful association sent a fire letter to the responsible MPs and once again demanded that the law be gutted. Otherwise, there is a risk of a “system break that sends a very negative to destructive signal for investments and innovation to the detriment of Germany as a business location,” says the document available to the Handelsblatt.
The head of the agency, Andreas Mundt, a member of the FDP, will gain considerable power as a result of the new law.
(Photo: Imago Images)
Economists, on the other hand, support the project in the majority, as does the President of the Cartel Office and FDP member Andreas Mundt. The head of the agency is now next on the train after the Bundestag will make its decision this week. The Bonn authority is already preparing to implement the massive new powers. It needs staff and new ways of working.
And Habeck’s officials are already writing the next amendment to the competition law. This time it should be about a new option for legally secure cooperation options in climate protection issues for companies. This also promises a new discussion with the FDP.
More: Finance Minister Lindner warns of decline of the business location