2017 Annual Report of the Bundeskartellamt

Today, the President of the Bundeskartellamt, Andreas Mundt, presented the authority’s annual report for 2017 in Bonn.

Andreas Mundt: “Our key focus is on protecting competition in the digital economy. We have two key objectives when it comes to the major internet companies. Our task is to keep markets open to ensure they remain contestable and companies continue to have the opportunity to be successful with new ideas. We also need to make sure consumers can select the products and services matching their requirements in a transparent and fair environment.

Digital economy

The growing importance of large internet platforms raises new and different antitrust and economic issues. The Bundeskartellamt has reacted quickly and dedicated more resources to tackle these issues. During the last few years it has already concluded a large number of "internet cases".

Andreas Mundt: “We are currently conducting proceedings against Facebook, and sector inquiries on online advertising, comparison portals and smart TVs. A joint project on algorithms with the French competition authority is ongoing. We are also going to deal with the topic of e-commerce in a more targeted way. The Bundeskartellamt covers key competition issues from the digital economy with its procedures and investigations. Simultaneously, the European Commission has undertaken significant activities in the digital area, for example its proceedings against Google. Our overall range of activities is, therefore, exceptionally wide. The competition authorities in Europe are carrying out the groundwork for setting guidelines for the digital economy.”

Already in the summer of 2017, the legislator supplemented the German Competition Act, the Act against Restraints of Competition, by providing important rules for the digital economy. Initiated by impulses formulated in the coalition contract, discussions to update the competition law further are ongoing, in particular with regard to the control of abuse of dominant positions. The aim is to provide for quicker and more targeted opportunities to examine the business practices of major internet companies.

Consumer protection in the digital economy

Also in the summer of 2017, the legislator granted the Bundeskartellamt initial competences in the area of consumer protection. Whenever there is sound reason to suspect significant violations of consumer rights, e.g. under the Act Against Unfair Competition (Gesetz gegen den unlauteren Wettbewerb, UWG) or legal requirements for general terms and conditions, the Bundeskartellamt is entitled to conduct sector inquiries. A newly created division has since initiated surveys on the transparency and fairness of comparison portals and on handling user data in smart TVs.

Andreas Mundt: “Strengthening the authority's capacities in the area of consumer protection, especially as far as the internet is concerned, could be a significant contribution to quicker remedies for negative developments in the digital economy. The coalition contract includes a wide array of projects in the area of consumer protection in the digital economy: Transparency with regard to algorithms, artificial intelligence, dynamic pricing, and rankings and interdependencies in comparison portals, to name but a few. There is also a permanent call for quicker implementation of the competition authorities’ procedures. We can achieve a combination of both. Many problems arising in the internet economy could be dealt with and remedied quicker with competences in the area of consumer protection. Some of the topical areas identified in the coalition contract could be dealt with under competition law. However, a consumer protection toolbox for violations of the Act Against Unfair Competition, data protection or regulations on general terms and conditions would enable us to achieve even quicker remedies."

Cartel prosecution

In 2017, the Bundeskartellamt imposed fines amounting to approx. 66 million euros. It concluded its investigations against manufacturers of industrial batteries, harbour towage service providers and automotive part manufacturers. The authority has received 37 so-called applications for leniency and numerous indications of possible infringements of competition law. It carried out eleven dawn raids at a total of 60 companies.

Andreas Mundt: “Cartel prosecution is one of our key work areas. In the past years nearly every one of our cases was overshadowed by the risk that the cartel members could avoid paying fines by carrying out simple restructuring measures within their companies. This has hampered cartel prosecution in the past years. By closing this legislative loophole, which was referred to as the “sausage gap”, and by harmonising German and European competition law, this impediment has finally been removed".

In the current year 2018, several cartel proceedings were closed and new proceedings were initiated. To this day, the Bundeskartellamt has carried out seven dawn raids at 21 companies and four private residences. Fines amounting to approx. 273 million euros, among them initial fines in the proceedings against stainless steel manufacturers and technical building services, have been imposed on 17 companies and 14 private individuals."

Market transparency unit for fuels

The Bundeskartellamt’s Market Transparency Unit for Fuels was set up in 2013. Consumers can now access information on current fuel prices charged by petrol stations in Germany from over 50 information services, and they can fuel up at the cheapest station near them at the right time.

Andreas Mundt: “The Market Transparency Unit’s evaluation, which was published recently, confirms that the tool was well received and is working. We are currently seeing a tendency towards increasing prices at petrol stations. Consumers have the power to strengthen competition by using the fuel app for selecting the right time to fuel up at the cheapest petrol station near them. Regular reports provided by the authority show the times during the day when consumers can expect to pay less. The more use consumers make of such offers, the higher the pressure on the suppliers.”

The Annual Report 2017 is available on the Bundeskartellamt’s website.