Bundeskartellamt presents its Annual Report for 2021/22

in Today, the President of the Bundeskartellamt, Andreas Mundt, presented the authority’s “2021/22 Annual Report”.

Protecting competition in difficult times

Andreas Mundt: “Russia’s terrible war against Ukraine and its devastating consequences are accompanied by market uncertainty, scarce resources and price increases in many industries. Since early 2022, inflation has been putting high pressure on consumers. Companies must not use the crisis to increase their profits by violating competition law. We are therefore taking a very close look: We will take firm and consistent action against illegal agreements or abuse of market power. On the other hand, competition law is also flexible enough to take into account the changed conditions and to temporarily tolerate companies’ special needs, for example, for crisis-related cooperations.”

Fuel prices under close scrutiny by the Bundeskartellamt

Since March 2022, the Bundeskartellamt has intensified its continuous monitoring of fuel prices at around 15,000 petrol stations in Germany by the Market Transparency Unit for Fuels; in addition, the authority has also initiated an investigation into refineries and wholesalers.

Andreas Mundt: “We will continue to keep a very close eye on this and provide information on how prices develop and what will happen when the tax reduction no longer applies as from 1 September. By investigating refineries and wholesalers we also want to shine a light on price setting factors and mechanisms. So far, only little is known about what actually happens between the purchase of crude oil and its sale at petrol stations. We are planning to present the first interim results in autumn.”

Main focus digital economy

The digital economy was once again a key area of the Bundeskartellamt’s work.

Andreas Mundt: “Since the introduction of the new legal instrument to better control large digital corporations in early 2021, we have initiated several proceedings against Alphabet, Amazon, Apple and Meta, some of which have already been concluded. We are constantly expanding our expertise by liaising with other national and international experts as well as conducting proceedings and investigations, such as our current investigation into online advertising. In close cooperation with the EU Commission and national competition authorities across the world, we are working hard on finding solutions to protect and restore competition in the digital economy.”

The Bundeskartellamt has already determined that Alphabet/Google, Amazon and Meta/Facebook are of “paramount significance for competition across markets” pursuant to the newly introduced Section 19a(1) of the German Competition Act (GWB). The corresponding proceeding against Apple is still ongoing.

In addition, the Bundeskartellamt is conducting further proceedings against all four of the digital corporations mentioned above to clarify the question as to whether certain practices employed by these companies have to be prohibited on the grounds of impeding competition or securing their position of power.

Cartel prosecution is gaining momentum

In 2021 the Bundeskartellamt imposed fines of around 105 million euros on a total of 11 companies or trade associations and 8 natural persons. The fines were imposed on special steel producers and steel forging companies and for vertical price-fixing agreements relating to musical instruments, school bags and consumer electronics. In 2022 the authority has so far imposed fines of around 20 million euros on manufacturers of expansion joints for bridges as well as on several companies for colluding in procurement procedures awarding contracts for industrial buildings.

Andreas Mundt: “The particular circumstances during the pandemic have made effective cartel prosecution more difficult in the past years. But this is behind us now. We have initiated a number of new proceedings and have carried out numerous dawn raids again. Several of these new proceedings were triggered by information received via our anonymous whistle-blowing system.”

Overall, in 2022 the Bundeskartellamt has already carried out 13 dawn raids; 8 of these dawn raids were carried out in the context of the authority’s own proceedings and 5 were carried out for proceedings conducted by other competition authorities belonging to the European Competition Network.

Merger control

In 2021, the Bundeskartellamt examined around 1,000 notified merger projects. Of these, 10 were closely examined in the so-called second phase. Three of these were cleared without conditions. One merger was cleared subject to conditions as EDEKA was only allowed to take over some of the Real stores. Five notifications were withdrawn by the parties during the ongoing examination. Funke Mediengruppe’s proposed takeover of Ostthüringer Zeitung was prohibited.

This year the Bundeskartellamt has so far prohibited one proposed merger (Aco/Birco in the surface drainage sector). The EG Group was only allowed to acquire OMV petrol stations subject to a divestiture obligation, and in three proceedings the parties withdrew their notifications in the course of the Bundeskartellamt’s second-phase examination.

Andreas Mundt: “The current economic situation highlights the paramount importance of merger control. In concentrated markets it is easier for individual companies to assert their price setting power. This is one of the reasons why merger control, which has a preventive effect, is a key instrument for competition authorities. Various studies have shown that the degree of concentration in Europe and Germany has not increased over the last few years. This is also due to consistent merger control in Europe.”

The Competition Register for Public Procurement is in full operation

The Bundeskartellamt has successfully launched the Federal Competition Register for Public Procurement, which is intended to help fight economic crime and competition law infringements. In early 2021, the Bundeskartellamt commenced operating the Competition Register starting with the registration of the contracting entities authorised to consult the register and the authorities obliged to communicate data. Public contracting authorities can check in a single electronic search whether a company has committed violations of the law which might lead to its exclusion from public award procedures.

Over 4000 notifications on relevant violations have already been made by public prosecution offices, customs and other authorities. On average, the register is consulted around 800 times per day by contracting entities to check whether a company is listed.

Tightening competition law

Several weeks ago, the Federal Minister for Economic Affairs and Climate Action, Robert Habeck, announced the expansion of the Bundeskartellamt’s scope for action. With the 11th amendment to the German Competition Act sector inquiries are to become even more effective, the obstacles to the disgorgement of benefits under competition law are to be reduced and a possibility for unbundling irrespective of the finding of abuse is to be introduced. The Federal Government also intends to expand the Bundeskartellamt’s competences in the area of public consumer protection before the end of this legislative term.

Andreas Mundt: “We welcome the plans to strengthen the Bundeskartellamt and are constructively involved in developing concrete legislative proposals.”

The “2021/22 Annual Report” provides an informative overview of the Bundeskartellamt’s activities from 2021 to May 2022.