Statement of objections issued against associations of medical aids providers

The Bundeskartellamt has sent its preliminary investigation results in the proceeding for coordinated price increases to the detriment of health insurance companies to the working group of
associations of medical aids providers (referred to as ARGE) for comments. ARGE represents a large part of the relevant medical aids suppliers (especially medical supply stores providing
rollators, sitting aids, etc.) in the rehabilitation and care sector.

The associations organised under the ARGE umbrella are Bundesinnungsverband für Orthopädie-Technik, EGROH, CURA-SAN, rehaVital, Reha-Service-Ring and Sanitätshaus Aktuell. Under
the “ARGE” name, the associations had demanded coordinated price increases from health insurance companies for their products and services under existing supply contracts at least as of
September 2021, and in many cases they were able to achieve them.

Andreas Mundt, President of the Bundeskartellamt: “At the current stage of the investigation, we consider the formation of a syndicate of suppliers consisting of almost all relevant medical aids
associations to be incompatible with the prohibition of anti-competitive practices. Under German law, suppliers of medical aids are given the possibility to negotiate collectively with health
insurance companies within the framework of associations. However, this does not legitimise supplier syndicates of any possible size and monopoly-like market coverage, such as in the case of
ARGE. Only in competition can prices emerge which are in line with market conditions and ultimately protect both sides against exploitation.”

ARGE represents around 80 per cent of the relevant medical supply stores providing medical aids in Germany. In collective negotiations with health insurance companies, ARGE therefore acts as a quasi-monopolist. Medical aids suppliers, such as medical supply stores, orthopaedic technicians and others, are allowed to form national associations to collectively negotiate with health
insurance companies regarding the provision of medical aids to patients. Only in this way can medical aids suppliers ensure the provision of medical aids throughout Germany. However, in the
authority’s view, the limits of competition law are at any rate reached when all the relevant associations join forces or cooperate to an extent which almost completely stifles competition.

The ARGE participants had justified the coordinated price increases demanded from health insurance companies with the cost-related effects of the Covid-19 pandemic (increased freight, supply
and raw material costs). In the authority’s view, this justification is not sustainable if the price increases are demanded as a general rule and without any objective differentiation for practically all
products and services offered. The price increases demanded were thus no longer calculated on the basis of real cost increases in relation to the products and services provided, but were largely decoupled from the costs incurred by the participants and their member companies.

In addition to the provisions of the German Competition Act (GWB), the Bundeskartellamt may also enforce European competition law. At present, the authority assumes that these provisions,
which in any case are to take precedence also over any special regulations under German social law, were violated too.

The statement of objections outlining detailed reasons is an intermediate step in the authority’s administrative proceeding, which gives the parties the opportunity to comment in detail on the
authority’s preliminary assessment. The proceeding may result in the authority prohibiting the parties’ anti-competitive practices, the parties offering commitments or the authority discontinuing the case.

Background information: Relationship between competition law and social law

In the Bundeskartellamt’s view, the application of the antitrust provisions set out in the German Competition Act (GWB) to the cooperation of the parties involved is not ruled out by special
provisions under social law (in this case: Book V of the German Social Security Code (SGB V)) which could override competition law. In particular, the exclusion of application set out in Section 69(1) sentence 1 SGB V does not apply in the present case. The reason for this is that this provision pertains exclusively to the legal relationship between health insurance companies and medical
aids suppliers and not to agreements reached among medical aids suppliers prior to these negotiations.

No other results are reached on the basis of the provision under Section 127(1) SGB V which refers to consortia and associations in which suppliers cooperate in providing medical aids. It does not justify cooperation among all associations. Here, too, the limits set by competition law must be observed.