New EU report: A boost for competition enforcement in Germany

The European Commission has published a report titled “Protecting competition in a changing world” (link). The report seeks to assess how the conditions of competition have changed in the EU over the past 20 to 25 years.

A special focus is placed on economic indicators such as prices, productivity, competitiveness and economic growth. The report finds that market concentration tends to be relatively low in Germany compared to other EU Member States. In the sectors analysed, more favourable conditions of competition are shown to be associated with lower prices for consumers.

Andreas Mundt, President of the Bundeskartellamt: “The report acknowledges our work and provides a boost for competition enforcement in Germany. The Commission has carefully assessed relevant studies and presents important findings. Although it is always difficult to establish a causal link, there is a clear tendency that consumers and the economy as a whole greatly benefit from competitive markets.”

The report was presented by the Commission’s Directorate-General for Competition (DG Competition) at a conference on 27 June 2024. The conference material as well as a speech by Margrethe Vestager, Executive Vice-President of the European Commission, are available here: link.

Overview of the findings for Germany

• Germany is one of the countries in which average market concentration was relatively low in the sample period between 2000 and 2019, in contrast to France, the United Kingdom, the Nordic countries, Ireland or Greece [p. 5 and pp. 31 ff.; based on data from OECD, Calligaris et al., 2024, and other studies].
• Germany is one of the EU Member States in which markups did not increase over the sample period between 2000 and 2019 but remained relatively stable [pp. 66 ff.; citing OECD, Calligaris et al., 2024; Díez, 2021; Lear et al., 2024].
• Structural changes, including trends towards increased concentration, seem to be more pronounced in the US compared to the EU. One possible explanation could be more vigorous competition enforcement, especially in Germany [p. 114; citing Philippon, 2019].

For certain sectors the Commission has assessed evidence in more detail:

• For mortgages, more concentrated markets tend to have higher mortgage rates. For instance, rates for fixed rate mortgages in the Netherlands (a high concentration country) were more than 50 basis points (0.5 percentage points) higher than in neighbouring Germany or France (low concentration countries) in 2021 [p. 11 and p. 138; citing Lear et al., 2024].
• For beer, on average, prices in Belgium and France (high concentration countries at producer level) were more than 150 per cent higher than in neighbouring Germany (a low concentration country) in 2021 [p. 11 and p. 137; citing Lear et al., 2024, and others].