Bundeskartellamt examines significant malfunctioning of competition in the wholesale of fuels – first proceeding based on new competition tool

The Bundeskartellamt is for the first time making use of the new competition tool introduced in 2023 (Section 32f(3) of the German Competition Act), applying it to the wholesale fuel sector. The authority has initiated a proceeding to, in a first step, examine whether there is a significant and continuing malfunctioning of competition in the wholesale of fuels. If such a malfunctioning can be established, the Bundeskartellamt may consider taking targeted measures to remedy the malfunctioning. 

Andreas Mundt, President of the Bundeskartellamt: “When a malfunctioning of competition in a specific sector is caused by structural conditions, traditional competition law, which is applied in response to violations of the law by individual companies, reaches its limits. In the wholesale of fuels, we see indications of such a structural malfunctioning of competition. In particular, the price information services widely used in this sector could pose a considerable risk to competition. This is what we will now look into further. The new competition tool was intended to make it possible for us to intervene in precisely such cases. In a first step we will examine whether there is a significant and continuing malfunctioning of competition in individual markets or across markets. If such a malfunctioning can be established, we will address the root causes in order to stimulate competition.”

The Bundeskartellamt’s recently concluded sector inquiry into the refining and wholesale of fuels (see press release of 19 February) provided first indications that the use of price information services in the wholesale of fuels poses significant risks to competition. Publishing highly detailed market information generally increases the risk of collusion, meaning the risk that market players could tacitly agree on a price level above the one that would have evolved in a competitive environment. There is also a risk that individual market players systematically manipulate price assessments. However, the inquiry did not provide indications of any specific competition law violations. In the proceeding it has now initiated, the Bundeskartellamt will therefore examine more closely how, in particular, the provision of price information services by Argus Media and S&P Global, the two most commonly used providers in Germany, affects competition in the sector.

The new competition law tool enshrined in Section 32f(3) of the German Competition Act (GWB) provides for a multi-step procedure, enabling the Bundeskartellamt to, in a first step, and following a sector inquiry, issue a decision determining that a significant and continuing malfunctioning of competition exists in one or several markets. Based on such a decision, also without finding that competition law has been violated in an individual case, the Bundeskartellamt can then take remedies.

Proceedings under Section 32f(3) GWB are subsidiary to the use of the Bundeskartellamt’s other powers. On the basis of the information currently available, using the Bundeskartellamt’s conventional powers may not be sufficient to effectively and permanently remedy a possible lack of competition.