The Federal Cartel Office | Annual Report 2019

open markets fair competition

Bundeskartellamt 2019 Annual Report 2 | BUNDESKARTELLAMT 2019 • Annual Report ORGANISATION CHART

Responsibilities of the decision divisions: All decisions in administrative and fine proceedings; participation in proceedings of the supreme Land authorities

Postal address Kaiser-Friedrich-Straße 16 53113 Bonn

Federal Public Procurement Tribunals: Villemombler Straße 76 53123 Bonn

Phone: +49 (0) 228 9499 – 0 Fax: +49 (0) 228 9499 – 400 IVBB: +49 30 18 7111 – 0 E-Mail: [email protected] (only informal contacts are possible via e-mail)

Please read the additional information provided under “legal notice” on our website www.bundeskartellamt.de L1

PRESIDENT

MUNDT

L2 Z Central Division Chair of Staff Council: ORTI VON HAVRANEK VICE PRESIDENT Equal Opportunities Officer: IMMEL Representative for Severely SCHNEIDER Disabled Employees: HENSEL General Legal Matters Prof Dr OST Information Security Officer

Z1 Z2 Z3 Z4 Z5 G Budget and Procurement Internal Services Information Technology Human Resources Organisation Ge

Acting Head of Unit:Acting Head of Unit: Acting Head of Unit:Acting SCHOLL-BÄCKER FRANZEN HOEVER ZEISE LANGE

VK1 VK2 WebReg

1st Public 2nd Public Establishment Team Procurement Tribunal Procurement Tribunal Competition Register Review Procedures Review Procedures for Public Procurement G1 G German and European Antitrust Law ECN Coordination

BEHRENS Dr HERLEMANN HOOGHOFF Dr STEMPEL

B1 B2 B3 B4 B5 B6 B7

1st Decision 2nd Decision 3rd Decision 4th Decision 5th Decision 6th Decision 7th Dec Division Division Division Division Division Division Divisi

Dr WAGEMANN Dr ENGELSING Dr LANGHOFF TEMME E. M. SCHULZE TOPEL Dr KRA extraction of ores agriculture health sector (incl. waste management mechanical and media telecommun and other non- medical technology, industry plant engineering metallic minerals food, food industry pharmacy, health internet economy broadcast en insurance and other services metal industry building materials, textiles, shoes hospitals) advertising industry EDP construction automotive industry iron and steel industry and rucksacks chemical industry (incl. rail, air and outdoor adve related services bags water vehicles) measurement and control technology radio real estate and cosmetics and related services drugstore products paper industry press and pre related adver wood industry wholesale and gambling industry industry and furniture retail trade in food patents and electrical household licences appliances, consumer electronics P Litigation and Legal Division IR NOTHDURFT Internal Audit

HEINEN-HOSSEINI

P1 P2 P3 SKK eneral Policy Division Litigation and Legal 1 Litigation and Legal 2 Library Special Unit for Combating Cartels

HOSSENFELDER QUELLMALZ RAUBER ORTI VON HAVRANEK Dr ROESEN

Chief Economist

RASEK

2 G3 G4 G5 G6 PK

Regulation and Economic Issues German and International Digital Economy Press, Competition, in Competition Policy European Merger Control Competition Matters Public Relations Procurement Law

Dr WACKER RASEK Dr PAPE B. SCHULZE Dr WISMER WEIDNER

B8 B9 B10 B11 B12 V cision 8th Decision 9th Decision 10th Decision 11th Decision 12th Decision Decision Division on Division Division Division Division Division Competition Protection and Consumer Protection AUß EWALD KRUEGER HENGST HAWERKAMP TESCHNER Prof. Dr BECKER

ications electricity, gas, tourism and prosecution of prosecution of prosecution of district heating, Horeca sector administrative administrative administrative consumer ngineering drinking and offences in offences in offences in protection wastewater transport conjunction with conjunction with conjunction with violations of violations of violations of culture, sport, mineral oil, mining postal services Sec. 1 GWB and Sec. 1 GWB and Sec. 1 GWB and entertainment ertising Art. 101 TFEU Art. 101 TFEU Art. 101 TFEU electrical engineering financial services books

insurance trade shows Working Group ess- Energy Monitoring rtising Dr MEYER-FLAMME

Working Group Market Transparency Unit Electricity/Gas Dr SCHWENSFEIER

Transparency Unit Fuels HÄFELE 2 | BUNDESKARTELLAMT 2019 • Annual Report 3 |

CONTENTS

Message of greeting – Peter Altmaier �� 4

Foreword – Andreas Mundt �� 5

Tasks and organisation �� 6

Close involvement in the 10th amendment to the German Competition Act (GWB) ��14

Cartel prosecution ��16

Avoid concentrations - preserve diversity of competition ��24

Facts and figures ��34

The digital economy ��36

Energy sector ��42

Market transparency unit for fuels ��46

Trade ��48

Sport ��56

Consumer protection ��60

Federal public procurement tribunals ��62

Competition register for public procurement ��64

Imprint ��66

Organisation chart 4 | BUNDESKARTELLAMT 2019 • Annual Report

Message of greeting – Peter Altmaier Federal Minister for Economic Affairs and Energy

2019 was both challenging and successful: The Bundeskartell amt was once again able to demonstrate its key function in the protection of competition. In the course of cartel prosecution it imposed fines amounting to approximately 848 million euros. The authority examined approximately 1,400 merger notifica tions and initiated second phase proceedings in 14 cases. Further activities of the Bundeskartellamt include its widely acclaimed abuse of dominance proceedings.

This is the time to appreciate what has been achieved and look ahead to the future. Germany and Europe are facing enormous challenges. The Covid crisis is impacting many aspects of our lives. We have therefore taken far-reaching measures to save lives and limit economic harm.

The crisis also affects the work of competition authorities. In some cases companies have to cooperate to ensure the supply of essential goods and limit the negative effects of the pandemic. However, it has to be ensured that the extent of their cooperation does not go beyond what is necessary in order to pre vent harm for consumers. In its application of the flexibility offered by German competition law the Bundeskartellamt has been exerting its discretion well. I would like to thank the Bundeskartellamt and its staff for their work and achievements.

Germany will take over the presidency of the Council of the European Union in the second half of 2020. We would like to take this opportunity to further develop European competition law, in particular with regard to digitalisation and platform economics as well as geopolitical changes. I presented the key points together with my counterparts from Poland and France in July 2019. As hosts of the presidency we will contribute our expertise to enhance the ability of EU competition law to meet the challenges posed by globalisation and digitalisation. The Bundeskartellamt will play a particularly important role in this.

In addition to being fair, competition has to provide a level playing field for all participants, an objec tive which we must come even closer to in the context of the European Single Market. We must make a greater effort to counteract distortions of competition caused by companies from third countries that are subsidised or controlled by the state. During our presidency we will provide constructive support to the European Commission in its endeavours to counteract such distortions of competition.

The Bundeskartellamt has again ensured the protection of competition and consumer rights and compli ance with the rules on award procedures in the course of 2019. Its achievements have led to its excellent reputation and are also an obligation for the future, both in the international context and with regard to the implementation of the upcoming amendments to the German Competition Act (GWB) in the digital era. The amendments to the German Competition Act strengthen in particular the Bundeskartellamt’s key role in addressing the abuse of dominant positions by digital platforms, and thus set a signal for the EU as well.

I would like to thank you for the excellent work in 2019 and wish you much continued success for the future.

Peter Altmaier 5 |

Foreword – Andreas Mundt President of the Bundeskartellamt

Competition is a cornerstone of our economic and social order. As an inde pendent institution which protects competition the Bundeskartellamt has for more than 60 years ensured that companies have to compete with one other to win customers. In doing so it prohibits cartel agreements, any mergers which pose a threat to competition and the abuse of market power.

Since the beginning of this year the COVID-19 crisis has shaped not only people’s daily lives but also economic framework conditions. Competition law has proved to be a flexible tool in this special situation. In many sectors compa nies currently have to cooperate with one another to react to bottlenecks in the production, storage, logistics and distribution of goods. The restart of business activity may also require competitors to cooperate with one another or closely coordinate business activity with their suppliers in a way which under normal circumstances would be problematic under antitrust law. Together with the European Commission and the national competition authorities within Europe and throughout the world we have made it clear that the altered economic framework conditions are also taken into account in antitrust assessment. In a swift and unbureaucratic way we have already guided many cooperation projects and provided the companies with a certain amount of legal security. We all have to deal with an exceptional situation we have never experienced before. And protecting competition is no exception. However it is also important that even restrictions of competition which have been caused by the crisis should be kept to an absolute minimum and only accepted for a necessary interim period. We are therefore also taking special care in these times of crisis that no cartels are formed which could harm customers or that companies do not illegally abuse their market power.

However, it is not only in times of crisis that competition faces challenges. For several years already we have focused on fundamental changes in economic activity due to the digital transformation. With the conclusion of our internationally acclaimed abuse case against Facebook last year we imposed on the company extensive restrictions in the collection and processing of user data. The Federal Court of Justice’s decision in June this year clarified key legal issues raised by this case. The court’s decision provides important information on how we should deal with the issue of data and competi tion in the future. In 2019 we also concluded our proceeding against Amazon and obtained far-reaching improvements in the terms of business for sellers on Amazon Marketplace. Amazon has since implemented these improvements on its marketplaces worldwide.

In addition to our numerous antitrust proceedings in the digital economy, we are also using our competences in the area of consumer protection to closely examine digital business models such as e.g. comparison websites, online user reviews or smart TVs.

For the future it will be vital for us to keep online markets open too to give newcomers a chance, and to prevent large companies from abusing their market power to the detriment of consumers. We hope that the upcoming 10th amend ment to the German Competition Act (GWB), in which we are very closely involved, will among other things reinforce abuse control over large digital companies.

I hope that our annual report will give you an interesting overview of the entire spectrum of our work and wish you pleasant reading.

Yours sincerely

Andreas Mundt TASKS AND ORGANISATION

„The Bundeskartellamt’s task is to protect free and fair competition in Germany“

Andreas Mundt, President of the Bundeskartellamt

The Bundeskartellamt is the most important competition authority in Germany. It is an independent higher federal authority which is assigned to the Federal Ministry for Economic Affairs and Energy. The legal framework for the Bundeskartellamt's work is the Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen – GWB), which came into force in 1958 and is applied and enforced by the Bundeskartellamt. Tasks and organisation | 7 The tasks of the Key Facts Bundeskartellamt in detail: Enforcing the ban on cartels Consumer protection 2019 Agreements between companies which The Bundeskartellamt can conduct prevent, restrict or distort competi sector inquiries into consumer protec tion are generally prohibited. Exam tion issues if there are any indications ples of these are agreements on prices, that consumer law provisions have President: Andreas Mundt quantities, supply areas or customer been infringed. As a so-called “amicus Vice President: Prof. Dr Konrad Ost groups (so-called hardcore cartels). curiae” it can also make statements Budget 2019: 40.3 million euros The Bundeskartellamt prosecutes in court in civil consumer protection around 373 employees illegal cartels and can impose heavy actions. of which 158 are legal experts fines on the persons and companies and economists responsible. Sector inquiries five trainees The Bundeskartellamt conducts sec 190 female/183 male staff Merger control tor inquiries in order to gain a better Mergers between companies are insight into the competition situation subject to merger control by the in certain sectors if there are indica Ban on cartels Bundeskartellamt if they fulfil certain tions that competition in these mar requirements. In examining a merger kets is restricted or distorted. The Fines amounting to 848 million project the Bundeskartellamt assesses aim of the inquiries is to gain exten euros, 23 companies/associations the effects it will have on competi sive information about the markets and 12 natural persons fined tion. If the negative effects outweigh concerned. Since this new tool was the positive effects, a merger project introduced in 2005 the authority can be prohibited or cleared but only has concluded a whole range of sec Merger control subject to certain conditions. tor inquiries, e.g. into the following sectors: fuels, dual systems for pack Approximately 1,400 notifications Control of abuse of a dominant aging recycling, district heating, milk 14 second phase proceedings during position as well as into buyer power in the which four concentrations were Companies holding a dominant posi food retail sector. In early April 2019, prohibited, six notifications were tion are exposed to little, if any, com within its competencies in the area withdrawn, one merger was cleared petitive pressure. Companies can of consumer protection, the Bun subject to conditions and three exert relative market power even if deskartellamt concluded a sector mergers were cleared they do not hold a dominant position. inquiry into comparison websites. As a result they enjoy a large scope A sector inquiry into online user for action vis-a-vis their competi reviews was also started in May 2019 Control of abusive tors, suppliers or customers. Having (see p. 61). practices a position of economic power is not prohibited per se but the abuse of Competition Register for Ten proceedings concluded and nine such market power is forbidden. The Public Procurement initiated control of abusive practices by the On 2 June 2017 the Bundestag passed Bundeskartellamt therefore acts as a the Act introducing a competition state regulatory tool in the absence of register for public procurement. Public Procurement competition. The register will enable contracting Tribunals authorities in future to check in a Review of procedures for the single nationwide electronic search 105 applications for review award of public contracts by whether a company has committed 14 applications granted, 27 rejected, the Federation relevant violations of law, which 34 withdrawn and 30 became moot The provisions of public procurement could lead to its exclusion from public law ensure that public contracts are award procedures for several years. awarded under competitive condi However, companies listed in the Sector inquiries tions and through transparent and register can be deleted prematurely non-discriminatory procedures. The from the register if they undertake April 2019: Comparison websites Public Procurement Tribunals at the self-cleaning measures. The register June 2020: Online user reviews Bundeskartellamt are responsible for is scheduled to be operational by the July 2020: Smart TVs reviewing tender procedures which end of 2020. Ongoing investigations: Waste man- are carried out by the Federation or agement, hospitals, online advertising public contracting entities. 8 | BUNDESKARTELLAMT 2019 • Annual Report

Internal organisation

The Bundeskartellamt is headed by The ongoing digital transformation The task of the Central Division is to President Andreas Mundt and Vice and the legal and economic issues provide cross-functional services to President Prof. Dr Konrad Ost. They are associated with it are another ensure the authority’s operability and responsible for organising the internal important focus area of the General assist the various organisational units processes and representing the author Policy Division’s work. In August in discharging their tasks. Its units for ity to the public. 2019 the new “Digital Economy” unit Budget and Procurement, Internal was set up as part of a restructuring Services, Building Management, IT Decisions on cartels, mergers and abu process in the General Policy Division. including Data Science, IT Forensics sive practices are taken by 13 Decision It has taken over the tasks previously and IT Security, HR and HR Divisions of the Bundeskartellamt. dealt with by the “Digital Economy, Development, Organisation including Nine Decision Divisions are responsi Regulation and Competition, Risk Management and General ble for specific economic sectors. The Procurement Law” unit. The unit Legal Matters are the corresponding 10th, 11th and 12th Decision Divisions supports the Decision Divisions intersections facilitating the Central deal exclusively with the cross-sector and works on conceptual projects Division's services. prosecution of cartels. In the middle of like the joint study with the French 2017 a further Decision Division was competition authority on algorithms The IT Unit assists the Decision established for competition protection and competition, which was published Divisions e.g. in conducting online and consumer protection. You will find in November 2019. It cooperates with surveys in major proceedings, in their an overview of the Decision Divisions, other internal support units such as work on digital economy cases and their competencies and respective IT Forensics and Data Science and by seizing and evaluating IT data in chairs in the organisation chart at the engages in exchanges with other cartel proceedings. end of the report. authorities. A key area of focus of the Central Two Federal Public Procurement Division in 2019 remained the Tribunals are also located at the Bun recruitment and further training deskartellamt and examine whether of highly qualified staff. The public procurement law was observed Bundeskartellamt is a family friendly in the award of large public contracts employer faced with many diverse falling within the Federal Govern and challenging tasks. It places great ment’s area of responsibility. emphasis on the further training and development of its staff both in A Competition Register for Public the professional as well as personal Procurement is currently being set sphere. The authority offers a large up. It will list relevant infringements number of placements for practical of law committed by companies. training and internships for qualified lawyers and economists. The General Policy Division advises the Decision Divisions in specific com The Litigation and Legal Division In 2019 the Bundeskartellamt pushed petition law and economic matters and advises the Bundeskartellamt on further ahead with its concrete represents the Bundeskartellamt in the legal matters, prepares appeal preparations to introduce an decision-making bodies of the Euro proceedings before the Düsseldorf electronic file management system pean Union. The Division is closely Higher Regional Court and represents and initiated an evaluation of its involved in competition-relevant legal the Bundeskartellamt before the personnel requirements. reforms, both on the national level, as Federal Court of Justice in Karlsruhe. for example in the 10th amendment The Litigation and Legal Division to the German Competition Act (GWB) also includes the Special Unit for (see p. 14f.), and on the European level. Combating Cartels (SKK). The SKK It coordinates the Bundeskartellamt’s assists the Decision Divisions in the cooperation with foreign competition preparation, execution and evaluation authorities and international organi of dawn raids in cartel proceedings. It sations. The Division is also in charge is also the contact point for companies of press and PR work and assists the wishing to apply for leniency in cartel authority's president. proceedings. Tasks and organisation | 9

Protecting competition during the COVID-19 crisis

Since the beginning of 2020 the Contact partner for and international competition COVID-19 crisis has shaped not only cooperation projects authorities to provide information the everyday lives of people but also The Bundeskartellamt has examined and urgently needed guidance to economic framework conditions. many cooperations as a result of the companies. Many sectors are particularly affected crisis, giving companies legal security by the crisis and the exceptional cir and protecting them against possible Participation in legislative cumstances make an intervention punishment. There are three major initiatives into the market processes necessary. areas in which the Bundeskartellamt The Bundeskartellamt has contributed However, competition is not sus acts as a contact partner for compa to legislative initiatives to facilitate pended even in times of crisis. The nies looking for support: Cooper competition law enforcement during Bundeskartellamt is there to protect ations in the area of production in the crisis. consumers and companies. At the order to avoid bottlenecks, in logis same time the Bundeskartellamt is tics, distribution and storage and in Prosecution of competition sufficiently flexible to facilitate useful restarting complex supply chains. law violations and necessary cooperations. The Bundeskartellamt is particularly Intensive international vigilant in preventing prohibited coordination cartel agreements, and companies The Bundeskartellamt has partici from abusing their market power to pated in joint initiatives of European the detriment of consumers.

„The Bundeskartellamt has adjusted its working processes to the challenges posed by the COVID- 19 crisis. The authority could thus ensure its full operability at every point in time during the crisis and respond quickly to enquiries from companies looking for support.“ Prof. Dr Konrad Ost Vice President of the Bundeskartellamt 10 | BUNDESKARTELLAMT 2019 • Annual Report

The Bundeskartellamt as a family friendly employer

In 2018 the Bundeskartellamt was again awarded by the Federal Minister for Family Affairs, Dr Franziska Giffey, with the “work and family audit” certificate ("audit berufundfamilie") for a three-year period for its strategically developed family and life-phase oriented human resources policy.

Kartell Man

The Düsseldorf University of Applied Sciences (Hochschule Düsseldorf) and the Bundeskartellamt have published a short animated film about cartel prosecution starring Kartell Man uncovering and combatting an ice cream cartel. Two media engineering students of the Hochschule Düsseldorf, Viviann Banh and Max Matthias Karl, produced the film as part of a bachelor thesis. The bachelor thesis was supervised by Prof. Isolde Asal (direction & editing) and Prof. Dr Sina Mostafawy (character design & animation) at the Media Go here to see the film: Faculty. https://www.youtube.com/watch?v=5zugIftAY9M

Visiting the Bundeskartellamt

The Bundeskartellamt offers inter ested groups the possibility to visit the authority to learn about its role, tasks and current cases. This service is open to school children, students, companies, organisations and all those interested in the protection of competition and the Bundeskartell amt's work.

In 2019 and early 2020 the Press and Public Relations Unit received over 30 visitor groups. Since June 2020 visitor groups can also participate in virtual information events organised by the Bundeskartellamt. Tasks and organisation | 11

International Cooperation

The Bundeskartellamt closely cooperates with competition authorities all over the world. This cooperation is either conducted on a bilateral basis or within international networks.

ECN digital economy remains one of the OECD/UNCTAD The national competition authorities ICN’s key focus areas, which was also In 2019 the Bundeskartellamt again in the EU work very closely together. underlined by the topics selected for cooperated in the competition- Areas of cooperation include cartel the ICN’s 18th annual conference in related activities of the Organisation prosecution, the control of abusive Cartagena (Colombia) in May 2019. for Economic Cooperation and practices and merger control. In order During the plenary sessions, the Development (OECD) and the United to combat cross-border restrictions of questions dealt with were, among Nations Conference on Trade and competition the national competition others, how authorities can uncover Development (UNCTAD). authorities have formed the European and punish cartels in the digital age, Competition Network (ECN). They how market power can be examined Andreas Mundt is a member of the assist one another e.g. in dawn raids in digital and high tech companies Bureau of the OECD Competition or other investigative measures and and how authorities have to restruc Committee. Every year the OECD can cooperate in case work, e.g. by ture to master the challenges of the hosts two conferences of the exchanging confidential information. digital transformation process. An Competition Committee and a Global In the ECN competition authorities event for the heads of the authorities Forum on Competition in Paris. The also exchange information on their was also dedicated to digital topics. Bundeskartellamt takes an active part case experience and accompany the in all these events and has provided evaluation and review of guidelines Fair procedural principles were written contributions on the topics and Block Exemption Regulations, for another focus area at the confer “Hub and spoke arrangements”, example on vertical and horizontal ence at which the ICN Framework “Access to the case file and protection restraints of competition. on Competition Agency Procedures of confidential information”, “Vertical (ICN CAP) with the Bundeskartellamt mergers in the technology, media and ICN as a founding member was also intro telecom sector” and “The standard of At international level the national duced. ICN CAP is an opt-in frame review by courts in competition cases”. competition authorities work work built on the principles of fair together within the International and effective procedural principles The UNCTAD Intergovernmental Competition Network (ICN). With for authorities that fully complies Group of Experts on Competition 140 competition authorities from with the ICN’s comprehensive work. Law and Policy(IGE) holds its annual more than 125 jurisdictions the ICN The ICN also presented recommen conference every year in Geneva. As is the most important association dations for fair and effective pro a member of the Discussion Group of competition authorities world cedures in Cartagena. Further work on International Cooperation the wide. Since September 2013 the products deal with leniency pro Bundeskartellamt contributed to President of the Bundeskartellamt, grammes, vertical mergers, vertical the Guiding Policies and Procedures Andreas Mundt, has been the Chair restraints of competition and private under Section F of the UN Set on of the ICN's Steering Group. The competition law enforcement. Competition. 12 | BUNDESKARTELLAMT 2019 • Annual Report

The Bundeskartellamt in an international comparison

Every year the renowned antitrust authorities themselves, this takes into own surveys and analyses. Again in journal Global Competition Review account the opinions of experts such 2019 the Bundeskartellamt ranked (GCR) analyses and evaluates the as lawyers specialising in competition in the 5 star "elite" category together performance of leading competition law, economists and academics as with the French Autorité de la authorities worldwide. In addition well as other special information concurrence and the US Federal Trade to the information submitted by the which the journal derives from its Commission.

19th International Conference on Competition (IKK)

From 13 to 15 March 2019 the Bundeskartellamt hosted its In addition to how to deal with the challenges posed by 19th International Conference on Competition in Berlin. the global rise in market power and digitalisation as well With around 400 participants from more than 50 countries as the importance of data as a competition parameter, the the event once again confirmed its international appeal. interaction between leniency programmes and antitrust The keynote speakers were Peter Altmaier, Federal Minister damages actions was another key area of focus of the for Economic Affairs and Energy, Margrethe Vestager, conference. European Commissioner for Competition, and Daniel Ek, Chief Executive Officer and founder of Spotify. Tasks and organisation | 13

Exchange with the Monopolies Commission

The Bundeskartellamt also exchanges talks were held in preparation for The next Biennial Report which information with the Monopolies the Sector Reports on the railway, will assess, among other things, the Commission on a regular basis, energy, post and telecommunications Bundeskartellamt's current case especially in the context of expert sectors. The Monopolies Commission practice, is due in 2020. opinions that are provided by the prepares Biennial Reports and Sector Monopolies Commission. In 2019 Reports alternately every two years.

Exchange with academic experts

The Bundeskartellamt organises an Working Group on Competition Law on Competition Economics discussed annual meeting of the Working Group meeting the participants discussed fuel markets, minority shareholdings on Competition Law and semi-annual with competition law experts how and the modernisation of abuse meetings of the Working Group on rules on vertical agreements have to control. Current issues of competition Competition Economics. These formats be adjusted in the age of the digital economics such as effects of vertical offer legal and economic experts economy in order to keep pace with mergers, algorithms and abusive data an opportunity to discuss current the digital transformation and the processing conditions were at the topics in the context of competition challenges associated with it. In its heart of the second event which took law and politics. During the 2019 first 2019 meeting the Working Group place late in 2019. CLOSE INVOLVEMENT IN THE 10TH AMENDMENT TO THE GERMAN COMPETITION ACT (GWB)

On 24 January 2020 the draft bill of the 10th amendment to the German Competition Act was published by the Federal Ministry for Economic Affairs and Energy, which is primarily responsible for the bill. The Bundeskartellamt worked closely together with the Ministry in the preparation of this draft. At its core, the draft bill is intended to implement the European Directive to empower the competition authorities of the Member States (ECNplus) and to modernise abuse control with particular regard to digital platforms. Close involvement in the 10th amendment to the German Competition Act (GWB) | 15

In the area of abuse control the draft posed by markets and undertakings with other European competition bill widens the scope of application in the digital economy. authorities. Further changes to of the rules on relative market power be implemented by the draft bill and provides for stricter rules for To implement the ECNplus Directive include in particular the expedition so-called undertakings of paramount the Bundeskartellamt requires new of administrative proceedings by significance for competition across investigative powers, a statutory facilitating interim measures, the markets. The new provisions set provision for its leniency programme possibility of oral hearings as well forth in Section 19a of the German and, in particular, stronger rights as the provision of comprehensive Competition Act are intended in judicial fine proceedings. access to file rules. The amendment to enable the Bundeskartellamt Furthermore the amendment is is also to intended to readjust merger to impose mandatory conduct intended to make instruments for control thresholds and further requirements on such companies. The applying penalties more effective and develop the provisions on damages draft bill also clarifies the regulations to enhance the scope for cooperation actions. on data access for companies, criteria for the assessment of the market position of so-called intermediaries New Section 19a GWB (draft bill) and the standard for causality in general abuse control. The According to the new Section 19a, the Bundeskartellamt could prohibit Bundeskartellamt considers these undertakings of paramount significance from preferring their own offers aspects to be well-justified reforms over competitors’ offers when providing access to supply and sales markets. to even better meet the challenges Self-preferencing can lead to market foreclosure and hinder competitors, e.g. from developing and marketing innovative offers. However, especially on dynamic or newly emerging markets, undertakings are supposed to be able to compete for market shares and customers on the merits of their performance and positions of power are to remain contestable. CARTEL PROSECUTION

In 2019 the Bundeskartellamt imposed fines of around 848 million euros on a total of 23 companies or trade associations and 12 individuals. The industries concerned were technical building services, wholesalers of plant protection products, plate embossing companies, liquefied gas suppliers, steel manufacturers and purchasers of automotive steel, magazines and bicycle wholesalers. Cartel prosecution | 17

Agreements on the provision of technical building services

The Bundeskartellamt imposed fines four and 35 million euros, in one case Higher Regional Court discontinued totalling approx. 110 million euros on to around 100 million euros. the proceeding against one company eleven technical building service pro upon its appeal due to the expiry of viders. The companies had colluded The fines against eight companies the limitation period. The Düssel to a varying extent on the award of are already final. Three companies dorf General Public Prosecutor’s major contracts for the design and each appealed the decisions and their Office appealed the Higher Regional installation of technical equipment findings to the Düsseldorf Higher Court's decision to the Federal Court for large building complexes such Regional Court. The Düsseldorf of Justice. as power plants, industrial facilities, shopping centres and office build ings. The proceeding was initiated in November 2014 following a leniency application.

Based on the agreement the com panies submitted fictitious bids to protect their competitors in the cor responding award procedures. In return the companies in many cases received specific services such as for example subcontracts or compensa tory payments or were offered cover quotes in another tender procedure. In all anticompetitive practices were proved in 37 different award pro cedures in the period from 2005 to 2014. The order volume for the tech nical building service disciplines con cerned usually amounted to between

Selected maximum fines*

Year Antitrust proceeding Total fines imposed in euros Highest single fine against a company 2019 quarto plates 646,405,000 370,000,000 2018 special steel 304,050,050 118,000,000 2014 beer 338,000,000 160,000,000 2014 sausage 338,500,000 128,050,000 2014 sugar 281,700,000 195,500,000 2009 coffee 159,000,000 83,000,000 2008 clay roof tiles 188,081,000 66,280,000 2007 liquefied gas 249,000,000 67,200,000 2005 industrial insurance 151,400,000 33,850,000 2003 cement 396,000,000** 175,900,000

* Figures are rounded. Since litigation is still pending in individual cases, not all the fines are final. ** Total sum of final fines based on a judgment issued by the Federal Court of Justice in 2013. 18 | BUNDESKARTELLAMT 2019 • Annual Report

Proceeding against wholesalers of plant protection products

In early 2020 the Bundeskartellamt imposed fines companies simply used the agreed price list to set their totalling 157.8 million euros on eight wholesalers of own prices and basically just added their company logo plant protection products and their representatives for to the final list. agreeing on price lists, discounts and some individual sales prices for retailers and end customers in Germany. All the wholesalers concerned cooperated with the The companies agreed on price lists for plant protection Bundeskartellamt during the proceeding and helped products in the spring and autumn of each year between to clarify the matter by applying for leniency. All eight 1998 and the dawn raid in March 2015. Their agreements fined companies and the individual employees fined were based on a joint calculation by the wholesalers that have acknowledged the facts as established by the led to largely uniform price lists for retailers and end Bundeskartellamt and agreed to a settlement. The orders customers. Especially during the first few years, some imposing the fines have now become final.

The Leniency Programme in brief

Whoever as the first participant in a cartel agreement All other and later leniency applicants can have their uncovers a cartel of which the Bundeskartellamt has no fines reduced by a maximum of 50 percent, provided they previous knowledge, receives immunity from a fine ("first cooperate with the Bundeskartellamt and produce decisive come, first served" principle). Immunity from fines can evidence to prove the offence. also be granted at a later date if the Bundeskartellamt is provided with decisive evidence without which the The requirement for immunity from and reduction of fines existence of a cartel could not have been proved. The is the continuous and unlimited cooperation of the leniency sole ringleader and those members of a cartel who have applicant with the Bundeskartellamt throughout the coerced others to participate in the cartel are excluded from proceedings. immunity. Cartel prosecution | 19 Agreements between plate embossing companies

In December 2019 the Bundeskartel The companies agreed for example on over 700 local number plate supplier lamt imposed fines totalling approx. which company would be allowed to markets in Germany. eight million euros on four plate operate a stamping shop on a certain embossing companies and five individ local market and which companies When setting the fine, it was taken uals involved for their anticompetitive would not. The total income, into account that all the companies practices in the sale of embossed vehi costs and profits of the designated and individuals involved except one cle registration plates. Number plates stamping shop would then be pooled acknowledged the facts as established are stamped on special machines in to rule out any entrepreneurial and by the Bundeskartellamt and agreed to the stamping shops and the finished competitive risk. The anticompetitive a settlement. One individual involved number plate (still without the techni cooperation took place in different appealed the decision and the findings cal inspection sticker and official seal) forms and at various levels of to the Düsseldorf Higher Regional is sold to the customer. Afterwards the involvement on approx. 40 percent of Court. number plate is presented to the vehi cle licencing office where the official seal is applied.

At least between 2000 and early 2015 the companies exchanged competi tion-relevant information and cooper ated with one another in various ways.

„We invest many resources in cartel prosecution. It remains a key focus of the Bundeskartellamt's work. Cartels harm the economy and consumers because of artificially increased prices, inferior quality and restrained innovation.“

Andreas Mundt, President of the Bundeskartellamt

Territorial agreements in the Calculation of fines sale of liquefied gas Fines are calculated according to the seriousness and duration The Bundeskartellamt imposed fines Moderate fines were imposed in this of the infringement. Under the totalling approx. 195,000 euros on case as the effects on the German German Competition Act, GWB, four companies for entering illegal market for liquefied gas were insig the maximum fine is limited to territorial agreements for the sale of nificant due to the very small mar 10 percent of a company's total liquefied gas. The territorial agree ket shares of the companies involved. annual turnover. ments covered the period between The Bundeskartellamt therefore November 2006 and July 2016. The refrained from imposing a fine on Another significant aspect in the proceeding was initiated follow the individuals involved, i.e. indi calculation of the Bundeskartell ing a leniency application filed by vidual managers of the companies. amt's fines is the cartel-related another company, which was there turnover, i.e. the turnover fore granted immunity from its fine. achieved with the products that were the subject of the cartel agreement. 20 | BUNDESKARTELLAMT 2019 • Annual Report

Price-fixing agreements for quarto plates

The Bundeskartellamt imposed fines Quarto plates are hot rolled flat steel models agreed on or adopted them in totalling around 646 million euros products. These are used for example coordination with one another. on Ilsenburger Grobblech GmbH, in steel construction, bridge build thyssenkrupp Steel Europe AG and ing, building construction, general The companies admitted to the accu voestalpine Grobblech GmbH as mechanical engineering, wind tower sations and agreed to a settlement. well as three individuals responsible and pipeline construction. This was taken into account by the for exchanging information on and Bundeskartellamt when calculating agreeing certain price supplements Representatives of the steel manufac the fines. and surcharges for quarto plates turers regularly met from July 2002 to in Germany. The anticompetitive August 2008 and agreed on the most Voestalpine Grobblech GmbH cooper agreement was in place from mid- important price supplements and sur ated with the Bundeskartellamt in the 2002 until June 2016. Dillinger charges for specific quarto plates in course of the proceeding, which was Hüttenwerke, a public limited Germany. Until mid-2016 the compa also taken into consideration when company which also participated nies continued to calculate these price setting the fine. The orders to impose in the agreement, was the first components according to the uniform the fines are final. company to cooperate with the Bundeskartellamt and was therefore granted full immunity from fines. Positive effects of cartel prosecution

The prosecution of illegal cartels has immediate positive effects on the economy and consumers. Cartels cause great harm to the overall economy because they lead to higher prices, lower product quality and less innovation. Scientific studies indicate that cartels result in average price increases of up to around 15 percent. Uncovering a cartel often directly leads to lower prices. The companies need to make an effort to win customers. Cartel prosecution | 21

Automotive manufacturers concluded agreements on the purchase of steel

In November 2019 fines total The price for long steel products con The companies admitted to the accu ling around 100 million euros were sists of a basic price and scrap and sations and agreed to a settlement. This imposed on Bayerische Motoren alloy surcharges. During the period of was taken into account by the Bundes Werke AG, Daimler AG and Volkswa infringement the surcharges, which kartellamt when calculating the fines gen AG for anticompetitive practices fluctuated in amount, accounted on as was the fact that the car manufac in the purchase of long steel products. average for approximately a third of turers had cooperated with the author Between 2004 and the end of 2013 the end price of the long steel products ity throughout the proceeding. The representatives of the companies concerned here. The purchase costs of fines imposed are final. regularly met twice a year with steel long steel account for less than one manufacturers, forging companies and percent of the total costs of a car. large systems suppliers and exchanged information on uniform surcharges for the purchase of long steel products. 22 | BUNDESKARTELLAMT 2019 • Annual Report

Vertical price-fixing by bicycle wholesaler ZEG Vertical price fixing Vertical price fixing denotes a process where a manufacturer commits its customers (usually The Bundeskartellamt imposed fines ZEG is a purchasing cooperative con retailers) to resell its products totalling around 13.4 million euros sisting of approx. 960 independent at a certain price (or at least not on the bicycle wholesaler ZEG Zwei bicycle retailers in Europe, around 670 below a certain minimum price). rad-Einkaufs-Genossenschaft eG of which are in Germany alone. It has This kind of fixed or minimum (ZEG) and its representatives for fixing a strong market position in Germany resale price maintenance retail prices with 47 bicycle retailers. both on the purchase and sales sides. imposed on retailers by manufacturers generally ZEG agreed with its member compa In setting the fine the Bundeskartell violates the prohibition of nies on retail prices for certain bicy amt took into account that ZEG had anticompetitive agreements cle models. The independent retail cooperated with the authority in under Section 1 GWB and ers were asked not to undercut the uncovering the agreements and that Article 101 TFEU because minimum sales prices set by ZEG for a settlement could be reached. The retailers can no longer compete different bicycle models. This greatly fining decisions are final. with one another on the price of restricted price competition between the product. the members of the purchasing An exception to the rule is cooperation to the detriment of the possible in individual cases, e.g. consumer. for a short period during the launch of a new product.

Customer allocation agreements by providers of magazine lending services

In early 2019 fines amounting to publishers in order to create magazine from poaching business customers approx. three million euros were packs which they usually rent out to from one another. The customer imposed on eight magazine lending their customers for a period of one allocation practice prevented price service providers. The companies are week. Their customers include private competition between the services. All accused of having concluded illegal individuals and in particular doctors’ the companies concerned agreed to customer allocation agreements. practices, hairdressers or restaurants. have the proceedings terminated by The agreements were concluded settlement. The orders to impose the Providers of magazine lending services between the magazine lending fines are final. purchase different magazines from services providers to prevent them

Settlement

Administrative fine proceedings can be concluded in the form of a negotiated settlement between the Bundeskartellamt and the parties concerned to terminate the proceedings. A settlement generally expedites and shortens resource-intensive antitrust proceedings. The formal requirement for settlement is a confession and a settlement declaration in which the company or individual involved acknowledges the facts of the infringement with which it/he is charged and accepts the fine up to the amount announced. A settlement declaration can lead to a reduction of fine of max. ten percent. A waiver of the right to appeal is not part of a settlement declaration. Cartel prosecution | 23

Increase in number of private damages actions

Companies which violate the While the number of actions the majority of all compensation prohibition of cartels not only have concerning the truck cartel decreased payments is usually enforced in out- to expect fines from the competition in 2019 compared to the previous year, of-court negotiations (also partly by authorities but also claims for damages these still account for approximately offsetting claims in future deliveries.) from customers or suppliers harmed 80 percent of the follow-on claims in It is therefore generally not possible by the cartel. The number of damages the period covered by the report. The to calculate exactly the amount of actions following cartel proceedings amount of compensation (approx. compensation actually paid in such by the Bundeskartellamt or the 420 million euros) was still fairly high, damage actions. European Commission ("follow-on but approximately 380 million euros claims") increased significantly in of this was paid to a single company Further professionalisation in the recent years. The actions concerned which had bundled the claims of bundling and assertion of damages a variety of product areas such as several damaged companies and claims can be observed, which is sugar, trucks, rails, bathroom fittings, brought them to court. Various district encouraged by the market entry of law electronic cash, chipboard panels, courts have already ruled in the first firms specialising in damages actions detergents, television tubes, packaging, instance that this kind of bundling of and litigation funding. cement, steel abrasives, wallpapers, claims in one company is inadmissible, gas-insulated switchgears, drugstore but the legal situation has not yet been With the implementation of the products, flour (mills cartel) or clarified by the Federal Court of Justice. EU Directive on Antitrust Damages confectionery. For this reason it remains to be seen Actions 2014/104/EU in the 9th whether the bundling model will amendment to the GWB in the summer The truck cartel is a good example of prevail for such claims in future. of 2017, the conditions for damages the significance of follow-on actions. actions were further improved so that In 2016/2017 the EU Commission The Bundeskartellamt estimates a further increase in the assertion of had imposed fines on several truck that in private damages proceedings damages claims can be expected. manufacturers for agreeing on their sales prices for freight vehicles over a number of years. In Germany alone over 400 actions were filed in connection with the case. The actions for damages vary greatly in terms of the amount of damages and the value in dispute. The claimants are mainly from the construction, transport, freight forwarding and logistics sectors but also from other sectors such as the food retail trade. Many actions were also brought by small companies. What is more, last year about half of all actions were brought by the public sector (cities and municipalities, municipal undertakings, federal states, the federation, etc.). AVOID CONCENTRATIONS - PRESERVE DIVERSITY OF COMPETITION

CRRC/Vossloh Locomotives | CinemaxX/Cinestar | Telekom/EWE Loomis/Ziemann | Harry’s Inc./Edgewell Personal Care Company Miba/Zollern | IBM Deutschland/T-Systems Heidelberger Druckmaschinen/MBO Maschinenbau Oppenweiler Binder Bidding syndicates and supplier consortia in the ready-mixed concrete industry | Hospital mergers “Alliance of publishing houses”/BPVG | Berliner Morgenpost/Der Tagesspiegel Heinrich Bauer Verlag/MDZ | REMONDIS/DSD

Mergers between companies are subject to merger control by the Bundeskartellamt if they fulfil certain requirements. They may be implemented only after clearance by the Bundeskartellamt. The Bundeskartellamt examines and assesses the effects a merger will have on competition. If the negative effects on competition outweigh the positive effects, a merger project can be prohibited or cleared only subject to certain conditions. The Bundeskartellamt also often makes antitrust assessments of cooperations between companies, which provide companies with guidance on how to specifically structure their project. Provided that the restrictions of antitrust law are observed, meaningful and necessary cooperations are explicitly allowed. Avoid concentrations - preserve diversity of competition | 25

Thorough examination of acquisition by Chinese state-owned company

The Bundeskartellamt examined the success in Europe has been limited so market. It is true that in the context acquisition of Vossloh Locomotives far. Vossloh is the market leader for of the complex approval processes by the CRRC group (People’s Republic the manufacture of diesel-powered for shunters CRRC can benefit in of China) in great detail in second shunters in the European Economic future from the expertise it obtains phase proceedings. Vossloh’s strong Area and in Switzerland. The Chinese from Vossloh as an established market position on the one hand state’s aid for CRRC played an manufacturer. However, the company and CRRC’s still very weak position important role in the assessment of has only played a minor role on the on the European market on the the case under competition law: The European market so far. Vossloh’s other hand made it difficult to assess Bundeskartellamt’s considerations competitiveness has considerably the participation of Chinese state- included possible state subsidies, decreased over the last few years and owned companies in the context of the risk of low-price and dumping several strong competitors are now merger control. The project could be strategies, strategic advantages active on the market. What is more, cleared in April 2020 after an in-depth obtained through other participations new competitors providing innovative examination. and cost advantages due to state traction technologies have entered the funding for CRRC activities in many market since. The CRRC group is the world’s other markets. largest manufacturer of rolling stock. This case has shown that although Its activities have mainly focused Based on the Bundeskartellamt’s Chinese state-owned companies enter on China so far. The company has investigations it was possible markets with strong economic power, more than 150,000 employees and to ultimately rule out that the they cannot be assessed as a general operates a large number of factories merger would considerably impair threat to competition. in China and other countries. Its competition on the European shunter 26 | BUNDESKARTELLAMT 2019 • Annual Report

More than one local operator of cinemas? Merger of two cinema chains

In March 2020 the Bundeskartellamt cleared the merger six regions of Augsburg, Bielefeld/Gütersloh, Bremen, between the two cinema chains CinemaxX and Cinestar Magdeburg, Wuppertal/Remscheid and the western part subject to the merger parties selling six of their cinemas of the Ruhr region that it would have been expected to to other operators first. significantly impede local competition between the cin emas there. The cinema operators undertook to sell one A merger between CinemaxX and Cinestar would cre cinema each to a competitor to avoid disadvantages, for ate the leading cinema operator in Germany in terms of example in the form of higher ticket prices, for consumers turnover and number of cinema screens. The acquisition in the affected regions. would have led to such high joint market shares in the

Enhanced fibre deployment for telecommunications and internet connections

In late December the Bundeskartell region’s largest providers of internet The Bundeskartellamt estimates that amt cleared plans by Telekom connections, the Bundeskartellamt the cooperation and the obligatory Deutschland GmbH and EWE AG to asked the parties to make far-reaching investments associated with this will found a joint venture for fibre deploy commitments regarding their cooper lead to a significant improvement on ment in north western Germany. ation beforehand. the telecommunications markets in the As both companies were among the region concerned and in rural areas. Avoid concentrations - preserve diversity of competition | 27

Merger notification for services for high- performance computers withdrawn

In June 2019 IBM Deutschland infrastructure of its competitor which would have benefited IBM in withdrew its notification of the T-Systems. As a result of the planned particular. The merger project was planned acquisition of significant acquisition T-Systems would no closely examined in second phase parts of the hardware and software longer have been independent and merger control proceedings which business and several hundred expert would not have been active to the same involved extensive investigations. staff from T-Systems’ mainframe extent on the market as previously, business following concerns expressed by the Bundeskartellamt. Mainframes are powerful computers mostly manufactured by IBM and used by large companies and public institutions worldwide to reliably store and process large amounts of information and for high-speed bulk data processing. The relevant infrastructure outsourcing services for the mainframe business account for a market worth billions.

The Bundeskartellamt preliminarily assessed that IBM had a dominant position in the European Economic Area for mainframe infrastructure outsourcing which would have been strengthened by its acquisition of sought-after specialists and key

Choice of cash handling services ensured

Late in December 2019 the Bun of coins and banknotes to and from This development would have consid deskartellamt prohibited the proposed customers, cash processing in cash erably impeded effective competition acquisition of all shares of Germany’s centres and the refilling and mainte in several very concentrated regional second-largest cash handling service, nance of ATMs. markets for cash handling services. Ziemann Sicherheit Holding GmbH, The commitments offered by the com by Loomis AB, an internationally Already in summer 2019 the Bundes panies were not sufficient to eliminate active Swedish cash handling service. kartellamt had assessed the merger the Bundeskartellamt’s competition project as critical as Loomis/Ziemann concerns. The project was therefore The merger project mostly affected and Germany’s market leader Prosegur prohibited. The decision is final. the provision of cash for businesses would have been the only two compa and banks. This includes the transport nies active on the markets concerned. 28 | BUNDESKARTELLAMT 2019 • Annual Report

Acquisition of a supplier of wet shave razors prevented

The Bundeskartellamt closely of branded products in this market concentration would have considera examined the intended acquisition after The Procter & Gamble Company, bly impeded effective competition in of Harry’s Inc. by Edgewell Personal which distributes its products under the national market for private label Care Company in second phase the “Gillette” brand. Edgewell also wet shave razors. In November 2019 proceedings. offers wet shaving products as own- the Bundeskartellamt informed the brand products, i.e. private labels. Har parties to the merger of its competition Edgewell manufactures personal ry’s also manufactures wet shaving concerns. The parties withdrew their hygiene products and distributes products and is one of Germany’s lead notification in February 2020 follow them worldwide. Edgewell distrib ing suppliers of private label products. ing a critical assessment of the project utes wet shaving products, including by the US Federal Trade Commission. the “Wilkinson Sword” brand, and is The preliminary investigation results the second most important supplier of the authority have shown that the

Market concentration in plain bearings segment

In January 2019 the Bundeskartellamt two very close competitors from the the Ministry granted the authorisation prohibited the formation of a joint customers' perspective, would join subject to conditions, holding that venture between Miba AG and Zollern forces. the merger was significant for GmbH & Co. KG. The companies had achieving the energy transition and planned to pool their hydrodynamic After the merger was prohibited the environmental objectives associated plain bearing production activities in parties applied to the Federal Ministry with it, which would mean that there a joint venture. for Economic Affairs and Energy was an overriding public interest (BMWi) for ministerial authorisation. to authorise the merger. Miba and The authority's investigations showed Zollern then filed an appeal against that the two companies are the major In a special opinion commissioned by the Bundeskartellamt's prohibition competitors in a market which is the Ministry for Economic Affairs and decision with the Düsseldorf Higher already highly concentrated. The Energy, the Monopolies Commission Regional Court. The Court will merger would have exacerbated the recommended against granting probably decide on the appeal in the situation because Miba and Zollern, ministerial authorisation. However, second half of 2020.

Ministerial authorisation (Section 42 of the German Competition Act, GWB)

The Federal Minister for Economic Affairs and Energy can, upon application, authorise a merger which has been prohibited by the Bundeskartellamt if ... – ... in a specific case the restraint of competition is outweighed by advantages to the economy as a whole following from the concentration or – ... the concentration is justified by an overriding public interest. Since the introduction of merger control there have been ten successful applications for ministerial authorisation Avoid concentrations - preserve diversity of competition | 29

Prohibition of merger of folding machine manufacturers

The Bundeskartellamt prohibited whole of Europe. The merger would the high level of customer loyalty plans by Heidelberger Druck have created a dominant position and the customers’ requirements maschinen AG to acquire all the for Heidelberger Druckmaschinen for prompt service and spare parts. shares in an asset management and have significantly impeded In fact no market entries were company which is a shareholder of the competition in the market to the witnessed in the last 20 years. The folding machine manufacturer MBO detriment of customers. decision is final. Komori Corporation, Maschinenbau Oppenweiler Binder which manufactures offset printing GmbH. The merger especially affects The investigations also showed that machines, has acquired MBO in the the market for special machines for market entry seems difficult due to meantime. The acquisition was not the manufacture of sheet folding the high costs and time involved, subject to merger control. machines for industrial printing processes.

Heidelberger Druckmaschinen AG is already the market leader on the European market for sheet folding machines. With the merger the parties would have achieved joint market shares far exceeding 50 percent. There are already only four companies active on the relevant market throughout the

Guidelines for cooperations in the ready-mixed concrete industry

In 2019 the Bundeskartellamt assisted tition law. The guidelines explain the In 2017 the Bundeskartellamt pub the German Ready-Mixed Concrete antitrust aspects to be considered lished a sector inquiry into cement Association (Bundesverband der when assessing such cooperations. and ready-mixed concrete which also Deutschen Transportbetonindustrie What matters most in the assessment deals with the limitations for supplier e. V.) in drafting guidelines to check is for example the question whether an consortia under competition law. The whether bidding syndicates and sup offer could only be submitted after a subsequent divestiture proceedings plier consortia in the ready-mixed syndicate was formed and whether the of joint ventures which were prob concrete industry are admissible under cooperation is economically advanta lematic under competition law were competition law. geous and commercially reasonable. concluded by 2019. The guidelines also explain the extent Cooperations between companies to which it is permitted to exchange which are necessary and reasonable information between partners and are explicitly allowed under compe contains some relevant case examples. 30 | BUNDESKARTELLAMT 2019 • Annual Report

Competition between hospitals for the benefit of the patient

Irrespective of their operators by the hospitals are comparable of the plans. In this way any possible (municipal authorities, churches, from the patients' point of view. competition concerns about the private operators), hospitals are There are, for example, separate merger can be considered at an early independently active as entrepreneurs market definitions for the market stage of the political decision-making and compete with one another. Due to for acute hospitals and the market processes of the individual local strict legal provisions there is almost for rehabilitation centres or senior authority bodies and, if necessary, no price competition in this sector. It citizens homes and nursing homes. alternative solutions be sought. is therefore important first of all to maintain competition in the quality As for the geographic market Merger control proceedings of healthcare for patients. It is crucial definition, only those hospitals Despite high market shares, the to ensure that patients have sufficient will be examined which patients planned merger between the hospital local options to choose from. actually choose as an alternative. group Klinikverbund Kempten- In merger projects between public Oberallgäu and the district clinics When examining a proposed merger service operators, in particular, the Kreiskliniken Unterallgäu under the the Bundeskartellamt first of all Bundeskartellamt also often conducts management of Sana Kliniken was assesses whether the services provided an informal preliminary examination cleared in the first phase of merger

Merger control in the hospital sector

In recent years the number of notified merger control projects In the other cases the mergers were either not subject to has increased. merger control, the proceedings have not been concluded or From 2003 to May 2020 the Bundeskartellamt examined a the parties had abandoned their plans. total of 323 notified hospital mergers. In many cases the Bundeskartellamt carried out an informal 270 mergers were cleared, seven prohibited. In two cases the pre-assessment before the mergers were formally notified. notifications were withdrawn in second phase proceedings Since 2011, there have been eight cases in which the intended after the authority had expressed its concerns. merger was not notified after the authority had expressed its preliminary competition law concerns. Avoid concentrations - preserve diversity of competition | 31

control. Klinikverbund operates four region and were generally only a medical care centres Rhön also runs general hospitals, one rehabilitation comparably remote competitor of five hospitals in the federal states clinic and medical care centres in Klinikverbund Kempten-Oberallgäu of Hesse, Bavaria, Thuringia and the Kempten-Oberallgäu region and in terms of number of cases and Brandenburg. Asklepios and Rhön are Kreiskliniken operate two general range of treatments. The merger mainly competitors in the provision hospitals and medical care centres between Katharinen-Hospital Unna of acute in-patient hospital services in the neighbouring region of and Ev. Krankenhaus Unna could also in the Gießen/Marburg region. Mindelheim-Unterallgäu. Sana is not be cleared in the first phase following Universitätsklinikum Gießen und active in any of the two regions. market investigations even though Marburg, operated by Rhön, is the the parties hold a paramount market only privately run university clinic Klinikverbund and Kreiskliniken are position in the city of Unna and its in Germany. Asklepios is also active the market leaders in their respective surroundings. Patients still have in this region with several hospitals. neighbouring home regions. The sufficient alternative clinics to choose However, the planned acquisition merger could be cleared nonetheless from after the merger. These clinics are did not raise any serious competition because it did not significantly reduce located to the west and north of Unna. concerns as the parties’ hospitals the existing options for patients. It are not close competitors, neither also did not reduce the operators’ The acquisition of 100 percent of the geographically nor functionally. incentives to promote innovation shares and sole control over Rhön Since 2012 the Bundeskartellamt and provide high quality. More Klinikum AG by Asklepios could also has examined several acquisitions important competitors than the be cleared in the first phase of merger of shares in Rhön by Asklepios. Over respective merging partner remained control. Asklepios operates a total of the last few years Rhön has sold a in both regions. What is more, the 160 health care centres throughout large number of hospitals. In 2017 district Kreiskliniken were relatively Germany, including, apart from the Bundeskartellamt already cleared important only for patients from hospitals, medical care centres and Asklepios’ acquisition of a 25% part of the Kempten-Oberallgäu rehabilitation clinics. Besides several participation in Rhön. 32 | BUNDESKARTELLAMT 2019 • Annual Report

Disadvantages in press wholesale distribution for small publishing houses eliminated

In January 2020, following competition not achieving a minimum average turn ing niche publications. This discrimi law concerns expressed by the Bundes over per retailer per year. As a result, nation contradicts the intention of the kartellamt, the “Alliance of publishing the distribution of smaller publications German Competition Act (GWB) that houses” consisting of seven major pub generating less sales became more allows in exceptional circumstances the lishing houses and the Association of expensive. The publishing houses rep formation of a cartel by all competitors German Book, Newspaper and Maga- resented in the German working group on the side of the wholesalers and of zine Wholesalers (BPVG) refrained from of small or medium-sized publishing the publishing houses in the interest of applying the minimum sales require houses (Arbeitskreis Mittelständischer non-discriminatory press distribution. ment in the press wholesale sector. Verlage e. V.) objected to this provision. With the current provision having been The minimum sales requirement had The Bundeskartellamt holds that this abandoned, the Bundeskartellamt has been part of an agreement that had been new remuneration system could dis discontinued the proceeding against in force since March 2018. It stipulated criminate against publishing houses the alliance of publishing houses and a wholesale surcharge for publications predominantly distributing low-sell the BPVG.

GWB: Exemption regulation for the press sector

In order to ensure press diversity, Section 30 (2b) sentence 1 agreements and editorial cooperation are not exempted of the German Competition Act, GWB) allows cooperations from the prohibition of cartels. between publishers to strengthen their economic basis for This exemption is only applicable under German competi- intermedia competition. tion law. If the cooperation also appreciably affects trade However, even under this provision which was introduced between the Member States of the EU, Article 101 TFEU in summer 2017, price-fixing, territorial and customer applies.

No objections to the cooperation between publishing houses

Berliner Morgenpost GmbH and the In February 2020 the authority also The Bundeskartellamt considers the publishing house Der Tagesspiegel cleared plans by the publishing house planned merger to be unproblematic GmbH asked the Bundeskartellamt for Heinrich Bauer Verlag to acquire all because the circulation areas of “Volkss an assessment under competition law of the shares in the media group Mittel timme” and “Mitteldeutsche Zeitung” their planned cooperation agreement. deutsche Zeitung GmbH & Co. KG, Mit- do not overlap. Their circulation areas The planned cooperation will include the teldeutsches Druck- und Verlagshaus adjoin one another in the Harz, Salzland joint marketing of advertising space, joint Geschäftsführungsgesellschaft mbH and kreis and Anhalt-Bitterfeld districts. As newspaper distribution, a joint call centre, MZ Druckereigesellschaft mbH (together a result the two newspapers practically joint promotion activities and possibly “MDZ”). The newspapers published by do not compete for the same readers. cooperation in procurement. The coop Bauer include “Volksstimme” and several For the same reason, no restriction of eration agreement will not affect the edi advertising newspapers in the north of competition is expected on the adver torial offices of Berliner Morgenpost and Saxony-Anhalt. MDZ publishes the daily tising and radio broadcasting markets Der Tagesspiegel. The Bundeskartellamt “Mitteldeutsche Zeitung” and two adver either because there are no geographi has no objections to the cooperation. tising newspapers in its distribution area. cal overlaps. Avoid concentrations - preserve diversity of competition | 33

Concentration in the waste management sector stopped

The trend towards concentration have led to higher costs for DSD’s to the merger that it took a critical in the German waste management competitors, significant market share view of the merger project. Remondis sector continued in 2019. The gains for DSD and finally higher prices and DSD then offered commitments, Bundeskartellamt examined in for the disposal of sales packaging. A but they were not sufficient to particular detail the proposed further problematic aspect is the fact eliminate the Bundeskartellamt’s acquisition by REMONDIS SE & Co. that the two companies achieve joint competition concerns. The Düsseldorf KG of all the shares in the dual system market shares of 40 to 60 percent Higher Regional Court also confirmed DSD - Duales System Holding GmbH in the marketing of recycled glass. the Bundeskartellamt's prohibition & Co. KG. The commitments offered by the decision in the Remondis/DSD case companies were not suitable to as, contrary to the parties’ view, the The planned acquisition was eliminate the Bundeskartellamt’s merger would have led to a market prohibited in July 2019 as it would competition concerns. share level which would have been have considerably impeded effective problematic under competition law competition in the dual system sector In mid-April 2019 the Bundes and to a dominant position in the for packaging recycling. It would kartellamt already notified the parties waste glass marketing sector. 34 | BUNDESKARTELLAMT 2019 • Annual Report

FACTS AND FIGURES

Prohibition of cartels 2019 848 16 million euros leniency of fines applications in total 540 files 14.9 secured terabytes of electronic evidence 5 32 dawn raids companies/ 217 associations operatives searched 5 in total private residences searched

Fines imposed in 2019 in euros

* The figures are 848.000.000 Euros* rounded values.

Technical Purchasing of Bicycle building automotive Other wholesale services steel Quarto plates Special steel fines 13,428,450 57,840,000 100,250,000 646,405,000 12,310,250 17,331,127 Facts and figures | 35

Merger control: Bundeskartellamt decisions in 2019

4 prohibitions

6 withdrawals by parties to the merger Approximately 1,400 of which 14 decisions second phase proceedings 1 merger cleared subject to obligations

3 clearances without obligations

Figures of the Federal Abuse control Public Procurement figures Tribunals in 2019 2019 14 10 granted 27 proceedings rejected concluded 9 105 proceedings applications initiated for review 12 30 34 proceedings carried became moot withdrawals forward from the previous year THE DIGITAL ECONOMY

As a truly interdisciplinary topic, the digital transformation affects all sectors of the economy. Many digital markets have a tendency towards concentration or are dominated by a few big players. The Bundeskartellamt started looking into this issue at a very early stage and is now one of the internationally leading and most active competition authorities in this area.

Besides its enforcement activities in specific individual cases the Bundeskartellamt contributes its expertise in discussions on urgent competition policy matters raised by the digital economy. This also goes for the 10th amendment to the German Competition Act (GWB) scheduled for 2020, which is intended to strengthen abuse control in the digital economy. The digital economy | 37

Abuse proceeding against Facebook

In early 2019 the Bundeskartellamt only information about the users if the conditions also impede imposed on Facebook far-reaching which is available in Facebook’s competitors that are not able to restrictions in the processing of user network itself but also information amass such a treasure trove of data. data. The company was prohibited from Facebook-owned services such The Bundeskartellamt considers that from combining its users’ data from as WhatsApp and Instagram, as well Facebook violated the prohibition different sources without the users' as data generated from the surfing to abuse its dominant position by consent. behaviour of users on countless third- making the use of its social network party websites. conditional on the unlimited The Bundeskartellamt assumes that collection of user data from third- Facebook has a dominant position Dominant undertakings must not party sources and their combination on the German market for social impose unfair contract conditions with the users’ Facebook accounts for networks. The company collects not on consumers. This applies especially various purposes.

Facebook is the largest social network Facebook tracks users in every detail of their lives

32 million users per month in Germany ... Sex Financial data

23 million of these use Facebook Own home on a daily basis Age Demographic Date: End of 2018 data Parents

In 2018 Facebook achieved a global ... Politics turnover of approx. 55 billion US dollars. $ 98 per cent of its turnover is Education generated through advertising. $ Language Behaviour Relationship ...... Location Interests ......

The Bundeskartellamt's decision After the Facebook Group’s success The Bundeskartellamt decision is thus For the above reasons the Bun ful emergency appeal of the authori immediately enforceable. The court deskartellamt’s decision prohibits this ty’s decision to the Düsseldorf Higher said there are neither serious doubts extensive collection and use of data Regional Court, the Bundeskartellamt about Facebook’s dominant position without the express and voluntary lodged an appeal on points of law with on the German market for social net consent of the users. In view of the net the Federal Court of Justice in order to works nor about Facebook abusing this work’s market power, voluntary con clarify key legal issues. dominant position by leaving its users sent means that the use of Facebook’s no choice but to accept the processing services must not be subject to the The judgment of the Federal Court of their “off Facebook” data. users’ consent to their data being col of Justice lected and combined in this way. The On 23 June 2020 the Federal Court of use of the social network must also be Justice reversed the decision by the possible without such consent. Higher Regional Court of Düsseldorf. 38 | BUNDESKARTELLAMT 2019 • Annual Report

Amazon adjusts its terms of business for its marketplace worldwide

In July 2019 the Bundeskartellamt made Amazon adjust its terms of business for sellers on Amazon online marketplaces worldwide.

The adjustments have led to consider able improvements for the sellers, who often depend on their presence on the Amazon marketplace.

In view of Amazon’s phased adjust ments, the ongoing sector inquiry into “online user reviews” (see p. 61) and the European Commission’s inquiry into Amazon’s collection and use of transaction data, the Bundeskartel lamt has for the time being deferred further proceedings regarding prod uct reviews and seller ratings, which have been objected to by many sellers.

Improvements for sellers:

Liability provisions: Returns and reimbursements: Amazon was almost exempted from any liability towards In cases where Amazon had decided to reimburse a customer, sellers. Amazon will now be liable to the same extent as the sellers had to bear the incurring costs. Sellers can now sellers for intent or gross negligence for any breach of major object to the reimbursement if they consider it unjustified contractual obligations. and may be entitled to compensation from Amazon. Never- Termination and blocking of seller accounts: theless, the relationship between Amazon and the customer Amazon had an unlimited right to immediately terminate and remains unchanged. block seller accounts without justification. Now an ordinary Further improvements: termination will require a 30 days’ notice. Extraordinary Further improvements were achieved regarding product termination and blocking of an account by Amazon is now information and rights of use, confidentiality with regard to subject to justification. sellers’ statements and transparency. Court of jurisdiction: Until now Luxembourg was specified as the only court of jurisdiction in the event of legal disputes. The competency for legal disputes can now also lie with national courts. The digital economy | 39

Proceeding on mobility platforms

Innovative, modern mobility concepts One question in the focus of the and the online sale of travel tickets are Bundeskartellamt’s investigation is on the rise. Digital platforms via which whether DB AG imposes restrictions travellers can book all means of trans on mobility platforms in respect port to their destination from a single of advertising in app stores, search source will be an important market in engines and social networks. Among the future. further aspects under examination are conditions according to which online Late in 2019 the Bundeskartellamt ini platforms cannot grant discounts on tiated an administrative proceeding DB tickets. Another aim of the exam against Deutsche Bahn AG concerning ination is to clarify to what extent ticket sales via so-called mobility plat mobility platforms must have access forms. In this proceeding the author to current departure and delay data of ity is examining whether DB AG as the services. leading railway group wrongly restricts the visibility and attractiveness of mobility platforms for consumers.

More competition in the area of tax advisory software

In late 2019 the Bundeskartellamt constituted a considerable competitive able to synchronise data with the tax concluded a proceeding to facilitate advantage over other providers of tax authorities themselves and develop more competition in the area of advisory software. With its proceeding their own authentication solutions in software solutions for tax advisors. the Bundeskartellamt ensured that in a competitive environment. future all software providers will be The German Chamber of Tax Consultants had commissioned DATEV as the only operator of what they refer to as the mandate database. This database is a prerequisite for electronic access to client data and facilitates the legally required authentication of the tax advisor towards the tax authorities.

DATEV’s ability to provide both a tax advisory software and the database exclusively from a single source 40 | BUNDESKARTELLAMT 2019 • Annual Report

Sector inquiry into Costs for digital advertising in Germany from 2013 to 2018 (in million euros) online advertising 7,201 Online advertising has generated considerable increases 6,600 in turnover in the last few years. The market volume in Germany is estimated at five to nine billion euros. Accord 5,950 5,794 ingly online advertising is very significant from an eco nomic point of view, both for advertisers and for online content providers. The difficult competitive environment 4,676 of this market, on which major companies like Google or Facebook are very significant, is also a subject of frequent discussion.

Against this background the Bundeskartellamt is conduct ing a sector inquiry into this market which was further advanced in the course of 2019. The sector enquiry looks among other factors into the very complex and highly tech nological system of various forms of online advertising and how they are sold and examines whether a few major players operate in closed systems, as is claimed by some market players, and if so, what significance these systems have. The formal investigation will involve comprehensive Source: Statista 2020 Statista Source: talks with all market players. 2013 2015 2016 2017 2018

The Bundeskartellamt has so far provided Digital platforms guidance i.a. for the following digital platforms: unamera – an online trading platform for agricultural products (2020) Many companies approach the Bundeskartellamt for its assessment of cooperations in the digital economy in order XOM Materials – a trading platform for steel products to clarify any competition law issues. Digital platforms can (2018) make commerce considerably more efficient; however, they ECEMENT – a trading platform for cement (2017) must not restrict competition. ADAMOS – a platform for the mechanical engineering sector focussing on Industry 4.0 and the Industrial Inter- Digital platform for agricultural products can net of Things be launched OLF – a trading platform in the mineral oil sector (2020) Early in 2020 the Bundeskartellamt announced that it had no objections to the launch of unamera, a digital platform for agricultural products. The platform is to serve the Antitrust assessment of cooperations trade in particular in grain and oil seeds between agricul in the digital economy tural trading companies on the one side of the platform and farmers and processors on the other side. As offer Digital platforms can make trade considerably more effi- ing standard products on a platform goes hand in hand cient; however, they must not restrict competition. with increased transparency, which can facilitate collusion, Such networks should not result in price-fixing agree- market participants first have to register as providers and ments, they should be non-discriminatory and they customers by creating a customer log in. The trading prices should not create an excess of transparency. will then be shown anonymously. The contracting partner For this reason, the antitrust assessment primarily focuses is disclosed only in the final stage before a contract is a on the type and volume of information exchanged, the concluded. Against this background the Bundeskartellamt publication of market statistics and the disclosure of the decided not to object to the launch of the trading platform. trading partners’ identities. The digital economy | 41

Policy work for the digital economy

Policy work is of outstanding importance especially as regards the digital economy. Besides its role as an enforcer the Bundeskartellamt contributes its expertise in national and international discussions of urgent competition policy Policy work includes issues raised by the digital economy. This also goes for the 10th amendment to the German Competition Act (GWB) Advising the Decision Divisions which is intended to further strengthen abuse control Commenting on new laws in the digital economy (see p. 14). In early 2020 the Bun Cooperation with the academic community deskartellamt published its comments on the government Participation in conferences and workshops draft bill of the amendment. The authority also works on Reports and publications conceptual projects.

Algorithms project

One example of the Bundeskartellamt’s conceptual work is the study on the effects of algorithms on competition which it published together with the French competition authority Autorité de la concurrence in November 2019. Algorithms are gaining in importance in the digital age. They are used for example for matching and ranking purposes, but also for pricing, and are becoming more and more elaborate. Algorithms help companies become more innovative and efficient.

The increasing use of algorithms by companies has, however, also triggered a broad discussion about their effects on competition and the consequences for society in general. The two authorities worked together to broaden their expertise on algorithms and one of the topics they looked into was whether algorithms could have negative effects on competition. They also considered the practical challenges of examining algorithms.

A summary of the study “Algorithms and Competition” is available here. ENERGY SECTOR

RWE/E.ON | Report on market power in the electricity generation sector Guidelines for the control of abusive practices | Energy monitoring Market Transparency Unit for Electricity and Gas

Since the liberalisation of energy supply in the late 1990s, there has been a continuous surge of competitive activity in the electricity and gas markets. Customers can choose from a variety of offers provided by various energy suppliers. The Bundeskartellamt protects competition on markets that are upstream and downstream of the energy networks. These markets cover in particular the generation, trading and supply of energy to end customers. Energy sector | 43

RWE acquires share in E.ON

In February 2019 the Bundeskartellamt The part of the overall transaction under German law and was therefore cleared plans by RWE AG to acquire a examined by the Bundeskartellamt subject to notification in Germany. 16.67 percent minority shareholding mainly concerned the market for the in E.ON SE. The acquisition is generation and first-time sale of electric The Bundeskartellamt's examination part of an extensive exchange of ity e.g. to wholesalers, distributors and of the acquisition, which was con business activities between the two bulk customers but not the distribution ducted in close cooperation with the companies. At the same time as the of electricity to the final consumer. The EU Commission, showed that although Bundeskartellamt's decision the EU Bundeskartellamt examined this part RWE is not dominant, it could become Commission cleared RWE's acquisition of the transaction because, unlike the so as a result of the nuclear phase-out of further E.ON assets as a further other parts of the overall transaction, which is due for conclusion by the part of the overall transaction. In it did not constitute a merger (acqui end of 2022. However, as the nuclear September the EU Commission also sition of control) under European law. power plants remaining with E.ON are cleared subject to conditions E.ON’s However it does fulfil the elements of also to be shut down, any competition acquisition of a majority holding in an acquisition of a material competi concerns against the merger could be innogy SE. tive influence on another undertaking ruled out. 44 | BUNDESKARTELLAMT 2019 • Annual Report

Market power report on the competition conditions in the electricity generation sector

The market power report presented ing report jointly published by the ducer are indispensable for meeting by the Bundeskartellamt for the first Bundeskartellamt and the Bundesnet the demand for electricity. The anal time in December 2019 also focused zagentur. The market power analysis ysis shows that only RWE is indis on the further development of the for the whole of 2019 confirms that pensable for meeting the demand for market power situation in electricity RWE is currently still not dominant. electricity in a significant number of generation and the first-time sale of However, in contrast to all the other hours which, however, are not suf electricity in 2019. This report has so electricity producers, the company ficient to assume a dominant posi far been part of the annual monitor is relatively close to the dominance tion. RWE could in future cross the threshold. dominance threshold already in the event of a relatively minor additional As in the RWE/E.ON merger con reduction of production capacities as trol proceeding (see above) the Bun a result of the phase-outs of nuclear deskartellamt based its current assess and now also coal power plants. In ment on considerably extensive data this connection the report also analy on the actual use of power plants and ses the increasing importance of elec analysed in greater detail whether and tricity imports for the market power to what extent the capacities of a pro situation in Germany.

Guidelines for the control of abusive practices in electricity generation

In view of possible developments in detail the main intention, rules the Bundesnetzagentur. The unit‘s in the market power situation in of application and scope of abuse task is to monitor electricity and electricity generation, effective control in electricity generation. gas wholesale trading in order to abuse control can become more They also improve the necessary detect any irregularities in price important in the coming years. legal certainty for companies for new developments at the wholesale level The Bundeskartellamt is well investments in power plants. which could be attributed to the prepared for this. In September abuse of market power. 2019 the Bundeskartellamt and Market Transparency Unit for the Bundesnetzagentur published Electricity and Gas guidelines for the control of The Bundeskartellamt is also involved abusive practices in the electricity in the further expansion and work generation/wholesale trade of the Market Transparency Unit sector under antitrust and energy for Electricity and Gas Wholesale wholesale law. The guidelines set out Trading (MTU-E) which is based at Energy sector | 45

2019 Monitoring Report

In November 2019 the Bundesnetzagentur and the Bundeskartellamt published their joint 2019 Monitoring Report on developments in the electricity and gas markets.

Key findings:

Electricity generation from renewable energy sources On average household customers can choose between rose by 2.9 percent in 2019 whilst generation from con 130 electricity and over 100 gas suppliers. Many house ventional power plants continues to decrease. holds can still save money despite increasing prices by switching provider. In 2018 average electricity wholesale prices rose significantly. However, the number of supplier switches is stagnating both in respect of gas and electricity customers. The average price of electricity for household customers on 1 April 2019 was around one cent per kilowatt hour The share of household customers on expensive default higher than in the previous year; the price of gas for supplier contracts is still too high. household customers and commercial consumers also rose by 1 April 2019. MARKET TRANSPARENCY UNIT FOR FUELS

The Market Transparency Unit for Fuels (MTU Fuels) monitors the fuel market.

It enables consumers to obtain immediate information about current fuel prices via different channels and a number of information services. The Bundeskartellamt also publishes annual reports on the work of MTU Fuels. These reports can provide consumers with comprehensive information on pricing at the petrol stations which can help them in their choice of petrol station. By using this information, consumers can benefit from lower petrol prices and create competitive impulses with their decision on where to buy petrol. Market transparency unit for fuels | 47

2019 Annual Report

The Bundeskartellamt published the current annual report in April 2020. Its key findings include:

At one and the same petrol station, average price diffe The average price differences between towns and rural rences of approx. 10 cents/litre can be observed every areas are relatively low. Off-motorway service areas day. A comparison of all petrol stations in one town often charge somewhat higher prices (+2-4 cents/litre). shows that there are even average price differences of Motorists refuelling at a motorway station must expect up to 20 cents/litre every day. considerably higher prices (+20-25 cents/litre). Fuel Prices Germany 2019 Fuel Prices Germany 2019

POTENTIALS FOR SAVINGS AT INDIVIDUAL PETROL STATIONS AND IN TOWN AREAS PRICE DIFFERENCES BETWEEN TOWN/RURAL AREAS, OFF-MOTORWAY SERVICE AREAS AND MOTORWAYS

Autohof individual whole 27 petrol station town area cents +2–4 per litre (compared with town/rural area)

town/rural area € € €

about 10 nearly 20 cents cents per cents per +20–25 per litre litre / day litre / day (compared with town/rural area)

(Potentials for savings on Super E5, E10 and Diesel, on average, without off-motorway service areas and motorway stations, from April to December) (Typical ranges of mean daily price differences for Super E5, E10 and Diesel from April to December)

Fuel prices are in most cases still highest in the mor The relative price position of the different petrol stations nings and lowest in the evenings. In between these compared to each other is quite stable. "Cheap" petrol periods, prices on average vary significantly. They are stations mostly remained relatively cheap. "Expensive" normally highest between 5 and 8 am and lowest bet petrol stations mostly stayed relatively expensive. ween around 6 and 10 pm. However, even during the evenings when prices are normally at their lowest, customers should check whether prices have increa Saving money on petrol with MTU Fuels sed in the meantime. Towards the night time prices are significantly raised by most of the petrol stations which The operators of public petrol stations or companies are still open and remain that high during the night. which have the power to set prices at them (e.g. oil Fuel Prices Germany 2019 companies) are required to report every change in price for the fuel categories Super E5, Super E10 and diesel PRICE DIFFERENCES IN THE COURSE OF A DAY "in real time" to the MTU Fuels.

The unit then passes these price data on to consumer approx� information services, which in turn inform the 10 cents consumers. per litre

Via the internet, a smartphone or navigation system, motorists are thus able to gain information on current fuel prices and find the cheapest petrol station in their 00:00 06:00 12:00 18:00 24:00 vicinity or along a specific route.

(Fuel prices in the course of a day averaged over all petrol stations in Germany from April to December using Super E5 as an example) For a list of authorised consumer information services and MTU Fuels’ annual reports (in German), please refer to www.bundeskartellamt.de → Market Transparency Unit for Fuels TRADE

Whether it be in food, sports articles, furniture or books, trade covers a diverse range of goods and is always subject to competition control. In addition to brick-and-mortar retail and wholesale, the large internet platforms have long been active players. Last year the Bundeskartellamt had to deal with numerous cases in this multi-faceted sector. The competitive pressure exerted by online sales has posed a special challenge. In its case practice the authority endeavours to ensure that consumers have an adequate number of shopping alternatives with various groups of retailers. It also closely examines the procurement side, i.e. demand on the retail side vis-a-vis the manufacturers and suppliers. Its aim is to ensure effective and fair competition both online and offline ultimately for the consumers’ benefit. Trade | 49

Food trade

The German food retail market is highly concentrated. The four big retailers EDEKA, REWE, Aldi and the Schwarz Group (Lidl, Kaufland) account for more than 85 percent of food sales to the consumer (excluding drugstores, specialist retailers and online sales). This should be clearly distinguished from the food wholesale sector, which sells goods to commercial customers (e.g. retailers, the gastronomy sector and bulk buyers). In assessing both the food retail and food wholesale sectors, the Bundeskartellamt always examines both the sales side and the relationship between the retailers and their suppliers, for example in merger control proceedings or in the control of the abusive practices of powerful or dominant companies.

The Bundeskartellamt has also applied its expertise in the European legislation process. In 2019 the EU Commission introduced its Unfair Trading Practices Directive (UTP) which prohibits certain unfair trade practices of powerful buyers towards suppliers of agricultural produce. This directive is currently being implemented into national law.

EDEKA can acquire Handelshof

In July 2019, after intensive exami Based on the total procurement cially drugstore products) and addi nation within the one-month first volume of the German food trade tional product ranges from the phase of merger control, the Bun (retail and wholesale) the results of non-food segment to commercial deskartellamt cleared the acquisition the Bundeskartellamt’s investigations customers (e.g. retailers, the gastron of Handelshof by EDEKA. showed that the Handelshof Group’s omy sector and bulk customers). share at well below 0.5 percent was The findings of the examination so low as to assume that the increase showed that the merger ultimately in EDEKA’s market position on the did not pose a problem to competition procurement markets post merger in any of the regional food wholesale would have no significant effect on markets. In a nationwide comparison competition. the merged company EDEKA/ Handelshof ranks only third in the The food wholesale market includes food wholesale sector behind its the sale of food, products from the competitors Metro and Transgourmet. so-called non-food-segment (espe 50 | BUNDESKARTELLAMT 2019 • Annual Report

Supply of convenience products – REWE acquires Lekkerland

The Bundeskartellamt conducted food wholesale market. The merger After EDEKA, REWE, along with the extensive investigations in preparation mainly affected the supply of food Schwarz Group, is one of the three of another merger in the food whole products to petrol stations and other largest buyers from manufacturers sale sector, namely REWE’s acquisition convenience stores. The parties are and suppliers for the food retail and of Lekkerland. In July 2019 this merger together by far the strongest supplier wholesale trade in Germany. How was referred to the Bundeskartellamt in this market. However the parties’ ever in this case, too, the increase in by the European Commission as it scope for action and setting prices is the procurement volume (based on the affected markets in Germany. The limited by the strong buyer power of entire food trade) following the acqui merger was finally cleared in October the large oil companies. Operators of sition of Lekkerland was marginal at 2019. small and medium-sized petrol sta less than 0.5 percent. tions also have sufficient alternative Together REWE and Lekkerland only suppliers, e.g. suppliers of individual achieve an unproblematic market product categories. share of less than 10 percent in the

Examination of sale of real stores

In several proceedings concerning the ket situation in Germany and extended Instead of Redos, the investor SCP will food retail sector last year the Bundes its investigations to include all 277 real now acquire all real stores from Metro. kartellamt examined the proposed sale stores in order to collect the necessary This acquisition has been cleared by of real stores. It initially assessed and data for any other proposed acquisi the European Commission. The Bun cleared the proposed acquisition of tions by further acquiring companies. deskartellamt will very closely exam the real stores by the property inves However, the planned survey of the top ine under merger control any further tor Redos. It then began a close exami suppliers in the individual product cat sale by SCP of real stores to food retail nation of plans in particular by EDEKA egories on the procurement side was companies. to acquire 87 real stores from Redos. In ultimately not conducted as the project addition, from October 2019 it began was not implemented due to the selec extensive investigations into the sales tion of another purchaser by Metro, the markets to examine the current mar owner of the real stores. Trade | 51

Merger between manufacturers of chocolate and nougat spreads

In March 2019 the Bundeskartellamt food retailers and other manufacturers would also be possible to switch from cleared the acquisition of the Dutch (so-called private labels). manufacturer brand to private label Peeters group, a manufacturer of choc production without any problems. olate and nougat spreads, by Wilhelm The merger narrows the choice of In addition, the role of Nutella which Reuss GmbH, a member of the Krüger manufacturers producing private label has a share of over two-thirds of the Group based in Bergisch Gladbach. chocolate and nougat spreads availa chocolate and nougat spread market, This merger is of great significance ble to food retailers. The authority’s is so important in the German food for food retailers because it creates a investigations have shown, however, retail sector that this also limits the manufacturer which is by far Germa that competitors in and outside Ger two merging manufacturers‘ scope ny’s leading producer of chocolate and many could easily expand the capac of action as well as their scope to set nougat spreads for third parties such as ities available to them and that it prices for private labels.

Who is competent?

Merger control: Cartel prosecution and control of abusive practices: The European Commission examines cases with a Community Cases in which European law is (also) applicable, are notified dimension (rule of thumb: if the combined turnover of all the within the European Competition Network (ECN) and are companies involved is higher than five billion euros.) Cases can dealt with by the best placed authority. As a rule the European be referred between Brussels and the Bundeskartellamt in Bonn Commission is to be considered the best placed authority on application. if an infringement affects competition in more than three Member States. 52 | BUNDESKARTELLAMT 2019 • Annual Report

Sustainability – a real competitive factor Sustainability Sustainable production is becoming of such initiatives are often meant to be initiatives increasingly important for consum achieved through agreements between ers, companies and politicians alike. as many companies as possible, which In examining sustainability initia- The chief aim of sustainable produc requires that they comply with compe tives the Bundeskartellamt focuses tion is to maintain social and ecologi tition law criteria. on the following aspects: cal standards in the supply chain (from How great are the restrictions of the purchase of raw materials through Against this background the Bundes competition, e.g. alignment of to the manufacture and distribution of kartellamt is receiving a growing num cost components? the product). Sustainability is a genu ber of requests from companies wishing How does this affect the sales ine competitive factor for companies to cooperate in achieving sustainability. prices? because they can distinguish them Examples of such initiatives which the Is access to the cooperation selves from their competitors with authority has had to examine in the non-discriminatory? sustainable products. However, new recent past include the animal welfare Were the sustainability criteria sustainability initiatives can be expen initiative “Tierwohl” and "Fairtrade". developed in an open process? sive and risky for companies. The aims Is there sufficient transparency for consumers (“labelling”)?

Merger between Thalia and

Book resale price Mayersche bookstore chains maintenance

In May 2019 the Bundeskartellamt Nevertheless, no major competition The German Book Resale Price cleared the merger between Thalia concerns were expressed about the Maintenance Act (BuchPrG) and Mayersche Buchhandlung after merger either from the perspective stipulates that book sales in Ger- an intensive examination in the first of consumers or book publishers in many are subject to resale price phase. Altogether the two companies the course of the authority's detailed maintenance. operate 288 bookstores in Germany. investigations. Competition in book retailing is therefore primarily not on prices The authority’s investigations showed Consumers will still have good shop but on the quality of offers, e.g. that the merger will result in relatively ping alternatives with growing online range of selection, advisory ser- high joint shares for the parties in the sales and a number of small and medi vices and shop design, which also brick-and-mortar retail market for um-sized booksellers in the tradi offers opportunities for smaller printed books in individual regional tional book retail sector. bookstores. markets in North Rhine-Westphalia. Trade | 53

Turnover development in e-commerce (turnover in offline and online retailing in Germany in billion euros)

27 77

2013 2020*

448 405

IFH Köln, *forecast Offline sales Online sales

Signa (incl. Karstadt and Kaufhof) can acquire SportScheck

In February 2020 the Bundeskartellamt Ultimately the merger project did cleared the acquisition of SportScheck not give rise to any competition law GmbH by Signa Retail GmbH (Austria). concerns. With Karstadt Sports, the Galeria Karstadt/Kaufhof department stores and several specialist retailers like the Tennis-Point Group and the Outfitter Group, Signa Retail is active in the sport and outdoor retail sector. Up until now SportScheck belonged to the Otto Group. With its 19 stores and online shop, the company is a significant retailer in this sector.

The authority’s investigations showed that a large number of competitors, including specialists and the direct retailing operations of the sports goods manufacturers, offer local shopping alternatives for consumers. Online sales pose some of the closest com petition for most brick-and-mortar outlets. 54 | BUNDESKARTELLAMT 2019 • Annual Report

Major furniture purchasing cooperation prevented

The Bundeskartellamt prevented the merging of the fur niture purchasing cooperations VME Union GmbH and KHG GmbH & Co. KG (Krieger/Höffner Group). VME Union (including the MHK kitchen trade association which coop erates with VME) is the largest purchasing cooperation in the German furniture sector.

Together with KHG the new association would have gained market shares in the German furniture sector and in par ticular in the kitchen furniture sector, which would have clearly exceeded the limits for admissible purchasing coop erations under competition law. According to current Euro pean-wide standards, purchasing cooperations potentially restrict competition if their market shares exceed 15 percent. As the merger project was abandoned by the parties, the Bun deskartellamt discontinued its administrative proceeding.

The big players in the furniture sector Domestic turnover in furniture retail in euros* Die „Großen“ im Möbelhandel Inlandsumsatz im Möbeleinzelhandel in Euro GIGA Purchasing cooperation (XXXLutz group) in furniture sector IKEA < 3 Billion < 5 billion EMV/Garant The German furniture sector is (incl. Seg- characterised by large chains müller) like IKEA and XXXLutz on the < 3 Billion Others one hand and a large number of < 7.5 Billion VME Union small and medium-sized retailers 33 < 3 Billion on the other. billion In order to be able to compete Amazon market volume MHK with the “big” market players < 1 Billion < 2 Billion both on the purchase and sales Dänisches Bettenlager KHG side, most furniture retailers < 1.5 Billion < 2 Billion are members of purchasing Otto Group cooperations. < 1.5 Billion Alliance/ This is acceptable and appro- Begros Küchenring priate under competition law. < 1.5 Billion < 2 Billion However, these cooperations should not become too large because this would create dis- * According to information available to the BKartA, partly supplemented by information advantages for consumers and from official sources (2018) small and medium-sized furniture manufacturers. Trade | 55

XXXLutz plans to acquire Roller

In the area of merger control the Bundeskartellamt also closely monitors any further increase in concentration in the furniture sector. In second phase proceedings it is cur rently examining the proposed acquisition by XXXLutz KG of 50 percent of the shares and joint control of Roller GmbH & Co. KG and other companies of the Tessner Group.

Following a partial referral from the EU Commission, the Bundeskartellamt initiated a second-phase proceeding in this case in spring 2020 which extended the examination period. The authority is extensively examining the effects of the merger project on the supply side for consumers. The EU Commission is assessing whether the merger will create excessive buyer power which would be to the detriment of the primarily small and medium-sized manufacturers.

Boundaries for special rebates

The demand for special rebates (“wedding rebates”, “inte their products being de-listed in the following year if they gration bonuses”, “concentration bonuses”, etc.) from sup do not agree to grant a special rebate. pliers is becoming a frequent phenomenon following the acquisition of smaller competitors or mergers between In September 2019 the Bundeskartellamt had taken up the trade associations in this sector. These demands can raise general anniversary rebate demanded by the XXXLutz Group competition concerns if the new company or the new asso to celebrate the company’s 75th anniversary and asked the ciation has a powerful or even dominant market position company to comment. At the authority’s insistence XXXLutz and no objectively viable service is offered in return, e.g. abandoned this general demand from its suppliers of a 7.5 additional exhibition space or guaranteed listing. percent rebate to be granted over two three-month periods in 2020 and instead has now individually negotiated the In many cases such demands are even made during a busi rebate with each supplier and agreed on services in return for ness year within the framework of ongoing supply con the rebate. In view of this the Bundeskartellamt has decided tracts, which means manufacturers have to worry about not to further examine the facts of the case.

Federal Court of Justice’s decision of principle on “wedding rebates”

After its takeover of the "Plus" stores in 2008, EDEKA had made 2014 decision of principle because they violated the so-called one-sided demands of its suppliers. “Anzapfverbot” which prohibits retailers from demanding These included demands made with retroactive effect, the unjustified benefits from their suppliers. “cherry picking” of individual preferential conditions and the In 2018 the Federal Court of Justice confirmed the general and unjustified demand of substantial special payments. Bundeskartellamt’s decision in key points. This was an impor- The Bundeskartellamt had selected the demands on sparkling tant signal to the entire food retail sector. wine manufacturers as an example and prohibited them in its SPORT

DOSB/IOC | DFL media rights Sky/DAZN | 50+1 Rule of DFL

Professional sport is of great economic value. The organisation of various types of sport by associations and other organisations is therefore always of relevance to competition law. Markets closely related to professional sport like advertising and the media sector also raise competition issues. Sport | 57

More advertising opportunities for athletes competing in the Olympic Games

At the beginning of 2019 the Bundes the games. Pursuant to rule 40 No.3 impossible for athletes to organise kartellamt obtained further advertis of the Olympic Charter, no athlete advertising activities with their indi ing opportunities for German athletes participating in the Olympic Games vidual sponsors. Even if the preven from the German Olympic Sports may allow his person, name, picture tion of legally inadmissible forms of Confederation (Deutscher Olymp- or sports performances to be used advertising to ensure that the games ischer Sportbund, DOSB) and the for advertising purposes during the can take place on a regular basis could International Olympic Committee Games and several days before and be deemed a legitimate aim, such an (IOC) for the duration of the Olympic after the Games. extensive ban on advertising was not Games. Due to the competition con considered proportionate. With the cerns expressed by the Bundeskartel However, as the games mark the easing of rule 40 bye-law 3 there are lamt, DOSB and IOC undertook height of their careers, self-market now clearly more advertising possi appropriate commitments to consid ing during the games plays a very bilities, including the activities of ath erably relax the extensive restrictions important role. As the possibilities of letes on social media channels and for on advertising which had previously exemption from the rule were very the use of certain “olympic” terms and existed under rule 40 bye-law 3 of the restricted, it was barely or virtually pictures from other competitions. Olympic Charter.

According to the Bundeskartellamt’s preliminary assessment the Olympic Movement has a dominant posi tion on the market for the organisa tion and marketing of the Olympic Games. The Bundeskartellamt exam ined whether the IOC and DOSB as members of the Olympic Movement had abused their market power by imposing far-reaching advertising restrictions on German athletes par ticipating in the Olympic Games. Rules of any sport association are also generally subject to national and international competition law inso far as they refer to economic activ ities. However this does not apply if they serve legitimate objectives and are thus proportionate to the legit imate objectives pursued. Athletes nominated for the Olympic Games must undertake towards the DOSB and the IOC to observe the Olympic Charter in order to be admitted to 58 | BUNDESKARTELLAMT 2019 • Annual Report

Award procedure of media rights to football matches complying with competition law

In March 2020 the German Football can be exempted from the ban on automatically mean that viewers League (DFL) undertook towards restrictive practices if it results need more than one subscription to the Bundeskartellamt to observe in specific advantages for which be able to view all the matches. As in comprehensive criteria when awarding such a restraint of competition is the previous award procedure DFL media rights for the matches of the indispensable. As in other national still has several options for meeting Bundesliga and Bundesliga 2 from leagues and at the international the authority’s competition law the 2021/2022 season onwards. DFL level, it is acknowledged in Germany requirements without viewers who had offered various self-commitments, that the joint selling of media rights would like to watch all the matches in particular a so-called 'no single by a central association involves live having to purchase different buyer' rule, to dispel the authority`s advantages for consumers and can subscriptions. competition law concerns. In this way thus be acceptable under competition the Bundeskartellamt has ensured law if certain preconditions are met. According to the marketing model that no single bidder can exclusively proposed by DFL for the 2021/2022 to acquire all live rights and act as a As in the previous award of media 2024/2025 seasons, the broadcasting monopolist in providing coverage for rights the Bundeskartellamt has called rights are to be sold within the viewers. for rules which ensure that no single framework of an auction for live games supplier can exclusively acquire the in four packages. Every package covers In principle, DFL's joint selling of the rights to all matches and thus enable all transmission channels (satellite, media rights relating to the individual competition between different TV cable, internet). It is not possible for football matches represents an anti- and streaming providers. The award a single bidder to acquire all of the competitive agreement. However, of rights should result in more than four packages exclusively (no single under German and European one supplier broadcasting football buyer rule). DFL can grant individual competition law such an agreement matches. This requirement does not packages of rights to different acquirers if they submit bids to this effect. Should one acquirer nevertheless win the award for all four packages of rights, DFL will grant two of the four packages on a co-exclusive basis to a second acquirer for OTT coverage. Sport | 59

Award procedure for Champions League broadcasting rights - Proceeding against Sky and DAZN discontinued

In April 2020 the Bundeskartellamt Although Sky and DAZN’s conduct at discontinued its proceeding against first seemed problematic under com Sky and DAZN for discretionary rea petition law, the Bundeskartellamt sons; the proceeding had been con decided to discontinue the proceed ducted due to suspected anti-compet ing. New players entering the market itive agreements in connection with are increasing its dynamism, which the award of UEFA Champions League was again demonstrated by the award broadcasting rights. procedure in early 2020 for Champi ons League broadcasting rights for Sky and DAZN had been suspected of matches as from the 2021/2022 sea agreeing prior to the award procedure son. What is more, the effects of the to split the broadcasting rights for COVID-19 crisis on the current foot Germany for the seasons 2018/2019 ball season in Germany, as in national to 2020/2021 between them. At that and international football, made near- time Sky was the only company to term market developments hardly pre acquire the broadcasting rights for all dictable in early 2020. For this reason, matches and then sublicensed some of it would currently be particularly dif the rights to DAZN. One of the conse ficult to assess the effects of an inter and award processes are permissible quences of the award procedure was vention under competition law. under certain circumstances under that Champions League matches were competition law. In case of doubt no longer broadcast live on free TV. Unlike collusion prior to the award these cooperations have to be assessed procedure, subsequent cooperations beforehand by the competent compe between broadcasters after the bidding tition authorities.

Examination of DFL’s 50+1 rule

The Bundeskartellamt is currently shareholders meeting (hence 50+1 The Bundeskartellamt is examining examining whether the so-called 50+1 rule). The purpose of this rule is to in an administrative proceeding ownership rule in the statutes of the prevent commercial investors from whether the application of the 50+1 German Football League (Deutsche acquiring the majority of the voting rule in the annual licensing process Fußball Liga, DFL) violates German rights and consequently having a and process for the approval of an and European competition law. strong influence on the strategies exemption from the 50+1 rule violate of the capital company. competition law. The proceeding is The 50+1 rule stipulates that if the still ongoing. professional players division is On request the Presidency of the DFL outsourced into an independent can grant an exception from the 50+1 capital company, the parent club rule. An investor can be exempted retains the majority of the voting from the rule if it has provided rights in the independent company. uninterrupted and substantial This applies in particular if the support for the parent club’s football parent club holds more than 50 for over 20 years. percent of the voting shares plus at least a further voting share in the CONSUMER PROTECTION

With the 9th amendment to the German Competition Act (GWB) which came into force in early June 2017, the Bundeskartellamt was for the first time granted competences in the area of economic consumer protection. Consumer law provisions include rules on unfair competition and the Law governing General Terms and Conditions of Business. Public consumer protection is to be intensified in order to address possible shortcomings in the enforcement of consumer rights, especially in the digital economy. The Bundeskartellamt can now conduct sector inquiries into consumer law issues and also act as an amicus curiae (“friend of the court”) in civil consumer protection actions. However, the authority has as yet not been granted powers to intervene in such matters e.g. order the termination of the infringement. Consumer protection | 61

Comparison websites

In April 2019 the Bundeskartellamt published the results and market coverage. The inquiry uncovered consumer of its sector inquiry into comparison websites. A large unfriendly tricks practised by some of the websites and number of website operators were questioned on topics gives advice on how best to use comparison websites. such as rankings, financing, corporate links, reviews

Consumers should pay attention to the following points when using comparison websites:

Some key providers are not included in Sometimes the websites indicate identical search results which could the comparison. shortages, benefits or exclusive offers simply have been copied. Some websites leave out certain offers in a misleading manner that may put in their initial rankings. consumers under pressure. Video with tips for consumers using Providers can influence positions in Services can often only be rated by comparison websites: the ranking list by payment. users who were able to procure them Some websites display selected offers via the website. above the actual ranking (“position 0”) Comparison websites in all sectors and receive payment for this from the cooperate with one another with the providers. result that different websites show

Smart TVs

In July 2020 the Bundeskartellamt The sector inquiry has shown that smart The Bundeskartellamt therefore published its final report on its sector TVs can collect personal usage data in demands that the manufacturers inquiry into smart TVs. Smart TVs are many forms. Almost all the smart TV provide consumer information that is connected to the internet which not manufacturers use privacy policies that easily understandable and recommends only means that viewers receive data have serious shortcomings in terms legal regulations especially for updates and TV programmes but also that their of transparency and thus violate the and liability issues. user data is transmitted. General Data Protection Regulation.

Online user reviews

A third sector inquiry in the area law. It has therefore questioned of consumer protection deals with numerous internet platform opera online user reviews As well as prices, tors and companies offering review online user reviews are often a key services. criterion influencing consumers in their online purchases. However there The results of the inquiry were pub are many indications that user reviews lished in June 2020 in a consultation are frequently faked or manipulated. paper. The affected market partici pants are invited to comment on the The Bundeskartellamt is therefore results of the inquiry. A conclusive examining how ranking systems work report on the sector inquiry is due to to find out how trustworthy they are be published in the autumn of 2020. and whether they violate consumer FEDERAL PUBLIC PROCUREMENT TRIBUNALS

The Federal Public Procurement Tribunals are responsible for reviewing tender procedures which are carried out by the Federation or public contracting entities. The review procedure is similar to a court proceeding and is carried out if a company that wishes to participate or has participated in an invitation to tender has found evidence of a violation of public procurement law and applies to the public procurement tribunals for a review of the award procedure. The focus of the public procurement tribunals in 2019 lay with review proceedings concerning the procurement of security and cleaning services, the award of contracts for employment services, the maintenance and modernisation of transport systems, hydraulic engineering projects and procurements in the areas of security and defence. Federal public procurement tribunals | 63

The Federal Public Framework agreement for the Procurement Tribunals in figures procurement of office furniture In 2019, 105 applications were filed for the initiation of review In 2019 the Public Procurement The previous supplier now claims proceedings. Tribunals had to decide in a case in in the review proceeding that a new Around 55 percent of the cases which a major public contracting award would be unlawful and argues concerned the award of con- entity had awarded a new frame that the contracting entity is obliged tracts for public supplies and work contract for the procurement to use up the designated period of the services, followed by construc- of office furniture although the old old framework contract first. tion contracts which accounted contract had approximately another for 28 percent of the cases. two years to run. However the con However, the public procurement tri These were followed by the tract was re-awarded because the bunal fully confirmed the position of award of contracts for defence maximum supply quantity which the public contracting entity. It also and security services and by sec- had been specified by the contract raised the fundamental question of toral contract services. ing entity had already been reached. whether an application for review 41 decisions were taken, 27 of aimed at preventing a tender could which in favour of the public Framework contracts for commod be at all admissible. According to the contracting entities and 14 in the ities such as office material are an general principles of procurement law applicants‘ favour. In all other effective tool under procurement it was appropriate for the contracting cases the review proceedings law because the contracting entity entity to issue a new award after the were terminated without a deci- can call off any quantity it requires pre-defined maximum quantity had sion on the merits either because based on its current needs. However, been reached. This was supported by applications were withdrawn (34) the European Court of Justice has the decision of the European Court or cases were concluded by other already decided that unlimited call- of Justice, which also justified the means (30). off orders from a framework contract re-award procedure in the present In 12 cases the decisions of the are inconsistent with the principle of case. The results of this proceeding will public procurement tribunals unrestricted competition. be presented in a report upon conclu were immediately appealed to sion of the tribunal’s investigations. the Düsseldorf Higher Regional Court.

Statutory Fee Schedule for Public procurement law Public procurement law defines the rules which have to be Architects and Engineers observed by public contracting entities in procurement procedures In 2019 a decision by the European This decision was already taken into and the possibilities which sup- Court of Justice attracted much public account in a review proceeding of pliers have to defend themselves attention. The Court decided that the the public procurement tribunals against any violations of procure- parts of the Statutory Fee Schedule for concerning a functional specification ment law. The aim of procurement Architects and Engineers (HOAI) which for planning services, in which the law is to ensure the efficient use of set binding fees violated European binding fee structures had been budgetary resources whilst at the provisions. According to the Court, accepted as a mandatory specification. same time protecting fair compe- these regulations could hinder offices, The functional specification was thus tition between the companies and especially outside Germany, from declared as an infringement of public guaranteeing free market access to establishing an office in Germany. procurement law. the European Single Market. COMPETITION REGISTER FOR PUBLIC PROCUREMENT

The Competition Register is intended to quickly and electronically provide contracting authorities, sector contracting entities and concession grantors with information on the relevant law violations committed by senior staff of companies for their procurement procedures. The register is scheduled to be operational by the end of 2020. Competition register for public procurement | 65

Reporting and inquiry obligations of the Competition Register

The reporting and inquiry obliga The reporting and inquiry obligations estimated value of 30,000 euros net. tions of the Competition Register will come into effect only once However, the decision on whether will ensure that public contracts the ordinance comes into force. to exclude a company listed in the and concessions are only awarded Contracting authorities will then Register from the procurement to those companies which have not be obliged to consult the register procedure will remain with the committed any serious offences and on whether an entry exists before contracting entity. have acted fairly in competition. awarding contracts with a minimum

Strengthen the preventive effect of the law

A company whose senior staff have Register is therefore to help fight Award of contracts committed serious economic offences economic crime. This transparency for by state agencies should not be able to benefit from contracting authorities will increase public contracts and concessions. the preventive effect of criminal and The State is an important con- Under the public procurement administrative offence law, including tractor for many companies. law provisions under Sections 123 competition law. In the future contracting and 124 GWB companies are thus authorities will be obliged to be excluded from participating Search enquiries in the Competition to electronically consult the in procurement procedures on Register can only be made by con Competition Register before compulsory or facultative grounds tracting authorities in procurement they award any contract with a if their senior staff have committed procedures. The register is not acces minimum value of 30,000 euros certain crimes or administrative sible to the general public. Entries net. offences. of companies in the Register will be They will have the possibility to deleted after the expiry of certain consult the register if the value The data stored in the Competition periods (three or five years). of the contract is less than this Register is intended to quickly amount. provide contracting authorities, Companies listed in the Register will If the company concerned is sector contracting entities and also have the opportunity to apply for listed in the register, it is for the concession grantors with the premature deletion from the register contracting authority to decide necessary information to reliably once they have implemented suitable whether the company should be examine the grounds for exclusion. remedies (“self-cleaning”). excluded from the procurement The purpose of the Competition procedure.

The Competition Register is to help fight economic crime and antitrust violations. This new transparency will strengthen the preventive effect of criminal and competition law. IMPRINT

Published by Bundeskartellamt Kaiser-Friedrich-Straße 16 53113 Bonn www.bundeskartellamt.de as of / status July 2020

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Photo credits Getty Images: Cover: Orbon Alija/E+; p. 6: dem10/iStock; p. 9: fotograzia/Moment; p. 10: skynesher/E+; p. 11: sinology/iStock; p. 12: bamlou/DigitalVision Vectors; p. 13: PeopleImages/E+; p. 14: Ralf Hiemisch; p. 15: Studio 642; p. 16: Mint Images/Mint Images RF; p. 17: Westend61; p. 18: Canetti/iStock; p. 19: C Squared Studios/Photodisc; p. 20: AlexandruRosu/iStock; p. 21: Nordroden/iStock; p. 22: alvarez/E+; p. 23: Ulf Wittrock / EyeEm/EyeEm; p. 24: Mehdi Khemiri / EyeEm/EyeEm; p. 25: Sjo/iStock; p. 26: technotr/E+; p. 27: luismmolina/E+; p. 28: simonidadjordjevic/iStock; p. 29: Arno Masse/Cultura; p. 32: Fedor Kozyr/iStock; p. 33: Roc Canals/Moment; p. 36: MF3d/E+; p. 39 (o.): Patcharanan Worrapatchareeroj/Moment; p. 39 (u.): Tom Hoenig; p. 41: Just_Super/E+; p. 42: zhongguo/E+; p. 43: yangphoto/E+; p. 44: Westend61; p. 45: Ketchana Jedsenarak / EyeEm/EyeEm; p. 46: Thomas Winz/The Image Bank; p. 48: Igphotography/E+; p. 49 (o.): Alexander Spatari/Moment; p. 49 (u.): Image Source/Image Source; p. 50: Mint Images/Mint Images RF; p. 51: _Ra_/iStock; p. 52 (o.): primeimages/E+; p. 52 (u.): maurizio siani/Moment; p. 53: redmal/E+; p. 55: Westend61; p. 56: Kiyoshi Hijiki/Moment; p. 57: Thomas Barwick/Stone; p. 58: maxcam2008/iStock; p. 59: alphaspirit/iStock; p. 60: Towfiqu Barbhuiya / EyeEm/EyeEm; p. 61: NicoElNino/iStock; p. 62: Koron/Moment; p. 64: 3alexd/E+

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Text Bundeskartellamt Kaiser-Friedrich-Straße 16 53113 Bonn

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