On July 29, 2020, the Monopolies Commission published its Biennial Report XXIII.  The Monopolies Commission makes three main recommendations to strengthen the German and European competition regimes.^[1]

First, during the COVID-19 crisis, substantive competition law should uncompromisingly continue to apply .  If the German State provides rescue packages that might distort the market, it should also apply measures to promote competition.  For example, financial aid to Deutsche Bahn AG (“DB”) might harm competition in the transportation sector if the aid does not also benefit competitors, e.g. by using it to improve rail infrastructure.  Temporary cooperation between companies during the time of the crisis might be appropriate, such as between hospitals or medical suppliers, but the report warns that mergers being approved during the crisis that may create dominant players could negatively impact competition and consumers long after the crisis ends.  Merger control review period extensions based on COVID-19 should continue until the end of 2020.

Second, the European Commission should regulate large digital platforms at the European level to limit abuses of market power.  A Platform Regulation at European level should include, for example, the obligation to refrain from self-preferencing and instead support interoperability and portability.  Procedural obligations to cooperate with authorities’ investigations should also become more stringent.

Third, to reduce competition distortion in the internal market, the Monopolies Commission proposes introducing a European instrument applicable to third-country subsidies, such as from China.  The instrument should cover all subsidies which would violate Art. 107(1) TFEU if they were provided by a Member State and allow a compensatory levy in case of violations to reap benefits of third-country subsidies.  The report further recommends suspending aid pending the examination of any third-country aid to avoid passing on subsidies to third parties.

In addition to these main recommendations, the report notes that the Monopolies Commission has not found any alarming trends in the concentration of companies in Germany, but recommends observing cross-sectoral company concentration and sales-weighted price mark-ups in manufacturing.  The report further provides a review of competition decisions and judgments to recommend future actions legislators and competition authorities should take.

[1]              Monopolkommission, Wettbewerb 2020, XXIII.  Hauptgutachten der Monopolkommission gemäß § 44 Abs. 1 Satz 1 GWB, full report available is only available in German here; English summary available here; press release in German available here; press release in English available here.