On August 30, 2022, the Federal Cartel Office (“FCO”) published its Annual Report 2021/2022.[1] Andreas Mundt, the President of the FCO, pointed out two areas of the FCO’s focus: First, the collusion of undertakings under the guise of inflation and Russia’s war against Ukraine. Second, to use the flexibility of antitrust law to allow for a degree of cooperation that is necessary in times of crisis. Moreover, the FCO continues to pursue its digital agenda for the digital economy and the protection of consumer rights.
Fuel And Energy Prices
In light of drastic rise of energy prices following the war in Ukraine, fuel prices are under increased scrutiny. In April 2022, also launched a sector inquiry into refineries and the wholesale level for the sale of crude oil. For a closer monitoring of the development of fuel prices, the German government plans to extend the FCO’s Market Transparency Unit For Fuels’ monitoring mandate to all levels of the supply chain.
Digital Economy And Consumer Protection
In January 2021, the 10th Amendment of the Act against Restrains of Competition (“ARC”) entered into force which also brought new powers for the FCO under the new Sec. 19a ARC to prohibit certain conduct (e,g., self-preferencing; creating or strengthening of barriers to entry; non-transparency; or impediment of interoperability) of companies that have been designated by the FCO to have paramount cross-market significance (“PCMS”).[2] The FCO has already designated Alphabet (Google), Amazon, Meta (Facebook) to have PCMS.[3] Subsequently, the FCO opened new investigations into several of their business practices or extended ongoing investigations under Sec. 19 ARC opened prior to the entry into force of the 10th Amendment[4] to Sec. 19a ARC.[5]
The FCO’s new enforcement powers partially overlap with the Digital Markets Act (“DMA”), a new EU regulation for digital markets containing behavioral standards for digital platforms which entered into force on November 1, 2022.[6] While the DMA’s obligations for digital platforms will not become applicable until June 25, 2023, the FCO stated that Sec. 19a ARC will serve a complementary function to the DMA’s direct prohibitions of certain forms of conduct, enabling additional investigations on a case-by-case basis.
With regards to consumer protection in the digital economy, the FCO has undertaken several sector inquiries in 2021, i.e., a sector inquiry into mobile apps,[7] a sector inquiry into messenger and video services,[8] and a sector inquiry concerning the procedures of merchants for the verification of consumers’ solvency when shopping online.[9]
Cartel Enforcement
In 2021, the FCO imposed fines of approx. € 105 million on a total of 11 companies or associations and eight individuals across various sectors, including consumer electronics and musical instruments.[10] The largest fine (approx. € 51 million) was imposed against two stainless steel manufacturers on January 27, and July 21, 2021, respectively.[11] The FCO’s total fines were significantly lower compared to 2020 (€ 349.4 million on a total of 19 companies), despite the fact that no dawn raids were conducted in the first half of 2020 due to the COVID-19 pandemic. In 2021, the FCO received 10 leniency applications and conducted two dawn raids.
Compared to 2021, cartel enforcement gained some momentum in 2022. The FCO carried out 13 dawn raids, five of which were carried out in cooperation with other competition authorities in the European Competition Network. So far, in 2022, fines of approx. € 20 million were imposed on manufacturers of expansion joints for bridges[12] as well as on several companies for colluding in procurement procedures in the industrial buildings sector.[13]
In addition, the FCO has issued several statements providing guidance on sustainability agreements. The FCO outlined the possibilities and limits of cooperation between companies in order to support environmental, social, and animal welfare goals.[14] It rejected an industry initiative in the milk sector noting that agreements impacting consumer prices without specific sustainability benefits are incompatible with competition law.[15]
Merger Control
In 2021, the FCO received approx. 1,000 merger notifications. This is a decrease of 19.1 % compared to 2020, continuing a downward trend after a peak of approx. 1,400 notifications in 2019. The reduction of merger filings follows the increase in the relevant turnover thresholds for merger filings under the 10th Amendment to the ARC.
As in previous years, the FCO cleared approx. 99% of the notified transactions in Phase I (i.e., within one month). In 2021, the FCO concluded 10 Phase II proceedings after an in-depth review. Of these ten transactions, the FCO cleared three unconditionally[16] and one subject to obligations[17]. The parties of five transactions withdrew their notifications after the FCO expressed concerns.[18] The FCO issued a single prohibition decision in the media sector.[19] In 2022, the FCO has prohibited one proposed merger (Aco/Birco in the surface drainage sector).[20]
Commenting on the paramount importance of merger control, President Mundt referred to various studies suggesting that the degree of concentration in Europe has not increased over the last few years as a result of consistent merger control.
In a push to increase scrutiny for mergers in the highly concentrated waste recycling sector, the FCO is also preparing for the use of new powers introduced with the 10th amendment to the ARC.[21]
Competition Register
At the beginning of 2021, the FCO launched the Competition Register.[22] This is a central register that public institutions can consult when awarding contracts to private companies. It lists undertakings that have committed economic offenses which prohibits them from participating in public tenders. According to the FCO, more than 4,000 notifications of relevant violations have already been made by law enforcement authorities. On average, the register is consulted around 800 times a day.
* Special thanks for their contribution to this article to Lena Lemnitzer and Nicolas Pohl.
[1] The Annual Report 2021/2022 is only available in German here. The press release is available in English here. For a summary of the FCO’s activities in 2021 please see our Cleary Antitrust Watch blog article of December 22, 2021, available here.
[2] For further information, please see our Cleary Antitrust Watch blog articles of June 23, 2021, available here and of January 24, 2020, available here.
[3] See FCO Press Release regarding Alphabet/Google, dated January 5, 2022, available in English here; regarding Amazon, dated July 6, 2022, available in English here and regarding Meta/Facebook, dated May 4, 2022, available in English here.
[4] E.g., Apple’s controversial fee system for in-app purchases, see FCO Press Release, dated June 21, 2021, available in English here; please also see our Cleary Antitrust Watch blog article of June 21, 2021, available here
[5] See the FCO’s Press Release of December 10, 2020, available in English here and our Cleary Antitrust Watch blog article of December 10, 2020, available here.
[6] For more information, please see our Cleary Antitrust blog article of July 18, 2022, available here.
[7] The FCO’s Press Release of July 29, 2021, available here. The full report is only available in German here. For more details, please also see our Cleary Antitrust Watch blog article of July 29, 2021, available here.
[8] See FCO Press Release, dated November 11, 2021, available in English here; the full Interim Report of November 4, 2021 is available in German here. For more details, please also see our Cleary Antitrust Watch blog article of November 4, 2021, available here.
[9] See FCO Press Release, dated March 31, 2022, available in English here.
[10] For more details regarding some of the investigations, see our Cleary Antitrust Watch blog article of December 1, 2021, available here and the summary of the FCO’s activities in 2021 of December 22, 2021, available here.
[11] Cases B12-22/15 and B12-21/17. An FCO Case Summary dated September 28, 2021, is available in English here.
[12] Case B11-22/17 (Expansion joints), see FCO Press Release, dated February 2, 2022, available in English here
[13] See FCO Press Release, dated June 9, 2022, available in English here.
[14] See FCO Press Release, dated January 18, 2022, available in English here. For more details, please also see our Cleary Antitrust Watch blog article of January 20, 2022, available here.
[15] See FCO Press Release, dated January 25, 2022, available in English here. For more details, please also see our Cleary Antitrust Watch blog article of January 28, 2022, available here.
[16] Andros/Spreewaldhof (B2-23/21), FCO decision of June 24, 2021, a press release is available in English here, the decision is only available in German here; Rethmann/TSR Recycling/Willi Hennies Recycling (B5-168/20), FCO decision of June 28, 2021; Südbayerisches Portland-Zementwerk Gebr. Wiesböck/Ganser Baustoffe (B1-40/21), FCO decision of August 23, 2021.
[17] Edeka/Real (B2-85/20), FCO decision of March 17, 2021, a press release is available in English here, the decision is only available in German here.
[18] Magtech Europe/New Lachaussée (B5-160/20), withdrawal on January 27, 2021; OSR/Max Aicher Recycling/Hohenloher Recycling (B5-39/21), withdrawal on April 22, 2021; Dana/Modine Manufacturing (B4-144/20), withdrawal on June 9, 2021; Dana/Modine Manufacturing (B4-72/21), withdrawal on October 25, 2021, the FCO’s Case Summary is only available in German here; TSR Recycling/Rhein-Main Rohstoffe (B5-31/21), withdrawal on December 8, 2021, the FCO’s Press Release of December 14, 2021 is only available in German here .
[19] Funke Mediengruppe/Ostthüringer Zeitung (V-36/20), FCO decision of September 28, 2021, a press release is only available in German here and the decision is only available in German here.
[20] Aco/Birco (B1-137/21), FCO decision of January 13, 2022, see the FCO’s Press Release of January 13, 2022, available in English here.
[21] See the FCO’s Press Release of January 19, 2022, available in English here. For more details, please also see our Cleary Antitrust Watch blog articles of January 19, 2022, available here, and of January 24, 2020, on the government’s draft of the 10th Amendment to the ARC, available here.
[22] See the FCO’s Press Release of March 25, 2021, available in English here; For more information on the introduction of the competition register see also our article on our Cleary Antitrust Watch blog article of June 8, 2021, available here, and of December 22, 2021, a summary of the FCO’s activities in 2021, available here.