Germany: Newsletter, Antitrust Law October 2011

Last Updated: 8 November 2011
Article by Maxim Kleine

1. German Federal Court of Justice [Bundesgerichtshof] acknowledges the validity of the termination of a press wholesaler by the Bauer publishing house

By judgement dated 24 October 2011 (docket no. KZR 7/10), the Antitrust Senate of the German Federal Court of Justice upheld the validity of the termination of the independent press wholesaler Heinz-Ulrich Grade KG by the Bauer Media Group. According to the Court the publishing house was not obliged to continue supplying its press products to the wholesaler through a joint declaration of the associations nor on grounds of the impediment and discrimination ban pursuant to German antitrust law. The termination did not call into question the freedom of the press protected by the German Constitution [Grundgesetz]. (The full judgement has not yet been published.)


For decades, the wholesale of magazines and newspapers in Germany has been conducted via the press wholesale system ("Presse-Grosso-System"). Through such system, about 70 wholesalers in their respective exclusively allocated distribution territories ("wholesale territorial monopolies") distribute the press products of all publishing houses to about 120,000 retail sales points. Only Hamburg and Berlin have two wholesalers ("double wholesale"). Already in 2004, at the proposal of the Federal Government, the Association of German Magazine Publishers [Verband Deutscher Zeitschriftenverleger], the Federation of German Newspaper Publishers [Bundesverband Deutscher Zeitungsverleger] and the Association of German Book, Newspaper and Magazine Wholesalers [Bundesverband deutscher Buch-, Zeitungs- und Zeitschriften-Grossisten] announced their commitment to the wholesale distribution system by way of a joint declaration. This provides inter alia that wholesalers can only be terminated on grounds of substantiated sustained performance deficiencies and for other materially justified reasons.

At the beginning of 2009 the Bauer Media Group deviated from the official course taken by the associations and terminated the press wholesale distribution agreement with Heinz-Ulrich Grade KG for the Hamburg area. Since then, it has been distributing its magazines in this territory through its own affiliate. Heinz-Ulrich Grade KG took legal action pursuing the continued supply of the press products of Bauer in future.

A brief account of the substantial reasons given by the Federal Court of Justice

  • Bauer Media AG was not prevented from terminating the wholesaler by the joint declaration of the associations. The declaration did not establish any legal effects for the publishing house, since the publishing house had neither acceded to the declaration nor acknowledged the binding nature of the contents thereof, e.g. by amending the wholesaler contracts.
  • The wholesaler's supply claim could not be based on the antitrust impediment and discrimination ban of Sec. 20 para. 1 German Act against Restraints of Competition [Gesetz gegen Wettbewerbsbeschränkungen, ARC"]. No discrimination or inequitable impediment existed. Enterprises are all fundamentally free to personally assume the distribution of the products which they had previously transferred to independent dealers.

The freedom of the press to be borne in mind within the scope of the press wholesalers' activities (Article 5 para. 1 Grundgesetz) must generally be taken

  • into consideration. Although the legislator has allowed price fixing for newspapers and magazines in order to protect the freedom of the press (Sec. 30 ARC), this is not called into question through the termination of the wholesaler contract. There is no mandatory connection between price fixing and territorially exclusive delivery.
  • The interests of the magazine retailers were not being impaired. The examples of Hamburg and Berlin already showed that no difficulties existed with regard to the "double wholesale" in operation there.
  • Smaller publishing houses were not being prevented from accessing the market. Because of its predominant market position in press distribution in its territory, Heinz-Ulrich Grade KG was obliged to grant all publishers market access there.

It is still being disputed before the Regional Court [Landgericht] of Cologne (upon legal action filed by Bauer) as to whether or not the Federal Association Pressegrosso may negotiate uniform conditions centrally (for members and wholesalers with a participation in publishers) with the publishing houses. Moreover, the Association should refrain from ordering wholesalers to refuse individual negotiations with Bauer.

2. European Court of Justice misses the chance to clarify the right to inspect procedural files of the cartel prosecution authorities (leniency policy)

By judgement dated 14 June 2011, the European Court of Justice of the European Union (ECJ) acknowledged in the matter Pfleiderer AG versus the German Federal Cartel Office (FCO) [Bundeskartellamt] (case C-360/09), that in the absence of a binding European provision, it was the task of the national courts to decide in the specific individual case whether or not the interest of the cartel-damaged party in obtaining information outweighs the interest in maintaining the confidentiality and thus proper functioning and attractiveness of the leniency programme, so that the corresponding documents would have to be disclosed.


The basis herefor was a referral decision of the Local Court [Amtsgericht] of Bonn pursuant to Art. 267 Treaty on the Functioning of the European Union (TFEU) dated 4 August 2009 concerning an application to comprehensively inspect the files of summary proceedings concerning a cartel in the decorative paper sector. The undertaking allegedly damaged by the cartel, Pfleiderer AG, requested the inspection of the files in order to enforce civil law damage claims. Upon application, the Federal Cartel Office merely provided a copy of the ongoing procedural file from which business secrets, internal documents and other documents voluntarily transmitted by the cooperating witness had been removed. The Local Court of Bonn subsequently ordained that the Federal Cartel Office must allow the inspection of the complete, unrevised file. Upon the complaint of the violation of the right to a hearing in court, the Local Court of Bonn stayed execution and presented the ECJ with the question of whether the antitrust provisions of Community law should be interpreted to the effect that cartel-damaged parties may not be allowed access to files in leniency applications or information and documents voluntarily surrendered by leniency applicants in this connection for purposes of asserting civil law claims.

A brief account of the substantial reasons given by the ECJ

  • The ECJ established in its decision that binding stipulations on the access of cartel-damaged parties to documents from leniency programmes were lacking in Community law. In the opinion of the ECJ, Community law does not, however, fundamentally prohibit access to the documents of cooperating witnesses..
  • It is therefore the task of the Member States to agree on regulations in respect of these questions, with it being understood that they may not excessively impede the implementation of Community law ("principle of effectiveness"). It is ultimately the responsibility of the national courts to decide on the access in application of the national provisions and in consideration of the interests protected by Community law.
  • In the opinion of the ECJ, leniency programmes are useful instruments in the fight against cartels, the effectiveness of which most certainly can be impaired by the transmission of documents from leniency proceedings to the damage claimant. However, in the opinion of the ECJ it should be possible to compensate for any damage incurred through an antitrust violation because this would also increase the enforcement powers of the Community's antitrust law.
  • Insofar, in the opinion of the ECJ, within the scope of every application for the granting of full access to the files, an individual case decision ultimately has to be made by the national courts by taking into consideration the opposing interests of the damaged persons on the one hand and the cartel members on the other.

Effects in practical terms

 The key question of the judgement, whether and to what extent the Federal Cartel Office must grant cartel-damaged third parties access to sensitive information voluntarily submitted within the scope of a leniency policy or can guarantee the promised confidentiality of the information received, has ultimately not been answered by the ECJ. The judgement falls below expectations and has failed to create Union-wide legal certainty insofar. Notwithstanding this, several consequences of practical relevance can be derived from the judgement:

  • The judgement can be understood to the effect that besides, the actual "leniency application/corporate statement", all documents above and beyond this that are transmitted during the course of the leniency proceedings fundamentally merit protection. The ECJ generally speaks of "access to documents from leniency proceedings".
  • The judgement runs the risk of different decisions being passed by the courts of the individual Member States as well as by courts within the same jurisdiction, for, according to the ECJ, the balancing of interests should be made on the basis of the relevant national law.
  • In case of cross-border cartels the judgement could motivate damage claimants to a kind of "forum shopping". Accordingly, damage claims could be asserted in the jurisdictions in which the greatest degree of access to the relevant documents is granted.

National legal systems which fundamentally prohibit access to cartel procedural files or make such access subject to the consent of the undertakings concerned must, against the background of the "principle of effectiveness" expressly mentioned by the ECJ, be applied accordingly. Against this background it will hardly be possible to uphold an absolute prohibition of access to the documents of cooperating witnesses. The ECJ will be addressing this issue in the near future (case C.536/11 – Donau Chemie). The Austrian antitrust court presented to the ECJ for decision inter alia the question of whether the Austrian file access provisions contravene Community law in this respect.

3. Reformed European antitrust procedures and the extended role of the Hearing Officer

In October 2011 the European Commission published its reviewed notice on best practices for the conduct of cartel proceedings at the Commission (OJ EU C 308/06 dated 20 October 2011). The aim of the new package of measures is the strengthening of the cooperation between the parties in the antitrust proceedings and the preservation of their procedural rights. The role of the Hearing Officer in all phases of the antitrust proceedings is also strengthened. If differences of opinion exist in respect of the procedural rights of the parties, the latter can refer the matter to the Hearing Officer for antitrust proceedings.

An overview of the substantial reforms

 The revised Commission notice envisages a number of reforms vis-à-vis a draft that was presented in 2010:

  • In the Statement of Objections to the parties the parties are informed of the most important parameters for the imposition of a possible fine (margin no. 84 of the notice)
  • The bilateral state of play meetings have been extended to antitrust matters and, under certain circumstances, complainants will also be included (so-called "triangular meeting", margin no. 67 of the notice)
  • The parties' possibilities of being granted access to the "key submissions" such as documents of the complainant or an interested third party prior to the Statement of Objections, have been improved (margin no. 73 of the notice)
  • Decisions rejecting complaints are to be published in full or as a summary thereof (margin no. 150 of the notice).

During the course of the revision of the Commission notice, the role of the Hearing Officer in respect of the preservation of procedural rights has been strengthened.

  • The role of the Hearing Officer in the preparation and conduct of the oral hearing is strengthened (margin no. 80 of the notice)
  • Throughout the entire proceedings, the Hearing Officer writes reports on the actual exercise of procedural rights (margin no. 80 of the notice)
  • The parties can refer the matter to the Hearing Officer if they do not consider themselves obliged to answer questions which could be self-incriminating (margin no. 36 of the notice)
  • The matter can be referred to the Hearing Officer if an undertaking feels that it has not been (sufficiently) informed of its procedural status (margin no. 15 of the notice)
  • The matter can be referred to the Hearing Officer in cases of differences of opinion concerning the extension of deadlines for answering requests for information (margin no. 40 of the notice)
  • The Hearing Officer mediates in case of problems concerning the legal professional privilege (margin no. 55 of the notice).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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