On 15 September 2011, the Higher Social Court in Darmstadt gave judgment on an annulment action brought by a statutory sickness fund against a request for information issued by the German Federal Cartel Office (FCO). The FCO's request related to an increase of monthly contributions for the fund's members, which had been announced in a common press release issued by eight statutory sickness funds.
In its judgment, the Court found the FCO's request to be unlawful. First, the Court found that the request constituted an infringement of the fund's autonomy as provided for in the German Social Security Code (SGB), which foresees the coordination between statutory sickness funds with regard to the autonomous collection of contributions. Secondly, the Court did not see a legal basis for the FCO's request. It reasoned that the FCO was not competent because the exclusive competence for legal supervision of statutory sickness funds lies with the German Federal Insurance Agency, as laid down in the SGB. While the SGB contains provisions on the applicability of the German Act Against Restraints of Competition (GWB) regarding the activities of statutory sickness funds on the demand side, it does not contain such provisions regarding their activities on the supply side. The Court elaborated further that, even if German competition law were applicable, the FCO's request would have been unlawful as the funds did not act as undertakings within the meaning of Article 1 GWB, the German equivalent to Article 101 TFEU. Referring to the Court of Justice's judgment in AOK-Bundesverband, the court argued that the fund's activities on the supply side did not constitute an economic activity. The Court rejected the existence of an economic purpose because the statutory funds were fulfilling an exclusively social function since they are all bound by law to provide the same standard services. Therefore, the fund's activities on the supply side in competition for new members were found to be of a public law nature.
The recent decision stokes the debate concerning the relationship between the SGB and the GWB in general and concerning the health care sector's exposure to competition law review in particular (see also VBB on Competition Law, Volume 2011, No. 6, Volume 2007, No. 6 and Volume 2008, No. 2. available at www.vbb.com).
The newspaper Frankfurter Allgemeine Zeitung reported in an article dated 21 November 2011 that FCO President Mundt has declared in response to the judgment that the FCO will immediately stop any merger control proceedings with regard to statutory sickness funds. Reportedly, he also recommended to the German government to close the loophole in the law in the upcoming revision of the GWB.
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.
