Germany: Developments In German Competition And Antitrust Law—Better Safe Than Sorry

Last Updated: 26 March 2009
Article by Horst Daniel and Philip Haleen

In 2006, we reported on the 2005 reform of the German competition and antitrust law to bring it closer in line with the corresponding EU legislation. We believe an update at this time is appropriate.

The reform of the German Act Against Restraints of Competition (GWB) that came into effect on July 1, 2005, was intended to reduce the administrative bureaucracy often associated with antitrust cases in Germany. As a replacement for prior approvals, it imposes a system of self-assessment. In addition, company mergers that impact the German market may require merger control clearance by the Federal Cartel Office (FCO) or the EU Commission before the closing of the transaction. Noncompliance can be costly.

Harmonization With EU Law Regarding Restrictive Agreements And Concerted Practices

The central provision of the general prohibition against restrictive agreements and practices was extended to mirror Article 81 (1) of the EU Treaty. Previously, only agreements and arrangements between competitors (horizontal agreements) were covered. Agreements between companies and their suppliers or distributors (vertical restrictions), on the other hand, were only prohibited under certain specific provisions found in the GWB. Its revised Section 1 simplifies this regime and prohibits all agreements, arrangements and concerted practices between undertakings which have the object or effect of preventing, restricting or distorting competition, making no distinction between horizontal and vertical restrictions. The special provisions on vertical restrictions have been deleted. A general exemption provision, which is almost identical to Article 81 (3) of the EU Treaty, was introduced into Section 2 of the GWB. It contains a direct reference to the EU block exemptions on the application of Article 81 (3) of the EU Treaty. Consequently, the EU block exemptions now also apply to agreements that are purely domestic and have no effect on trade between the EU member states.

In addition, new rules on the parallel application of German and EU antitrust law have been introduced. For agreements which affect the trade between member states (and thus fall under EU rules), German law may be applied alongside its EU counterpart. However, in any case of conflicting provisions, EU law will prevail. These changes align Germany's antitrust law with the EU rules and with the national rules of most other EU member states. They also contribute to a level playing field in the EU and remove the risk of conflicting standards within the EU in the assessment of agreements and practices of international relevance.

German Statutory Exemptions Abolished

Under the prior German competition law regime, a number of statutory exemptions allowed companies to obtain individual clearances from the FCO for certain agreements or cooperative ventures. This bureaucratic system was abolished with the reform and replaced by a system of EU-style self-assessment. Agreements that fulfill the conditions of the general exemption in Section 2 of the GWB are now automatically valid and enforceable without an administrative decision. The onus has been placed on companies and their advisers to assess whether the conditions of the general exemption are fulfilled.

"No-Action Letters"

The new German system of legal exemptions and self-assessment has resulted in some increased legal uncertainty for undertakings with respect to the compliance of agreements and cooperative ventures with antitrust law. This uncertainty applies in particular when large investments are contemplated and in such cases where companies intend to enter into new forms of agreement for which no precedents or administrative guidance exist.

In limited recognition of these risks, the FCO has been granted the authority to decide in writing that no administrative measures in a particular case are necessary (the so-called "no-action letters"). However, the decision of whether to issue a no-action letter is entirely within the discretion of the FCO; no applicant has any legal right to such a letter. Actual practice has shown that fewer requests for the issuance of a "no-action letter" have been made than was initially anticipated. Although at the time some commentators also suggested that the FCO should use the no-action letters as an instrument in order to establish a system of model decisions, there is little evidence that this advice has been followed by the FCO. The legal profession and its clientele seem to have adjusted to the new responsibilities without the need to resort to either a direct request for a no-action letter or to a databank of "precedential" letters.

In other cases where it was always clear that a no-action letter would not be appropriate—for example, because the FCO is entitled to publish them—it was thought that it might still be possible to discuss the admissibility of an agreement with the FCO in order to obtain some informal guidance. The FCO indicated at the time, however, that it was not prepared to take over the role of a consultancy institution nor to assume the tasks and responsibilities of legal advisers. The FCO has held rather firmly to its expressed intentions.

Extended Powers For Authorities And Higher Fines

The abolition of the system of prior notification and administrative clearance has made it necessary to extend the FCO's powers to enable them to monitor the behavior of undertakings more effectively. The armory for cases of misbehavior now includes:

  • The power to impose active measures upon companies
  • The right to impose injunctive measures in cases of urgency where irreparable damage must be prevented
  • The ability to declare commitments offered by companies as remedies against cartel violations legally binding
  • The power to revoke by administrative decision the application of an EU block exemption to an individual agreement
  • The power to impose fines

The maximum fine limits have been increased substantially. The previous total maximum of three times the additional revenues generated from a cartel violation has been abolished. Instead, fines of up to 10 percent of the annual revenue of the relevant undertaking can now be imposed. This means the authorities no longer have the burden of proving that the anti-competitive conduct has actually generated additional revenues, which was often very difficult to ascertain.

Civil Remedies

In a speech at the French Supreme Court on October 17, 2005, in Paris, EU Competition Commissioner Neelie Kroes stated, "The first advantage of private enforcement is direct justice, which allows the victims of illegal anticompetitive behaviour to be compensated for the loss they have suffered." These sentiments have been somewhat slow in their realization.

Only relatively recently has this possibility been actively pursued by private litigants, and even then one must concede that the EU is still in its infancy as to such cases in comparison to the United States. What has changed most in Germany and the EU is the imposition of tougher administrative sanctions. In Germany, in what may be somewhat inspired by the U.S. legal system, the legislature has strengthened civil remedies. For example, the right to sue and claim damages based upon antitrust law violations has been considerably extended. Anyone "affected" by a violation of antitrust law now has standing to sue. Furthermore, the revised act now provides for alleviation of the burden of proof and other procedural changes to encourage private antitrust enforcement.

For the concrete producers Cemex, Dykerhoff, Heidelberger Cement, Holcim, Lafarge and Schwenk, the filing of a private action for damages means additional liability exposure to the already record fine (at the time) of €660 million, which was imposed by the EU Commission for price fixing. The private action seeks damages for up to €350 million, including interest.

This private action was filed in 2006, accepted by the Higher Regional Court of Düsseldorf in 2008 and is pending. A unique element to the private action is that the claim was not filed by the aggrieved parties themselves but by the Belgian enterprise Cartel Damage Claims (CDC) on behalf of the aggrieved parties. CDC's business model consists of acquiring outstanding claims from customers who have been affected by third party cartels, as in the case against the concrete producers in which they filed the action. According to the competition authorities, the cartel agreed on price fixing, distribution channels and sales quotas from 1993 to 2002. In allowing a "subrogation model" for the financing of litigation for antitrust damages, this decision of the Düsseldorf court to generally accept the filing of a private action by CDC may have a groundbreaking effect. The individual damages suffered by a company from an antitrust infringement are usually rather low in comparison to the costs of pursuing a separate legal remedy. Through a pooling of their claims and resources, a damages action can then make economic sense from the individual plaintiff's perspective.

Civil action lawsuits against oligopolies for damages resulting from antitrust violations were possible before these reform developments in Germany. However, the claims were difficult to prosecute and prove. Mostly such lawsuits resulted in settlements, without court proceedings, because the legal procedures on burden of proof, evidence of damages, joinder of parties and claims were uncertain. With the 2005 reform, it has become significantly easier for the injured party to prevail under the same facts. Whereas prior to the reform, claimants would generally have maybe a 25 percent chance of success, now the chance appears more like 75 percent.

If the pooling of claims in a single action, such as in the cement case, prove successful, it would seem likely that more companies like CDC may look for further "business" opportunities in Germany to consolidate and to prosecute the claims of injured parties. CDC itself is rumored to have turned its attention to an elevator cartel involving the companies Kone, Otis, Schindler and Thyssen-Krupp. In this case the EU Commission levied a (new) record fine of €992 million in February 2007 against the participants. In a surprising turn, and in addition to the imposition of that fine, the EU Commission announced in 2008 that it had filed a civil lawsuit against the members of the elevator cartel claiming damages as a third party based upon the argumentation that the EU had paid inflated prices when purchasing elevators for EU buildings. This civil action by the EU Commission has been widely reported in the European press and is regarded as open encouragement to any company affected by anticompetitive behavior to actively consider the filing of an action for damages.

Compliance With German Merger Control Rules

In contrast to the cartel law changes, the revisions to the merger control regime appeared relatively minor at first sight and related only to procedural aspects. Hence, the 2005 reform was not expected to have a large impact on merger notifications.

However, the FCO appears to have taken the reform as an opportunity to monitor merger notification compliance more closely than ever before. Historically, FCO fines imposed for failure to obtain merger clearance before closing a deal were reported only sporadically. Even if imposed, the fines for noncompliance appeared "reasonable." In the aftermath of the 2005 reform, the FCO issued new guidelines on fines in 2006, indicating to the market by increased levels in possible fines that it was changing its overall approach and that it would henceforth closely monitor merger notification compliance. This "message" appears to have been overlooked by some market participants. Since 2008, the FCO has followed through with its new approach. In December 2008, it imposed a fine of €4.5 million on the U.S. candy and pet food giant MARS for closing on a transaction before merger clearance was granted. In early February 2009, the FCO levied a fine of €4.13 million against the German publishing house DuV (Druck- und Verlagshaus Frankfurt am Main GmbH) because the FCO realized in one of DuV's recent merger applications that the company had failed to file a notification for another transaction concluded in 2001, even though it had been obvious to DuV that the transaction required clearance.

In short, not all applicable law to a transaction is found at the EU level. National laws must be consulted and their ramifications considered with respect to any transaction. Companies which conduct a transaction in Germany are well advised to consider German merger control rules closely. In case of doubt, a merger notification should be filed.


Overall, the 2005 reform of the GWB has been a positive step forward toward the implementation of comparable antitrust law standards throughout the EU. In adopting the EU antitrust rules in both substance and procedure, German law helps eliminate uncertainties otherwise associated with the dual regulation of agreements with international relevance. However, the higher risk inherent in a system of self-assessment for legal conformity, coupled with the easing of procedural restraints against the pursuit of private actions for damages, will make it ever more important for companies active in Germany to regularly include antitrust and competition law assessments in their overall legal compliance reviews. Given the EU Commission's and the FCO's increased scrutiny of potentially anticompetitive practices, companies are likely to conduct antitrust and competition law audits on a regular basis in order to comply with "good business practice" and foreclose liability risks.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions