Germany: Cartels

Last Updated: 23 September 2009
Article by Alexander Rinne and Tilman Siebert

Originally Published by Global Competition Review

Applicable law and enforcement

The legal basis for cartel enforcement in Germany is the Act against Restrictions of Competition (ARC), which has been modified by the Seventh Amendment. The changes came into effect on 1 July 2005 after a lengthy debate of more than two years. Following the Seventh Amendment, further Amendments entered into force. However, they did not change the applicable rules on cartels enforcement.

Following the entry into force of the European Commission's Modernisation Package of Regulation 1/2003, the German ARC required revision to allow for the parallel application of EU and national competition rules and for a system of cooperation within the European Competition Network (ECN). In essence, the Seventh Amendment modified the general prohibition of anti-competitive agreements and concerted practices to mirror article 81 of the EC Treaty even more closely than before and also now provides for the application of the European Commission's block exemption regulations under national law. In addition, the amendment has removed a number of national legal and administrative exemptions, and increased the level of fines that can be imposed for infringements of the ARC.

To the extent that agreements or concerted practices may affect trade between the EU member states, the ARC and articles 81 and 82 of the EC Treaty apply in parallel (section 50 of the ARC and article 3(1) of Regulation 1/2003).

The ARC is enforced primarily by the Federal Cartel Office (FCO) in Bonn and the fight against hard-core cartels (agreements between companies on the setting of prices or sales quotas and on market sharing) is one of the authority's key enforcement priorities. The FCO has 10 independent divisions which are responsible for different industry sectors and product markets. Two additional divisions are solely in charge of conducting cartel investigations and fining proceedings (with technical support from a special unit for combating cartels (SKK)). Infringements with regional effects only are dealt with by the State Cartel Offices. However, the majority of cartel cases are dealt with by the FCO.

Substantive law

Section 1 of the ARC corresponds to article 81(1) of the EC Treaty and broadly prohibits agreements or concerted practices between undertakings that have as their object or effect the prevention, restriction or distortion of competition. Until 1 July 2005, when the Seventh Amendment came into force, section 1 of the ARC only prohibited anti-competitive agreements or concerted practices between competitors (horizontal restrictions). The prohibition has been extended to cover agreements or concerted practices between undertakings at different levels of the supply chain (vertical restrictions). Practices that are prohibited under section 1 of the ARC include price fixing, bid rigging, allocation of customers, quotas or territories, limiting production or distribution and the exchange of sensitive market data (eg, prices).

Section 2 of the ARC corresponds to article 81(3) of the EC Treaty and exempts agreements from the prohibition of section 1 of the ARC if they contribute to an improvement in the production or distribution of goods, or help promote technical or economic progress, while allowing consumers a fair share of the resulting benefit, and which do not impose restrictions on the undertakings which are not indispensable to the attainment of these objectives; or afford the undertakings the possibility of eliminating competition in respect of a substantial part of the products in question. In addition, section 2 of the ARC incorporates the European Commission's block exemption regulations, even for cases that do not have an effect on trade between member states and are therefore governed by German competition law only.

Apart from the European Commission's block exemption regulations, the only exemption available under the ARC applies to agreements that are concluded between small and medium-sized undertakings and are designed to rationalise economic processes through cooperation between undertakings without significantly limiting competition in the relevant market.

Agreements that violate the ARC are void and are therefore not enforceable before German courts. In addition, the FCO can impose fines on individuals and companies.


The substantive law can be enforced on the basis of two different proceedings. German law distinguishes between administrative orders and administrative offences. The FCO's proceedings are governed by the ARC to the extent that the case involves only minor infringements that require a cease-and-desist order. However, where the FCO intends to impose fines, the proceedings are governed by the Code on Administrative Offences and the Code on Criminal Procedure. The key steps of the process are similar under both regimes.

Where the FCO discovers anti-competitive conduct (ie, through third-party complaints or a leniency application by one of the companies involved), it normally gathers further information and evidence regarding the infringement. To collect this further information and evidence, the FCO has a broad arsenal of investigative powers, which are described in more detail below.

Once the FCO has completed its fact finding, it will issue a statement of objections setting out the underlying facts of the case, the alleged infringements and the FCO's legal assessment. Around the same time, the targets of the FCO's investigation will be given access to the FCO's file and have the opportunity to comment on the allegations.

The FCO's decisions are subject to appeal to the higher regional court in Düsseldorf. Further appeal against the decision of the higher regional court is only permitted on questions of law, to the Federal Supreme Court.

The FCO publishes its decisions in administrative proceedings in a non-confidential version on its website, , whereas fining decisions rendered under the Code on Administrative Offences are not normally published.

The rights of third parties are broader in Germany than under EU rules. Third-party complainants can get access to the nonconfidential part of the FCO's files in administrative proceedings without having to demonstrate a specific interest. In proceedings governed by the Code on Administrative Offences, third-party access to the non-confidential part of the file is limited to companies or individuals directly affected by the anti-competitive conduct, if they are able to demonstrate a legitimate interest for gaining access to it. However, the FCO can deny access to the file where this is necessary to protect public interests or the legitimate interests of the companies or individuals under investigation.

Powers of investigation

The FCO's powers of investigation differ depending on whether the proceedings are governed by the ARC or by the Code on Administrative Offences.

In administrative proceedings, the FCO can conduct sector inquiries (section 32e of the ARC, similar to article 17 of Regulation 1/2003) and has done so in the markets for milk, fuels and outdoor advertising. In addition, the FCO can request specific information from companies (section 59 of the ARC, similar to article 18 of Regulation 1/2003), it can hear witnesses (section 57 of the ARC, similar to article 19 of Regulation 1/2003) and – with the confirmation of the local court – seize documents and other evidence (section 58 of the ARC).

In proceedings governed by the Code on Administrative Offences, the FCO can conduct inspections (dawn raids) provided that it obtains a search warrant issued by the local court. These inspections are not limited to company premises but can be extended to private homes of key individuals, cars, etc. In addition, the FCO can seize documents (eg, business correspondence, calendars, travel expense reports), electronic evidence (including e-mails) and other evidence. Normally, the FCO's officials are accompanied by police staff and IT experts who support the FCO in its investigations.

During the investigation, the company and the individuals concerned are, of course, protected by fundamental rights of defence. Individuals therefore do not have to respond to any questions asked by FCO officials if they have been accused of a violation of the competition rules or if the answer would expose them or a member of their family to the risk of criminal prosecution or prosecution under the Code on Administrative Offences. The fundamental rights of defence also include the right to legal advice and the FCO will normally be prepared to wait for approximately 30 minutes until external legal counsel is present before starting the inspection.

The concept of legal privilege in Germany is not as broad as under the EU rules. Attorney-client communication at the premises of the undertaking under investigation is only protected by legal privilege if the communication specifically relates to the ongoing investigation (defence correspondence). The FCO will have full access to advice that was given before the initiation of proceedings relating to the conduct under investigation.


Where the FCO considers it appropriate, it can impose fines against companies and individuals for intentional or negligent violations of the competition rules, including articles 81 and 82 of the EC Treaty.

The level of fines has been increased by the Seventh Amendment from €500,000 to €1 million for severe infringements (hard-core cartel activity such as price fixing, bid rigging, allocation of quotas, customers or territories) and from €25,000 to €100,000 for less severe infringements. According to statements from the FCO's president, Dr Berhard Heitzer, the FCO intends to impose higher fines in order to increase the deterrent effect.

Similar to article 23(2) of Regulation 1/2003, fines in excess of €1 million can be imposed on companies up to a maximum amount of 10 per cent of worldwide turnover in the last completed business year. This calculation has replaced the previous method of fining up to three times the proceeds gained from the infringement. However, in determining the amount of the fine, the FCO can still take into account the proceeds gained as a consequence of the infringement.

In order to establish a minimum level of legal certainty, the FCO published fining guidelines in September 2006, which are similar to the European Commission's fining guidelines. The FCO uses a two-step procedure to calculate the fines. In a first step, it determines a basic amount, which will then be adjusted in a second step. Depending on the gravity of the infringement, the basic amount will represent up to 30 per cent of the turnover achieved during and from the infringement. The turnover achieved from the infringement is the domestic turnover achieved by the undertaking concerned with the products or services connected with the infringement. In the case of price fixing and quota cartels and other severe horizontal competition restraints, the basic amount is generally set in the upper range of the maximum possible basic amount. The basic amount can in a second step be increased in order to achieve a sufficient level of deterrence or to take into account aggravating circumstances. However, it can also be lowered if there are attenuating circumstances. In any event, the fine is capped at 10 per cent of the company's worldwide turnover.

It should be noted that German law generally does not provide for criminal sanctions for violations of the ARC. The notable exception to this rule is section 298 of the German Criminal Code, which provides for a prison sentence of up to five years for bid rigging in tender proceedings conducted under the public procurement rules. According to a Federal Supreme Court decision, bid rigging could, depending on the circumstances of the individual case, be regarded as a special form of fraud (prison sentence of up to five years), where the tender proceedings are not conducted under the public procurement rules. If the FCO discovers cases involving bid rigging, it must refer the proceedings against individuals to the public prosecutor. The corresponding proceedings against companies may be referred to the public prosecutor as well.

Where the FCO has imposed fines on companies or individuals, interest is payable on the fine, commencing two weeks from the date of the formal notification of the FCO's decision, even where the decision is being appealed.

The statute of limitation is generally five years for severe infringements and three years for less severe infringements. However, investigatory measures conducted by the FCO, the European Commission or competition authorities of other member states will suspend the limitation period.

Measures in administrative proceedings

In cases where fines are not required (ie, cases not involving any hard-core cartel activity), the FCO's proceedings are governed by the ARC. The measures available under the ARC closely mirror the European Commission's powers. In particular, the FCO can order companies to bring an end to the infringement and it can impose interim measures (similar to articles 7 and 8 of Regulation 1/2003). In suitable cases, the authority can also accept remedies and declare these remedies binding on the companies (similar to article 9 of Regulation 1/2003). However, unlike the Commission, the FCO cannot impose fines in administrative proceedings.

Leniency programme

In order to provide companies engaged in cartel activity with an incentive to end their involvement and to inform the FCO about the infringement, the FCO introduced a leniency programme in 2000, which was revised in 2006.1 The revised programme largely reflects the European Commission's 2002 leniency notice.2 However, unlike the Commission's programme, the FCO's leniency programme is available both to companies and individuals. Within the FCO, the 11th division and the SKK are the main points of contact for companies and individuals wishing to cooperate with the authority to benefit from the leniency programme.

According to the FCO's revised leniency programme, companies involved in an illegal agreement can be entirely or partly exempted from a fine if they make a decisive contribution to uncovering a cartel and cease their anti-competitive behaviour. In particular, a fine will not be imposed if the offender:

  • is the first applicant to contact the FCO before it has sufficient evidence to obtain a search warrant;
  • provides the FCO with verbal and written information and, where available, evidence that enables it to obtain a search warrant;
  • was not the only ringleader of the cartel nor did it coerce others to participate in the cartel; and
  • cooperates fully and on a continuous basis with the FCO.

At the point at which it is in a position to obtain a search warrant, the FCO will still grant a cartel participant immunity from a fine if it:

  • is the first applicant to contact the FCO before it has sufficient evidence to prove the offence;
  • provides the FCO with verbal and written information and, where available, evidence which enables it to prove the offence;
  • was not the only ringleader of the cartel nor did it coerce others to participate in the cartel; and
  • cooperates fully and on a continuous basis with the FCO.

Even where the conditions for full immunity are not fulfilled, the fine may also be reduced if the offender makes a significant contribution to proving the offence by voluntarily revealing its knowledge and discontinues its participation in the cartel. To the extent that the above conditions are fulfilled, they will be taken into account by the FCO in setting the amount of the fine.

The submission of all relevant documents, together with an explanation of the information given will be deemed to help contribute to detection. Undertakings are also expected to encourage their members of staff to cooperate.

Individuals from a particular company will not be subject to individual fines if the company immediately and unreservedly cooperates with the FCO and contributes to uncovering cartel activity.

The revised 2006 leniency programme has for the first time introduced a marker system, under which applicants can place a marker with the FCO by declaring their willingness to cooperate.

The timing of the placement of the marker is decisive for the status of the application and the marker must contain basic information on the cartel. After having placed the marker, the applicant will be set a time limit of up to eight weeks for the submission of a complete leniency application.

The FCO will confirm immediately that a marker has been placed and that the application has been received. If the requirements for immunity are satisfied, the FCO will assure the applicant in writing that he or she will be granted immunity.

According to the FCO, cooperation with the authority can, in principle, be treated as confidential. In particular, the authority is committed to protect the identity of a 'whistle-blower' to the extent that this is possible. However, there are certain limits to this as the other cartel members will necessarily have access to the nonconfidential part of the FCO's file once a statement of objections is issued and could, in certain cases, be able to draw conclusions from the content of the file. In addition, where the FCO has no other evidence, it may have to rely on the testimony of the whistle-blower and will have to disclose this evidence to the other companies.

It should be noted that the FCO's leniency programme has no effect on civil antitrust litigation or on criminal investigations conducted by the public prosecution. Whistle-blowers can therefore still be subject to damage claims and individuals could face criminal prosecution where the case at hand involves bid rigging.

Unlike the European Commission, the FCO does not have a formalised settlement process. However, informal 'fast-track proceedings' used by the FCO in suitable cases can lead to a reduction of fines if the companies concerned admit their participation in illicit conduct and confirm that they will not appeal against a fining decision before court.

Damage claims

Until the entry into force of the Seventh Amendment it was very difficult, if not impossible, for customers of cartel members to successfully bring lawsuits against their suppliers before German courts for damages incurred as a result of the cartel conduct. A number of German courts have rejected such damage claims for various reasons.

In light of this, the Seventh Amendment has introduced new rules to facilitate private litigation in cartel cases.

As some courts have rejected claims of customers because the prohibition on anti-competitive conduct is not intended to specifically protect individual customers, the ARC now contains a clause entitling competitors and 'other market participants' to bring damage claims, provided that they are affected by the anti-competitive conduct. Although this clause is designed to catch direct customers of the cartel, it is unclear whether it also entitles indirect customers to bring damage claims.

The Seventh Amendment further facilitated damage claims by making decisions of the FCO, the European Commission and of competition authorities in other EU member states binding on the relevant court in so far as they find an infringement of the competition rules. Moreover, the ARC makes it more difficult for the defendant to invoke the 'passing-on defence'. The mere fact that the goods in question have been sold by the claimant no longer excludes the possibility of damage being caused at the level of the direct customer. However, where the defendant can demonstrate and provide full evidence that the claimant was in turn able to pass on the higher price to his customers, the claimant has arguably been compensated for any damage and will therefore not be in a position to bring damages.

In addition, the ARC contains a rule on statute of limitation for private antitrust litigation under which the statute of limitation is suspended if the FCO, the European Commission or competition authorities of other member states initiate proceedings.

These rules have led to an increase in private antitrust litigation in Germany and the Federal Court of Justice has recently confirmed that professional claimants can bundle customers' individual damage claims and commence proceedings against cartel members. (For further information, please refer to the chapter on private antitrust litigation in Germany.)

International cooperation

The FCO has always cooperated closely with the European Commission and the other member state competition authorities. Formal cooperation agreements of limited relevance are in place with France and the US.

With the introduction of Regulation 1/2003, cooperation between the European competition authorities has been formalised in the ECN. Corresponding rules have been added to the ARC by the Seventh Amendment, allowing the FCO to exchange information and evidence with the Commission and competition authorities in other member states for the purpose of the application of articles 81 and 82 of the EC Treaty. In essence, these rules mirror article 12 of Regulation 1/2003.


1 Available at .

2 Commission notice on immunity from fines and reduction of fines in cartel cases OJ C 45, 19 February 2002, pp3-5.

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”

Mondaq Advice Centre (MACs)
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
Check to state you have read and
agree to our Terms and Conditions

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.

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 by clicking here .

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.


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.