The EU's Corporate Sustainability Due Diligence Directive (CS3D) stresses that industry initiatives (next to multi-stakeholder initiatives) can constitute helpful tools for allowing covered companies to fulfill their obligations to identify, mitigate, and prevent adverse impacts on human rights and certain environmental standards under the CS3D. Guidance (currently only available in German) recently published by the German regulator (Federal Office for Economic Affairs and Export Control, BAFA) responsible for the enforcement of the German Supply Chain Due Diligence Act (SDDA) serves, however, as a reminder that industry initiatives in which companies cooperate in the area of supply chain due diligence raise complex questions under applicable antitrust laws. Companies cooperating with competitors need, in particular, to be mindful of the strict standards as regards the exchange of sensitive information among competitors established inter alia by EU competition law (see recent judgment by European Court of Justice of July 29, 2024). Further, the new German Guidance reminds companies of the prohibition of boycotts under German competition law.
Indeed, companies required to comply with supply chain due diligence laws should recall that neither the national due diligence laws nor the CS3D provide for an antitrust exemption. In other words, the mere fact that companies intend to fulfill their obligations under supply chain due diligence laws does not provide a justification under applicable antitrust laws. In order to provide guidance, a number of competition law authorities have published or will publish guidance on the compliance with antitrust laws in the context of supply chain due diligence. Further, the German Federal Cartel Office published a case summary on 8 March 2022 of its assessment of a sustainability initiative to promote living wages in the banana sector.
The publication of the Guidance by BAFA is timely. While the future German Government has indicated that it wants BAFA to reduce its enforcement activities regarding the SDDA until the CS3D is transposed into German law by 2027, numerous companies cooperate voluntarily in industry initiatives designed to support human rights or environmental standards today.
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