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04 February 2021
The amendment is titled the "Act Amending the Act against Restraints of Competition for a Focused, Proactive and Digital Competition Law 4.0 and amending other competition law provisions" (the so-called 'GWB Digitalisation Act') and regulates issues relating, in particular, to the steady advance of digitalisation. It is essentially about the power of internet platforms.
Other important amendments relate to merger control. In the future, fewer mergers will have to be registered as the turnover thresholds have been raised. However, the Federal Cartel Office (FCO) will be able to require companies in certain sectors to notify mergers for merger control even below the turnover thresholds.
In the context of adapting competition law to the ongoing digitalisation, the change that has probably attracted the most attention is the introduction of Section 19a of the GWB. This now enables the FCO to preventively prohibit certain types of conduct by companies which have an overriding importance for competition across markets. This provision is aimed primarily at companies in the digital economy.
In order to account for the fast-paced nature of the digital economy, in the future the Federal Court of Justice will have direct jurisdiction for appeals against FCO decisions, pursuant to Section 19a of the GWB.
Regulations for companies with relative or superior market power now apply to all companies. The previously existing, so-called 'small and medium-sized enterprise provision' has been deleted. When measuring market power, the law now also provides that access to competition-relevant data and the question of whether a platform has so-called 'intermediation power' are to be considered. Such a key position in the intermediation of services can establish a dependency relevant under antitrust law. Further, companies may now have a claim to access to data.
In the future, mergers will be subject to merger control only if, among other things, one of the companies involved achieves annual sales of at least €50 million in Germany (previously €25 million) and another company involved achieves annual sales in Germany of at least €17.5 million, instead of the previous €5 million. In addition to an increase of the thresholds, which is intended to free up resources at the FCO and thus enable it to focus on the most important proceedings, companies in certain sectors of the economy can now be required to notify mergers even if they fall below the thresholds. This should prevent a company with market power from taking over small competitors or a company in an already concentrated market from buying up newcomers that are potentially dangerous to its market position.
In the context of the assessment of fines, the relevant criteria for an assessment are now specified in a (non-exhaustive) list and are thus intended to ensure greater legal certainty. Further, compliance measures can now be considered as a mitigating factor.
Pursuant to Section 81c(4) of the GWB, in the event of a violation of antitrust law, associations may now be fined up to 10% of the sales of their members which were active on the market affected by the violation. The prerequisite for this is that the association's conduct must be related to the activities of its members. Compared with the previous limit (a maximum fine of 10% of the association's total turnover), this represents a significant increase in the scope of fines.
In addition, pursuant to Section 81b(1) of the GWB, companies which are a member of the respective association will now be liable in the event of the association's insolvency. However, companies which were not involved in the infringement may be exempted from their payment obligation.
In implementing EU Directive 2019/1/EU (ECN+ Directive), the investigative powers of the antitrust authorities will be expanded. Any natural person can now be obliged to provide information or surrender evidence, subject to a fine. Therefore, company representatives no longer have a right to refuse to provide information. Only in subsequent proceedings against the natural persons will the use of evidence be prohibited.
For further information on this topic please contact Raoul Schätzler at Fieldfisher by telephone (+49 211 950 749 0) or email (firstname.lastname@example.org). The Fieldfisher website can be accessed at www.fieldfisher.com.
(1) For further information please see "Amendment of the German Act against Restraints of Competition".
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