Introduction

On 9 June 2021 the Federal Cartel Office (FCO) published its Standards of Effective Compliance. These are highly relevant right now because sufficient compliance measures have been legally recognised as a factor which can lead to reduced fines since the amendment of the Act Against Restraints of Competition earlier in 2021. The standards are therefore also valuable for the question of which measures are necessary to exonerate company management.

The FCO published the standards in the guidelines and the practice directions on how to apply for removal from the competition register due to self-cleaning.

Background

As of 25 March 2021 the FCO has maintained a competition register, which provides contracting authorities, sector contracting bodies and concession grantors with electronically retrievable information for procurement procedures and enables them to check whether a company will be excluded from the procurement procedure due to economic misconduct (for further details please see "FCO begins operating competition register: excluding companies from public procurement procedures").

Companies can request early deletion from the competition register because of so-called 'self-cleaning', which includes implementing sufficient compliance measures. Within the scope of a request for deletion, the FCO examines whether the compliance measures taken are sufficient.

Standards of Effective Compliance

In summary, the FCO has given the following indications as to which standards should apply for compliance measures to be effective:

  • Risk analysis – companies are asked to investigate prior misconduct and the reasons for it.
  • Adjustments to organisational and supervisory structure – the results of the risk analysis may require adjustments to the company's organisational and supervisory structure (eg, with regard to contacts of distribution staff).
  • Commitment of company management to legally compliant actions – the unambiguous commitment of the company's management to act in a legally compliant manner is an essential component of effective compliance measures. It is also relevant how management communicates this to employees.
  • Careful selection, training and monitoring of company employees – employees must be informed about the rules to be followed (eg, individuals should be briefed, guidelines should be issued and training measures should be taken). These trainings must be individually tailored and regularly repeated.
  • Dealing with tip-offs via a whistleblower system – the FCO has pointed out the importance of setting up a confidential whistleblower system to report infringements.
  • Adequate resources and competences of individuals responsible – according to the FCO, compliance measures can be effective only if the persons responsible for compliance are equipped with adequate resources and competences. Direct reporting to company management is also a key issue here.
  • Incentives for observing compliance requirements and punishment of violations – compliance with legal requirements should be actively demanded. Questions arise here, such as whether compliance with legal requirements is stipulated in employment contracts and whether violations are penalised.
  • Evaluation and adaptation of compliance measures – the FCO has emphasised that the required compliance measures may change over time. Accordingly, evaluations and adjustments are necessary.

Practical advice

The FCO had not previously issued any requirements for antitrust compliance standards. These standards were therefore expected, especially against the background of the new legal situation. As of 2021, sufficient compliance measures constitute a factor that may reduce fines. Therefore, if a violation does occur, compliance with these standards can lead to lower fines (ie, save companies millions of euros).

Against this background, the standards are also important for the question of which compliance measures a company should implement to prove that management have fulfilled their obligations.

So far, the standards are a draft for consultation. It should also be noted that the FCO has clarified that they were prepared for self-cleaning and not as general compliance guidance. However, they are still valuable for companies as the FCO has not yet published any other or more detailed standards.