The Federal Cartel Office has begun operating the competition register. The competition register enables contracting authorities to check nationwide, by means of a single electronic query, whether a company has committed relevant legal violations and whether there are grounds for exclusion from public procurement procedures.
Successful franchisor-franchisee relationships which stand the test of time share the common traits of mutual respect, good communication, a convergence of interests, an appreciation of what drew the parties together in the first place and, perhaps most importantly, a willingness to make up. However, even the biggest and most successful franchise networks run into difficulties. This article considers common issues faced by well-established and successful franchisors and how to best handle or avoid them.
Franchising is a complex area of law and, aside from ensuring that a business is franchisable and ready to franchise, choosing the right franchise lawyer is a key strategic decision. The right specialist advice can maximise the chances for long-term success and minimise the risks of incurring big expenses and liabilities down the road. However, choosing a franchise lawyer who is a good fit can be difficult.
An amendment to the Act against Restraints of Competition recently entered into force, regulating issues relating, in particular, to the steady advance of digitalisation. Other important amendments relate to merger control. In the context of adapting competition law to the ongoing digitalisation, a notable change is that the Federal Cartel Office can preventively prohibit certain types of conduct by companies which have an overriding importance for competition across markets.
In two decisions, the Saarbrücken Regional Court rejected the liability of management bodies for cartel fines imposed on a company. Bathroom equipment manufacturer Villeroy & Boch claimed damages from four ex-board members with regard to a fine imposed by the European Commission for the claimant's participation in the bathroom fittings cartel (2010) and legal fees.
The Federal Cartel Office (FCO) has given further advice on the development of a business-to-business internet platform in a recently published case report on OLF Germany. The FCO's main concerns are the increased transparency between competitors on the platform and the transfer of information to OLF's shareholder Shell.
Under pressure from the Federal Cartel Office (FCO), guitar manufacturer Alhambra has distanced itself from influencing the selling prices of wholesalers and distributors. The FCO investigated Alhambra on the suspicion that it had exerted pressure on wholesalers and distributors to comply with minimum prices on the German market and urged distributors to raise their retail prices. The FCO has been active in the field of price fixing in recent years and this article provides a historic round-up of cases.
The Federal Court of Justice recently issued a decision on the statute of limitations for bid-rigging agreements. According to the court, the limitation period does not begin with the conclusion of the contract resulting from the anti-competitive agreement; rather, it begins later with the complete execution of the contract.
In Germany, any form of pressure not to reduce prices below a certain level (including the granting of advantages) is prohibited. However, the Dusseldorf Higher Regional Court has clarified that not every discussion on resale prices is prohibited. Even the termination of a supply relationship by the supplier due to the retailer's sales prices failing to meet its expectations is permissible. However, suppliers should beware: threatening a retailer with non-supply if they fail to enforce a certain price level is illegal.
In the wake of the COVID-19 pandemic, the franchise model will play an important role in economic recovery, helping individuals to take their first steps into business ownership, presenting opportunities to established operators to grow their portfolios and enabling brand owners to expand and regain or grow their market share. This podcast explores the key legal considerations for any business which is preparing to franchise.
The Federal Cartel Office (FCO) recently published its Annual Report 2019. This article highlights the topics which the FCO covered in its report, including COVID-19, cartel prosecution, merger control, the digital economy, the energy industry, trade, consumer protection and the Competition Register.
The Federal Cartel Office (FCO) is investigating whether Amazon influences pricing on the Amazon marketplace. According to the FCO, it received numerous complaints from merchants regarding Amazon's conduct. The investigation is one of a number of antitrust measures being undertaken in Germany with regard to powerful platforms (eg, Facebook and Booking.com). The German legislature has also become active and included special provisions for powerful platforms in the upcoming antitrust law.
The Federal Court of Justice recently decided in interim proceedings that Facebook must implement a Federal Cartel Office order of 15 February 2019 regarding the storage and processing of user data with immediate effect until the decision in the main proceedings. This decision is a milestone with respect to antitrust law limits for data collection through internet platforms for which user data is extremely important.
The IP Enterprise Court recently considered the impact of the EU Trade Secrets Directive on the law of breach of confidence – in particular, in the context of ex-employees who sought to franchise their services. The case confirms the limited impact of the directive on the pre-existing law on breach of confidence. However, it also indicates that the directive can be useful in helping to tease out the distinctions between confidential and non-confidential information.
In response to the COVID-19 crisis, the government has stated that new tools will be added to the UK insolvency framework, including a moratorium for companies to give them "breathing space from creditors enforcing their debts while they seek a rescue or restructure". The government is also expected to introduce a moratorium provision, introduce an exclusion of ipso facto clauses and suspend temporarily wrongful trading provisions. This article considers what the changes would mean for franchisors.
The antitrust authorities have signalled their approval for cooperation between competitors during the ongoing COVID-19 crisis. President of the Federal Cartel Office Andreas Mundt and EU Commissioner Margrethe Vestager emphasise that the authorities are open to direct communication. According to Mundt, even after the crisis, cooperation might be necessary to overcome economic difficulties.
In the wake of the economic turmoil caused by the COVID-19 crisis, a number of high-profile brands in the leisure and hospitality sectors have entered or will soon enter into formal insolvency processes. Although failure rates among franchises are typically lower than among non-franchised businesses, franchising will not be immune to this trend. It is therefore important that franchisors and suppliers ensure that they have the contractual rights to act quickly and effectively if the need arises.
In 2019 the new EU Trademarks Directive was implemented in the United Kingdom. As part of this implementation, numerous changes were made to the licensing provisions of the Trademarks Act. This article sets out the changes which are most significant for franchisors, including limited direct enforcement rights for non-exclusive licensees and enhanced direct enforcement rights for exclusive licensees.
A recent Federal Court of Justice decision clarifies open questions relating to cartel damages and simplifies the presentation of claims by plaintiffs, as it will no longer be necessary to present and prove that a cartel agreement had an actual impact on an acquisition transaction under the requirements of Section 286 of the Code of Civil Procedure. It is to be expected that the number of cartel damage actions pending before the German courts will continue to increase.
There is no one-size-fits-all plan for how businesses should respond to the COVID-19 crisis. However, this article provides some guidance for businesses which are primarily consumer focused and use franchise and distribution networks to sell their products and services in order to help them to respond to the challenges ahead and hopefully even emerge on a stronger footing than before.