German Ministry for Economics publishes study on modernizing the competition rules on unilateral conduct of companies with market power (2)

We have already featured the release of this report of September 4, 2018, dealing with the digital economy in our news section, see here [Link zur früheren Meldung auf unserer Webseite).  In the meantime, Silke Heinz has summarized the 187 page report and analyzed some of the key messages it provides in a Kluwer Competition Law Blog, see here.

She comments on some of the proposed legislative changes, including the prohibition of unjustified prevention of multihoming and platform switching absent dominance and relative market power in markets characterized by high network effects and prone to tipping, and the changes to merger control rules to allow to prohibit large digital companies systematically buying start-ups as potential future rivals at an early stage of their development.

European Commission opens formal investigation into German car manufacturers

On September 18, 2018, the European Commission has opened formal antitrust proceedings against German car manufacturers BMW, Daimler and VW, including VW, Porsche and Audi, for possible collusion to avoid competition on the development and roll-out of technology to clean the emissions of petrol and diesel passenger cars in the EEA (see press release here.

The Commission dropped other discussions among these manufacturers on technical cooperation from the scope of its investigation.  Originally, in 2017 both the FCO and the European Commission reviewed information on the allegations, before the European Commission carried out inspections. Silke Heinz is quoted on the opening of proceedings in Global Competition Review, see here.

German Ministry for Economics publishes study on modernizing the competition rules on unilateral conduct of companies with market power

The Ministry has published the study on September 4, 2018, see here.
The study deals with the question whether there are gaps in the current antitrust rules on unilateral conduct of dominant companies or companies with market power in the digital industry, and if yes, how to close these in Germany.  The study provides a comprehensive overview and excellent analysis of a very up-to-date discussion among antitrust lawyers and economists, as well as some interesting recommendations.  One focus is whether the already existing possibility for the authority in Germany to intervene even below the level of dominance should be expanded, for example in order to prevent the tipping of a digital market.   Silke Heinz is quoted on the study in the Global Competition Review, including on recommended changes to merger control rules, see here.

Joint draft guidelines for new transaction value threshold in Germany and Austria

On May 14, 2018, the competition authorities of Germany and Austria have published joint draft guidelines on the new transaction value merger thresholds for public consultation, see here.

Comments can be submitted by June 8, 2018.  The draft concerns the new merger control thresholds introduced in 2017.  These provide that a transaction may be notifiable if the value of the consideration for a transaction exceeds € 400 million in Germany or € 200 million in Austria, respectively, and the target has significant domestic activities, even if the other turnover-related thresholds are not met.  The draft guidelines deal with interesting issues, such as determining the consideration value (including which point in time is relevant and how to determine the value in case of earn-out clauses or other conditional or future payments), when domestic activity is considered as significant, including in digital markets and concerning R&D activities, as well as other questions.  Silke Heinz has published a blog on the draft guidelines on Kluwer Competition Law Blog, see here.

Bundeskartellamt refers metal packaging cartel case to European Commission to avoid another sausage-gap-like scenario

The Bundeskartellamt (“BKartA”)has for the first time referred an ongoing cartel investigation to the European Commission within the framework of the network of European Competition Authorities (“ECN”) on April 27, 2018 (see here). The BKartA had inspected several metal packaging manufacturers in Germany in March 2015 following an anonymous tip-off, and has since then pursued national proceedings.  It is an unusual step to refer a case after such a long duration of proceedings at national level.  Typically, the case allocation within the ECN takes place at the beginning of an investigation.  The BKartA gave the following reasons: (i) increasing evidence that the cartel was not limited to Germany but also concerned other EU Member States, and (ii) that several companies subject to the proceedings undertook internal restructuring prior to the new legal regime that took effect in mid-2017.  To these restructuring measures the former legal rules would still apply, which might render sanctioning these companies impossible.  This point refers to the so-called sausage gap in German competition law, which made fining of legal successors difficult or sometimes impossible.  The new law provides for group liability and full liability of the “economic” successor of a cartel participant (i.e. not limited to the value of the cartel participant’s assets).  Interestingly, the BKartA now seems to confirm that the contingent liability rules aimed at covering the interim period between old and new law would not apply to restructuring measures carried out prior to mid-2017 when the new law took effect.  In light of this, the BKartA has indeed followed its announcement to refer sausage-gap-like scenario cases to Brussels.  Silke Heinz is quoted on this step in the Global Competition Review, (see here).

Bundeskartellamt launches sector inquiry into online advertising

The Federal Cartel Office announced on February 1, 2018, to launch a sector inquiry into online advertising (here).

This in line with the FCO’s focus on competitive conditions in the digital economy and big data. The FCO follows the French competition authority that started a separate online advertising sector inquiry in 2016 and has recently published its results. Silke Heinz has published a blog on the FCO’s sector inquiry and its background on Kluwer Competition Law Blog (see here).

Federal Cartel Office publishes preliminary assessment in Facebook probe

On December 19, 2017, the FCO has published a press release (here) and a background paper (here), outlining the preliminary assessment in the Facebook proceedings: Facebook is considered dominant in the German social media network market and to abuse its position through collecting and combining user data from third-party sources in a very broad way.

The allegations focus on collecting user data from third-party websites or Apps with a Facebook like button, even if the user does not click on it.  The FCO finds that this practice infringes data protection laws, and Facebook’s general t&cs therefore violate the legal principles on general terms and conditions, which in turn qualifies as an abuse of dominance.

The fact that the FCO publishes a background paper pending proceedings is unusual.  It may be explained by the great public interest in these proceedings, in which the FCO explores new territory.  In addition, the FCO thereby puts some public pressure on Facebook.  The proceedings raise the question whether antitrust law is the proper tool to tackle data protection law infringements.  Silke Heinz is quoted on this in Global Competition Review, see here.

Bundeskartellamt publishes background paper on innovation

The Bundeskartellamt has published a background paper on innovation and related challenges in the antitrust law practice in October 2017, see here.

The paper covers economic and legal aspects of innovation across various areas of antitrust analysis, a hotly debated topic in recent months, notably after the European Commission’s Dow/DuPont merger decision. Silke Heinz has published a blog on the background paper on Kluwer Competition Law Blog, see here.