Germany: New competition rules for large digital corporations

Jun 16, 2021 Benn-Ibler Rechtsanwälte

On the basis of the newly created Section 19a of the (German) Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, GWB), which came into force at the beginning of the year through the 10th GWB amendment (GWB-Digitalisierungsgesetz), the Federal Cartel Office (Bundeskartellarmt) is granted particularly enhanced abuse control. This is generally intended to enable more effective control and the containment of the power of large digital corporations such as Amazon.

The amendment complements and purposefully strengthens the existing German system of antitrust supervision and implements Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018.

The intention of the Federal Government was to adapt the existing GWB to the emerging challenges in connection with nationwide digitalization. In addition, the implementation of the EU Directive is intended to achieve an alignment of European standards in the area of competition control and thus a simplification of international work of the authorities.

The core of the amendment is Section 19a GWB with its stricter abuse control. Unlike before, the threshold for intervention under Section 19a (1) GWB is determined by "overriding cross-market significance". The standard is primarily aimed at companies which, in addition to a dominant position on the network markets pursuant to Section 18 (3a) GWB, also have the resources to assume a central strategic market position and thus exert influence on the legal position of third parties. Based on current market dominance, it is precisely future competition that is to be protected.

If a company is found to have a cross-market position under Section 19a (1) GWB, Section 19a (2) GWB sets out a number of new prohibitions that can be imposed by the Federal Cartel Office.

For example, companies can be prohibited from directly or indirectly hindering other competitors in a market where they can rapidly expand their position. Similarly, it is prohibited to establish and appreciably increase market entry opportunities by processing competitively sensitive data collected by the company.

BT-Drucksache 19/23492 XIX. GP- Gesetzentwurf der Bundesregierung (19.01.2021)