Germany Expands Competition Authority Powers with GWB Amendment
The German Competition Act has been amended to enhance the Bundeskartellamt's authority, allowing it to address competition malfunctions without prior legal violations.
06.11.2023 | German competition authority
The 11th amendment to the German Competition Act (GWB) has officially come into effect, significantly expanding the powers of the Bundeskartellamt, Germany's competition authority. This amendment allows the authority to take remedial actions following a sector inquiry, addressing cases of significant and ongoing competition malfunctions without needing to first prove a legal violation.
According to Andreas Mundt, President of the Bundeskartellamt, the new provisions enhance the agency's ability to tackle competition issues effectively. However, the authority must adhere to strict requirements when imposing measures, particularly in cases involving divestment, which is considered a last resort. The process will involve a sector inquiry that must be completed within 18 months, culminating in a final report that will guide potential follow-up actions.
Once a sector inquiry is concluded, the Bundeskartellamt can identify significant and ongoing competition malfunctions, which must have persisted for at least three years and be expected to continue for two more. The authority's previous powers must be deemed insufficient to rectify the situation, and the conduct of the involved parties must have significantly contributed to the competition issues.
In cases where remedial measures are necessary, the Bundeskartellamt can mandate actions to eliminate or mitigate the identified malfunctions. The amendment also introduces a new section aimed at strengthening the enforcement of the Digital Markets Act (DMA), granting the Bundeskartellamt the authority to investigate potential violations by designated gatekeepers.
Additionally, the amendment facilitates cooperation between the Bundeskartellamt and the European Commission in DMA-related proceedings and enhances private enforcement mechanisms. A notable change includes lowering the threshold for disgorgement of benefits, establishing a presumption that violations yield economic benefits of at least 1% of domestic turnover related to the violation, which can only be contested by the accused company.