Ahead of the curve, Germany introduced its Section 19a of the Act against Restraints of Competition in early 2021. Under this provision, companies with “paramount significance for competition across markets” are subject to special supervisory rules. While this does not specifically apply to digital markets, the legislative intention was in fact to tackle anti-competitive practices by large digital players. You will find below all you need to know about this cutting-edge provision and its application so far.
Scope
The FCO will designate companies of paramount significance for competition across markets. Assessments will notably be based on the undertaking’s:
The designation lasts five years but can be challenged by the affected company before the German Federal Court of Justice.
Duties
Companies designated to be of paramount significance will in particular be prohibited from the following conduct:
Enforcement
German rules are enforced in two-step proceedings:
However, the FCO can initiate and run both investigations in parallel.
Once the FCO challenges the conduct of a designated company, it is for the company to prove that the conduct is objectively justified and, therefore, does not harm competition.
The FCO will not be able to impose fines initially but can issue declaratory orders and impose interim measures as well as commitments. The Federal Court of Justice will decide on appeals against these FCO decisions.
Case law: Overview on proceedings
So far, the FCO investigations have been targeted at large digital players. A detailed tracker of the past and current cases is available here.
Interplay with the DMA
Pursuant to the DMA, national authorities can still apply their national rules if they wish to take measures going beyond the DMA or take action against companies that are not “gatekeepers” within the meaning of the DMA. In several aspects, Section 19 a ARC is wider than the DMA. German rules do not link the “gatekeeper” status to quantitative thresholds but focus on companies’ activities on multi-sided markets and networks. The German list of abusive practices is shorter but non-exhaustive. It relies on broader terms and can cover practices outside the scope of the DMA.
However, these differences will likely not impact the first years of DMA enforcement as the FCO is currently focusing on large digital players which are also targeted by the DMA.
In addition, both the FCO and the European Commission will co-ordinate and collaborate within the ECN network and it may be that the scope of the German rules will become more independent in the longer term.
Legislation and Papers
A translation of Section 19 (a) ACR is available here.
The FCO and the German Ministry for Economic Affairs and Climate Chance also participated in the following publications:
The EU’s Digital Markets Act creates multiple digital rights (and obligations). Who is or will be affected by this next frontier of digital platform regulation in Europe? You will find all you need to know on our one-stop-shop dedicated to the DMA.
The DMA’s criteria for designating “gatekeepers” stipulate which companies and “core platform services” must comply with the DMA’s obligations. There are, however, a number of key questions concerning the DMA’s jurisdiction. Read further to see the breakdown of the DMA’s key criteria for gatekeeper designation.
The DMA sets out a host of obligations for designated gatekeepers. These can be categorised according to the aims of the DMA, including to ensure fair conditions of use; to prevent self-preferencing / leveraging; and to protect digital rights and improve access to data, among others.
As with the EU’s competition rules, the DMA provides for private enforcement as well as public enforcement by the Commission. The Commission ensures that gatekeepers comply with their obligations under the DMA.