Is “the wind of change” in German antitrust law about to come?

With the new team of Commissioners in charge at EU level and Teresa Ribera starting her new role as EU Competition Commissioner, the antitrust world is excited to see how things will evolve in the years to come. But changes are not only to be expected in Brussels, but potentially also at national level in Germany. The German Monopolies Commission has sat down and drafted some suggestions for the next German government. This post explores if we should expect to be blown away by the possibly upcoming changes.

The Monopolies Commission, which was launched in January 1974, is “a permanent, independent expert committee which advises the German government and legislature in the areas of competition policy-making, competition law, and regulation”. With the upcoming elections in February 2025 (read about the parties´ positions on antitrust law here), the Monopolies Commission wanted to use the chance to provide the new government with guidance in advance.

The suggestions – a quick summary

Overall, the Monopolies Commission provided nine suggestions and states that it sees competition as the key to free entrepreneurial spirit, innovation, welfare and employment. Broadly speaking, the suggestions can be divided in two sub-categories:

• The overall strengthening of competition for regaining competitiveness in Germany and Europe, and
• Suggestions for promoting further competition-oriented reforms for the energy, rail, postal and telecommunications sectors.

1^st suggestion: Focus on the EU single market

The first recommendation of the Monopolies Commission is to enhance competitiveness by completing the European single market. The Monopolies Commission believes that Germany and Europe are increasingly losing their competitive edge, particularly in key technologies such as AI, quantum computing and biotechnology. In the digital economy, rising barriers to entry are fostering a “winner-takes-most”-dynamic, leading to greater dependency. According to the Monopolies Commission, a key issue is the continued fragmentation of the European single market in many sectors, with varying national regulations and framework conditions hindering market access and expansion. To address this, the Monopolies Commission advocates for boosting competitiveness by lowering barriers to entry, especially by providing a reliable infrastructure and legal framework, a highly trained workforce and fair market conditions. Furthermore, state intervention should be limited to instances of market failure and even then, in a targeted, efficient and market-oriented manner.

Overall, this is in accordance with the European Commission´s agenda to strengthen European competitiveness, as only recently stated by Commission President Ursula von der Leyen.

2^nd suggestion: Principles for a modern competition and industrial policy

The Monopolies Commission considers targeted state intervention in the economy to be important as it can help to rectify market failure. The concrete recommendations include:

• Maintaining a strict control over state aid at the European level and introducing a competition check at the national level for all industrial policy measures,
• Utilizing competitive mechanisms to allocate funding in an effective, efficient and transparent manner,
• Strengthening the European dimension of industrial policy, e.g., by further developing and improving instruments like the IPCEI (Important Projects of Common European Interest),
• Investments in key areas such as digital economy, healthcare and clean tech and especially in the public infrastructure,
• Supporting research and giving researchers and experts access to all public data while accordingly planning the collection of new data.

These principles largely align with current practices while seeking to optimize them in one way or another. Given that these principles are rather vague, it remains with the legislator and the regulators to fill them with concrete content.  

3^rd suggestion: Combating the concentration of market power

In order to combat the concentration of market power, the Monopolies Commission suggests two main areas of action: Applying and shaping competition law effectively and breaking off concentrations of power (in the digital economy).

A main focus is on civil antitrust damages claims. The Monopolies Commission promotes that procedures must become more efficient and faster. In particular, the process for harmed companies and consumers to claim damages for antitrust violations should be simplified. To this end, plaintiffs should face fewer obstacles in proving the amount of damages. Additionally, jurisdiction should be centralized in a single federal court. It remains to be seen if and how this will be implemented by the (new) legislative.

Moreover, the Monopolies Commission wants to tackle concentrations of market power by implementing changes in merger control. It proposes to maintain the current turnover thresholds, and to broaden the scope of German merger control by removing or at least relaxing the requirement that the target company must have significant domestic activity for a transaction to be notifiable in Germany under the transaction value threshold. Furthermore, the Monopolies Commission proposes that Germany should campaign for the introduction of a transaction value threshold at EU-level. This contributes to the ongoing discussion on how to capture specific transactions under merger control without overreaching and while ensuring legal certainty.

Outlook and conclusion

Overall, the proposed changes might suggest more a breeze of change rather than an actual wind. However, some of the suggestions might spark the interest of a new German government. A first indication will be the publication of the coalition agreement of the new government, but time will pass until any plans are put into practice. And changes at EU-level usually also take some time, so I think it´s safe to say that we will not be blown away by major changes too soon.

Photo by Mark König on Unsplash