Antimonopoly & Unilateral Conduct
Michael Dietrich and Marcel Nuys
Herbert Smith Freehills
Antimonopoly & Unilateral Conduct – Germany Herbert Smith Freehills
2 GCR Know-how
Antimonopoly & Unilateral Conduct
Michael Dietrich and Marcel Nuys
Herbert Smith Freehills
1 What is the legal framework governing unilateral conduct by
companies with market power?
The abuse of a dominant position is prohibited by sections 19 and 20 of the
Act against Restraints of Competition (ARC). These provisions apply to all
‘undertakings’ (for more details as to the addressees, see question 19) with
‘market power’. As explained below (see question 5), distinct levels of market
power exist under the German dominance regime:
• single dominance (see questions 6 and 18);
• collective dominance, where two or more companies have joint market
• a ‘superior’ market position in relation to other competitors or customers
and suppliers (relative dominance) (see question 6).
In addition, article 102 of the Treaty on the Functioning of the European
Union (TFEU) is directly applicable in Germany according to article 3(1) of
EC Regulation 1/2003 and section 22(3) ARC, though important differences
between article 102 TFEU and the German dominance regime remain, in
particular, regarding the addressees of the prohibition of prohibited unilateral
2 What body or bodies have the power to investigate and
sanction abuses of market power?
The prohibitions of sections 19 and 20 ARC are enforced by the Bundeskartellamt
(German Federal Cartel Office (FCO)) and the state cartel offices in
each of the federal states in Germany. The FCO is a higher federal authority,
which is assigned to the area of responsibility of the Federal Ministry for Economic
Affairs and Energy, and which is independent in its decision-making
role. The FCO has twelve decision divisions that are mainly organised according
to certain industry sectors (with three divisions exclusively dealing with
cross-sector cartel prosecution) and is primarily responsible for the enforcement
of the ARC in Germany. Only if the effect of an abuse is limited to
one federal state (typically in the supply of gas or energy) the respective state
cartel office will be responsible for intervening. However, since almost all
dominance cases have an effect in more than one federal state, most proceedings
are handled by the FCO.
3 What role does market definition play in market power
Market definition plays a key role in the assessment of market power. For
establishing a dominant market position – as a first step – the relevant
product and geographic market has to be defined. Then, as a second step,
the undertaking’s market position on the relevant market needs to be
4 What is the approach to market definition?
On the supply side, the relevant product market includes all goods or services
that are substitutable from a demand-side perspective. The relevant geographic
market covers the area where the undertaking concerned is active and to
which consumers can practically turn for alternative sources of the product
or service concerned.
For determining market power on the demand side, markets need to be
determined from a suppliers’ perspective.
5 How is market power or monopoly power defined?
As mentioned above (question 1), the dominance regime addresses not only
cases of single or collective dominance, but – under certain circumstances –
also scenarios where a company holds a ‘superior’ market position vis-à-vis
certain customers or suppliers referred to as ‘relative dominance’.
6 What is the test for finding of monopoly power?
Section 18(3) ARC sets out the criteria to be considered for the assessment
of dominance. The list is non-exhaustive and includes:
• market share;
• financial power;
• access to suppliers or markets;
• links with other undertakings;
• legal or factual barriers to market entry;
• actual or potential competition;
• the ability to shift its supply or demand to other goods or services; and
• the ability of the demand or supply side to switch to other suppliers or
As explained further under Question 8, in particular the market share is a
criterion of great practical importance.
Section 20(3) ARC prevents undertakings with relative market power
from wielding their position against small or medium-sized customers or suppliers.
According to section 20(1) ARC, relative market power is assumed if
such suppliers or purchasers of certain goods or services depend on an undertaking
in such a way that sufficient and reasonable possibilities of turning to
alternative customers or suppliers do not exist. The relative market power test
thus requires an assessment of market power in a bilateral relationship (ie, an
assessment of other options for the potentially dependent party). In carrying
out this assessment the criteria that are laid down in section 18(3) ARC (set
out above) should be consulted for guidance.
Section 20(3) ARC also prevents undertakings with relative market
power from wielding their position against small and medium-sized competitors.
To demonstrate the existence of market power in the sense of this
section it is sufficient to show that the dominant undertaking has a ‘superior’
Herbert Smith Freehills Antimonopoly & Unilateral Conduct – Germany
market position in relation to its competitors. Again, the criteria that are laid
down in section 18(3) ARC may provide initial guidance.
7 Is this test set out in statute or case law?
The test is set out in statutory law (see answers to questions 5 and 6).
8 What role do market shares play in the assessment of
Market shares play – besides other factors listed in response to question 6
– the most important role in determining whether an undertaking holds
a dominant position. They often are the starting point for an assessment of
market power. However, while market shares are a (strong) indication, they
do not constitute conclusive evidence of dominance. Even if the market share
threshold for a presumption of dominance (see question 9) is fulfilled, the
FCO needs to carry out a fully-fledged legal and economic analysis.
In this context and in light of recent case practice of the FCO, it is important
to note that the relevance of market shares as an indication for dominance
needs to be very carefully considered when it comes to platform or network
markets (eg, hotel booking platforms, food delivery or price comparison
websites) in particular. High market shares on two-sided markets have much
less importance compared to traditional markets without network effects. On
the one hand, markets with network effects are ‘tipping markets’ if and when
a product or a service has reached a critical mass, but this does not mean
that these markets are non-contestable despite high market shares. On the
other hand, on two-sided network markets the position and actual strength
of a party with high market shares depends on the reaction of the other side.
9 Are there defined market share thresholds for a
presumption of monopoly power?
The following thresholds indicating a rebuttable presumption of single or
collective dominance exist under the ARC:
• according to section 18(4) ARC, a single undertaking is presumed to be
dominant if it has a market share of at least 40 per cent; and
• according to section 18(6) ARC, several companies are deemed to be
dominant if three or fewer undertakings have a combined market share
of at least 50 per cent, or, alternatively, if five or fewer undertakings have
a combined market share of at least two-thirds of the relevant market.
10 How easily are presumptions rebutted?
In practice, the presumption of dominance plays a significant role in dominance
cases and is often difficult for the alleged dominant undertaking to
rebut. Where a presumption of dominance applies, it is much more difficult
for the allegedly dominant undertaking to defend its case, that is to
convince the FCO that the requirements for the existence of a dominant
position are nonetheless not fulfilled. As noted above, however, technically
the FCO has to fully investigate all circumstances in dominance cases for
the benefit of the defendant notwithstanding a presumption of dominance.
Only if the FCO does not find – after making full use of its investigative
powers – conclusive evidence either way as to the existence of dominance,
it may rely on the presumption.
With respect to collective dominance, the criteria for a rebuttal of collective
dominance are explicitly laid down in section 18(7) ARC: a rebuttal
either requires demonstrating that effective competition between the suspected
oligopolists exists, or proving that the members of the suspected oligopoly
are not immune against action from fringe competition in the market.
11 Are there cases where companies with high shares have
been found not to exercise monopoly power?
Yes. For example, a high market share held by a highly specialised small or
medium-sized undertaking (eg, suppliers in the automotive industry) does
not necessarily indicate a dominant position if barriers to entry are low or
where the demand side of the market has the ability to exercise a certain
level of countervailing buying power. Also, on bidding markets (ie, markets
where assignments for products or services are awarded for a certain period
of time) high market shares may have limited importance only. In addition,
highly volatile as well as network markets (see question 8) are also indications
for a lack of market power.
12 What are the lowest shares with which companies have
been found to exercise monopoly power?
The lowest market share based on which a company was found to be dominant
to our knowledge was 12 per cent. That case, which was determined in
1982, concerned regional markets for flowers that were highly fragmented
on the supply side, and, in addition, the dominant undertaking was found
to have superior financial strength and access to upstream markets for the
supply of products.
Normally, however, allegations of dominance have involved a market
share threshold of at least 20 per cent.
13 How important are barriers to entry and expansion for the
assessment of monopoly power?
Barriers to entry and expansion are of significant importance for the assessment
14 Can the lack of entry barriers negate a finding of monopoly
In some cases, low entry barriers were – amongst other criteria – considered
as an important factor to rebut a dominant position despite market shares
of 35-40 per cent.
15 What kind of barriers to entry are typically considered in the
German courts and the FCO have considered a wide range of legal or
de facto (economic) entry barriers ranging from languages and technical
specifications, intellectual property rights, licences and permissions from
authorities, vertical integration or long-lasting agreements with customers.
16 Can countervailing buyer power negate a finding of
Although countervailing buyer power is not explicitly listed in section 18(3)
ARC, it is clearly a significant argument to rebut an allegation of dominance
and has been successfully raised in a number of cases.
17 What if consumers can easily switch between suppliers?
As mentioned in question 6, the absence of lock-in effects on the demand
or supply side can be decisive for the degree of market power.
18 Are there any other factors that the regulator considers in
its assessment of monopoly power
Section 18(3) ARC sets out a non-exhaustive list of criteria for the assessment
of dominance (see question 6). Other criteria may be, inter alia, the
existence of a technological edge over competitors, R&D resources, pipeline
products or the strength of a brand. In addition, though at a very early
stage, the role of big data as a factor of dominance is under discussion.
19 Are any entities or sectors exempt from the antimonopoly
Sections 19 and 20 ARC apply to all ‘undertakings’. The definition of an
‘undertaking’ is construed broadly in accordance with the functional
approach, which includes all natural persons and legal entities, provided that
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4 GCR Know-how
they are involved in the performance of commercial activities (including state
authorities and state-owned companies as far as they perform a commercial
activity in a market).
There are no exemptions for particular sectors from competition law or
the dominance regime in particular, except for certain agreements between
producers of agricultural products (section 28 ARC). In addition, sectorspecific
provisions apply to certain regulated industry sectors including the
energy, railway, water and telecommunication sectors (see section 29 ARC).
20 Can companies be deemed to hold collective monopoly
Yes, see question 9.
21 Can the exercise of joint monopoly power or tacit
oligopolistic collusion be treated as an infringement?
The abuse of collective dominance constitutes an infringement by those
companies involved in the abuse (notably, an infringement does not require
that all of the collectively dominant undertakings are involved). Tacit collusion
among members of a dominant oligopoly mainly falls into the scope
of the cartel prohibition (section 1 ARC/article 101 TFEU).
22 Has the national competition authority published guidance
on how it defines markets and assesses market power?
The FCO has not published any guidance specifically dealing with the definition
of markets and has published very limited guidance on the assessment
of market power (only in relation to the procurement procedures for gas
and electricity). However, the FCO has published ‘Guidance on substantive
merger control’ which may be useful also in a dominance context as the
same market share presumptions apply in merger control cases with regard
to the creation or strengthening of a dominant position.
Abuse of monopoly power
23 Is there a general definition for what constitutes abusive
conduct? What does it entail?
Section 19(1) ARC constitutes a general prohibition of an abuse of a dominant
market position. Similar to the position under article 102 TFEU, ‘abuse’ is
understood as any practice of a dominant undertaking that relates to a market
(not necessarily the market where the dominance exists) on which competition
is already weakened due to the presence of the dominant undertaking,
and is capable – through recourse to methods different from those typically
applied in an environment with functioning competition – of restricting the
functioning of the remaining (weakened) competition.
24 What are the general conditions for finding an abuse?
See question 23.
25 Is there a list of categories of abusive or anti-competitive
conduct in the applicable national legislation?
Section 19(1) ARC serves as a catch-all clause and is complemented by section
19(2) ARC, which provides five types of specific abuses that apply –
despite their non-exhaustive character – in almost all dominance cases:
• according to section 19(2) No. 1 ARC, dominant companies may not
directly or indirectly exclude other undertakings in an unfair manner from
legitimate business activities, which are usually open to similar undertakings
(‘unfair hindrance’), nor treat them differently from similar undertakings
without any objective justification (‘discrimination’). While the prohibition
of unfair hindrance mainly protects competitors of dominant undertakings,
the prohibition of discrimination ensures that buyers and suppliers are protected
compared to their peer groups (see also question 44);
• pursuant to section 19(2) No. 2 ARC, dominant companies may not charge
excessive prices or demand unreasonable terms and conditions. The benchmark
for an abuse applied by the FCO is the ‘comparable (hypothetical)
market concept’. Accordingly, prices of the dominant undertaking in the
market concerned have to be compared with prices that would prevail in
markets with effective competition (see also question 43);
• according to section 19(2) No. 3 ARC, a dominant undertaking abuses its
dominant position if it demands less favourable payment or business terms
in one market in comparison to those that are applied by the dominant
undertaking on other comparable markets from similar customers;
• pursuant to section 19(2) No. 4 ARC, a dominant undertaking may not
refuse access to its own networks and other infrastructure facilities (eg, harbours,
cables or other networks constituting natural monopolies) thereby
excluding third parties from competition on related up- or downstream
markets. The ‘essential facility’ doctrine is described in more detail in question
• pursuant to section 19(2) No. 5 ARC, a dominant undertaking must not
demand commercial advantages (eg, better purchase prices from its suppliers)
by wielding its dominant position without an objective justification.
While the aforementioned examples require a dominant position, section
20 ARC prohibits certain types of abusive behaviour even below the level
• according to section 20(1) ARC, unfair hindrance or discrimination practices
of relatively dominant undertakings (see questions 1, 5 and 6) against
small or medium-sized undertakings that are dependent on the supply of
products or services from the dominant undertaking are also prohibited;
• a relatively dominant undertaking is prohibited from demanding advantages
by wielding its position vis-à-vis a dependent supplier undertaking (see
section 20(2) ARC). This provision plays an important role in the German
food retail sector where the FCO is attempting to reactivate the provision
in light of an increased level of concentration mainly on the demand side
(see question 61); and
• section 20(3) ARC particularly prevents undertakings with relative market
power from wielding their position against small and medium-sized
26 Is this list open or closed?
The list described in question 25 is open. For example, there is no general
statutory provision that explicitly addresses margin-squeeze practices (see further
question 41). However, it is accepted that these practices are principally
dealt with under section 19(2) No. 1 ARC.
27 Has the national competition authority published any
guidance on what constitutes abusive conduct?
28 Is certain conduct per se abusive (without the need to
prove effects) and under what conditions?
The FCO takes the position that with regard to certain categories of conduct,
in line with the practice of the EU Courts, a proof of anti-competitive
effects is not required. Such concept is applied in the case of conduct that
reveals in itself a sufficient degree of harm to competition, such as to render
an examination of its actual effects on the market redundant (eg, exclusivity
arrangements, behaviour of pricing below average variable costs). For example,
in its recent Deutsche Post AG case (see question 61) the FCO referred
to the 2014 Intel decision of the EU General Court and took the position
that loyalty rebates are a per se abuse where proof of concrete foreclosure
effects is not required. The FCO justified the approach on the basis of:
• the special responsibility of a dominant undertaking not to impair the
level of competition in the market (which is already restricted due to the
existence of a dominant undertaking); and
• the loyalty-enhancing effect of exclusive supply conditions in respect of
the remaining contestable portion of demand that produces an unacceptable
obstacle to access to the market for (potential competitors).
Herbert Smith Freehills Antimonopoly & Unilateral Conduct – Germany
Outside the aforementioned categories, the FCO has to show that the
conduct in question is capable of having restrictive effects on competition.
It is, in principle, not necessary to demonstrate that the abuse actually had
a concrete effect on the markets concerned.
29 To the extent that anti-competitive effects need to be shown
what is the standard to demonstrate these effects?
The FCO needs to run a fully-fledged analysis in order to demonstrate
‘beyond reasonable doubt’ that the conduct is capable of having or likely to
have restrictive effects on competition.
30 Does the abusive conduct need to harm consumers?
No. Sections 19 and 20 ARC primarily intend to protect the competitive
process in the market and not specific competitors, customers or suppliers.
Therefore, evidence that consumers have been harmed by the conduct in
question is not required. However, harm to consumers may be a factor taken
into account by the FCO when determining the level of fine.
31 What defences are there to allegations of abuses of
There are different defences against allegations of an abuse of a dominant
position. The undertaking may provide evidence to rebut the suggested abuse
or claim that the alleged abuse is objectively justified (see question 32).
32 Can abusive conduct be objectively justified?
An objective justification of an alleged abuse requires a balancing test that
weighs the interests of the dominant undertaking against (potential) negative
effects inflicted on competitors and suppliers or customers. The balancing
test has to be aligned with the aim of the ARC to ensure effective
competition and open markets (see question 30). In sum, interests invoked
by the dominant company need to outweigh the (potential) anti-competitive
effect caused by the potentially abusive conduct.
33 What objective justifications have been successful
It is established case practice that the protection of ‘legitimate commercial
interests’ might be an objective justification for an abuse. For example, it was
found that a dominant undertaking legitimately protected its commercial
interests when it refused to supply third parties in order to meet its own
captive demand due to existing capacity restraints.
For the sake of completeness, it should be mentioned that the decisional
practice in Germany demonstrates that it is difficult to justify abusive conduct
on the basis of the more economic approach in general or the efficiency
defence in particular. Further, in light of the 2014 Intel decision, it is unlikely
that the ‘as efficient competitor test’ will have a lot of relevance in the context
of allegedly abusive rebate practices. It remains to be seen if and to what
extent the as efficient competitor test might be of greater relevance with
respect to other exclusionary practices, such as predatory pricing (question
40) or margin squeeze (question 41).
34 How is the burden of proof distributed in an abuse
There is no established case law as to how the burden of proof is distributed
in dominance proceedings. However, as a general rule, the FCO has to prove
that the conditions for an abuse of market dominance are fulfilled. Further,
the FCO needs to demonstrate that the conduct is not objectively justified.
With regard to specific types of abuses (eg, discriminatory practices or
essential facility cases), the burden of proof is partially shifted to the company,
which needs to demonstrate an objective justification for its conduct.
35 What are the legal conditions to establish an abusive tie?
An abusive tie requires that:
• an undertaking is dominant with respect to one product;
• the supply of this product is subject to the condition that this customer also
agrees to buy another (separate) product;
• foreclosure effects are likely; and
• there is no objective justification for such behaviour.
36 What are the legal conditions to establish a refusal to
supply or refusal to license?
In principle, dominant undertakings are free to decide if and under what
conditions they are willing to supply products or grant licenses to third parties.
To establish an obligation to supply or grant to license, the claimant needs
to provide evidence that:
• the refusal would significantly harm competition on the downstream market;
• no viable substitute is available;
• the refusal is discriminatory; and
• there is no objective justification for the dominant undertaking’s refusal.
37 Do these abuses require an essential facility?
The abuse described under question 36 does not necessarily require an
38 What is the test for an essential facility?
A dominant undertaking might be required to grant access to its ‘essential
facility’ (eg, infrastructure facilities such as airports, harbours, railway
stations or other networks such as electricity, gas, or telecommunication
Pursuant section 19(2) No. 4 ARC, the relevant test is whether:
• a refusal to grant access would make it for legal or factual reasons impossible
for third parties to compete on related up- or downstream markets
(eg, telecommunications, energy or gas supply, rail or ferry transport); and
• there is any objective justification for a refusal.
In the case that access has to be granted, the dominant undertaking is
allowed to request an adequate fee for the shared use or access.
Note that intellectual property rights are not considered infrastructure in
the sense of section 19(2) No. 4 ARC. Therefore, the basis for a claim to grant
compulsory licences would be sections 19(1) or 19(2) No. 1 ARC.
39 What is the test for exclusivity arrangements?
An exclusivity arrangement is considered as abusive where a dominant
undertaking – without having an objective justification – either contractually
obliges a customer to obtain all or most of its demand of products or services
exclusively from that undertaking or induces the customer by economic
incentives (eg, by way of loyalty rebates – see question 42) to do so.
As mentioned (question 28), abusive conduct qualified as an exclusivity
arrangement is per se abusive without the need to prove anti-competitive
40 What is the test for predatory pricing?
Undercutting competitor’s prices in principle is not prohibited (even if
applied by a dominant market participant).
However, a pricing strategy that a dominant undertaking pursues to
force a competitor out of the market and to that end is willing to accept
short-term losses is prohibited. In such cases, the following rules apply:
First, pricing below average variable cost is presumptively abusive. Second,
pricing below average total cost but above average variable cost is abusive
if it is shown that this is part of a plan to eliminate a competitor. Third,
prices above average total cost are – in principle – not abusive. It is sometimes
argued that the aforementioned test in itself constitutes an as-efficient
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6 GCR Know-how
41 What is the test for a margin squeeze?
Like under EU law, a margin squeeze involves consideration of the margin
between the price charged on the downstream market by a vertically integrated
and – at least on the upstream level – dominant undertaking and the
price charged on the upstream market. Such conduct is found abusive if the
margin is either negative or not sufficient for the dominant company to cover
its product-specific costs in the downstream market. In exceptional cases, the
competitor’s costs might also be considered to reflect, for example, economies
of scale or network effects.
42 What is the test for exclusionary discounts?
The test for prohibited exclusionary rebates is whether a financial advantage
is granted for the purpose of inducing a customer to obtain also the contestable
share of demand from the dominant undertaking. That means that
competitors are unable to compete as they normally have to offer extremely
low prices to compensate a customer for the loss of additional rebates in the
case of switching the contestable share of demand to a competing supplier.
In accordance with the EU practice, loyalty rebates are per se abusive. The
same holds true for retroactive rebates. With respect to other kinds of rebates
(see question 49) it needs to be assessed on a case-by-case basis whether they
have a loyalty enhancing effect.
43 Are exploitative abuses also considered and what is the
test for these abuses?
Exploitative abuses by charging excessive prices or demanding unreasonable
terms and conditions are prohibited (see section 19(2) No. 2 ARC). The
benchmark for an abuse applied by the FCO is the so called ‘comparable
market concept’. Accordingly, prices charged by the dominant undertaking
in the market concerned have to be compared with prices that would prevail
in structurally comparable markets with effective competition. An abuse can
be assumed if the prices charged by the dominant undertaking in the relevant
market significantly exceed the prices in comparable markets.
Before the prices are compared, a three-step procedure applies: First, in
order to better reflect the characteristics of the market where the undertaking
is dominant, the prices charged on the comparable market need to be
adjusted by premiums and discounts. Second, as such adjustments naturally
bear a certain amount of inaccuracy, a ‘safety margin’ is applied which varies
from case to case to prevent over-enforcement. Finally, the prices charged by
the dominant company in the relevant market need to exceed significantly
the prices in the comparable markets (insofar that an additional premium
applies to establish an abuse).
44 Is there a concept of abusive discrimination and under what
conditions does it raise concerns?
In principle, unlawful discrimination may arise if a dominant undertaking
applies different conditions to similar customers for equivalent transactions,
provided that there is no objective justification for such dissimilar treatment,
and some customers are placed at a competitive disadvantage relative to
other customers to such a degree that it creates a risk of foreclosing equally
45 Are only companies with monopoly power subject to special
obligations under unilateral conduct rules?
Companies with relative market power may also fall within the scope of
certain unilateral conduct rules as described in questions 5 and 25.
46 Must the monopoly power exist in the same market where
the effects of the anti-competitive conduct are felt?
No. For example in relation to margin squeeze (see question 41), competition
is restricted on a downstream market where the dominant undertaking does
not need to have any market power.
Sanctions and remedies
47 What sanctions can the national competition authority
impose or recommend?
If the FCO determines that an abuse of a dominant position has occurred,
it issues a cease-and-desist order or determines that a certain conduct constituted
an abuse if the abusive conduct has been terminated before (the end
of) the investigation but where the risk of repetition remains in the future. In
clear-cut cases, in particular with regard to per se abusive conduct (see question
28), the FCO may also impose an administrative fine.
48 How are fines calculated for abuses of monopoly power?
The level of the fine that can be imposed is up to €1 million for private
In the case of undertakings, in relation to intentional infringements fines
may amount up to a maximum of 10 per cent of the worldwide group turnover
in the last financial year prior to the decision (5 per cent for negligent
infringements) (the ‘statutory maximum fine’).
For purposes of calculating corporate fines, the FCO has published
revised fining guidelines in 2013. According to these guidelines, the authority
determines the individual framework marking the upper limit of the payable
fine. The upper limit may be the statutory maximum fine or 10 per cent of
the turnover generated through the abusive conduct during the infringement
period and multiplied by a factor reflecting the companies’ total group turnover
(the ‘affected turnover’), as long as the affected turnover does not exceed
the statutory maximum fine. If the individual framework for fines exceeds the
statutory maximum fine, the latter prevails and constitutes the absolute limit.
Once the framework for fines has been determined, the FCO identifies the
individual mitigating and aggravating factors and infringement-related criteria
(eg, type and effect of the infringement) to set the concrete fine within
the individual 10 per cent statutory maximum framework for fines.
The new guidelines have been adopted, inter alia, to put greater emphasis
on the principle of proportionality since in previous cases higher fines have
been imposed on one-product companies in comparison to multi-product
companies. The reason is that in case of a one-product company, the affected
turnover represents the entire turnover whereas in a multi-product company
the affected turnover may be only a small share of the overall turnover.
49 What is the highest fine imposed for an abuse of monopoly
In 2007, the FCO imposed the highest ever fine in an abuse case totalling
to €216 million in a case concerning the abuse of market dominance on the
markets for television advertising. Two German private television groups hold
a combined share of approximately 80 per cent and offered specific and retroactive
rebates to media agencies if they spent a minimum proportion of their
advertising budget for commercial air time on these channels. This practice
had the effect that the contestable share of advertising budgets of media agencies
were enticed away from smaller television companies because they could
not afford to compensate losses incurred if media agencies decided to switch.
Hence, the high market shares in combination with the rebates effectively
foreclosed the television advertising market for smaller competitors.
50 What is the average fine imposed over the last five years?
Over the past five years, the FCO – based on publicly available information
– has imposed fines for abuse of dominance in only one case, namely
against SodaStream GmbH (€250,000). In an investigation against EDEKA
that started as an administrative fine proceeding, the FCO decided to switch
to a pure administrative proceeding and drop any fines due to the novelty and
complexity of the legal issues involved.
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51 Can the national competition authority impose behavioural
The FCO may impose all measures that are necessary and appropriate to
effectively bring the infringement to an end (ie, structural or behavioural
remedies, or both). However, structural measures may only be imposed if
there are no behavioural measures sufficiently addressing the abusive conduct
or the behavioural remedy already constitutes a heavier burden for the
52 Can it impose both negative and positive behavioural
53 Can the national authority impose structural remedies?
Yes, see question 51.
54 Can companies offer commitments or informal undertakings
to settle concerns?
Offering commitments may be a successful remedy to deal with competition
concerns. If the FCO finds that the commitment offered would sufficiently
remedy the abusive behaviour, it may declare such commitments
to be binding for the addressee of the decision.
55 What proportion of cases have been settled in the last five
There is no public data for a reliable assessment. Often, cases are not made
public, in particular when the case has been settled.
56 Have there been any successful actions by private
Section 33(1) and (2) ARC allow follow-on actions to seek compensation
for damages inflicted by an abuse of dominance. Moreover, companies can
require dominant companies to provide products or services if the legal
requirements are fulfilled. Also, interim measures are available to an affected
party. The respective court may issue a preliminary injunction to protect the
claimant in the case of an urgency that requires immediate relief to avoid
57 Can a company appeal a finding of abuse?
58 Which fora have jurisdiction to hear challenges?
Decisions of the FCO can be appealed to the Higher Regional Court of
Düsseldorf. In civil litigation against a dominant undertaking, the usual rules
of civil procedures apply.
A further appeal against a decision of the Higher Regional Court of
Düsseldorf to the Federal Supreme Court is only permitted on important
or novel questions of law or a successful non-admission complaint to the
Federal Supreme Court.
59 What are the grounds for challenge?
A decision by the FCO is subject to full review by the Higher Regional
Court of Düsseldorf in fact or in law, or both.
60 How likely are appeals to succeed?
Only a few dominance cases have been appealed to the Higher Regional
Court in Düsseldorf (or the former Court of Appeals in Berlin), and only a
small percentage has been successful. There is no general rule of thumb. All
cases need to be assessed on a case-by-case basis.
61 Summarise the main abuse cases of the last year in your
Main abuse cases in the last year include the following:
• Google/VG Media: In September 2015, the FCO decided not to open
formal proceedings against Google based on a complaint filed by VG Media,
a German copyright collection society. VG Media’s complaint concerned
Google’s reaction following an arbitration court case in which VG Media
accused Google – on behalf of several authors and publisher – of breaching
new German copyright rules that were introduced on 1 August 2013.
Under these rules, publishers may prohibit search engines and similar services
from using their content (ie, articles or other work products), except
individual words or tiny text fragments (‘snippets’). As a consequence of
the pending arbitration with VG Media, Google announced that it would
display search results relating to the websites of authors and publishers represented
by VG Media in a reduced form only unless they agreed to a
free-of-charge use of their work. Google justified this by claiming that
otherwise it ran the risk of being sued for breaching copyright rules. The
FCO determined that Google’s behaviour is objectively justified. Even as a
dominant company, Google cannot be forced based on competition law to
bear a considerable risk of damages in the case of an unclear legal situation.
• DPAG/Bundeskartellamt: In July 2015, the FCO concluded its abuse proceedings
against Deutsche Post AG (DPAG) finding that DPAG had abused
its dominant position in the market for the provision of postal services. As
a dominant postal services provider, DPAG is obliged to grant competitors
access to its mail delivery network for adequate consideration. The FCO
found that DPAG agreed on discounted letter prices with four large volume
mailers that were below the prices a competitor had to pay for access
to the mail delivery network. The FCO concluded that this constituted an
abusive margin squeeze; DPAG excluded competitors from the market as
they were no longer able to compete effectively for the large customers in
question (see also question 41). The FCO further found that DPAG implemented
an abusive loyalty rebate system as discounts depended on a certain
minimum target usage of DPAG’s mail delivery network. The allegedly
restrictive contracts all expired in 2013. Nevertheless, the FCO issued an
infringement decision (but without imposing a fine) because DPAG continued
to maintain during the course of the investigation that the practices
were legitimate. DPAG has appealed the decision to the Higher Regional
Court of Düsseldorf.
• EDEKA/Bundeskartellamt: After several years of investigation, the FCO
rendered, in July 2014, a decision on the alleged abuse of buyer power
by EDEKA following the acquisition of Plus, a rival retailer, in 2009. In
its decision, the FCO found that EDEKA had abused its buyer power on
the procurement market for sparkling wine by demanding excessive and
unjustified rebates from its suppliers. At the heart of the proceedings was the
question what is required for the FCO to find that a retailer has a ‘superior’
market position and what constitutes an abuse of that position (see question
25). The final decision has been appealed by EDEKA and is currently
pending at the Higher Regional Court of Düsseldorf. The final judgement
is expected by the end of 2015.
62 What is the hot topic in unilateral conduct cases that
antitrust lawyers are excited about in your jurisdiction?
Highly topical is the FCO’s milestone decision on the alleged abuse of
buyer power (see question 61). The decision is based on several novel concepts
aimed at large retailers in Germany. If confirmed upon appeal, the
decision would have a far-reaching impact on the retail and other industry
sectors (eg, the automotive industry).
63 Are there any sectors that the national competition
authority is keeping a close eye on?
The FCO is keeping a close eye on the food retail industry.
Antimonopoly & Unilateral Conduct – Germany Herbert Smith Freehills
8 GCR Know-how
Operating from over 23 offices across Asia Pacific, EMEA and North America, Herbert Smith Freehills is at the heart of the new global business landscape
providing premium quality, full-service legal advice. We provide many of the world’s most important organisations with access to market-leading dispute
resolution, projects and transactional legal advice, combined with expertise in a number of global industry sectors, including energy, natural resources, infrastructure
and financial services.
Dr Michael Dietrich specialises in all aspects of European Union and German
competition law, with particular expertise in compliance matters, cartel investigations,
competition litigation including follow-on damages and strategic
competition advice, particularly on joint ventures and mergers. Michael has
been involved in a very significant number of cartel investigations of the EU
Commission and the Federal Cartel Office ever since the start of his career.
Currently he advises clients in several investigations pending at the Federal
Cartel Office and the Court of Appeals in Düsseldorf. In the largest ever
investigation of the Federal Cartel Office against companies in the German
food retail sector, which has been partially concluded very recently, he has
represented one of the key companies involved and has managed to reduce
the level of fines very significantly also compared to other participants. His
industry focus includes consumer products, leisure and retail, media, logistics,
automotive, building materials and public banking. He has extensive experience
in working with clients in China, Japan and the US.
Dr Marcel Nuys specialises in all aspects of European Union and German
competition law, with particular focus on cartel investigations, competition
litigation including follow-on damages cases, merger control proceedings
and distribution law. Marcel regularly advises German and international clients
in complex merger control cases on national and EU-level. In addition,
Marcel represents companies involved in cartel activities and advises commercial
customers regarding follow-on damages claims. His industry focus
is on automotive, consumer products, retail, logistics, building materials and
the public and private banking sector. He regularly works with clients from
Japan and the US.
64 What future developments can we expect?
Dominance cases have steadily moved up on the enforcement agenda of
the FCO over the past few years. The FCO has initiated a number of new
proceedings in important industrial areas (eg, food retail, e-publishing, postal
services – see question 61). In addition, the Working Group on Competition
Law met at the invitation of the FCO in October 2015 to discuss ‘Internet
platforms in the digital economy: competition law, privacy and consumer
protection’. The working group not only addressed merger control aspects but
also dominance issues. It can thus be expected that dominance in the digital
industry (including market with network effects – see questions 8 and 11)
will be subject to close scrutiny in the future.