On 12 April 2016, the Cartel limb of the German Federal Supreme Court in Karlsruhe (the "Court") codifies its rules on concerted actions between market participants from an antitrust perspective.
Case No. KZR 31/14 involved a claim by a broadband cable provider (the "Plaintiff") that ten major public service broadcasters (the "Defendants") had been colluding in such a way as to restrict and distort competition within the market. Specifically, the Plaintiff alleged that the Defendants had exchanged commercially sensitive information, conspired to restrict their services to digital broadcasting, and agreed to terminate their existing contracts with broadband cable providers.
Despite there being no written contracts in evidence to this effect, the Court nevertheless opined that the contract terminations were unlawful under Sec. 1 German Competition Act, which prohibits agreements and concerted practices between undertakings which have as their object or effect the prevention, restriction, or distortion of competition.
In the view of the judges, a concerted action with anticompetitive effect will be automatically proven where competitors exchange information regarding their future market behaviour. Such conduct inevitably violates the principle of a competitive market in which each participant must decide independently on the market strategy pursued, and inescapably has a detrimental effect on the relevant market.
In its decision, the Court has limited the scope for inter-company information exchanges and adopted a presumption of detrimental competitive effect in such circumstances. As the burden of proof in such cases rests with the defendant, it remains to be seen what level of proof the courts will require from defendants in order to disprove an alleged violation of Sec. 1 German Competition Act.