10th GWB Amendment and Hangtown Fry

The 10th amendment to the Act against Restraints of Competition (‘GWB Digitization Act’) not only deals with the regulation of the digital economy under competition law. In addition to changes due to implementation of the European ECN+ Directive, changes were made in all areas of competition law.

Regulation of digital groups

The competition authorities’ effort to regulate digital corporations is reminiscent of the hangtown fry in California in the 1850s: with the complicated last meal, execution was delayed for months because oysters and bacon had to be brought in first, opening up the possibility of escape. Similarly, competition regulation of undertakings in the digital markets can come to naught because the subject matter of the proceedings no longer exists in its competition-relevant form.

Therefore, the 10th GWB amendment strengthens the possibility of ordering interim measures. In addition, a new standard concerning undertakings in the digital markets with overriding cross-market significance is introduced to enable early monitoring. In addition, there is a clarification that potentially harmful effects of the abuse of a dominant undertaking in the digital markets are sufficient. Not only the abuse of market power by undertakings in the digital markets is redefined, but also access to their data. Also, in order to be able to intervene at an early stage in the event of a tipping process to the market dominator, a right to access data is provided. Finally, the provisions on market-dominant companies are no longer intended to provide protection only for small and medium-sized enterprises, but for all companies – including large corporations.

ECN+

The reason for the amendment was the implementation of the ECN+ Directive. The core of the directive is to improve cooperation between the antitrust authorities of the European Union. Although there will be no significant changes to the content of the authorities’ powers in Germany in this regard, the previous provisions of the ‘Bundeskartellamt’ will be unbundled, as it were.

An end to the ‘punitive’ fines?

Due to the change of system between the Bundeskartellamt’s fine assessment and the Düsseldorf Higher Regional Court (‘Oberlandesgericht Düsseldorf’), appeals against fines were at times not pursued further because the Düsseldorf Higher Regional Court imposed (even) higher fines. With the new legal framework for fines provided for in the 10th GWB amendment, there is hope that harmonization will be achieved and that in the future legal protection will not be neglected for economic reasons.

Raising the threshold for merger control

If competition authorities are to increasingly regulate the digital economy, they must be relieved elsewhere. Such relief is to result in merger control by raising the second domestic threshold to EUR 17.5m. According to the authors of the amendments, this will reduce the number of mergers requiring notification by around 1,500, which will increase capacities elsewhere.

Cartel damages

It is unfortunate that the amendment only makes adjustments in the area antitrust damages. The amendment does not address the core problem of damage assessment. There is no commitment to the free estimation of damages or a presumption of damages, only a clarification of the retroactive effect of information claims and the possibility for courts to use an expert to assess documents that have been requested.

No new powers

In the run-up to the amendment, it was suspected that the Bundeskartellamt would gain further powers, for instance for consumer protection or data protection. However, no such powers were given.

  • Dr. Thomas Thiede LL.B., LL.M.

    • German and European competition law / Merger control
    • Lawyer