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The 11TH Amendment To The ARC and Germany’s New Competition Tool

 |  May 11, 2023

By: Florian Wagner-von Papp (D-Kart)

On 5 April 2023, the German government, represented by Robert Habeck (Vice Chancellor and Minister for the Economy and Climate Protection, The Greens) and Marco Buschmann (Minister for Justice, Liberal Democrats (FDP)) unveiled the Government Bill (RegE in German) to reform the Act against Restraints of Competition (ARC) in a press conference [in German, but subtitles can be auto-translated]. In the press conference, Vice Chancellor Habeck called the reform the ‘biggest reform in decades’, ‘perhaps the biggest reform since Ludwig Erhard’. Even if one does not want to go as far as that, it is clear that the planned reforms are not just tinkering around the edges. Prof. Dr. Florian Wagner-von Papp explains the planned reform here.

The content of the Government Bill can be summarized under the following three headings.

  1. Strengthening sector enquiries by introducing, in a Draft-§ 32f ARC (Act against Restraints of Competition = Gesetz gegen Wettbewerbsbeschränkungen, GWB),
    • the power for the Bundeskartellamt to order remedies including divestitures, or to accept commitments, where the sector enquiry finds a ‘substantial and persisting malfunctioning[1] of competition’ which may, but need not result from an infringement of competition law (similar to UK Market Investigation References in the case of adverse effects on competition or the EU plans for a New Competition Tool), and
    • the power for the Bundeskartellamt to impose on undertakings the obligation to notify all future concentrations where the sector enquiry finds that there are indications that such future concentrations may significantly impede effective competition, provided that the acquirer has a domestic turnover of more than €50m and the target has a domestic turnover of €500,000 in the last business year;[2]
  2. strengthening the power to disgorge economic benefits by adding two presumptions to the current text of § 34 ARC: first, the presumption that an infringement of competition law results in a gain to the infringer, and, second, the presumption of a minimum gain in the amount of one per cent of the relevant turnover; and
  3. providing for powers for the Bundeskartellamt to support the Commission in the enforcement of the DMA as well as introducing rules to enable and facilitate private enforcement of the DMA…