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Clifford Chance

Clifford Chance

Antitrust/FDI Insights

The new coalition agreement in Germany: More progress in competition law?

The coalition agreement of the new government in Germany has the title "Daring more progress. Alliance for freedom, justice and sustainability". What does it mean for the future of competition law in Germany?

The new German government of Social Democrats, Greens and Liberals recently presented its coalition agreement. 

With regard to German competition law, under the heading "Fair Competition", the coalition agreement expresses the intention to further develop the German Act against Restraints of Competition ("ARC").

A particular intention is to strengthen the power and competences of the German Federal Cartel Office ("FCO") even further, for example with regard to violations of consumer protection law.

Furthermore, the coalition agreement identifies an enforcement priority in relation to the food retail sector. According to the political intention of the coalition, antitrust law and merger control should be used to ensure fair consumer prices. In this context, the coalition agreement points out that the coalition will take action to prevent the sale of food below production costs which is currently only prohibited for undertakings with so-called relative or superior market power compared to small or medium-sized enterprises.

In relation to merger control, the coalition agreement intends to modify the ministerial authorisation procedure (Ministererlaubnisverfahren) which is a peculiarity of the German merger control regime. This procedure is designed as an exception and is rarely used in practice (to date, there have been only 23 ministerial authorisation procedures in Germany since 1974 ). If the FCO prohibits a concentration, the undertakings concerned may ask the German Federal Minister for Economic Affairs and Climate Action to ultimately allow the concentration based on the macroeconomic benefits of the merger and / or an overriding public interest outweighing the restraints of competition (e.g. securing a large number of jobs). In this respect, the coalition intends to include an adequate legal action against a ministerial authorisation and a new role in the authorisation procedure for the German parliament (Bundestag).

In addition, the coalition agreement refers to certain developments at the European level. In particular, the coalition agreement strongly favours the possibility of legal unbundling as a solution to competition problems in entrenched markets, irrespective of the provisions relating to an abuse of dominance. In this respect, the primary focus of the FCO is on large digital companies. Further, the coalition agreement intends to promote the European Commission's adoption of the Digital Markets Act ("DMA"). However, the coalition agreement also expresses support for national competition authorities in the Member States to have enforcement powers, alongside the European Commission (something that is not currently envisaged by the draft DMA legislation). Furthermore, the coalition agreement intends to advocate for merger control provisions at EU-level that prevent innovation-inhibiting strategic acquisitions of potential competitors (so-called killer acquisitions).

Overall, the coalition agreement remains somewhat vague in relation to the future of competition law in Germany. However, this is not unusual for a coalition agreement, as this is a political document which defines the lowest common denominator between the coalition partners. In practice, it remains to be seen how the coalition will ultimately implement its goals.