Competition Law in Germany
Ensuring there is fairness in the market is a vital element of regulating it. Without fairness in the market companies could operate in any manner they wish which would be to the detriment of the consumer and to new firms entering the competition. For consumers, competition law ensures that firms operate in a responsible manner when it comes to advertising and promoting their product. Whereas, allowing new firms into the marketplace is good for innovation and thus ensures that all firms improve and provide the best service that they can. On this front, competition law is primarily based around two main areas: anti-trust and unfair practices.
Antitrust law is designed with the intention of preventing price-fixing, anti-competitive practices and the abuse of a dominant position within the marketplace. Allowing for cartels to develop results in newer firms being prevented from entering the market and long-term this inhibits innovation. Antitrust and prevention of cartels is seen as an important part of the work of the European Union. In Germany this area is regulated by the German Restraints of Competition Act and it works alongside European Union legislation on the issue such as Article 101 Treaty on the Functioning of the EU. This Act is quite detailed as it not only outlines the law relating to competition law but also the way cases are legislated for, the appeal process and what is meant by firms abusing their dominant position within the market.
At Schlun & Elseven we provide clarity when it comes to practices that could be considered anti-competitive. Our lawyers provide their expertise to companies when it comes to mergers and acquisitions. It is in such cases that claims of anti-competitive practices can be made. Therefore, it is invaluable to have a competition lawyer available to assist the process and ensure that everything is above board.
Accusations of Cartel Activities
The Act Against Restraints of Competition outlines in § 1 GWB that it is against cartel activities. The goal of such activities is defined under the Act as the following:
Agreements between undertakings, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition are prohibited.
Should your company face an investigation due to an accusation of cartel then it is advisable to contact our competition lawyers. During such an investigation, companies can face serious disruptions which they must be prepared for. Among the actions which the authorities can take during this time are the following:
- Compulsory interviews,
- Unannounced searches of premises
- Demands for certain documents,
- Seizure of electronic devices.
Should a company be found liable for cartel activity they can face huge fines. The amount fined will depend on the facts of the case with major sanctions reaching a maximum of 10% of worldwide turnover from the previous year. Liability can also lead to major fines on the individuals involved.
If you are aware of such an investigation into your company then it is important to have a German competition lawyer in your corner to provide the advice you need. Expertise in the field of competition law means that you can have your legal concerns answered and our experienced professionals can guide you through how to respond to such accusations. Contact our lawyers today using the form below this article.
The world of business is a competitive environment. However, this competition is also one based on rules and fairness. Without such rules, companies would be able to carry out any actions they wished which would contribute to a race to the bottom. By having rules about what are considered fair and unfair practices companies have to show they deserve to be at the forefront of the market based on their quality and what they offer rather than through unfair means. Furthermore, competition law in this area is in place to ensure that customers are not deceived through the advertising and labelling employed by companies. By establishing a competitive environment which is based on fairness, consumers can decide in a more informed manner which products they wish to purchase.
Unfair practices in the field of competition law include inaccurate advertising, false labelling on products/trademark infringement, product imitation among others. In this area, it tends to be the responsibility of individual firms to counter competitors they believe are engaging in anti-competitive practices.
Countering Unfair Practices
In order to counter these competitors, the first call of action is usually a “cease-and-desist” letter. Before launching this letter, it is advisable to avail of legal assistance and advice as to what can and what should not be in the letter. It is also worth establishing why such suspicions exist and what proof (if any) the company has against their competitor’s alleged unfair practice. Should this all be above-board, and the letter is sent, the competitor can accept or challenge the cease-and-desist letter. Should they provide a challenge to this letter through the claim that they are not engaging in such unfair practices, then it is possible worth considering bringing an injunction action against them as well as seeking a court order to force the competitor to disclose their records.
At this point in affairs the company should really have a competition law expert on board so as to establish what moves they may make. In that regard, contacting our firm directly will allow to outline the specifics of the case to a member of our competition law team. From there they can provide the necessary counsel for that specific situation.
Competition Law in Germany: Clients and Legal Expertise
Our multidisciplinary legal team provides legal assistance to a diverse range of both domestic and international clients. Here we have listed some of the services we offer in the field of competition law. Should you require more information about our services please contact our firm directly using our contact details below.
- Antitrust litigation
- Merger reviews and challenges
- Advice on German & European legislation
- Drafting of contracts
- False advertising investigations
- Advise on laws relating to specific business areas
- Arbitration services
- Cartel investigation and representation
- Aid in relation to government investigations
- Ensure that advertising is compliant with regulations
- Defence in claims of unfair practices
- Trademark and copyright enforcement