Competition law warnings are an essential instrument of fair competition. They are used whenever a competitor engages in competition law misconduct (in Germany). Such misconduct is possible in the areas of intellectual property protection and unfair competition. If there is a violation of competition law, the competitor can be warned—a warning results in several claims for the injured party.
However, before such a warning is issued, it makes sense to have it checked whether there has actually been a violation of competition law. Ideally, such an examination is carried out by specially trained lawyers. At Schlun & Elseven, our lawyers have extensive experience and in-depth knowledge of all the relevant legal rulings and regulations in this context and offer leading legal advice on competition law warnings and related issues in Germany.
The Purpose of Competition Law Warnings in Germany
Such warnings are used in the B2B sector to stop alleged competition law misconduct. They are, therefore, a formal request to the respective company or individual from whom the respective warned behaviour originates. The aim is to stop the offending conduct and to refrain from it in the future. For example, if a competitor’s product is found to be counterfeited on the market, the competitor will be sent a competition law warning and asked to stop distribution and destroy the existing counterfeits. The infringing company or individual is requested to submit a cease-and-desist declaration in which they undertake to refrain from the offending conduct in the future. If this request is not complied with, it is possible to take legal action, in the course of which claims for damages can also be asserted.
Grounds for Issuing a Cease-and-Desist Letter in Germany
In principle, a cease-and-desist letter can always be issued if there has been a violation of competition, i.e. if the Act against Unfair Competition (UWG) has been violated. This is possible, for example, in the following situations:
- Obstruction of competitors
- violations of market conduct rules
- misleading information or
- imitation of competitor products.
In addition, the following actions can also be the subject of such a warning:
- misleading advertising
- violations of copyrights or trademark rights
- unfair business practices.
An infringement must always take place in a business context, i.e. the basic requirement is always that a business act is involved. This is also the difference to antitrust law: while competition law deals with the admissibility of individual business actions, such as product advertising, antitrust law, on the other hand, deals with agreements between companies, the monitoring of dominant market positions and the control of company mergers.
In the context of a competition law warning, the party issuing the warning and the party receiving the warning must have a competitive relationship with each other. Such a relationship always exists when the competing company offers the same or similar services in the same market. Incidentally, due to the mandatory competitive relationship, an anonymous warning is not possible. The competitor issuing the warning must be named so that the addressee has the opportunity to check the validity of the warning.
Key Components of a German Competition Law Warning
A competition law warning usually consists of several components. The warning itself must include a precise description of the competitor’s misconduct. In addition, the warning must include a deadline by which the competitor must submit the declaration of discontinuance that is part of the warning. The declaration of discontinuance is the second component of the competition law warning. It is a contractual agreement with the content to request the competitor to refrain from the criticised conduct in the future.
Furthermore, the written warning can already specify the further steps that the party issuing the warning will take if the competitor does not react appropriately within the set period of time. Possible steps include obtaining a preliminary injunction or filing a lawsuit. The addressee bears the costs of the written warning, provided that the written warning was justified.
Available Remedies for Competition Law Violations
Various claims are conceivable as a result of unfair behaviour by a competitor, including
- injunctive relief,
- remediation,
- disclosure and
- damages,
- as well as reimbursement of the costs of the written warning.
At Schlun & Elseven, our many years of experience show that injunctive relief is generally the easiest to enforce. At the same time, the other claims, particularly for information or damages, are usually more challenging to enforce.
In the case of claims for damages, the damage must be precisely documented, calculated, and proven to be asserted successfully. The same applies to the claim for information. In addition to the loss of sales, a claim for the absorption of the competitor’s profit is also conceivable under certain circumstances. However, this requires knowledge of the exact profit made by the competitor by imitating the product. However, such information is difficult to obtain because competitors will not usually provide it voluntarily.
Best Practices: Responding to Competition Law Warnings
If you suspect a competition violation, please do not hesitate to contact us at Schlun & Elseven Rechtsanwälte. Our lawyers in this field are trained to check whether a competition infringement, trademark infringement, or copyright infringement has actually occurred. We have the necessary experience dealing with relevant, extensive case law and legal situations. This helps to prevent typical mistakes that could lead competitors to continue their competition law misconduct.
Practice Group: German Competition Law
Practice Group:
German Competition Law
Contact Schlun & Elseven Rechtsanwälte
Please use our online form to outline your request to us. After receiving your request, we will make a brief initial assessment based on the facts described and provide you with a cost offer. You can then decide whether you would like to engage our services.
