German authorities have passed an amendment to the German Competition Act, published in the Federal Gazette on Jan. 19, that will allow the country’s strong Federal Cartel Office (FCO) to ban large internet platforms like Amazon from engaging in certain types of conduct much earlier than before. The German Cartel Office says it will be able, “so to speak, to shut the stable door before the horse has bolted,” by swiftly taking appropriate preventive measures.
Notably, under Section 19a of this 10th amendment of the competition law, the Cartel Office will be able to prohibit practices such as the self-referencing of a group’s own services or preventing third companies from entering the market by denying them access to specific data.
Jochen Schäfer, the specialized attorney of the European Federation of the Sporting Goods Industry (FESI), regards Section 19a as an important step against any platform provider that “acts in a double function, by operating the platform with numerous third-party vendors and sellers while at the same time selling the very same products in its own name and on its own account at preferential conditions.”
In another important move that will shorten the legal process, appeals made against such decisions will be directly brought before the Federal Court of Justice, bypassing a regional court in Düsseldorf. The modernized Competition Act also gives the Cartel Office special competences in cases where a digital platform threatens to “tip” the balance toward a large supplier, allowing a dominating player to control certain markets at the retail level.
In addition, the amended legislation doubles the minimum threshold turnover generated in Germany required for a merger proposal to be reviewed, allowing the Cartel Office to concentrate on cases that raise serious concerns. The anti-trust body has been examining around 1,200 cases each year.
The German legislative action in the digital front is setting a precedent for the legislative process that is taking place at the European level, where the discussions on similar tools are still in an initial stage. According to Schäfer, the modernized German legislation will play a pioneering role in the European Union, serving as a role model for other anti-trust authorities in the region, including the European Commission itself.
It will also make it easier for sporting goods companies to plead against certain internet giants. ”Sporting goods companies doing business in Germany, same as their industry federations, will now be able to report (also in an anonymous fashion) abusive practices of major platforms to the FCO, and the Office is now empowered to intervene already ex-antem instead of only ex-post,” Schäfer comments.