Government Draft of the 11th GWB Amendment – Part 2: Skimming and Digital Markets Act

A. Skimming off advantages contrary to cartel law

I. New regulation

Section 34 GWB already grants the BKartA the possibility of skimming off advantages. It serves to secure the enforcement of cartel law. In principle, companies should not be able to derive any advantage from a cartel violation. Therefore, the BKartA has the possibility, in addition to imposing a fine, to generally skim off the advantages gained from the cartel violation. This is intended to make it clear, as a preventive measure, that a cartel violation is not worthwhile. The skimming of benefits is subsidiary to the other measures, i.e. everything that the company has already paid in fines and damages, especially in connection with the cartel proceedings, is offset against the amount of the skimming of benefits.

The current advantage levy is based on a comparison between the actual economic situation of the company (i.e. with the cartel violation) and the hypothetical economic situation of the company if it had not committed the cartel violation. This hypothesis currently means a highly complex economic analysis. Cartel violations regularly last for several years; accordingly, the hypothetical alternative scenario must also be based on several years. The BKartA is often in the dark because the infringers, by their very nature, have much better information about the advantages gained. In this context, § 39 VwVfG and Art. 20 II, III GG, or Art. 41 EU-GrCh require that the decision be based on a sufficiently comprehensible calculation standard, so that a possibly excessive decision can be challenged. The administration’s obligation to comply with the law and the requirement to state reasons, in conjunction with the envisaged standard of calculation, force the cartel authority to document lengthy calculations in an elaborate manner in order to be able to adequately punish a cartel infringement.

With the new Section 34 (4) GWB-E, the legislator reacts to the difficulties in enforcing cartel law and shifts the burden of proof for the levying of benefits to the infringer. This is done through a statutory presumption and the authorisation to estimate the amount of the advantage. In concrete terms, this looks as follows:

1. It is presumed that the cartel violation brings some advantage (Section 34 (4) sentence 1 GWB-E)
2. The presumption according to (1) can only be rebutted by the fact that an advantage is excluded due to the nature of the infringement (i.e. according to objective criteria) (Section 34 (4) sentence 6, 9 GWB-E)
3. It is presumed that the advantage amounts to at least 1% of the turnover from domestic sales for the duration of the cartel violation, but for a maximum of 5 years (Section 34 (4) sentence 4, 5 GWB-E)
4. The presumption under (2) can be rebutted by the undertaking by proving that neither the legal person or association of persons directly involved in the infringement nor the undertaking has made a profit in the corresponding amount during the skimming-off period, whereby the global profit of the economic unit is to be taken as a basis (Section 34 (4) sentences 7, 8 GWB-E)
5. The actual amount of the advantage may be estimated pursuant to Section 287 of the Code of Civil Procedure, whereby a preponderance of probability is sufficient (Section 34 (4) sentences 2, 3 GWB-E)
6. The amount of the levy is capped at 10% of the company’s total turnover in the business year preceding the decision (Section 34 (4) sentence 10 GWB-E)

In contrast to the draft bill, the government bill is again considerably more restrained. While the draft bill is still based on the entire period of the infringement as determined in the order of the BKartA, the levy is capped at 5 years in the government draft. The time limit for the levy was also to be increased from seven to ten years in the draft bill, but the government bill does not touch the time limit of seven years.

II. Assessment

The new provisions are largely in line with private damages under Section 33a ARC, which already provides for a rebuttable presumption of damages in Section 33a (2) and Section 287 of the Code of Civil Procedure (ZPO) has been applied to Section 33a ARC anyway. There should also be no doubts as to the proportionality of the provision and, in this respect, its constitutional harmlessness. At most, one could question whether the deviation between Section 33a (2) and Section 34 (4) sentences 1, 7 is permissible. While the presumption in section 33a(2) is rebuttable on the merits in individual cases, the presumption in section 34(4)(1) is only rebuttable “in kind”, i.e. according to objective criteria, according to sentence 7.

In practice, the innovation will lead to faster proceedings at the BKartA and mean a higher burden for the infringers, who now fully bear the burden of full proof against the presumption in the aftermath of the cartel infringement. Accordingly, it will become more difficult for infringers to reduce or contest cartel levies. However, this can be well justified with regard to the principle of effectiveness in the enforcement of EU law and generally because of the preventive function of the levying of benefits.

B. Digital Markets Act

Finally, the GWB amendment makes use of the possibility under Article 38 (7) of the Digital Markets Act (Regulation (EU) 2022/1925) to grant its own national authorities investigative powers. This means that the FCO, as a national authority, may now investigate whether the so-called “gatekeepers” (or in the German language version “Torwächter”) are complying with their catalogue of duties under Articles 5, 6 and 7 of the Digital Markets Act. The investigative power is regulated in Section 32g GWB-E and only provides for notification of the Commission, which can then take measures pursuant to Art. 29 et seq. Digital Markets Act. This innovation only affects “gatekeepers”, i.e. in particular the big tech companies such as Apple, Google and Microsoft. The idea behind the Digital Markets Act is above all to reduce restrictions on competition that arise when individual providers monopolise access to a market. A typical case of application will therefore be the App Store, through which Apple controls the market for iOS software.