11th Amendment to the Act against Restraints of Competition Enters into Force; Consultations on 12th Amendment Begin

In Germany, the amended Act against Restraints of Competition (Gesetz gegen Wettbewerbsbeschränkungen, “GWB”) is set to enter into force on 7 November 2023. The final version of the Act softened the government’s draft bill (Regierungsentwurf) of 5 April 2023 (article of 17 April 2023) and the initial draft of the competent Federal Ministry for Economic Affairs and Climate Action (Bundesministerium für Wirtschaft und Klimaschutz) of 15 September 2022 (article of 28 September 2022) in some – but not in material – respects. The new law is the culmination of intense debates between supporters and opponents of the proposals.

The responsible minister regards this as “the biggest reform of competition law since Ludwig Erhard”. The Amendment adds a fourth pillar to the GWB, the “basic law of the social market economy”. In addition to the three existing pillars – the prohibition of cartels, abuse control and merger control – the Federal Cartel Office (Bundeskartellamt) has a new intervention mechanism at its disposal for “protecting free and fair competition”. By means of targeted measures, it will be able to put a stop to or remedy “significant and continuous malfunctioning of competition” identified in sector inquiries.

The reason for the Amendment was a price hike during the 2022 energy crisis, which also made itself felt at petrol stations. The original intention of the competent Ministry was to implement more effective antitrust legislation. According to the explanatory memorandum, the Amendment aims “to improve the State’s ability, in the interest of consumers, to put a stop to malfunctioning of competition. Antitrust intervention mechanisms are to be strengthened where market structure conflicts with competition, for example where there are only a few providers on the market and prices generally develop in parallel, to the disadvantage of consumers.”

In addition, the Amendment aims to simplify the already existing rules regarding the disgorgement of benefits and to create the legal basis for the Bundeskartellamt to support the European Commission in enforcing the Digital Markets Act (DMA) and for injured parties to enforce the DMA in Germany before the civil courts.

I. The changes in detail: 

1. Sector inquiries and remedies (section 32e and section 32f(3-9) GWB)

In future, it will be possible for sector inquiries to have consequences – in line with the approach in the UK. So far, sector inquiries have been without consequences, with most mainly culminating in final reports (for example, the final reports on the fuel sector (2011), on electricity generation and wholesale markets (2011), on buyer power in the food retail sector (2014) or most recently on hospitals (2021) as well as on the collection of household waste (2021)). It was only the sector inquiries into rolled asphalt (2012) and cement and ready-mixed concrete (2017) that led to any extensive unbundling of joint ventures. This was, however, based on administrative proceedings initiated or threatened on the basis of the rules on cartels. Under the new provisions, the Bundeskartellamt will be able to take action with respect to identified abuses and to intervene based on regulatory requirements, without having to prove any specific antitrust violations.
The procedure has two stages: First, the sector inquiry must be carried out. After that, a malfunctioning of competition must be identified and a remedy ordered.

Sector inquiries, section 32e GWB

Sector inquiries are to last a maximum of 18 months. This will strengthen their effectiveness. The Bundeskartellamt is obliged to publish interim – or at least final – reports in future. These reports may include recommendations to the Federal Government regarding competition policy. It will also be possible to carry out seizures as part of investigations. However, sector inquiries usually focus on interviews, requests for information (including data collection) and information analyses carried out by the Bundeskartellamt, with these forming the basis for the subsequent final report.

Section 32f GWB as the central provision of the new intervention mechanism

At the heart of the new intervention mechanism – a major change – is section 32f GWB, which grants the Bundeskartellamt far-reaching powers to intervene following publication of the final sector inquiry report. The Bundeskartellamt should also not spend more than an additional 18 months on this second stage, in which it determines whether there has been a malfunctioning of competition and orders remedies. The proceedings before the Bundeskartellamt should therefore be concluded no later than 36 months after a sector inquiry has begun.

The main requirement for exercising these powers is a situation in which there is “significant, continuous malfunctioning of competition on at least one market extending across Germany, several individual markets or across markets”
The procedure in accordance with this provision is subject to “soft” subsidiary application, in particular in relation to the prohibition of cartels and rules on abuse. No provision is made as to how the Bundeskartellamt is to prove in individual cases that “the other powers set forth in [the GWB] cannot be expected to appropriately counter the malfunctioning of competition in an effective and lasting manner, given the findings available to the Bundeskartellamt at the time the decision is taken.” According to the explanatory memorandum, however, the Bundeskartellamt will not be subject to very strict requirements (“cursory”, “not necessary to conduct any further investigations”) when setting out grounds for its decision.

Malfunctioning of competition

Using a number of (non-exhaustive) examples drawn from complex theories of harm in competition law, which are themselves quite general and open to and in need of interpretation, section 32f(5) GWB attempts to clarify what constitutes a “malfunctioning of competition”. Depending on the scenario, the examples are intended to be considered either in isolation or cumulatively as part of an overall assessment determining whether there is significant malfunctioning of competition. They partially draw on the factors relevant for market dominance, but deviate from these in that they include, in particular, market outcomes and behaviours that negatively affect competition in the overall assessment. Section 32f(5), sentence 1 lists “in particular” four examples of cases in which malfunctioning of competition can take place, namely in the case of unilateral seller or buyer power (no. 1), restrictions on entering or leaving a market or restrictions on company capacity or on switching to another seller or buyer (no. 2), uniform or coordinated behaviour (no. 3) or input or customer foreclosure through vertical relationships (no. 4). This attempt to be more specific, addresses one of the main criticisms levelled at the initial draft, but still falls short of the mark.

Section 32f(5), sentence 2 GWB sets out a number of additional criteria for analysing individual cases when assessing whether malfunctioning of competition has taken place. However, these provide neither a binding nor a conclusive framework, but merely a guideline that supplements sentence 1. Nor do these additional criteria have to be cumulatively met. Rather, the provision mentions possible indications that competition is malfunctioning (such as cross-ownership of companies (no. 2) as well as prices or volumes, selection and quality of the goods offered (no. 3)). The degree of market dynamics is also relevant (no. 6). It is also possible to mount an efficiency defence.

The Amendment makes it clear that the malfunctioning of competition is continuous only “if this malfunctioning has continued or occurred repeatedly over a period of three years and no indications exist at the time of the order under section 3 that it is more likely than not that the malfunctioning will cease within two years.” A greater degree of uncertainty remains in this respect as well, and predictive decisions by the Bundeskartellamt are necessary.

Who is subject to remedies?

The criteria for determining which companies will be subject to remedies were modified somewhat during the legislative procedure. Being subject to remedies requires “that [the] companies [...] must have significantly contributed to the malfunctioning of competition through their behaviour and their significance for the market structure” and that “in particular their market position” is taken into account. This provision should in particular protect smaller market participants from remedies, but not from the sector inquiry itself.


In terms of legal consequences, the Amendment provides for behavioural or structural remedies to be ordered as a rule, with behavioural remedies taking precedence. Unlike the preventive merger control, the new market structure control will however allow behavioural remedies to be followed by further control of conduct on a continued basis.

Section 32f(3), sentence 6 GWB lists a number of non-exhaustive and in part far-reaching examples, which include instructing companies to grant access to data, interfaces, networks or other facilities (no. 1), imposing requirements on business relationships (no. 2), obliging companies to establish FRAND standards (no. 3), imposing requirements on contractual arrangements (no. 4), prohibiting the unilateral disclosure of information (no. 5) and, as a structural measure, requiring the unbundling of company or business divisions in accounting or organisational terms (no. 6).

The Bundeskartellamt can therefore give the companies concerned very specific instructions on how to behave in the market and monitor compliance with these instructions in the long term if it believes that they will eliminate malfunctioning of competition in the affected market. This makes it possible for the Bundeskartellamt to heavily intervene in the markets and impose a wide range of requirements on companies.

Ownership unbundling as last resort

The blunt instrument that is the unbundling order under section 32f(4) GWB – which does not require any violation – is to be used as a last resort only under strict application of the principle of proportionality and other procedural steps and only where the serious and ongoing malfunctioning of competition cannot be remedied or significantly reduced by other means. In response to criticism of the initial draft, this instrument has been limited to dominant companies.

The Amendment sets minimum proceeds of 50% of the business unit’s value as a prerequisite for unbundling and introduces a compensation provision should the proceeds fall short of the value. This ensures the constitutional concerns about unbundling are taken into account. Merger control clearance or ministerial authorisation is grandfathered in for ten years for unbundling measures.

Legal protection

The legal protection for companies subject to remedies has been strengthened in the course of the legislative procedure. This means that a company can ask the court to review not only the remedies imposed, but also the decision determining that there has been a malfunction of competition. However, the sector inquiry as such cannot be contested in isolation. Appeals against the remedies now also have suspensive effect. Companies that are subject to remedies can accordingly have them reviewed in court and do not have to implement them immediately. They only have to do so once a court has confirmed the Bundeskartellamt’s legal opinion. The legislator has therefore responded to the harsh criticism raised by legal practitioners and has made allowances for companies’ need for legal protection.

Other aspects

Affected companies can offer the Bundeskartellamt commitments that the Bundeskartellamt can then declare to be binding. It is conceivable that companies may choose this route to avoid a remedial order and a legal dispute.

Given the extent to which it can intervene, the Bundeskartellamt is now obliged to hold a public hearing when imposing remedies in order to grant the right to be heard and comply with the transparency requirement, unless the parties waive this.

Finally, an evaluation clause was added late in the legislative procedure. This requires the Ministry to report to the legislator on its experience with section 32f GWB ten years after it comes into force.

2. Expanded merger control by way of individual orders (section 32f(2) GWB)

Sector inquiries can also have an impact on merger control. Under section 32f(2) GWB, concentrations below the thresholds stipulated in section 35 GWB may be subject to notification if the Bundeskartellamt’s sector inquiry has uncovered indications that further concentrations would significantly impede competition in the sector concerned. In this case, the Bundeskartellamt can oblige companies to notify all concentrations where the acquiring undertaking has turnover of EUR 50 million in Germany and the target has turnover of EUR 1 million. As per the previous section 39a GWB, the notification obligation and therefore the prohibition to implement a concentration applies for three years from the date of service of the order and may – following a restriction imposed by the Economic Affairs Committee – be extended by three years a maximum of three times.

This new rule applies with retroactive effect to sector inquiries already completed when the Amendment came into force, if the final report was published less than a year beforehand. This could apply, in particular, to the sector inquiry into non-search online advertising concluded in May 2023 or the ongoing ad hoc sector inquiry into refineries and fuel wholesaling.

3. Simplified disgorgement of benefits (section 34 GWB)

The explanatory memorandum points out that the previous legal hurdles for the disgorgement of benefits were too high in relation to the overall economic damage caused by antitrust violations, and that the relevant provisions were therefore not applied in practice. For example, the antitrust authorities previously had to carry out complex calculations of the economic benefit and prove that a company acted intentionally or negligently. The new provision is aimed at making it easier to force companies to disgorge benefits – thereby deterring them from committing antitrust violations.

A double presumption now applies: first, it is presumed that an infringing company that acted intentionally has obtained an economic benefit from its antitrust violation. Second, there is a blanket presumption that the benefit obtained by the company as a result of the proven antitrust violation amounts to 1% of its domestic turnover with the relevant product or service. This is, however, capped at 10% of the total annual group turnover worldwide in the year prior to the authority’s decision.

There are very stringent prerequisites for rebutting the blanket presumption. This can only be done “if the company proves that neither the legal entity directly involved in the violation nor the company as a whole achieved a profit in the relevant amount during the disgorgement period” or “if obtaining a benefit is excluded due to the special nature of the violation”. The explanatory memorandum mentions very specific exceptions where the violation does not result in a benefit, e.g. bid-rigging where none of the participating companies is awarded the contract or a violation of the boycott prohibition that goes no further than a “request” without this request being complied with.

Fault is still required, contrary to what was provided in the initial draft. It remains unclear whether the 1% rule also applies to violations committed before the 11th Amendment entered into force, which is likely to lead to some legal uncertainty in this regard.

Contrary to the proposals of the initial draft, the time limits set in connection with the disgorgement of benefits have not been tightened. A time limit of seven years (instead of ten) after termination of the violation has therefore been retained. The maximum disgorgement period remains limited to five years.The explanatory memorandum points out that the previous legal hurdles for the disgorgement of benefits were too high in relation to the overall economic damage caused by antitrust violations, and that the relevant provisions were therefore not applied in practice. For example, the antitrust authorities previously had to carry out complex calculations of the economic benefit and prove that a company acted intentionally or negligently. The new provision is aimed at making it easier to force companies to disgorge benefits – thereby deterring them from committing antitrust violations.

4. Amendment of the procedural provisions relating to the DMA (section 32g GWB)

The Amendment gives the Bundeskartellamt the power to conduct its own investigations into possible violations by gatekeepers of Articles 5, 6 and 7 DMA (cf. section 32g GWB). However, the Bundeskartellamt can only support the European Commission – without prejudice to the options open to the Bundeskartellamt to take action, pursuant to section 19a GWB, outside the scope of the DMA. Only the European Commission can find that the DMA has been violated. 

The new law also strengthens private enforcement options. The explanatory memorandum follows the provisions for facilitating private enforcement in antitrust proceedings implemented with the Antitrust Damages Directive. These are declared applicable in the DMA context where appropriate, and some of the simplifications for civil antitrust actions also apply. In particular, a final decision of the European Commission finding that the obligations pursuant to Articles 5-7 DMA have been violated has binding effect in follow-on damages proceedings before German courts. This considerably strengthens Germany’s position as the place of jurisdiction for such lawsuits.

As is also the case under antitrust law, jurisdiction is centralised so that the court divisions responsible for antitrust matters – specifically the civil divisions – also have jurisdiction as far as DMA-related disputes are concerned (sections 87, 89 GWB). Finally, the Amendment makes it possible for the Bundeskartellamt to take part in court proceedings relating to the DMA.

II. Assessment and outlook

The Amendment significantly bolsters the Bundeskartellamt’s powers by adding new intervention mechanisms. The planned market structure control, which will not be based on violations or abuses, provides antitrust law with a fourth pillar alongside the prohibition of cartels, abuse control and (preventive) merger control, even if a very soft form of subsidiary application is stipulated for section 32f GWB.

All in all, the new law not only tightens German competition law, but represents a paradigm shift. The legislator considered the previous intervention powers of the competition authorities to be insufficient in cases involving a malfunctioning of competition that lacks a demonstrable violation and could have causes related to market structure. In such cases, competition authorities will now not only be able to prevent negative structural changes (merger control), but also to actively promote preferable structures. Under its current management, however, the Bundeskartellamt has emphasised that it will deal responsibly with the new options and does not want to engage in “market design”. It is to be hoped that the Bundeskartellamt will maintain this sense of proportion and not allow itself – and its new powers – to be used for political purposes.

It remains unclear whether the gap in the law described by the legislator actually exists, and this was extremely contentious during the legislative procedure, with business associations and some academics and legal practitioners expressing strong doubts. In any event, the explanatory memorandum does not contain any new arguments in this regard.

It also remains to be seen whether the new fourth pillar will in fact have the practical impact described by the responsible minister. The Bundeskartellamt itself is assuming that it will conduct in the region of two sector inquiries per year. Given that there are two stages to the process, it will be some time before the first decisions determining that there has been a malfunctioning of competition are issued and remedies ordered. The various legal protection options – and the fact that an appeal will have the effect of suspending the ordered remedies – also mean that it will most likely take years before it is clear whether the new intervention mechanism actually has any teeth.

The broader scope of legal protection adopted in the legislative procedure compared to the original draft is an important counterweight to the far-reaching possibilities for intervention by the antitrust authorities – especially since the large number of undefined legal terms in section 32f GWB will no doubt give rise to substantial interpretation issues.

What is in any event to be welcomed is the clarifying, and in some cases mitigating, wording introduced into section 32f GWB – as compared to the initial draft – during the part of the legislative procedure involving the Federal Ministry for Economic Affairs and Climate Action and the Federal Ministry of Justice (Bundesministerium der Justiz) and later the Economic Affairs Committee.

The extension of preventive merger control is consistent with parallel developments at European level. This is demonstrated by the new stance taken by the European Commission and the General Court (Illumina/Grail) on referrals under Article 22 EUMR, also by Member States which did not originally have jurisdiction, as well as the most recent case law of the ECJ (Towercast) on the application of Article 102 TFEU to non-notifiable concentrations by national competition authorities. This significantly reduces legal certainty for corporate acquisitions, especially given the new hurdles created by the expansion of regulatory procedures in connection with foreign investment control and the newly introduced control of third-country subsidies at EU level (Foreign Subsidies Regulation).

It is doubtful whether the simplified disgorgement of benefits, in particular the blanket and more or less irrebuttable presumption that profits are obtained by infringing companies, is constitutional. This needs to be clarified. There are still no provisions governing how this relates to civil damages awards or allowing for any privileged treatment of leniency applicants. These points are to be addressed in a future amendment. The same applies to the specification of legal privilege in German law.

The Amendment merely implements the first part of the Federal Ministry for Economic Affairs and Climate Action’s competition policy agenda of 21 February 2022, which sets out ten points for achieving sustainable competition, fleshing out what was agreed in the coalition agreement. Further elements of the ten-point agenda – such as more legal certainty for cooperations between companies aimed at greater sustainability and stronger consumer protection – are to be addressed in another Amendment before the end of this legislative period. The Federal Ministry for Economic Affairs and Climate Action recently launched the consultation process for this: Öffentliche Konsultation zur Modernisierung des Wettbewerbsrechts – Wettbewerb weiter stärken (Bundesministerium für Wirtschaft und Klimaschutz)And so change remains constant in antitrust law – and seems to be coming faster and faster.