The tenth amendment to the Act against Restraints of Competition (Digitalisation Act), which entered into force on 19 January 2021 (available in the German language at bgbl.de), brings substantial changes to German competition law. In particular, it
- revises the regulatory framework for the digital sector by giving the Federal Cartel Office (FCO) far-reaching powers to intervene in digital platforms’ business activities;
- introduces new provisions in the area of merger control, in particular by increasing the first domestic turnover threshold from €25 million to €50 million and the second domestic turnover threshold from €5 million to €17.5 million; and
- introduces interim measures for the FCO enabling speedy and flexible intervention, brings additional changes to merger control and cartel damage claims, and facilitates more efficient administrative proceedings.
The legislative background to the Digitalisation Act goes back to the ECN+ Directive (EU) 2019/1. It aims at strengthening cooperation between the competition authorities of EU Member States to achieve a more uniform and efficient enforcement of competition rules.
Companies active in Germany and any transactions having a domestic dimension are now required to comply with the new rules.
A. New enforcement powers for the FCO with regard to digital platforms
In particular, the Digitalisation Act revises the rules for powerful digital platforms by granting the FCO new enforcement powers with regard to undertakings that have a significant impact on competition across markets. These companies are now subject to stricter regulation in order to mitigate the distorting impact on competition of network effects at an early stage. To this end, the FCO is now entitled to declare a company to be subject to the new rules where the FCO finds the applicable criteria have been met.
Once a company is considered subject to the new rules, it not only has to comply with those rules, which go far beyond the prohibitions applicable to dominant companies, but also the FCO has far-reaching powers to intervene in the company's business activities, where necessary, to protect competition.