What do antitrust laws do

8 things you need to know about antitrust law

Antitrust law is an essential core area of ​​business law.

It protects free competition. Most people probably still know that.

But who has to observe antitrust law at all? What does it regulate? And what are the penalties for violations of antitrust law?

Answers to these and other questions can be found in the following article. We have summarized the 8 most important things you need to know about antitrust law for you.

Overview

What is a cartel?

A cartel is an agreement or concerted practice between companies with the aim or effect of increasing competition restrict, to distort or to prevent.

Examples:

  • Monopoly (there is only one)
  • Oligopolies (there are few)
  • Price fixing
  • Agreement on production quantities
  • Division of sales areas or customer groups
  • Calls for boycotts

What is the purpose of antitrust law?

Antitrust law protects competition as an institution. It is intended to ensure free competition as such and, for example, prevent monopolies and agreements that restrict competition.

Where is antitrust law regulated?

The German legislator has the German antitrust law, which in Law against Restraints of Competition (GWB) is regulated, largely aligned with the regulations of EU antitrust law by the 7th Amendment to the GWB.

However, agreements restricting competition are then followed European law assesses if they are likely to affect trade between the member states of the European Union. The threshold to European relevance is quickly exceeded, as only minor requirements are placed on it.

What does antitrust law prohibit?

Antitrust law includes the prohibition of cartels, merger control (merger control) and abuse control.

The ban on cartels is intended to put a stop to coordinated behavior and agreements that aim to prevent, restrict or distort competition.

Merger control is intended to prevent entrepreneurial monopoly positions by restricting competition in the market. A monopoly position can arise, for example, when two companies merge after a company acquisition and thereby assume a dominant position. The responsible antitrust authorities check the market and monitor mergers.

The prohibition of abuse is intended to prevent dominant companies from abusing their position. Companies with a market share of a third and more are obliged by the prohibition of abuse to be fair to their competitors and forbid discrimination. A company cannot charge different prices from suppliers, for example, without an objective reason.

Are there any exceptions?

Under certain conditions there are anti-competitive agreements exempted from the ban on cartels.

This is the case, for example, if it improves the production of goods or promotes technical progress. An additional prerequisite is that the consumers are given an appropriate share in the resulting profit. In addition, certain types of cooperation between small and medium-sized companies are permitted.

Who has to observe antitrust law?

It is one's duty every companyto check for himself whether his behavior is compatible with antitrust law. That is often not easy. Whether an agreement is a prohibited cartel or a permissible cooperation often depends largely on the market share of the companies involved.

That means that yourself also the middle class can be found guilty of antitrust violations.

What are the consequences of violating antitrust law?

Antitrust violations involve considerable risks. Which includes

The fine against the responsible persons can be up to one million euros be. Companies can also use up to ten percent of their annual turnover be prosecuted.

It should not be underestimated that actions by competitors that violate antitrust law can not only be reported to the antitrust authorities, but can also be punished under civil law against the offending company warned can be.

Our antitrust law services

  • Advice on all questions relating to antitrust law
  • Advice on questions regarding calls for boycotts
  • After reporting a violation of antitrust law, we take care of damage limitation as part of a strategy agreed with the client
  • We demand cessation of illegal behavior, removal of the legal consequences and compensation
  • We protect you against repetitions with high contractual penalties
  • In the event of an (unfounded) claim due to an alleged violation of antitrust law by a competitor or by the antitrust authorities, we will immediately prepare appropriate steps (protective letters, negative declaratory action, etc.)