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Increasing Aggressiveness and Fines, Germany's Competition Watchdog Fights to Shake Ineffectual Image

An Amazon distribution warehouse in Briselang, Germany, in November 2013. Source Reuters
An Amazon distribution warehouse in Brieselang, Germany, in November 2013. Germany's cartel regulator forced the U.S. online retailer to change its business practices.
  • Why it matters

    Why it matters

    The Federal Cartel Office has issued a record number of fines but critics question whether its efforts have a preventive effect.

  • Facts

    Facts

    • About half the cases investigated by the cartel office are initiated by principal witnesses, who come forward to report monopolistic behavior.
    • Attorneys say this often results in a company agreeing to pay a fine rather than endure bad publicity related to the charges.
    • Some argue that fines are not enough and criminal charges should be filed in some cases.
  • Audio

    Audio

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The Federal Cartel Office recently accused producers of sugar, beer and sausage for illegal price fixing in its ongoing efforts to maintain open markets in every sector of competition.

The competition authorities in Bonn have been aggressively pursuing investigations and levying hefty fines on violators, setting a new record this year by imposing penalties of €973 million ($1.3 billion), even though some companies vow to fight the fines.

“In the past years, cartel prosecution has clearly become more powerful,” said Andreas Mundt, president of the cartel office, which is an independent authority in the Federal Ministry of Economy and Technology. “Businesses are encouraged to disclose illegal cartels to receive a break on fines in return.” It’s estimated that about half of the procedures the cartel pursues are initiated in this manner.

Businesses under investigation aren’t happy about the relatively high number of principal witness cases, according to Christian Horstkotte, an expert in antitrust law in the law firm of Baker and McKenzie in Düsseldorf. Specifically, he criticizes the large number of principal witnesses who initiate the procedures, noting the cartel office hardly needs to seek out any cases when so many knock on its door. And he wonders whether even a simple discussion among groups of companies within the same industry could be punished as cartel behavior.

 

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