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GRP Rainer Rechtsanwälte – Abuse of a dominant market position – Antitrust assessment

July 2018

Businesses are not allowed to abuse their dominant market position, as this constitutes a violation of antitrust law. The key issue that requires assessment is when this kind of abuse has occurred.

Abuse of a dominant market position constitutes a violation of antitrust law. According to the Gesetz gegen Wettbewerbsbeschränkungen (GWB), Germany’s Act Against Restraints of Competition, a business is considered to occupy a dominant market position if it has no competitors or is not exposed to any substantial competition, or has a paramount market position in relation to its competitors. We at the commercial law firm GRP Rainer Rechtsanwälte note that one circumstance pursuant to which a dominant market position or superior market power can said to have been abused is when a business takes advantage of its contractual partner’s dependence or at least prompts the latter to grant it benefits for which there is no objective justification.

When it comes to assessing when this type of antitrust violation has occurred, the Bundesgerichtshof (BGH), Germany’s Federal Supreme Court, further strengthened the so-called “Anzapfverbot”, i.e. the extraction ban, in its ruling of January 23, 2018 (Az.: KVR 37/17). According to this, a violation can be said to have occurred from as early as when the company prompts its contractual partner to grant it benefits that have no objective justification and not only once an agreement has been concluded to this end. In the case in question, a supermarket chain had demanded more favourable terms such as “Hochzeitsrabatte” (wedding discounts) or “Partnerschaftsvergütung” (partnership compensation) from suppliers during the course of a takeover. These demands are impermissible according to the BGH’s ruling, because they were neither met with any consideration nor did they have any objective justification.

Following this decision, businesses with a dominant market position or superior market power should refrain from exploiting their position and making arbitrary or retrospective demands if there are no objective reasons underlying these demands.

The BGH’s ruling has thus bolstered the position of suppliers, yet it has also restricted the freedom to negotiate of businesses in a dominant market position. While this does not mean that driving a hard bargain for better conditions is forbidden, certain limits do need to be respected if one is to avoid violations of antitrust law.

Lawyers who are experienced in the fields of antitrust law and competition law can advise businesses as well as enforce or fend off claims in the event of violations of antitrust or competition law.

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