As competition law experts we are used to think about competition law and regulation as it is the most easy legal and business concept in the world. For our clients however, we feel like it is important to address at least the 6 more important competition law concepts and information.
Competition law consists of fair trading and antitrust law.
Fair trading law (Lauterkeitsrecht) monitors the compliance with the rules/laws. It has the task of protecting competitors, consumers as well as other market participants from unfair business acts. Examples of unfair acts are misleading advertisements, violations of so-called market conduct rules, disparagement of competitors or their products.
Antitrust law (Kartellrecht) serves to safeguard competition as a whole and is directed against restrictions of competition, such as the formation of monopolies.
Question Nr. 2: Where is competition law regulated?
Fair competition law is regulated in the Unfair Competition Act (UWG). Please consider that we are always talking about German Law. The 7th GWB amendment largely aligned German antitrust law with the regulations of EU antitrust law. Agreements restricting competition are judged under European law if they are likely to affect trade between the Member States of the European Union.
Question Nr. 3: Who does competition law protect?
Competition law in the narrower sense protects
- other market participants and
- the general public from unfair business practices.
Antitrust law protects competition as an institution. It is intended to guarantee free competition as such.
Question Nr. 4: Who must observe competition law?
Not only big companies shall observe the regulations of competition law. Medium-sized companies and start-ups in particular should check the fairness of their marketing measures. Expensive warnings can be avoided, if you always act legally secure.
Question Nr. 5: What are the consequences of a violation of competition law?
If you violate competition law, you can be warned by competitors. A warning usually requires you to submit a cease-and-desist declaration. If you do not comply, you must pay a contractual penalty. In addition, you are supposed to reimburse your opponent’s legal fees. This is how a worst-case scenario could look like, if you were not aware of the importance of competition law.
Antitrust infringements entail considerable risks. These include invalidity of agreements, fines, levying of benefits and
criminal sanctions.The fine against the responsible persons can be up to one million euros. Companies can also be fined up to ten percent of their annual turnover. It should not be underestimated that actions of competitors in violation of cartel law can not only be reported to the Cartel Office, but can also be sanctioned under civil law against the offending company.
Question Nr. 6: Where do I find an German-located law firm specialized in competition law matters?
Horak. Attorneys-at-law is a Hanover-based law firm. We are active Germany and Europe-wide. Our lawyers are specialized and used to face competition law disputes. We also have a lot of branch office you can easily reach from everywhere in Germany and also in Austria. To contact us is easy: just send us a short e-mail and we will get back to you.