German antitrust authority set to gain more powers

BERLIN (Reuters) -Germany’s antitrust authority will have more power to crack down on anti-competitive practices under plans agreed by the government on Wednesday, a move business associations could give the state body too big a role to intervene in the market.

Under legislation drafted by the economy and justice ministries, the Federal Cartel Office will be able to order measures to address disruptions to the market after cross-sector probes, instead of just issuing a report, as is the case now.

In addition, the government plans to make it easier to skim off benefits that companies gain from what is deemed to be antitrust violations.

“Competition is the best means to protect consumers from unjustified price increases,” Economy Minister Robert Habeck said, describing the move as one of the biggest changes to competition law in Germany in decades.

The legislation still has to be passed by parliament, which can take months. Habeck said he hoped it would be pass into law swiftly.

The Association of German Chambers of Industry and Commerce (DIHK) said the move risked giving a state institution too much power to intervene in the market.

“Lawful action no longer protects companies from state intervention as soon as the Federal Cartel Office, in its broad discretion, considers competition to be disturbed over a longer period of time,” DIHK chief legal counsel Stephan Wernicke said.

“The amendment must worry companies in markets that are of particular political interest, for example in climate protection or the digital economy,” Wernicke added.

The German wholesale association BGA said the plan could put German firms on a weaker footing to European rivals, saying that companies that adhered to the law could be subject to intervention for being “too successful”.

“I consider this constitutionally questionable,” BGA President Dirk Jandura said.

(Reporting by Rachel More; Editing by Friederike Heine and Edmund Blair)