Abuse of a dominant market position or superior market power constitutes a violation of antitrust law and can be sanctioned accordingly.
In a judgment from January 23, 2018 on the so-called “Anzapfverbot”, i.e. the prohibition on demanding unjustified benefits from suppliers, the Bundesgerichtshof (BGH), Germany’s Federal Supreme Court, further tightened the rules regarding abuse of a dominant market position (Az.: KVR 37/17). According to the Karlsruhe judges’ ruling, if the business occupying a dominant market position asks a contractual partner to grant it advantages in the absence of an objective justification for these advantages, this is enough to give rise to a presumption of a violation of antitrust law. We at the commercial law firm GRP Rainer Rechtsanwälte note that the judgment illustrates the need for experience when two or more parties are negotiating terms to avoid overstepping the boundaries for violating either competition or antitrust law.
In the instant case, the business in question had gone too far with its demands and abused its dominant market position and superior market power by demanding more favorable terms from its suppliers in the form of discounts and benefits. The BGH deemed this a violation of antitrust law due to the absence of any kind of consideration or objective justification.
Following the BGH’s ruling, suppliers are now better protected in the event of businesses in a dominant market position exerting pressure on them with the intention of more or less forcing them to agree to different terms. While the Court’s decision does not mean that negotiations are no longer permitted as a means of achieving the best possible outcome for one’s company, the ruling does necessitate care and sensitivity as well as an objective justification in order to remain within the confines of the law.
According to the Gesetz gegen Wettbewerbsbeschränkungen (GWB), Germany’s Act Against Restraints of Competition, a business is considered to be in a dominant market position if it has no competitors or holds a paramount market position, with the result that the business is not exposed to any substantial competition. A business is deemed to have abused this kind of market power if it asks its contractual partners to grant it advantages without an objective justification for doing so.
Lawyers who are experienced in the fields of antitrust and competition law can advise businesses and enforce or fend off claims in the event of violations of antitrust or competition law.
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