Reform of the Act against Restraints of Competition (GWB): Federal Cartel Office to Loose Price Control of Public Law Utility Fees

The Mediation Committee of the Bundestag and the Bundesrat today reached a compromise on the long-awaited 8th reform of the German Act against Restraints of Competition. The reform which inter alia unexpected last-minute changes on the competence of German competition authorities regarding price control of fees levied by public utilities organized under pubic law.

Several details of the 8th reform of the German Act against Restraints of Competition (Achtes Gesetz zur Änderung des Gesetzes gegen Wettbewerbsbeschränkungen – 8. GWB-ÄndG) has been controversial for quite some time. The compromise now provides that German competition authorities shall not be entitled any more to supervise and control prices imposed by public utilities in the form of  public law fees (öffentlich-rechtliche Gebühren und Beiträge). By contrast, prices imposed by public utilities operating in the form of companies under civil law such as limited liability companies (GmbH) or corporations (AG) shall remain under control of competition law, irrespective of state-ownership. The reform also relates to disputes in the drinking water sector in Germany, where efforts of public utilities to escape price control under competition law by reforming their corporate organization under public law (Rekommunalisierung) turned out to be increasingly difficult as courts tended to apply competition law to public utilities even organized under public law under certain circumstances (see decision of the Federal Supreme Court “Niederbarnimer Wasserverband” dated 18 October 2011, ref. no. KVR 9/11)

Sources: Mediation Committee, Frankfurter Allgemeine Zeitung

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