The Bundeskartellamt has initiated proceedings under Germany’s new competition tool (Section 32f(3) of the German Competition Act) to examine significant and continuing competition failures in the wholesale fuel sector.
This is the first time the authority has used this new legal mechanism.
Andreas Mundt, President of the Bundeskartellamt, stated: “When a malfunctioning of competition in a specific sector is caused by structural conditions, traditional competition law reaches its limits. In the wholesale fuel market, we see indications of such a structural malfunctioning. In particular, the price information services widely used in this sector could pose a considerable risk to competition.”
The Bundeskartellamt’s recently concluded sector inquiry into refining and fuel wholesale pricing found that widely used price information services, such as those provided by Argus Media and S&P Global, may be facilitating anti-competitive behavior. The concern is that highly detailed price data could enable fuel wholesalers to coordinate prices above competitive levels, increasing costs for businesses and consumers.
Although the inquiry found no direct violations of competition law, the regulator believes these practices could be leading to inefficient market outcomes. The next step is to determine whether there is a significant and continuing competition failure in specific or multiple fuel markets. If confirmed, the Bundeskartellamt could implement remedies to address the underlying structural issues.
“The new competition tool was intended to make it possible for us to intervene in precisely such cases,” said Mundt. “If a malfunctioning is established, we will address the root causes in order to stimulate competition.”
Proceedings under this new legal framework allow the Bundeskartellamt to take remedial actions without needing to prove individual legal violations. Given the structural nature of the issues, the regulator’s conventional powers may not be sufficient to restore competition in the fuel market.
As both regulators take steps to improve competition in their respective markets, businesses and industry stakeholders will have opportunities to provide feedback on potential remedies before any corrective measures are implemented.
