Germany’s move to the right will boost calls for a “global” European competition policy, but is unlikely to see any major overhaul in the national competition authority’s powers. In their election programs, none of the main political parties called for a rewriting of antitrust or merger law. They all seemed to agree that a “strong” competition policy was essential, with the Christian Democratic Union advocating modernizing it in light of geopolitical challenges and global markets.
Germany’s move to the right will boost calls for a “global” European competition policy, but is unlikely to see any major overhaul in the national competition authority’s powers.In yesterday's federal election the center-right Christian Democratic Union came in first with 208 seats in the 630-seat parliament, in partnership with the CSU from the southern region of Bavaria, according to official results.
The far-right Alternative for Germany came second with 152 seats, but is highly unlikely to be part of the government due to the refusal of mainstream parties to work with it. This leaves the conservatives with the option of working with the center-left SPD, which got 120 seats, and the Greens, which got 85.
In their election programs, none of the main political parties called for a rewriting of antitrust or merger law, yet they all seemed to agree that a “strong” competition policy was essential.
The CDU will feel emboldened in its push to modernize competition law.
Much of the conservative program focused on strengthening the resilience of the German economy in light of geopolitical challenges. That included a commitment to a “modern” antitrust and competition law that considers the “global market.”
This could pressure the Bundeskartellamt to take a more lenient stance on mergers to allow German or European companies to consolidate to better compete with rivals from the US or China.
A common gripe of EU companies wanting to scale up is that European regulators view their market shares at a national or European level instead of globally — ignoring the threat of foreign rivals at their expense.
The center-right also referenced a plan to limit the ability of the Bundeskartellamt to intervene against companies to when there's been a breach of the law. That could mean removing the antitrust regulator’s newly-gained, yet little used, "New Competition Tool," which gives it the power to probe entire sectors.
The party, led by Friedrich Merz, also vowed to improve protections for small suppliers against unfair trading practices from strong buyers. They are expected to push ahead with plans to increase competition on the rail market by splitting Deutsche Bahn into separate infrastructure and transport companies.
In its program, the party also pledged to support IPCEIs — Important Projects of Common European Interest — a state aid instrument that brings together funding from multiple EU governments to finance joint projects such as hydrogen power, batteries and cloud infrastructure.
The CDU said it was committed to IPCEIs — which were recently backed in a report by former Italian leaders Mario Draghi and Enrico Letta on boosting Europe's competitiveness — and their effective use in Germany.
— Social Democrats —
While the center-left Social Democrats are no longer in power, they are likely to play a critical role in shaping Germany's position on policy discussions in Berlin and Brussels.
Outgoing chancellor Olaf Scholz advocated for boosting Europe’s competitiveness, welcoming the reports by Draghi and Letta, and saying he would support the European Commission on their implementation.
The SPD said it would support German companies with attempts to tackle global competition with a “Made in Germany” investment policy.
The center-left party promised to keep a “close eye” on the market power of large food retailers, saying this can lead to excessive price increases to inflate profit margins. It proposes giving authorities more powers to make food pricing transparent and check for breaches of competition law.
The SPD also wants to establish a competition watchdog that puts consumer protection “first.”
— Greens —
Big Tech companies would likely breathe a sigh of relief if the Greens are excluded from the new government, with their pledges to tackle the power of online platforms. Part of their platform included a plan to prevent tech giants from expanding into financial markets.
The Greens proposed using competition law to stop practices that harm small and medium-sized enterprises and consumers, such as blocking access to the EU market with goods from non-EU countries that don’t comply with European standards. Competition law needs to be developed to protect SMEs and consumers more effectively against monopolies and to increase fairness, they argued.
The Greens also backed calls for a strong German and European competition policy, saying this was necessary to tackle inflation and unfair profits created by Russia’s invasion of Ukraine.
If they wind up in opposition, it would likely be a blow to their proposal for the New Competition Tool at the EU level. The tool would allow the commission to conduct sector-wide probes into malfunctioning markets and impose remedies, which the EU's executive arm proposed in 2020 but later dropped.
Coalition talks are expected to take place over the coming weeks, but the results will surely shape how the new government lays out their vision for "modern" competition law for the global market, with its ripple effects felt in Brussels.
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