The German Act against Restraints of Competition (the “ARC”) does contain only a few specific provisions aimed at the retail market. Alongside EU competition law, the grocery sector is subject to the general rules of the ARC. In recent years, the relevant cartel provisions in the ARC have been aligned with Art. 101 TFEU. Section 1 ARC prohibits all agreements, concerted practices or decisions by associations that have as their object or effect a restriction of competition. This applies in particular to hard-core restrictions of competition such as price fixing, sharing of customers and markets, allocation of production, market share quotas or bid rigging. In recent years, the FCO has imposed fines for information exchanges between competitors.

Substantive differences exist between German and EU antitrust rules in the area of dominance. According to German law, hindrance and discrimination are also prohibited to undertakings with a relatively strong market position (marktstarke Stellung), i.e. small or medium-sized enterprises, as suppliers or purchasers of certain kinds of goods or commercial services depend on them in such a way that sufficient and reasonable possibilities of resorting to other undertakings do not exist. However, Sections 19 and 20 ARC deal with anticompetitive behaviour only in terms of prohibiting abusive conduct by an undertaking with a dominant or relatively high market position. Section 20(3) ARC explicitly prohibits undertakings with superior market power (überlegene Marktmacht) to abuse their market position towards small and medium-sized enterprises by selling goods or services below cost price without an objective justification.

According to German law, resale price maintenance (the “RPM”) is considered a restriction of competition by object. In a recommendation paper, the FCO has provided some guidance on RPM and a number of other competition law aspects of vertical distribution agreements between manufacturers and retailers. According to the FCO, RPM may under certain circumstances lead to efficiencies, which may result in an exemption under Art. 101(3) TFEU. It is, however, on the parties to demonstrate such efficiencies.

According to German law, there are no specific provisions beyond the ARC aimed particularly at controlling the structure of the retail sector. The general provisions of the German merger control regime apply.

In principle, in Germany, the retail sector is neither fully nor partly exempted from competition law.

However, a sector exemption for certain agreements between producers of agricultural products is contained in Section 28 ARC. The aim of the German Market Structure Act (the “MStG”), which has implemented this provision, is to improve the market position of farms. It enables producer collectives to be set up and permits what is termed “dual membership”, i.e., membership of a cooperative and of a producers’ union.

Furthermore, Section 3 ARC contains a specific provision for small and medium-sized enterprises with requirements that, if they are fulfilled, justify an exemption from the cartel prohibition. Systematically, this provision constitutes a legal fiction with the content that the general exemption requirements of Section 2(1) ARC in general are fulfilled if the requirements of Section 3 ARC are fulfilled. However, this provision regulates only cases without any interstate effect and applies to all sectors.

In Germany, there exists also no specific regulation applying to retail grocery market structures or behaviours beyond the general rules of the ARC that have any appreciable effect on competition.

The ARC deals with the accumulation and abuse of market power and the anticompetitive coordination of business decisions of companies. However, it does not stipulate a general ban on unfair competition. Whether commercial practices by dominant or non-dominant undertakings against competitors, consumers or other market participants are improper is determined by the Act against Unfair Competition (the “AUC”), which applies to the grocery retail sector in the same way as to other sectors. The anticompetitive effect of the AUC is quite low because it restricts the retailers only regarding a number of unfair and abusive practices.

Also beyond the AUC, in Germany there is no sector-specific regulation that, for example, provides an administrative price control, the prohibiting of the passing on of discounts or rebates to consumers or special provisions regarding internet retail stores.