The new German electronic Competition Register: long planned and now ready for use. Before the Competition Register can finally go live, however, there are still final steps to be taken. Nevertheless, we are venturing a glimpse into the future and summarise the most important changes.
After almost four years of preparation, the German Federal Cartel Office (FCO) has initiated the next phase of project "Competition Register". The legislator had already decided to introduce a Competition Register in July 2017. Since then, the FCO has created the electronic database and the necessary interfaces in cooperation with a large number of partners. Now that the system has been put into operation, the approximately 30,000 public contracting authorities and entities required to file notifications can register with the Competition Register. However, the Competition Register has not yet gone live. In particular, there are no notification and query obligations as yet. It is also planned to include violations of the new German Supply Chain Act (“Lieferkettengesetz”) in the Competition Register.
As a Reminder - Overview of the Competition Register
The purpose of the Competition Register is to help contracting authorities, sectoral contracting entities and franchisors to verify in procurement procedures whether a bidder must or can be excluded due to certain economic offences (see our newsletter on the Competition Register). This is to ensure that only reliable companies are selected in public procurement procedures. For this purpose, authorities report certain economic offences to the FCO, such as violations of antitrust law, tax offences, cases of money laundering or bribery, etc.
After violations have been registered, the information will be listed in an electronic database. In future, public contracting authorities will be obliged to consult the Competition Register before awarding a contract with an estimated contract value of EUR 30,000 or more. If records exist, bidders can or must be excluded. An entry in the register can be deleted either after the expiry of a deadline or on the basis of so-called “self-cleansing”.
Additional Amendment to Companies’ Access to the Register
Before the Competition Register went live, the legislator already made the first amendments to the Competition Register Act (Wettbewerbsregistergesetz - WRegG) in January 2021. These are primarily clarifications and editorial adjustments.
Besides this, the legislator changed the regulations as to the right of companies to obtain information about themselves. Companies can now only request information about their own records once a year, unless there is a special interest in further information (Section 5 (2) sentence 2 WRegG). The applicant must prove his identity and, if necessary, his power of representation (Section 5 (3) sentence 2 WRegG). Furthermore, it has been clarified that contracting authorities may not demand self-disclosure from companies pursuant to Section 5 (2) sentence 1 WRegG.
Violations of the German Supply Chain Act in the Competition Register
The draft of the German Supply Chain Act (Lieferkettengesetz) recently adopted by the Federal Government also provides for changes to the WRegG (see our newsletter on the Supply Chain Act). According to the Supply Chain Act, due diligence obligations are to be imposed on companies to monitor and ensure compliance with human rights standards by their suppliers abroad.
If the Supply Chain Act enters into force as drafted, the FCO can record violations of the Supply Chain Act in the Competition Register if a fine of at least EUR 175,000 is imposed. A fine of this amount is possible, e.g., if a company, contrary to Section 6 (1) of the draft bill, does not take a preventive measure or does not do so in time, despite having identified a human rights or environmental risk in the supply chain. A company can also be entered in the Competition Register if it fails to set up a complaint procedure.
Outlook: The Final Steps
Although the Competition Register is now technically ready for use, it has not yet gone live. Final steps by the Federal Ministry of Economics and Technology (Bundeswirtschaftsministerium - BMWi) are required. The BMWi has already presented a draft of the Competition Register Ordinance that specifies the provisions of the WRegG. Inter alia, it regulates the requirements for applications and evidence to be provided by companies for the early cancellation of entries by conducting self-cleansing measures. In addition, the Ordinance sets the fee for access to one’s own records at EUR 20.
The Competition Register will not be used until the BMWi has declared that the requirements for electronic data transmission have been met (Article 12 (1) WRegG). The announcement is a prerequisite for the application of the essential provisions of the WRegG. One month after the announcement, authorities must notify the economic and tax offences of companies.
Upon request of a contracting authority, the FCO may provide information on registered violations from this date. However, the obligation of contracting authorities to request entries in procurement procedures will not become effective until six months after the announcement. Only then it is possible for companies to apply for access to their own records. Since the BMWi has not yet made the announcement, the notification and query obligations in particular are still not applicable.