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Mittelstandskartell - Solution in demerger procedures

Antitrust unbundling proceedings are expensive and time-consuming. A SME cartel is one of several possible solutions. If your company is permanently linked to a competitor, for example in a joint venture, the cooperation must be regularly checked to see whether it is permissible under antitrust law. If this is not the case, this is unfortunate. There is a risk of an antitrust investigation, which could lead to unbundling proceedings and fine proceedings. The Cartel Office can oblige companies to stop violations of antitrust law. If a joint venture violates antitrust law, the Federal Cartel Office can demand that the joint venture be dissolved. In addition, a fine can be imposed that can amount to up to 10% of the annual turnover of the entire group of companies. However, this can be avoided through careful planning and strategic action. Think in particular of a SME cartel as a solution to unbundling proceedings.

When does a joint venture violate antitrust law?

In July 2020, the Federal Cartel Office announced the completion of the unbundling process in the ready-mix concrete sector. As part of the cement and ready-mix concrete sector investigation, the Federal Cartel Office identified almost 100 joint ventures between competitors that the Cartel Office classified as problematic. The Federal Cartel Office initiated formal unbundling proceedings for more than half of them from 2017 onwards. As the Federal Cartel Office currently reports (case report B1-216/17 from July 20, 2020), these have now largely been completed. This means that many companies formally dissolved their cooperation as part of these unbundling procedures.

Joint ventures exist in various forms. The Federal Cartel Office's focus was primarily on companies that operate in the same product and the same or neighboring geographical markets and are therefore competitors. These are involved in companies, such as GmbH or GmbH & Co KG, and thereby form a joint venture between competitors. This enabled companies to exchange information and to soften and weaken competition, for example through price coordination. The joint ventures therefore led to significant restrictions on competition that were inadmissible under antitrust law. The Federal Cartel Office therefore ordered these restrictions on competition to be abolished and called for the joint ventures to be dissolved. In addition, fine proceedings were initiated.

Don't be afraid of antitrust law

Companies often shy away from taking a closer look at whether their collaborations are in order under antitrust law. Cooperation with current or potential competitors on the same geographical and product market is only permitted under antitrust law in exceptional cases. In particular, the combined market share on all affected product and geographical markets may not exceed 10%. Current developments in antitrust law, in particular sector investigations by the Federal Cartel Office or the European Commission, can provide important information as to which sectors may be at risk of antitrust investigations. Unbundling proceedings are often preceded by other investigations by the Federal Cartel Office, such as the investigation of entire industrial sectors such as cement or ready-mixed concrete.

Companies should therefore regularly check whether they have entered into collaborations that may be critical under antitrust law and whether there is a risk of action by the Federal Cartel Office. At the same time, companies are well advised to have their collaborations with competitors checked under antitrust law. As part of a cooperation, a dynamic often arises, which intensifies the form and intensity of the cooperation. For example, if the cooperation originally only concerned joint purchasing, it cannot be ruled out that over time the companies involved could expand the cooperation to include joint marketing, for example, without checking this under antitrust law. As a result, they run a high risk that their cooperation as a whole will become inadmissible under antitrust law without them noticing this.

Use antitrust exceptions

Finally, companies sometimes overlook the fact that they could take advantage of antitrust exemptions. However, this requires that companies continually track evidence of the exemption so that they can present it in an emergency. If a cooperation leads to noticeable restrictions on competition, but generates efficiency advantages in the form of cost savings and these are demonstrably passed on to customers in the form of price advantages, a so-called individual exemption from the general ban on cartels comes into question. This applies regardless of the individual or collective market shares of the companies concerned. Although it is difficult to prove the requirements in practice, the basic requirement is always that companies think about this and align their cooperation with this and document it accordingly.

In Germany, the special regulation of permissible small and medium-sized businesses cartels also applies. You can read important details about the requirements of a SME cartel here [link]. A medium-sized cartel is an option for small and medium-sized companies that want to compensate for competitive disadvantages through cooperation. Competing companies may also enter into a SME cartel for this purpose if their combined market share does not exceed 10% in all affected markets and cost efficiencies can be demonstrated for all companies. Companies that are threatened with unbundling proceedings should therefore check whether their joint venture can be maintained through a SME cartel as a solution to unbundling proceedings. Restructuring is necessary if necessary. Please feel free to contact me by mail or by telephone if you have any questions.

Avoiding a formal unbundling decision

If you and your joint venture are on the radar of the Federal Cartel Office, it is advisable to cooperate with the Federal Cartel Office to avoid a formal unbundling decision. Explain to the Federal Cartel Office why the joint venture is permissible under antitrust law. It is particularly important to remember that there is little or no competition between the partners of the joint venture or that it can be proven. It is also possible that the combined market share does not exceed the 10% threshold. If you and the other companies achieve cost savings, these should also be outlined. A reorganization of the joint venture by reducing its business activities or turning it into a medium-sized business cartel may also be an option for unbundling proceedings.

What to do if the Federal Cartel Office cannot be convinced or a reorganization is not possible in a legally secure manner? If the companies do not operate independently and dissolve their joint venture, there is a risk of a formal unbundling decision. This obliges the companies to dissolve the joint venture and imposes the costs of the antitrust proceedings on them. The companies in the joint venture can challenge this decision by filing a complaint with the Düsseldorf Higher Regional Court.

Unbundling plan instead of a SME cartel

If the chances of success of a complaint are critical based on the Federal Cartel Office's arguments, companies should avoid a unbundling decision and the corresponding procedural costs. A clear plan for dissolving the joint venture must be presented to the Federal Cartel Office. This plan must set out how and by what date the dissolution will take place. Please feel free to contact me by phone or by mailso that we can discuss such a plan for you in an initial telephone conversation

There are several options for resolution. If the joint venture was, for example, a civil law company or a commercial company, the companies must make a resolution to dissolve the joint venture, discontinue the joint venture's business operations, fulfill liabilities, collect claims and distribute the remaining assets among the companies.

In addition, the tax office must be informed. If the joint venture was established as a GmbH or GmbH & Co. KG, there are several options. The shareholders can decide on liquidation. This leads to a comparable procedure as described above. Alternatively, one company can buy and take over the company shares of the other; the company continues to exist, but without competitors as shareholders. This would also be the case if the joint venture was sold to a third party, a non-partner.

Mittelstandskartell - Solution in demerger procedures

Cooperation with competitors is only permitted under antitrust law in exceptional cases. Therefore, check whether you and your company have entered into purchasing, sales, logistics or production partnerships with competitors. It is possible that the joint venture can be maintained and continued as a so-called SME cartel as a solution to unbundling proceedings. If companies are competitors but are smaller or medium-sized companies, they can combine business areas such as sales or purchasing if this cooperation results in a rationalization of economic processes. This means in particular cost savings and an improvement in the competitive position of each company involved in the joint venture. Such cost savings must be demonstrated to the Federal Cartel Office by companies demonstrating, in particular, an improvement in the cost-benefit ratio and an increase in competitiveness. Read here Details on the organization of a middle class cartel.


Joint ventures in which competitors have a stake are only permissible under antitrust law under strict conditions. Companies have their own interest in continually checking the antitrust requirements of their joint venture. If the Federal Cartel Office has begun an investigation and the joint venture cannot be maintained under antitrust law, the companies involved should decide to dissolve the joint venture if a medium-sized business cartel is excluded as a solution to unbundling proceedings. This is the only way to avoid unbundling proceedings and subsequent fine proceedings.

Anwalt Gesellschaftsrecht und Handelsrecht

dr Andrelang, LL. M

Specialist lawyer for international business law

Specialist lawyer for commercial and corporate law


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