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Effective competition rules as foundation for growth and investment

A market-oriented regulatory framework that promotes open markets and functioning competition is an essential precondition and the best guarantee for growth, innovation and jobs in an economy. Because competition keeps market power in check, rewards entrepreneurial commitment and innovative skill, and opens up opportunities.

Accordingly, the competition principle is an expression of our liberal economic order. In their own interest, companies oppose restrictions on competition, be it through state intervention or through infringements by private market participants.

Antitrust law in particular ensures that companies operate on the market independently of each other and compete with each other. German industry champions effective and rigorous competition control by the European Commission and national antitrust authorities.

Anti-competitive behaviour must be punished. Many antitrust breaches can only be uncovered through in-house corporate compliance efforts. The legislator should therefore provide clear incentives for the introduction of effective compliance systems with the purpose of preventing anticompetitive infringements. Companies and consumers which have suffered injury due to an antitrust infringement have a right to efficient enforcement of the law and to appropriate compensation. In this regard, procedural law must always strike the right balance between ensuring effective legal protection on the one hand and guaranteeing an appropriate defence on the other.

Alongside antitrust law, merger control also plays an important role in ensuring functioning competition. Its purpose is to verify the compatibility of external growth by company mergers with competition on the markets in question.

Fair competition – also between private and municipal market participants

Competition law should protect companies not only against unfair practices of other private market participants. Competition between private and public providers must also be ensured. There has been a marked change in the area of service provision by the state. Services covered by the unclear concept of “services of general economic interest” which were previously provided as sovereign tasks of central, regional and municipal government are today also provided by the private sector to an ever greater extent. Economic activity is not one of the core tasks of the public sector. Liberalisation of the telecoms, postal or energy markets have led to a perceptible improvement in the provision of basic services to citizens. It is all the more important to create fair conditions of competition between municipal and private providers.

Well-targeted state aid for exceptional cases

Lastly, state aid can also distort competition between companies. A high level of state aid discipline at national level as well as effective state aid control by the European Commission is indispensable for fair competition. Investments in Europe are generated first and foremost by an upturn in the economic cycle, through growth and through deregulation of the labour market, and not through state aid. Only in exceptional cases, if markets do not underpin competition, can state aid be permissible. State aid must therefore be deployed in a targeted way in areas where it is genuinely capable of supporting the competitiveness of European industry in global competition.