Wiedemann zum 70. Geburtstag, C.H. Beck 2020, pp. 269-284; F. Engelsing, Nachhaltigkeit und Wettbewerbsrecht, DB 2020(10), M4-M5; M. Otto, Gemeinwohlorientierte Absprachen in der Wirtschaft, FAZ 13.02.2021, p. 22; J. Dreyer and E. Ahlenstiel, Berücksichtigung von Umweltschutzaspekten bei der kartellrechtlichen Bewertung von Kooperationen, WuW 2021(2), pp. 76-81; A. Heinemann, Nachhaltigkeitsvereinbarungen, sic! 2021(5), pp. 213-227; W. Frenz, Klimaschutz und Wettbewerb in der digitalen Kreislaufwirtschaft, WRP 2021(8), pp. 995-1003; A. Wambach, Gemeinwohlziele und Wettbewerb, FAZ 20.08.2021, p. 16; D. Seeliger and K. Gürer, Kartellrecht und Nachhaltigkeit, Neue Regeln für Umweltschutzvereinbarungen von Wettbewerbern, BB 2021(6), pp. 2050-2056; D. Seeliger and K. Gürer, ESG und Kartellrecht, neue Chancen für Unternehmen, DB 2021(20), supplement. no. 2, pp. 39-41; A. Bischke and S. Brack, Neuere Entwicklungen im Kartellrecht, NZG 2022(9), pp. 393-396; R. Inderst and S. Thomas (2022), Nachhaltigkeit und Wettbewerb: Zu einer Reform des Wettbewerbsrechts für die Erreichung von Nachhaltigkeitszielen, available at https://safe-frankfurt.de/fileadmin/user\_ upload/editor\_common/Policy\_Center/SAFE\_Policy\_Letter\_94.pdf. Accessed 5 November 2022; C. Ritz and F. v. Schreitter, Chain(ed) Reaction? Das Lieferkettengesetz und seine kartellrechtlichen Hürden, NZKart 2022(5), pp. 251-259; J. Hertfelder and D. Drixler, Ein "more sustainable economic approach" – der niederländische Leitlinienentwurf zu Nachhaltigkeitsvereinbarungen im Kartellrecht, BB 2022(22), pp. 1218-1224; E. Wiese (2022), Agenda 2025 - Roadmap to Sustainability, available at https://www.d-kart.de/blog/2022/05/18/ agenda-2025-roadmap-to-sustainability/. Accessed 5 November 2022; See also S. Legner, Die Relevanz eines Geschlechteraspekts für das Kartellrecht, ZWeR 2020(2), pp. 289-312; J. Haucap, C. Heldmann and H. Rau, Die Rolle von Geschlechtern für Wettbewerb und Kartellrecht, WuW 2021(7), pp. 408-412; On EU law W. Frenz, Kartellrecht und Umweltschutz im Zeichen der Energiewende, WRP 2012(8), pp. 980-989; C. Mayer, Der Beitrag des Kartellrechts zum Green Deal, WuW 2021(5), pp. 258-260; M. Olthoff and A. v. Bonin, Das "Hinkley Point"-Urteil des EuGH: Berücksichtigung von Nachhaltigkeitsaspekten in der beihilferechtlichen Prüfung sowie allgemein im EU-Kartell- und Fusionskontrollrecht, EuZW 2021(5), pp. 181-187; O. Schley and M. Symann, Article 101 Abs. 3 AEUV goes green (und Nachhaltigkeit), WuW 2022(1), pp. 2-7.

8 On the ensuing questions for competition law C. Ritz and F. v. Schreitter, Chain(ed) Reaction? Das Lieferkettengesetz und seine kartellrechtlichen Hürden, NZKart 2022(5), pp. 251-259.

9 D. Seeliger and K. Gürer, Kartellrecht und Nachhaltigkeit, Neue Regeln für Umweltschutzvereinbarungen von Wettbewerbern, BB 2021(6), p. 2050.

### 7.2 General Framework

### 7.2.1 Definition of Sustainability

There is no statutory definition of sustainability specifically for German competition law. Neither the German Federal Cartel Office nor competition law scholarship offer clear-cut definitions of what sustainability precisely is. That said, sustainability is generally understood to be a broad concept that should be determined in particular with a view to UN standards and international treaties, such as the Paris Agreement of 2015. The German Federal Cartel office usually stresses that sustainability includes environmental as well as social aspects or standards,10 sometimes referring to the UN agenda 2030 for sustainable development11 with its 17 sustainable development goals.12 In a similar vein, journal articles on competition law briefly state that sustainability includes environmental, social and governance standards.13

While it is generally accepted that sustainability comprises all ESG dimensions, the environmental dimension of sustainability, in particular climate protection, is currently at the heart of the case law (see Sect. 7.3) and the academic as well as political discourse in Germany.14 Secondly, social standards such as the protection

10 See Bundeskartellamt, Open markets and sustainable economic activity – public interest objectives as a challenge for competition law practice, October 2020, p. 5; Bundeskartellamt (2021), Jahresbericht 2020/21, available at https://www.bundeskartellamt.de/SharedDocs/ Publikation/DE/Jahresbericht/Jahresbericht\_2020\_21.pdf?\_\_blob=publicationFile&v=5.

Accessed 5 November 2022, p. 46; F. Engelsing and M. Jakobs, Nachhaltigkeit und Wettbewerb, WuW 2019(1), p. 16.

11 See United Nations General Assembly (2015), Transforming our world: the 2030 Agenda for Sustainable Development, available at https://www.un.org/en/development/desa/population/migra tion/generalassembly/docs/globalcompact/A\_RES\_70\_1\_E.pdf. Accessed 5 November 2022, para 2: "[...] sustainable development with its three dimensions – economic, social and environmental [...]"

12 Bundeskartellamt, Open markets and sustainable economic activity – public interest objectives as a challenge for competition law practice, October 2020, p. 5.

13 A. Bischke and S. Brack, Neuere Entwicklungen im Kartellrecht, NZG 2022(9), p. 393; J. Dreyer and E. Ahlenstiel, Berücksichtigung von Umweltschutzaspekten bei der kartellrechtlichen Bewertung von Kooperationen, WuW 2021(2), pp. 76-77 fn. 1.

14 Bundeskartellamt, Open markets and sustainable economic activity – public interest objectives as a challenge for competition law practice, October 2020, pp. 7-8; Stellungnahme der Bundesregierung zum Tätigkeitsbericht des Bundeskartellamtes 2019/2020, BT-Drs. 19/30775, pp. III, IV; Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, para 404; SPD, Bündnis 90/Die Grünen and FDP (2021), Mehr Fortschritt wagen, Koalitionsvertrag 2021-2025, available at https://www.spd.de/fileadmin/Dokumente/Koalitionsvertrag/ Koalitionsvertrag\_2021-2025.pdf. Accessed 5 November 2022, p. 5: "Die Klimaschutzziele von Paris zu erreichen, hat für uns oberste Priorität. Klimaschutz sichert Freiheit, Gerechtigkeit und nachhaltigen Wohlstand.

of human rights in supply chains get attention.15 By contrast, governance factors as such appear to play a minor role so far.

The lack of a clear explanation or even a precise definition of sustainability in German competition law and practice is partly remedied by the deliberate conformity of the German prohibition of cartels in Sections 1 and 2 GWB with the European prohibition of cartels in Article 101 TFEU, as expressed by the German legislator when amending the GWB in 2005. By consequence, legal terms are generally to be interpreted in parallel, and the legislator intended that the Commission's guidelines be considered in that regard.16 Adding to that, sustainability has so far been discussed mostly with respect to the prohibition of cartels, not in relation to the prohibition of abuse of a dominant position, which is where German and European Union competition law diverge. Therefore, German competition law can and should draw on definitions of sustainability in European (competition) law whenever possible. This may even be a legal requirement in all cases where the German Federal Cartel Office also enforces Article 101 TFEU (see Article 3 (1)1 reg. 1/2003). In those cases, the application of national competition law may not lead to the prohibition of agreements, decisions by associations of undertakings or concerted practices, which may affect trade between Member States but which do not restrict competition within the meaning of Article 101 (1) TFEU. The same goes for corporate behaviour exempted by Article 101 (3) TFEU or covered by a Regulation for the application of Article 101 (3) TFEU (Article 3 (2)1 reg. 1/2003).

European competition law does not provide a clear-cut definition of sustainability either. With reference to Article 101 TFEU, Article 210a (3) of Regulation 1308/ 2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products,17 as amended by Regulation 2021/2117 of the European Parliament and of the Council of 2 December 2021,18 defines the term "sustainability standard". Again, this definition stresses the environmental dimension of sustainability. Besides, the EU has enacted a taxonomy regulation that defines sustainability for capital market law.19

15 Cf. BMWK (2022), Wettbewerbspolitische Agenda des BMWK bis 2025, available at https:// www.bmwk.de/Redaktion/DE/Downloads/0-9/10-punkte-papier-wettbewerbsrecht.pdf?\_\_blob= publicationFile&v=6#:~:text=Die%20Kartellbeh%C3%B6rden%20beobachten%20die%20 Entwicklungen,und%20auf%20den%20Fernw%C3%A4rmesektor%20ausweiten.

16 Gesetzentwurf der Bundesregierung, Entwurf eines Siebten Gesetzes zur Änderung des Gesetzes gegen Wettbewerbsbeschränkungen, BT-Drs. 15/3640, pp. 22-23, 25, 44; but see D. Zimmer, in: Körber, Schweitzer and Zimmer (eds), Immenga/Mestmäcker, Wettbewerbsrecht, Vol. 2, 7th ed, C.H. Beck 2023, sec. 1 GWB paras 15-17.

17 OJ 2013 L 347, p. 671.

18 OJ 2021 L 435, p. 262.

19 OJ 2020 L 198, p. 13; see further E. Bueren, Die EU-Taxonomie nachhaltiger Anlagen, Teil I, WM 2020(35), pp. 1611-1618, Teil II, WM 2020(36), pp. 1659-1664.

However, from a legal perspective, definitions within secondary EU law are inferior to the goals and the provisions associated with sustainability enshrined in the European treaties.

In the EU treaties, sustainability and environmental objectives are enshrined, inter alia, in recital 9 preamble TEU; Article 3 (3) and (5) TEU; Articles 11 and 191 TFEU; and Article 37 CFR. Moreover, there are horizontal clauses on certain aspects of sustainability in the broad ESG sense, such as social protection (Article 9 TFEU), health protection (Article 168 (1), Article 9 TFEU, Article 35 sentence 2 CFR), development policy (Article 208 (1) TFEU), consumer protection (Article 12 TFEU, Article 38 CFR), gender equality (Article 8 TFEU, Article 23 (1) CFR) and culture (Article 167 (4) TFEU).20 As a general matter, many of these horizontal clauses reflect values integral to the European Union (see Article 2 TEU).

Against this background, the draft Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements (horizontal guidelines) acknowledge a broad concept of sustainability but, just like the discussion in Germany, focus on the environmental dimension. The Commission rightly states that sustainable development is a core principle of the TEU and a priority objective for the Union's policies. At the same time, the Guidelines recall that the Commission committed to implementing the United Nation's sustainable development goals and the growth strategy of the European Green Deal.21 The draft horizontal guidelines go on to explain:

in broad terms, sustainable development refers to the ability of society to consume and use the available resources today without compromising the ability of future generations to meet their own needs. It encompasses activities that support economic, environmental, and social (including labour and human rights) development. The notion of sustainability objective therefore includes, but is not limited to, addressing climate change (for instance, through the reduction of greenhouse gas emissions), eliminating pollution, limiting the use of natural resources, respecting human rights, fostering resilient infrastructure and innovation, reducing food waste, facilitating a shift to healthy and nutritious food, ensuring animal welfare, etc.22

To sum up, there is a lot of agreement on what sustainability means in abstract due to general European and international rules on sustainability. Nevertheless, there is no concise definition that makes sustainability goals readily operational in practice. This vagueness is circumvented to the extent that current practice, scholarship

20 For an in-depth analysis with a view to competition law, see L. Breuer, Das EU-Kartellrecht im Kraftfeld der Unionsziele, Nomos 2013.

21 European Commission, Communication from the Commission, Approval of the content of a draft for a Communication from the Commission – Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal cooperation agreements, OJ 2022 C 164 para 542.

22 European Commission, Communication from the Commission, Approval of the content of a draft for a Communication from the Commission – Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal cooperation agreements, OJ 2022 C 164 para 543 [footnotes omitted].

and policy discussions on competition law and sustainability in Germany as well as in Europe deal with the environmental dimension of sustainability.

This focus partly distinguishes the discussion on competition law and sustainability from the closely related but more general discussion on non-economic goals in competition law. While sustainability is often considered a non-economic goal and while joint sustainability initiatives can conflict with the cartel prohibition, environmental problems are often caused by external effects, i.e. a kind of market failure that impedes workable competition.23 From that perspective, the promotion of sustainability can actually promote efficiency, workable competition and long-term consumer welfare, a goal central to competition law. However, conventional competition law only involves the welfare of the consumers in the markets affected by the restriction of competition. In western economies, these consumers will often be the ones who produce and take advantage of external effects rather than the one exposed to them (see Sects. <IP_ADDRESS>.2 and <IP_ADDRESS>).24

### 7.2.2 Role of Sustainability in Competition Law

### <IP_ADDRESS> General Framework: Constitutional Law, European Law, Climate Protection Act (KSG)

As a general matter, the German constitution (Grundgesetz (GG)), similarly to European primary law, obliges the state to protect certain dimensions of sustainability, in particular natural livelihoods and human rights, see Articles 1, 2 (1) and 20a GG. Article 20a GG has recently come into focus as an obligation for the legislator to fight global warming in order to protect future generations.25 It is generally acknowledged that Article 20a GG, while predominantly addressing the legislator, is also binding for public authorities. When applying and interpreting a general clause, i.e. a statute that grants an authority discretion, the authority must take the goals of Article 20a GG into account.26 In the same vein, the interpretation

23 D. Freitag, K. Hansen, K. Markert and V. Strauch, Umweltschutz und Wettbewerbsordnung, Athenäum 1973, pp. 50-52; Bundeskartellamt, Open markets and sustainable economic activity – public interest objectives as a challenge for competition law practice, October 2020, p. 5; F. Wagner v. Papp, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol.

2, 4th ed, C.H. Beck 2022, sec. 1 GWB para 362. 24 Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, paras 434-435.

25 Bundesverfassungsgericht, BVerfGE 157, 30.

26 See S. Huster and S. Rux, in: Epping and Hillgruber (eds), BeckOK Grundgesetz, 51st ed, C.H. Beck 15.5.2022, GG Article 20a paras 27, 32-33; H. Schulze-Fielitz, in: Dreier (ed), Grundgesetz Kommentar, Vol. 2, 3rd ed, Mohr Siebeck 2015, GG Article 20a paras 67, 74-75; R. Scholz, in: Dürig, Herzog and Scholz (eds), Grundgesetz-Kommentar, 96th supplement November 2021, C.H. Beck 2021, GG Article 20a paras 46, 56; H. Jarass, in: Jarass and Pieroth (eds), Grundgesetz für die Bundesrepublik Deutschland, 17th ed, C.H. Beck 2022, GG Article 20a paras 18, 21; K.-P. Sommermann, in: v. Münch and Kunig (eds), Grundgesetz-Kommentar, Vol. 1, 7th ed, C.H. Beck 2021, GG Article 20a, paras 41, 46-48.

of general clauses must incorporate the protection of fundamental rights (interpretation in conformity with fundamental rights or other constitutional law).

This applies to competition law, too, as both the prohibition of anti-competitive agreements (Section 1 GWB) and the exemption pursuant to Section 2 GWB as well as the prohibition of an abuse of a dominant position (Section 19 GWB) are general clauses. By consequence, the German Constitutional Court as well as the German Federal Court (Bundesgerichtshof (BGH)) have repeatedly held that Section 19 GWB must be interpreted in conformity with fundamental rights.27

Furthermore, since 2019, Section 13 (1)1 of the Climate Protection Act (Klimaschutzgesetz (KSG)) has spelled out and clarified that (inter alia) federal state authorities must interpret and apply general clauses with regard to climate protection when they make discretionary decisions. The purpose of the KSG is to soften the effects of global climate change by ensuring that national and European climate protection targets are met. Section 13 (1)1 KSG requires that wherever substantive federal law uses legal terms that require interpretation or accord assessment or discretionary powers, the purpose and objectives of the KSG need to be included in the considerations as (co-)decisive aspects. This can significantly influence the application practice of other federal laws.28

Notably, however, this requirement is restricted to discretionary decision-making within the framework of the statutory requirements.29 Moreover, Section 13 (1) KSG only requires that climate protection be taken into account. Section 13 (1) KSG does not postulate a strict obligation to effectively take account of climate protection targets, nor does it give them a special weight in the sense of an optimisation requirement. This means that climate protection concerns can be set aside in favour of other concerns.30 Therefore, it seems somewhat doubtful whether Section 13 (1) KSG goes beyond the requirements of Article 20a GG.31 Regarding competition law, the discussion so far has been mostly about whether and under which conditions the GWB allows the Federal Cartel Office to apply more lenient standards to (potentially) anti-competitive behaviour at all (see Sects. <IP_ADDRESS> and <IP_ADDRESS>). If the GWB does not grant permission to do so, there will arguably be no scope for

27 See recently Bundesverfassungsgericht, 3 June 2022, 1 BvR 2103/16, ECLI:DE:BVerfG:2022: rk20220603.1bvr210316, paras 35, 37; BGH, 23 June 2020, KVR 68/19, ECLI:DE:BGH:2020: 230620BKVR69.19.0, para 105; critical A. Fuchs, in: Körber, Schweitzer and Zimmer (eds), Immenga/Mestmäcker, Wettbewerbsrecht, Vol. 2, 7th ed, C.H. Beck 2023, sec. 19 GWB paras 211c-211d.

28 S. Klinski et al., Das Bundes-Klimaschutzgesetz, NVwZ 2020(1-2), p. 6.

29 See the government explanatory memorandum accompanying the draft act, BT-Drs. 19/14337, p. 36; M. Wickel, Das Bundes-Klimaschutzgesetz und seine rechtlichen Auswirkungen, ZUR 2021(6), p. 337.

30 M. Wickel, Das Bundes-Klimaschutzgesetz und seine rechtlichen Auswirkungen, ZUR 2021(6), p. 337; M. Kment, Klimaschutzziele und Jahresemissionsmengen – Kernelemente des neuen Bundes-Klimaschutzgesetzes, NVwZ 2020(21), p. 1544.

31 See S. Schlacke, Klimaschutzrecht im Mehrebenensystem, NVwZ 2022(13), p. 911.

(discretionary) decision-making with regard to climate protection, and Section 13 KSG may not come into play as far as substantive competition law is concerned.

To summarise, for the reasons explained above, from a theoretical point of view, Section 13 KSG does not necessarily affect the positions in the discussion on German competition law and sustainability at all. Nevertheless, the legislative intention of Section 13 (1) KSG ought to get more attention in German competition law scholarship. So far, it seems to have been completely ignored.

Another source of conflict between competition law and sustainability have been the legislator's efforts to encourage cooperations aiming to achieve sustainability goals, even though their agreements were likely to contravene competition law. This scenario can put authorities in an enforcement dilemma (see Sect. <IP_ADDRESS>).

### <IP_ADDRESS> Cartel Prohibition

<IP_ADDRESS>.1 Section 1 GWB (Equivalent to Article 101 TFEU) The obligation to interpret general clauses in conformity with the constitution is not to say, however, that Sections 1 and 19 GWB can be narrowed or even set aside to account for fundamental rights or sustainability according to Article 20a GG. Whether this is possible is in dispute. If it is possible by law, the KSG (see Sect. <IP_ADDRESS>) requires a climate change impact assessment.32 The position of the Federal Cartel Office regarding the latter has changed over time.

Until 1995, the German Federal Cartel Office used to apply a balancing test to justify restrictions of competition for public interest reasons, along two lines of reasoning: sometimes the balancing test was meant to restrict the scope of application of Section 1 GWB; sometimes it was presented as a part of prosecutorial discretion. Arguably, the Federal Cartel Office has applied this policy mostly to issues of health protection33 but also to agreements in the interest of environmental protection.34

32 BT-Drs. 19/14337, p. 36; S. Schlacke, Klimaschutzrecht im Mehrebenensystem, NVwZ 2022(13), p. 911.

33 Bericht des Bundeskartellamtes über seine Tätigkeit im Jahre 1966 sowie über Lage und Entwicklung auf seinem Aufgabengebiet (§ 50 GWB), BT-Drs. V/1950, p. 58: restrictions of cigarette advertising. In this report, it is unclear whether the balancing test was meant to restrict the scope of application of sec. 1 GWB or whether it was considered part of prosecutorial discretion. With regard to a subsequent agreement of the cigarette industry amending the aforementioned one, the Federal Cartel Office made clear that it considered the balancing test to restrict the scope of the cartel prohibition, see Bericht des Bundeskartellamtes über seine Tätigkeit im Jahr 1976 sowie über die Lage und Entwicklung auf seinem Aufgabengebiet (§ 50 GWB), BT-Drs. 8/704, pp. 9, 79; also clearly arguing for a restriction of the scope of the cartel prohibition Bundeskartellamt, 20 February 1960 - Doppelstecker, WuW/E Bundeskartellamt pp. 145, 149-152, concerning an agreement to build in protective contacts for plugs.

34 Bericht des Bundeskartellamtes über seine Tätigkeit in den Jahren 1985/1986 sowie über Lage und Entwicklung auf seinem Aufgabengebiet (§ 50 GWB), BT-Drs. 11/554, p. 70, as part of prosecutorial discretion.

Following a conference with scholars on packaging regulation,35 the Federal Cartel Office in 1995 changed its policy in view of scholarly critique36 and backed by critical studies of the Centre for European Economic Research (ZEW) as well as the German Monopolies Commission:37 The agency gave up the approach of a balancing test and moved instead to exclusive reliance on opportunity decisions (discretionary prosecution principle – Opportunitätsprinzip, Section 47 (1) OWiG), i.e. toleration (non-prosecution) of certain kinds of sustainability agreements even if they were considered to violate competition law (for particular cases, see Sect. 7.3.1).38

The Federal Cartel Office may have had different reasons for its decision. First, as a general matter, the discretionary prosecution principle shall enable the authority to avoid spending resources on infringements that, although (potentially) illegal, are thought not to produce meaningful harm, for instance because the affected business volume is (very) small.

Second, in the 1990s, the Federal Cartel Office used this strategy to avoid an enforcement dilemma with sustainability goals. In particular, environmental law on European as well as on German level has occasionally pursued the strategy to encourage (as opposed to require) companies to cooperate in order to achieve certain regulatory goals, for instance with regard to the reduction or recycling of waste or the avoidance of CFC.39 This tendency can give rise to a conflict with competition law. Most notably, when enacting the packaging ordinance (Verpackungsverordnung) in 1991, the German legislator had been warned beforehand by the German Federal Cartel Office of a conflict with competition law but decided to leave the regulatory framework unchanged. This presented the competition authority with the dilemma that strict competition law enforcement could have rendered the regulatory concept

35 Bundeskartellamt, Arbeitsunterlage für die Sitzung des Arbeitskreises Kartellrecht am 4. und 5. Oktober 1993, Wettbewerbspolitische und kartellrechtliche Probleme der deutschen Entsorgungswirtschaft, September 1993.

36 For an overview, see K. Krauß, in: Bunte (ed), Kommentar zum Deutschen und Europäischen Kartellrecht, Vol. 1, 14th ed, Luchterhand 2022, sec. 1 GWB para 162; H. Köhler, Abfallrückführungssysteme der Wirtschaft im Spannungsfeld von Umweltrecht und Kartellrecht, BB 1996(50), p. 2579; T. Lappe, Zur ökologischen Instrumentalisierbarkeit des Wettbewerbsrechts, WRP 1995(3), p. 174; D. Freitag, K. Hansen, K. Markert and V. Strauch, Umweltschutz und Wettbewerbsordnung, Athenäum 1973, pp. 73-75, 79-80.

37 Monopolkommission, XI. Hauptgutachten 1994/1995, Wettbewerbspolitik in Zeiten des Umbruchs, 1996, BT-Drs. 13/5309, paras 75-98.

38 Bericht des Bundeskartellamtes über seine Tätigkeit in den Jahren 1995/1996 sowie über Lage und Entwicklung auf seinem Aufgabengebiet (§ 50 GWB), BT-Drs. 13/7900, pp. 39-40; Bundeskartellamt, Arbeitsunterlage für die Sitzung des Arbeitskreises Kartellrecht am 4. und 5. Oktober 1993, Wettbewerbspolitische und kartellrechtliche Probleme der deutschen Entsorgungswirtschaft, September 1993, pp. 28, 40.

39 I. Pernice, Rechtlicher Rahmen der europäischen Unternehmenskooperation im Umweltbereich unter besonderer Berücksichtigung von Article 85 EWGV, EuZW 1992(5), pp. 139-140; Bundeskartellamt, Arbeitsunterlage für die Sitzung des Arbeitskreises Kartellrecht am 4. und 5. Oktober 1993, Wettbewerbspolitische und kartellrechtliche Probleme der deutschen Entsorgungswirtschaft, September 1993, pp. 10-12.

vacuous. The authority therefore decided to tolerate cooperation under certain circumstances (see also Sect. 7.3.1).40

Such a decision does not prevent the Federal Cartel Office from changing its conclusion and finding an infringement in the future, nor does it affect the civil law consequences of a possible infringement of the cartel prohibition. Hence, there remains legal uncertainty for the undertakings concerned.41 Inter alia for this reason and in fear of a possible influence of political and social interests, this newer line of reasoning has been subject to criticism.42

Today, the German Federal Cartel Office and the leading opinion in German competition law scholarship continue to hold the view that it is not possible to deny a violation of Section 1 GWB, the prohibition of anti-competitive agreements, by means of a balancing test. Weighing the benefits of competition via-á-vis other legal interests43 can therefore not justify a sustainability or an ecological cartel privilege, unless explicitly stipulated by law (on such provisions see Sect. 7.2.3). If no such exemptions exist, restrictions of competition that serve a public interest do not escape the prohibition of cartels. In particular, it is considered impossible to tailor the cartel prohibition by interpretation for it to protect only competition on the merits (Leistungswettbewerb) as this would give rise to enormous problems of delimination.44

A strong argument in support of this position is that previous versions of the GWB explicitly allowed for the exceptional permission of cartels due to overriding reasons of the overall economy and of public interest (Section 8 GWB former version; see Sect. 7.2.3). The legislator has abolished these provisions so that the current GWB lacks a (codified) public interest exception. Any exemptions are deliberately left to Section 2 GWB, the German equivalent of Article 101 (3) TFEU. One can therefore argue that acknowledging an uncodified balancing

40 Bundeskartellamt, Arbeitsunterlage für die Sitzung des Arbeitskreises Kartellrecht am 4. und 5. Oktober 1993, Wettbewerbspolitische und kartellrechtliche Probleme der deutschen Entsorgungswirtschaft, September 1993, pp. 28, 40; see also Monopolkommission, XI. Hauptgutachten 1994/1995, Wettbewerbspolitik in Zeiten des Umbruchs, 1996, BT-Drs. 13/5309, pp. 30-31, paras 75-76.

41 H. Köhler, Abfallrückführungssysteme der Wirtschaft im Spannungsfeld von Umweltrecht und Kartellrecht, BB 1996(50), p. 2578.

42 For example by F. Säcker and A. Zorn, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Kartellrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 1 GWB para 185; J. Heyers, in: Jaeger et al. (eds), Frankfurter Kommentar zum Kartellrecht, Vol. 4, 91st supplement August 2018, Otto Schmidt 2018, sec. 2 GWB para 72.

43 F. Säcker and A. Zorn, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Kartellrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 1 GWB para 185. 44 D. Freitag, K. Hansen, K. Markert and V. Strauch, Umweltschutz und Wettbewerbsordnung,

Athenäum 1973, pp. 67-68. Note, however, that performance-based competition can be the object of competition rules by business and trade associations, sec. 24 GWB. These rules can be recognised by the Federal Cartel Office. But a recognition only means that the competition authority will not exercise its power to intervene.

test would circumvent the abolishment of the old exemptions and thereby contradict the intention of the legislator.45

Besides, the German Federal Cartel Office and German scholarship argue that it is good policy to separate objectives related to competition from those related to non-economic goals, such as sustainability. The Federal Cartel Office considers itself well positioned to safeguard the former but argues that the democratically legitimised legislator is best positioned to protect the latter and, when doing so, to strike a balance with the interest in workable competition.46 This task should not be imposed on companies in their self-assessment nor on the Federal Cartel Office.

The Federal Court of Justice has also held on several occasions—which did not concern sustainability agreements—that a restriction of Section 1 GWB by means of a balancing test is impossible.47 The German Federal Court as well as the German Constitutional Court have so far adhered to this principle when employing a so-called materialisation in their interpretation of competition law (Pechstein, Facebook; see Sect. <IP_ADDRESS> with fn. 27): as indicated by recent judgments, the courts have resorted to fundamental rights only as an argument for applying competition law, i.e. a strict interpretation, but, to our knowledge, never as an argument to effectively weaken it.

<IP_ADDRESS>.2 Section 2 GWB (Equivalent to Article 101 (3) TFEU) It follows that according to the Federal Cartel Office and the majority view in scholarship, sustainability or other political objectives (such as "fair trade") may only be taken into account as a consumer benefit within the scope of the exemption requirements of Section 2 GWB, the German equivalent of Article 101 (3) TFEU. Section 2 (1) GWB was aligned with Article 101 (3) TFEU in 2005, and Section 2 (2) GWB has since then contained a dynamic reference to the European block exemption regulations.48 By consequence, the question to what extent sustainability can be a benefit offsetting a restriction of competition in German competition law should generally be answered in the same way as in European competition law.49 However, European competition law is currently witnessing an intense legal and policy discussion on the matter. At present, the Commission is of the opinion that

45 See Unabhängige Sachverständigenkommission zum Umweltgesetzbuch, in: Bundesministerium für Umwelt, Naturschutz und Reaktorsicherheit (ed), Umweltgesetzbuch (UGB-KomE), Duncker & Humblot 1998, p. 504: a general privilege under competition law for anti-competitive agreements that protect the environment requires a legislative decision.

46 Bundeskartellamt, Open markets and sustainable economic activity – public interest objectives as a challenge for competition law practice, October 2020, pp. 13-15.

47 BGH, 9 March 1999, KVR 20/97 - Lottospielgemeinschaft, WuW/E DE-R 289, 293, 295; BGH, 11 December 1997, KVR 7/96 - Europapokal-Heimspiele, NJW 1998, pp. 756, 759-760. 48 On the object and consequences of this dynamic reference, see J. Heyers, in: Jaeger et al. (eds),

Frankfurter Kommentar zum Kartellrecht, Vol. 4, 91st supplement August 2018, Otto Schmidt 2018, sec. 2 GWB paras 36-40a.

49 See J. Heyers, in: Jaeger et al. (eds), Frankfurter Kommentar zum Kartellrecht, Vol. 4, 91st supplement August 2018, Otto Schmidt 2018, sec. 2 GWB para 72.

sustainability agreements are to be examined according to the usual criteria for Article 101 (3), i.e. they do not receive preferential treatment (see Sect. <IP_ADDRESS>). In line with this, the Federal Cartel Office and the majority opinion in Germany require that consumers consider the relevant feature (such as sustainable production) to be a qualitative value of the product.50 Additionally, the benefit needs to accrue essentially to the same group of consumers negatively affected by the restriction of competition.51 Such collective advantages do not require every single consumer who is negatively affected to profit from the advantages. Nevertheless, this prerequisite does not seem to allow for restrictions of competition that would internalise external effects, e.g. in situations where consumers in Western Europe produce emissions that cause damage (predominantly) in other parts of the world. Again, this issue is in dispute. The opposing view advocates a more generous inclusion of the non-economic goals that are enshrined in the constitution.52 Besides, the Federal Cartel Office as well as German competition law scholarship show great interest in pioneering approaches in other jurisdictions to broaden the scope for efficiency exemptions, e.g. by the Dutch Competition Authority.53 Finally, the Commission has put forward a partly more generous concept of collective advantages in the draft horizontal guidelines.54

### <IP_ADDRESS> Prohibition of Abuse of a Dominant Position (Section 19 GWB)

While there is an intense discussion on sustainability with regard to the prohibition of cartels in Section 1 GWB, sustainability has not played a considerable role so far with regard to Sections 19–20 GWB, the prohibitions of abuse of a dominant

50 K. Krauß, in: Bunte (ed), Kommentar zum Deutschen und Europäischen Kartellrecht, Vol. 1, 14th ed, Luchterhand 2022, sec. 1 GWB paras 161, 164; J. Nordemann and C. Grave, in Loewenheim et al. (eds), Kartellrecht, 4th ed, C.H. Beck 2020, sec. 2 GWB para 14; R. Ellger and A. Fuchs, in: Körber, Schweitzer and Zimmer (eds), Immenga/Mestmäcker, Wettbewerbsrecht, Vol. 2, 7th ed, C.H. Beck 2023, sec. 2 GWB para 72; D. Zimmer, in: Körber, Schweitzer and Zimmer (eds), Immenga/Mestmäcker, Wettbewerbsrecht, Vol. 2, 7th ed, C.H. Beck 2023, sec. 1 GWB para 49. 51 Bundeskartellamt, Open markets and sustainable economic activity – public interest objectives as

a challenge for competition law practice, October 2020, p. 28; F. Wagner v. Papp, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 1 GWB paras 368, 372; Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, paras 435, 445-449.

52 See for this view e.g. J. Heyers, in: Jaeger et al. (eds), Frankfurter Kommentar zum Kartellrecht, Vol. 4, 91st supplement August 2018, Otto Schmidt 2018, sec. 2 GWB paras 69-74 with further references; J. Hackl, Verbot wettbewerbsbeschränkender Vereinbarungen und nichtwettbewerbliche Interessen, Nomos 2010, pp. 245-247.

53 Authority for Consumers & Markets (2021), Guidelines, Sustainability Claims, available at https://www.acm.nl/sites/default/files/documents/guidelines-suistainability-claims.pdf. Accessed 5 November 2022.

54 European Commission, Communication from the Commission, Approval of the content of a draft for a Communication from the Commission – Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal cooperation agreements, OJ 2022 C 164 paras 601-607; Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, paras 446-448.

position and of relative market power, respectively. The conventional leading opinion argues that the German law on abuse of a dominant position is essentially competitive in nature. Therefore, according to this view, non-competitive considerations can only be taken into account in the interpretation if this is permitted by a special provision. Otherwise, the inclusion of non-competitive considerations would generally counteract the basic legislative intention according to which the control of abusive behaviour is to promote the regulatory principles of free competition.55

This strict position may seem somewhat surprising because, as far as constitutional law and European primary law are concerned, the requirements for the interpretation of general clauses are the same for the cartel prohibition and for the prohibition of abuse. When applying and interpreting a general clause, the authority and the courts must take the fundamental rights and the goals of Article 20a GG into account (Sect. <IP_ADDRESS>). Section 19 GWB seems even more prone to the influence of non-economic goals, such as sustainability, than Section 1 GWB because the application of Section 19 GWB always requires a balancing test. This can incorporate, apart from the interest in the protection of free competition, certain value judgments that the legislator has made in constitutional law and public law.56 Indeed, the German Constitutional Court as well as the BGH have repeatedly interpreted Section 19 GWB with regard to fundamental rights (Sect. <IP_ADDRESS>) and with regard to value judgments of other laws, e.g. of social security law.57 In principle, the same holds with regard to the horizontal clauses in European primary law. To the extent that they apply, they can affect the interpretation of the prohibition of abuse.58 If there is scope to consider environmental sustainability, Section 13 (1) KSG requires the Federal Cartel Office to perform the above-mentioned climate change impact assessment (see Sect. <IP_ADDRESS>.1).

There are, however, also reservations against taking value judgments of other laws into account, in particular with regard to a line of reasoning according to which a violation of another law can amount to or contribute significantly to finding an

55 W. Wurmnest, Marktmacht und Verdrängungsmissbrauch, 2nd ed, Mohr Siebeck 2012, pp. 100 f.; K. Markert and R. Podszun, in: Körber, Schweitzer and Zimmer (eds), Immenga/ Mestmäcker, Wettbewerbsrecht, Vol. 2, 7th ed, C.H. Beck 2023, sec. 20 GWB para 9; see also J. Nothdurft, in: Bunte (ed), Kommentar zum Deutschen und Europäischen Kartellrecht, Vol. 1, 14th ed, Luchterhand 2022, sec. 19 GWB para 369 at the end. 56 J. Nothdurft, Bunte (ed), Kommentar zum Deutschen und Europäischen Kartellrecht, Vol. 1, 14th

ed, Luchterhand 2022, sec. 19 GWB para 369.

57 See M. Kubiciel, Verhaltensbeschränkungen marktbeherrschender Unternehmen durch außerwettbewerbliche Zielsetzungen, WuW 2004(2), pp. 163-164 with regard to BGHZ 129, 53 which relied on the legislator's conception of competition in the pharmaceutical wholesale market inherent in sec. 129 SGB V.

58 With respect to EU law, W. Wurmnest, Marktmacht und Verdrängungsmissbrauch, 2nd ed, Mohr Siebeck 2012, p. 92.

infringement of Section 19 GWB.59 A popular argument for a restrictive reception of other laws in the balancing test for Section 19 GWB is that Section 19 GWB should not become the repair kit for enforcement problems in other parts of the law unrelated to competition. This topic created great controversy on the occasion of the Facebook case. The German Federal Cartel Office argued that a dominant company violating data protection law at the same time abuses its market power vis-à-vis consumers, irrespective of whether there is a causal link between the company's market power and the violation of data protection law.60 This gave rise to the question of whether and to what extent the violation of other laws, inter alia environmental laws, can amount to an abuse of a dominant position.61 After the Higher Regional Court of Düsseldorf had halted the decision of the Federal Cartel Office,62 the BGH upheld it with a modified line of reasoning.63

As a reaction to the fierce dispute about the case, the German legislator modified Section 19 GWB to support the position of the German Federal Cartel Office.64 However, the legislator also intended to restrict the scope of provisions whose violation can amount to an abuse of a dominant position. The legislator did not want to include any kind of illegal conduct by dominant companies. This shall only be the case if a statute is market related, i.e. if it regulates a supply-demand relationship, and if it serves to protect market participants. According to the government's explanatory memorandum to the tenth amendment of the GWB, data protection law fulfils these criteria. Conversely, according to the government's memorandum, violations by dominant companies of other norms do not suffice to constitute a violation of competition law. The government's explanatory memorandum mentions infringements of tax, labour or environmental law as examples.65

However, not all of the negative examples mentioned by the government memorandum are self-explanatory or readily apparent from a competition law

59 On the case law and the disputes associated with this line of reasoning, see M. Wolf, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 19 GWB paras 35d-35f.

60 Bundeskartellamt, 6 February 2019 – B6–22/16, paras 522-523, 573, 630, 872-873, 876. 61 See i.a. with regard to environmental law T. Körber, "Ist Wissen Marktmacht?" Überlegungen zum Verhältnis von Datenschutz, "Datenmacht" und Kartellrecht – Teil 2, NZKart 2016(8), p. 354; F. Bien, in: Säcker et al. (eds), Münchener Kommentar zum Wettbewerbsrecht, 3rd ed, C.H. Beck 2020, Article 101 TFEU para 265; M. Wolf, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 19 GWB paras 35d-35f. 62 OLG Düsseldorf, 26 August 2019, VI-Kart 1/19 (V) – Facebook I, ECLI:DE:OLGD:2019:0826. KART1.19V.00.

63 BGH, 23 June 2020 – KVR 69/19, NZKart 2020(9), p. 473; for a detailed analysis, see E. Bueren, Die Neufassung der Missbrauchsgeneralklausel durch die 10. GWB-Novelle im Lichte des Facebook-Beschlusses, ZHR 2021(4), pp. 569-574.

64 For a detailed analysis, see E. Bueren, Die Neufassung der Missbrauchsgeneralklausel durch die 10. GWB-Novelle im Lichte des Facebook-Beschlusses, ZHR 2021(4), pp. 577-594.

65 Government draft 10th amendment of the GWB, BT-Drs. 19/23492, p. 71.

perspective.66 As far as sustainability is concerned, environmental law, though it will generally not be relevant,67 could at least selectively have an impact on market relations, especially in times of increasing emphasis on CSR and sustainable finance. The outcome of individual cases will depend on whom the laws in question are intended to protect. With this in mind, it does seem possible to meet the requirements spelled out in the government's explanatory memorandum even for areas of the law that the government has explicitly excluded. Ultimately, only the violation of a norm can reveal its competitive relevance because strategies that conform to competition law as well as those that do not are the result of a development process. The decisive test should therefore rather be whether a violation can negatively affect the objectives of Section 19 GWB, not a formal grouping of statutes that are considered per se relevant or irrelevant for competition.68

To sum up, even though it does not seem inconceivable that a violation of certain environmental laws by a dominant firm may, depending on the circumstances of the case, be a strategy to strengthen the dominant position or exploit the opposite market side, amounting to a violation of competition law, such a line of reasoning has not yet been accepted by the majority view in Germany.

### <IP_ADDRESS> Merger Control

Similar to the prohibition of abuse of a dominant position, German merger control has so far only played a peripheral role in the discussion on competition law and sustainability.

A concentration that would significantly impede effective competition, in particular a concentration expected to create or strengthen a dominant position, shall be prohibited by the Federal Cartel Office, Section 36 (1)1 GWB. Importantly, the Federal Cartel Office has no discretion in that regard.69 It follows that, in contrast to horizontal or vertical agreements between undertakings (see Sect. <IP_ADDRESS>.1), the Cartel Office cannot tolerate mergers that do not pass the legal test but would be beneficial to sustainability. This means that the Federal Cartel Office's current main tool with respect to sustainability concerns is not available in merger control.

By consequence, the Federal Cartel Office can only consider sustainability in merger control if the substantive merger test allows for this. According to the majority view, the extent to which this is possible is broadly similar to Section 1 GWB. The merger control test is generally taken to focus predominantly on

66 E. Bueren, Die Neufassung der Missbrauchsgeneralklausel durch die 10. GWB-Novelle im Lichte des Facebook-Beschlusses, ZHR 2021(4), pp. 590-591.

67 See T. Körber, "Ist Wissen Marktmacht?" Überlegungen zum Verhältnis von Datenschutz, "Datenmacht" und Kartellrecht – Teil 2, NZKart 2016(8), p. 354; J. Nothdurft, in: Bunte (ed), Kommentar zum Deutschen und Europäischen Kartellrecht, Vol. 1, 14th ed, Luchterhand 2022, sec. 19 para 229, arguing that environmental law be irrelevant per se.

68 M. Wolf, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 19 GWB paras 35-36; Monopolkommission, Wettbewerbspolitik: Herausforderungen für digitale Märkte, BT-Drs 18/5080, paras 523-524.

69 M. Dreher and M. Kulka, Wettbewerbs- und Kartellrecht, 11th ed, C.H. Beck 2021, para 1638.

competitive concerns, as does Section 1 GWB.70 Therefore, sustainability can only be considered as part of the competitive process, for instance if markets for certain sustainable products exist and/or if consumers value sustainability as a product quality.

As with Section 2 GWB, the Federal Cartel Office can take efficiencies into account, which might allow for the promotion of sustainability to come into play.

First, it might be possible to consider efficiencies in the competitive assessment of the merger as part of the SIEC test. As the GWB does not allow for this explicitly, it is in dispute whether this is possible; the question has not yet been clarified by the BGH.71 The Federal Cartel Office has already examined efficiency arguments raised by the merging parties.72 However, the standard of proof that the parties face concerning efficiencies seems very high. So far, the Federal Cartel Office has always held that the submissions of the parties to the merger did not meet the requirements formulated by the Commission in this regard.73 Furthermore, the efficiencies must be passed on to the consumers, that is the opposite market side,74 which implies that merger efficiencies do not usually contribute to internalising external effects. In principle, the discussion concerning Section 2 GWB, Article 101 (3) TFEU, whether and how the concept of (collective) efficiencies should be broadened, applies here mutatis mutandis (see Sects. 7.2.1 and <IP_ADDRESS>.2). However, as German merger control already offers another solution to account for non-economic goals (ministerial approval, see Sect. <IP_ADDRESS>), it seems more difficult to argue that the current approach must be changed to promote sustainability.

Second, German merger control explicitly allows for an examination of efficiencies and certain other advantages under the so-called balancing clause, Section 36 (1) 2 No. 1 GWB. This clause allows for a merger to be cleared if it improves the competitive conditions—which, according to the majority view, must refer to other markets75 —and if these improvements outweigh the restriction of competition caused by the merger. The "other markets" must at least partly extend to

70 J. Dreyer and E. Ahlenstiel, Berücksichtigung von Umweltschutzaspekten bei der kartellrechtlichen Bewertung von Kooperationen, WuW 2021(2), pp. 76-77; Bundeskartellamt, Open markets and sustainable economic activity – public interest objectives as a challenge for competition law practice, October 2020, p. 42.

71 M. Dreher and M. Kulka, Wettbewerbs- und Kartellrecht, 11th ed, C.H. Beck 2021, para 1640; S. Thomas, in: Körber, Schweitzer and Zimmer (eds), Immenga/Mestmäcker, Wettbewerbsrecht, Vol. 2, 6th ed, C.H. Beck 2020, sec. 36 GWB paras 488-491. 72 S. Thomas, in: Körber, Schweitzer and Zimmer (eds), Immenga/Mestmäcker, Wettbewerbsrecht,

Vol. 2, 6th ed, C.H. Beck 2020, sec. 36 GWB para 510. 73 Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, para 427.

74 M. Dreher and M. Kulka, Wettbewerbs- und Kartellrecht, 11th ed, C.H. Beck 2021, para 1641 S. Thomas, in: Körber, Schweitzer and Zimmer (eds), Immenga/Mestmäcker, Wettbewerbsrecht, Vol. 2, 6th ed, C.H. Beck 2020, sec. 36 GWB para 489. 75 Efficiencies in the markets affected by the merger are, according to the majority view in Germany,

already part of the SIEC test, M. Dreher and M. Kulka, Wettbewerbs- und Kartellrecht, 11th ed, C.H. Beck 2021, para 1641, 1657; A. Christiansen and J. Knebel, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 36 GWB para 245; for a slightly different view see S. Thomas, in: Körber, Schweitzer and Zimmer (eds), Immenga/Mestmäcker, Wettbewerbsrecht, Vol. 2, 6th ed, C.H. Beck 2020, sec. 36 GWB para 626.

Germany—purely foreign markets are irrelevant.76 According to the wording of Section 36 (1) 2 No. 1 GWB, only positive effects on the conditions of competition are relevant. Whether these improvements can include efficiency-related advantages is in dispute; the majority view seems to answer in the affirmative.77 By contrast, non-economic advantages are clearly excluded.78

### <IP_ADDRESS> Reference Point: European Competition Law

When authorities of the member states, such as the German Federal Cartel Office, enforce European competition law, they must comply with Article 51 (2) CFR which protects several dimensions of sustainability. In particular, it requires a high level of environmental protection (Article 37 CFR79 ) (see Sect. 7.2). Furthermore, though the matter is controversial, it is argued that member states must also respect the horizontal clauses,80 which include several aspects of sustainability, in particular environmental protection, when applying or enforcing European (competition) law (see Sect. 7.2).

As a general matter, both fundamental rights and horizontal clauses can influence the application of European competition law. With regard to sustainability, in

76 S. Thomas, in: Körber, Schweitzer and Zimmer (eds), Immenga/Mestmäcker, Wettbewerbsrecht, Vol. 2, 6th ed, C.H. Beck 2020, sec. 36 GWB para 635; A. Christiansen and J. Knebel, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 36 GWB para 247.

77 S. Thomas, in: Körber, Schweitzer and Zimmer (eds), Immenga/Mestmäcker, Wettbewerbsrecht, Vol. 2, 6th ed, C.H. Beck 2020, sec. 36 GWB para 619; M. Dreher and M. Kulka, Wettbewerbs- und Kartellrecht, 11th ed, C.H. Beck 2021, para 1657; A. Christiansen and J. Knebel, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 36 GWB para 235. Besides, it is not completely clear if improvements must be structural in nature, see A. Christiansen and J. Knebel, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 36 GWB para 235; Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, para 427.

78 M. Dreher and M. Kulka, Wettbewerbs- und Kartellrecht, 11th ed, C.H. Beck 2021, para 1656. 79 It is generally acknowledged that Article 37 CFR, despite its somewhat ambiguous wording, is binding also for the authorities of the member states, see H. Jarass, Charta der Grundrechte der EU, 4th ed, C.H. Beck 2021, Article 37 para 4; D. Winkler, in: Stern and Sachs (eds), Europäische Grundrechte-Charta, 1st ed, C.H. Beck 2016, Article 37 para 13; A. Schwerdtfeger, in: Meyer and Hölscheidt (eds), Charta der Grundrechte der Europäischen Union, 5th ed, Nomos 2019, Article 37 para 32.

80 For an in depth analysis with a view to competition law, see L. Breuer, Das EU-Kartellrecht im Kraftfeld der Unionsziele, Nomos 2013, pp. 166-179; with regard to Article 11 TFEU J. Nowag, Environmental Integration in Competition and Free-Movement Laws, Oxford University Press 2016, pp. 21-24.

particular environmental protection, this can occur in two forms:81 first, competition law can be narrowed or restricted to the benefit of sustainability. In order to achieve this, one can interpret competition law in a way that allows for sustainability-friendly measures, or beyond that, one could even set competition law aside to the benefit of other non-economic goals related to sustainability. Second, in other circumstances, one can tighten the application of competition law in order to prevent activities that are harmful to sustainability.

There is long-standing and wide-ranging case law of the Commission and by the European courts on non-economic goals in the application of Article 101 (1) and (3) TFEU.82 Several aspects of this case law are in dispute or somewhat unclear.83 A detailed analysis would surpass the scope of this chapter, which focuses on Germany and includes EU law only as an important reference point for the application of German competition law. Therefore, a rough sketch shall suffice.

The case law of the European Court of Justice (ECJ) on Article 101 (1) TFEU recognises that certain non-economic objectives enshrined in European primary law can exempt anti-competitive arrangements from the cartel prohibition if the associated restriction of competition is necessary to achieve the non-economic objective.84 On some occasions, the ECJ has restricted the ban on cartels with such teleological considerations, such as in Albany85 (collective bargaining autonomy) and Wouters86 (liberal professions). In essence, this is an uncodified restriction of the cartel prohibition clause, by which the objectives established in particular in the horizontal clauses of Article 8 ff. TFEU are brought to a balance with the interests protected by competition law. This provides a solution for those cases where the exemption clause of Article 101 (3) TFEU seems unsuitable to achieve such a balance.87 However, so far, the ECJ has not extended this line of reasoning to sustainability agreements.88

To date, only the case law of the Commission has explicitly dealt with environmental issues. However, its approach has changed over time and does not always

81 See J. Nowag, Environmental Integration in Competition and Free-Movement Laws, Oxford University Press 2016, pp. 3-4, 53, 139, who uses the terms "supportive integration" and "preventive integration". 82 For an in depth analysis with a view to competition law, see L. Breuer, Das EU-Kartellrecht im

Kraftfeld der Unionsziele, Nomos 2013, pp. 319-568.

83 D. Zimmer, in: Körber, Schweitzer and Zimmer, Immenga/Mestmäcker, Wettbewerbsrecht, Vol. 1, 6th ed, C.H. Beck 2020, Article 101 AEUV para 164. 84 W.-H. Roth and T. Ackermann, in: Jaeger et al. (eds), Frankfurter Kommentar zum Kartellrecht,

Vol. 4, 73rd supplement January 2011, Otto Schmidt 2011, sec. 1 GWB para 105. 85 ECJ, case C-67/96, Albany International BV v Stichting Bedrijfspensioenfonds

Textielindustrie, ECLI:EU:C:1999:430. 86 ECJ, case C-309/99, J. C. J. Wouters, J.W. Savelbergh, Price Waterhouse Belastingadviseurs BV

v. Algemene Raad van de Nederlandse Orde van Advocaten, ECLI:EU:C:2002:98. 87 W.-H. Roth and T. Ackermann, in: Jaeger et al. (eds), Frankfurter Kommentar zum Kartellrecht,

Vol. 4, 73rd supplement January 2011, Otto Schmidt 2011, sec. 1 GWB para 105. 88 Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, para 422.

appear to be clear and consistent.89 The Commission's draft horizontal guidelines (see Sect. 7.2.1) refuse to set competition law aside, referring to the aforementioned case law.90 In a nutshell, the draft horizontal guidelines examine sustainability agreements broadly along the standard lines of competition law. The Commission, while open to a favourable treatment of sustainability agreements, does not acknowledge more lenient competition law standards for them. Several problems in that regard are currently unresolved, in particular how to verify and quantify qualitative and quantitative environmental efficiencies for Article 101 (3) TFEU.91

All in all, German and European competition law thus seem mostly aligned in their approach to sustainability agreements. That said, there also appear to be two divergent tendencies.

On the one hand, the fact that the ECJ has at least occasionally restricted the ban on cartels due to teleological considerations seems to be an important deviation from German competition law, where the majority view rejects such sweeping exemptions. This majority opinion is in dispute. The opposite view in scholarship argues that since German competition law was aligned with European law in 2005,92 German competition law ought to embrace the case law of the ECJ.93 Regardless, for the time being, it does not seem realistic that broad exemptions will be justified in this way.

On the other hand, there is so far no indication for a stricter interpretation of European competition law when activities harmful to sustainability are at stake.94 This could only influence the level of the fines imposed on undertakings. By contrast, in Germany, the interpretation of competition law general clauses in conformity with fundamental rights has so far served to advocate a strict application of competition law (see Sect. <IP_ADDRESS>). While the relevant cases did not concern pure sustainability cases, it seems possible to make similar arguments with regard to environmental sustainability, drawing on Articles 2 (1), 1 (1) and Article 20a GG.95

89 For a detailed review see L. Breuer, Das EU-Kartellrecht im Kraftfeld der Unionsziele, Nomos 2013, pp. 322-370; for a concise overview of the current discussion, see F. Wagner v. Papp, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 1 GWB paras 361-372.

90 European Commission, Communication from the Commission, Approval of the content of a draft for a Communication from the Commission – Guidelines on the applicability of Article 101 of the Treaty on the Functioning of the European Union to horizontal cooperation agreements, OJ 2022 C 164 para 548 with fn. 315.

91 See Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, paras 431-432, 439-443.

92 See fn. 16.

93 W.-H. Roth and T. Ackermann, in: Jaeger et al. (eds), Frankfurter Kommentar zum Kartellrecht, Vol. 4, 73rd supplement January 2011, Otto Schmidt 2011, sec. 1 GWB para 105. 94 See on environmental protection J. Nowag, Environmental Integration in Competition and Free-

Movement Laws, Oxford University Press 2016, pp. 140-142.

95 Cf. F. Wagner v. Papp, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 1 GWB para 365.

### 7.2.3 Specific Legislative Provisions on or with Relevance to Sustainability and Competition Law

### <IP_ADDRESS> Exemptions in Force

At the time of writing, German competition law does no longer contain specific legislative provisions that focus on sustainability as such. This has been different in the past (see Sect. <IP_ADDRESS>) and is likely to change again with the next amendment to the GWB (see Sect. 7.4.2).

With that said, four provisions or groups of provisions with relevance for sustainability in competition law deserve mention.

First, concerning the cartel prohibition, Section 2 GWB, the German equivalent of Article 101(3) TFEU, can exempt an agreement that restricts competition if it promotes sustainability. This requires that, in the case at hand, sustainability be a quality that consumers appreciate or that the promotion of sustainability result in a more efficient use of resources that in turn creates cost savings. Furthermore, these savings need to be passed on to the consumers affected by the restriction of competition. More far-reaching approaches are currently being discussed but have not yet been accepted by the majority view in Germany (for more detail, see Sect. <IP_ADDRESS>.2).

Second, concerning the cartel prohibition and the prohibition of abuse of a dominant position, the GWB (inter alia) contains special provisions for agriculture (Section 28 GWB) and a sectoral exemption for the water industry. The latter one applies to companies involved in the public supply of water, in particular municipal water supply companies (Sections 31–31b GWB).96 None of these provisions are tailored to sustainability, but one might argue that they can, in principle, promote at least some aspects of sustainability: the exemption for the agricultural sector in Section 28 GWB corresponds in essence to the regulation at European level by Council Regulation (EC) No 1184/2006 of 24 July 2006 applying certain rules of competition to the production of, and trade in, agricultural products.97 It declares Section 1 GWB inapplicable to certain agreements by agricultural producers, inter alia about production. This allows for agreements about sustainable production, irrespective of consumer preferences.98 Section 28 (2) GWB adds a limited exemption for vertical price maintenance. Besides, there is a sectorial exemption in the German law on forestry (Section 46 Bundeswaldgesetz – BWaldG), inter alia concerning the planning and execution of silvicultural measures. Again, this could pave the way for agreements on sustainable measures. However, neither of these exemptions have been introduced with the goal of promoting sustainability.

96 V. Emmerich and K. Lange, Kartellrecht, 15th ed. C.H. Beck 2021, p. 204. 97 OJ 2006, L 214, p. 7.

98 Cf. H. Schweitzer, in: Körber, Schweitzer and Zimmer (eds), Immenga/Mestmäcker, Wettbewerbsrecht, Vol. 2, 7th ed, C.H. Beck 2023, sec. 28 GWB para 34.

Section 46 BWaldG is rather heavily criticised for being the result of successful lobbying to avoid effective competition law.99

Section 31 (1) GWB stipulates that the prohibition of cartels under Section 1 GWB does not apply to certain anti-competitive contracts that are customary in the water industry sector. It forms the basis of the territorial monopolies of the municipal water supply companies. To compensate for the permission of these territorial monopolies, Section 31 (3)–(4) provides for control of abuse conducted by the Cartel Offices. However, Section 185 (1) 2 GWB determines that Sections 19–20 and 31b (5) GWB do not apply to fees and contributions under public law. This serves the purpose of preventing competition law control of water charges. These rules are considered by some to be a reason for the exceptionally high water prices in Germany.100 However, one could argue that this result promotes sustainability because, ceteris paribus, high water prices will make consumers more frugal in their use of water.101

Third, with regard to merger control, German law grants companies the option to apply for ministerial approval after the Federal Cartel Office has prohibited a merger project. Pursuant to Section 42 GWB, the Federal Minister for Economic Affairs may, upon application, permit a merger prohibited by the Federal Cartel Office if the overall economic benefits of the merger outweigh the restrictions on competition in the case at hand or if the merger is justified by an overriding public interest. According to the Ministry's legal application of Section 42 GWB and the explanatory memorandum to the second amendment to the GWB, reasons of public interest can only be taken into account if they are of great weight in the individual case, demonstrated by concrete evidence, and if there are no alternative state-induced remedies that are better in line with competition law.102

The public benefits recognised in the ministerial approval may overlap with the efficiencies examined under the efficiency defence in the proceedings of the Federal Cartel Office. However, these are not usually cost savings that can be quantified but

99 See R. Podszun, Außerwettbewerbliche Interessen im Kartellrecht und ihre Grenzen, in: Kokott, Pohlmann and Polley (eds), Europäisches, deutsches und internationales Kartellrecht: Festschrift für Dirk Schroeder zum 65. Geburtstag, Otto Schmidt 2018, pp. 613, 618-619; V. Emmerich and K. Lange, Kartellrecht, 15th ed. C.H. Beck 2021, p. 205. 100 V. Emmerich and K. Lange, Kartellrecht, 15th ed. C.H. Beck 2021, p. 217; see also T. Reif, in:

Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 31 GWB paras 18-19, 26, 39, 40; J. Scholl, in: Körber, Schweitzer and Zimmer (eds), Immenga/Mestmäcker, Wettbewerbsrecht, Vol. 2, 7th ed, C.H. Beck 2023, sec. 31 GWB para 10.

101 But see T. Reif, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 31 GWB para 33, who argues that concerns about the competition authorities neglecting environmental policy objectives are unfounded.

102 BMWi, 19 August 2019, I B 2 - 20302/14-02 – Miba/Zollern, para 163 referring to BMWi, 22 May 2006, I B 2 – 221410/02 - Rhön/Grabfeld, para 63; BMWi, 17 April 2008, I B 1 - 221410/ 03 – Universitätsklinikum Greifswald/Kreiskrankenhaus Wolgast, para 58; BT-Drs. VI/2520, Änderung des Gesetzes gegen Wettbewerbsbeschränkungen (Gesetzentwurf der Bundesregierung), p. 31.

rather benefits that should be assessed more qualitatively. According to the Ministry, fields of public interests potentially relevant to Section 42 GWB include economic policy, environmental concerns, employment, social and educational aspects, academic research, defence policy and health policy.103

Moreover, public welfare benefits may be, and will usually be, benefits that (also) have an impact outside of the affected markets. Against this background, environmental protection in general and climate protection in particular are generally accepted as important public interests that can justify ministerial approval.104 As concerns the legal-economic peculiarities of climate protection—so far at the heart of the sustainability debate – the Ministry set out the requirements of the public benefit exemption of Section 42: with regard to future scenarios for which no experience rates (Erfahrungssätze) exist, the public benefit prognosis has to rely on reliable facts, satisfy the general rules of logic and occur with sufficient probability.105

Nevertheless, the aspect has not been very important in the case law so far.106 The only case in which it played a major role was the Miba/Zollern merger (see Sect. <IP_ADDRESS>.2). In the E.ON/Ruhrgas merger, the parties put forward environmental advantages as a public interest, but neither the Monopolies Commission107 nor the Minister for Economic Affairs108 followed this line of reasoning. The Minister granted approval for other reasons (see Sect. <IP_ADDRESS>.2).

Fourth, Sections 24–27 GWB allow business and trade associations and professional organisations to establish competition rules within their area of business and to have these, upon examination, recognised by the Federal Cartel Office. Competition rules are provisions that regulate the conduct of undertakings and that aim to safeguard and encourage fair competition on the merits, Section 24 (1)–(2) GWB. It has been discussed whether the target of effective competition on the merits can

103 BMWi, 19 August 2019, I B 2 - 20302/14-02 – Miba/Zollern, para 164. 104 L. Fries, Die Berücksichtigung außerwettbewerblicher Interessen in der Fusionskontrolle, Nomos 2020, pp. 166-168; S. Thomas, in: Körber, Schweitzer and Zimmer (eds), Immenga/ Mestmäcker, Wettbewerbsrecht, Vol. 2, 6th ed, C.H. Beck 2020, sec. 42 GWB para 84; E. Bremer and F. Scheffczyk, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 42 GWB para 29. 105 "Liegen keine derartigen Erfahrungssätze vor, genügen plausible und hinreichend

wahrscheinliche Prognosen auf Grundlage gegenwärtig gesicherter Tatsachen. Beziehen sich die Gemeinwohlvorteile auf künftige Sachverhalte, genügt es, wenn die Prognosen auf konkreten Tatsachen aufbauen und nach logischen Denkgesetzen mit einer hinreichenden Wahrscheinlichkeit eintreten", BMWi, 19 August 2019, I B 2 -20302/14-02 – Miba/Zollern, para 165 with reference to

BMWi, 5 July 2002 – I B 1 – 220840/129 – E.ON/Ruhrgas, WuW/E DE-V 573. 106 But see ; E. Bremer and F. Scheffczyk, in: Säcker and Meier-Beck (eds), Münchener Kommentar zum Wettbewerbsrecht, Vol. 2, 4th ed, C.H. Beck 2022, sec. 42 GWB para 29, who note a general tendency that climate protection and environmental protection are becoming more important.

107 Monopolkommission, Sondergutachten 34, Zusammenschlussvorhaben der E.ON AG mit der Gelsenberg AG und der E.ON AG mit der Bergemann GmbH, Nomos 2002, para 212.

108 BMWi, 5 July 2002 – I B 1 – 220840/129 – E.ON/Ruhrgas, WuW/E DE-V 573.

capture agreements on sustainability.109 In current practice and in leading commentaries, however, the topic does not seem to play a role. In principle, it seems conceivable to argue that effective competition on the merits should not create external effects. Accordingly, effective competition should cover sustainability agreements that internalise external effects. In any event, however, a recognition of competition rules by the Federal Cartel Office only implies that the authority will not exercise its enforcement powers with regard to the rules. Private plaintiffs and the courts are not bound by this and may consider certain competition rules an infringement of competition law.

### <IP_ADDRESS> Former Exemptions

In the past, German competition law used to contain more exemptions, which have gradually been abolished. Sometimes this was intended to effectively restrict the scope for exemptions; at other times, the deletions were not considered to bring about a change in substance. While none of the former exemptions focused on sustainability as such, several of them captured or at least were able to capture certain aspects of sustainability.

First, from the oldest version of the GWB in 1957 until the seventh reform in 2005, the GWB contained an explicit exemption for agreements on standards and types in Section 5 GWB old version. This exemption could also apply to agreements on sustainability standards.110 Today, such agreements are examined under Section 2 GWB. Over the same period, the GWB contained an explicit exemption for agreements on rationalisation in Section 5 GWB old version. Somewhat surprisingly, however, this did not seem to apply to agreements that promote sustainability because the provision required that the cost/income ratio of the undertakings concerned be improved. Therefore, the internalisation of external effects, i.e. of costs that were caused by the producing companies but borne by others, was not covered.111

Again from 1957 until the seventh amendment in 2005, Section 8 GWB provided that if the requirements of the exemptions pursuant to Sections 2-7 GWB were not met, the Federal Minister for Economic Affairs could, upon application, grant permission for a contract or decision within the meaning of Section 1 GWB. This exception required the restriction of competition to be necessary for overriding reasons related to the economy as a whole and the public interest. It was in dispute whether "overriding reasons for the economy as a whole" and "the public interest" were cumulative criteria or if one or the other sufficed to grant permission. In any event, arguably the majority view, shared in particular by officials of the Federal

109 D. Freitag, K. Hansen, K. Markert and V. Strauch, Umweltschutz und Wettbewerbsordnung, Athenäum 1973, pp. 85-87.

110 D. Freitag, K. Hansen, K. Markert and V. Strauch, Umweltschutz und Wettbewerbsordnung, Athenäum 1973, pp. 81-82.

111 D. Freitag, K. Hansen, K. Markert and V. Strauch, Umweltschutz und Wettbewerbsordnung, Athenäum 1973, pp. 82-84.

Cartel Office, considered Section 8 GWB suitable to legalise sustainability agreements.112

Third, in 1999, as part of the sixth amendment to the GWB, the legislator passed Section 7 GWB old version, which enabled the Federal Cartel Office to exempt agreements between companies that contributed to an improvement, inter alia, in the take back or disposal of goods or services. This required that consumers receive a fair share of the resulting benefit and that the improvement could not be achieved by the undertakings in any other way. Furthermore, the benefits had to be proportionate to the restriction of competition, and the latter could not create or strengthen an undertaking's dominant position.

The requirement of "take back or disposal" was supposed to exempt agreements from Section 1 GWB that aimed at ensuring compliance with the obligations arising from the Recycling and Waste Management Act (Kreislaufwirtschafts- und Abfallgesetz).113 The goal of this act (and thus of the aforementioned elements of Section 7 GWB old version114 ) was to protect natural resources and make waste disposal more environmentally friendly.115 Besides, the legislator argued that European law required competition policy to account for environmental protection.116

Section 7 GWB was removed in 2005 as part of the seventh amendment to the GWB. The legislator did not intend to bring about a change in substance. Rather, the deletion intended to align German with European competition law (Article 101 (3) TFEU).117 Aspects that were previously relevant to Section 7 GWB should henceforth be covered by Section 2 GWB.118

### 7.3 Case Law

### 7.3.1 Sustainability as a Sword

As already explained in Sect. 7.1, it is generally acknowledged that the objectives promoted by competition, such as the effective use and allocation of resources tend to go hand in hand with sustainability objectives.119 Despite some constellations in

112 D. Freitag, K. Hansen, K. Markert and V. Strauch, Umweltschutz und Wettbewerbsordnung, Athenäum 1973, pp. 88-92.

113 BT-Drs. 13/9720, p. 33. 114 BT-Drs. 13/9720, p. 33. 115 See Recycling and Waste Management Act (Kreislaufwirtschafts- und Abfallgesetz), sec. 1, former version.

116 BT-Drs. 13/9720, p. 33. 117 BT-Drs. 15/3640, pp. 24-25. 118 BT-Drs. 15/3640, p. 27. 119 Bundeskartellamt, Open markets and sustainable economic activity – public interest objectives as a challenge for competition law practice, October 2020, p. 8.

which public interest objectives and the objective to protect competition do in fact collide, competition law enforcement is typically designed to foster innovation, and innovation includes the realm of sustainability. Against this backdrop, the German Federal Cartel Office in several cases ended up promoting sustainability by intervening against anti-competitive practices.120 The fact that the agency did not explicitly mention possible concerns about sustainability in its reasoning raises the question of whether the beneficial consequences to sustainability were in fact intended or merely coincidental in nature.

### <IP_ADDRESS> DSD

There seems to be widespread agreement that the primary responsibility to reach sustainability targets resides with the legislator, resulting in no more than a subordinate role for the executive branch – including the competition law agencies – with regard to sustainability matters (see Sect. <IP_ADDRESS>.1). However, as indicated by the case against Duales System Deutschland,121 this division of responsibility is by no means linear in nature: instead, in this particular case, it was precisely compliance with the obligations created by the legislative branch in its Packaging Ordinance (Verpackungsverordnung122 ) that caused the competition law agencies to become active (see already Sect. <IP_ADDRESS>.1).

Duales System Deutschland (DSD, "The Green Dot") used to be the sole nationwide system for the return and disposal of packaging. Operating through a net of service contracts with waste disposal firms, DSD took on the disposal obligations of manufacturers and dealers under the Packaging Ordinance against the payment of a licence fee. The resulting bundling of the demand constituted an appreciable restriction of competition, making DSD a monopoly player in the market for disposal services. After the Federal Cartel Office had been tolerating the DSD contract system within its discretion to take up a case, it initiated a competition law inquiry in

120 See for example the DSD case discussed below. 121 Even before the inquiry by the German Federal Cartel Office, the EU Commission had investigated DSD's practices and in 2001 found its payment system to violate former Article 82 TEC (now Article 102 TFEU), case T-151/01 (available at https://ec.europa.eu/commission/ presscorner/detail/null/IP\_01\_584. Accessed 5 November 2020), upheld by the CFI, case T-151/01, Der Grüne Punkt - Duales System Deutschland v Commission, ECLI:EU:T:2007:154 and ECJ, case C-385/07 P, ECLI:EU:C:2009:456. Interestingly enough, concluding investigations under Article 81 TEC (now Article 101 TFEU), the DSD's was granted an exemption under Article 81 (3), European Commission, case T-289-01 (available at https://ec.europa.eu/commission/presscorner/ detail/en/IP\_01\_1279. Accessed 5 November 2020). This outcome was highly motivated by the fact that DSD had reduced the duration of its exclusivity provisions to end in 2003. Also, the exemption was subject to two obligations regarding DSD's exclusivity clauses that were later upheld in CFI, case T-289-01, Duales System Deutschland v Commission, ECLI:EU:T:2007:155. 122 Verordnung über die Vermeidung und Verwertung von Verpackungsabfällen, Federal Law

Gazette 1991 I, p. 1234, replaced by the Verpackungsgesetz (Gesetz über das Inverkehrbringen, die Rücknahme und die hochwertige Verwertung von Verpackungen) in 2019, Federal Law Gazette 2017 I, p. 2234.

2002,123 motivated by the aforementioned sixth amendment to the GWB and the introduction of the new exemption in Section 7 GWB.

Following an announcement by the Federal Cartel Office that from 2006 on it would no longer tolerate the contract system without intervention, DSD decided to dismantle its cartel-like structure.124 Contributing to the "liberalization of the market for disposal services the Commission strives for", 125 the Federal Cartel Office successfully refuted the sustainability claims previously made by DSD. According to these, competition in the disposal service market would defeat the objective of the Packaging Ordinance and negatively affect environmental protection. Instead, in its sector inquiry published in 2012, the Federal Cartel Office observed substantial cost savings and improvements in the quality of recycling due to the opening up of the market. 126 In fact, contrary to the concerns by DSD, a wave of innovation in technology for sorting the mix of waste material led to higher quality recycling. Disregarding these improvements, municipal waste management providers and the private waste management industry continued to argue for the elimination of competition between compliance schemes to the legal framework, thereby reflecting their entrepreneurial interests.127

The German DSD case underscores concerns that sustainability cooperations more often than not turn out to be attempts at greenwashing what turn out to be purely economic interests of market participants. Moreover, the move from a general exemption outside the realm of competition law to a consideration within the competition law framework reflects the overall development in the approach by the German Federal Cartel Office (see Sect. <IP_ADDRESS>.1).

123 Bundeskartellamt (2002), Bundeskartellamt examines whether DSD is compatible with competition law, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/ Pressemitteilungen/2002/23\_08\_2002\_DSD\_eng.html;jsessionid=7B56D1A14EF4BDC4 A9EEF1D460FAB063.1\_cid378?nn=3591568. Accessed 5 November 2022. 124 Bundeskartellamt (2004), Bundeskartellamt welcomes opening-up of DSD to more competition,

available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/

Pressemitteilungen/2004/12\_10\_2004\_DSD\_eng.html?nn=3591568. Accessed 5 November 2022. 125 Bundeskartellamt (2002), Bundeskartellamt examines whether DSD is compatible with competition law, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/ Pressemitteilungen/2002/23\_08\_2002\_DSD\_eng.html;jsessionid=7B56D1A14EF4BDC4

A9EEF1D460FAB063.1\_cid378?nn=3591568. Accessed 5 November 2022. 126 Bundeskartellamt (2012), Bundeskartellamt presents results of its sector inquiry into compliance schemes, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/ Pressemitteilungen/2012/03\_12\_2012\_SU-duale-Systeme.html. Accessed 5 November 2022. The full version of the sector inquiry in German language is available at https://www.bundeskartellamt. de/SharedDocs/Publikation/DE/Sektoruntersuchungen/Sektoruntersuchung%20Duale%20Systeme

%20-%20Abschlussbericht.pdf?\_\_blob=publicationFile&v=7. Accessed 5 November 2022. 127 Bundeskartellamt (2012), Bundeskartellamt presents results of its sector inquiry into compliance schemes, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/ Pressemitteilungen/2012/03\_12\_2012\_SU-duale-Systeme.html. Accessed 5 November 2022.

#### <IP_ADDRESS> DSD/Remondis

Furthermore, DSD was the subject of yet another competition law case relevant to the field of sustainability: in 2019, the German Federal Cartel Office prohibited the acquisition of DSD by REMONDIS SE & Co. KG, stating that the merger would have significantly impeded competition between the dual systems for packaging recycling.128 Remondis is Germany's largest waste management company and among the contract partners of DSD. Due to the increase in concentration achieved by the merger, Remondis would have had an incentive to charge DSD's competitors higher prices.129 In a way, the prohibition thus served the purpose of maintaining the benefits achieved by opening up the market sector in the previous DSD proceedings. Additionally, the Federal Cartel Office points to sustainability concerns regarding the related market of glassworks: the expected decrease in the supply of glass cullet due to the proposed merger would cause glassworks to resort to alternative raw materials where obtainable. Severe increases in production costs aside, this adjustment would result in greater energy consumption, contradicting the overall aims of the recycling economy.130 Even though this implication was not at the centre of the Federal Cartel Office's reasoning for the prohibition of the merger, the line of thought reveals the authority's awareness of sustainability effects in the field of disposal services.

### 7.3.2 Sustainability as a Shield

### <IP_ADDRESS> Merger Control Cases

On other more recent occasions, German competition law enforcement dealt with sustainability as a potential justification for non-intervention. As explained in Sect. <IP_ADDRESS>, Section 42 GWB allows the Federal Minister for Economic Affairs to override a prohibition by the Federal Cartel Office if the restrictions on competition are offset by public benefits of a certain weight. Three recent cases indicate how environmental concerns increasingly feed into the consultation process required by

128 Bundeskartellamt (2019), Bundeskartellamt prohibits Remondis/DSD merger, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2019/11\_07\_201 9\_Remondis\_DSD.html;jsessionid=2ED3D994A5FC35EA94B18CEC544478BF.1\_cid378? nn=3591568. Accessed 5 November 2022. Confirmed by the Superior Court of Düsseldorf in OLG Düsseldorf, 24 April 2020 - VI-Kart 3/19 (V) – Remondis/DSD, ECLI:DE:OLGD:2020:0422. KART3.19V.00.

129 For more details see Bundeskartellamt, 11 July 2019, B4-21/19, available at https://www. bundeskartellamt.de/SharedDocs/Entscheidung/DE/Entscheidungen/Fusionskontrolle/2019/B4- 21-19.pdf;jsessionid=B2C1593C5F903CA2353E8C3D0DB97A7B.2\_cid378?\_\_blob= publicationFile&v=2. Accessed 5 November 2022; OLG Düsseldorf, 22 April 2020, VI-Kart 3/19

(V) – Remondis/DSD, ECLI:DE:OLGD:2020:0422.KART3.19V.00. 130 Bundeskartellamt, 11 July 2019, B4-21/19, https://www.bundeskartellamt.de/SharedDocs/ Entscheidung/DE/Entscheidungen/Fusionskontrolle/2019/B4-21-19.pdf;jsessionid=B2C1593 C5F903CA2353E8C3D0DB97A7B.2\_cid378?\_\_blob=publicationFile&v=2. Accessed 5 November 2022, pp. 190-191.

Section 42 GWB, but they also reveal the shortcomings of this solution.131 The consideration within the procedure for ministerial approval is subject to similar economic realities and constraints as is the political debate about climate change in general: in E.ON/Ruhrgas (Sect. <IP_ADDRESS>.1), the Ministry clarified that competitive constraints generally occur right after the implementation of a merger, whereas the overall economic benefits can only be determined in the long term.132 This is exactly one of the difficulties with climate change protection and a major obstacle to political solutions to the problem. This starting position provokes calls for an examination of sustainability concerns irrespective of their inclusion in consumers' preferences. Whether or not competition law is the right place for this remains an open question. For the moment, the general opinion within German competition law is doubtful in this regard.

<IP_ADDRESS>.1 E.ON/Ruhrgas In the merger case of E.ON/Ruhrgas, the Ministry allowed for the merger of the two energy providers to proceed in accordance with additional requirements,133 contradicting the previous prohibition by the Federal Cartel Office.134 Besides the procedural particularities of the case,135 both the Monopolies Commission's opposition and the ministerial approval examined the macro-economic consequences of the intended vertical integration.136 Highlighting the significance of natural gas for the German energy supply, the companies in their application relied on the joint venture's international competitiveness, their contribution to securing Germany's energy supply and the preservation of jobs.137 Furthermore, they claimed that the merger would support the government's climate protection efforts and

131 Cf. inter alia S. Roth and M. Voigtländer, Die Ministererlaubnis für den Zusammenschluss von

Unternehmen – ein Konflikt mit der Wettbewerbsordnung ZfW 2002(2), p. 239. 132 BMWi, 5 July 2002 – IB1 – 220840/129 – E.ON/Ruhrgas, WuW/E DE-V p. 573, para 140. 133 BMWi, 5 July 2002 – IB1 – 220840/129 – E.ON/Ruhrgas, WuW/E DE-V p. 573. 134 Bundeskartellamt (2002), Bundeskartellamt prohibits E.ON/Gelsenberg (Ruhrgas) merger,

available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/ Pressemitteilungen/2002/21\_01\_2002\_EON\_eng.html. Accessed 5 November 2022. According to the agency, the merger would have strengthened dominant positions in the gas and electricity sales markets.

135 Since the Minister for Economic Affairs at the time, Werner Müller, was legally prevented from deciding the case due to possible conflicts of interest, the decision was issued by state secretary Alfred Tacke, whose responsibility had been under debate, see BMWi, 5 July 2002 – IB1 –

220840/129 – E.ON/Ruhrgas, WuW/E DE-V 573, paras 87-91. 136 Monopolkommission, Sondergutachten 34, Zusammenschlussvorhaben der E.ON AG mit der Gelsenberg AG und der E.ON AG mit der Bergemann GmbH, Nomos 2002, paras 137 ff; BMWi, 5 July 2002 – IB1 – 220840/129 – E.ON/Ruhrgas, WuW/E DE-V 573. 137 Application by E.ON as reported by Monopolkommission, Sondergutachten

34, Zusammenschlussvorhaben der E.ON AG mit der Gelsenberg AG und der E.ON AG mit der Bergemann GmbH, Nomos 2002, paras 84-95.

environmental policy.138 They predicted that gas would replace a major part of the energy supplied by oil and nuclear energy and thus help achieve the government's climate policy goals, fulfilling the public interest criteria of Section 42 GWB. The Monopolies Commission in turn highlighted the primacy of functioning competition for innovation and the efficient use of resources when opposing the merger.139 The expert panel also criticised the idea that the government could depend on a single company when trying to achieve its environmental objectives.140 On a side note, in view of the current energy crisis, the Monopolies Commission's concerns regarding the diversification of energy sources turned out to be very accurate.141

The E.ON/Ruhrgas case was by no means the first merger in which German's security of supply had been invoked as an area of public interest: Already in its first approval case in 1974142 and again in 1978,143 the Ministry overruled the Federal Cartel Office's prohibitions based on similar policy considerations.144 Criticising its own previous work, the Ministry recognised the problems related to energy policy considerations within the scope of Section 42 GWB.145 Whether or not the uncertainty of forecast decisions is a problem peculiar to policy considerations or even to the ministry approval procedure is a different issue altogether.

Interestingly enough, irrespective of the environmental implications of natural gas as a fossil fuel, the German government subscribed to safeguarding the reliability of supply and the competitiveness of the energy supply sector as some of its major

138 Application by E.ON as reported by Monopolkommission, Sondergutachten 34, Zusammenschlussvorhaben der E.ON AG mit der Gelsenberg AG und der E.ON AG mit der Bergemann GmbH, Nomos 2002, para 95.

139 Application by E.ON as reported by Monopolkommission, Sondergutachten 34, Zusammenschlussvorhaben der E.ON AG mit der Gelsenberg AG und der E.ON AG mit der Bergemann GmbH, Nomos 2002, paras 183, 190, 236.

140 Application by E.ON as reported by Monopolkommission, Sondergutachten 34, Zusammenschlussvorhaben der E.ON AG mit der Gelsenberg AG und der E.ON AG mit der Bergemann GmbH, Nomos 2002, para 211: "Davon abgesehen erscheint es wenig sinnvoll, dass sich die Bundesregierung bei der Erreichung ihrer umwelt- und klimapolitischen Zielsetzungen im Wesentlichen von einem Unternehmen abhängig macht."

141 Application by E.ON as reported by Monopolkommission, Sondergutachten 34, Zusammenschlussvorhaben der E.ON AG mit der Gelsenberg AG und der E.ON AG mit der Bergemann GmbH, Nomos 2002, para 162. Nonetheless, the Monopolies Commission in its statement underestimated the consequences of Germany's high import dependency in the energy sector, cf. para 173.

142 BMWi, 1 February 1974 – IB5 – 810607 – VEBA/Gelsenberg, WuW/E BWM p. 147. 143 BMWi, 5 March 1979 – IB6 – 220840/15 – VEBA/BP, WuW/E BWM p. 165. 144 For more details, see L. Fries, Die Berücksichtigung außerwettbewerblicher Interessen in der Fusionskontrolle, Nomos 2020, pp. 169-170.

145"Durchgesetzt hat sich die Einsicht, daß die Ministererlaubnis kein Instrument zur wirtschaftspolitischen Steuerung ist.  Die dabei zugrunde gelegten energiepolitischen Prognosen haben sich im Rückblick als recht problematisch erwiesen", Erfahrungsbericht des Bundeswirtschaftsministeriums über Ministererlaubnis-Verfahren bei Firmen-Fusionen, WuW 42(11), 1992, p. 928.

political targets.146 Anticipating the market pressure caused by the EU's efforts to open up the European gas market, the Ministry believed that the merger would contribute to achieving the above-mentioned target while at the same time ensuring the international competitiveness of Ruhrgas.147

Moreover, the Ministry explicitly went on to discuss contributions to climate protection as potential public benefits within the realm of Section 42 GWB.148 In accordance with the Monopolies Commission, it observed that, generally, the transition from emission-heavy oil to gas might indeed meet the threshold of Section 42. Nevertheless, it concluded that the reduction in emissions remained uninfluenced by the merger and hence did not fulfill the causality requirement.149 Even though the E.ON/Ruhrgas case is said to have opened up Section 42 GWB to environmental policy goals,150 the ministerial approval was granted irrespective of sustainability aspects.151 Instead, the Ministry questioned the R&D intentions of the merging parties, maybe even suggesting that the stated benefits due to improvements in fuel cell technology may have been a sign of greenwashing.152

<IP_ADDRESS>.2 Miba/Zollern The Ministry for Economic Affairs further specified the E.ON/Ruhrgas ground rules in the more recent Miba/Zollern merger.153 Initially, the Federal Cartel Office had prohibited the proposed merger in the bearing production sector vital to mechanical and plant engineering as well as engine construction. The joint venture would have increased concentration in a market with only a few suppliers and high barriers to entry.154 According to the Federal Cartel Office, the parties had not sufficiently

146 Bundesregierung (2017), Die Energie der Zukunft – Langfassung, Zweiter Fortschrittsbericht zur Energiewende, available at https://www.bmwk.de/Redaktion/DE/Publikationen/Energie/ fortschrittsbericht-monitoring-energiewende-kurzfassung.pdf?\_\_blob=publicationFile&v=8. Accessed 5 November 2022, p. 21.

147 BMWi, 5 July 2002 – I B 1 – 220840/129 – E.ON/Ruhrgas, WuW/E DE-V 573, paras 114-121. 148 BMWi, 5 July 2002 – IB1 – 220840/129 – E.ON/Ruhrgas, WuW/E DE-V 573, para 136. 149 BMWi, 5 July 2002 – I B 1 – 220840/129 – E.ON/Ruhrgas, WuW/E DE-V 573, paras 137-138. 150 Quoted for example by BMWi, 19 August 2019, I B 2 - 20302/14-02 – Miba/Zollern, para 172. 151 In support of this conclusion, see L. Fries, Die Berücksichtigung außerwettbewerblicher

Interessen in der Fusionskontrolle, Nomos 2020, p. 166.

152 BMWi, 5 July 2002 – IB1 – 220840/129 – E.ON/Ruhrgas, WuW/E DE-V 573, para 139. The Monopolies Commission had arrived at a similar conclusion, pointing to E.ON's past R&D behavior, Monopolkommission, Sondergutachten 34, Zusammenschlussvorhaben der E.ON AG mit der Gelsenberg AG und der E.ON AG mit der Bergemann GmbH, Nomos 2002, paras 209-210. The mere declarations of intent did not meet the burden of proof required by sec. 42 GWB, cf. para 212.

153 Bundeskartellamt, 17 January 2019, B 5-29/18, BMWi, 19 August 2019, I B 2 - 20302/14-02 –

Miba/Zollern. 154 Bundeskartellamt (2019), Bundeskartellamt prohibits merger between Miba and Zollern in bearing production sector, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/ EN/Pressemitteilungen/2019/17\_01\_2019\_Miba\_Zollern.html;jsessionid=6321A35D69BB250 6F4AF94C49DF15AAB.2\_cid378?nn=3591568. Accessed 5 November 2022.

substantiated that the merger would result in the claimed efficiencies and synergies.155 They had not met the requirements set by the balancing clause in Section 36 (1) 2 No. 1 GWB (see Sect. <IP_ADDRESS>).156 Once again, the agency refrained from deciding whether efficiencies can be considered within the SIEC test, pointing out that the parties' submissions were insufficient in this regard (see Sect. <IP_ADDRESS>).157

The parties to the proposed merger then filed for ministerial approval under Section 42 GWB. In addition to the preservation of jobs—a frequently tried argument in merger cases158 —the companies' application pointed to the "know-how and innovation potential for energy transition and sustainability" and the "preservation of the technological lead of Germany and the EU". 159 They argued that their pooled production activities would contribute significantly to the desired energy transition and reduction of emissions.160 The combination of unique expertise, (intellectual) property rights and resources would (re-)establish and ensure the undertaking's international competitiveness in the highly specialised industry of the bearing production sector.161 Disregarding the contrary recommendation by the German Monopolies Commission,162 Federal Minister Peter Altmaier granted authorisation for the Miba/Zollern merger to proceed subject to conditions and obligations.

Even though the German legislator made a conscious decision when separating the areas of responsibility of the Federal Cartel Office on the one hand and of the

155 Bundeskartellamt, 17 January 2019, B 5-29/18, paras 364-367, 372-377. 156 Bundeskartellamt, 17 January 2019, B 5-29/18, paras 416-435. 157 Bundeskartellamt, 17 January 2019, B 5-29/18, para 372. 158 Cf. Monopolkommission, Sondergutachten 81, Zusammenschlussvorhaben der Miba AG mit der Zollern GmBH & Co. KG, Nomos 2019, para 129.

159 BMWi, 19 August 2019, I B 2 - 20302/14-02 – Miba/Zollern, paras 24-30. 160 The special report issued by the German Monopolies Commission refers to ongoing research and development in the area of wind turbine technology as one of the examples states by the applicants, Monopolkommission, Sondergutachten 81, Zusammenschlussvorhaben der Miba AG mit der Zollern GmBH & Co. KG, Nomos 2019, paras 37, 41.

161 Application by Miba and Zollern as reported by Monopolkommission, Sondergutachten 81, Zusammenschlussvorhaben der Miba AG mit der Zollern GmBH & Co. KG, Nomos 2019, paras 43-45.

162 Monopolkommission, Sondergutachten 81, Zusammenschlussvorhaben der Miba AG mit der Zollern GmBH & Co. KG, Nomos 2019. While recognizing the maintenance of technological know-how, of the potential for innovation and the technological lead to generally be in the public interest, the Monopolies Commission argued that the companies had not met the high burden of proof required for public benefits in the realm of sec. 42 GWB, cf. paras 147-148. In continuation of its restrictive interpretation, the Monopolies Commission underscored the companies' need to show that the claimed public benefits are merger specific in nature and would not have occurred otherwise, cf. paras 80, 147, 152. The Commission also pointed out that European public interests – as compared to German public interests – are not eligible for consideration within sec. 42 GWB. Balancing impediments to competition and public benefits, sec. 42 GWB calls for a uniform reference point. Since the GWB's aim is to protect competition in the domestic market, the public benefits are confined to those with impact on the German market as well. The Monopolies Commission supports this view by recalling that the German Minister for Economic Affairs's range of authority is restricted to German territory, cf. paras 69-79.

Federal Ministry for Economic Affairs and Energy on the other hand,163 the balancing process pursuant to Section 42 GWB might require a re-evaluation of the competitive restraints in individual cases. This balancing process necessitates the weighting of the competitive constraints found by the Federal Cartel Office164 in order to determine the exact requirements for the public benefits.165 In principle, the division of responsibility keeps the Federal Cartel Office from taking into account non-competition-related interests in the scope of its merger assessment.166 Accordingly, the Federal Ministry is bound by the findings of the Federal Cartel Office as far as they concern the restriction of competition.167 This notwithstanding, the Minister may deviate from this principle when new facts relevant to the ruling demand a re-evaluation of the circumstances.168 Contradicting the assessment by the Monopolies Commission, the Federal Minister—based on a competitor's pleading in the oral proceedings—gave greater importance to the remaining competition (Restwettbewerb) in the sector.169 This in turn caused the Minister to diverge from both the Federal Cartel Office's and the Monopolies Commission's evaluations. As a result, the Minister saw only a minor impairment to competition due to the proposed merger.170

While acknowledging the relation of rule and exception within the framework of the GWB,171 Minister Altmaier concluded that the obligations imposed on the merging parties would safeguard the realisation of the sustainability benefits. Drawing on Section 20a GG, the Ministry set forth its practice from the E.ON/ Ruhrgas case:172 through their joint venture, Miba and Zollern would contribute significantly to the desired energy transition and thus help implement the "leading principle of sustainability" (Leitprinzip der Nachhaltigkeit).173 Altmaier based his approval on the public interest in the "know-how and innovation potential for energy

163 BT-Drs. 13/9720, p. 44. 164 BMWi, 5 July 2002 – IB1 – 220840/129 – E.ON/Ruhrgas, WuW/E DE-V 573 para 140. 165 BMWi, 19 August 2019, I B 2 - 20302/14-02 – Miba/Zollern, para 155; see also KG, WuW/E

OLG 1937, 1939 – Thyssen/Hüller-Hille. 166 Bundeskartellamt, Open markets and sustainable economic activity – public interest objectives as a challenge for competition law practice, October 2020, pp. 42-43.: "Due to the clear separation of the areas of responsibility of the Bundeskartellamt and those of the Federal Ministry for Economic Affairs and Energy within the context of ministerial authorisation proceedings, it could hardly be justified to take into account non-competition related interests opposing the clearance of a merger project in the scope of the competition authority's merger assessment."

172 BMWi WuW/E DE-V 573, 593 – E.ON/Ruhrgas. 173 BMWi, 19 August 2019, I B 2 - 20302/14-02 – Miba/Zollern, para 180.

transition and sustainability" 174 while rejecting the more standard arguments along the lines of general international competitiveness, job protection, armaments sector security and defence policy.175 To secure the promotion of the public benefit at the heart of the case, the ministerial approval demanded the creation of an escrow account containing a total investment sum of EUR 50 million.176

<IP_ADDRESS>.3 Beretta/Ammotec Without having to undergo the procedure of Section 42 GWB, Beretta, an Italian manufacturer of firearms, was granted permission to acquire ammunition specialist Ammotec earlier this year. The Federal Cartel Office cleared the merger plans, observing only minor market share additions in the area for ammunition for civilian purposes.177 It elaborated that Ammotec's supply of low-pollutant ammunition is in great demand by the German army (Bundeswehr). Collaboration with firearms manufacturers would facilitate compliance with goals for environmental protection and occupational safety.178 The Federal Cartel Office saw no indication that competitors' access to low-polluting ammunition or its components could be restricted due to the merger. Whether the sustainability implications served as a shield in this particular case is hard to judge, given the little insight that the agency gave in its press release. The Federal Cartel Office's short remarks give the impression that there was no conflict between competition law and sustainability concerns in the case at hand.

### <IP_ADDRESS> Individual Guidance

The Federal Cartel Office further specified its stance towards sustainability cooperations through its individual guidance in constellations relevant to competition. The authority explicitly acknowledged the increasing frequency and significance of sustainability initiatives.179

174 BMWi, 19 August 2019, I B 2 - 20302/14-02 – Miba/Zollern, paras 149, 167-168. 175 BMWi, 19 August 2019, I B 2 - 20302/14-02 – Miba/Zollern, paras 202-233. 176 BMWi, 19 August 2019, I B 2 - 20302/14-02 – Miba/Zollern, paras 1.2-1.4. 177 Bundeskartellamt (2022), Small arms and ammunition sector: Merger between Beretta and Ammotec cleared, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/ Pressemitteilungen/2022/11\_05\_2022\_Beretta\_Ammotec.html?nn=3599398. Accessed 5 November 2022.

178 Special requirements in tender procedures increase the importance of non-toxic ammunition for the German Bundeswehr, cf. Bundeskartellamt (2022), Small arms and ammunition sector: Merger between Beretta and Ammotec cleared, available at https://www.bundeskartellamt.de/SharedDocs/ Meldung/EN/Pressemitteilungen/2022/11\_05\_2022\_Beretta\_Ammotec.html?nn=3599398. Accessed 5 November 2022.

179 Bundeskartellamt, Tätigkeitsbericht 2015/16, BT-Drs. 18/12760, p. 54.

Making use of its discretion to take up a case (see Sect. <IP_ADDRESS>.1), the Federal Cartel Office in "Fairtrade", 180"Living Wages" 181 and "Initiative Tierwohl" 182 clarified the ground rules for private sustainability initiatives. The Fairtrade Labelling Organisations International, e.V., is an internationally recognised, non-profit organisation that aims for fairer trade terms for farmers and workers in developing countries. Participation in the labelling process restricted to goods produced in non-EU countries is voluntary and non-exclusive. Despite the price elements of the agreement (agreement of a minimum price for certain import goods and the payment of the so-called Fairtrade Premium, irrespective of production costs183 ), the Federal Cartel Office decided not to initiate proceedings against Fairtrade. Drawing on the experience with quality mark associations (Gütezeichengemeinschaften) within German competition law,184 it seems worth considering if parts of the Fairtrade mechanism could potentially pass as "quality features" 185 and might therefore qualify for an expanded interpretation of the exemptions granted to quality mark associations.186 Others discuss the application of ancillary restraints or the rule of reason (Immanenztheorie) 187 with regard to the social standards implemented through private initiatives, such as the Fairtrade label.188 According to this doctrine, competitive restraints necessary to ensure a main purpose can be exempted from

180 Bundeskartellamt, Tätigkeitsbericht 2017/18, BT-Drs. 19/10900, p. 52. 181 Bundeskartellamt, 25 November 2021, B2-90/21; Bundeskartellamt (2022), Achieving sustainability in a competitive environment – Bundeskartellamt concludes examination of sector initiatives, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/ Pressemitteilungen/2022/18\_01\_2022\_Nachhaltigkeit.html;jsessionid=2E99AFE29AA5859CB0

CA98F0FB1D6331.2\_cid381?nn=3591568. Accessed 5 November 2022. 182 Bundeskartellamt, Tätigkeitsbericht 2013/14, BT-Drs. 18/5210, pp. 53-54.; Bundeskartellamt (2017), Bundeskartellamt calls for more consumer transparency in animal welfare initiative, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/201 7/28\_09\_2017\_Tierwohl.html;jsessionid=2B4801015737BFBD09A5AE315F90D570.1\_cid390? nn=3591568. Accessed 5 November 2022; Bundeskartellamt (2022), Achieving sustainability in a competitive environment – Bundeskartellamt concludes examination of sector initiatives, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2022/1 8\_01\_2022\_Nachhaltigkeit.html;jsessionid=2E99AFE29AA5859CB0CA98F0FB1D6331.2\_cid3 81?nn=3591568. Accessed 5 November 2022. 183 Fairtrade International, available at https://www.fairtrade.net/about/how-fairtrade-works.

Accessed 5 November 2022. For a more detailed discussion of the particularities, cf. F. Engelsing and M. Jakobs, Nachhaltigkeit und Wettbewerb, WuW 2019(1), p. 18.

184 U. Loewenheim, in: Loewenheim et al. (eds), Kartellrecht, 4th ed, C.H. Beck 2020, sec. 20 GWB para 93; Krauß, in: Bunte (ed), Kommentar zum Deutschen und Europäischen Kartellrecht, Vol. 1, 14th ed, Luchterhand 2022, sec. 1 GWB para 272. 185 K. Krauß, in: Bunte (ed), Kommentar zum Deutschen und Europäischen Kartellrecht, Vol.

1, 14th ed, Luchterhand 2022, sec. 1 GWB paras 161, 164. 186 F. Engelsing and M. Jakobs, Nachhaltigkeit und Wettbewerb, WuW 2019(1), p. 19. 187 D. Zimmer, in: Körber, Schweitzer and Zimmer (eds), Immenga/Mestmäcker,

Wettbewerbsrecht, Vol. 2, 7th ed, C.H. Beck 2023, sec. 1 GWB para 50. 188 F. Engelsing and M. Jakobs, Nachhaltigkeit und Wettbewerb, WuW 2019(1), p. 19; see also

Bundeskartellamt, Open markets and sustainable economic activity – public interest objectives as a

competition law as long as that main purpose does not raise any concerns under competition law. Commonly invoked in partnership and acquisition agreements, the same line of thought could extend to environmental protection.189 This approach is broadly similar to the teleological considerations made by the ECJ in Wouters190 and Albany191 (see Sect. <IP_ADDRESS>).192 Nonetheless, it would contradict recent efforts to embed sustainability concerns within the efficiency considerations of Article 101 (3) TFEU/Section 2 GWB (Sect. <IP_ADDRESS>.2).

In its decision regarding Fairtrade, the Federal Cartel Office points to the initiative's relatively low market coverage within the EU as well as the existence of competing sustainability labels in Germany.193 It also stressed the importance of a voluntary and discrimination-free participation in the certifications194 as well as transparency for consumers.195 Voluntary labels primarily increase customer choice and thus tend to be less objectionable under competition law.196 For the same reason, the Federal Cartel Office announced that it has no competition concerns about "Living Wages", a voluntary commitment to achieving common standards for wages in the Ecuadorian banana sector.197 Among its objectives are the introduction of responsible procurement practices and the development of monitoring transparent wages. The cooperation operates without any price-fixing arrangements and up to this point seems to comply with competition law requirements.

The guidance issued regarding the Initiative Tierwohl underscored the transparency requirement generally set out by the Federal Cartel Office. Initiative Tierwohl is an industry alliance of agriculture, the meat industry and food retailers. Its purpose is to reward livestock farmers for improving the conditions in which they keep their animals. To do so, the participants (major food retailers) agree to the payment of a uniform surcharge via the participating slaughterhouses. Employing labels for meat produced in line with animal welfare criteria, the initiative wants to create

challenge for competition law practice, October 2020, p. 20; L. Breuer, Das EU-Kartellrecht im Kraftfeld der Unionsziele, Nomos 2013, pp. 529-568.

189 For an EU perspective of this line of thought, cf. S. Holmes, Climate Change, sustainability, and competition law, J. Antitrust Enforc. 2020 (2), pp. 370-371.

190 ECJ, case C-309/99, J. C. J. Wouters, J.W. Savelbergh, Price Waterhouse Belastingadviseurs

BV v. Algemene Raad van de Nederlandse Orde van Advocaten, ECLI:EU:C:2002:98. 191 ECJ, case C-67/96, Albany International BV v Stichting Bedrijfspensioenfonds

Textielindustrie, ECLI:EU:C:1999:430. 192 F. Engelsing and M. Jakobs, Nachhaltigkeit und Wettbewerb, WuW 2019(1), p. 19. 193 Bundeskartellamt, Tätigkeitsbericht 2017/18, BT-Drs. 19/10900, p. 52. 194 Bundeskartellamt, Tätigkeitsbericht 2013/14, BT-Drs. 18/5210, pp. 53-54. 195 Bundeskartellamt, Tätigkeitsbericht 2017/18, BT-Drs. 19/10900, p. 52. 196 F. Engelsing and M. Jakobs, Nachhaltigkeit und Wettbewerb, WuW 2019(1), p. 20. 197 Bundeskartellamt, 25 November 2021, B2-90/21; Bundeskartellamt (2022), Achieving sustainability in a competitive environment – Bundeskartellamt concludes examination of sector initiatives, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/ Pressemitteilungen/2022/18\_01\_2022\_Nachhaltigkeit.html;jsessionid=2E99AFE29AA5859CB0 CA98F0FB1D6331.2\_cid381?nn=3591568. Accessed 5 November 2022.

transparency and consumer awareness. Due to difficulties in the implementation of a monitoring process for pork products, the Initiative Tierwohl initially restricted the use of its label to poultry. Again stressing the importance of consumer choice, the Federal Cartel Office demanded an adjustment for the label to include pork products.198 Later on, it also urged the parties to revise the structure of the financing model by gradually introducing competitive elements. Working towards a reconciliation of competition law requirements and sustainability efforts, the Federal Cartel Office suggested for the participants to part ways with the standard premium and to consider compensation for animal welfare costs instead.199 Apart from this, the authority early on clarified the need for the participants to avoid the exchange of any information relevant to competition, thereby trying to keep sustainability initiatives from becoming a coincidental facilitator of illegal conduct.200

This detailed advice shows that in order to support companies in their sustainability efforts, the Federal Cartel Office focuses in particular on assisting companies in structuring their respective agreements.201 There are further cases along these lines that cannot be analysed in detail here.202 At the same time, it should be noted that there is only limited information publicly available on the cases that are the basis for the Federal Cartel Office's guidance. This implies a certain degree of opacity and a lack of legal certainty, which constitutes a weakness of the solution via the authorities' prosecutorial discretion (see also Sect. 7.4.1).

198 Bundeskartellamt (2017), Bundeskartellamt calls for more consumer transparency in animal welfare initiative, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/ Pressemitteilungen/2017/28\_09\_2017\_Tierwohl.html;jsessionid=2B4801015737BFBD0 9A5AE315F90D570.1\_cid390?nn=3591568. Accessed 5 November 2022. 199 Bundeskartellamt (2022), Achieving sustainability in a competitive environment –

Bundeskartellamt concludes examination of sector initiatives, available at https://www. bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2022/18\_01\_2022\_ Nachhaltigkeit.html;jsessionid=2E99AFE29AA5859CB0CA98F0FB1D6331.2\_cid381?nn=3591

568. Accessed 5 November 2022. 200 Bundeskartellamt, Tätigkeitsbericht 2013/14, BT-Drs. 18/5210, p. 54. 201 Bundeskartellamt (2022), Achieving sustainability in a competitive environment – Bundeskartellamt concludes examination of sector initiatives, available at https://www. bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2022/18\_01\_2022\_ Nachhaltigkeit.html;jsessionid=2E99AFE29AA5859CB0CA98F0FB1D6331.2\_cid381?nn=3591 568. Accessed 5 November 2022; the Federal Cartel office reports a certain expectation on the part of politicians and the public not to obstruct such agreements, see Bundeskartellamt, Tätigkeitsbericht 2015/2016, BT-Drs. 18/12760, p. 54.

202 Bündnis für nachhaltige Textilien ("Grüner Knopf") and Initiative zur Reduzierung von Fett, Zucker und Salz in Fertigprodukten und Getränken, see Bundeskartellamt (2021), Jahresbericht 2020/21, available at https://www.bundeskartellamt.de/SharedDocs/Publikation/DE/Jahresbericht/ Jahresbericht\_2020\_21.pdf?\_\_blob=publicationFile&v=5. Accessed 5 November 2022, p. 46; Initiative des Handels zur Verringerung des Verbrauchs von Kunststofftragetaschen, see Bundeskartellamt, Tätigkeitsbericht 2015/16, BT-Drs. 18/12760, p. 54.

### 7.3.3 Greenwashing Cartels: Sustainability Initiatives as a Cover for Illegal Conduct

### <IP_ADDRESS> GGA

Whether ultimately intended or not, competition law enforcement turned out to promote sustainability by breaking up the DSD cartel (see Sect. 7.3.1 above). Adjusting its policy to European standards, the Federal Cartel Office rejected the suggested pretext that the undertaking's structure was the only feasible way to meet the requirements imposed by the Packaging Ordinance. Following a similar path, the Federal Cartel Office in 2007 took action against a cooperation of German container glass manufacturers.203 The participants had set up the "Gesellschaft für Glasrecycling und Abfallvermeidung" (GGA) to jointly purchase waste glass recovered from household collections. Similar to the line of argument in the DSD case, the parties in GGA claimed that the purchasing cartel was the only way to guarantee high recycling quotas for waste glass. Going beyond the agency's stance in the DSD proceedings, the Federal Cartel Office's president accused the companies of greenwashing: "We will not allow anti-competitive cartel agreements to be made under the guise of environmental protection." 204 He went on by referring to end consumers who are denied their share of potential sale proceeds due to the elimination of competition in the sector. The Higher Regional Court sided with the Federal Cartel Office when denying GGA's motion to suspend the decision's implementation.205 The purchasing cartel served the individual economic interests of the participants while neglecting the overall public interest in opening up the market.

### <IP_ADDRESS> Agrardialog Milch

Another case that helped draw boundaries for the treatment of cooperative initiatives within German competition law enforcement was the individual guidance provided to Agrardialog Milch.206 This agricultural policy project had suggested a financing concept in favor of raw milk producers whose costs oftentimes exceed the price paid for milk. The Federal Cartel Office heavily criticised the idea of a surcharge

203 Bundeskartellamt (2007), Bundeskartellamt prohibits purchasing cartel in the container glass industry, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/ Pressemitteilungen/2007/01\_06\_2007\_Beh%C3%A4lterglasindustrie.html. Accessed 5 November 2022; Bundeskartellamt, 31 May 2007, B4-1006-06, confirmed by OLG Düsseldorf, 14 June 2007 - VI-Kart 9/07 (V), ECLI:DE:OLGD:2007:0614.VI.KART9.07V.00.

204 Bundeskartellamt (2007), Bundeskartellamt prohibits purchasing cartel in the container glass industry, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/ Pressemitteilungen/2007/01\_06\_2007\_Beh%C3%A4lterglasindustrie.html. Accessed 5 November 2022.

205 OLG Düsseldorf, 14 June 2007 - VI-Kart 9/07 (V), ECLI:DE:OLGD:2007:0614.VI. KART9.07V.00.

206 Bundeskartellamt, 8 March 2022, B2-87/21; Bundeskartellamt (2022), Surcharges without improved sustainability in the milk sector: Bundeskartellamt points out limits of competition law, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/ Pressemitteilungen/2022/25\_01\_2022\_Agrardialog.html. Accessed 5 November 2022.

independent of sustainability efforts by the producers. It pointed out the lack of specific criteria for milk production that would take into account sustainability concerns. Reinforcing its stance from the Initiative Tierwohl case, the agency advised the participants to link the intended surcharge to consumer demand.207 The current version proved to be a price agreement to the disadvantage of consumers, rendering the project "not acceptable under competition law". 208 The Federal Cartel Office rejected the claim that the initiative would help finance the transformation of the domestic agricultural sector. Bearing in mind that the Federal Cartel Office in previous decisions attached importance to the market coverage of sustainability cooperatives, the intended sector-wide implementation of Agrardialog Milch certainly did not help its case.

### 7.4 Policy and Reform

### 7.4.1 General Guidance

The Federal Cartel Office is sympathetic to the goal of sustainability, acknowledging the importance of sustainability for society as a whole209 and for consumers in particular.210 Nevertheless, it has not provided general guidance for the consideration of sustainability in competition law yet. This is explained by four reasons: first, there has been insufficient case law on the matter up to now. Second, the effects of the specific conduct in question largely depend on the individual case at hand. Third, the formulation of general guidance would entail the risk of false negatives, i.e. the inclusion of agreements that are on balance harmful to competition and consumers.211 Fourth, the Federal Cartel Office points out that its primary task is to protect competition; therefore, it wants to consider non-economic goals only in atypical cases.212 In the view of the Federal Cartel Office, it is the legislator's task to

207 Cf. F. Engelsing and M. Jakobs, Nachhaltigkeit und Wettbewerb, WuW 2019(1), p. 22. 208 Bundeskartellamt (2022), Surcharges without improved sustainability in the milk sector: Bundeskartellamt points out limits of competition law, available at https://www.bundeskartellamt. de/SharedDocs/Meldung/EN/Pressemitteilungen/2022/25\_01\_2022\_Agrardialog.html. Accessed 5 November 2022.

209 Bundeskartellamt, Tätigkeitsbericht 2019/2020, BT-Drs. 19/30775, p. 13. 210 Bundeskartellamt (2022), Achieving sustainability in a competitive environment – Bundeskartellamt concludes examination of sector initiatives, available at https://www. bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2022/18\_01\_2022\_ Nachhaltigkeit.html;jsessionid=2E99AFE29AA5859CB0CA98F0FB1D6331.2\_cid381?nn=3591 568. 211 E. Wiese (2022), Agenda 2025 - Roadmap to Sustainability, available at https://www.d-kart.de/

blog/2022/05/18/agenda-2025-roadmap-to-sustainability/. Accessed 5 November 2022. 212 Bundeskartellamt, Tätigkeitsbericht 2015/2016, BT-Drs. 18/12760, p. 54; Bundeskartellamt,

Tätigkeitsbericht 2019/2020, BT-Drs. 19/30775, p. 13.

determine which goals to pursue and how much weight to attach to them.213 Accordingly, the Federal Cartel Office so far has been acting on a case-by-case basis (see Sects. <IP_ADDRESS>.1 and <IP_ADDRESS>).214 This lack of general guidance is subject to criticism since it can discourage companies from implementing sustainability initiatives.215 The government has already announced its intention to address this problem; see Sect. 7.4.2.

### 7.4.2 Reform Proposals

### <IP_ADDRESS> Monopolies Commission

In 2022, the Monopolies Commission published a report, inter alia, on the consideration of sustainability goals in competition law, focusing on climate and environmental protection. The expert panel shares the majority view in German competition law scholarship that sustainability and competition law tend to go hand in hand, yet it also acknowledges a first-mover disadvantage216 for sustainability initiatives and discusses possible remedies. It rejects the idea of exempting cooperations for environmental and climate protection from the cartel prohibition (Section 1 GWB) through teleological interpretation as this would reduce legal certainty.217 Instead, the Monopolies Commission suggests further elaboration on Section 2 GWB, Article 101 (3) TFEU, the existing efficiency defence, which requires balancing efficiencies with restrictions of competition case by case.218 In a similar vein, the Monopolies Commission is of the opinion that in merger control, the—currently unwritten—efficiency defence provides a suitable framework for sustainability considerations.219 It contemplates clarifying this defence in the GWB220 as this could encourage notifying parties to assert and substantiate a positive impact of the proposed merger in terms of efficiencies with respect to sustainability.221 However, somewhat paradoxically, the Monopolies Commission recommends the

213 Bundeskartellamt, Tätigkeitsbericht 2019/2020, BT-Drs. 19/30775, p. 13. 214 Bundeskartellamt, Tätigkeitsbericht 2015/2016, BT-Drs. 18/12760, p. 54; Tätigkeitsbericht 2019/2020, BT-Drs. 19/30775, p. 13.

215 Cf. Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, para 414; critical of this approach also E. Wiese (2022), Agenda 2025 - Roadmap to Sustainability, available at https://www.d-kart.de/blog/2022/05/18/agenda-2025-roadmap-to-sustainability/. Accessed 5 November 2022.

216 Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, paras 408-413.

217 Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, para 424. 218 Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, paras 418, 424.

219 Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, para 462. 220 Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, para 475. 221 Monopolkommission, XXIV. Hauptgutachten, Wettbewerb 2022, BT-Drs. 20/3065, para 463;

J. Welsch (2022), Agenda 2025: Mehr Nachhaltigkeit in der Fusionskontrolle?, available at https://

discussed amendment only after more companies have invoked the efficiency defence with regard to sustainability.222