Skip to main content
SpringerLink
Log in
Book cover

The Rule of Reason in Antitrust Law pp 67–106Cite as

The Notion of Restraint of Trade under Section 1 of the German Anticartel Law

  • Chapter

  • 73 Accesses

Abstract

Whereas the Rome Treaty tackles the problem of restrictive trade agreements in two basic substantive provisions, the German statute against restraints of competition utilizes a substantially different technique. It has been drafted in the most detailed manner and contains a wide range of both substantive and procedural rules, which deal with a specific situation. (1) Its main characteristic is its pretension to be a self-contained code, but the language used is not as broad as that commonly found in such legislation. Obviously, the attempt was to define, as precisely as possible, the basis on which courts and the administrative enforcement agency would proceed, so that discretionary decisions of economic policy would be confined within narrow limits. If it can be said that Article 85 of the Rome Treaty has, like the Sherman Act, “a generality and adaptability comparable to that found to be desirable in constitutional provisions (2) ”, conversely, it is certainly the rigidity and the technicality of the German statute which first strikes the comparative lawyer. Differences of the same kind exist, for instance, between the French and the German law of torts. While the French Civil Code has limited itself to laying down a few broad and general principles, entrusting the courts with their application to all factual situations, the German Civil Code has formulated a series of rules, each of which, again, provides for a particular situation.

This is a preview of subscription content, log in via an institution.

Chapter
USD   29.95
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
USD   39.99
Price excludes VAT (USA)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
USD   54.99
Price excludes VAT (USA)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free shipping worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Learn about institutional subscriptions

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

Reference

  1. The German Act against restraints of competition enacted July 27, 1957, contains more than one hundred sections. It has been amended by a statute of September 15, 1965 (See Bgb1. 1965, Teil I, 1363). This statute is reproduced in WuW 829 (1965).

    Google Scholar 

  2. I am quoting the words used by Chief Justice Hughes in Appalachian Coals Inc. v. United States, 288 U.S. 344, 359, 360 (1933).

    Google Scholar 

  3. Sections 1–14 of the German law pertain to cartel agreements, while Sections 15–21 relate to vertical arrangements. On the law applicable to certain types of restrictive practices, e.g., exclusive dealing, tying, franchise agreements, see infra, this chapter, at 103–106.

    Google Scholar 

  4. See e.g. the comparison made by Deringer between the exemption provided by the German statute for rationalization cartels and that by Art. 85(3) of the Rome Treaty, in Muller-Henneberg and Schwartz, Gesetz Gegen WetrBewerbsbeschrÄNkungen Und EuropÄIsches Kartellrecht (hereinafter referred to as Gemeinschaftskommentar), 312–316 (1963).

    Google Scholar 

  5. Northern Securities v. United States, 193 U.S. 197 (1904).

    Google Scholar 

  6. Standard Oil Co. of New Jersey v. United States, 221 U.S. 1 (1911) and United States v. American Tobacco Co., 221 U.S. 106 (1911).

    Google Scholar 

  7. On Section 6 of the British Restrictive Trade Practices Act of 1956, see e.g. Wilberforce, Campbell and Elles, The Law OF Restrictive Trade Practices And Monopolies, 238–294 (1966) and Stevens and Yamey, The Restrictive Practices Court 157–192 (1965).

    Google Scholar 

  8. “The Act is a step toward the promotion of competition, but it is very far from accepting competition as invariably desirable. ” Stevens and Yamey, op. cit.,at 44.

    Google Scholar 

  9. Wilberforce et al., op. cit., at 316–317.

    Google Scholar 

  10. Section 1(1) of the German anticartel law reads as follows: “Agreements made for a common purpose by enterprises or associations of enterprises and decisions of associations of enterprises are of no effect insofar as they are likely to influence, by restraining competition, production or market conditions with respect to trade in goods or commercial services… ” I am quoting the translation prepared by the Guide TO Legislation ON Restrictive Business Practices published by the Oecd.

    Google Scholar 

  11. See Langen, Kommentar Zum Kartellgesetz, 55 (1957); No Schwartz, Antitrust Legislation and Policy in Germany - A Comparative Study, 105 U. PA. L. Rev. 621 (1956–57).

    Google Scholar 

  12. For a criticism of this distinction, see Blaise, LE Statut Juridique Des Ententes ÉConomiques, 259–260 (1964).

    Google Scholar 

  13. See Shapiro, The German Law against Restraints of Competition - Comparative and International Aspects 62 Colum. L. Rev. 4 (1962).

    Google Scholar 

  14. The first conception expounded by Blaise was clearly illustrated by Neale [The Antitrust Laws OF America, 15–16 (1962)] in regard to horizontal integration: “A man with two bakeries in Cardiff buys another in Barry and there is no problem. By and by, however, he acquires more bakeries and yet more until the observer has very real doubts whether the bread trade in South Wales is competitive. Somewhere along the way comes the question whether this firm’s newest acquisition is to be regarded as in restraint of trade.” On the other hand, Hefermehl has expressed clearly the second possible theory: “In a sense, every restriction of the freedom of the traders competing in the same line of business has an impact on market conditions, if you consider that, before binding themselves collectively, the cartel members could establish independently the prices of their products, and are free in regard to other factors which are relevant to competition. It makes no difference whether you evaluate the contractual restraint of trade against the model of pure competition or against the competitive situation actually existing before the restraint was adopted. The degree of monopolization of the market has increased if the number of suppliers or purchasers who were previously acting autonomously has decreased. From that theoretical standpoint, every restraint affects market conditions.” But turning to the second test laid down in Section 1 of the German law, Hefermehl raised the question with which I will concern myself: “If Section 1 does not satisfy itself with the presence of a restriction, but requires moreover,a reasonable probability that market conditions will be affected, this shows that this latter test has a separate meaning.” See Hefermehl in Baumbach-Hefermehl, Wettbewerbs-und Warenzeichenrecht, 1231 (1960) (My translation)•

    Google Scholar 

  15. Reprinted in Gemeinschaftskommentar, 1076 (1958) (My translation).

    Google Scholar 

  16. Ibid., at 1175 (My translation).

    Google Scholar 

  17. Ibid., at 1059. Cf. Frankfurter Kommentar Tz. 20, § 1.

    Google Scholar 

  18. See also Baumbach-Hefermehl, op. cit., at 2; Frankfurter Kommentar Tz. § 1; in the area of unfair competition, the German Courts have developed a similar definition, see Hefermehl in 1 Baumbach-Hefermehl, Wettbewerbs und Warenzeichenrecht, 3 (1964). No original idea is conveyed by these definitions. The Webster’S New World Dictionary similarly regards competition as “ the effort of two or more parties acting independently to secure the customs of a third party by offering more favorable terms.”

    Google Scholar 

  19. “Das Streben eines Markteilnehmers an Stelle eines anderen gleichgerichteten Mitbewerbers ein Kauf-Tausch-Geschäft oder einen Miet-Pacht-oder auf gewerbliche Leistungen gerichteten Vertrag mit anderen Marktpartnern abzuschliessen.” See Eberhard Günther, Einkaufsvereinigungen und Kartellgesetzentwurf, Der Markenartikel, 35 (1957) quoted by Ingo Schmidt, Zum Begriff der Preiswettbewerbs nach § 17 Gwb, WuW 132 (1964) (My translation).

    Google Scholar 

  20. “ Wirtschaftlicher Wettbewerb ist das selbständige Streben sich gegenseitig im Wirtschaftserfolg beeinflussender Anbieter oder Nachfrager (Mitbewerber) nach Geschäftsverbindung mit Dritten (Kunden oder Lieferanten) durch Inaussichtstellen günstiger erscheinender Geschäftsbedingungen.” See Fikentscher, Neuere Entwicklungen der Theorie zum Tatbestandsmerkmal der Wettbewersbeschränkung § 1, 798 WuW (1961) (My translation).

    Google Scholar 

  21. “ Wirtschaftlicher Wettbewerb ist ein Verhalten betätigt durch Handlungen (oder Unterlassungen) mit denen mehrere Rivalen um die Wette das gleiche Ziel anstreben, ihren auf Gewinn gerichteten Leistungsaustausch zu fördern.” See Meyer-Cording, Die Grundbegriffe des Wettbewerbsrechts, WuW 462 (1962) (My translation).

    Google Scholar 

  22. J. Dean, Competition - Inside and Out, 32 Harv. Bus. Rev. 64 (1954).

    Google Scholar 

  23. See Meyer-Cording, op. cit., at 462.

    Google Scholar 

  24. See Baumbach-Hefermehl, op. cit. (1960) at 1233; Frankfurter, Tz. 25, § 1.

    Google Scholar 

  25. See Meyer-Cording, op. cit., at 469.

    Google Scholar 

  26. MÜLler-Henneberg in Gemeinschaftskommentar, 136 (1963) (My translation).

    Google Scholar 

  27. See Müller-Henneberg, Zu den Begriffen “Kartell” und “Wettbewerbsbeschränkung ”, WuW 883 (1963) (My translation).

    Google Scholar 

  28. I am here referring to the formula used by Chief Justice Hughes in Sugar Institute Inc. v. United States, 297 U.S. 553 (1936).

    Google Scholar 

  29. See e.g. decision of the B Kart A, December 9, 1959, WuW/E B Kart A 101, WuW 139 (1960); 1959 B Kart Rep. 51–52; letter of the B Kart A, April 6, 1962, WuW/E B Kart A 486, WuW 576–578 (1962); decision of the B Kart A, WuW/E B Kart A 310, WuW 150 (1961); 1958 B Kart A Rep. 39–41. Among the authors, see Moller-Henneberg in Gemeinschaftskommentar, 142 (1963); Hefermehl in Baumbach-Hefermehl, op. Cit., at 1239.

    Google Scholar 

  30. Sugar Institute Inc. v. United States, 297 U.S. 553 (1936).

    Google Scholar 

  31. See e.g. MÜLler-Henneberg in Gemeinschafts Kommentar, 143–145 (1963).

    Google Scholar 

  32. See for discussion, MÜLler-Henneberg, Op. Cit., 134–135; Baumbachhefermehl, op. cit., at 1244; Meyer-Cording, op. cit., at 472–473; cf. judgment of the German Federal Supreme Court, Bgh, October 26, 1961 (Export ohne BS), WuW/E Bgh 451, WuW 293 (1963). It seems that the German Court held that every agreement by which competing firms agree to refrain from advertising will be regarded as a “ restraint of competition ”; but as far as the market effect of the restraint is concerned, the German Court gives the impression that it would prefer a case-by-case analysis. In a comment, Hefermehl has approved this view. Advertising is an essential means for competing. Thereby purchasers are informed of the sources of supply. Advertising is also designed to increase the number of customers patronizing a producer. Hence, if a firm limits itself in its ability and freedom to advertise, its possibilities of action are restricted and there will be a “ restraint ” within the meaning of Section 1. But Hefermehl then raises the question whether every restraint of that kind is likely to affect market conditions. JZ 364 (1962). In United States v. Gasoline Retailers Association Inc., the United States Court of Appeals for the 7th Circuit held that an agreement between competitors to stabilize the local retail gasoline market, in an effort to prevent, by the elimination of price advertising at the station sites, gasoline price wars, constituted a price-fixing device which was illegal per se, 285 F. 2d 688 (7th Cir. 1961).

    Google Scholar 

  33. I am referring here to some of the tests applied by the United States Supreme Court in United States v. Columbia Steel Co., 334 U.S. 495 (1948).

    Google Scholar 

  34. Letter of the B Kart A, February 20, 1960 (Doppelstecker) WuW/E B Kart A 145, WuW 363 (1960).

    Google Scholar 

  35. See infra, this chapter, at 87–88 and 94–96.

    Google Scholar 

  36. See the Government Explanation for its Draft Law reprinted in Gemeinschaftskommentar, 1076 (1958); Baumbach-Hefermehl, op. cit., at 1242.

    Google Scholar 

  37. For discussion of this case, see MÜLler-Henneberg in Gemeinschaftskommentar, 159, 163 (1963).

    Google Scholar 

  38. Decision of the B Kart A, April 10, 1964 (Teerverwertung) WuW/E B Kart A 795, WuW 765 (1964) and 1959 B Kart A Rep. 8.

    Google Scholar 

  39. MÜLler-Henneberc in Gemeinschaftskommentar 139 (1963); id., Zu den Begriffen “Kartell” und “ Wettbewerbsbeschränkung”, WuW 891 (1963); Deringer/ Tessin, Comment on the Grundig-Consten case, Awd BB 332 (1964).

    Google Scholar 

  40. See e.g. Baumbach-Hefermehl, op. cit., at 1234.

    Google Scholar 

  41. B. Kart A Report 17 which raises the issue. (S) See information, WuW 324 (1962).

    Google Scholar 

  42. Letters of the B Kart A of February 8–9 and March 27–28, 1962 (Freiwillige Ketten), WuW/E B Kart A 576, WuW 432 (1963).

    Google Scholar 

  43. See Benisch, Comment, WuW 434 (1963).

    Google Scholar 

  44. BKartA Rep. 19; 1961 BKartA Rep. 52–53 (Kieler Fisch Grosshandel); 1962 BKartA Rep. 23–24 (Putzträger); 1963 BKartA Rep. 18 (Torf); 1963 BKartA Rep. 34–34 (Fotogeräte); 1963 BKartA Rep. 56 (common procurement agency of TV companies).

    Google Scholar 

  45. See e.g. 1964 BKartA Rep. 18 (Teererzeugnisse) 1964 BKartA Rep. 38 (Frauen-and Mädchenoberkleidung).

    Google Scholar 

  46. See Deringer/Tessin, op. cit., at 332.

    Google Scholar 

  47. This position is almost unanimous. See MÜLler-Henneberg in Gemeinschaftskommentar, 120 (1963); Frankfurter Kommentar Tz. 26 Sec. 1 and Tz. 7 § 1; Baumbach-Hefermehl, op. cit., at 1235 and 1229. An opposite thesis has been advocated by Likes, Der Kartellvertrag (1959). His opinion stands rather isolated. For a criticism, see e.g. P. Ulmer, Kartellvertrag und Gentleman’s Agreement, WuW 3 (1962).

    Google Scholar 

  48. The German Parliament was aware that the requirements set up in Section 1 were opening a loophole. See the Government Explanation for its Draft Statute, In Gemeinschaftskommentar, 1077 (1958). As put by Shapiro, op. cit., at 15, “ the cartel’s prohibition against anticompetitive agreements could be circumvented by substituting formless agreements for such agreements.” This loophole was only partly corrected by Section 38(2) (Umgehungsverbot).

    Google Scholar 

  49. See BegrÜNdung ZU Dem Entwurf Eines Gesetzes Gegen WettbewerbsbescrÄNkungen, reprinted in Gemeinschaftskommentar 1075 (1958).

    Google Scholar 

  50. Deringer in Aktuelle Grundsatzfragen Des Kartellrechtes 71–72 (1957).

    Google Scholar 

  51. The report of this Committee is reprinted in Gemeinschaftskommentar 1156, 1217 (1958). See at 1175.

    Google Scholar 

  52. See Böhm, WuW 153, 177 (1956) quoted by Deringer in Aktuelle Grundsatzfragen Des Kartellrechtes, 72 (1957).

    Google Scholar 

  53. Meyer-Cording, op. cit., WuW 470, 471 (1962); Frankfurter Kommentar Tz. 49, § 1.

    Google Scholar 

  54. Decision of the B Kart A (Einspruchsabteilung), Textillohnveredelung II, December 15, 1962, WuW/E B Kart A 569, WuW 263 (1963).

    Google Scholar 

  55. Judgment of the Bgh, July 1, 1964 (Flussspat), WuW/E Bgh 605, 610, WuW 653, 658 (1964).

    Google Scholar 

  56. See Fikentscher, Neuere Entwicklungen der Theorie zum Tatbestandsmerkmal der Wettbewerbsbeschränkung, § 1, WuW, 799–801 (1961).

    Google Scholar 

  57. See Biedenkopf, Aktuelle Grundsatzfragen Des Kartellrechtes, 24 (1957).

    Google Scholar 

  58. See Oppenheim, Federal Antitrust Legislation: Guideposts to a revised national Antitrust Policy, 50 Mtca. L. Rev. 1161 (1951–1952).

    Google Scholar 

  59. Standard Oil Co. of California v. United States, 337 U.S. 293, 322 (1949). See the observations made by Justice Frankfurter in his majority opinion, Ibid., at 310 and note 13.

    Google Scholar 

  60. B Kart A Rep. 8 and Fikentscher, op. cit., at 801.

    Google Scholar 

  61. See Gemeinschaftskommentar, 1175 (1958); cf. Frankfurter Kommentar, Tz. 49, § 1.

    Google Scholar 

  62. Judgment of the Bgh, October 26, 1959, WuW/E Bgh 359, WuW 295 (1960).

    Google Scholar 

  63. See Fikentscher, Comment on Gasgliihkörper, WuW/E Bgh 368, WuW 346 (1960).

    Google Scholar 

  64. Decision of the Bgh, January 14, 1960, Kohlenplatzhandel, WuW/E Bgh 369. WuW 347 (1960). See the judgment of the Court of Appeal, Olg Hamburg, August 24, 1959, WuW/E Olg 290, WuW 64 (1960).

    Google Scholar 

  65. See Benisch, Comment, WuW/E Bgh 374, WuW 352–353 (1960). This judgment of the German Federal Supreme Court has also been discussed by Lieberknecht, Grur 353 (1960); Deringer, BB 43 (1960); Buntig, BB 384 (1960); von Beringe, DB 289 (1960); Lea, AktG, 95 (1960); Benkendorff, Wrp 146 (1962).

    Google Scholar 

  66. Cited by Klaue, Zwei Jahre Rechtsprechnung zum Gifb, WuW 393 (1960).

    Google Scholar 

  67. Judgment of the Bgh, June 7, 1962 (Spar), WuW/E Bgh 486, WuW 680 (1962). Cf. Frankfurter Kommentar, Tz 50, § 1.

    Google Scholar 

  68. See Dörinkel, Comment on the Spar case, Grur 43 (1963). This is also the conception advocated by the Frankfurter Kommentar, Tz. 49, § 1 und MÜLler-Henneberg in Gemeinschaftskommentar, 156 (1963).

    Google Scholar 

  69. Judgment of LG Dusseldorf, August 15, 1961, WuW/E LG/AG 186, WuW 446 (1962).

    Google Scholar 

  70. Judgment of L. G. Dortmund, October 16, 1961 (Milchhändler), WuW/E LG/AG 189, WuW 623 (1962).

    Google Scholar 

  71. Decision of the Kammergericht (Court of Appeal of Berlin), October 16, 1964 (Bockhorner Klinker), WuW/E Olg 709, 713, WuW 235, 239 (1965).

    Google Scholar 

  72. See e.g. Frankfurter Kommentar, Tz. 26, § 1.

    Google Scholar 

  73. See e.g. MÜLler-11Enneberg in Gemeinschaftskommentar 120 (1963).

    Google Scholar 

  74. See Kurt Market, Gemeinschaftsunternehmen und Antitrust recht, Awd BB 243 (1964).

    Google Scholar 

  75. See Frankfurter Kommentar, Tz. 52, § 1.

    Google Scholar 

  76. See MÜLler-Henneberg, op. cit., 129 (1963).

    Google Scholar 

  77. See Frankfurter Kommentar, Tz. 51, § 1.

    Google Scholar 

  78. Cf. Brown Shoe Co. v. United States, 370 U.S. 294, 323 (1962).

    Google Scholar 

  79. See Baumbach-Hefermehl, op. cit., 1231 (1960) (My translation). Cf. Neale, The Antitrust Law OF The U.S.A. 430–431 (1962).

    Google Scholar 

  80. Handler, A Study OF The Construction And Enforcement OF The Federal Antitrust Laws, Tnec Monograph no. 38, 34 (1941).

    Google Scholar 

  81. See Frankfurter Kommentar, Tz. 25, § 1.

    Google Scholar 

  82. Ulmer, Wettbewerbsbeschränkende Absprachen im Rahmen von Unternehmenszusammenschlässen, WuW 164, footnote 7 (1960), Shapiro, op. cit., at 4. at 4.

    Google Scholar 

  83. Section 5(2) of the German Law against restraints of competition; See Deringer in Gemeinschaftskommentar, 288, 290.

    Google Scholar 

  84. On this provision, see Bartholomeyczik in Gemeinschaftskommentar 631 (1963).

    Google Scholar 

  85. Section 18 of the German Law reads as follows:—

    Google Scholar 

  86. The Cartel Office can invalidate, either immediately or effective at some future date, agreements between enterprises relating to goods or commercial services and can prohibit the consummation of other similar agreements insofar as such agreements a. restrain one of the parties in its freedom to use the delivered goods, other goods or commercial services; or b. restrain one of the parties in the purchase or sale of other goods or other commercial services from or to third parties; or c. commit one of the parties to accept other goods or commercial services that are not normally related either technically or by custom of the trade, and thereby unreasonably restrict the freedom of economic action of a party to the agreements or any other enterprise and insofar as, by the amount of such restrictions, competition in the market for these or other goods or commercial services is substantially restrained.

    Google Scholar 

  87. See Schwartz in Gemeinschaftskommentar, 522 (1963); Fikentscher, Sonstige Verträge jar Gesetz gegen Wettbewergsbeschränkungen, in Festschrift FÜR Alfred Hueck, 543 (1959); Shapiro, The German Law against Restraints of Competition, Comparative and International Aspect, 62 CoLvm. L. Rev. 211, 219 (1962).

    Google Scholar 

  88. See Gemeinschaftskommentar 1186 (1958).

    Google Scholar 

  89. Gesetz Zur ÄNderung Des Gwb, September 15, 1965, Bgb1 1965, Teil I, 1363. This statute is reproduced in WuW 829 (1965). See also the excerpts of the Report issued by the Economic Committee, WuW 834 (1965).

    Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Northwestern University, Chicago, USA

    René Joliet (Assistant à l’Université de Liège, LL.M.)

Authors
  1. René Joliet
    View author publications

    You can also search for this author in PubMed Google Scholar

Rights and permissions

Reprints and permissions

Copyright information

© 1967 Springer Science+Business Media Dordrecht

About this chapter

Cite this chapter

Joliet, R. (1967). The Notion of Restraint of Trade under Section 1 of the German Anticartel Law. In: The Rule of Reason in Antitrust Law. Collection Scientifique de la Faculté de Droit de l’Université de Liège. Springer, Dordrecht. https://doi.org/10.1007/978-94-017-5900-7_3

Download citation

  • DOI: https://doi.org/10.1007/978-94-017-5900-7_3

  • Publisher Name: Springer, Dordrecht

  • Print ISBN: 978-94-017-5640-2

  • Online ISBN: 978-94-017-5900-7

  • eBook Packages: Springer Book Archive

Publish with us

Policies and ethics

Search

Navigation