Antitrust law: The seven dangers to a good competitive order

We can prevent the concentration of economic power and improve the opportunities for prosperity. However, this raises the fundamental question: Does competition in a market economy really serve the people?

Dhe competition regime is facing major challenges in the course of the digital and ecological transformation processes in Germany. In view of the concentrated power of Big Tech companies, for example, it is not just about increasing economic welfare. In the spirit of Franz Böhm, one of the fathers of post-war German antitrust law, it is also about the competition “as the most ingenious instrument of disempowerment in history”. Since then, the competition regime has been extremely successful in combating cartels and monopolies. This is proven not least by the monopolies commission’s concentration reports. If you look at the company concentration, the share of the 100 largest companies in the overall economic value added shrank from 1978 to 2020 from 19.4 to 14 percent. Personnel ties at company management level have fallen even more drastically, by almost 90 percent since the heyday of “Deutschland AG”.

These achievements should not be underestimated. This is shown by a view across the Atlantic. In the USA, the antitrust authorities are struggling with much greater concentrations. These correlate with significant price premiums that illustrate the damage to consumers. In Germany, price surcharges, i.e. the difference between economic production costs and market prices, are only increasing in individual, highly concentrated sectors. This includes mineral oil processing. In other sectors, such as the service sector, on the other hand, we are seeing falling margins.