Yesterday's press release reveals that the German Federal Competition Authority (Bundeskartellamt) has taken a firm stance on antitrust violations, imposing substantial fines totalling EUR 16 million on the manufacturer of the 'FRITZ!' brand of electronic products and one of its employees. The fines, based on the serious allegation of vertical price fixing, underscore the severe consequences of such actions under German and European antitrust law. This involves suppliers influencing the resale prices of retailers, which is largely regarded as a violation of the general ban on cartels under German and European antitrust law. It's important to note that exceptions to this general ban on cartels are almost never accepted by the authorities.

Practical tips from Reed Smith, Germany:

• Resale Price Maintenance (RPM) is not a trivial offence under German or European antitrust law but is often severely punished. Offences of this kind continue to be the focus of the Bundeskartellamt’s enforcement practice. This applies not only to the electronics industry, but across all sectors. Non-binding price recommendations or the specification of maximum prices are permitted.
   
• The probability of detection is exceptionally high in RPM cases because market participants are usually disturbed by the exertion of influence. This case was also initiated by market participants via the Bundeskartellamt's anonymous whistle-blower system.
   
• The use of price monitoring technologies can further increase the severity of a price fixing offence. Even if the use of such tools is not prohibited per se, caution is still required from an antitrust law perspective. This applies even more to an AI-driven pricing policy. 
   
• Since the introduction of the German Whistle-blower Protection Act (Hinweisgeberschutzgesetz), companies above a certain size must maintain reporting systems for antitrust violations, among other things, which supplement the anonymous whistle-blower systems of the antitrust authorities and ensure additional detection. Ideally, your own company will be the first to learn of an infringement and can put an end to it before the enforcement authorities become aware of it. 
   
• In Germany, the consequences of antitrust offences can be particularly serious. As in this case, responsible private individuals can be personally sanctioned with fines of up to EUR 1 million. The fine for private individuals is in addition to the corporate fine, which can be as high as 10% of the relevant company's annual turnover. 
   
• Compliance pays off - effective compliance systems can prevent offences and thus fines. By providing evidence of effective compliance measures, it is possible to obtain a significant reduction in the penalty as part of the so-called compliance defense if an infringement nevertheless occurs. Compliance also includes preparing for the possible event of a dawn raid.