Hintergrundpapier. Strukturelle Maßnahmen erklärt: Wie man Unternehmen sinnvoll entflechtet (PDF, German)
Background paper. Structural measures explained: How to break up firms well (PDF, English)
Competition authorities have been hesitant to use structural remedies in the recent past. This background paper documents that breakups are a perfectly feasible instrument of competition policy, with a track record of effectively tackling competition concerns. A selection of past cases demonstrates that competition authorities have successfully mandated divestments in various jurisdictions in various contexts: to end abuse of dominance, to change market structures detrimental to competition, to prevent and reverse harm from mergers as well as to ensure competition in network industries.
European and German competition law offer various possibilities for structural measures, some of which have not yet been applied. Proceedings for abuse of a dominant market position can lead to structural measures, although this has rarely been the case to date and some experts argue that the threshold for this should be lowered. Due to the recent reforms of competition law, competition authorities can also order break ups following investigations into systematic violations of the Digital Markets Act, following German sector inquiries and following German proceedings for violations by “companies with paramount cross-market significance for competition”.
Needless to say, structural remedies should only come into play when their use is appropriate and they need to be used with care. Effective breakup design requires finding faultlines that resolve the root cause of competition concerns and allow economically viable companies to emerge. These considerations suggest that it may be time for structural measures to be added (again) to the practical enforcement toolkit.
Background paper. Structural measures explained: How to break up firms well (PDF, German)
Background paper. Structural measures explained: How to break up firms well (PDF, English)
