Why are Association Activities important?

Business associations are legitimate intermediaries between business and politics. Thanks to their internal democratic structure, they are able to pool interests and articulate them to policymakers. They enable small and medium-sized enterprises in particular to bring their concerns into political decision-making processes. The legislative and executive branches also rely on receiving the pooled expertise of the relevant business sectors.

Representatives of companies from the same sector regularly come together in associations and umbrella organisations. Professional exchange and the joint representation of interests in the political process are permissible and essential for effective association activities. At the same time, associations and their members must ensure that their cooperation is not used for agreements that restrict competition or for the exchange of competitively sensitive information.

A Shared Understanding between the Federal Cartel Office and Industry Associations

Against this background, it was important to the BDI that the Federal Cartel Office clarify the importance of association activities that comply with competition law. In September 2018, Andreas Mundt, President of the Federal Cartel Office, Joachim Lang, then Chief Executive of the BDI, and other association and company representatives discussed the competition law framework governing association activities.

In an agreed record of conclusions, they set out their shared understanding that association activities conducted in compliance with competition law are a substantial element of the social market economy. At the same time, Andreas Mundt, President of the Federal Cartel Office, made it clear that proceedings by the Federal Cartel Office, including those involving investigations into associations, were not directed against association activities as such. Rather, he emphasised the particular importance and responsibility of associations in the political process.

This shared understanding remains relevant today: associations fulfil important functions in economic and political processes. They bring together interests and specialist knowledge, contribute to political opinion-forming and can serve as points of contact for policymakers, public authorities and competition authorities. This requires association activities to be carried out in accordance with German and European competition law.

Association Activities and Competition Law are Compatible

Association activities inevitably involve contact between companies that may be competitors in their respective markets. However, this in itself does not give rise to concerns under competition law. The line is crossed when an association provides a forum for anti-competitive agreements or the exchange of competitively sensitive information.

Andreas Mundt, President of the Federal Cartel Office, has also explained this shared understanding in his specialist article, ‘Association Activities and Competition Law Are Compatible’. In it, he emphasises the important functions of associations in economic and political processes and makes it clear that German and European competition law allows ample scope for cooperation that complies with competition law and for permissible exchanges of information within associations.