The number of companies listed in the Federal Cartel Office’s competition register has seen a significant increase since its introduction, according to a response from the Federal Ministry for Economic Affairs and Energy to a query from the Left party. Reports indicate a jump from 4,632 companies at the close of 2022 to 21,456 companies as of March 31, 2024.
The competition register serves as an electronic database for companies found to have committed specific economic offenses. Being listed can have implications for affected businesses, most notably current exclusion from public procurement contracts when the value of the contract exceeds €30,000.
A substantial portion of the increase is attributed to violations of Section 266a of the Criminal Code, which typically involves employers failing to properly remit social security contributions. The number of companies recorded under this infraction rose from 2,271 to 9,847. The register also includes data relating to violations of the Posted Workers Act, the Minimum Wage Act, the Temporary Work Act and the Act against Illegal Employment.
The government is planning revisions relating to public procurement processes, with a draft law aimed at accelerating procedures expected to be discussed by the cabinet next week. A key component of this draft includes a proposed increase to the threshold for exclusion from public procurement, raising it from €30,000 to €50,000. This change has drawn criticism from Left party parliamentarian, Meiser.
“The Federal Government appears to be endeavoring to ensure that companies profiting from unlawful practices can once again easily benefit from public contracts” Meiser stated. He also pointed to concerns that expanded possibilities for direct awarding of public contracts will eliminate the obligation of procurement bodies to consult the competition register.
Meiser argues that compliant businesses, adhering to legal frameworks, will ultimately be disadvantaged in competition for public contracts due to the presence of companies utilizing illegal practices. He is advocating for adjustments to the draft law, suggesting a removal of existing exemptions rather than undermining existing obligations.
A spokesperson for the Federal Cartel Office explained that the increase in listings is a natural consequence of the register’s introduction and mandatory reporting requirements, initiated in December 2021. They cautioned against drawing firm trends at this early stage.
