The number of companies listed in the Federal Cartel Office’s competition register has seen a significant increase, according to a response from the Federal Ministry for Economic Affairs and Climate Action to an inquiry from the Left party. Reports in publications from the Funke-Mediengruppe detail that the register, a digital database documenting companies found to have committed certain economic offenses, has expanded dramatically. As of December 1, 2022, 4,632 companies were listed; by March 7, 2024, that number had risen to 21,456.
Currently, companies registered in the competition register are excluded from the awarding of public contracts exceeding a value of €30,000. The register primarily records violations related to non-payment or incorrect remittance of social security contributions, alongside breaches of the Posted Workers Act (AEntG), the Minimum Wage Act (MiLoG), the Temporary Work Act (AÜG) and the Act on the Prevention and Combating of Illegal Employment (SchwarzArbG). The largest proportional increase has been observed in cases of unpaid social security contributions.
The government is planning adjustments concerning public contract awards, with a draft law aimed at accelerating the process slated for discussion in cabinet next week. A key element of this draft includes raising the threshold for exclusion from public contracts based on registration in the competition register. The proposed change would increase the value limit from €30,000 to €50,000.
Left party parliamentarian Lorenz Meiser has voiced strong criticism of this proposed change, arguing that it effectively facilitates access to public funds for companies engaging in unlawful practices. He also raises concerns about the potential elimination of the obligation for awarding bodies to consult the competition register when using direct award procedures, creating avenues for companies using questionable business models.
Meiser contends that reputable companies operating within legal frameworks will be disadvantaged by this adjustment, facing unfair competition from those employing illegal practices. He is calling for modifications to the draft law to maintain existing consultation requirements and prevent the granting of public funds to businesses reliant on unlawful activities, arguing that “such ruthless wage dumping should not be subsidized with taxpayer money.
A spokesperson for the Federal Cartel Office noted that the increase in registered companies is a natural consequence of the register’s introduction in 2021, with a statutory reporting obligation in place since December 1, 2021. Assessing longer-term trends remains premature at this stage.
