The number of companies listed in Germany’s competition register, a database maintained by the Federal Cartel Office, has seen a significant increase. This information comes from a response by the Federal Ministry for Economic Affairs and Energy to an inquiry from the Left Party, as reported by newspapers within the Funke-Mediengruppe.
As of December 31, 2022, 4,632 companies were registered, a figure that has sharply risen to 21,456 as of March 31, 2024. The register catalogues companies found to have committed specific economic offenses. Inclusion in the register can have considerable implications for affected businesses, previously resulting in exclusion from public contracts exceeding a value of €30,000.
According to the parliamentary inquiry, a substantial number of violations relate to breaches of Section 266a of the German Criminal Code, primarily concerning employers failing to pay or incorrectly remitting social security contributions. The number of companies listed under this category rose from 2,271 to 9,847. The register also records violations of the Employee Deployment Act (AEntG), the Minimum Wage Act (MiLoG), the Temporary Work Act (AÜG) and the Law on Combating Illegal Work (SchwarzArbG).
The German government is currently considering modifications concerning the awarding of public contracts. A draft law aimed at accelerating this process is slated for discussion within the cabinet next week, including a proposed increase to the threshold for exclusion from public contract bids. Under the proposed changes, companies would not be excluded from bids until the contract value reaches €50,000, up from the current €30,000. Left party MP Meiser has strongly criticized this proposal.
“The government appears determined to ensure that even companies profiting from unlawful practices can more easily access public contracts” Meiser stated. He also voiced concerns that expanding the scope for direct contract awards would eliminate the obligation for awarding bodies to consult the competition register.
Meiser argues that this shift would disadvantage reputable companies adhering to legal frameworks and struggling to compete on costs against those employing less scrupulous methods. He is calling for revisions to the draft law to maintain the existing consultation obligations. “Business models based on illegal practices should not be permitted to benefit from public funds and must not be further enabled through public tenders” Meiser added.
A spokesperson for the Federal Cartel Office clarified that the increase in registrations is a natural consequence of the register’s introduction in 2021 and the subsequent statutory reporting obligation implemented on December 1, 2021. They cautioned against drawing definitive trends based on the current data.
