The number of companies listed in Germany’s competition register, maintained by the Federal Cartel Office, has seen a significant increase, according to information released by the Federal Ministry for Economic Affairs and Climate Action following a request from the Left party. The register, an electronic database, records companies that have committed specific economic offenses.
As of December 2022, 4,632 companies were registered. By March 31, 2024, this figure had risen dramatically to 21,456. Registration in the competition register can have consequences for the affected businesses, currently resulting in exclusion from public contracts exceeding a value of €30,000.
The most frequent reasons for listing relate to violations of Section 266a of the Criminal Code, often concerning employers failing to pay or incorrectly remitting social security contributions. The number of companies listed for this reason increased from 2,271 to 9,847. The register also records violations of the Posted Workers Act (AEntG), the Minimum Wage Act (MiLoG), the Temporary Work Act (AÜG) and the Law on Combating Illegal Employment (SchwarzArbG).
The government is planning changes regarding the awarding of public contracts, with a draft law designed to accelerate the process scheduled for discussion in cabinet next week. A key component of this draft includes raising the threshold for exclusion from public contracts based on registration in the competition register, potentially increasing it from €30,000 to €50,000.
Left party MP Lorenz Meiser has sharply criticized this proposal, stating that it appears designed to facilitate public contract access for companies employing unlawful practices. He argues that expanding the scope of direct contract awards while eliminating the obligation to consult the competition register opens the door for businesses engaged in illegal activities. He also expressed concern that reputable companies adhering to legal standards may be disadvantaged competitively due to lower costs amongst those using illicit methods.
Meiser is calling for modifications to the draft law, advocating for the abolishment of existing exceptions to the consultation obligation. He emphasized that business models built on illegal practices should not benefit from public funds and that exploitative wage practices should not be subsidized through taxpayer money.
A spokesperson for the Federal Cartel Office explained that the increase in registered companies is a natural consequence of the relatively new register, which has been in operation since 2021 with a mandatory reporting obligation commencing December 2021. They cautioned against drawing firm trends at this early stage.