The number of companies listed in Germany’s Federal Cartel Office’s competition register has increased significantly, according to information obtained by the Left party and released in response to a parliamentary inquiry. The register, an electronic database of companies that have committed certain economic offenses, contained 4,632 entries at the end of 2022. As of March 31, 2024, this figure has risen to 21,456.
Currently, companies listed in the register are excluded from public procurement contracts exceeding a value of €30,000. The increase in listings reflects a range of violations, with a notable rise in cases related to failures by employers to properly pay social security contributions – representing a significant portion of the increase. Other violations recorded include breaches of the Posted Workers Law, the Minimum Wage Act, the Temporary Work Act and the law against illegal employment.
The German government is planning changes to public procurement procedures, with a draft law aimed at accelerating the process set to be discussed by the cabinet next week. A key aspect of the proposed legislation involves raising the threshold for exclusion from public tenders due to competition register listings. The current exclusion limit of €30,000 is slated to increase to €50,000.
Left party parliamentarian Lorenz Meiser has voiced sharp criticism of this proposed change, alleging that the government is facilitating access to public contracts for companies engaging in illegal practices. He argues the planned expansion of direct contract awards will also eliminate the obligation for procurement bodies to consult the competition register.
Meiser contends that the changes will disadvantage companies that adhere to legal requirements and operate fairly, placing them at a competitive cost disadvantage. He is calling for amendments to the draft law to maintain existing reporting obligations and prevent businesses based on illegal practices from being awarded public contracts, stating that “ruthless wage dumping should not be subsidized with taxpayer money.
A spokesperson for the Federal Cartel Office acknowledged that the increase in listings is a natural consequence of the register’s introduction in 2021 and it is too early to identify long-term trends.