An important judge changes the Senate. Is that news? And what news! Even Rupprecht Podszun, who is usually not at a loss for words, was momentarily speechless when he heard this one. Now he has regained his composure and quickly jotted down his thoughts – here are his SSNIPpets, small but significant news, information and pleasantries – our pet project!
This HR development is a real bang for the buck: Prof. Dr Jürgen Kühnen, the legendary “Judge Kühnen”, is stepping down as presiding judge of the 1st Cartel Senate of the Düsseldorf Higher Regional Court (Oberlandesgericht) on 1 August 2021. If you are interested in what he will be doing in the future and what this means for our much-loved Facebook proceedings, then you have come to the right place.
“Cartel-Kühnen” – a personality
It will be the end of an era: “Kartell-Kühnen” (as he is sometimes called in distinction to his twin brother, “Patent-Kühnen”) had been a member of the 1st Cartel Senate since 1998, and chairman since 2007. So one of the most distinguished competition law judges in the world, it is fair to say, is leaving the field. Bang! The unique position of the 1st Cartel Senate of the Oberlandesgericht here in Düsseldorf lies in the fact that it is the competent court for all complaints brought against the Bundeskartellamt in administrative cases. It also deals with many civil law competition cases as second instance.
Kühnen stands for razor-sharp legal analysis and for very direct words. His hearings and decisions often have a high entertainment value, at least for those who – like me – can enjoy them light-heartedly. Lawyers sometimes have to assure their clients afterwards that they really did pass both law exams when Kühnen speaks out on the quality of pleadings in the courtroom. His Senate often refused to follow the Cartel Senate of the Federal Supreme Court (Bundesgerichtshof) (and Kühnen would – rightly – object now that there is no such thing as following in this relationship). The judges in Karlsruhe recently referred some cases back to another Düsseldorf Senate.
In terms of substantive law, it is difficult for me to assess the Kühnen era, but my impression is: the Senate remained true to an ordoliberal tradition, relying more on the idea of competition on the merits than on economic expert opinions. Even if the Booking.com and Facebook cases have recently obscured the view, the Senate – my subjective impression – has sided with the Bundeskartellamt. In the increasingly important area of damages law, the Senate has tried some things, which did not go without friction with the Bundesgerichtshof.
Less is known about Kühnen privately, but attentive observers may notice that there is a judge named Kühnen-Sasse in another senate of the Higher Regional Court with whom Kartell-Kühnen was occasionally seen… Otherwise: robe, round glasses, objectivity. Of course, one could always learn a little about the Senate between the lines:
“The members of the Senate, who belong to the group of customers addressed, can make the determination that sour milk cheese (…) is not interchangeable with other soft cheeses on the basis of their own life experience” (Case No. VI-Kart 10/08 (V)).
At least this much is known about his private lives.
His biggest case
All the large and small cases in German administrative antitrust law in recent years were on his desk. For me, one stands out because it so strongly reflects the unconditional judicial ethos that I associate with him in the first place (even though of course many other judges have it, too). On 12 July 2016, he and his associate judges Lars Lingrün and Andrea Lohse temporarily stopped the ministerial authorisation in the Edeka/Tengelmann merger case. The Bundeskartellamt had stopped this food retail merger, now the German Minister of Economics had overruled this with a “Ministererlaubis”, a special instrument in German merger control law. Upon complaint by competitors, the Düsseldorf Court stopped the ministerial approval. The reason given was that the Minister, it was Sigmar Gabriel at the time, had committed serious procedural errors and that there was a concern of bias in favour of the buyer. The three members of the Senate took a striking stand against the Vice-Chancellor of the Federal Republic of Germany and head of the Social Democrats.
Whether the Senate was right in its decision of July 2016 does not need to be clarified here. (They were probably not completely wrong – my colleague Daniel Zimmer, whom I hold in high esteem, resigned as chairman of the Monopolies Commission in protest against the ministerial authorisation). My point is different: reminding a minister, who intervenes in competition law, in very clear terms of the rule of law is something you first have to dare to do – German daily FAZ, for example, wrote of a “slap in the face” for the minister. The judges were convinced that they had made the right decision and they were prepared to stand up for it and take a risk.
Some readers may ask: What risk? But it is enough to look at our neighbouring country Poland to appreciate how quickly judges can be put under pressure if they do not meet the expectations of those in power.
The situation at the time was heated: when the decision of the Düsseldorf court became public, Sigmar Gabriel interrupted his holidays and counterattacked. This powerful man with his spin doctors and network lashed out. In a press conference he tried to give the impression that the judges in Düsseldorf had no understanding for the hardships of the employees of the target, retailer Tengelmann:
“16,000 jobs are at stake, the future of many women workers and their families, who often only earn between 1,000 and 2,000 euros gross per month in full-time employment…. Warehouse workers, forklift drivers, workers in meat factories, shop assistants – many only part-time. “
Moreover, the Senate had misjudged the constitutional order and was weakening the social market economy. If the media had bought Gabriel’s story, Jürgen Kühnen would have been pretty much alone. With his legal skills, he could certainly have easily justified a more comfortable path for the government. He did not choose the comfortable path in this highly politicised procedure, but the one he saw as the right one. It was never Kühnen’s ambition to make things easy for himself or others. The rule of law lives from such judges.
Incidentally, those in power have reacted in their own way: With the next amendment to the German competition act, the right of appeal in the case of ministerial authorisations was curtailed to such an extent that it was hardly to be expected that a minister would again be lectured from the Düsseldorf bench. (Parallels to current developments concerning jurisdiction in antitrust proceedings should not even be discussed here).
Speaking of Facebook…
I asked the Higher Regional Court what the change at the top of the Senate actually means for the ongoing proceedings in the Facebook case. The deputy press officer said:
“When the [ECJ’s] preliminary ruling is available, the proceedings will be conducted in the then current Senate composition, taking into account the legal opinion expressed by the ECJ.”
Just a moment! The exam candidate naturally thinks of § 309 of the Code of Civil Procedure, according to which the judgement must be passed by the judges who also attended the oral proceedings. And in the Facebook case, there has already been an oral hearing, which we reported on here. Wouldn’t Kühnen then have to make the decision?
Peter Hartmann provides information in a commentary on civil proceedings called Baumbach/Lauterbach/Albers/Hartmann: It depends on the final hearing. So we can certainly look forward to another oral hearing in the Facebook case – if only to meet the requirements of § 309. But in the Facebook case, after the ECJ’s statement, there should indeed still be a lot to discuss. Incidentally, Hartmann recommends the following in his commentary of 2018 (section 309 ZPO marginal no. 2):
“At least it is up to the remaining cast on the bench to at least give the added College member the real opportunity to express a further thought that may be fruitful precisely because of this addition. The ‘newcomer’ should not shy away from this.”
The “newcomer” is an old acquaintance
The “new” head of the 1st Cartel Senate is an old acquaintance: Jürgen Breiler. Breiler was himself a member of this senate from 2009 to 2013, after which he moved to the 4th Cartel Senate, headed by Manfred Winterscheidt, where he was mainly involved in cartel fine proceedings. In the renowned “Frankfurt Commentary”, Breiler writes on procedural issues in competition law. So here comes someone who already knows a lot about competition law (which is not always guaranteed when there is a change of personnel in the judiciary). I am curious to see how he follows in the footsteps of Jürgen Kühnen, Jörg-Winfried Belker and Wolfgang Jaeger, the chairmen who have been judging the Bundeskartellamt’s practice in the 1st Cartel Senate since its move to Bonn.
There are now six cartel senates at the Düsseldorf Higher Regional Court: in addition to No. 1, the other senates focus on energy law issues or cases with fines. They are headed by judges Dr Maimann (2), Frister (3), Winterscheidt (4), van Rossum (5) and Dr Egger (6). If you want to know more, please look here.
And what does Kühnen do?
You want to know what Kühnen is up to now. Let’s put it this way: everyone has their secret dreams. Kühnen is to become chairman of the 3rd Civil Senate of the Düsseldorf Higher Regional Court. The Court writes in a press release about the tasks of this Senate:
“The 3rd Civil Senate decides in proceedings of so-called voluntary jurisdiction, in particular in the areas of land register law, probate law as well as registry law.”
But that is only half the truth. According to the court plan, the 3rd Civil Senate is also responsible for Fideikommiss matters, matters according to the Law on the Settlement of Agricultural Debt Relief of 25 March 1952, applications for the granting of increased lump-sum fees for assigned lawyers in cases on custodianship, and so on and so forth. My impression is that this is somewhat far away from HHI, SSNIP test or Upward Pricing Pressure, but perhaps I’m mistaken: Fideikommiss is not my speciality.
Of Trust and Antitrust
One antitrust lawyer who probably knows a lot about Fideikommiss is Rainer Becker, whom many readers know as an important player in the European Commission. Becker does pharmaceutical antitrust law there; we reported on the Aspen case here once. By chance, I once came across Rainer Becker’s doctoral thesis. I thought of it when I was thinking about Fideikommiss. Becker once dealt with the fiducie and the trust in Québec law. The fiducie is a trust without a legal entity, a so-called patrimoine d’affectation. This fiduciary model has parallels with the Fidei, if I am reading this correctly.
(If you wish to know what I am talking about when talking about Fideikommiss (this word is very uncommon in German and completely unknown to everyone but Rainer Becker, I guess), please consult old Prussian law, the “Zweyten Theil des Allgemeinen Preußischen Landrechts”:
“If, however, someone decrees that a certain property or capital should remain with a family, either permanently or through several generations, this is called a family fideicommissum.
You’re welcome 😉
Is this an antitrust thing? One goes from trust to antitrust (Becker) or vice versa (Kühnen)? Should I start looking more closely at trusts, i.e. fiduciary legal constructions? For the time being, when thinking about fiduciary duties I still think of AC Treuhand, since Treuhand is the German word for “fiduciary” or the older Fidei. AC Treuhand was that cartel service provider from Zurich that helped organise agreements on tin stabilisers and esters (see ECJ, Case C-194/14 P). Incidentally, AC Treuhand-AG now operates under a different name and has imposed a code of conduct on itself that is likely to bring any compliance officer to tears of joy.
Axe in the wood
One of Kühnen’s decisions that I particularly like is one on a forestry case, known as “”Rundholzverfahren” in Germany. In a lengthy complex of proceedings, the Federal Cartel Office accused the State Forest of the Land of Baden-Württemberg of violating cartel law. In addition to performing the sovereign tasks of the forestry, it had behaved like an “axe in the woods” (that’s a German saying, but I guess you get the meaning) by entering into agreements restricting competition in the marketing of timber. The procedure was so complex since the state government did not really seem to understand that it may be bound to respect competition rules. During proceedings, the Federal Forest Act was simply amended in order “to let the trees grow to the sky again” (another German expression) for the state in economic terms. Oh, being the state… if you need a law that helps you out when you are infringing the law, you just do it! Or…? In proceedings VI-Kart 10/15 (12.3.2017), the Düsseldorf Oberlandesgericht ruled that the amendment of the Bundeswaldgesetz, the Federal Forest Act, was void due to a lack of competence. (The OLG decision was overturned by the BGH for other, formal reasons).
Sawmills are now suing for damages at the Stuttgart Regional Court, incidentally without a legally binding decision of a competition agency to base their claim on. The defendants are several federal states, including Baden-Württemberg. Peter Hauk, Minister for Food, Rural Areas and Consumer Protection, gave an interview to the Schwäbische Zeitung at the start of the trial that would make any expert in litigation PR throw up his hands. Juve reported on it in detail. Hauk threatened the plaintiffs more or less directly that he would no longer supply them in future. Moreover, the chances of success are low, he said, since the lawsuit is directed against the state – which reveals at least a dubious understanding of the rule of law. Finally, they would “not stand idly by”: as a “flanking measure” to the proceedings, he said, they had tried to bar the plaintiffs’ legal construction of standing from competition law cases. The German Bundestag, after all, did not follow the recommendation of the Länder. The idea, however, that the state should set its own rules, just as it needs them for economic activities, is very questionable. For Hauk, however, I request extenuating circumstances: before becoming a minister, he was head of state forestry offices.
A letter from England
It is always fitting, especially in a blog named after a French philosopher, to quote from a letter by Voltaire. Voltaire, that is François-Marie Arouet, had a thing for economic modelling. As the Süddeutsche Zeitung recounted this week, he secured his income and thus his freedoms by working with a mathematician to exploit a state lottery system.
In his actual work as a writer, he impressed with an eye for happiness through trade that was also very alert for the time: Voltaire was in England and saw many developments in the already somewhat freer country that he did not yet see in France. Among other things, he was enthusiastic about free enterprise, which we are always fighting for in antitrust law, if necessary against state paternalism. It is the X. Letter from the series Letters Concerning the English Nation, and Voltaire compares the social benefits of courtiers with those of merchants:
“However, I need not say which is most useful to a nation; a lord, powdered in the tip of the mode, who knows exactly at what o’clock the king rises and goes to bed, and who gives himself airs of grandeur and state, at the same time that he is acting the slave in the ante-chamber of a prime minister; or a merchant, who enriches his country, despatches orders from his counting-house to Surat and Grand Cairo, and contributes to the felicity of the world.”
The felicity of the world! Ah! This first appeared in 1733, and when the “Letters” landed in France, they were suppressed. That was probably a “flanking measure” against the coming revolution.
Since we are on the subject of HR today: Jonathan Kanter completes Joe Biden’s antitrust team. He is to become the new Assistant Attorney General at the US Department of Justice and thus the DoJ’s chief enforcer. Kanter is a lawyer, most recently in his own boutique, he has made a name for himself representing Google opponents, according to press reports. So, along with Lina Khan and Tim Wu, this is the third exclamation mark Joe Biden has put on showing GAFAs that a sharp wind is about to blow. Whether Kanter will also bring the Chief Morale Officer from his law firm could not be clarified for the time being…
By the way, TheInformation.com recently reported that 70 antitrust cases are currently pending worldwide against Apple, Amazon, Google and Facebook. And the trend is rising. Recently, the news made the rounds that the German Federal Cartel Office was examining whether Facebook should have notified the takeover of Kustomer in Bonn. The press release reads like a small affront to Brussels. Because there, following a referral from Austria under Article 22 of the ECMR, precisely this case is already being examined. Is it possible that Bonn is overzealous and has forgotten the principle of the “one stop shop”, according to which only the Commission should be responsible – and no more member states?
I have looked very closely at Art. 22 and Art. 21 ECMR, and I cannot explain it to you exactly now, but it is right the way the German NCA deals with this. I think. There are cases where the “one stop shop” principle of EU merger control is broken. And that has nothing whatsoever to do with the new interpretation of Article 22 of the ECMR, which Georg Schmittmann has already reported on here. Of course, it is a funny coincidence that it is the favourite customer of Bonn, Facebook, that is affected.
I dedicate this unforgettable song by Fury in the Slaughterhouse to you. I wish you a great summer and all the felicity of the world!
PS: I am happy to recommend our podcast “Bei Anruf Wettbewerb”, which I run with Justus Haucap. Most recently we talked about all kinds of things, before that with Monika Schnitzer. All in German, though. Have a listen! And speaking of podcasts: For law students and those interested, there is the great law podcast by my team of researchers on civil law cases: Einfall im Recht – if you click on the link, you can even see the associated Instagram page. Enjoy!