The Competition Register and Self-Cleaning

The competition register and self-cleaning: the short answer

The federal competition register (Wettbewerbsregister), kept by the Bundeskartellamt, records companies that have committed certain serious economic offences, so that public contracting authorities can check bidders before awarding contracts. Entries cover criminal convictions and penalty orders for offences such as bribery, money laundering, fraud against public budgets, tax evasion and bid rigging, final fine decisions against companies for these offences, and cartel fines of at least EUR 50,000.

Contracting authorities must query the competition register before awarding contracts with an estimated value of EUR 50,000 or more (net of VAT). An entry does not automatically exclude a company, but it triggers the exclusion grounds of §§ 123 and 124 of the Act against Restraints of Competition (GWB). A company can avoid exclusion, and obtain early deletion of the entry, by demonstrating self-cleaning under § 125 GWB.

For companies active in public procurement, the competition register turns compliance failures into a business risk that can last up to five years. This article explains what is entered, how contracting authorities use the register, how self-cleaning works and how to manage the process with the Bundeskartellamt.

What is entered in the competition register

Under § 2 of the Competition Register Act (Wettbewerbsregistergesetz, WRegG), the register contains final decisions concerning offences committed by persons whose conduct is attributable to a company, in particular under § 30 of the Administrative Offences Act.

Entries are deleted at the latest after the periods set out in § 7 WRegG. Once deleted, the underlying offence may no longer be used against the company in procurement procedures (§ 7(2) WRegG). Before an entry is made, the company is informed and has the opportunity to comment within two weeks, which allows it to correct errors, for example where the offence cannot be attributed to the company.

How contracting authorities use the competition register

Under § 6 WRegG, public contracting authorities must query the register before awarding a contract with an estimated value of at least EUR 50,000 net, regarding the bidder to which they intend to award the contract. Sector contracting entities and concession grantors must query from the EU thresholds. Authorities may also query below these values. They can rely on a recent query for repeated awards to the same bidder within a short period.

The query result is one element of the authority's assessment. The contracting authority decides on exclusion under §§ 123 and 124 GWB in its own responsibility. For the mandatory exclusion grounds in § 123 GWB, exclusion is required unless the company has self-cleaned or one of the narrow exceptions applies. For the optional exclusion grounds in § 124 GWB, including serious misconduct and cartel infringements, the authority has discretion. A company may be excluded for at most five years from the conviction in the case of mandatory grounds and three years from the relevant event in the case of optional grounds (§ 126 GWB).

Self-cleaning under § 125 GWB

Section 125(1) GWB sets three cumulative requirements for self-cleaning. The company must prove that it has:

1. compensated damage: paid or committed to pay compensation for any damage caused by the offence or misconduct;
2. clarified the facts: comprehensively clarified the facts and circumstances relating to the offence and the damage through active cooperation with the investigating authorities and the contracting authority; and
3. prevented recurrence: taken concrete technical, organisational and personnel measures suitable to prevent further offences or misconduct.

When assessing these measures, the seriousness and particular circumstances of the offence must be taken into account (§ 125(2) GWB). Typical measures include internal investigations, separation from or disciplinary action against responsible individuals, strengthening the compliance organisation and controls, training and monitoring, and in some cases independent compliance monitors. For tax evasion and § 266a StGB, payment of the outstanding taxes or contributions, or a binding commitment to pay, can be sufficient (§ 123(4) sentence 2 GWB).

Early deletion by the Bundeskartellamt

Under § 8 WRegG, a company that has been entered can apply to the Bundeskartellamt as register authority for early deletion on the grounds of self-cleaning. The application is admissible if the company shows a legitimate interest, which is usually the case for companies that participate in public tenders. The entry must be deleted if the company proves self-cleaning in accordance with § 125 GWB, or for tax and social security offences in accordance with § 123(4) sentence 2 GWB.

The Bundeskartellamt investigates the facts ex officio but may confine itself to what the applicant submits and what it must otherwise know. It can require the company to submit the criminal or fine decision and expert reports or other documents suitable for evaluating self-cleaning measures, and it has investigative powers similar to those in competition proceedings. The authority has published guidelines on self-cleaning describing its approach. A decision to delete is binding on contracting authorities in the sense that the deleted offence may no longer be used; a rejection, by contrast, does not bind contracting authorities, which can still accept self-cleaning in an individual procurement (§ 7(2) WRegG). Fees are charged for the procedure.

Self-cleaning in practice

Self-cleaning is an exercise in credibility. Authorities expect a coherent narrative: what happened, who was responsible, how it was discovered, how the company investigated and cooperated, what damage was compensated and which changes make recurrence unlikely. Generic references to a code of conduct do not suffice. Specific measures linked to the root causes of the misconduct are needed, for example changes to approval processes for sales intermediaries after bribery, or separation of bid preparation teams and antitrust training after bid rigging.

Personnel measures are often the most sensitive part. Authorities look at whether individuals involved remain in positions of influence. Employment law limits on dismissal and the presumption of innocence in ongoing proceedings must be respected, but companies usually need to remove involved persons from relevant functions at least provisionally.

Groups and acquisitions

Entries relate to the legal entity whose representative committed the offence, but contracting authorities may consider group context. Acquirers of companies with entries should check the register in due diligence, require self-cleaning measures in the purchase agreement and plan early deletion. The Bundeskartellamt's assessment of self-cleaning can take into account changes in ownership and management after an acquisition.

Checking your own status

Companies can request information from the Bundeskartellamt about whether and which entries concerning them are stored in the competition register. This is useful before major tenders, in due diligence and when preparing an early deletion application. Because the register relies on reports from prosecutors, courts and authorities, companies should also verify that entries are correct, that the offence is attributable to the company within the meaning of § 30 OWiG and that the deletion periods have been calculated properly. Errors can be corrected through the register authority, and incorrect entries should be challenged promptly before tenders are affected.

Bidder declarations and self-declarations

In addition to the register query, contracting authorities typically ask bidders to declare in the European Single Procurement Document or national forms whether exclusion grounds exist. These declarations must be complete and accurate. False declarations are themselves an optional exclusion ground and can lead to further consequences. Where an entry exists, bidders should disclose it proactively together with evidence of self-cleaning, rather than wait for the authority to discover it through the register query.

Interaction with other proceedings

Self-cleaning interacts with criminal and administrative proceedings, civil damages claims and other registers. Compensation under § 125(1) no. 1 GWB may require settling claims of public clients, which may affect cartel damages litigation. Cooperation with authorities may require disclosure of internal investigation results, which raises questions of legal privilege and data protection. Coordinating these strands from the beginning avoids contradictions that could undermine the credibility of the self-cleaning.

Timing matters as well. Early deletion is available only after the company can prove that the measures have been implemented, not merely planned. Authorities generally want to see that new controls have been operating for a period and that training has been delivered. At the same time, waiting too long prolongs the exclusion risk in pending tenders. A realistic plan sets milestones for each self-cleaning element, assigns owners and links them to the company's bidding pipeline and tender calendar.

Illustration: a hypothetical German construction company receives a cartel fine of EUR 400,000 for bid rigging in municipal tenders. The fine is entered in the competition register. The company compensates the affected municipalities, cooperates with the Bundeskartellamt, replaces the responsible regional manager, introduces independent review of bids and antitrust training, and has its antitrust compliance audited. Eighteen months later, it applies for early deletion and submits the audit report and evidence of compensation. The Bundeskartellamt deletes the entry, and the company can again bid without the offence being held against it.

How TRW & Co helps with the competition register

We advise companies on the competition register, from the hearing before an entry to applications for early deletion. We design and document self-cleaning measures, coordinate compensation and cooperation, prepare submissions to the Bundeskartellamt and represent companies in procurement procedures and review proceedings where exclusion is at stake. We also advise buyers on register risks in transactions. Our work connects with our public procurement, white-collar defence and cartel investigations practices. See also corporate fines under the OWiG and procurement review proceedings. To discuss an entry or a self-cleaning strategy, contact us.