The Berlin Court of Appeal has upheld Immowelt's lawsuit against market leader ImmoScout24.
ImmoScout24 had granted discounts to customers who listed a certain share of their real-estate ads exclusively on ImmoScout24’s platform (for a certain time period). Last summer, the Berlin Regional Court followed the plaintiff's case that the market leader’s discount practice could tip the market and lead to a monopoly-like market structure (case no. 16 O 73/21 Kart and related proceedings case no. 15 0290/21 Kart and case no. 16 O 82/22 Kart).
The decision is now final. ImmoScout24 withdrew its appeal following an indicative decision (“Hinweisbeschluss”) from the Berlin Court of Appeal (case no. U 4/21 Kart).
What is so special about the decision is that for the first time, a final ruling was made on the basis of the newly introduced Section 20 (3a) of German Competition Act (“GWB”), the so-called tipping paragraph. From the legislator’s perspective, the fundamentals of the digital economy have changed competition law requirements so drastically that a tipping paragraph had to be introduced. It aims to enable courts and the Federal Cartel Office to intervene in markets before market leaders become dominant due to tipping.
In this respect, authorities need to find the right balance: they should not intervene at a too early stage preventing innovations – but early enough to stop irreversible market tipping. Finding this balance requires detailed economic analyses.
Frontier’s competition experts advised ImmoScout24 in this case.