In competition law, a distinction is made not only between entrepreneurs and consumers, but also in particular between competitors and other (commercial) market participants. The basic aim of competition law is to protect consumers from unfair practices. On the other hand, competitors are also protected against their rivals gaining an unfair advantage in competition.

The concept of competitor in competition law

The legal definition of a competitor can be found in Section 2 para. 1 No. 3 UWG. It is therefore an entrepreneur,

„who is in a concrete competitive relationship with one or more entrepreneurs as a supplier or buyer of goods or services.“

§ 2 Abs. 1 No. 3 UWG

There are therefore two key requirements: Firstly, the potential competitor must necessarily be an entrepreneur. Consumers can therefore never be „competitors“ within the meaning of competition law.

Secondly, there must be a „concrete competitive relationship“ between the parties involved. This already shows very clearly that the concept of a competitor can never be determined in a purely abstract manner and is relative. There always needs to be another entrepreneur and a separate business act as reference points on the basis of which a concrete competitive relationship can be established.

This means that entrepreneur A can be a competitor with his business act in relation to entrepreneur B, but not in relation to entrepreneur C. The situation may even be reversed in the case of another commercial act. It is therefore always a question of the individual case. Nevertheless, there are principles that can be used as a guide.

Competitor only in case of „concrete competitive relationship“

As a first principle, it can be stated: In principle, no high requirements are to be placed on the prerequisite of a concrete competitive relationship between two entrepreneurs (see BGH, judgment of April 19, 2018 – Ref.: I ZR 154/16). This is intended to ensure the effective enforcement of unfair competition law standards and thus the protection of competition law as a whole. At the same time, the purpose of the respective standard that uses the term „competitor“ and thus presupposes a competitor status always plays a role. Thus, there may be slight differences even between different provisions of the UWG.

The specific competitive relationship is always determined on the basis of a specific business act in relation to two specific entrepreneurs. On the one hand, it is irrelevant whether the two entrepreneurs belong to different industries, because a competitive relationship can also arise here (e.g. between motor vehicle experts and liability insurers if they also offer expert opinions, see OLG Nuremberg, reference of November 20, 2006 – 3 U 1838/06).

Secondly, it is also irrelevant whether the two entrepreneurs operate at different economic levels. For example, the manufacturer of products and the retailer who sells these products to end consumers can also be competitors. This is because the manufacturers themselves will often also advertise their products, for example. Even if they themselves do not sell to end consumers. Nevertheless, the end consumers are also indirectly the manufacturer’s target group. Competitor status was therefore affirmed, for example, between the producer of a television program and a television station (see BGH, judgment of April 13, 2000 – I ZR 282/97).

Different types of competition between competitors

A distinction can be made between three types of competition with regard to the question of the nature of competition:

• Demand competition
• Substitution competition
• Disability competition

Demand-side competition occurs in particular when supply is scarce and in situations in which entrepreneurs want to secure this supply using unfair methods. This also includes the demand for labor and, in particular, the case of enticing employees away from other companies by unfairly inducing them to breach their contracts. Companies that are otherwise not in competition with each other may also be in competition with each other in the demand for labor.

Substitution competition, on the other hand, describes a situation in which similar goods or services are to be sold within the same end customer group. The relevant question is therefore whether the services of the two companies are substitutable from the point of view of the final customers (usually the consumers). This is the case if the products are interchangeable for a not insignificant proportion of the end customers in terms of subject matter, geography and time. This is not to be determined in the abstract, but always on the basis of the specific commercial act at issue in the underlying case.

Obstructive competition, on the other hand, can also exist if the companies involved do not offer interchangeable products, but their business activities impair the sales of the other. There must therefore be an interaction between the promotion of one’s own competition on the one hand and the impairment of the competition of the third party on the other. This is the case if the products of the acting entrepreneur have a competitive relationship with the products of another entrepreneur and the promotion of their own sales can be accompanied by an impairment of the third party’s sales.

Promotion of third-party competition can lead to competitor status

In cases in which a company promotes the competition of another company through its business activities, it is not the promoting company but the promoted company that is relevant for the assessment of whether a company is a competitor. Examples here are not only advertising partners, but also professional associations that want to support their members. The competitors of such a sponsored company are then entitled under Section 8 para. 3 No. 1 UWG to take action against the sponsor.

Conversely, it is not possible for the sponsor to take action against competitors of the company it is sponsoring. The sponsor itself does not have the status of a competitor. This is not affected by the fact that the sponsor may well have its own interests, e.g. it may participate in the turnover of the sponsored company with commissions.

Potential competitors also partially protected under competition law

Case law has also recognized that entrepreneurs can also be protected as (potential) competitors who are only just preparing their market entry (e.g. only in a certain segment). However, there must already be concrete steps that make such market entry likely. The fundamental possibility of later market entry alone is not sufficient.

The protection of potential competitors is also only granted to a limited extent. In principle, this should only apply to cases of protection against unfair acts pursuant to Section 4 UWG. § 4 UWG that make it difficult or even completely prevent the potential competitor from entering the market. In the case of all other breaches of unfair competition law, a competitor must have already entered the market at the time of the breach.

Other market participants are not competitors under competition law

Anyone who is neither a competitor nor a consumer will often be regarded as another market participant pursuant to Section 2 para. 1 No. 2 UWG. These are

„in addition to competitors and consumers, all persons who are active as suppliers or consumers of goods or services.“

§ 2 Abs. 1 No. 2 UWG

Other market participants are mentioned, for example, in the context of the prohibition of unlawful acts or the prohibition of misleading information. This is intended to ensure that purchasers and suppliers of products who are not consumers are also protected under these provisions. This applies, for example, to legal entities under public law, associations and other organizations.