Awarding the operation of the Tourist Information to a private business may be anti-competitive in practice if that business fails to separate the business areas subject to public and private law and to make the separation readily apparent. A corresponding ruling by Brandenburg Higher Regional Court of April 5, 2018 has now become final. The Federal Court of Justice rejected the plaintiff’s complaint against non-admission of the appeal. SKW Schwarz and Dr. Ilja Czernik successfully represented city tourism agency “Alter Fritz” against the state capital Potsdam in the proceedings.
The City of Potsdam had transferred the operation of the Tourist Information to TMB Tourismusmarketing Potsdam GmbH, a private company that also offers city tours itself. Additionally, TMB was billed as the “official service provider of the state capital Potsdam” on the city’s website and was permitted to use the “vineyard logo” of the City of Potsdam to advertise its city tours.
The operator of “Alter Fritz” filed a complaint and demanded an injunction from the City of Potsdam for anti-competitive behavior because the city inadmissibly combined public law and private law business activities, allowing TMB to gain a considerable competitive advantage.
Potsdam Regional Court upheld the complaint in part. On appeal, Brandenburg Higher Regional Court ruled in favor of the plaintiff. It essentially ordered the City of Potsdam to refrain from transferring, for competitive purposes, the operation of the state capital’s Tourist Information to a business which itself provides such services, unless it was ensured that the commercial activities of the company in Potsdam were organizationally, spatially, and personally separate from performing the Tourist Information tasks; both business areas had to be readily identifiable as such. Additionally, the City of Potsdam was prohibited from unilaterally licensing the “vineyard logo” to a private operator of the Tourist Information for commercial activities. Brandenburg Higher Regional Court considered this to be violations of the principle of equal treatment and of the principle of official neutrality.
The judgement is of key importance for the awarding of service concessions. Where such concessions are awarded, the public authorities must ensure that unilateral preferential treatment and the combination of commercial and public interests are prevented.
Federal Court of Justice, January 24, 2019, I ZR 98/18
Brandenburg Higher Regional Court, April 05, 2018, 6 U 50/13
Potsdam Regional Court, March 04, 2013, 2 O 3/12