Criminal risks for companies and executives
Corruption and competition law is a core area of white-collar crime. Investigations into bribery, corruption, granting of undue advantages to a public official, or anti-competitive agreements can have significant legal and economic consequences for companies, board members, and senior employees.
Free competition is the fundamental principle of the social market economy. For this reason, the Act Against Unfair Competition (UWG) and antitrust law contain various provisions – including penal provisions – to prevent unfair manipulation of market decisions.
The corruption of public officials damages citizens' trust in the integrity of government decision-makers. Therefore, the penal code contains specific offenses for corruption in office. "Corruption" is not an explicit term in criminal law; rather, the law refers to the acceptance and granting of advantages, as well as bribery and corruption.
Our team at Galen Rechtsanwälte advises and defends clients nationwide in matters of corruption and competition law. Our lawyers possess many years of forensic experience and an in-depth understanding of compliance structures. Based on this foundation, we develop a defense strategy tailored to your needs, taking into account criminal, corporate, and economic aspects.
Overview of Corruption and Competition Criminal Law
The central offenses under corruption and competition law include, in particular:
- Section 298 of the German Criminal Code – Anti-competitive agreements in tenders,
- Section 299 of the German Criminal Code – Bribery and corruption in business transactions,
- Section 299a of the German Criminal Code – Bribery in the healthcare sector,
- §§ 331–335 StGB – Corruption offenses in office (acceptance of advantages, granting of advantages, bribery, bribery of public officials).
In addition, the law on the protection of trade secrets (GeschGehG) can have criminal relevance if business and trade secrets are betrayed in the course of a corruption offense.
The sanctioned behavior has a significant impact on the economy. Price fixing under Section 298 of the German Criminal Code (StGB) and the granting of undue advantages under Section 299 of the German Criminal Code (StGB) or Sections 331 et seq. of the German Criminal Code (StGB) can distort markets, influence public contracts, and permanently damage trust in economic processes.
The corruption offenses committed in office, as defined in Sections 331–335 of the German Criminal Code (StGB), pertain to the public service. Although both categories of offenses are discussed under the term "corruption," their objectives differ: While offenses committed in office protect the integrity of the public service and public trust in it, i.e., the proper functioning of the state administration, offenses committed in commercial transactions—particularly those in Section 299 of the German Criminal Code (StGB)—aim to protect free competition and thus the market economy as a whole.
Anti-competitive agreements in tendering processes (§ 298 StGB)
Agreements between companies aimed at deceiving the contracting authority about the actual competitive situation are punishable offenses. The protected legal interest is free competition in procurement procedures. This offense covers bids in open and restricted tenders as well as negotiated procedures following a prequalification phase; however, direct award of contracts without prior competition is not covered.
Typical manifestations include price fixing or coordinated sham offers. Alongside criminal proceedings under Section 298 of the German Criminal Code (StGB), fines under antitrust law and substantial civil claims for damages are possible.
Bribery and corruption in commercial transactions (§ 299 StGB)
Bribery in commercial transactions occurs when an employee or agent of a company demands, solicits, or accepts a benefit for themselves or a third party in return for unfairly favoring another person in certain business decisions (so-called competition-related corruption, Section 299 Paragraph 1 No. 1 of the German Criminal Code) or for performing or refraining from an action (so-called duty-related corruption, Section 299 Paragraph 1 No. 2 of the German Criminal Code). Conversely, criminal bribery in commercial transactions occurs when a benefit is offered, promised, or granted for such purposes (Section 299 Paragraph 1 No. 2, Paragraph 2 No. 2 of the German Criminal Code). The bribed person must be an employee or agent of a company; company owners are not covered by this offense.
Conditions for the illegal agreement
The central point of reference is the so-called unlawful agreement: the advantage and the preferential treatment must be reciprocal. At least a tacit understanding is required that the advantage serves as consideration for future unfair preferential treatment. Criminal proceedings therefore regularly revolve around the question of whether there was an intention to influence a specific preferential treatment in competition or within a company.
It is important to know that, unlike the official offenses under Sections 331 and 333 of the German Criminal Code (StGB), Section 299 requires that the unlawful agreement be directed towards the future. A subsequent "thank you" without prior reference to a specific favor is generally not punishable. Distinguishing between these offenses requires careful legal examination in each individual case.
Distinction from permissible business relationships
Preferential treatment is only considered unfair if it violates the principles of fair business practice. This depends on market conformity, transparency, and a factual connection to the business relationship. Discounts, advertising cost subsidies, or industry-standard invitations can therefore be perfectly permissible. The line between permissible and criminal conduct is fluid and always depends on the circumstances of the individual case.
Corruption offenses in office (§§ 331 ff. StGB)
Corruption offenses committed in public office include accepting and granting undue advantages, as well as bribery and corruption of public officials. These laws protect the integrity and functionality of public administration, as well as public trust in it.
For companies, situations involving government permits, funding procedures, or procurement decisions are particularly relevant. A key difference from Section 299 of the German Criminal Code (StGB) is that, in the case of official misconduct, even a benefit "for the performance of official duties" is sufficient – without reference to a specific official act. "Grooming" – the systematic cultivation of goodwill through initially small tokens of appreciation – is already a criminal offense. The legal classification is therefore complex and requires particular care.
How are corruption and competition crimes uncovered?
Investigations often begin with internal tips, compliance reporting bodies, or anonymous whistleblowers. Searches conducted as part of antitrust investigations can also lead to criminal proceedings. Furthermore, public procurement agencies can report suspicious activities.
The public prosecutor's office regularly collaborates with customs, antitrust authorities, and specialized economic crime units of the police. Typical investigative measures include searches, the seizure of extensive digital data sets, the confiscation of communication equipment, and asset freezes.
What penalties and collateral consequences are threatened under corruption and competition criminal law?
The penalties vary depending on the offense:
- Section 298 of the German Criminal Code: Imprisonment for up to five years or a fine.
- Section 299 of the German Criminal Code: Imprisonment for up to three years or a fine; in particularly serious cases (§ 300 StGB) a higher penalty may apply.
- §§ 331–335 StGBPenalties range from a fine to three or five years' imprisonment; in particularly serious cases, up to ten years' imprisonment.
At the same time, companies face substantial fines under the Administrative Offenses Act, especially if a manager violates a supervisory duty (§ 130 OWiG in conjunction with § 30 OWiG).
Associated offenses: Corruption cases are often accompanied by fraud, embezzlement, and tax evasion.
In addition to the main penalty, the following secondary consequences are possible:
- Confiscation of assets pursuant to Sections 73 et seq. of the German Criminal Code (StGB) – assets can be secured by seizure even during the preliminary investigation.
- Entries in the Federal Central Register
- Professional bans
- Civil claims for damages from competitors or clients
In the area of public procurement, the competition register plays a significant role under the Competition Register Act (WRegG). Certain legally binding convictions – for example, under Section 298 of the German Criminal Code (StGB) – are recorded there and can lead to exclusion from procurement procedures. Furthermore, even the ongoing investigation itself can pose considerable risks to a company's reputation and thus indirectly lead to consequences under procurement law.
Criminal defense in corruption and competition law – advice and representation by Galen Lawyers
An accusation in corruption and competition law requires early and strategic defense – whether you are affected as a private individual, executive, or company. We immediately review the case file and analyze the legal elements of the offense. We advise you on exercising your right to remain silent, accompany you during searches, and develop a defense strategy that also considers potential consequences under procurement, employment, and corporate law.
Based on our experience in compliance consulting and internal investigations, we also support you in the structured analysis of the facts. Our goal is to protect your personal and business interests.
The earlier criminal defense lawyers are involved, the more scope there is to actively shape the defense strategy.
Please contact us to arrange an appointment.
Corruption in business transactions refers to the unfair influencing of certain business decisions through the granting or acceptance of a benefit. Not every benefit is punishable, but only those agreed upon as consideration for a specific favor. The decisive factor is the existence of a so-called unlawful agreement.
Invitations or sponsorships are not inherently illegal. However, the threshold for criminal liability is reached when such measures are intended to influence specific business decisions. Indications of this include, among other things, unreasonably generous invitations or the covert processing of payments.
Anti-competitive agreements in public tenders are coordinated behaviors by bidders aimed at manipulating competition. Typical examples include price fixing and sham bids. The goal is regularly to deceive the contracting authority about the true competitive situation in order to secure the acceptance of a particular bid.
Under German law, criminal liability rests solely with natural persons. However, companies can face substantial fines and the confiscation of assets. Furthermore, entries in the competition register can have consequences under public procurement law.
Pre-trial detention requires not only a strong suspicion of a crime but also grounds for detention, such as risk of flight or obstruction of justice. In complex white-collar crime cases, such a risk may be assumed, particularly in cases involving large sums of money or international elements.
An effective compliance system can be taken into account in individual cases when determining the amount of the fine, especially if it is seriously implemented and actively practiced. Therefore, in addition to representing clients in ongoing proceedings, we also place great emphasis on preventative consulting and support companies in building robust compliance structures.
As soon as you become aware of an investigation – for example, through a summons, search warrant, internal information, or media reports – you should seek legal advice immediately. Early legal representation allows you to actively shape procedural strategies and minimize legal risks.