Concept and Fundamentals of Economic Administrative Law
Das Economic Administrative Law is a subfield of special administrative law that encompasses state interventions, measures, and controls with respect to the economy. It serves as the legal basis for the conduct of public administration towards natural and legal persons in the realm of economic activities. Economic administrative law regulates the norms, principles, and procedures that determine, control, and limit the state’s economic administrative activities.
Distinction from General Administrative Law
Economic administrative law is to be distinguished from general administrative law, which establishes the fundamental principles and procedures for administration as a whole. While general administrative law addresses, for example, administrative procedure law, administrative enforcement law, and the general law of administrative action, economic administrative law addresses the specific needs and characteristics of economic activities of both the state and economic participants.
Systematics and Structure of Economic Administrative Law
Regulatory Administration and Service Administration
Economic administrative law is divided into two main areas:
- Regulatory Administration: This concerns the restriction, control, or supervision of the economic activities of private actors, for example through licensing requirements, conditions, prohibitions, or monitoring measures.
- Service Administration: This area comprises the promotional, supportive, or providing activities of the administration, through which the state actively intervenes in the economy, for example by means of subsidies, state aid, or the provision of infrastructure.
Public Economic Law and Private Economic Law
Economic administrative law is part of public law and differs from private economic law (commercial private law), which governs the relationships between economic participants themselves. Economic administrative law primarily governs the relationship between administration and economic actors.
Constitutional Foundations of Economic Administrative Law
Economic administrative law is founded in various provisions of the Basic Law (Grundgesetz). Important constitutional principles and norms include:
- Art. 12 GG (Freedom of Occupation): Protects the free choice and exercise of occupation and the freedom to practice a profession, limited by the requirements of the common good.
- Art. 14 GG (Property Guarantee): Secures property and regulates its use and expropriation in the public interest.
- Art. 2 para. 1 GG (General Freedom of Action): Guarantees the free development of one’s personality, including economic activities.
- Art. 87 et seq. GG (Organization of Economic Administration): Establishes the framework for specific areas of economic administration, such as the railway and postal services.
These constitutional provisions form the legal basis for all measures of economic administration, particularly regarding the limitations and justifications of interventions.
Legal Sources of Economic Administrative Law
Economic administrative law is shaped by a multitude of statutes and regulations. The most important legal sources include:
Federally Relevant Laws
- Trade Regulation Act (GewO): Regulates the principles of business activities.
- Crafts and Trades Code (HwO): Establishes the framework conditions for skilled trades.
- Act Against Restraints of Competition (GWB, “Cartel Act”): Its objective is to ensure effective competition.
- Foreign Trade and Payments Act (AWG) and Foreign Trade Regulation (AWV): Define the legal requirements for foreign trade transactions.
- Price Indication Ordinance, price maintenance laws
- Public procurement laws (public procurement law)
- Subsidy laws and guidelines
- Environmental legal provisions with economic relevance
European Legal Sources
European legislation has a major impact on German economic administrative law, for example through
- Primary Law: Treaties on the European Union, e.g., the freedom of competition and the prohibition of discrimination.
- Secondary Law: Directives and regulations, for example in areas such as public procurement, cross-border services, or state aid law.
State Law
In addition to federal law, there are numerous state-level regulations, for example in the areas of trade law, markets, or regional economic development.
Forms of Action in Economic Administrative Law
The actions of economic administration are carried out using various legal forms of action:
Administrative Act
The central form of action is the administrative act, for example in the form of a trade license, prohibition order, condition, or permit notice.
Public-law Contract
Contracts between administration and economic actors are particularly important in the area of service administration. They require specific statutory bases and have specific effectiveness requirements.
Factual Act and Simple Administrative Action
Non-regulatory measures are also possible, for example information, advice, or guidance, which do not have the character of an administrative act.
Areas of Application and Subject Matters of Economic Administrative Law
Trade and Market Law
Trade law includes provisions on starting and operating a business, regulatory requirements, monitoring measures, and the administrative authority’s powers of intervention.
Competition Law and Cartel Law
Cartel law, part of public economic law, aims to ensure free and undistorted competition, prohibits cartel agreements, and abuses of a dominant market position.
Energy and Infrastructure Law
The public sector intervenes to regulate sectors such as energy supply, telecommunications, or transport services, but is subject to European requirements such as the prohibition of discrimination and market liberalization.
Subsidy Law and Economic Development
Subsidies are granted according to strict legal requirements, taking into account both national and European law.
Public Procurement Law
Public procurement law governs the conditions for the awarding of public contracts and is intended to ensure transparency, efficiency, and competition. It is significantly influenced by European secondary law.
Environment-related Economic Administrative Law
Environmental legal requirements have a profound impact on economic administration, for example through emission standards, permits for industrial facilities, or environmental impact assessments.
Administrative Protection and Legal Remedies in Economic Administrative Law
Measures of economic administration may be challenged by those affected through legal remedies. The most important instruments include:
- Objection proceedings under the Administrative Procedure Act and state laws
- Legal action before administrative courts (in particular rescissory actions, mandatory actions, declaratory actions, and actions for performance)
- Provisional legal protection (interim legal protection) according to §§ 80, 123 VwGO
Judicial review of sovereign measures plays a central role in proportionally limiting infringements on fundamental rights and economic freedom.
Significance and Current Developments in Economic Administrative Law
Economic administrative law is highly dynamic and marked by numerous legislative amendments, steps toward digitalization, and increasing European harmonization. The role of the state as regulator on the one hand and as economic promoter on the other is constantly being reconsidered and adapted, so that economic administrative law is subject to continual change. Recently, issues such as sustainability, energy transition, digitalization, crisis management, and ensuring fair competition conditions have been at the forefront.
Literature and Further Resources
For further study of economic administrative law, standard works, commentaries, current legal publications, as well as relevant legislative texts and materials, are recommended. Regular information services, professional journals, and the publications of regulatory authorities and institutions in economic oversight offer ongoing updates on current developments.
Frequently Asked Questions
What is the significance of economic administrative law for the regulation of markets?
Economic administrative law plays a central role in the regulation and organization of markets within a state. It sets the legal framework and administrative actions that ensure a proper, fair, and competition-promoting economic order. Its aim is to counteract excesses such as monopolies, cartels, and abuses of market power, while at the same time establishing the conditions for effective competition. This is achieved, among other things, through regulations governing market access, particularly authorization, licensing, and approval procedures, the control of corporate concentrations, the monitoring of pricing, and the setting of minimum standards. Authorities such as the Federal Cartel Office or the Federal Network Agency have sovereign powers within the framework of economic administrative law to exercise intervention rights and sanction violations of economic law provisions. Furthermore, business decisions with potentially far-reaching social impacts are subjected to specific review, such as pre-approval or reservation of consent. Overall, economic administrative law thus ensures a balance between entrepreneurial freedom and the protection of public interests.
What rights and obligations do companies have towards authorities under economic administrative law?
Within the framework of economic administrative law, companies are often in a legal relationship with administrative authorities, characterized by mutual rights and obligations. Companies are required to fulfill certain reporting, notification, or licensing requirements associated with their economic activity. They must provide correct and complete information, submit relevant documents, and may be required to cooperate in administrative procedures, especially during hearings. In return, companies have the right to a fair and lawful administrative procedure that upholds the principle of equal treatment and proportionality. The right to be heard as well as the right to effective legal remedies, such as objection or rescissory action against adverse administrative acts, are central protection mechanisms for companies. In addition, companies have the right to access files in administrative procedures in order to better assess their own legal position. If administrative procedures result in the imposition of sanctions, fines, or regulatory measures, these must be judicially reviewable and transparently justified.
How is the economic activity of the public sector supervised under economic administrative law?
The economic activity of the public sector, whether through its own companies, equity holdings, or the awarding of public contracts, is subject to special rules of economic administrative law. Central to this is so-called budgetary law, which ensures the legality of the economic activity of state authorities and defines fiscal limits. Supervision includes legal requirements regarding the necessity and admissibility of entrepreneurial activity, such as for public services of general interest or hazard prevention, and in many cases requires a statutory authorization for activities related to the market. In addition, specific transparency obligations and the requirements of European and national public procurement law apply to prevent distortion of competition and discrimination against private providers. Further oversight is carried out by audit offices and independent regulatory authorities, which ensure compliance with the principle of equal treatment with private enterprises.
What is the significance of licensing and approval procedures in economic administrative law?
Licensing and approval procedures are key instruments of economic administrative law for the steering and control of certain economic activities. They serve to regulate market access while ensuring public interests such as safety, health, environmental protection, or general welfare. As part of these procedures, the competent authority examines whether the legal requirements for exercising a specific economic activity are met, such as personal reliability, professional competence, financial capacity, or special additional requirements to protect third parties. A negative outcome may result in the refusal, revocation, or withdrawal of the license. Companies and applicants in these procedures are legally protected by the principles of administrative procedural law, such as the right to a hearing, obligation to state reasons, and the right to review via legal remedies. In the interest of simplifying and reducing bureaucracy, fixed deadlines and the possibility to appeal against official decisions exist for numerous procedures.
What role do official oversight and controls play in economic administrative law?
Official oversight and control are integral parts of economic administrative law and ensure compliance with state requirements and protection standards in economic life. Authorities, within the framework of their statutory powers, have the authority to monitor, audit, and, where necessary, impose orders to avert dangers or safeguard legal framework conditions. This may include regular or occasion-driven business audits, inspections of goods and services, reviews of business records, and the collection of information. In cases of detected violations, authorities may impose regulatory measures such as fines, prohibitions, or, in extreme cases, closure. Such measures must always comply with the principle of proportionality, and those affected have the right to judicial review as well as due process.
What is the significance of European requirements for German economic administrative law?
European requirements, in particular the freedom to provide services and the freedom of establishment as well as European directives and regulations, significantly shape German economic administrative law. National regulations and administrative practices must comply with European primary and secondary law, resulting in the harmonization of many areas of administrative authorization and oversight. Key requirements relate to public procurement law, the regulation of specific sectors (e.g., telecommunications, energy, finance), consumer protection, and the free movement of goods. Authorities are obligated to apply Union law directly and interpret national provisions in accordance with European law. In the event of conflicts, Union law takes precedence, which in individual cases may lead to the inapplicability of conflicting national provisions. This makes a significant contribution to the creation of a unified European internal market and influences both administrative actions and the development of national economic administrative standards.
