The European Antitrust Review 2015

Austria: Federal Competition Authority

Nathalie Maierhofer, Theodor Thanner

Federal Competition Authority

The Austrian Federal Competition Authority (FCA) strongly believes that the international exchange of knowledge and experience contributes to the development of a global competition law. The FCA is an investigating and legal body in cartel cases. Decisions, however, are made by the Cartel Court. Therefore, it is the authority’s dedicated intention to communicate with a wide public of practitioners, legal experts and law enforcement authorities.

The authority’s focus: protecting the consumer

Since 2011, the FCA has focused on consumer protection in the retail sector both online and offline. So far, the authority has based its actions on a comprehensive approach. On the one hand, investigations, trials and fines were used to deploy their deterrent effects in order to stop widespread practices of resale price maintenance (RPM) and trilateral price fixing in different branches of the retail sector. On the other hand, the FCA triggered a process of enhancing prevention and compliance mechanisms in close cooperation with stakeholders, experts and practitioners. One of the major difficulties the investigators face at the moment is the possibility of preclusion of anti-competitive violations while investigations are still in progress. The FCA has achieved the commitment of the legislator to change this rule, so that undertakings trying to protract the length of the investigations will henceforth have no chance to avoid condemnation for their anti-competitive infringements. In 2013 and 2014, a record number of dawn raids have been carried out.

Competition talks (advocacy)

Since October 2012, the authority has established a monthly forum on hot topics concerning competition law enforcement in Austria. This forum focuses on mechanisms of prevention and compliance and the fostering of a proactive prevention policy. These ‘competition talks’ bring together undertakings, lawyers, experts and agents from the authority and allow them to engage in fruitful discussions over lunch. Recent topics include: ‘Franchising – a permitted cartel’; ‘Expert opinions in cartel enforcement’; ‘Current antitrust judicature;’; ‘Compliance and antitrust law’; and ‘Mergers and obligations’. The FCA promotes public awareness concerning cartel and antitrust practices by means of publicity, transparency and external communication, in order to deter antitrust offences in advance and to facilitate their detection.

Jurisdiction

The cartel court decided a few major decisions for the FCA which brought legal certainty in competition law enforcement. These two decisions allowed more rights before and during inspections. First was Decision 16 Ok 7/13 on the subject of anonymous announcements, which can be a justifying matter of facts for legal search warrants for antitrust dawn raids. The decision has broadened the cartel enforcement and the FCA will use anonymous announcements as the basis for further investigations. Decision 16 Ok 5/13 also gave the FCA more power during investigations. The FCA applied for an expansion of the search warrant, due to the appearance of new and suspicious facts. The decision said that it is for the FCA to judge whether any new suspicious facts are arising in already commenced proceedings or to decide to claim in a new proceeding. Decision 16 Ok 4/13, in which undertakings who violate article 101 TFEU, may receive a fine despite an incorrect decision of a national authority or despite incorrect advice made by a lawyer.

Resale price maintenance and trilateral price fixing in the retail sector

In recent months, there have been several decisions by the Cartel Court (the Court) imposing fines on dairy products as well as on several breweries for breach of article 101 TFEU and of section 1 of the Austrian Cartel Act 2005 by resale price maintenance. The cases were initiated as part of the FCA’s ongoing investigation in the food industry. There have been inspections on the premises of all the companies concerned. After the inspections, all the companies have been cooperating with the FCA; those proceedings were ended via settlement procedure. The Court followed the FCA’s application in all the cases and approved the fines proposed; in December 2013, the Cartel Court imposed a €375,000 fine on Kärntnermilch reg GmbH (Kärntnermilch). The Court held that Kärntnermilch agreed on consumer prices with a number of retailers between 2007 and 2011. Only a limited part of the turnover of Kärntnermilch – mainly dairy products (eg, milk, yogurt, cheese) – was concerned by the infringement. In the decision of 13 January 2014, a €195,000 fine was imposed on Vereinigte Kärntner Brauereien AG for RPM practices between 2007 and 2012 concerning brewery products with a number of supermarkets.

In the decision of 22 January 2014, the Court imposed a €57,000 fine on Brauerei Schloss Eggenberg Stöhr GmbH & CoKG for agreeing with a number of supermarkets on consumer prices for certain brewery products. The infringement covered the years 2007 to 2011. In two decisions of 29 January 2014, the Court again declared fines for RPM practices by breweries. A €82,500 fine was imposed on Mohrenbrauerei August Huber KG for agreeing with a number of supermarkets on consumer prices for certain brewery products from 2006 until 2012. The same amount – €82,500 – was imposed on Privatbrauerei Zwettl Karl Schwarz GmbH for agreeing with a number of supermarkets on consumer prices for certain brewery products between 2007 and 2011. Furthermore, in May 2014, a €52,200 fine was imposed on Braucommune in Freistadt for agreeing with a number of supermarkets on consumer prices for certain brewery products between 2007 and 2011. Another brewery company, Hirter, received a €58,500 fine on vertical price fixing for certain brewery products between 2006 and 2012. And Beverage supplier AFS Franchise-Systeme GmbH was imposed a €225,000 fine for vertical price fixing between 2005 and 2013. Furthermore, the FCA brought several applications in the food sector as well as in the online sector before the Cartel Court. These cases are still pending before the Court.

In February 2014, the Federal Competition Authority (FCA) filed five applications against companies in the electronic industry and electronic retail sector for participating in vertical price fixing and resale price maintenance with important companies active in the Austrian online market of electronic products. The infringement leads to a significant impediment of effective competition in online sales of consumer electronics and electronic for households. The FCA applied for fines of approximately €2.1 million at the Austrian Cartel Court. The investigations started in 2012 on the basis of a study of the online retail market of the Vienna University for Economics and Business Administration. In this study 47.2 per cent of the surveyed online retailers said that the retail prices were given by the electronic industry and the undercutting can lead to indirect pressure (eg, termination of selective agreements, delivery refusals). Based on this study, the FCA started its investigations of the online market. However, the suspicion of the infringements was confirmed after its investigations.

Besides resale price maintenance, the FCA has further focuses on other sectors, including on Google. Since November 2013, the FCA initiated procedures against Google. Several complaints have been brought before the FCA. The case is focusing on ad blocks. The FCA is now analysing all the complaints. The investigation has yet to be concluded.

Another focus of the FCA is the sawing and timber industry. This case started with several anonymous complaints against the industry. In autumn 2013, several inspections were conducted. The infringements lead to horizontal price fixing and restriction of distribution. The investigation has not yet been concluded.

Guidelines for the retail sector

In light of the FCA’s investigations in the retail sector, the need for a more targeted prevention and compliance policy specifically concerning this sector became evident. Hence, in 2013, the authority began to develop its Guidelines on Vertical Price Maintenance and Trilateral Price Fixing between Suppliers of Branded Goods and Retailers. While working on these guidelines, the authority maintained constant communication with stakeholders and practitioners to be able to consider their experiences as well as the idiosyncrasies of the sectors concerned. The final version of the Guidelines will be published by the end of June 2014. They are not binding but will give legal certainty in Austrian competition law.

Federal Competition Authority

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