Austria: Federal Competition Authority
Last year brought a number of changes for the Austrian Federal Competition Authority (FCA): the authority moved to another building with larger premises in Vienna, and a new cartel act and competition act was postulated that entered into force in May 2017. Finally, the annual budget is to be doubled and personnel staff will increase by a third.
2016 in figures
In 2016, the FCA: conducted 11 dawn raids; filed six leniency applications; organised one moot court and seven competition talks; completed one sector inquiry; started two sector inquiries; and established a record 420 national merger notifications. Overall, approximately €18.6 million in fines were imposed on undertakings.
The new Cartel and Competition Act
A new Cartel and Competition Law entered into force in May 2017. One of the most important changes is the adjustment of the limitation period on the basis of European Rules: the limitation period is now interrupted if the FCA conducts an investigation or pursues an undertaking that committed an infringement. Prior to the amendment, the limitation period was only interrupted if the FCA filed an application to the Cartel Court. Additionally, an absolute period limitation of 10 years has been implemented.
The Cartel Supreme Court as a second instance is now also called on to reassess the substance of a case. Previously, the Cartel Supreme Court was only obliged to judge on legal defects.
Concerning dawn raids, an undertaking can now be forced to pay a penalty up to 5% of the average daily turnover generated in the previous year for each day of delay if the undertaking refuses access to evidence in its premises. Other novelties concern the access principle during dawn raids of electronic data. The undertaking must grant access to electronic data if access is possible in its premises, as covered by the search warrant.
The FCA now has a legal provision that allows it to report matters of public significance regarding its procedures at any stage of investigation, thus bringing more transparency in ongoing proceedings.
Further modifications were made concerning de minimis regulation, the leniency programme and private enforcement.
Digitalisation and mergers
The legislator also implemented new thresholds for merger notifications. Due to rapid change especially in technology markets, the legislator implemented a transaction value which means that the sales value of an undertaking is also relevant for the analysis of merger notifications. The reason for this amendment is to bring under the notification regime mergers that might not be relevant under the older thresholds parameters. The legislator wants particularly to avoid monopolisation in technology markets.
Finally, the FCA is now entitled to implement a whistle-blower system for anonymous entries of cartel infringements, which will launch in 2017.
Budget and staff
In previous years, the FCA has suffered from a lack of budget and personnel staff. Its budget is to be increased by €2 million and 10 employees are to be hired. This financial reinforcement and increase of staff is an important milestone towards having a well-resourced and efficient authority in Austria.
The food retail sector
In 2016, the FCA finalised a number of proceedings in the food retail sector. These cases bound many of the authority's resources. Between 2011 and 2016, the FCA conducted approximately 50 dawn raids in the food retail sector. Large quantities of data were found during inspections, which have since been evaluated and packed into Cartel Court applications. As a result, several decisions on horizontal and vertical price fixing in the food retail sector have been issued by the Cartel Court or by the Cartel Supreme Court. The last decision finalised in 2016 was against a food retailer on the basis of incriminating material found during the above-mentioned dawn raids. Overall, approximately €69 million in fines were imposed on 27 undertakings. The two biggest fines on retailers were €40.2 million and €20.8 million.
In 2016, a total of eight undertakings received fines for horizontal and vertical price fixing in the sectors of freight transport and logistics; online trade in electronical devices such as coffee machines; and tools. The FCA is now also focusing on other sectors such as construction, in which undertakings infringed cartel law during bid-rigging procedures - these investigations are still ongoing. Eight dawn raids have been conducted; however, this is just the start of the investigations in the construction sector. More dawn raids due to suspicious material are planned. Several decisions by the Cartel Court are expected in the middle of 2017.
As already mentioned, 2016 was a record year for merger notifications: the FCA received 421 national and 327 European merger notifications. Additionally, the Cartel Court prohibited its first merger in the gambling sector due to negative effects on affected markets. The undertaking appealed against the decisions of the Cartel Court, however the Cartel Supreme Court rejected the application.
Besides ongoing investigations, the FCA focuses mainly on sector inquires. In 2016, it initiated sector inquiries into the healthcare sector and the banking sector (specifically an analysis of ATM fees). There was much discussion in Austria regarding an announced obligation to pay ATM fees and the proposal of a prohibition by law of such fees. The FCA provided economic analysis concerning the impact of such a prohibition on the market and the consumer. Results will be released at the beginning of 2017.
Events organised by the FCA
The FCA endeavours to raise awareness for competition and its benefits for the economy and society. As a result, the FCA has organised seven competition talks with topics such as ‘industry and competition', ‘credit cards and competition' or ‘good governance and competition'.
Another event, organised for its second year, was the Cartel Law Moot Court. The FCA is the first and only authority in the EU to organise such an event. Young students receive a chance to profile each other in a cartel case before a fictive court, and the best speaker wins a traineeship at the authority. A further Cartel Law Moot Court is planned for 2017.
Finally, a brochure on Cartel Law & Compliance has been issued together with the chamber of commerce. This brochure presents undertakings with a quick overview of cartel risks and practical examples.
In 2016, several international events were also organised by the FCA. Delegations visited the FCA to exchange practice and share experiences. Delegates came from Brazil, Moldavia, Russia, Serbia and the Ukraine.
In January 2016, the FCA, together with the Maltese Competition Authority, organised a conference for the European Mediterranean Competition Forum in Malta. The programme included best practice strategies for young competition authorities and how to implement effective law enforcement in the field of Cartel and
In March, the FCA organised, with the UNCTAD MENA Programme, a three-day study visit to Austria for French-speaking countries Morocco, Egypt and Algeria. The workshops focused on economic analysis of cases, the leniency programme and dawn raids.
Last but not least, a meeting between the competition authorities of Germany, Switzerland, Liechtenstein and Austria was organised. The aim was to foster closer cooperation between the German-speaking countries that should allow an exchange of confidential information in future. These meetings will be held annually to discuss common themes.