The main Austrian antitrust law statute is the Cartel Act 2005. The Cartel Act contains the rules on cartels, horizontal and vertical agreements, abuse of dominance, mergers and enforcement procedure. The Competition Act lays down provisions relating to the Federal Competition Authority (FCA) and its powers, and the Commission on Competition.
Apart from the Cartel Act and the Competition Act, further rules on competition are set out in various other statutes such as the Neighbourhood Supply Act, which basically governs the relationship between suppliers and retailers. Other important rules covering areas such as demonopolisation in formerly protected sectors have been brought about through several statutes, including the Telecoms Act 2003.
On 1 March 2013 as well as on 1 May 2017, major amendments to the existing regulatory framework entered into force.
Authorities - institutions involved in enforcement
The main competition authority is the Viennese Court of Appeals sitting as Cartel Court. The Cartel Court has the sole right to issue binding decisions and is responsible for administering all competition proceedings provided for in the Cartel Act. Since the amendment in 2013, the FCA has the authority to enforce information requests without the help of the Cartel Court. The only remaining criminal law aspects of cartel behaviour (ie, bid rigging and fraud) are not dealt with by the Cartel Court but by the ordinary criminal courts. Appeals from the Cartel Court go to the Austrian Supreme Court sitting as Cartel Court of Appeals, which is the second and last instance in competition matters.
The Cartel Court sits in panels consisting of two professional judges and two expert lay judges, with the presiding professional judge having the casting vote. The Cartel Court of Appeals sits in panels of three professional judges and two expert lay judges. Thus, the Cartel Act ensures that the professional judges on a panel always have the decision-making power.
The official parties
The FCA is formally part of the Federal Ministry of Economy, Family and Youth. In fulfilling its duties, the FCA is independent and not bound by any government instructions. It is headed by the director general for competition, who is appointed for a term of five years upon nomination by the federal government. The term of the first director general, Professor Barfuss, ended on 30 June 2007. The current director general, Dr Thanner, took office on 1 July 2007 and was reappointed for another five-year term in 2012. It can be expected that he will be reappointed again in July this year. The FCA currently has a staff of about 40 people (including around 30 case handlers).
The main task of the FCA is the investigation of possible restrictions of competition and prosecution of such violations by bringing actions before the Cartel Court. As one of the two official parties, the FCA has standing in all proceedings before the Cartel Court. The FCA shall also assist other agencies and cooperate with the European Commission in individual cases. Furthermore, it can inquire into sectors of the economy where restrictions of competition are suspected and render expert opinions regarding competition policy. Aiming at increasing transparency, the amended section 2(4) of the Competition Act sets out that the FCA can provide information about proceedings that are of public relevance, as well as inquiries into economic sectors. Since 1 January 2006, it has also administered merger control proceedings in Phase I (Phase II proceedings are, as under the old Cartel Act, handled by the Cartel Court).
In order to fulfil the tasks assigned to it by the Competition Act, the FCA is provided with far-reaching powers of investigation. In particular, it has the right to inspect all business documents, to question witnesses and parties involved, and to oblige undertakings to provide all required information. Since the last amendment, the principle of access, which had already been established in a decision by the Austrian Administrative Court, is now expressly laid down in section 11a(1) lit 2 and 11a(2) of the Competition Act. According to this principle, the FCA is entitled to inspect and examine documents and data irrespective of their storage location as long as such are accessible at, or can be viewed from, the premises covered by the search warrant. It may also be mentioned in this context that, in the said decision, the Administrative Court further made it clear that forensic software may be used for securing IT data (Administrative Court, Ra 2014/04/0046). With authorisation from the Cartel Court, the FCA also has the right to conduct dawn raids.
The Cartel Act further provides for a federal antitrust prosecutor (FAP) who, together with his deputy, is located at the Cartel Court and is de jure subject to instructions by the Federal Minister of Justice. As the second official party, the FAP has the right to bring actions before the Cartel Court, replacing the Cartel Court's power to open proceedings ex officio (as was the case under the old Cartel Act). The FAP cooperates closely with the FCA.
In certain sectors, specific regulatory bodies like the Telecoms Control Commission have been established. They apply (sector-specific) competition rules and can make certain requests with the Cartel Court. In practice, both the official parties and the Cartel Court revert to the specific knowledge of the regulators in cases involving one of the regulated sectors.
Commission on Competition
The FCA is advised by the Commission on Competition, which comprises eight ordinary members. In merger control proceedings, the Commission on Competition can issue recommendations regarding applications for an in-depth examination to the FCA. Such recommendations must be issued upon request, and only one member of the Commission is needed to make a recommendation. The FCA may decide not to act on a recommendation, but not without giving sufficient reasons, which also have to be made public.
The ‘social partners' (mainly the Federal Chamber of Commerce and the Federal Chamber of Labour) have the right to deliver comments in all competition proceedings. In practice, they rarely make use of this right. However, the lay judges at the Cartel Court are appointed upon suggestion by the social partners.
In 2006, the current Cartel Act brought about far-reaching changes to the substantive and procedural rules on anticompetitive agreements and concerted practices. The traditional distinction of Austrian cartel law between various types of cartels and vertical agreements to which a variety of different rules were applicable has been abolished and replaced with three provisions that are, in substance, almost identical to article 101 of the Treaty on the Functioning of the European Union (TFEU).
Definition of ‘cartels'
Under the heading ‘cartels', section 1(1) of the Cartel Act prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices that have, as their object or effect, the prevention, restriction or distortion of competition. According to section 1(2), the following practices in particular are prohibited:
- directly or indirectly fixing purchase or selling prices, or any other trading conditions;
- limiting or controlling production, markets, technical development or investment;
- sharing markets or sources of supply;
- applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them at a competitive disadvantage; and
- making the conclusion of contracts subject to acceptance by the other parties of supplementary obligations that, by their nature or according to commercial usage, have no connection with the subject of such contracts.
Further, section 1(4) also outlaws cartels by recommendation, comprising recommendations to observe specific prices, price limits, rules of calculation, trade margins or rebates that restrict or are intended to restrict competition. If, however, the recommendation explicitly states that it is non-binding and not enforced by social or economic pressure, it will not constitute an illicit practice within the meaning of the Cartel Act (but may do so under article 101 TFEU).
It may be noted that, especially in the past few years, the FCA has particularly investigated agreements between producers and the (grocery) retail market. On the occasion of identified cartel infringements (mainly vertical price maintenance), which led to decisions imposing fines by the Cartel Court, the FCA published guidelines on its website. These guidelines are valuable as they reflect the thinking of the FCA on verticals.
Consequences of illicit conduct
Agreements and decisions prohibited by section 1(1) are void pursuant to section 1(3). Further, the undertakings involved can be subject to fines. Under certain circumstances, particularly in bid-rigging cases, criminal law sanctions may be imposed against individuals as well as undertakings. It should also be mentioned that antitrust laws are generally considered to be protective provisions, the infringement of which may trigger (civil law) damage claims; meanwhile, this is also expressly foreseen in the law. For example, several large private claims for damages against the background of cartel court decisions are currently pending. Against the background of one such case, the ECJ recently held that even customers of third parties (ie, non-cartelists) may bring damages claims against the members of the cartel (‘umbrella plaintiffs' and ‘umbrella claims', respectively). Further consequences can be: exclusion from public tendering procedures; damage to reputation; and, for employees involved, loss of jobs. The last amendment, which had been triggered by the EU Damages Directive, has led to a further strengthening of private enforcement.
Like article 101(3) TFEU, section 2(1) of the Cartel Act exempts cartels that, while allowing consumers to receive a fair share of the resulting benefit, contribute to improving the production or distribution of goods or to promoting technical or economic progress, and that do not:
- impose restrictions that are not indispensable to the attainment of these objectives; or
- afford the possibility of eliminating competition in respect of a substantial part of the products in question.
Section 2(2) contains a list of cartels that are exempted from the prohibition of section 1 in any case, in particular:
- de minimis cartels, for which, since the amendment in 2013 has entered into force, a similar regime is set forth as under the European Commission's De Minimis Notice. Accordingly, in the case of practices where the undertakings concerned are competitors, the de minimis rule applies where their combined market share threshold does not exceed 10% on the relevant market or, in the case of non-competitors, if their individual market share thresholds remain at or below 15%. Hardcore restrictions such as price-fixing or market allocation agreements will no longer benefit from the Austrian de minimis exemption;
- certain agreements on retail prices in the book and press sector, including such between publishers and press wholesalers;
- restrictions of competition between members of a cooperative insofar as they are justified by the aim of the cooperative; and
- certain restrictions of competition within the agricultural sector.
It should be noted, however, that even though there may be an exemption under Austrian law, a behaviour may still fall foul of article 101(1) TFEU.
In line with the concept of EC Regulation No. 1/2003, the former notification system for all types of anticompetitive agreements and decisions has been abolished by the Cartel Act.
On the basis of section 3(1) of the Cartel Act, the Minister of Justice can issue regulations stating that certain groups of cartels are exempt from the prohibition of section 1(2). The Act explicitly provides for the possibility that these notified regulations may refer to regulations issued pursuant to article 101(3) TFEU. However, no such regulation has been issued so far. In practice, the rules contained in the relevant EU block exemption regulations and accompanying guidelines are also applied as guidance for national scenarios.
Abuse of dominant position
The material rules on the abuse of a dominant market position under the Cartel Act are largely identical to those of article 102 TFEU (formerly article 82 EC Treaty).
Definition of a dominant position
According to section 4(1) of the Cartel Act, an undertaking holds a dominant position if it:
- is exposed to no or only insignificant competition; or
- holds a predominant market position in relation to other competitors.
Thus, financial strength, relationships with other undertakings, access to suppliers and markets, as well as entry barriers for other undertakings, shall be considered when assessing market power. The 2013 amendment also introduced explicit rules on collective dominance. According to section 4(1a), two or more undertakings are to be considered market dominant if there is no significant competition among them and they as a whole fulfil the criteria of section 4(1).
Pursuant to section 4(3), an undertaking shall also be deemed dominant if it has a predominant position in relation to its customers or suppliers. This is particularly the case if customers and suppliers are obliged to maintain business relations with the dominant company in order to avoid serious economic disadvantages.
In addition (and unlike the situation under article 102 TFEU), section 4(2) provides for a rebuttable presumption that an undertaking is market dominant if it:
- has a market share of at least 30%;
- is exposed to competition by not more than two other companies and has a market share of more than 5%; or
- is one of the four largest undertakings, which together have a market share of at least 80%, provided it has itself a market share of more than 5% of the market, regardless of whether the market is to be defined nationally, regionally or locally.
Additional presumptions of market dominance are provided for in section 4(2a) of the Cartel Act: Three or less undertakings are to be considered collectively market dominant if they have a market share of at least 50% or if up to five undertakings (together) have a market share of at least 66.66%. Notably, these presumptions are applicable irrespective of the individual undertaking's market share within such a group of potentially market dominant undertakings (ie, even a very small undertaking can be presumed market dominant in concentrated markets or markets where there is one ‘big fish').
If one of these criteria is fulfilled, the burden of proof is placed upon the undertakings concerned, which may prove that this is not the case.
As under article 102 TFEU, abuse of a dominant position is prohibited by section 5 of the Cartel Act. The official parties, associations representing the economic interests of companies like the Federal Chamber of Commerce and any company having legal or economic interests, as well as certain institutions and regulatory authorities, may apply to the Cartel Court to order a company to cease and desist from the abuse in question.
Section 5(1) contains a non-exhaustive list of examples of abusive practices, following the wording of article 102 TFEU. Thus, an abuse will in particular occur if the dominant company:
- requests terms that differ from those that would likely persist under effective competition - in particular, the behaviour of undertakings on comparable markets with effective competition shall expressly be taken into account (this wording was inspired by section 19 GWB);
- limits production, markets or technical development to the detriment of consumers;
- discriminates by way of imposing different contractual conditions to similar transactions;
- imposes supplementary obligations unrelated to the subject matter of the contract; or
- without factual justification, sells goods below their cost price (predatory pricing - this provision includes a rebuttable presumption, leaving it to the dominant undertaking to prove the contrary or to justify its pricing policy).
Intentional or negligent abuse of a dominant position is subject to fines. In addition, section 26 of the Cartel Act empowers the Cartel Court to order measures intended to weaken or even eliminate the dominant position, even for first-time abuse.
Upon application by the official parties, the Cartel Court increasingly imposes considerable fines (in cartel, vertical and abuse cases as well as gun jumping). For example:
- €75.4 million against the main elevator companies operating on the Austrian market for customer allocation;
- €3 million against Spar, a large food retailer, for price-fixing concerning dairy products, which the Cartel Court of Appeals increased by 10 times to €30 million; in the same year, another fine amounting to €10.21 million was imposed on Spar for price-fixing concerning other product groups;
- €20.8 million against REWE, another large food retailer, for (resale) price maintenance agreements with its suppliers;
- €17.5 million against 30 freight forwarding companies (members of the Freight Forwarding Agents Consolidated Consignment Conference (the SSK)) for price fixing;
- €7 million against Europay Austria for abuse of a dominant market position and infringement of the prohibition of cartels (fixing of certain fees in connection with debit cards);
- €1.7 million against Rauch, a fruit juice producer, for vertical coordination of final selling prices including horizontal elements;
- €1.5 million against Lenzing, the worldwide market leader in the production of lyocell because of the implementation of a merger prior to clearance;
- €1.1 million against breweries for boycotting cash-and-carry retailers with draft beer; and
- €75,000 against five (rather small) driving schools in Graz for price fixing.
In some cases, fines have also been imposed because of infringements of procedural provisions.
It should be noted that anticompetitive practices can also be challenged before the ordinary civil courts. Apart from private damage claims, based on section 1 of the Act Against Unfair Trading Practices, undertakings may be forced to terminate cartel practices as well as the abuse of a dominant position. In addition, interim relief can be granted through interlocutory injunctions and damages may be awarded.
In this context, it may be noted that the core part of the 2017 amendment is the implementation of the EU Damages Directive. Austrian law had already previously introduced some of the provisions foreseen by the Directive - eg, the binding effect of final decisions of European competition authorities, now restated in the new section 37i(2) of the Cartel Act. The current amendment, however, introduced a number of new sections that govern the civil liability for, and assertion of damages caused by, competition law infringements (section 37a to section 37m of the Cartel Act). Many of these provisions have already taken effect, as of 26 December 2016, since the Directive was to be implemented by then.
Notably there is now a rebuttable presumption that cartel infringements cause harm (section 37c(2) of the Cartel Act). According to the wording of this section, the presumption only applies to cartels between competitors and thus does not apply to vertical agreements. Further, as regards the extent of the compensation, lost profit has to be compensated irrespective of the level of fault and interests paid as from the moment the harm occurred (section 37d of the Cartel Act).
Section 37e of the Cartel Act governs the joint and several liability of undertakings which have infringed competition law through joint behaviour. Under certain conditions small or medium-sized undertakings, as well as the principal immunity applicant, are privileged in their liability as they are liable only to the amount as is attributable to their own direct and indirect purchasers and providers.
Section 37f of the Cartel Act makes a further clarification in the context of private enforcement, namely that the passing-on defence is admissible but with the burden of proof resting on the defendant. Passing-on may also be used as a ‘sword' - that is an indirect purchaser to which the damages were passed on to can claim damages if it establishes that such passing-on has taken place.
Changes were also introduced with regard to the statute of limitation. From now on, the general limitation period is five years from the point in time at which the one harmed cumulatively becomes aware or should reasonably have become aware of: the infringer; the damage; the behaviour that led to the damage; and the fact that this behaviour constitutes a competition law infringement. There is also an objective limitation period of 10 years (beginning with the occurrence of the damage), which is to be expected to play the more significant role in practice.
The amendment also introduced special provisions concerning the disclosure of evidence which significantly go beyond the rules laid down in the Austrian Code of Civil Procedure. Until now, there were no disclosure rules in the narrow sense. The court can now order the defendant or a third party to disclose evidence upon a reasoned request (section 37j of the Cartel Act). A proportionality test, in which the different interests have to be weighed against each other, has to be made. Moreover, the court has to order effective measures for protecting confidential information. Under certain circumstances (eg, right to refuse to give evidence under criminal procedural law), the defendant of the application can demand that the evidence is only disclosed within the court, which then decides on the disclosure. Special provisions apply to evidence contained in the files of competition authorities, as the court has to conduct an ‘enhanced' proportionality test in order to safeguard the public enforcement of competition law.
In the field of mergers, the Cartel Act has brought about a plethora of changes in comparison with the old law, concerning the definition of a merger, the thresholds for merger control to apply, as well as the procedural rules for mergers. The current amendment also introduced a completely new notification threshold. This new threshold has to be taken into account for transactions implemented as of 1 November 2017.
Notion of concentration
According to section 7(1) of the Cartel Act, a concentration is deemed to arise when:
- an undertaking acquires, wholly or to a substantial extent, a business, in particular by merger or change of corporate form;
- an undertaking acquires control of another undertaking by contractual agreement (eg, assignment of the right to use, operate or manage the place of business);
- an undertaking acquires, directly or indirectly, either 25% or more or 50% or more of the shares in another company (regardless of whether this leads to a change of control);
- at least half of the members of the management board or the supervisory board of two or more companies are identical; or
- undertakings are linked in any other way that confers upon one company the possibility of exercising, directly or indirectly, a decisive influence over the other company (general clause).
As under article 3(4) of the EC Merger Regulation, section 7(2) foresees that the creation of a joint venture constitutes a concentration within the meaning of the Cartel Act if it performs, on a lasting basis, all the functions of an autonomous economic entity (ie, it is ‘full-function', irrespective of whether or not it is concentrative or cooperative).
Intra-group transactions are exempted from merger control (section 7(4) of the Cartel Act).
According to section 9(1), a concentration must be notified to the FCA if:
- the combined aggregate worldwide turnover of all undertakings concerned exceeds €300 million;
- the combined aggregate turnover on the Austrian market of all undertakings concerned exceeds €30 million; and
- each of at least two of the undertakings concerned has a worldwide turnover exceeding €5 million.
However, to limit the broad scope of application of Austrian merger control, section 9(2) provides for an exemption to this rule so that mergers (despite meeting the above criteria) are not notifiable if:
- only one undertaking concerned has achieved more than €5 million within Austria; and
- all the other undertakings concerned have achieved an aggregate turnover of no more than €30 million worldwide.
Pursuant to section 9(4), concentrations that cumulatively meet the following thresholds also have to be notified:
- the combined worldwide turnover of the undertakings concerned exceeds €300 million;
- the combined Austrian turnover of the undertakings concerned exceeds €15 million;
- the value of the consideration exceeds €200 million; and
- the target undertaking is to a significant extent active in Austria.
The new threshold was deemed necessary particularly because the value of undertakings in the digital economy may be much higher than is reflected through their turnover. However, it has to be noted that the new threshold applies to all industries.
According to the official explanatory remarks, the term ‘consideration' is understood to contain all assets and other services of monetary value (purchase price) which the seller receives from the purchaser in connection with the transaction plus the value of possible liabilities which the purchaser takes over. For fulfilling the ‘significant activity in Austria' criterion, the official explanatory remarks deem it sufficient if a site of the undertaking to be acquired is situated in Austria. Nevertheless, a physical presence in Austria is not required for meeting this criterion. For evaluating the domestic effect in the digital sector, the number of monthly active users or the number of unique visits can serve as a reference.
Moreover, the notification fee in section 10a of the Competition Act was increased from €1,500 to €3,500.
Further, section 24(2) explicitly confirms that there is an ‘effects doctrine' stating that the Cartel Act only applies to cases having an effect on the Austrian market. Owing to various partly conflicting judgments by the Austrian Supreme Court (sitting as Cartel Court of Appeals), the application of the effects doctrine is largely unclear. In the Lenzing case, the acquirer of a business located outside Austria was fined €1.5 million for the implementation of a merger before clearance, although the target did not generate any turnover within Austria. On the other hand, a decision of the Cartel Court, by which it held that a large Austrian bank (Erste Bank) had failed to file a notification in Austria for the acquisition of a Czech and Slovakian bank, was quashed by the Cartel Court of Appeals. The Cartel Court of Appeals stated in the latter case that an effect on the Austrian market could not be established since the target undertakings were active in a different geographic market (not including Austria) and had no turnover in Austria. The FCA takes a very strict approach to the effects doctrine, construing the exemption very narrowly. It is usually of the opinion that the abstract possibility of an effect and a potential impairment of competitive conditions in Austria are sufficient for constituting a domestic effect. This, for instance, would be the case where the relevant market is Europe-wide, with Austria being part of this market even though there are no actual sales in Austria. Due to this situation, it is highly recommended to clarify in advance whether or not a filing may be avoided in Austria. It is often better to apply in doubt for merger clearance and to request that the official parties waive their right to an in-depth analysis, which they are often prepared to do, if there are negligible effects in Austria.
Calculation of turnover
Section 22 stipulates that the turnover of all undertakings inter-linked within the meaning of section 7 of the Cartel Act has to be taken into account. This means in particular that, unlike the situation under European law, the turnover of undertakings that are connected only via a non-controlling stake of 25% or more must also be included in the calculation.
It should be noted that certain limits to this rule have been developed in a number of cases. The Cartel Court and the Supreme Court have limited the calculation of ‘endless chains' of minority shares. Thus, the turnover of undertakings holding a minority share in another minority shareholder may be disregarded under certain circumstances. The principles are, however, not entirely clear.
Special rules for the calculation of turnover apply in the media, banking and insurance sectors.
Obligation to suspend implementation
Concentrations requiring notification must not be put into effect before clearance. In this context, section 17(1) and (2) list a whole set of various conditions as to when a merger may be implemented. Section 17(3) stipulates that agreements are void insofar as they contradict this prohibition to implement.
Procedure and substantive test
Since 1 January 2006, mergers have had to be notified to the FCA, which forwards the notification to the FAP (section 10(3) of the Cartel Act).
The official parties may request, within four weeks of receipt of the notification, that the Cartel Court opens an in-depth examination of the contemplated concentration (Phase II). Upon application by the notifying parties, Phase I may now be extended to six weeks. If the official parties make no such request or, upon reasoned application by the notifying party, waive prior to the elapse of Phase I their right to make such request, the merger is deemed cleared and may be implemented.
Pursuant to section 10(4) of the Cartel Act, any undertaking whose legal or economic interests might be affected by the planned concentration may, within 14 days of the publication of the merger (on the FCA's website), submit a written comment. Although the submitting undertaking has no right to have its comment taken into consideration, such submissions serve as an additional source of information for the official parties. In Phase II cases, further comments may be submitted without any formal deadline to be observed. However, ‘last-minute submissions' only have a small chance of being considered by the Cartel Court.
If an in-depth examination is requested, the Cartel Court must, within five months, assess whether the proposed concentration will create or strengthen a dominant position in the relevant market (the concept of substantial lessening of effective competition known from the EC Merger Regulation is not the substantive test in Austria). Phase II may also be extended upon request by the notifying parties from five to six months. Unlike Phase I, the proposal does not set any limit to such extension (provided it is timely applied for). If the outcome of the in-depth examination is that the merger is expected to create or strengthen a dominant position, the Cartel Court must either prohibit the concentration or grant clearance on special grounds.
Clearance on special grounds will be granted if it can be established that the concentration will improve competition in the market in such a way that the advantages outweigh the disadvantages of the creation or strengthening of a dominant position, or if the concentration is indispensable to the international competitiveness of the undertakings concerned and justifiable on macroeconomic grounds.
The Cartel Court may also impose restrictions on and conditions to its clearance in order to prevent the creation or strengthening of a dominant position, or to achieve at least one of the compensating improvements mentioned above.
Just recently, the Cartel Court of Appeals confirmed in the Novomatic decision the prohibition of a concentration, evidently for the first time. This is despite the fact that the two undertakings concerned are active in the gambling market, a highly regulated sector.
Notifications have to be made in quadruplicate. The FCA issued a form for the notification of mergers that is published on the FCA's website (form for mergers 2013). Although not legally binding, it is highly recommended to use this form in order to avoid incomplete notifications. In the event of an incomplete notification, the Cartel Court may issue a formal decision on incompleteness ordering the applicants to file the missing information; in practice, it more often happens that the official parties use their right to ask for an in-depth examination in order to gain time for the assessment of the merits of a case. Since the form requires extensive information even in minor cases, it may be advisable to discuss with the FCA upfront whether certain parts of the notification form can be ‘carved out' owing to the specific merits of the case at hand.
A concentration in the media sector may be prohibited if it is expected that media diversity will be impaired. Section 13(2) of the Cartel Act explicitly defines the term ‘media diversity' as the existence of numerous independent media that are not connected within the meaning of section 7(1) and guarantee press coverage reflecting a range of opinions.
Fines, criminal charges
The system of fines is similar (but not identical) to that of EU competition law. Criminal sanctions exist for bid rigging (and cartel behaviour qualifying as fraud). The penalty for bid rigging is up to three years in prison.
Pursuant to section 29 of the Cartel Act, the Cartel Court may, upon the request of the official parties, impose fines against undertakings and associations of undertakings of up to 10% of the worldwide group turnover in the preceding business year for serious violations of the Cartel Act, such as:
- violation of the prohibition on cartels;
- abuse of a dominant position;
- infringement of articles 101 or 102 TFEU;
- prohibited implementation of mergers; or
- non-compliance with orders of the Cartel Court prohibiting or prescribing certain behaviour.
In the Spar case, the Cartel Court of Appeals has recently clarified that the provision that any fine may maximum amount to 10% of the annual (group) turnover is, different from the understanding on EU level, ‘not a cap but constitutes the range within which the Cartel Court has to orientate itself when determining the amount of the fine.' This is generally seen as leading to higher fines, and has in the particular case also led to this result (the fine imposed by the Cartel Court was increased 10 times by the Cartel Court of Appeals).
Less serious violations, such as non-compliance with certain procedural rules and decisions of the Cartel Court, can trigger fines of up to 1% of the worldwide group turnover in the preceding business year of the undertakings involved.
With regard to mergers, section 16 of the Cartel Act provides for the possibility of measures being imposed in order to reduce or eliminate the negative effects of a concentration approved on the basis of false or incomplete information. The same applies to violations of conditions imposed by the Cartel Court in connection with the clearance of a merger. The assessment of the amount of the fine depends upon the seriousness and duration of the violation, the material gain arising from it, the degree of fault and the economic capacity of the undertaking concerned. Section 30 of the Cartel Act contains further aggravating and mitigating circumstances. Notably, one of these aggravating reasons that allows for the imposition of higher fines are cases of repeat offenders, when a fine had already been previously imposed on an undertaking. Equally, where the respective undertaking was the leader or instigator of the infringement, this will lead to a higher fine. On the other hand, mitigating reasons are particularly where the undertaking's involvement in the infringement is substantially limited or if the undertaking stopped the infringement by its own motion or if the undertaking has significantly contributed to the clarification of the infringement or - since the current amendment - if the damage suffered has been compensated (in whole or in part).
As of 1 January 2006, a leniency programme has been in force in Austria. The scarce statutory rules are now contained in the new section 11b( of the Competition Act. These provisions are completed by a handbook published on the FCA's website.
According to section 11b(1) of the Competition Act, the FCA can refrain from applying for a fine against an undertaking or an association of undertakings if four conditions are met:
- the respective undertakings or associations of undertakings have ended their involvement in an infringement of section 1 of the Cartel Act or of article 101(1) TFEU;
- they inform the FCA of this infringement and the leniency applicant provides enough information to enable a dawn raid or even a direct fine application to the Cartel Court;
- they cooperate fully, promptly and truthfully with the FCA and submit all evidence concerning the infringement in their possession or available to them in order to clarify the circumstances of the case completely; and
- they did not coerce other undertakings or associations of undertakings to participate in the infringement.
However, the 2017 amendment clarified that: only one company or one association of undertakings can be granted the status as (full) immunity recipient; and the FCA has to file an application for finding against this company or association. Since the coming into force of the leniency programme, several leniency applications have already been made to the FCA, in some cases triggering fine proceedings. For increasing the efficiency of the prosecution of competition law infringements, the new section 11b(6) foresees the possibility to establish an internet-based whistle-blower system. Tips can also be made anonymously.
The Austrian official parties seem determined to fight against anticompetitive practices. Since its establishment, the FCA has performed various sector inquiries, conducted (both alone and in collaboration with the European Commission) several dawn raids and brought in a number of cases applications for fines. The official parties are also very active in merger control and have requested commitments in several cases. Private enforcement also plays an increasingly important role, with many cases currently pending before various Austrian civil courts. Due to this increase in antitrust proceedings, settlements (consensual process terminations) have taken place. In these cases, the Cartel Court decides on the basis of the determined facts of the FCA that are not disputed by the companies. The companies benefit from this procedure because it is quick and therefore cost-saving. This procedure is summarised by the ‘viewpoint of settlements' published on the FCA's website.
The amendment in 2013 further strengthened public and private enforcement. For example, during dawn raids, the FCA can now directly request information concerning documents and it is also entitled to seal premises. The search can only be objected to (claiming a legal privilege or that something falls outside the scope of the dawn raid) with regard to individually specified documents.
The new amendment also includes some measures which should increase transparency. The amended section 37(1) of the Cartel Act now states that also final decisions rejecting or dismissing an application have to be published by the Cartel Court. Moreover, also decisions on requests for an interim injunction must be published. Besides, the FCA is obliged to disclose the operative part of final decisions on its website immediately. In case of a decision against an immunity recipient, the announcement has to contain its name and an indication to its status in any case.