February 01 2018
Section 17 of the Cartel Act seems clear in that a merger requiring notification may be implemented only after clearance, which will be achieved if:
However, to date, the law contains no definition of 'implementation'. There has been much debate in doctrine regarding whether implementation should be defined broadly as the mere possibility of influencing the target's behaviour, or more narrowly as the actual exercise of such influence. The Cartel Court's case law has followed the narrower definition. However, a recent Supreme Court decision has clarified the matter and reached a different conclusion.(1)
Following extensive discussions regarding Austrian and EU literature on merger control, the Supreme Court has clearly stated that the mere possibility of influencing a target's competitive behaviour is sufficient to be regarded as implementation of a merger.
The court also referred to previous versions of the Austrian law and the objective of the prohibition to implement, which is that effective merger control will be guaranteed and not compromised by circumstances which would be difficult or impossible to reverse at a later date. Further, the court held that Austrian law should be construed in accordance with European law.
Although the Supreme Court's ruling has broadened the definition of 'implementation', the defendant in the case at hand was able to avoid a fine. This is because, although the Supreme Court found that an infringement had occurred, it did not find the defendant's actions to be punishable.(2) The court can waive a fine if:
The Supreme Court had to consider a unique case in which:
Finally, the official parties identified no competitive difficulties with the (economically insignificant) merger, nor any identifiable consequences of the late notification.
Enterprises contemplating or effecting a notifiable merger in Austria should consider the recently introduced consideration threshold (for further information please see "Fixing the WhatsApp gap?") and the prohibition on implementation. In order to get away with gun jumping, parties will have to be extraordinarily lucky.
For further information on this topic please contact Dieter Hauck at Preslmayr Attorneys at Law by telephone (+431 533 16 95) or email (email@example.com). The Preslmayr Attorneys at Law website can be accessed at www.preslmayr.at
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