General procedure
The Cartel Act 2005 (as amended) contains antitrust regulations on cartels, merger control and abuses of dominant market positions. Apart from exceptional infringements of criminal law provisions (eg, bid rigging), proceedings in cartel matters take place before the Cartel Court – a special division of the Vienna Court of Appeals. In all cases, proceedings are initiated by specific institutions under public law – that is, the Federal Competition Authority (FCA) and the Federal Cartel Prosecutor (known as the 'official parties').
In specific cases, proceedings may further be initiated by:
- any other individual or legal person which actively and independently take part in business (and is therefore not engaged in a purely private activity) and whose legal or economic interests are affected; or
- other public institutions (eg, the Federal Chambers of Economics, the Federal Chambers of Commerce and Labour, the Standing Committee of the Presidency of the Austrian Chamber of Agriculture and major regulators in, for example, the telecoms, media, electricity and railway sectors).
Violations of antitrust regulations may result in fines up to 10% of the worldwide turnover of the preceding financial year for any undertaking participating in the violation. In addition, the law sets out a leniency programme granting, under certain preconditions, immunity from or a reduction in fines to undertakings that inform the Federal Cartel Authority of cartels and cooperate fully throughout the procedure (for further details please see "New rules of the game for leniency applicants"). Most criminal penalties against individuals under the Cartel Act (except for anti-competitive collusive tendering) were abolished in 2002.
Violations of antitrust regulations may also give rise to interlocutory injunctions or claims for damages. A 2012 amendment introduced new articles to the Cartel Act 2005 in order to regulate such claims for damages. Further amendments are expected by the end of 2016 based on the EU Damages Directive (2014/104/EU).
Within the last few years, it has become more and more common to end cartel cases through settlements, which has led the FCA to issue guidelines on its settlement policy (for further details please "New settlement policy").
Cartels based on agreements between independent undertakings, or recommendations or decisions by associations of undertakings, which seek to prevent, restrict or distort competition (especially regarding production or demand) are prohibited and will be considered void. The Cartel Act mirrors the EU system of legal exemptions from the general prohibition of cartels. This means that cartels can no longer be exempted by court decisions, as it was previously possible under the Cartel Act; rather, the undertakings must decide whether the relevant agreement or concerted practice constitutes a prohibited cartel.
The Austrian de minimis rule has been adapted to the standards of the EU de minimis rule and now adopts the rules under which a cartel can be exempted from the cartel prohibition. While before March 2013 a cartel was exempt from the cartel prohibition if its members had a joint market share of less than 5% of the national market (or less than 25% of a local market), this has been modified to 10% if they are competitors (ie, have a horizontal connection) and 15% if they are non-competitors (ie, have a vertical connection) in the relevant market. However, any intended agreement on sales prices, limitation of production or distribution or allocation of market (known as 'hard core restrictions') will be exempt from the de minimis rule and therefore prohibited under the Cartel Act.
Vertical restrictions of distribution
Vertical restrictions of distribution are agreements between a binding entity and one or more bound entities which restrict the latter from purchasing or selling goods or receiving or rendering services. Vertical agreements are subject to the general rules on cartels.
Mergers include:
- acquisitions of all substantial parts of one undertaking by another;
- acquisitions (direct or indirect) of certain share percentages (25 %, 50 % or more);
- measures creating dominant influence over decision-making bodies; and
- joint ventures.
Pre-merger control (ie, approval by the FCA or, if requested by the authority, the Cartel Court) applies if:
- the combined relevant turnover of the participating enterprises equals or exceeds €300 million worldwide. For the purpose of calculating this threshold:
- the turnover of a media undertaking or media service is multiplied by 200;
- the turnover of a credit institution is replaced by interest and similar earnings, revenue from shares and other certificates; and
- the turnover of insurance undertakings is replaced by the value of cross premiums;
- the combined relevant turnover of the participating enterprises equals or exceeds €30 million in Austria (turnover is generated in Austria if the recipient of deliveries or services is domiciled in Austria); and
- the turnover of each of at least two participating enterprises equals or exceeds €5 million worldwide.
If only one undertaking has a national Austrian turnover of more than €5 million and all other undertakings concerned together have global turnover of no more than €30 million, the transaction need not be notified, even though the general thresholds are met.
The abuse of a dominant market position is expressively prohibited even without a relevant decision by the Cartel Court and may trigger fines. The Cartel Court can order participating undertakings to cease abuse of a dominant market position. Orders changing the structure of undertakings may be issued only if no measures are available that are equally effective but less burdensome on the affected undertakings. Consequently, such orders could entail the sale of parts of the undertakings or its reorganisation.
The rule of defining a dominant market position contains a definition of certain forms of joint dominance. Joint dominance will be presumed if up to three undertakings own at least half of the market share or up to five undertakings own up to two-thirds of the relevant market.
For further information on this topic please contact Dieter Hauck or Esther Sowka-Hold at Preslmayr Attorneys at Law by telephone (+431 533 16 95) or email ([email protected] or [email protected]). The Preslmayr Attorneys at Law website can be accessed at www.preslmayr.at.
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