Austria: Amendments To Austrian Competition Law

In December 2012, the Austrian Parliament adopted changes to the Austrian Cartel Act as well as the Austrian Competition Act that will enter into force as of 1 March 2013 (Austrian Cartel and Competition Law Amendment Act; KaWeRÄG 2012). Although the Amendment does not lead to a major overhaul of the current system, several changes are noteworthy:

1. New de minimis exception

The Austrian de minimis exception will be aligned with EU law:

  • At present, the cartel prohibition does not apply to restrictive agreements where the undertakings involved hold a combined market share of no more than 5% on the domestic market and a share of no more than 25% on a local submarket. In contrast to EU law, "hard-core infringements" such as price fixing or the allocation of markets have also, so far, been exempted from the Austrian cartel prohibition under the de minimis rule.

  • In the future, hard-core infringements will no longer benefit from the de minimis exception. Furthermore, the relevant market share thresholds have been adapted. The new de minimis exception will only apply to such agreements or concerted practices where the undertakings involved hold a share on the relevant (not necessarily domestic) market not exceeding 10% (competitors) or 15% (non-competitors).

The new provision applies to cartels (a term which, according to Austrian terminology, also encompasses co-operations and vertical agreements) established after 1 March 2013. It is unclear whether the de minimis exception currently in force will continue to be applicable to existing agreements.

2. Stop the clock-mechanism introduced

The amendment introduces a "stop the clock" mechanism for merger control proceedings. Upon request by the notifying party, the four-week investigation period (phase I) may be extended to six weeks. An in-depth investigation before the Cartel Court (phase II) may, upon request by the notifying party, be extended from five to six months.

3. Private Enforcement – Actions for Damages on the Rise?

One of the primary goals of the Amendment is to facilitate the enforcement of damage claims by cartel victims. This is reflected in particular in the new Section 37a of the Cartel Act, which stipulates inter alia that a damage claim by a cartel victim shall not be excluded for the mere fact that the cartel victim itself passed on the cartel overcharge to its customers. It is unclear to what extent this will exclude the "passing-on defence" in future.

Moreover, civil courts will explicitly be bound to the decisions of the Cartel Court, the European Commission or other National Competition Authorities (of EU member states) finding a competition law infringement. We would expect that such decisions will only be binding if the defendants had a right to be heard in the proceedings of the respective competition authority.

In the future, the limitation period for "follow-on claims" will be suspended for the duration of proceedings before the competition authorities.

4. New investigatory powers of the Austrian Federal Competition Authority (FCA)

The Amendment will strengthen the investigatory powers of the FCA. At present, the FCA is a purely investigative authority without decision-making powers. This principle has now been "overridden" for the first time. Similar to the European Commission, the FCA will be empowered to enforce requests for information by way of a binding order (Bescheid), and may impose fines of up to EUR 75,000 for incorrect, misleading or incomplete information. Up to now, the FCA had to apply to the Cartel Court for such orders to be enacted.

The powers of the FCA will also be broadened with regard to dawn raids. Thus, for example, the FCA shall be entitled to seize evidence and seal premises. Due to these new provisions, it is expected that the FCA will continue to increasingly revert to dawn raids as an investigative measure.

5. Concentrated Industries under Scrutiny

The Amendment does not introduce the fiercely debated special provisions regarding pricing by energy companies (§ 5a of the Government Proposal). However, additional presumption rules on collective market dominance will be introduced. Undertakings will be presumed to be collectively market dominant, if

(i) three or less undertakings have a combined a market share of 50%, or

(ii) five or less undertakings have a combined market share of at least two-thirds of the total market.

Furthermore, concentrated and – from a competition policy perspective – "sensitive" industries are expected to be in the focus of the newly-established competition monitoring, which shall be carried out by the FCA. The objective of this new tool is to systematically monitor specific sectors in the future and – on the basis of the findings – to remedy undesirable market developments by measures that stimulate competition.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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