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This presentation provides an overview of Austrian Antitrust Law, focusing on the legal basis of cartel prohibition, provisions on cartels and market dominance, mergers, and fines. The Cartel Act and Competition Act are discussed, along with their roles in public law enforcement by the Federal Competition Agency, Federal Antitrust Prosecutor, and Cartel Court.
Tipologia: Appunti
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Good morning and welcome to our presentation on Austrian Antitrust Law. In our presentation, we will cover the following aspects: First of all, we will give you an overview on the legal basis of Cartel prohibition in Austria. Secondly, we will present to you the relevant institutions in charge of the execution of the legal provisions. After that, we will discuss the provisions on Cartels and market dominance. In addition, we will cover the Investigation process and procedural steps. Moreover, we will talk about mergers, and last but not least, we will deal with the fines for infringements.
1. RELEVANT LEGISLATION The most important piece of legislation with respect to antitrust law is the Cartel Act, which contains provisions on restrictions of competition, including cartels, abuse of market dominance and mergers, as well as provisions on public & private law enforcement and fines. The provisions of the Cartel Act widely correspond to its equivalent statutes in EU law, namely Art. 101 & 102 of the TFEU. Moreover, the Austrian de minimis exception is very similar to the de minimis notice of the European Commission. As a consequence, Austrian court decisions are often influenced by the practices of the European Commission and the decisions of the European Courts. (It is also important to mention that according to Sec. 24 of the Cartel Act, its provisions are only applicable to circumstances affecting the domestic market, irrespective of whether they arose in Austria or abroad.) The Cartel Act was most recently amended in 2017, mainly in order to implement the EU damages directive. As this amendment has not yet been included in the book, we are going to talk about it in more detail in the course of the presentation. Another important piece of legislation is the Competition Act, as its provisions establish the Federal Competition Authority and the Commission on Competition, which both have important competencies when it comes to executing antitrust law. Some individual provisions related to competition are stipulated in other statutes, for example in the Neighbourhood Supply Act or the Telecommunications Act. Moreover, the minister of Justice is empowered to issue ordinances in order to exempt certain groups of cartels from the Cartel Prohibition. With regard to provisions in the criminal code, certain infringements of antitrust law also may be prosecuted by the criminal courts as bid rigging actions in public procurement proceedings, which is prohibited under Sec. 168b or as fraud or serious fraud, which are criminal offences according to Sec. 146 & 147.
There are several important institutions involved in public law enforcement. First, we will talk about the three main players, which are the Federal Competition Agency (FCA), the Federal Antitrust Prosecutor (FAP) and the Cartel Court. 2.1 The FCA The FCA is an independent and autonomous authority which is not subject to instructions, though it is formally part of the Federal Ministry of Science, Research and Economy. It is managed by the Director General for competition, Theodor Thanner (photo). The FCA is an investigating authority. It aims to ensure and maintain competition in Austria with the means at its disposal, such as merger control, detection and prosecution of cartel agreements and abuse of market dominance or general market research and sector inquiries. Its most important tasks are conducting investigations into possible violations of antitrust law and EU competition law, bringing actions before the Cartel Court and reviewing and administering merger cases in Phase 1. The FCA may conduct any investigation necessary to fulfill its statutory purpose. It can access all business documents, request information from companies involved and question parties and witnesses. It should also be noted, that the FCA has no general decision-making powers. However, it has been given the power to enforce information requests itself by issuing binding decisions and imposing administrative fines of up to 75 000€ in case of noncompliance. The FCA also has the power to conduct dawn raids, however, it can search business premises only when authorized by the Cartel Court. In particular, when searching premises, it has the right to seal rooms, whereas the suspect can only object to the search with regard to individually specified documents. It is one of the two so-called official parties. This means, that it has standing in all proceedings before the Cartel Court, even if it is not an applicant. 2.2 The Federal Antitrust Prosecutor The FAP represents the public interest in matters of competition law. Like The FCA, it is an official party and thus has the same rights and duties in this regard, which in particular includes standing in all proceedings before the Cartel Court. The FAP is obliged to cooperate closely with the FCA. In contrast to the FCA, the FAP is not independent as he reports to the Minister of Justice. The current incumbent is Dr. Alfred Mair (photo).
Now we are going to discuss the prohibition of cartels as well as the exemptions laid down in the Cartel Act. Furthermore, we will cover the consequences of such infringements and present to you the Austrian Leniency Program. 3.1 Prohibition of Cartels The Cartel Act defines cartels as any agreements between entrepreneurs, decisions of associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition. Under Section 1, para. 1, cartels under this definition are generally prohibited. The term entrepreneur used in the legal definition of cartels comprises every independent economic entity and therefore includes individuals and corporations participating in the market alike. Para. 2 lists some particularly prohibited practices , including fixing trading conditions, sharing markets or sources of supply or placing other trading partners at a competitive disadvantage by applying dissimilar conditions to equivalent transactions, to name some examples. Pursuant to Para. 4, so-called recommendation cartels shall be treated like cartels and thus prohibited as well. These are recommendations to maintain certain prices, price limits, calculation guidelines, trade margins and discounts which aim at or result in the restriction of competition. However, such a recommendation is allowed if it explicitly states to be non-binding and if there is no economic or social pressure exerted to enforce it. 3.2 Exemptions from the prohibition of cartels Sec. 2 of the Cartel Act contains some exemptions from the ban on cartels. Para. 1 states the general conditions that Cartels must fulfill in order to be exempt. Accordingly, Cartels which contribute to improving the production or distribution of goods or to promoting technical or economic progress, while allowing consumers a fair share of the resulting benefits and which do not: a) impose on the undertakings concerned restrictions which are not indispensable to the attainment of these objectives or b) afford such undertakings the possibility of eliminating competition in respect of a substantial part of the products in question shall be exempt from the general prohibition pursuant to Sec. 1. Para. 2 lists specific cartels that in any case shall be exempt from the general prohibition. First of all, there is an exemption for so-called de minimis cartels. These are either cartels in which undertakings are involved which compete with each other and jointly hold a total share of not more than 10% of the relevant market, or cartels in which
undertakings are involved which do not compete with each other and which hold a total share of not more than 15% each of the relevant market. In both cases, it is necessary for the cartels not to aim at fixing selling prices, restricting production or distribution, or sharing markets. This provision is very similar to the de minimis notice of the European Commission. Additionally, there are specific exemptions for certain sectors, namely the book and press sector and the agricultural sector. Moreover, restrictions of competition among members of cooperatives are exempt to the extent that such restrictions are justified by the objective of the cooperative. The Cartel Act also establishes the possibility for a type of national block exemption regulation. Pursuant to Sec. 3, the Federal Minister of Justice in agreement with another Minister (is empowered to determine by regulation that certain categories of cartels shall be exempt from the ban on cartels.) Since the former notification system has been abolished, it is up to the undertakings concerned to assess: a) whether their behavior may come within the scope of the ban on cartels AND b) whether their behavior fulfills the conditions for an exemption from the prohibition of cartels. 3.3 Consequences of an infringement An infringement of the prohibition of cartels can have legal as well as practical consequences. Let`s have a look at the legal consequences first. An important consequence is that prohibited agreements or decisions are void. Moreover, an infringement may lead to the imposition of fines by the Cartel Court. Under certain circumstances, the behavior may also constitute a criminal offence, such as bid rigging in tendering procedures or fraud. Thus, criminal penalties such as a prison sentence are possible. In addition, an infringement may trigger follow-on damage claims. Some of the practical consequences may be the exclusion from public tendering procedures, damage to the image of the undertakings involved and employees losing their jobs.