Amazon has offered to change its terms and conditions following a series of Federal Competition Authority (FCA) investigations regarding business practices on the 'Amazon.de' marketplace. The FCA conducted an extensive market survey in which approximately 400 of the top-selling Austrian marketplace traders on 'Amazon.de' were interviewed in writing and via telephone. The survey results showed that Amazon had market power for a representative selection of larger Austrian marketplace traders.
A recent Cartel Court decision demonstrates how a long-term relationship between Semperit and a group of Thai companies turned into an equally lengthy disagreement, which came to a decisive turning point in the courts. The final blow landed with a decision by the Federal Cartel Authority, which imposed a fine of €1.6 million on Semperit for violating the Austrian Cartel Act and Article 101 of the Treaty on the Functioning of the European Union.
The Federal Cartel Authority (FCA) recently published for consultation draft guidelines on the good conduct of entrepreneurs. Generally, neither the practices nor the laws as described by the FCA are new. The major issue is fear: smaller and less aggressive enterprises are afraid to lose business if they stand up to their dominant contractual partners in cases where the loss of a contract could lead to their financial collapse.
In 2017 an additional merger threshold was implemented to catch cases that fall below existing turnover thresholds but where the consideration for the transaction exceeds a specified amount and the target is active in the relevant country to a significant extent. While the first cases and legal discussions have shown that there is considerable uncertainty regarding the application of this legislation, new draft guidelines have been published on the application of the new, quite difficult piece of legislation.
To date, the law contains no definition of 'implementation' in relation to mergers. 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.
Following some busy years conducting dawn raids in various industries, the Federal Cartel Authority (FCA) recently published guidelines regarding such searches. Although the guidelines contain no big surprises, as they largely reflect the law and the FCA's earlier practice, there are some interesting points – particularly as some of the Austrian legal regime deviates from European law and practice.
At present, the Austrian merger control regime is based on a system of turnover thresholds. Following German legislation and anticipating possible new legislation by the European Union, the new Cartel Act introduces a consideration threshold for which, at least in Europe, there is no practical experience. Due to vague criteria in the law, it is expected that more transactions than envisioned by the legislature will be caught by the new regime or at least notified by careful parties and lawyers.
Although implementation of the EU Cartel Damages Directive in Austria was somewhat delayed, the Council of Ministers recently approved the bill to amend the Cartel Act and the Competition Act. The law will significantly amend Austrian cartel law, primarily facilitating private enforcement of cartel damages for consumers and enterprises alike. While Austrian law has included some of these elements since 2013, the implementation of the directive goes far beyond those implemented.
The Supreme Court recently considered whether a special concentration had to be assessed in accordance with the EU Merger Regulation or national cartel law. The Supreme Court ultimately submitted this question to the European Court of Justice for a preliminary ruling. While an answer to this question is necessary, the interest in quick merger proceedings must also be considered.
After the Supreme Court imposed a record €30 million fine on grocery chain SPAR Österreichische Warenhandels-AG and its subsidiaries, a draft to amend the Cartel Act 2005 was circulated. In addition to implementing EU Directive 2014/104/EC, the draft amends existing limitation periods, reiterates the joint and several liability of cartel members and further promotes Austria's leniency programme regarding the fine procedure.
Triggered by a complaint from radio station Kronehit, the Federal Competition Authority (FCA) looked into the media cooperation practices between radio broadcasters and concert and festival organisers. The investigation led to a set of FCA guidelines for media cooperation which will address the prevalent inequality between Austrian public broadcaster radio stations and private radio stations as media partners of concert and festival organisers.
The Cartel Act contains antitrust regulations on cartels, merger control and abuses of dominant market positions. It sets out the rules on what constitutes a cartel, the definition of vertical restrictions, joint dominance and mergers and establishes the conditions for when pre-merger control applies.
Following a dawn raid of the business premises of one of Austria's biggest food retailers, the company challenged the Cartel Court's order to conduct the raid and the Federal Cartel Authority's actions during the raid – in particular, due to the use of espionage software. The Supreme Administrative Court dismissed the applicant's appeal and ruled that the use of forensic software to access electronic data during a raid is unquestionably legal.
The Higher Regional Court, acting as the Cartel Court, recently imposed a fine of approximately €17.5 million on 30 forwarding agencies for infringing European competition law by agreeing on tariffs regarding collective freight transport between 2002 and 2007. The Cartel Court's decision preceded significant discussions among competition law specialists and several other Austrian and EU decisions clarifying important questions of law.
Following criticisms of an apparent lack of information and transparency in Federal Competition Authority (FCA) settlement proceedings, the FCA has issued guidelines on its settlement policy, elaborating on its legal position and practice. While it is clear that settlements provide some legal certainty for undertakings, they must be treated with caution, as settlement decisions include a binding sentence of guilt.
In the course of recent investigations the Federal Competition Authority (FCA) has found prohibited agreements between suppliers and their respective distributors, primarily in the field of consumer prices. In the wake of these findings, the FCA published its final statement on vertical restrictions – particularly resale price maintenance. The statement serves as a guide to identifying and avoiding infringements of the cartel ban.
The Supreme Court recently ruled on the scope of the Cartel Court's obligation to publish its fine decisions and highlighted the importance of transparency as the main goal of Section 37 of the Cartel Act. In its decision, the court made clear that the purpose of Section 37 is to present market participants with clear information about cases so that they may evaluate damages claims.
The Supreme Court (acting as the Higher Cartel Court) recently decided once again on the investigatory powers of the Federal Cartel Authority (FCA) with regard to house searches. The case focused on suspicions by the FCA of participation in anti-competitive agreements and/or concerted practices with regard to vertical price agreements between the applicants and retailers of daily consumer goods, among other things.
The Supreme Court (acting as the Higher Cartel Court) recently issued its decision in a case concerning a tender procedure organised by a large Austrian municipality that was subject to heated debate among practitioners. The court ruled that the consortia (if consortia at all) were so-called 'de minimis cartels' within the meaning of the Cartel Act, and therefore were in any case exempt from the cartel ban.
The Supreme Court recently considered a case in which an acquiring entity failed to notify the Austrian Federal Cartel Authority (FCA) of a share increase in relation to a Hungarian entity. The case came to light following a subsequent share increase, of which it duly notified the FCA. The acquiring entity's actions were based on legal advice that later turned out to be erroneous.
The Supreme Court referred a question to the European Court of Justice (ECJ) regarding whether an error on the legality of actions based on advice from a specialist adviser or a decision by a national competition authority would be a viable defence against fines imposed on an undertaking for infringing Article 101 of the Treaty on the Functioning of the European Union. The ECJ has now answered this question in the negative.
The Federal Cartel Authority (FCA) has published draft guidelines on vertical (pricing) restraints. The FCA described certain practices and commented on their respective illegality or legality with a view to preventing future infringements. While it remains to be seen how these guidelines will affect authority and industry practice, the FCA and national competition authorities are increasingly monitoring vertical relationships.
The long-discussed changes to the Austrian competition laws have finally become effective. These concern, among other things, the leniency programme implemented in Austria in 2006. The amended Competition Act now makes it possible for undertakings to qualify for full immunity from fines on a leniency request even after the Federal Competition Authority has gained knowledge of the reported infringement.
The Higher Cartel Court recently ruled on the obligation of dominant undertakings to contract with other market participants, including competitors, under specific circumstances. It held that they must be very careful to avoid discriminating against other undertakings by refusing to contract with them. The decision provides interesting clarifications on the applicability of the 'essential facilities' doctrine in such cases.
The Cartel Court recently rejected a Federal Cartel Authority action to fine approximately 50 Austrian plumbers for alleged collusion in a tender procedure initiated by the City of Vienna housing agency in 2007. The court ruled that all activities of the defendants - regardless of whether they had actually infringed cartel law - were exempt from the cartel ban under the Austrian de minimis regime.
Two recent Supreme Court decisions have triggered significant debate in the competition field, both in Austria and at a European level. Both cases questioned whether a justified error in law could exclude the imposition of a fine for alleged anti-competitive behaviour. One case has been referred to the European Court of Justice, as the Supreme Court considered that EU law did not provide a clear answer.
After a lengthy internal discussion process, the Ministry of Justice and the Ministry for Economic Affairs recently presented a draft bill for changes to the competition law in Austria. While fundamental changes to this draft bill are unlikely to occur, it remains to be seen how these amendments - if enacted - will affect administration, jurisdiction and advocacy for competition law in Austria.
For some time, the official guidelines of the tax authorities on income tax have included the way in which competition fines should be treated under income tax law. With the recent entry into force of the Act Changing Tax Law 2011, the deduction of competition fines as a whole is now explicitly excluded. Under the new law, undertakings hit by fines for infringing competition law may feel a double impact.
The Supreme Court has clarified that even after an entity has ceased to do business, it may remain an 'undertaking' for the purposes of the Cartel Act, since it may transfer a market share of considerable value. The decision leaves open the possibility that an acquisition of assets from an insolvent company may constitute a merger under Austrian law.
Acting on a respective application from the Federal Cartel Authority (FCA), the Higher Regional Court of Vienna, acting as cartel court, recently fined four print chemical wholesalers €1.5 million (not final). The FCA's investigations were initiated by two whistleblowers that filed consecutive applications with the FCA to be granted immunity from the fine.
In 2009 the Supreme Court authorised the search of an Austrian company's premises to investigate possible cartel law infringements relating to the German fire engine market. Recently, in dealing with the same alleged infringement, the court issued a decision on the preconditions for searching the offices of attorneys who represent possible cartel members
The Supreme Court, acting as Higher Cartel Court, recently rendered its first decision on the preconditions for the Federal Cartel Authority to conduct house searches in Austria on behalf of other EU antitrust authorities. The decision allows for the execution of house searches in Austria even in cases that do not affect the Austrian market.
In 2008 and 2009 the Supreme Court, acting as Higher Cartel Court, rendered rare decisions on the basis of the Local Supply Act. These controversial decisions may have significant consequences for the qualification of undertakings' discriminatory practices.
The Supreme Court, acting as Higher Cartel Court, recently confirmed a second Cartel Court fine decision based on the 2006 leniency programme. According to the Supreme Court's decision, in future, before filing its applications with the Cartel Court, the Federal Cartel Authority will have to examine in detail whether the preconditions for accepting an undertaking under the leniency programme have been met.
The Supreme Court, acting as the Higher Cartel Court, recently rendered a new decision on a previous infringement of antitrust law that had ongoing effects. The case involved the allegedly abusive promotion of contracts no longer available on the market by the defendant.
The Supreme Court has upheld two Higher Regional Court of Vienna (as Cartel Court) decisions and ruled on the preconditions for receiving a declaratory decision on past infringements of antitrust law. Damages claims following a fine decision in cartel matters must be filed in the civil courts under the rules of civil procedure, without additional assistance from the cartel authorities and the Cartel Court.
The Supreme Court recently ruled on the abuse of a dominant market position through promotional giveaways that conformed to the provisions of the Act against Unfair Competition. The court had to judge the legitimacy of a newspaper that held a dominant position offering promotional giveaways to potential subscribers.
The Higher Cartel Court recently redoubled a fine imposed by the Cartel Court for infringement of the obligation to provide information upon a formal information request by the Federal Cartel Authority. The decision emphasizes the importance of fulfilment of this obligation.
In a recent merger control procedure the Cartel Court had to consider whether an additional acquisition of shares by a 50% shareholder may lead to a change of control in the target company and thus result in a notifiable merger. The court stated that in connection with obtaining control in a company, there is a distinction between joint and sole exercise of control.
Court proceedings were recently initiated by a party to a contract that contained a clause which infringed antitrust law. The Higher Regional Court of Vienna, as Cartel Court, had to decide whether it had jurisdiction to declare an infringement of antitrust law if the infringement had already been terminated (ie, the illegal clause was declared inapplicable or had been removed from the contract).
The Supreme Court (as the Higher Cartel Court) recently issued a record fine of €5 million for an alleged cartel and abuse of a dominant position, thereby bringing into question the future fining policy of the Austrian cartel authorities. This update focuses on the main conclusions that can be drawn from this decision.
The delisting of Leberkäse by a large grocery retailer in 2004 led to an investigation by the Federal Competition Authority into the whole grocery sector. However, a number of retailers and suppliers refused to answer the authority's information requests on the grounds that they would have to reveal business secrets.
The Cartel Court has fined Europay Austria Zahlungsverkehrssysteme GmbH, which operates Maestro, the most widely used debit card system in Austria, a record €5 million for an alleged illegal cartel and abuse of a dominant market position. The fine is the highest set by the Cartel Court since the introduction of the fine system in 2002.
The Supreme Court has confirmed a Cartel Court decision dismissing a case brought by an overseas customer against a producer of pharmaceutical products. The customer alleged that the producer had abused its dominant position by failing to conclude a supply contract. Both courts concluded that, based on the customer's behaviour during the negotiations, the producer had legally refused to conclude a contract.
The Supreme Court recently released a decision, contradicting a 2005 ruling, that an Austrian undertaking need not notify a merger because the target was neither currently nor potentially active in the Austrian market, and the relevant markets for the transaction (banking) were national in scope.
The new Cartel Act came into force on January 1 2006. As the legislature was eager to bring Austrian cartel legislation as far as possible into line with EU cartel legislation, the act implemented the long-established EU system of not only punishing members of a cartel with high fines, but also rewarding those members of a cartel who 'blow the whistle' before the authorities know about the cartel.
The Cartel Act has traditionally been seen as a 'paper tiger' that poses little threat. However, following recent amendments to the act, this view has changed significantly. In a recent decision, the act was used by the Cartel Court to fine a company €1.5 million for illegally implementing a merger.
The new Cartel Act 2005 will take effect on January 1 2006 and will bring domestic cartel law into line with European law. Amendments include the abolition of various categories of cartels as well as the special regime for vertical distribution agreements.
The Cartel Act has traditionally been seen as a 'paper tiger' that poses little threat. However, this view has changed significantly following amendments to the act. Recently, the former state-owned telecommunications provider was heavily fined for a tariff model that had previously been explicitly permitted.
The draft Cartel Act 2005 amends existing anti-cartel provisions to reflect EU cartel legislation, for instance eliminating the special rules on vertical agreements from the current legislation. In addition, the draft act broadens certain definitions relating to mergers. It is expected to come into force on January 1 2006.
Under Section 124 of the Cartel Law, a decision by a court of general jurisdiction may be requested even where the jurisdiction of an arbitration court has been agreed in a cartel agreement. The Supreme Court recently ruled that this reasoning does not apply to vertical restrictions on distribution.
The Supreme Court has ruled that the no-fault liability for damages resulting from a preliminary injunction does not apply to cartel matters. Consequently, parties that seek a preliminary injunction before the Cartel Court need not fear any risk of no-fault liability for the resulting damages.
The Austrian Supreme Court recently prohibited a reimbursement system and emphasized that the defendant need not hold a dominant position in order for it to do so. The case was partly referred back to the court of first instance with regard to claims for damages.
The Federal Competition Authority (FCA) recently published guidelines for the notification of mergers. Its model form should be followed as closely as possible. Otherwise, the FCA may send it back to the parties in question, requesting additional information with the friendly hint that notification will be regarded as incomplete if no further information is provided.
In a significant ruling, the Supreme Court has held that abuse of a dominant market position occurs if a set-off clause is imposed by a dominant undertaking on its contractual partner to the extent that claims in connection with the contractual obligations of the dominant undertaking are excluded. No active pressure by the dominant undertaking is required.
The Austrian Supreme Court recently ruled that a film distributor did not hold a dominant market position despite being a monopolist with regard to the film Chocolat. However, the decision may well be contrary to a prior ruling. A cohesive definition of the relevant market regarding film distribution is thus required.
The Federal Competition Authority recently became operational. Its director general's main aim is to take firmer action against violations of antitrust law in terms of more rigorous punishment for illegal arrangements and abuse of market power in Austria.
Amendments to the Cartel Act and the new Act on the Establishment of a Federal Competition Authority were published on April 16 2002, to take effect on July 1 2002. The Cartel Court's controversial decision in the Formil Case appears to have expedited the reforms.
Outright prohibitions of proposed mergers are rare in Austria. The Supreme Court has revoked a recent decision of the Cartel Court to this effect, and requested it to undertake additional factual research and issue a new decision.
The Austrian Cartel Court must be notified of a merger if three separate turnover thresholds are met. Recently, the court has begun to establish a new rule whereby a merger need not be notified if it has no appreciable effect in Austria.
The Austrian Supreme Court has confirmed that a most favoured treatment clause, which guarantees equal treatment of the parties to a contract as defined in the Neighbourhood Supply Act, cannot be considered an abuse of a dominant market position.
A decision of the cartel court of first instance approved the acquisition of a competitor by a publisher that already dominated the weekly news magazine market. The subsequent media outcry has led to the reform of the cartel law.
The Supreme Court has ruled that if a website merely advertises a product or service and no contract can be concluded through it, then the service provider need not make contractual terms and conditions available in accordance with Section 11 of the E-commerce Act.
In a recent decision the Supreme Court ruled that a judgment in the plaintiff's favour concerning unfair competition and trademark infringement could be published on the defendant's website. The court stipulated that online reproductions of judgments must appear in a pop-up frame and remain online for 30 days.
The current provisions on spamming in the Austrian Telecommunications Act are to be amended by a new law, the Act on Communications. Since the draft act does not implement all provisions of the directive, it is likely to require modification before being enacted.
Austria's Federal Armed Forces, or Bundesheer, have succeeded in a dispute involving the domain name 'bundesheer.at'. Although the defendant provided a link to the government site 'bundesheer.gv.at', the court felt the defendant exploited the complainants' name.
Austria's domain name registrar has drafted a dispute resolution policy based on ICANN's Uniform Domain Name Dispute Resolution Policy. The policy will cover violations of trademarks, competition law and the general right to bear a name.
The new E-Commerce Act implements the basic principles of the EU directive for executing contracts electronically. However, at the time that the act came into force, only 6% of Austrian online vendors were fulfilling its requirements.
The Supreme Court has ruled that a distinction between online and offline transactions should be avoided. The standards for violations of trademarks or competition law apply to Internet and offline business alike. No special rules to govern online transactions are required.
The Supreme Court has ruled that facts made available on a homepage and within various sub-categories of a homepage are 'disseminated' in the sense required for the tort of defamation.
The Supreme Court has granted an application for a preliminary injunction where a defendant registered the official name of the Public Audit Office under the .com, .net and .org domains, offering inside information.
The Supreme Court has ruled that a person who links his web site to a site that is operated by a third party accepts the content of the other web site as part of his own. Therefore he can be held liable for violations of competition law occurring on the other web site.
In two recent cases the plaintiffs combined their complaints with applications for preliminary injunctions. In one case the Federal Republic of Austria argued that registration of the domain 'bundesheer.at' violated the right of the armed forces to bear the name bundesheer.