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AUSTRIA: An Introduction to Competition/European Law

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While Austria has had antitrust legislation since 1951, its regime is generally considered to be 'younger' than most of its western European counterparts. Indeed, the change from the post-war belief that cartels were often justifiable on industrial policy grounds, to a modern competition law system was gradual. Since Austria’s accession to the EU in 1995, competition rules and their enforcement have been modernised, and the application of EU law in general plays an important role in Austria’s legal system.

It may be mentioned that the EU accession has also brought state aid law matters, which can be directly enforced by the European Commission. Additionally, it introduced significant changes in the area of public and utilities procurement procedures. While the EU law impact is arguably strongest in competition law, there is virtually no area in Austrian law which has not been affected, in one way or another, by the EU law and the four freedoms (free movement of goods, capital, services, and people) it advocates and protects.

Focusing on competition law in the narrow sense, since 2002, the Austrian (public) enforcement framework provides for three main players: The independent Federal Competition Authority (Bundeswettbewerbsbehörde, FCA) is Austria’s prosecuting agency. Its main responsibilities are the investigation of restrictions of competition as well as the phase 1 review of mergers. Unlike most European competition authorities, in general, the FCA does not have decision-making power: all decisions on violation of the behavioural antitrust rules and on mergers (in phase 2 proceedings) are made by the Cartel Court (CC), a specialised division of the Vienna Court of Appeals. The FCA has some decision-making power as it can itself enforce information requests (rather than only through proceedings before the CC) by issuing binding decisions and by imposing fines if such decisions are not followed. While the CC can be used for disputes by private parties, the applications for fines as well as applications for phase 2 reviews of mergers may only be submitted by the FCA and the Federal Antitrust Attorney (Bundeskartellanwalt, FAA). The FAA, which reports to the Minister of Justice, is charged with protecting the public interest in competition enforcement.

Given the rather low filing thresholds and the wide definition of what constitutes a merger potentially affecting the Austrian market, a lot of the cases dealt with by the FCA and the FAA are merger control-related. However, as it was the case elsewhere, merger filing numbers took a serious hit in the 2008 economic crisis, and continue to be lower than the pre-crisis levels. However, the FCA has brought several proceedings against cartels based on leniency applications as well as against anti-competitive vertical practices (with horizontal elements such as hub-and-spoke), where it has conducted a great number of dawn raids. The highest fine imposed so far was EUR75.4 million in the Austrian elevators and escalators case.

While Austrian law provides for rather strict presumptions of dominance, the dominance cases have traditionally played a less prominent role in public enforcement practice. This is also in line with the situation at EU level, where merger control and cartel investigation work clearly make up the lion’s share of the European Commission’s work. Dominance issues, however, continue to be pleaded in litigation between private parties before the CC and the Austrian civil courts as well as in arbitration tribunals (including private enforcement and damage claims). There are a number of interfaces between general competition law requirements and the regulatory regimes imposed on such industries as energy and telecoms.

In addition to its case work, the FCA also has the power to conduct general market investigations. The main target of the FCA’s investigations so far have been the regulated industries. In particular, the FCA has examined the Austrian oil and gas market as well as the telecoms sector. Furthermore, the FCA also investigated the Austrian retail market.

In line with the European trend, Austria has recently also seen a rise in private damages claims, following an imposition of fines in a case relating to driving schools and, on a far bigger scale, after the CC’s decision in the elevators and escalators case. A further prominent case related to the investigation into the payment card industry. Most practitioners expect that private damages litigation will continue to grow and the European trucks cartel is expected to further trigger private enforcement also in Austria.

In general, most practitioners expect the demand for competition law advice to continue growing. It is driven by competition law risks as well as the strengthening of general compliance, with clients seeking increasingly sophisticated solutions to difficult and new questions.