Austria: Cartels

In Austria the main statute for cartels is the Cartel Act (Kartellgesetz 2005). Sec. 1 (1) to (3) and Sec 2 (1) of the Cartel Act have a wording similar to Art. 101 TFEU. However, in some areas, Austrian law is more specific than EU law.

The Competition Act (Wettbewerbsgesetz) governs the organisation and powers of the Austrian Federal Competition Authority (FCA). In addition, it sets out provisions on the Competition Commission, an advisory body to the FCA. Cartel Act and Competition Act have been amended most recently in 2021.

The Local Supply Act (Nahversorgungsgesetz) stipulates behavioural rules to prevent unfair treatment of trading partners, inter alia, a non-discrimination obligation.

Regarding the specific area of tendering procedures, Sec. 168b of the Austrian Criminal Code (Strafgesetzbuch) provides for up to three years’ imprisonment (“bid rigging”). Further, cartel collusion, in particular bid rigging, could also be prosecuted as serious fraud.

Like in EU competition law, restrictions by object do not require any proof of anticompetitive effects (per se illegal). Accordingly, an effect on the market is not always required for an infringement under Austrian antitrust law.

Austrian law applies to any conduct having an impact on the Austrian domestic market irrespective of whether the infringement was conducted in Austria or abroad (effects doctrine, Sec 24 (2) of the Cartel Act).

The FCA which is part of the Federal Ministry for Digital and Economic Affairs is Austria’s independent investigation authority. Accountable to the Minister of Justice, the Federal Cartel Prosecutor (Bundeskartellanwalt, FCP) represents the public interest in competition law matters. FCA and FCP are referred to as “Official Parties” and, therefore, by law parties to proceedings before the Cartel Court. Further, they are exclusively authorized to file a motion for a fine with the Austrian Cartel Court.

The Austrian Cartel Court is a specialized court with exclusive jurisdiction for all proceedings concerning competition law matters governed by the Cartel Act. The Cartel Court does not decide ex officio. Proceedings can only be initiated by the “Official Parties” and on a request of an undertaking or association of undertakings with legal or economic interest. The Cartel Court´s decisions can be appealed to the Higher Cartel Court (Austrian Supreme Court) as the second and final instance.

The FCA’s investigations may be initiated ex officio, by complaint, by leniency application or by (anonymous) whistle-blowers (online tool available on the FCA homepage for whistle-blowers to submit information anonymously). In many cases the FCA starts investigations with unannounced dawn raids.

The FCA may conduct investigations necessary to establish the relevant facts. It may request (binding) information, inspect and take copies of relevant documents, consult experts and question witnesses and representatives of the undertakings concerned.

If the FCA or the FCP suspects an infringement, the FCA or the FCP, or both, can file a petition to the Cartel Court aiming towards a decision for fines or towards the determination of an infringement or a judicial order to cease an infringement. The FCA is also entitled to conduct settlement talks (plea bargaining) with the undertakings concerned.

Since the Cartel Court is not limited to the evidence brought by the parties, it may conduct further investigations (inquisitorial principle). The Cartel Court may close the proceedings by dismissal of the case or by issuing a judicial order, which can be appealed before the Higher Cartel Court.

There is no specific time frame for cartel investigations, rather the duration of investigations depends inter alia on the cooperativeness of the companies involved and the complexity of the case.

Key investigative powers of the FCA are:

Request for information

FCA may issue binding requests for information from undertakings and associations of undertakings. Since the amendment in 2021, information can also be requested from “other natural or legal persons”. In the event of a violation, fines of up 0.5% – 1% of the last total turnover can be imposed (Section 11a (5) Competition Act), which can be appealed to the Administrative Court.

Inspection of business documents including the right to make copies or other transcripts:

These powers concern data irrespective of their format (e.g., electronic data) or their place of storage, i.e., every data accessible for the undertakings involved. The FCA is also authorized to seal rooms during a dawn raid (Section 12 (4) Competition Act).

Interview witnesses and suspects

The FCA may conduct interviews with witnesses and suspects or consult expert witnesses (Sec 11 (2) Competition Act). Generally, suspects may refuse to testify whenever the answer to certain questions would possibly expose them (or a family member) to the risk of sanctions. Witnesses are obligated to testify; a false statement may be subject to criminal law sanctions.

Dawn raids

The Cartel Court’s permission is needed to authorise the FCA to carry out dawn raids (Section 12 of the Competition Act). The FCA has published a “Guidance on Dawn Raids” (https://www.bwb.gv.at/en/factual_information/standpoints/), which provides an overview of the dawn raid procedure including the (above mentioned) powers of the FCA’s staff as well as the rights and obligations of undertakings concerned and their employees.

There is no explicit attorney-client privilege (comparable to EU law) in Austrian cartel investigations, but it may be derived from several provisions, such as in the Code of Criminal procedure, the Code of Conduct for Lawyers, and the European Convention on Human Rights.

In Austria, written communication between lawyers and their client concerning consultation or defence is protected in criminal procedure (Sec 157 (2) of the Code of Criminal procedure). In addition, lawyers have a right to refuse testifying against their client (Sec 157 (1) of the Code of Criminal procedure). However, this does not apply to in-house counsels.

In 2021, a new paragraph 1 was added to Section 13 of the Competition Act, which requires the FCA to ensure compliance with Fundamental rights and General principles of the EU, when exercising its powers. This implementation will result in the recognition of the attorney-client privilege in Austria which was developed at the EU level.

Whenever the FCA enforces EU competition rules, the attorney-client privilege applies as a general legal principle of EU law in any case.

The legal requirements for the leniency program can be found in Section 11b of the Austrian Competition Act. More detailed provisions are set out in the Leniency Regulation as of November 25, 2021 issued by the Federal Minister for Digital and Economic Affairs. The Leniency Regulation provides specific rules, based on the provisions of Directive (EU) 2019/1, about applications for leniency, markers, summary applications, the form of applications, the leniency applicant’s obligation to cooperate, the reduction of fines and the notice of acceptance. In addition, the FCA’s paper “Reductions of Fines under the Leniency Programme” provides details about the technical handling and the reduction of fines (https://www.bwb.gv.at/en/news/news-2022/detail/afca-publishes-paper-on-reductions-of-fines-under-the-leniency-programme) and, although, not legally binding, the “Leniency Handbook” offers further guidance on leniency applications (https://www.bwb.gv.at/en/cartels_and_abuse_control/leniency). The Leniency Handbook is currently being revised in light of the new Leniency Regulation and will be published on the AFCA’s website as “Guidance on the Leniency Programme” in the course of 2022.

The FCA is entitled, but not legally obliged, to fully refrain from imposing fines on the first leniency applicant. Full immunity can be granted to undertakings which (1) are first to provide sufficient information and evidence enabling the FCA to apply for a search warrant, or, if the FCA already has sufficient information to do so, if the additional information and evidence will enable the FCA to file a motion with the Cartel Court, (2) have ceased participating in the infringement (unless continuation is necessary for the investigation), (3) cooperate fully and effectively with the FCA (including the disclosure of all relevant documents and other evidence, keep the investigation confidential from the other participants), and (4) have not forced other undertakings or associations of undertakings to participate (Section 11b(1) of the Competition Act).

The application for leniency must be submitted to the FCA containing the information listed in Section 2(2) of the Leniency Regulation (i.e., name and address of the applying undertaking and other participants, description of the infringement, name, function, and address of all physical persons allegedly involved, evidence with clarifications, information on leniency applications to other competition authorities).

Full leniency is only granted to the first leniency applicant (see above). However, subsequent applicants may benefit from a reduced fine if they submit information that represents “significant added value”. The level of a possible reduction in fines depends to a large extent on time and chronology of the submission of the complete leniency application.

For subsequent leniency applicants the FCA can grant a reduction from 30 % to 50% for the second undertaking providing information with significant added value, from 20 % to 30 % for the third and for any subsequent applicant up to 20 %. The FCA will take into account the time of submission as well as the added value of the information submitted compared to the already known information in determining the amount of reduction within the above-mentioned ranges.

Yes, markers are now available in Austria. Section 3 of the Leniency Regulation provides that companies applying for leniency may secure a place in the queue of submissions by first providing certain essential information (Sec. 3(2) Leniency Regulation) and subsequently completing it within a deadline set by the FCA (usually a maximum of eight weeks). This allows the undertaking to approach the FCA at an earlier stage and complete internal investigations subsequently to meet the thresholds of proof set out in Sec. 11b (1) of the Competition Act (see question 3.1. above). If the information necessary is provided within the indicated timeframe, the leniency application will be considered as submitted on the date of the marker.

In “network cases”, i.e. cases where the European Commission is well placed to deal with the case and the applicant intends to submit or has already submitted a leniency application to the European Commission, the FCA may issue a “Summary Application Marker”. The Summary Application Marker confirms that the applicant will be granted a certain time period to complete its application should the FCA become active in this case in the future.

The applicant must cooperate with the BWB seriously, genuinely, fully, promptly and on a continuous basis during the entire duration of the proceedings. Section 6 of the Leniency Regulation further specifies the required conducts: i.e., applicants are obliged to maintain confidentiality about their leniency application vis-à-vis other undertakings involved and third parties until the FCA releases them from this obligation; undertakings must also, if necessary, attempt to obtain and submit further information from (including former) employees, directors, and members of the supervisory and management board.

This obligation ends with the closing of the investigation, i.e. with the start of the proceedings before the Cartel Court.

Certain types of cartels are also subject to criminal sanctions (see question 6.1).

The FCA is not authorized to grant immunity to individuals or (according to the Act on Responsibility of Legal Entities for Criminal Acts) undertakings from criminal prosecution.

However, individuals, who already cooperated in uncovering a cartel may benefit from Section 209b of the Code of Criminal Procedure. Pursuant to this provision the FCP may inform the public prosecutor about the cooperation, whereupon the public prosecutor may discontinue to prosecute employees if a criminal prosecution against the individual would be disproportionate concerning the weight of the undertaking’s contribution to the investigation and the active participation of the individual employees therein.

Individuals as well as undertakings (under conditions of the Act on Responsibility of Legal Entities for Criminal Acts) may also profit from Section 209a of the Code of Criminal Procedure if they approach the criminal prosecutor or the police voluntarily and disclose substantial information about their cartel behaviour.

No, there is no “amnesty plus” policy in Austria. However, for cartel damages that occurred after December 26, 2016, an undertaking that has been granted full immunity shall be liable only to its direct and indirect customers or suppliers, unless the other injured parties cannot obtain full damages from the other liable parties (Section 37e (3) of the Cartel Act).

The FCA offers settlement procedures and has published its approach in its paper “Position on Settlements” (https://www.bwb.gv.at/en/factual_information/standpoints/). Settlements can result in a fine reduction of up to 20%.

A settlement requires the undertaking to introduce a request for settlement in which the undertaking acknowledges the facts it is accused of and accepts the legal assessment made by the FCA as well as the maximum amount of the fine suggested. The FCA will subsequently submit a request to the Cartel Court to impose a fine based on the settlement submission and the available evidence. According to its “Position on Settlements”, the FCA cooperates closely with the FCP concerning settlements (as in all other cases).

Settlements do not by themselves terminate the proceedings, but the Cartel Court will rule based on the FCA’s application. The Cartel Court can only impose lower fines than the amount requested by the official parties but not higher ones (Sec 36 (2) Cartel Act).

There are no specific deadlines for the initiation of settlement proceedings. However, for practical reasons the FCA might be more willing to enter into a settlement before it has initiated a proceeding with the Cartel Court.

Pros:

Settlements can result in a fine reduction of up to 20% and additional cost savings, as settlement submissions can considerably reduce the duration and complexity of court proceedings.

Non-disclosure and confidentiality represent further reasons for concluding settlements. In principle, less information about the infringement has to be disclosed by the undertakings concerned compared to ordinary cartel proceedings. In general, settlement court decisions are more concise and shorter than decisions which are not based on a settlement.

Cons:

According to Section 37 (1) Cartel Act, the Cartel Court must publish its decisions (including those based on settlements) online in a specific public database (“Ediktsdatei”). This may trigger reputational disadvantages or the attention of potential follow-on damages claimants.

The FCA cooperates closely with national authorities, the European Commission (EC) and competition authorities in other jurisdictions (Section 10 of the Competition Act). Cooperation also exists with the criminal police and public security bodies, which can assist during dawn raids and exchange data obtained in criminal proceedings according to administrative assistance rules.

The FCA is part of the European Competition Network (ECN). Within the ECN framework, there is ongoing and close cooperation, combined with regular exchange of experience and information as well as the development of best practices in the context of Regulation 1/2003.

With regard to inter-agency cooperation, provisions of the ECN+ Directive were implemented into Austrian law. These provisions concern for example, requirements for the transmission of documents and decisions to authorities of other Member States, the imposition of fines and periodic penalty payments at the request of foreign competition authorities and corresponding procedural rules as well as Notification obligations to the EC.

It is, however, important to note that information obtained from other competition authorities or the EC in connection with a leniency application must not be used for a fine application. Such application must be based on information from sources in accordance with Section 11b (5) of the Competition Act.

Furthermore, the FCA cooperates with other competition authorities on the basis of memoranda of understanding (e.g., European Competition Authorities – ECA, Euro-Mediterranean Competition Forum – EMCF, International Competition Network – ICN etc.).

Administrative Sanctions:

The Cartel Court can impose fines of up to a maximum of 10 per cent of the undertaking’s, or the association of undertakings’, group´s turnover of the last business year (Section 29 of the Cartel Act). Fines of up to 1% of the annual turnover can be imposed in case of wrong or misleading information regarding a merger registration or a wrong or misleading answer to a request for information. If requested by an eligible applicant (specific standing is necessary) declaratory judgements, seize and desist orders as well as interim injunctions are further possible outcomes of a Cartel Court proceedings.

Civil Sanctions

Infringements of competition law may trigger civil sanctions, in particular the nullity of contracts and of other implementing measures, as well as claims for damages against individuals and undertakings.

Criminal Sanctions

Individuals participating in certain competition law infringements may be prosecuted under criminal law. Generally, cartel infringements could be prosecuted as fraud (Section 146 of the Austrian Criminal Code) or bid rigging (Section 168b of the Austrian Criminal Code), but there are no general criminal sanctions for cartel law infringements. The sanction for fraud is up to ten years (depending on the severity) and for bid-rigging up to three years of imprisonment.

Undertakings may according to the Act on Responsibility of Legal Entities for Criminal Acts also be held liable for criminal actions of their employees and management.

Public Procurement

An undertaking may be excluded from the participation in public tender procedure in case of suspected cartel activities (Section 78 (1) (4) of the Federal Procurement Act –Bundesvergabegesetz). There is, however, no up-front general exclusion from participating in public tender procedures as this must be assessed by the public authority on a case-by-case basis.

The Cartel Court may impose administrative fines of up to 10 % of the total group turnover achieved in the previous business year (Section 29 of the Cartel Act). The calculation of the fine particularly takes into account the gravity and the duration of the law violation, the (possible) achieved enrichment of the offending party, the fault, and the economic efficiency. (Section 30 of the Cartel Act). Apart from the Leniency Handbook and the Guidelines on “Reduction of Fines under the Leniency Programme” (mentioned above), there are no specific guidelines on fine setting in Austria. According to case law, the EC Guidelines on the method of setting fines may be applied mutatis mutandis in cases the relevant legal provisions are in line with the factors set out in Section 30 of the Cartel Act (RS0122747).

The number of fines actually imposed also depends on whether a settlement is concluded (settlement discount), a leniency application is submitted or whether a case is “fought through”, in which case the fines might be significantly higher. An example for the latter is the Spar decision of Cartel Supreme Court, in which the fine was increased to EUR 30 million further to an appeal.

Yes, according to Section 29 (3) of the Cartel Act, a penalty may also be imposed on parent companies belonging to the same economic unit as an undertaking involved in the infringement.

Yes, the Austrian legal system provides for a private damages regime for harm caused by infringements of the cartel rules.

Private damages claims may be brought before ordinary civil or commercial courts based on Sections 37c-37m of the Cartel Act and general tort law (section 1293 et seq. of the Austrian Civil Code). Special civil provisions exist, inter alia on limitation periods, passing-on of damage, interest, discovery, and binding effects of decisions by competition authorities in follow-on actions. Moreover, the Cartel Act clarifies that the Civil Courts are bound to the Cartel Court’s, the European Commission’s, or the FCA’s final decision that an undertaking culpably and illegally infringed the provisions specified in the respective decision.

Furthermore, damages claims may be based on the Section 1 of the Unfair Competition Act.

Austrian procedural rules do not explicitly provide for class actions or representative claims. However, there is the possibility of assigning collective or joining individual claims for damages in one court procedure, provided they result from the same facts or are based on the same legal basis.

Claimants may recover the direct loss (damnum emergens), loss of profit and interest. Pursuant to Section 37d (1) of the Cartel Act, the direct loss and loss of profit are to be compensated irrespective of the degree of fault. As a rule of law, no overcompensation of damages and thus no punitive damages exist in Austria.

In principle, the burden of proof lies with the claimant. The claimant must prove the cause and extent of damages. Section 37c (2) of the Cartel Act establishes the statutory presumption that a cartel between competitors resulted in damages. This presumption can be rebutted by the defendant. However, this provision is only applicable to damages that occurred after 26 December 2016.

The calculation method for cartel damages consists of a comparison of the claimant´s actual financial situation and the hypothetical situation under conditions without the infringement (contrafactual). In addition, pursuant to Section 273 of the Code of Civil Procedure the Court can under certain circumstances, e.g., if the assessment of damages faces disproportionate difficulties, estimate the amount of damages.

Cartel Court´s decisions may be appealed to the Supreme Court acting as the Higher Cartel Court (as second and last instance) because of incorrect legal assessment, and only to a limited extent, e.g., serious doubts, regarding the correctness of fact assessment (Section 49 of the Cartel Act).

The time limit for an appeal against Cartel Court´s decisions is four weeks. The time limit for appeals against temporary injunctions and temporary decisions, decisions considering the publication (Section 37 (2) of the Cartel Act) or interim relief is fourteen days. The appeal procedure is bilateral which means the other parties may submit a response to the appeal within the same time limit (i.e., four weeks or fourteen days).

On 14 July 2021, the FCA applied for the imposition of a EUR 45.37 million fine as part of its investigations into the Austrian construction industry. The application concerned two companies from the STRABAG Group. On 21 October 2021, the Cartel Court imposed the fine as requested. STRABAG was found to have infringed Sec. 1 (1) of the Cartel Act and Article 101 (1) TFEU on the grounds of a single and continuous infringement in the form of illegal price fixing, market sharing and information exchange with competitors with regard to public and private tenders in the sector of building construction and civil engineering in Austria during the period from July 2002 to October 2017. STRABAG applied for leniency and subsequently cooperated fully and on a continuous basis, also acknowledging its infringement.

In November 2021, the FCA launched a sector inquiry into the electric mobility market. The sector inquiry will be based on interviews with market participants, on studies, relevant publications, and in-depth discussions with stakeholders such as companies, interest groups, institutions, and authorities. Specifically, the FCA intends to examine the public charging infrastructure for electric vehicles in Austria and assess it from the perspective of competition.

In 2019 and 2020, the FCA conducted investigations into suspected vertical price fixing against a manufacturer of school bags and also against distributors. The collusive practices took place between February 2016 and March 2019 and involved agreements with manufacturers of school bags and school backpacks to meet certain sales prices. The FCA became aware of the alleged antitrust violations following complaints from consumers and had subsequently launched investigations. After the Cartel Court already imposed a fine on a manufacturer in July 2021, the FCA additionally applied for the imposition of a fine on a retailer in January 2022.

In May 2021, the FCA has published its third interim report, on “The Supply of Medicines from a Competition Perspective” The report examines medicines supply in Austria, with significant challenges having existed in this part of the market for some years now. The COVID pandemic has further highlighted how important the secure supply of medicines is in Austria. The inquiry was conducted between March 2020 and December 2020.

The Cartel and Competition Law Amendment Act 2021 implemented EU law requirements from Directive (EU) 2019/1 and adapted the competition law framework to current developments. In particular, the amendments address the digital platform economy and climate change. Most noteworthy, a so-called sustainability defence was included into the Cartel Act. The new wording of Section 2 (1) Cartel Act extends the legal exemptions from the ban on cartels to situations where the benefits contribute significantly to an environmentally sustainable or climate-neutral economy. This is intended to facilitate cooperation that appear ecologically desirable or sensible for overcoming the climate crisis.

The Directive 2019/1937 (Whistle-blower Directive) should have been implemented by the Member States by December 17, 2021. This Directive stipulates rules on the mandatory introduction of whistle-blower systems for large undertakings and public institutions. Core element of the directive is the protection of whistle-blowers to ensure better enforcement of EU law through the definition of common minimum standards. Austria has not yet transposed the Directive into national law.