Competition Law Compliance For Financial Investors

A glance at the website of the Austrian Federal Competition Authority confirms that private equity investors do not always observe competition law. Sanctions for non-compliance with competition law range from fines to ineffectiveness of the complete transaction. Investors should thus be cautious.

The Cartel Court recently imposed a EUR 200,000 fine against a private equity (PE) company (also) active in the motor vehicle sector. The financial investor had not observed obligations in the context of the clearance of a transaction by the Austrian competition authorities (including reporting duties, security trustee).

At least, this PE had lawfully notified the acquisition of interests to the Austrian competition authorities. In practice however even the obligation to notify is not always observed. A fatal error, since - apart from usually easily manageable fines - the whole transaction may be ineffective under civil law if the notifiable concentration is implemented