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13 September 2021

Merger Control Austria: Modified merger thresholds and new substantive test, as well as intensified FDI screening under the amended Austrian Cartel Act

The Austrian Cartel and Competition Law Amendment Act 2021 (KaWeRÄG 2021) will introduce – in part substantial – amendments to the Austrian merger control regime as of 1 January 2022. The amendment originated in the context of the implementation of the ECN+ Directive. However, the Austrian legislator seized the opportunity to, among other things, refine the Austrian merger control regime by introducing a second domestic turnover threshold and implementing the SIEC test, as well as to strengthen the FDI screening mechanism.

1. Introduction of a second domestic turnover threshold

While the proposed amendment leaves the transaction value test untouched, the KaWeRÄG introduces a second domestic turnover threshold for the primary thresholds. According to the new provision, the turnover of at least two undertakings needs to exceed EUR 1m in Austria to trigger a filing obligation.

This filter is to be seen against the fact that the number of mergers notified to the Austrian Federal Competition Authority (FCA) has been rising steadily throughout the past years, peaking in 2019 at almost 500 notifications, with a significant number of filings concerning target companies generating only trivial domestic turnover of a few thousand euros (or no Austrian turnover at all). The FCA expects that the second turnover threshold will result in a reduction in the number of annual filings by more than 40 %. At the same time, the filing fee for merger control notifications will be raised from EUR 3,500 to EUR 6,000.

2. Implementation of the SIEC test

Furthermore, the KaWeRÄG foresees the implementation of the significant impediment of effective competition (SIEC) test in Austria. The long-awaited alignment with the European standard is an important step in the modernisation of the Austrian merger control regime. By having one benchmark for merger control assessments throughout the EU, legal certainty is achieved and the potential of diverging decisions minimised.

Alas, the amendment grants the pre-existing market dominance test a somewhat special position in the Austrian merger control review, as it places the market dominance test not as a subcategory of the SIEC, but as a test in its own right that is to be applied in parallel to the SIEC. Practice will show whether the amendment, due to this duality, will have any impact on the results of the merger control assessment in Austria.

3. Further strengthening of FDI screening

The amendment further foresees an obligation of the FCA to forward merger notifications to the Federal Minister for Digital and Economic Affairs (BMDEA). This will reinforce FDI screening under the Austrian Investment Control Act (InvKG). Companies are advised to check whether a transaction needs to be notified to the FCA but is also subject to a notification obligation under the ICA.

authors: Christoph Haid, Franz Urlesberger, Volker Weiss and Hanno Wollmann