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06 April 2017
newsletter
austria

Significant amendments to Austrian Competition Law – Part I (Overview)

BACKGROUND

On 6 April 2017, the Austrian Parliament adopted significant amendments to Austrian competition law, as set forth in the Austrian Cartel Act ("KartG") and the Act on the Austrian Federal Competition Authority ("WettbG"). The amendments concern three main areas: (i) implementation of the EU Damages Directive; (ii) introduction of an additional transaction value test in merger control; and (iii) certain adjustments to strengthen public enforcement of antitrust infringements.

(1) IMPLEMENTATION OF THE DAMAGES DIRECTIVE

Many of the amendments serve to implement the EU Damages Directive (2014/104/EU), which aims to facilitate follow-on damage claims due to antitrust infringements. While Austrian law already enshrined many principles of the Damages Directive prior to its entry into force (eg the right to full compensation or joint liability of infringers), the amendments introduce inter alia the passing-on defence for cartelists (and the locus standi for indirect purchasers related to such a defence), generous rules on disclosure of evidence, and changes to the limitation period. As the deadline for transposing the Directive already expired on 27 December 2016, the new rules apply retroactively as of this date.

(2) NEW TRANSACTION VALUE TEST FOR MERGER CONTROL

The jurisdictional reach of Austrian merger control will be broadened. While the current jurisdictional test based on turnover will remain unchanged, a new alternative jurisdictional test based on the size of a transaction will be introduced. The new test aims to cover cases with respect to the acquisition of start-ups in the digital economy, where the target has little to no current turnover and is bought primarily because of its potential growth. It sets out four cumulative conditions: (i) the combined turnover of the undertaking must be at least EUR 300 million worldwide and (ii) EUR 15 million domestically; (iii) the "value of consideration" for the transaction must be above EUR 200 million (the new transaction value element); and (iv) the target must be to a significant degree active in Austria. The new rules will become effective on 1 November 2017.

In addition, the legislator seized the opportunity to increase the filing fees from the current EUR 1,500 to EUR 3,500.

(3) AMENDMENTS TO PUBLIC ENFORCEMENT RULES

Limitation period. The statute of limitations for the public enforcement of antitrust infringements will be brought in line with EU law. As has been the case to date, the Competition Authorities (FCA, Federal Cartel Attorney) will have five years (starting with the date on which the infringement ended) to file a motion before the Cartel Court to fine an offender. However, the amendments provide for the limitation period to be suspended during the FCA's investigation. The suspension will begin once the investigation has been notified to the defendants (eg in the course of a dawn raid). In order to protect undertakings from extended investigations, the amendments introduce a new absolute ten-year limitation period (also starting with the date on which the infringement ended). Thus, even if the Competition Authority has started investigating within the five-year limitation period, it has to file a motion before the Cartel Court after ten years at the latest.

Access to electronic files. The amendments make clear that the FCA may access electronic files during a dawn raid even if the data are stored outside the business premises being searched (eg on a server in the USA or in the cloud). Since those documents cannot be confiscated, the undertakings' obligation to support the FCA becomes subject to a specific sanction. Upon application by the FCA, the Cartel Court may impose a fine of up to 5 % of the undertaking's average daily turnover in the preceding business year until the defendant has given the authority access to external electronic files from the undertaking's location (eg from an office computer).

Transparency. The rights and obligations of the FCA to report about pending and resolved cases have been extended.

Whistleblower. The FCA was specifically authorised to set up a whistleblower hotline to collect anonymous tips about illegal behaviour. The legislator and the FCA thus hope to reap more benefits from disgruntled employees, for example.

In most cases, the new public enforcement rules will become effective on 1 May 2017.