Austria: Significant amendments to Austrian Competition Law - Part III (Damages Directive)

For "Part I - Overview" click here

For "Part II - Merger Control" click here

On 6 April 2017 the Austrian Parliament implemented the Damages Directive (2014/104/EU) ("Directive") by adopting an amendment to the Austrian Cartel Act ("KartG"). The rules will become effective retroactively from 27 December 2017, which was the deadline for transposing the Directive into national law.

Competition law traditionally has been enforced by public authorities, ie the European Commission and National Competition Authorities. However, the European Commission has taken a policy decision to also foster private enforcement, in particular through private damages claims of undertakings that have suffered harm from competition law infringements. What started with EU case law (BRT v Sabam in 1974, Courage and Crehan in 2001) has led the European Commission to adopt a Green Paper in 2005 and a White Paper in 2008 on this very topic, which in turn resulted in the adoption of the Damages Directive in 2014, aiming to harmonise national laws on private damages claims caused by competition law infringements.

While Austrian law already enshrined many principles of the Damages Directive prior to its entry into force, such as the right to full compensation or joint liability of infringers, the amendments introduce inter alia the passing-on defence for cartelists (and, as a related issue, supports locus standi for indirect purchasers), generous rules on disclosure of evidence, and changes to the limitation period as set out below.

MAJOR CHANGES

Presumption of harm. According to § 37c (2) KartG, as amended, it is presumed that a cartel causes harm. The amendment thus shifts the burden of proof concerning the negative impact of a horizontal restraint of competition on direct purchasers to the offenders. While in theory this presumption is rebuttable, experience shows that it is extremely difficult to prove a causal link between a restrictive agreement and a certain market development. In the future, uncertainties in this respect will work to the detriment of the cartelists. It is important to note that the presumption only relates to horizontal agreements ("cartels between competitors"), not to vertical agreements, which in Austrian terminology are also referred to as "cartels", and not to the abuse of a dominant market position.

Passing-on defence. One of the main policy issues debated in the build-up to the Directive was whether actions for damages should be primarily in the hands of direct purchasers or whether claims of indirect purchasers should be supported. So far, Austrian law has preferred actions by direct customers, and consequently did not accept the so-called passing-on defence (ie the claim that the direct purchaser did not suffer harm because he was able to pass any cartel-induced price overcharge to his own customers). In this respect, the Directive – and now also the KartG – turn the tables. § 37f (2) KartG, as amended, creates presumptions for passing-on. To the extent that the damage lies with an indirect purchaser, this claimant and not the cartelist's direct customer shall be primarily entitled to compensation. In 2016, the European Commission published a "Study on the Passing-on of Overcharge", which explains the economics behind this concept. The European Commission is also now preparing new guidelines on passing-on.

Disclosure of evidence. The amendments introduce evidence gathering rules which are more generous for the applicant than the general rules under Austrian law on civil procedure. For example, the applicant can also gather information from the defendant or from third parties even if it contains confidential information, although the Court has to ensure that confidentiality is protected (eg redact confidential parts). The amendments also introduce the possibility to request evidence in possession of Competition Authorities (European Commission, National Competition Authorities), except for leniency applications and settlements. This is because the award of the undertaking for cooperating with the Authority (no or lower fines) should not be taken away by the risk of higher private damage claims, otherwise undertakings would have no incentive to cooperate in the first place. We expect that the main benefit of the new rules on "discovery" will be enjoyed by defendants rather than by plaintiffs, mainly as it is difficult to invoke the passing-on defence without access to the plaintiff's account. This will be facilitated by the new evidential rules. On the contrary, we do not expect plaintiffs to benefit much from disclosure. Almost all actions for damages follow public enforcement decisions, ie a finding of an infringement by the competition authorities. In our experience, it is rare for the authority's file or the cartelists' internal documents to contain relevant facts which are not reported in the authority's decision.

Joint and several liability of infringers. The joint liability of infringers is not new to Austrian law and exists as a general rule under tort law. However, the amendment adapts the general rule in the specific context of competition law. For example, it provides for a more favourable treatment of leniency applicants, who should only be jointly liable when damage claims against other infringers have been unsuccessfully invoked. This ensures that leniency applicants are not worse off than other cartelists and takes into account that other cartelists might challenge the infringement decisions so that they become legally binding only after judicial review, whereas in the absence of judicial appeal the infringement decision against the leniency applicant becomes legally binding much earlier.

Limitation period. The general limitation period for injured parties to claim damages will be extended from three to five years, starting on the day the injured party learns about the harm and the infringer. The absolute limitation period for injured parties will be ten years, starting on the day the harm was caused. Although these time periods are now in line with those for the competition authorities (Federal Competition Authority (FCA), Federal Cartel Attorney), the starting point is not. The five-year limitation period for the competition authorities starts with the date on which the infringement ended and is suspended if the FCA starts to investigate. The absolute ten-year limitation period for the competition authorities starts with the date on which the infringement ended, rather than when the harm occurred.

Alternative dispute resolution. The Directive also aims to promote "consensual settlements". The competition authorities can consider compensation payments by the infringer as a mitigating factor when calculating the fine.

EFFECTIVE DATE

The new rules will apply retroactively as of 27 December 2016, which is the day the deadline for transposing the Directive expired. This means that most new rules apply only to harm which occurred after 26 December 2016. However, the rule on the limitation period applies to existing claims provided that the claim has not expired on 26 December 2016 and provided that the new rules are not less favourable for the injured person than the old ones. The rules on the disclosure of evidence are applicable if the motion has been filed before the civil court after 26 December 2016.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

    By clicking Register you state you have read and agree to our Terms and Conditions