1 The Legislative Framework of the Cartel Prohibition
1.1 What is the legal basis and general nature of the cartel prohibition e.g. is it civil and/or criminal?
The legal basis for the Cartel Prohibition in Austria is the Cartel Act (Kartellgesetz 2005). In March 2013, the "Cartel Law Amendment 2012" entered into force amending, inter alia, the Cartel Act and the Competition Act (Wettbewerbsgesetz).
Sec. 1 paras. 1 to 3 of the Cartel Act corresponds to Art. 101 paras. 1 and 2 of the Treaty on the Functioning of the European Union (TFEU). Sec. 2 para. 1 of the Cartel Act corresponds to Art. 101 para. 3 TFEU. Furthermore, since the Cartel Law Amendment 2012 the Cartel Act abandoned the Austrian specific de minimis exception in Sec. 2 para. 2 which now widely corresponds with the "De minimis Notice" of the European Commission. Accordingly, cartel agreements of competing undertakings with an aggregate market share not exceeding 10 per cent of the market share or of noncompeting undertakings not exceeding 15 per cent of the market share on any of the relevant markets affected by the agreement are exempted from the cartel ban, unless the agreement in question aims to fix prices, limit production or sale or share markets. Please note, however, that for example the notion of the cumulative foreclosure effect has not been included into the Cartel Act.
Sec. 3 of the Cartel Act empowers the Minister of Justice to issue ordinances to except certain groups of cartels of the Cartel Prohibition. Those ordinances can refer to the ordinances issued according to Art. 101 para. 3 TFEU. As Austria is an EU Member State, the Council Regulation 1/2003 allows the authorities to enforce the Cartel Prohibition under Art. 101 TFEU.
The Cartel Prohibition under the Cartel Act is addressed to entrepreneurs (companies and individuals); sanctions for infringements are not regarded strictu sensu as criminal law. However, with regard to the specific area of tendering procedures, Sec. 168b of the Austrian Criminal Code (Strafgesetzbuch) still provides for up to three years' imprisonment ("bid-rigging"). Very few convictions on that basis have occurred so far. Further, cartel collusion could be prosecuted also as serious fraud carrying a maximum fine of 10 years' imprisonment.
1.2 What are the specific substantive provisions for the cartel prohibition?
Sec. 1 of the Cartel Act prohibits – with wording very close to Art. 101 TFEU – agreements between entrepreneurs, decisions by associations of undertakings and concerted practices which have as their object or effect the prevention, restriction or distortion of competition (i.e. cartels). Sec. 1 para. 2 of the Cartel Act states typical cases which restrict competition, such as (i) price fixing, (ii) limitation or control of production, markets, technical development or investment, (iii) share markets or sources of supply, (iv) application of dissimilar conditions to equivalent transactions with other trading parties, and (v) the conclusion of contracts subject to acceptance by the other parties of supplementary obligations which have no connection with the subject of such contracts. Sec. 1 para. 3 of the Cartel Act declares agreements or decisions violating the Cartel Prohibition to be void.
Sec. 1 para. 4 of the Cartel Act prohibits so-called "recommendation cartels" (Empfehlungskartelle), which are unilateral practices providing recommendations such as the usage of fixed prices. However, there is an explicit exemption for such recommendations, which are explicitly marked as non-binding and for the implementation of which neither economic nor social pressure is applied.
1.3 Who enforces the cartel prohibition?
The Higher Court of Vienna as Cartel Court (Kartellgericht) and in second instance the Supreme Court as Higher Cartel Court (Kartellobergericht) are the competent courts to decide on violations of the Cartel Act or other antitrust regulations.
The Cartel Court does not decide ex officio. The Federal Competition Authority (FCA), the Federal Cartel Prosecutor (FCP), regulators of certain economic branches, the Chamber of Commerce, the Chamber of Labour, the Presidential Conference of the Austrian Chamber of Agriculture and any other undertaking or association of undertakings with legal or economic interest in a decision can file petitions to the Cartel Court.
The FCA is Austria's independent investigating authority and therefore files most of the petitions. The FCP represents the public interest in competition matters and is accountable to the Minister of Justice. The FCA and the FCP together are referred to as "Official Parties" in the law and in the Cartel Court's proceedings. Only these Official Parties may move to the Court for fines to be imposed or a merger to be prohibited, these and the other bodies may move to petition to stop infringements or to establish the existence of (past) infringements under certain circumstances.
1.4 What are the basic procedural steps between the opening of an investigation and the imposition of sanctions?
The opening of an investigation is usually conducted by the FCA, Austria's investigating authority. The FCA - or any of the other authorised parties - files a petition to the Cartel Court. This petition can aim towards a decision on the determination of an infringement or a judicial order to cease an infringement. The Cartel Court then conducts the proceedings and files a judicial order or dismisses the petition. Against this decision, parties may appeal to the Supreme Court acting as the Higher Cartel Court.
1.5 Are there any sector-specific offences or exemptions?
Sec. 2 para. 2 of the Cartel Act lists sector-specific exemptions from the cartel ban. Exempted from the cartel ban are: 1) agreements with retailers of books, art prints, music, journals and newspapers, fixing the retail price; 2) certain restrictions of competition among members of cooperative societies as well as between cooperative societies and their members; and 3) certain agreements, decisions and attitudes between producers of agricultural products or their interest groups.
1.6 Is cartel conduct outside Austria covered by the prohibition?
The Austrian Courts decide on violations of the Cartel Act with an impact on the Austrian market irrespectively of whether the infringement against the cartel ban was conducted in Austria or abroad.
As a consequence of the Cartel Law Amendment 2012, now the definition of the relevant market is not limited to the Austrian territory, as was the case before. Thus, the relevant market may also be defined as European - or even worldwide. This is of great importance with regard to the abuse of market dominant position as well as in the merger control.
2 Investigative Powers
2.1 Summary of general investigatory powers.
Please Note: * indicates that the investigatory measure requires the authorisation by a court or another body independent of the competition authority.
2.2 Please list specific or unusual features of the investigatory powers referred to in the summary table.
A specific or unusual feature to be mentioned with regard to the investigating powers is that since the Cartel Law Amendment 2012 the right of the parties to object to the access or seizure of documents is massively limited. Such is now possible only if recognised confidentiality obligations and rights to refuse to give evidence according to Sec. 157 para. 1 no. 2 - 5 Criminal Procedure Act (Strafprozessordnung) could be violated. These are, in particular, the right of attorneys in law, notaries or of medical specialist such as psychiatrists or psychologists to refuse to give evidence. It is not possible anymore to seal the documents in case of a dispute as to the question whether some documents are covered by the search warrant or not and to send these to the Cartel Court to decide on this matter.
Further, since the Cartel Law Amendment 2002 the person claiming a violation of the right to refuse to give evidence has to concretely identify each specific document concerned. If this is not possible (e.g. because it would unreasonably delay the search) the person may identify respective categories of documents which will then be separately stored by the FCA in a way to protect it from any unauthorised inspection. Following this, within a period set by the FCA and not shorter than two weeks, the person concerned may identify the specific documents.
In addition, since the Cartel Law Amendment 2002, during a house search, the FCA has the right to request from all employees and representatives of the undertaking concerned information on all documents and matters connected to the subject matter of the investigation.
In respect of "dawn raids" the Austrian Supreme Court ruled that if a company or individual voluntarily allows the FCA to conduct inspections, e.g. not demanding any "search warrant" and only on that basis tolerates the search as imposed by law, it will not be protected under the Cartel Act provisions because a "voluntary inspection" ("freiwillige Nachschau") does not affect legally protected positions of the searched (16 Ok 7/11 et al.).
2.3 Are there general surveillance powers (e.g. bugging)?
Surveillance powers are only foreseen for violations of criminal offences. The Austrian Cartel Act contains no criminal law provisions. Apart from violations of Sec. 168b of the Austrian Criminal Code ("bid-rigging"), that qualifies certain competition violations with regard to tendering procedures as criminal offences and Sec. 146 et seq. of the Austrian Criminal Code (fraud, serious fraud), there are no competition-related infringements legitimating surveillance powers.
2.4 Are there any other significant powers of investigation?
The FCA is empowered to examine potential restraints on competition on a case-by-case basis and undertake general examinations of entire business sectors if it suspects that competition is being threatened. In the course of its investigations the FCA may also call upon and question companies or individuals and examine relevant business documentation. According to a Supreme Court's decision (16 Ok 7/11 et al.), the investigation of the FCA is not limited to information relating to the requirements of a concrete cartel law offence but may also include legal and economic information relevant for the evaluation of the alleged infringement. The Cartel Court's permission is needed to allow the FCA to carry out dawn raids.
The Cartel Law Amendment 2012 has introduced also the possibility to conduct a "competition monitoring" even without suspicion of competition distortion in a business sector. The intention is to collect from public sources relevant data as to the development of competition intensity in specific markets, which may then make a basis for further decision-making and course of action, e.g. to undertake a more detailed examination of an entire business sector.
2.5 Who will carry out searches of business and/or residential premises and will they wait for legal advisors to arrive?
Searches of business and/or residential premises are generally carried out by employees of the FCA. If necessary, and requested by the FCA, they are assisted by experts and/or the police. The undertaking concerned has the right to ask for legal advisors or other confidants to attend; however, the FCA will not wait for their arrival to start the search.
2.6 Is in-house legal advice protected by the rules of privilege?
No. The legal professional privilege under Austrian law is regulated differently than under European law. However, according to both laws, in-house legal advice is not protected by rules of privilege. Different to European law, Austrian law does also not provide for legal professional privilege covering correspondence between the client and his external (EU) lawyer outside the immediate possession of the lawyer. Under Austrian law, a lawyer need not testify against his client unless so authorised, which includes the protection of any lawyer-client communication as stored in the lawyer's office. The protection of the confidentiality of the correspondence between a client and his lawyer is a European standard, obviously to be observed when Austrian Authorities act for the European Commission. The European law may imply such protection also for Austrian cartel proceedings enforcing European cartel law.
2.7 Please list other material limitations of the investigatory powers to safeguard the rights of defence of companies and/or individuals under investigation.
Apart from general limitations, such as domestic authority, which may be ignored under certain circumstances, there are no other material limitations of the investigatory powers.
2.8 Are there sanctions for the obstruction of investigations? If so, have these ever been used? Has the authorities' approach to this changed, e.g. become stricter, recently?
Since the Cartel Law Amendment 2012, the FCA can - without an order of the Cartel Court - by way of a respective decision, order an undertaking or an association of undertakings to present documents, provide information, and copy files for further investigations. In case of disobedience of such an order, the FCA can impose penalty payments at the maximum of 5 per cent of the average daily turnover of the undertaking or the association of undertakings in the last business year for each day of delay with the ordered measures. In case the information provided is incorrect, incomplete, misleading or was not provided at all, the FCA can impose a fine of up to EUR 75,000 (Sec. 11 Competition Act).
Prior to the Cartel Law Amendment 2012 it was the Cartel Court, upon a request of the FCA, which could order an undertaking or an association of undertakings to present documents, provide information, and copy files for further investigations. The Cartel Court has exercised this right once since the establishment of the FCA in 2002.
The FCA can also request the owners of the undertakings or their representatives and, in the case of legal persons, companies or firms, or associations having no legal personality, the persons authorised to represent them by law or by their constitution, to provide information, and copy files for further investigations unless they would risk a criminal prosecution thereby. Such request can be made only without a respective decision by the FCA (so-called "simple request") with the consequence that any delay or refusal to provide information is not sanctioned. However, incorrect or misleading information can be sanctioned with a fine of up to EUR 25,000. There is no obligation upon the FCA to request the relevant information by way of the simple request first.
3 Sanctions on Companies and Individuals
3.1 What are the sanctions for companies?
According to Sec. 1 para. 3 of the Cartel Act, agreements and decisions that infringe the cartel ban and that are not exempted are void. Apart from that, the Cartel Court can impose fines of up to a maximum of 10 per cent of the undertaking's, or the associations of undertakings', turnover of the last business year. The highest fine to date was EUR 75.4 million for an entire case (five elevator companies) and – in the same case – EUR 25 million for a single company. Additionally, third parties can also claim compensation for damages incurred due to cartel ban infringements in Civil Courts. Under certain conditions, criminal sanctions (fines) may be imposed on companies for "bid-rigging" (see the answer to question 1.1) or other criminal infringements by employees under the Act on Responsibility of Legal Entities for Criminal Acts ("Verbandsverantwortlichkeitsgesetz"), which so far was rarely applied.
3.2 What are the sanctions for individuals?
If the individual is an entrepreneur violating cartel law, the Cartel Act is applicable for him, like for any other undertaking. If the individual is considered to be a representative of an undertaking, such as a director or general manager, there is no specific sanction against the individual according to the Cartel Act. Criminal sanctions only against individuals are possible in case of "bidrigging" or fraud (see question 1.1).
3.3 Can fines be reduced on the basis of 'financial hardship' or 'inability to pay' grounds? If so, by how much?
These arguments could play a role in determining the amount of fines. However, there is no case law showing clear tendencies.
3.4 What are the applicable limitation periods?
The Cartel Court can impose sanctions when applications referring to violations of the Cartel Act were filed within five years after the termination of the violation. The end of a continuous infringement is considered when the last infringing action is completed. Under criminal law, different limitation periods, also depending on the type of damage caused, may apply.
3.5 Can a company pay the legal costs and/or financial penalties imposed on a former or current employee?
As said above, costs/penalties imposed on employees can only occur within the limited area of criminal infringements (see question 1.1.). In this respect, it is questionable whether a company is allowed to pay those costs/penalties. However, an ex ante agreement to do so may be void and tax questions could arise.
3.6 Can an implicated employee be held liable by his/her employer for the legal costs and/or financial penalties imposed on the employer?
Under general rules yes, but there are special privileges for employees in respect to their liability towards their employer.
4 Leniency for Companies
4.1 Is there a leniency programme for companies? If so, please provide brief details.
In order to effectively implement the Cartel Law, Austria introduced regulations for a leniency programme in line with the (older) European model, which became effective as of 1 January 2006. In March 2013, this leniency programme was amended by the Cartel Law Amendment 2012. Under the regulations of the new leniency programme (Sec. 11 para. 3 Competition Act) the FCA can refrain from demanding to impose a fine against enterprises which: (i) provide to the FCA information and evidence enabling the FCA to move for a search warrant or – if the FCA already has enough information for that – request a fine; (ii) have stopped their participation in an infringement of the cartel ban (violations of Art. 101 para. 1 TFEU or Sec. 1 para. 1 of the Cartel Act); (iii) cooperated with the FCA in order to fully clarify the facts of the case and supplied all evidence available to them; and (iv) have not forced any other undertaking to participate in the infringement. Also for undertakings not coming first but still providing useful information and/or evidence, the FCA, may demand a significantly reduced fine, provided that the other prerequisites have been met. The FCA has set forth the procedure for gaining leniency in the socalled "Leniency Handbook" according to which full reduction of a fine will only be granted to the first applicant notifying a particular violation to the FCA. This has already led to discussions amongst competition law practitioners as according to the wording of the law as set above, it is possible that one undertaking provides as the first information and evidence enabling the FCA to move for a search warrant and another undertaking provides as the first information allowing the FCA to request a fine before the Cartel Court. In any case, the extent of a potential reduction of fines depends significantly on the time of the application. The timing of a leniency application is, therefore, of the essence.
Together with the Leniency Handbook, the FCA has published a "notification form".
The Cartel Court decided, as confirmed by the Supreme Court (16 Ok 5/10, 4 October.2010), that it has no jurisdiction to evaluate the application of the law by the FCA, but the Court may use its own discretion in determining the amount of the fine, except that it may not be higher than requested by the FCA.
4.2 Is there a 'marker' system and, if so, what is required to obtain a marker?
Yes, since the Cartel Law Amendment 2012 the Leniency Handbook provides for the possibility to obtain a "marker" upon submitting certain essential information on the infringement. This information includes, in particular, the name and address of the undertaking seeking the marker as well as of the undertaking participating in the alleged infringement, information on the products and area concerned, the duration and the type of the alleged infringement and, information on whether it is intended to apply for leniency with other competition authorities or, as the case may be, what competition authorities has been already contacted. In this regard, the FCA recommends using its form attached to the Leniency Handbook.
The FCA sets a time period of a maximum eight weeks to provide the additional information necessary to fulfil the requirements for leniency according to Sec. 11 para. 3 of the Competition Act (as stated above in question 4.1). If the undertaking provides the additional information within the time period it will be considered as submitted at the time of setting the marker.
In "Network cases", i.e. in cases in which the European Commission is particularly well-placed to deal with the case and the leniency applicant intends to apply or has already applied for leniency with the European Commission, the FCA may grant the leniency applicant a so-called "Summary Application Marker". The Summary Application Marker confirms that this leniency applicant will be given a time limit to complete its application in case the FCA should become active in this case.
4.3 Can applications be made orally (to minimise any subsequent disclosure risks in the context of civil damages follow-on litigation)?
As mentioned above, leniency applications are generally made by using the notification form published by the FCA, which has to be filed with the FCA via fax or e-mail. According to the Leniency Handbook, however, the information required in the notification form can be provided also orally at the FCA (minutes will be taken by the FCA).
4.4 To what extent will a leniency application be treated confidentially and for how long? To what extent will documents provided by leniency applicants be disclosed to private litigants?
As the leniency application procedure is an administrative procedure, the respective administrative law principles apply. Based on these principles, the FCA is basically obliged to keep information confidential to the extent access to such information by third parties would interfere with the parties' interests. In past leniency cases, the FCA has kept this confidentiality to the extent known. As soon as the FCA has applied to the Cartel Court to fine the members of a cartel, the parties of the court proceeding (i.e. the FCA, the FCP and the members of the cartel) will have access to the files of the Cartel Court. However, it is important to know that in case criminal behaviour is suspected (e.g. bid-rigging) the Official Parties are obliged by law to notify the public criminal prosecutor of such suspicion. This notification and supporting documents may be quite easily accessible to third party victims in the court files during a criminal investigation/procedure. The Supreme Court ruled (16 Ok 3/10, 22 June 2010) that the Cartel Court is obliged to provide its files – that may include leniency documents as presented by the FCA or the parties to the Court – to the Public Prosecutor, if so requested. This may also apply to other Courts requesting a file, based on rules regulating assistance amongst courts and administrative authorities, respectively.
4.5 At what point does the 'continuous cooperation' requirement cease to apply?
According to Sec. 11 para. 3 of the Competition Act and the Leniency Handbook, the entrepreneur or the association of undertakings has to cooperate with the FCA until the end of its investigation. According to the letter of the law this would mean that the obligation to cooperate ends with the beginning of the court procedure. However, since it is standard practice that the FCA only states the exact amount of the fine requested during a later stage of the court procedure, until then a certain amount of cooperation would be required.
4.6 Is there a 'leniency plus' or 'penalty plus' policy?
No, there is no 'leniency plus' or 'penalty plus' policy in Austria.
5 Whistle-blowing Procedures for Individuals
5.1 Are there procedures for individuals to report cartel conduct independently of their employer? If so, please specify.
No, there are no special procedures for individuals to report cartel conduct independently of their employer. There is no need for a separate application by employees because employees are not subject to individual fines, except under criminal law (see question 1.1). Rules on leniency in criminal procedure, in particular relating to infringements of cartel law, were introduced at the end of 2010 (Sec. 209a and 209b of the Criminal Procedure Code).
6 Plea Bargaining Arrangements
6.1 Are there any early resolution, settlement or plea bargaining procedures (other than leniency)? Has the competition authorities' approach to settlements changed in recent years?
No, there are no explicit early resolution, settlement or plea bargaining procedures foreseen according to the Cartel Act and the Competition Act. However, recent practice by the FCA explores the possibilities of negotiated settlements which may be combined with leniency applications. The benefit of such settlement is seen in the reduction of procedural costs for the FCA and the defendant(s), a low PR profile as well as in reduced fines and less detailed reasoning in published decisions. The latter could have a significant impact on civil follow-on damage claims. A different situation may occur in a criminal procedure, where certain possibilities exist to close the procedure without a formal conviction by paying a fine proposed by the public criminal prosecutor ("Diversion"). For criminal leniency, see question 5.1 above.
7 Appeal Process
7.1 What is the appeal process?
Decisions of the Cartel Court can be appealed to the Supreme Court as the Higher Cartel Court. The Higher Cartel Court is the highest instance in cartel matters and its decision is legally final. Normally, the Higher Cartel Court will only consider questions of law.
7.2 Does an appeal suspend a company's requirement to pay the fine?
Yes, it does.
7.3 Does the appeal process allow for the cross-examination of witnesses?
As the procedure at the Higher Cartel Court is a written procedure on questions of law, the cross-examination of witnesses is not possible. Only if the Higher Cartel Court is of the opinion that the taking of evidence is incomplete and thus remands the procedure to the Cartel Court, (further) cross-examination of witnesses will be allowed.
8 Damages Actions
8.1 What are the procedures for civil damages actions for loss suffered as a result of cartel conduct? Is the position different (e.g. easier) for 'follow on' actions as opposed to 'stand alone' actions?
Since the Cartel Law Amendment 2012, the Austrian Cartel Law provides for specific rules as to limitation periods, passing-on of damage, interest and binding effects of decisions by competition authorities in "follow on" actions.
With regard to passing-on the Cartel Act now clarifies that a claim for damages is not ruled out merely because goods or services purchased at an excessive price were resold (Sec. 37a para. 1). Further, the limitation period is suspended until the Competition Authority's decision establishing the infringement has become final, plus six months (Sec. 37a para. 4). An action for damages can also be paused until the settlement/termination of a proceeding before the Cartel Court, the European Commission or a Competition Authority. The Cartel Act also specifies that interests for the damage start to run already from the time of the occurrence of the damage (Sec. 37a para. 1).
Moreover, Sec. 37a para. 3 of the Cartel Act clarifies that the civil courts are bound to the Cartel Court's, the European Commission's or the Competition Authority's final decision that an undertaking culpably and illegally infringed the provisions specified in the respective decision. Consequently, the burden of proof of whether, and what exact damage the plaintiff suffered by the defendant's infringement remains with the plaintiff. However, if the court decides to estimate the damage according to Sec. 273 of the Code of Civil Procedure it can, in particular, take into account the advantage which the undertaking received by the cartel infringement (Sec. 37a para. 1).
A further basis for civil damages actions for loss suffered as a result of cartel conduct can be Sec. 1 of the Act against Unfair Competition (German acronym: UWG).
In "follow on" actions the proof of an unlawful act itself may be easier; however, causation and amount of damages still need to be argued and established by evidence under general civil rules. Apart of this difficulty, in "follow on" actions special issues arise with respect to the jurisdiction of courts, the causation and calculation of damages as well as the passing-on defence and the statute of limitations.
8.2 Do your procedural rules allow for class-action or representative claims?
The Austrian procedural rules do not explicitly provide for classaction or representative claims like, for example, US class proceedings.
However, the Austrian law knows, in particular, of two ways by which claims of several injured parties can be brought in one court proceeding:
- The injured parties can assign their individual claims to a collective plaintiff which then opens the court proceeding against one and the same defendant.
- Under certain preconditions the injured parties can join their claims for damages in one single court procedure. A precondition therefore is, amongst others, that the claims of the injured parties result from the same facts or the claims are based on the same title.
8.3 What are the applicable limitation periods?
The generally applicable limitation period for damages is three years. The period starts to run as soon as the injured party has gained sufficient knowledge of the damage which occurred and the injuring party. Different rules may apply in cases of criminal behaviour relating to natural persons. Since the Cartel Law Amendment 2012 (see question 8.1 above) the limitation period is suspended during the cartel proceedings on the very existence of the cartel until six months after a final legally binding decision or a cessation of the proceedings.
8.4 Does the law recognise a "passing on" defence in civil damages claims?
As stated above (see question 8.1), according to Sec. 37a para. 1a of the Cartel Act a claim for damages is not ruled out merely because goods or services purchased at an excessive price were resold. Thus, the law neither explicitly allows nor prohibits the passing on defence. According to the legislative materials this question was left to be decided by the courts.
First cases where these questions may be dealt with are just under trial. We note that the German Federal Supreme Court has generally accepted the defence (KZR 75/10, 28 June 2011) and a certain reference to this decision was made by the Austrian Supreme Court (4 Ob 46/12m, 2 August 2012), so chances are high that the Austrian Courts will follow.
8.5 What are the cost rules for civil damages follow-on claims in cartel cases?
The cost rules for civil damages follow-on claims in cartel cases are based on the general cost rules of the Code of Civil Procedure. Thus the losing party of the civil procedure has to pay its own costs and the costs of the winning party. If one party is only partially successful such party's legal costs will only be reimbursed by the other party in proportion to its success. The amount of the costs is based on the lawyers' tariff. The assessment base of the costs is the amount in dispute.
8.6 Have there been any successful follow-on or stand alone civil damages claims for cartel conduct? If there have not been many cases decided in court, have there been any substantial out of court settlements?
In Austria only one successful (very minor) follow-on civil damages claim for cartel conduct has taken place so far. In 2006 the Cartel Court identified some driving schools as cartel members and imposed a total fine of EUR 75,000 on them. The driving schools had identical prices for the most demanded driving courses. After the fines became final, cartel damage claims (very low, the individual claim not reaching EUR 500) against the cartel members were assigned by potentially injured parties to the Austrian Federal Chamber of Workers and Employees.
According to price observations of the Chamber, prices for driving courses in the area of Graz decreased after the breaking up of the cartel by 22 per cent. Thus the Court stated that the damage can be equated with the price differential between the cartel price and the price after breaking up the cartel. Hence the Court ruled that the driving schools have to pay back course fees in that amount.
Just now several big cases following up the Cartel Court's decision in a banking cartel and the elevator cartel case are under trial. Several complex questions of law are discussed on different levels of the court system. No substantial settlements are known.
9.1 Please provide brief details of significant recent or imminent statutory or other developments in the field of cartels, leniency and/or cartel damages claims.
An amendment of the Cartel Act and the Competition Act came into force in March 2013 ("Cartel Law Amendment 2012"). Apart of the stated above, the Cartel Law Amendment 2012 has led to many important changes in the Austrian Competition Law. In particular, according to Sec. 28 para. 1a no. 1 Cartel Act now also declaratory antitrust proceedings against a leniency applicant are possible without fining him. Moreover, anybody can request the Cartel Court to establish past infringements of undertakings as a preparation of civil damage claims (Sec. 28 para. 1.a no. 2).
Since the Cartel Law Amendment 2012, the official parties (i.e. the Federal Competition Authority and the Federal Cartel Prosecutor) are obliged to reason their complaint for a fine in more detail, in particular to include a specific claim, the name of the undertakings concerned as well as information on the specific circumstances of the infringement. In addition, the complaint has to include a summary of the results of the investigations conducted by the official party and name evidence, which has to be taken by the Cartel Court. In case the official party moves for a fine, such has to be reasoned as well (Sec. 36 para. 1.a).
The Cartel Act now also stipulates that a final decision on the prohibition or establishment of infringements, the adjudication of fines as well as on a merger and further measures imposed after clearance of a merger shall be published by the Cartel Court in a respective public court media (so called "Ediktsdatei"). Such publication shall include the names of the parties and the essential content of the decision including the imposed sanctions whereas, at the same time, the justified interest of the undertakings to protect their business secrets shall be observed (Sec. 37 Cartel Act).
The criteria for measuring fines now closely reflect the fine policy of the European Commission. Further, the new Leniency Handbook of the FCA provides for a detailed catalogue of possible evidence and information that needs to be presented in order to qualify for full immunity of fine. Also the cooperation duties with the FCA regarding employees intending to leave the undertaking have been extended.
9.2 Please mention any other issues of particular interest in Austria not covered by the above.
In one of the big cartel damage cases the Austrian Supreme Court has referred to the European Court of Justice (ECJ) for a preliminary ruling the question of whether Art 101 TFEU has to be construed to the effect that anybody can claim damages from cartelists, which were inflicted upon the claimants by a cartel outsider, who has raised his own prices for his own products in the wake of elevated market prices to a higher level as he would have done without the cartel (so-called "Umbrella Pricing"). At the same time, the Supreme Court stated in its referral for a preliminary ruling, inter alia, that according to the Austrian law, in case of "Umbrella claims" the causal connection ("Kausalzusammenhang") is interrupted and damage is outside of the "context of unlawfulness" ("Rechtswidrigkeitzusammenhang"; 7 Ob 48/12b, 17.10.2012).
Other big cartel damage cases are still under trial. The cartel court files, including any leniency documents that may be included there, are not finally protected in case an administrative authority (e.g., Public Prosecutor) or a (criminal) court requests to receive the file based on rules on assistance amongst courts and administrative authorities (see also question 4.4).
Furthermore, following the request for a preliminary ruling by the Austrian Higher Regional Court (12 October 2011, 29 Kt 5/09-86) the ECJ also decided on the question whether the Austrian regulation concerning access to files (Sec. 39 para. 2 Cartel Act), according to which the court must not authorise access to judicial case files in competition cases without the consent of the parties, even where the party seeking access can demonstrate a legitimate legal interest in having access, is incompatible with the European Union Law. The Court stated that a provision of national law under which access to documents forming part of the file relating to national proceedings concerning the application of Art 101 TFEU, including access to documents made available under a leniency programme, is made subject solely to the consent of all the parties to those proceedings without leaving any possibility for the national courts of weighing up the interests involved, contradicts the European law and, in particular, the principle of effectiveness (C- 536/11, 6 June 2013).
After a referral for a preliminary ruling by the Austrian Supreme Court (16 Ok 4/11, 5 December 2011), the ECJ recently decided on the question of whether an error on the legality of actions based on a legal advice from a specialised lawyer or based on a decision by a National Competition Authority protects against imposition of fines for infringing Art 101 TFEU. The ECJ answered this question to the negative stating that the legal advice given by a lawyer cannot form, in any event, the basis of a legitimate expectation on the part of an undertaking that its conduct does not infringe Article 101 TFEU or will not give rise to the imposition of a fine. Similarly, with regard to the decision by the National Competition Authorities the ECJ clarified that such decision cannot protect the undertaking in question against fines for the infringement of Art 101 TFEU since National Competition Authorities do not have the power to adopt a negative decision, i.e. a decision concluding that there is no infringement of Art 101 TFEU (C 681/11, 18 June 2013).
The Cartel Law Amendment 2012 has also led to important changes not directly concerning cartels and leniency. In particular, the Cartel Act now includes a definition of collective market dominance as well as refutable presumptions of such. In addition, the definition of the relevant market is not limited to the Austrian territory anymore but may also be European - or worldwide. Consequently, this is of great importance with regard to proceedings concerning the abuse of market dominant position as well as in the merger control proceedings. In the merger control, since the Cartel Law Amendment 2012 notifying parties may request an extension of the four-week investigation period of the FCA to six weeks. In case the FCA files a request for examination of the notified transaction with the Cartel Court ("second phase"), the notifying party may request an extension of the four-month examination period to six months. Further, the Cartel Law Amendment 2012 clarified that the abuse of a market dominant position by demanding "unreasonable" prices and business conditions shall be analysed particularly by comparing the behaviour of undertakings on comparable markets with effective competition (Sec. 5 para. 1 no. 1). The Cartel Act also abandoned the wording "unreasonable" prices and business conditions and refers to prices and business conditions different to those, which would with high probability develop within an effective competition.
The authors would like to acknowledge the assistance of their colleague Dr. Peter Ondrejka in the preparation of this chapter.
Published by Global Legal Group, in association with CDR.
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