Kinstellar's Regional Competition Law Update: Mid-Year Insights 2025

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AUSTRIA

Supreme Cartel Court Ruling on Merger Thresholds and AFCA's Expanding Enforcement Focus

Merger Control and the Domestic Effects Test

The Austrian Supreme Cartel Court issued a significant decision clarifying the application of the transaction value threshold—specifically the requirement of domestic effects. The Austrian Federal Competition Authority (AFCA) and the Federal Cartel Prosecutor had submitted an application for a Phase II review of the planned acquisition of JenaValve Technology, Inc. (JenaValve) by Edwards Lifesciences Corp. (Edwards). However, both the Cartel Court and, ultimately, the Supreme Cartel Court found that the transaction did not trigger a filing obligation, as JenaValve lacked significant domestic activity in Austria.

JenaValve develops and sells a transcatheter aortic valve replacement (TAVR) product for the treatment of aortic regurgitation (TAVR-AR)—the only product of its kind currently approved in Europe. Edwards markets a product for aortic stenosis (TAVR-AS) and had recently acquired a company holding rights to a TAVR-AR valve outside of China.

AFCA's investigation raised concerns about potential market concentration, particularly due to the risk of bundling the only EU-approved TAVR-AR valve with the only other alternative (approved in China). There were fears that Edwards' strong market position would be further entrenched and that high entry barriers, including IP protections, would limit new market entrants.

Nevertheless, the Cartel Court rejected the applications, concluding that JenaValve's limited Austrian activities did not meet the threshold of "significant domestic activity." The Supreme Cartel Court affirmed this view and explicitly stated that the assessment must be based on the target's operations at the time of implementation, not on any expected future activity. At the time, JenaValve's Austrian operations consisted of selling just eight products to a single customer during 2023–2024—insufficient under Austria's transaction value test.

This decision mirrors a recent ruling by the German Higher Regional Court in Düsseldorf, marking a restrictive and harmonised interpretation of the domestic effects requirement in both Austria and Germany.

AFCA Activity at a Glance

Focus on Unfair Trading Practices

AFCA's 2024 Annual Report provides insights into Austria's implementation of the Unfair Trading Practices Directive and the Fair Competition Act (FWBG). Over the course of the year, AFCA conducted several investigations and initiated proceedings in one notable case involving an apple wholesaler that repeatedly delayed payments to two fruit growers.

Other complaints submitted in 2024 related to:

• Requests for payments unrelated to the sale of agricultural and food products
• Unilateral modifications to supply agreements

One investigation centred around allegations that a food retailer had forced suppliers to switch from standard green plastic crates to more expensive black crates, potentially abusing a dominant market position. Additionally, the system operator was accused of delaying deposit returns and blocking deliveries. However, these allegations were not substantiated, and the investigation was closed.

AFCA emphasized the importance of legal clarity in this emerging area of law. The 2023 food sector inquiry pointed to many unreported cases, and there is still no established case law on unfair trading practices in Austria.

Ongoing Enforcement Action: DM Case

AFCA has initiated proceedings before the Cartel Court against dm drogeriemarkt GmbH (DM) for 20 potential breaches of the FWBG. Following a tip-off, AFCA obtained a letter from DM sent to numerous suppliers requesting an "OCR bonus" of 1.5%–2.5% for the digital expansion of its stores, to take effect from 1 May 2024. The letter stated that the bonus would be charged automatically.

AFCA investigated these demands and, after confirming its concerns, applied to the Cartel Court for separate fines in each of the 20 cases. Under the law, fines may reach up to EUR 500,000 per infringement.

A key legal issue is whether these simultaneous payment requests should be treated as individual infringements or as a single overall breach. A preliminary ruling request is currently pending before the Court of Justice of the European Union (CJEU) on this matter.

Telecom Sector Under Scrutiny Across the EU

In a joint statement, six European competition authorities—Austria, Belgium, Ireland, the Czech Republic, Portugal, and the Netherlands—highlighted the importance of safeguarding competition in the telecommunications sector.

AFCA's director emphasized the need to protect SME competitiveness, cautioning against overly lenient merger assessments in markets where dominant players already enjoy significant power. Authorities signaled that future concentrations in the mobile telecom sector will be carefully scrutinized at both national and EU levels.

BULGARIA

Food prices in Bulgaria: Businesses remain vigilant even after the competition authority finds no anti-competitive agreements between supermarkets

In a decision that will shape the competitive landscape of the Bulgarian food market, the Bulgarian Commission for Protection of Competition ("CPC") concluded that there is no evidence of anti-competitive agreements between the major supermarket chains regarding food prices (Decision No 81 dated 23 January 2025 under case No КЗК/209/2023).

Background and investigation

The CPC initiated an investigation in response to the significant increase in the retail prices of basic food commodities observed since early 2022 and the first months of 2023. The competition authority aimed to identify any practices restricting competition, such as: covert agreements, collusion, or concerted actions among retailers.

While much of the data in the CPC's decision remains confidential, a key finding is that profit margins vary among retailers based on the type of goods, market conditions, economic factors and even the location of the supermarket. In some cases, profitability was even found to be negative. Retailers were observed to adjust their margins dynamically to remain competitive, often reducing mark-ups on certain products while applying higher mark-ups on others to maintain overall profitability.

The investigation found no evidence of prior coordination in retail pricing behaviour, common intent, or cooperation among supermarkets to set prices or exchange commercially sensitive information. As a result, the CPC determined that no prohibited agreements or concerted practices were present.

Key findings of the CPC decision

Following its investigation, the CPC concluded:

• there is no conclusive evidence of coordinated price-fixing or anti-competitive agreements among supermarkets;
• price movements in the sector are primarily driven by market dynamics, including supply chain factors, inflationary pressures, and individual business strategies;
• the competitive structure of the Bulgarian retail sector remains intact, with retailers setting prices independently in response to economic conditions;
• similarities in final selling prices among retail chains were found to be sporadic rather than systematic in response to the fast-moving economic and geopolitical landscape.

Wider economic and policy context

Bulgaria is not the only country where supermarket prices have drawn regulatory scrutiny and sparked public unrest. In Croatia, a boycott of hypermarkets began in late January, initiated by a Facebook campaign, and consumer frustration over rising prices quickly spread to other countries in the region. In Bulgaria, this culminated in a consumer boycott of hypermarkets on 13 February 2025, resulting in a reported 28.8% drop in supermarket turnover— equivalent to BGN 7.9 million, followed by a second boycott event held on 20 February 2025.

While regulatory responses to rising prices have varied, political parties in Bulgaria have proposed legislative measures to regulate pricing, including caps of profit margins on basic food products and introducing state intervention in pricing. However, past competition rulings and EU regulations caution against such measures.

Notably, in September 2024, the Court of Justice of the European Union ("CJEU") ruled that Hungary's price restrictions on basic food products and mandatory storage requirements for retailers violated EU competition and internal market rules. After a successful appeal by the retailer SPAR, the CJEU found that Hungary's state-imposed price caps distorted market competition and restricted the free movement of goods within the EU. By setting maximum retail prices and mandating stock levels, the Hungarian government interfered with free pricing mechanisms, giving domestic producers and sellers an unfair advantage over foreign competitors. The ruling emphasised that price controls disrupted market efficiency, leading to shortages, increased costs for retailers, and higher overall food inflation, which peaked at nearly 50% year-on-year in 2023— the highest in the EU. The CJEU made clear that while member states may take emergency economic measures, such actions must comply with EU competition law and uphold free-market principles.

Implications for the retail business and next steps

While the CPC's decision reaffirms the existing principles of fair competition, retailers should remain cautious and consider the following takeaways:

• Compliance with competition law – While no violations were found, retailers should continue to ensure that their pricing policies and distribution agreements comply with competition regulations to avoid future scrutiny. It is recommended that businesses in the sector train their key personnel for compliance with competition law and regularly review their distribution agreements.
• Avoidance of anti-competitive information exchange – Businesses participating in industry associations should be cautious about sharing commercially sensitive information that could lead to parallel pricing or unjustified price increases. Retailers and suppliers should ensure that industry discussions do not involve any exchange of pricing strategies, cost structures, or future market intentions. As a best practice, internal compliance policies should include detailed guidance and "do's and don'ts" for the participation in such meetings.
• Price monitoring – While sharing strategic and sensitive information is prohibited, the monitoring of publicly available information from competitors such as the end prices of offered goods is considered to be fair and enabling businesses to adapt to the current behaviour of their competitors.
• Market-driven pricing – Businesses are encouraged to maintain transparent and competitive pricing practices, considering the economic factors influencing food costs.
• Regulatory oversight – After this decision, the CPC remains vigilant in monitoring the sector. It announced the initiation of a new full preliminary investigation of the entire sector with respect to price increases. The competition authority has requested additional data from producers and traders of consumer goods, including eggs, dairy, meat, flour, bread, and oil, to further assess the current market dynamics. The Consumer Protection Commission will also assist in preventing potential unfair practices such as deferred payments, unilateral charges, and penalties imposed by supermarkets on other supply chain players.

In light of the above, dawn raids by the CPC may be reasonably expected to follow. Businesses should take internal measures to ensure that their personnel are aware of dawn raid procedures and how to comply with them in order to avoid sanctions for non-cooperation. It is recommended to perform internal mock dawn raids and regular compliance trainings.

Additionally, inspections by the Consumer Protection Commission will focus on unfair commercial practices in retail stores that could contribute to unjustified price increases. The Consumer Protection Commission will monitor whether:

• products meet the quality standards indicated on their labels;
• discount announcements comply with consumer law;
• discounted goods are actually available in stores;
• products are correctly labelled; and
• commercial information is not misleading to consumers.

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