Cartel leniency in Austria: overview
A Q&A guide to cartel leniency law in Austria.
The Q&A gives a succinct overview of leniency and immunity, the applicable procedure and the regulatory authorities. In particular, it covers the conditions to be satisfied, the method of making an application, availability of immunity from civil fines to individuals, the scope of leniency, circumstances when leniency may be withdrawn, leniency plus, confidentiality and disclosure, and proposals for reform.
To compare answers across multiple jurisdictions visit the Cartel leniency Country Q&A tool.
This Q&A is part of the PLC multi-jurisdictional guide to competition and cartel leniency. For a full list of jurisdictional Cartel Leniency Q&As visit www.practicallaw.com/leniency-mjg.
For a full list of jurisdictional Competition Q&As, which provide a high level overview of merger control, restrictive agreements and practices, monopolies and abuse of market power, and joint ventures in multiple jurisdictions, visit www.practicallaw.com/competition-mjg.
Applicable laws and guidance
The limited statutory rules that authorise the leniency programme are set out in:
Sections 11(3) to 11(6) of the Competition Act.
Section 36(3) of the Cartel Act 2005.
These provisions entered into force on 1 January 2006.
In addition, the Federal Competition Authority (Bundeswettbewerbsbehörde) (FCA) has explained its leniency procedure (as required by section 11(4) of the Competition Act) in a document called the Leniency Handbook. The Leniency Handbook was published on the FCA's website on 14 December 2005 (see box, The regulatory authority). The FCA published a new Leniency Handbook on 24 November 2011. References in this article to Leniency Handbook refer to the Leniency Handbook of 2011, unless otherwise indicated.
Generally, the institutional structure for administering the anti-trust rules in Austria is quite complex. More than one authority enforces the rules in relation to fines. The Cartel Court (Kartellgericht), a special division within the Vienna Court of Appeals (Oberlandesgericht Wien), is the sole body that can impose fines on undertakings for breaches of anti-trust law. However, it cannot impose a fine on its own initiative. The authorities, called the Official Parties (Amtsparteien), must apply for a fine through a request to the Cartel Court (section 36(2), Cartel Act 2005). The Cartel Court cannot impose a higher fine than the Official Parties requested in their application.
The Official Parties are the:
FCA (see box, The regulatory authority). The FCA is an independent body and has far-reaching powers of investigation in competition matters.
Federal Cartel Prosecutor (Bundeskartellanwalt) (FCP). The FCP has far-reaching powers of investigation. He is bound by the instructions of the Federal Minister of Justice.
The FCA is the sole authority in charge of administering the leniency programme. Therefore, once the FCA informs the FCP that the leniency programme has been applied (whether in the form of full immunity or fine reduction), the FCP entirely loses the right to apply for a fine in that competition law matter (section 36(3), Cartel Act 2005).
Scope of application
The leniency programme covers anti-competitive agreements, concerted practices and decisions by associations of undertakings (section 1, Cartel Act 2005). It also covers the earlier provisions of the Cartel Act 1988, to the extent that the conduct can be sanctioned with fines under that Act (that is, the conduct concerns infringements that took place between 1 July 2002 and 31 December 2005) and Article 101 of the Treaty on the Functioning of the European Union (TFEU), if the violating conduct has an effect on Austrian territory and therefore can be prosecuted by the Austrian authorities.
The anti-competitive behaviour covered includes secret and hard-core cartels, and all horizontal and vertical infringements (section 11(3), Competition Act).
The leniency programme does not cover:
Abuse of a dominant position.
Implementing a merger without clearance.
Providing false or misleading information.
Breaching the competition authority's previous decisions.
Criminal sanctions, which apply to (see Question 7, Circumstances.):
Civil claims for damages.
In addition, the FCA has the discretion to grant leniency in cases that are not covered by section 11(3) of the Competition Act (Leniency Handbook). This may be of particular interest in the case of mergers that have been implemented without clearance, thereby attracting possible financial penalties. However, it appears that the FCA is yet to apply this discretion to mergers in practice.
The first major leniency case concerned the Austrian elevator cartel. In December 2007 the Austrian Cartel Court imposed a record fine totalling EUR75.4 million (as at 1 December 2011, US$1 was about EUR0.7) on five Austrian elevator and escalator manufacturers because of alleged project allocation, market sharing, price-fixing agreements and information exchange (case 25 Kt 12/07, confirmed by the Supreme Court in case 16 Ok 5/08). Two of the elevator and escalator manufacturers co-operated with the FCA under the Austrian leniency programme. As a result, the FCA granted full immunity to the first leniency applicant (Thyssen-Krupp) and the second applicant's fine was reduced by 55% (due to the added value of the information provided and the willingness to co-operate the Cartel Court granted an extra 5% in reduction).
In December 2007 the FCA applied to the Cartel Court for a fine against two wholesalers in the chemical product sector (DonauChemie-AG und Donauchem GmbH) for participation in an alleged hard-core cartel. The application was based on a joint leniency application filed by two other wholesalers, being a parent company and its affiliate (Brenntag Austria Holding GmbH and Brenntag CEE GmbH). In October 2008, the Cartel Court imposed a fine of EUR1.9 million on the two wholesalers of the DonauChemie-Group (case 29 Kt 132, 133/07-54). In May 2009, the Supreme Court (case 16 Ok 4/09) confirmed the first instance ruling and the amount of fines imposed. Both leniency applicants were granted 100% reduction of fines.
In April 2010, the Cartel Court, on request of the FCA, imposed a fine of EUR1.5 million on four undertakings in the chemical industry sector (case GZ 29 Kt 5/09-50, confirmed by the Supreme Court in case16 Ok 5/10). For the first time in Austria, the first leniency applicant was not granted full immunity.
In February 2010, based on a leniency application of Schenker (made in 2007), the FCA applied to the Cartel Court for a fine against more than 40 freight forwarding undertakings that had been organised in a conference (Speditions-Sammelladungs-Konferenz; SSK). According to the FCA's allegations, the undertakings had fixed prices and allocated customers within the SSK with regard to national goods transports. In FCA's view, the SSK infringes Article 101 of the TFEU. However, the undertakings concerned fiercely contest the FCA's allegations. The case is of a particular interest as the SSK was exempted from the application of Austrian competition law by order of the Cartel Court, based on Austrian competition law. The Cartel Court was applying the Austrian de minimis exemption, which, contrary to EU competition law, can also exempt hard-core infringements.
The Cartel Court in its first instance decision dismissed the application for a fine in relation to all freight forwarding undertakings accused (case 24 Kt 7, 8/10). Based on the facts, the court ruled (rather briefly) that due to the lack of negligence or fault of the SSK members, the FCA's application for a fine had to be dismissed. Following the court's reasoning, all members naturally "could assume" that the SSK was a lawful de minimis cartel. In December 2011, the Supreme Court filed a preliminary ruling with the EU Court of Justice (ECJ) (case 16 Ok 4/11).
Availability of leniency
The FCA can grant full immunity and not request the Cartel Court to impose fines on the first applicant provided that they (section 11(3), Competition Act):
Have terminated the conduct that breached section 1 of the Cartel Act 2005 or Article 101 of the TFEU.
Inform the FCA about the breach before it has found out about the breach from other sources.
Co-operate fully and expeditiously with the FCA to clarify all aspects of the case.
Did not take steps to coerce other undertakings to participate in the infringement.
In addition, the following rules apply:
The breach must be terminated in co-operation with the FCA only, to guarantee the success of the investigations (Leniency Handbook). In addition, the undertakings must also prepare a statement in writing, confirming that the breach had been terminated.
The information provided to the FCA must cover the key features of the infringement (for example, kind of infringement, duration, identity of the undertakings concerned) (Leniency Handbook).
If the FCA already knows about the circumstances of the case when it receives an application for leniency, it can apply to the Cartel Court for a reduced fine (see Question 5).
The applicant undertaking must (Leniency Handbook):
give all evidence in its possession or available to it to the FCA;
provide fast, truthful and complete answers to the FCA's questions;
keep secret its co-operation with the authority from the other participants in the breach.
Ringleaders are explicitly excluded from the leniency programme (section 11(3)(4), Competition Act). (It seems that this exception has not been applied yet, but it was argued in the chemical product cartel (see Question 3)).
The FCA confirmed in a statement of 27 July 2005, published on its website, that it is bound by these rules. Therefore, if all of the conditions are met, the FCA must in fact grant full immunity.
If the criteria are not met, the FCA still has discretion on a case-by-case basis to grant full immunity or request that the Cartel Court grant a reduced fine (see Question 5).
There is a sliding scale of leniency from civil fines.
If the undertaking is the first to contact the FCA and all the criteria in section 11(3) of the Competition Act are met, full immunity is granted (see Question 4).
Subsequent undertakings can qualify for the following reductions, if all the criteria under section 11(3) of the Competition Act are met (except the condition that the FCA must not know about the illicit behaviour) and the application provides added value to the FCA:
Second undertaking to apply: 30% to 50%.
Third undertaking: 20% to 30%.
All later undertakings: up to 20%.
An application provides added value if the given information enables the FCA to present more coherent and complete evidence.
A sliding scale of available leniency is also granted if the FCA already knows about the illicit behaviour from other sources than the undertakings involved. In this case (provided that all other criteria are met), the following reductions apply:
First undertaking to apply: 30% to 50%.
Second undertaking to apply: 20% to 30%.
All later undertakings: up to 20%.
To determine the exact reduction of the fine, the FCA takes into account, in its application to the Cartel Court, both the:
Point in time when it was contacted by the undertaking.
Additional value of the information given.
In individual cases, where the criteria are met and the added value of the evidence given is exceptionally high or low, the FCA may apply for a reduction of fine that is higher or lower than the ranges set out above (Leniency Handbook).
Even if the criteria are not met, the FCA still has discretion on a case-by-case basis to request that the Cartel Court grant a reduced fine.
Criminal sanctions apply to:
Bid-rigging, which is a criminal offence under section 168b of the Criminal Code.
Fraud, which is a criminal offence under section 146 of the Criminal Code. Fraud may form part of certain anti-trust violations.
The leniency programme does not cover criminal sanctions (see Question 2). The planned introduction of a leniency programme for individuals in the Criminal Code has been abandoned.
Proceedings against individuals
Criminal proceedings can be brought against individuals of an undertaking that has been granted leniency or immunity (for example, employees, owners or members of the board), if they have personally participated in illicit behaviour. However, the FCP is entitled to request immunity from criminal prosecution for employees of an undertaking involved in the infringement, if prosecution would be "disproportional" (section 209, Criminal Procedure Code). In this case, the prosecutor is bound to terminate his preliminary proceedings against the individual concerned, if the latter fully and expeditiously co-operates with the court and prosecutor to clarify all aspects of the criminal law infringement.
As leniency does not cover individuals, they should ask the FCP to file the request with the prosecution service under 209 of the Criminal Procedure Code (see above, Proceedings against individuals).
General criminal law principles should be followed to reduce possible fines for criminal offences. A confession, and possibly co-operation with the FCA, may reduce sanctions.
It is important to be the first undertaking to contact the FCA before it has discovered the violation from other sources (see Question 4). Only the first undertaking to approach the FCA in these circumstances is eligible for full immunity.
Based on publications of the FCA case handlers, applications for leniency are, in general, precluded after the initiation of court proceedings before the Cartel Court. However, in special circumstances, the FCA could perhaps accept leniency applications after this point of time.
An application should be submitted to the FCA.
It is highly recommended that leniency applications be made through a legal adviser.
Is it not possible to obtain informal guidance on a confidential basis before submitting an application to determine whether an undertaking will qualify for full immunity or fine reduction.
Form of application
The FCA has attached a form to its Leniency Handbook. The following information must be submitted with the form:
Name and address of the applicant.
Contact person at the applicant's undertaking (internal) and legal counsel.
Type of infringement (for example, price-fixing, market allocation, resale price maintenance).
Geographical area concerned.
Duration of infringement.
Names and addresses of all undertakings involved.
Information on leniency applications made or intended to be made in other jurisdictions, if any.
The applicant undertakings must use this form when making a leniency application and submit it by fax or e-mail to the FCA (see box, The regulatory authority). On special request following an initial oral contact, the form can also be completed on the FCA's premises if the circumstances justify it.
Besides completing the form, all evidence in the applicant undertaking's possession or available to it must be given to the FCA (see below, Information/evidence).
Markers may be available for undertakings requesting full immunity. A marker secures an applicant's place in the queue while the applicant gathers enough information to apply for immunity. To be granted a marker, the information requested in the form attached to the Leniency Handbook must be provided (see above, Form of application). If the applicant then provides all further necessary information (see below, Information/evidence) and fully co-operates with the authorities, the position as first leniency applicant is secured and full immunity may be granted (see Question 4).
In relation to undertakings seeking a reduction of a fine or where full immunity cannot be granted anymore (due to the fact that the authority is aware of the infringement), a marker cannot be granted, as it is only the time of submission of the additional information that defines the ranking of these leniency applicants. In this case, the FCA informs the undertaking "as soon as possible" that only a reduction in fine but not full immunity is available (Leniency Handbook).
Markers can also be granted where the undertakings concerned applied for leniency to the European Commission (Leniency Handbook).
In addition to the form (see above, Form of application), all evidence in the applicant undertaking's possession or available to it must be provided to the FCA. This includes:
All documentary evidence.
A detailed corporate statement (which can be also provided in oral form in special circumstances) providing information on the following:
involvement of the applicant in the cartel;
description of the cartel;
names of all other accomplice undertakings.
List of all current and former employees of all undertakings involved.
Details concerning co-operation of all current and former employees of the applicant.
Witness statements of the individuals involved.
In addition, an applicant must expeditiously provide truthful and complete answers to the FCA's questions.
Short-form applications in the form of markers may be accepted (see above, Markers).
There is no specific timetable in relation to leniency procedure.
After a detailed examination of the evidence provided, and on the precondition of full co-operation, the FCA gives a non-binding statement as to whether it will apply the leniency programme. In this statement, the FCA informs the undertaking as to whether full immunity is possible or, if not, what range of fine reduction is available.
After completion of the investigation, the FCA grants a binding decision in relation to the leniency status. In case of a fine reduction, the FCA also indicates the exact reduction granted.
Additionally, the FCA contacts the FCP, who loses, for this matter, the right to apply for a fine in that competition law matter (see Question 1).
For markers, see Question 9, Markers.
Withdrawal of leniency
There are no explicit rules as to whether leniency can be withdrawn at any stage in the proceedings. However, the FCA's statement as to whether it will apply the leniency programme is non-binding (see Question 10) and it is assumed that leniency can be withdrawn if undertakings do not fully co-operate. This may happen, for example, if the undertaking is:
Not reacting promptly to the authorities' requests.
Holding back new documents.
Found to be a ringleader (in the case of immunity; see Question 4).
An undertaking that was second to apply cannot move up in rank and obtain full immunity, even if the immunity for the first undertaking is withdrawn, since the FCA would already have knowledge about the infringement. However, the second, and the following undertakings, may obtain a greater fine reduction (see Question 5).
Scope of protection
The statutory rules do not explicitly mention leniency plus.
The FCA can grant immunity or reduced fines in cases that are not covered by section 11(3) of the Competition Act (see Question 2). In this respect, the FCA may take information about other markets into consideration.
Confidentiality and disclosure
Within the FCA proceedings, the identity of the leniency applicant is confidential as other parties concerned and third parties do not get access to the file. After the proceedings before the Cartel Court are initiated, the other undertakings get informed about the identity of the leniency applicant. However, the Cartel Court often accepts closed proceedings, which makes it difficult for third parties to discover the identity of the leniency applicant. The decisions of the Cartel Court are generally available in a version where the parties' names have been deleted. All decisions of the Supreme Court, which hears appeals from the Cartel Court, are also published in an anonymous version.
The information provided is confidential within the FCA proceedings, as other parties concerned and other third parties do not get access to the file. After the proceedings before the Cartel Court are initiated, the other undertakings get access to the court's files. However, business secrets are not passed on to other undertakings as the FCA consults with the leniency applicant, at the latest before it instigates proceedings at the Cartel Court, as to whether any of the information provided constitutes business secrets. The FCA allows the applicant to provide a non-confidential version of the application.
Furthermore, access to file must only be granted if all parties of the cartel proceedings agree (section 39(2), Cartel Act 2005). This is currently before the ECJ in a preliminary request.
Apart from identity and information confidentiality as outlined above, further confidentiality seems not possible.
Domestic submissions and domestic discovery
In general, discovery orders do not exist in Austrian procedural law. Damages claims based on a breach of competition law are under the competence of general civil or commercial district or regional courts, but not the Cartel Court, which is only authorised to issue cease or desist orders. The FCA is only entitled to provide information to the Cartel Court, and not other courts (section 10(1), Competition Act).
However, civil and criminal courts, as well as the Prosecution Service (Staatsanwaltschaft), may request files from the Cartel Court in the context of labour law claims and criminal proceedings. In the past, criminal prosecution services and civil courts (where a claim for damages was pending) have requested files for inspection based on the constitutional principle of legal and administrative co-operation. It could be argued that the files should not be disclosed on the basis of the constitutional principle of official secrecy. However, the Supreme Court has recently confirmed that a request of the Prosecution Service based on the principle of administrative co-operation must be satisfied by the Cartel Court without taking into account the rights of the parties to confidentiality under section 39(2) of the Cartel Act (see Question 14, Information disclosure) (case 16 Ok 3/10).
Domestic submissions and foreign discovery
Foreign courts are not listed in section 10(1) of the Competition Act as bodies to which the FCA can provide information.
Foreign submissions and domestic discovery
Austrian law does not contain rules addressing discovery orders.
In the EU, the FCA co-operates with other national competition authorities in accordance with the following EC rules on the exchange of information within the European Competition Network (ECN):
Regulation (EC) 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty.
The Commission Notice on co-operation within the network of competition authorities (2004/C 101/43).
Information coming from the ECN following a leniency application cannot be used as a basis for an FCA's request for a fine (section 11(6), Competition Law). However, the FCA is not barred from conducting investigations and asking the Cartel Court for fines on the basis of information coming from other sources.
Proposals for reform
The regulatory authority
Federal Competition Authority (Bundeswettbewerbsbehörde) (FCA)
Head. Dr Theodor Thanner
Responsibilities. The FCA is the sole authority in charge of administering the leniency programme.
Person/department to apply to. Dr Peter Matousek (T +43 1 245 08 303)
Dr Stefan Keznickl (T +43 1 245 08 326)
Procedure for obtaining application documents. The application form is available on the FCA's website (see above, Contact details).