06.02.2025 | Austrian competition authority
In 2021, the Austrian Federal Competition Authority (BWB) filed a complaint against REWE International AG for conducting a merger without the necessary notification. The BWB argued that the acquisition of retail space in the WELAS Park shopping center by a REWE subsidiary required formal approval. Despite this, REWE maintained that no notification was necessary and only submitted the required application retroactively during the proceedings.
On May 15, 2023, the Cartel Court confirmed that the merger was indeed subject to notification but dismissed the BWB's request for a fine due to a lack of culpability. The BWB and the Federal Cartel Prosecutor appealed this decision.
In November 2023, the Supreme Cartel Court (OGH) upheld the appeals and instructed the Cartel Court to impose a significant fine. Initially, the Cartel Court set the fine at €1.5 million, but following further appeals from the BWB and the Federal Cartel Prosecutor, the OGH increased the fine to €70 million.
The OGH's decision involved a detailed examination of the fine's parameters, including the severity and duration of the violation, the financial gain from the infringement, the degree of fault, and the economic capacity of the offender. The OGH emphasized that fines must be substantial enough to deter future violations.
In determining the fine, the OGH considered REWE's total revenue of €92.3 billion, rejecting REWE's argument that only specific segments of its business should be included. The OGH applied the aggregation rule from the Cartel Act, leading to a fine based on the entire corporate group's revenue.
The OGH also addressed constitutional concerns regarding the sanctioning rules of the Cartel Act, affirming that the factors considered in determining the fine were sufficiently clear and justified. The court reiterated the necessity of imposing noticeable fines to effectively combat cartel violations.
Additionally, the BWB has established a service point to assist companies with uncertainties regarding merger notification obligations, emphasizing the importance of timely and efficient merger control to prevent market concentration and its negative effects.
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