Reform of Antitrust Law
Director General's Plans
The Federal Competition Authority (FCA) became operational on July 1 2002. The director general of the FCA, Dr Walter Barfuss, was the favoured candidate for the position, as he is a leading specialist in Austrian competition law.
The statutory retirement age was increased by five years to 70 years in view of the general director's age (he is 65 years old). This will enable the director general to retain his position for an entire term of office (ie, five years).
The director general's main aim is to take firmer action against violations of antitrust law in terms of more rigorous punishment for illegal arrangements and abuse of market power in Austria. Fines are introduced of up to 10% of a violating company's annual sales for the preceding financial year, and may be imposed upon first-time offenders.
The director general has been critical of the highly publicized Format/Profil merger (as discussed in 'Unwelcome Merger Accelerates Reform of Cartel Law') and its effects on competition and market power. When he took office, the director general declared that he would have appealed against the merger if the new Antitrust Law had taken effect sooner.
The director general has since announced that the media groups will be watched with special diligence.
Gas and electricity sector
The director general's first official act comprised an application to the Cartel Court to examine the intention of domestic gas firms to merge their customer sales and distribution services. The precise details of the deal have yet to be analyzed, but the director general is aware that such mergers must be investigated carefully at the preliminary stage of the merger proceedings. The director general also intends to open an investigation into the domestic electricity sector.
The director general has already suggested examining banking fee structures and has indicated that the purchase of Postbus by the Austrian National Railway will be examined by the Cartel Court if necessary.
Regarding the retail sector, the large market share of the supermarkets Billa and Spar is one of the more contentious issues to be reviewed.
Only time will tell whether the director general's actions prove to be successful during his term of office and whether tougher action will actually be taken against breaches of antitrust law.
For further information on this topic please contact Dieter Hauck at Preslmayr & Partners by telephone (+431 533 16 95) or by fax (+431 535 56 86) or by email ([email protected]).