According to the Austrian Cartel Act, the Austrian Cartel Court must be notified of a merger if three separate turnover thresholds are met.

Article 42a of the act stipulates that a merger (within the meaning of the act) must be notified if the relevant undertakings achieved a joint worldwide turnover of €300 million and a joint Austrian turnover of €15 million in the preceding financial year, and if at least two of the undertakings concerned had a worldwide turnover of €2 million.

When assessing whether these thresholds are reached, the turnover of connected undertakings must be taken into account. Since the act does not expressly stipulate any other de minimis rule, it may well be that the Cartel Court must be notified under the act of the acquisition of a small or medium-sized enterprise in, for example, India by a multinational enterprise generating turnover of at least €15 million in Austria, regardless of the fact that the acquisition has no effect on the Austrian market.

Consequently, during the last two years the Cartel Court has begun to establish a new, additional rule whereby a merger need not be notified if it has no appreciable effect in Austria, even if the turnover thresholds are met. The reasoning is that a merger does not fall under the Austrian merger control regime if there is no appreciable actual or potential effect on competition in Austria. So far, the criteria that must be met for a merger to be considered to have no appreciable effect in Austria are unclear. Any abstract possibility of an effect or potential restriction on competition in Austria appears to suffice for the merger to qualify as having an appreciable effect.

Any merger that must be notified under the act may be implemented only after the Austrian Cartel Court has issued its approval. Otherwise the agreement is null and void, and a criminal fine of up to €162,000, as well as fines against the undertakings for gaining any unjust enrichment, may be imposed. However, to date no such fines have been imposed.

An undertaking may request the Austrian Cartel Court to confirm that a proposed merger does not fall under the act. In such proceedings the court need not meet the time limit of the notification procedure (which is usally around six weeks), although the costs are virtually identical to those of a notification procedure.

In summary, if there is the slightest risk that a merger which meets the turnover thresholds may have an appreciable - even potential - effect in Austria, it should be notified. Future transactions may also be notified prior to the signing of the relevant agreements, provided that the parties agree on basic conditions.

For further information on this topic please contact Dieter Hauck, Bernhard Köck or Martin Nepraunik at Preslmayr & Partners by telephone (+431 533 16 95) or by fax (+431 535 56 86) or by email ([email protected], [email protected] or [email protected]).