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Process and timing
Is the notification process voluntary or mandatory?
Notification is mandatory if the transaction qualifies as a notifiable merger according to Section 9 of the Cartel Act. Any implementation of the transaction without clearance will be qualified as gun-jumping and may trigger fines.
What timing requirements apply when filing a notification?
The notification to the Federal Competition Authority (FCA) is subject to no deadlines (ie, there is no specific period within which notification must be submitted), but the undertakings are barred from implementing the deal before clearance. Hence, it is in the parties' interest not to wait too long to file the notification. It is also not necessary for the deal to have been signed before notification. Notifications may even be submitted before signing, provided that the parties can demonstrate a good-faith intent to enter into the transaction and there is a basic agreement as to the transaction’s structure and timing.
What form should the notification take? What content is required?
The FCA has developed a recommended form for notification which is available on its website and is commonly used in practice. The notification of a concentration must contain exact and complete information on all circumstances which are relevant for the creation or strengthening of a dominant position. The Cartel Act contains some basic rules regarding the necessary content of notifications – for example, the notification must mention the ownership and turnover of the undertakings concerned, their market shares and the general market structure.
Is there a pre-notification process before formal notification, and if so, what does this involve?
No specific pre-notification process is set out and pre-notification is still uncommon in cases that do not give rise to competition concerns. Further, notifications are typically submitted without prior consultation of the FCA or the federal cartel prosecutor (FCP). However, the authorities are open to pre-notification discussions if requested by the parties (in 2016 pre-notification talks took place in 28 out of 420 cases). Such contact may well be helpful in complex cases or notifications where undertakings with high market shares are involved. In particular, given the fact that Phase I in Austria is comparatively short, pre-notification contact can be useful to avoid the risk of the FCA or FCP requesting a Phase II investigation simply because they did not receive the necessary information or did not have time to process it. On its website the FCA indicates that pre-notification talks may be particularly helpful if the parties intend to offer remedies.
Can a merger be implemented before clearance is obtained?
A transaction subject to Austrian merger control must not be implemented before clearance from the FCA is obtained with no exemptions foreseen. A violation of this suspension obligation is an administrative offence and may be subject to fines of up to 10% of the total annual group turnover of the undertakings concerned. In addition, any legal acts which may qualify as implementing the transaction are invalid under Austrian civil law.
Guidance from authorities
What guidance is available from the authorities?
As already mentioned, Austrian competition authorities are quite informal. It is possible to approach them at any time; however, guidance on the substance of the case is likely to be provided only if substantial information has been provided. Further, there is some useful information on merger control proceedings on the FCA’s website.
What fees are payable to the authority for filing a notification?
The filing fee for a Phase I investigation is €3,500, regardless of the size of the transaction or the turnover of the parties to the concentration. The applicant must pay the filing fee by cash deposit into the FCA’s account.
If the case is taken to the Cartel Court for Phase II, the court may order substantial higher court fees of up to €34,000.
The deadline for Phase I starts to run only once payment is received by the FCA, and on receipt of the filing at the earliest.
Publicity and confidentiality
What provisions apply regarding publicity and confidentiality?
Following filing, a short notice about the transaction containing the names of the parties, the type of concentration, a brief description of the transaction and the economic sector concerned is published on the Competition Authority’s website. Parties should provide proposed wording for this notice in the notification. A notice of clearance in Phase I, initiation of Phase II and the outcome is also published on the FCA’s website.
The notification will not be published or otherwise disclosed to the public during the process. However, it is mandatory to provide a non-confidential version of the filing form. It is not common practice for the FCA to send this version to other market participants, but this has been done in some specific cases.
Further, final decisions of the Cartel Court or the Cartel Court of Appeals are published. The new legislation now also determines the publication of decisions rejecting or dismissing (not only granting) an application. Only with Cartel Court decisions can the parties request the deletion of business secrets from the published version. Moreover, the FCA is obliged to publish the operative part of decisions by which a merger is cleared under conditions and restrictions. The FCA is empowered to inform the public about proceedings of public importance.
Are there any penalties for failing to notify a merger?
There are no penalties for not filing, but penalties do apply to:
- the implementation of a non-notified (but notifiable) or prohibited concentration; and
- failure to implement a concentration in accordance with restrictions or conditions imposed by the Cartel Court.
These infringements may trigger a fine of up to 10% of the worldwide turnover of the undertakings involved. There is a long history of decisions and fines in infringement proceedings. However, since most notification failures are merely due to negligence, fines range between €100,000 and €1.5 million.
The FCA is committed to publish unlawful implementations and the respective court decisions.
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