Spotlight: the merger control regime in Austria

All questions

Introduction

The Austrian merger control regime is set out in Part I, Chapter 3 of the Austrian Cartel Act 2005 (KartG). The turnover thresholds that trigger a merger filing requirement in Austria are among the lowest in the European Union. However, following the Austrian Cartel and Competition Law Amendment Act 2021 (KaWeRÄG 2021) of 10 September 2021, in addition to a combined Austrian turnover of more than €30 million, it is now a requirement that at least two parties each achieved a turnover in Austria of more than €1 million in the previous financial year.

In addition, it is also important to note that the Austrian merger control rules contain very specific and sometimes far-reaching provisions concerning the attribution of turnover. In contrast to most other EU jurisdictions, Austrian merger control rules not only require that the turnover of (directly or indirectly) controlling shareholders and (directly or indirectly) controlled shareholdings is attributed; rather, Austrian merger control rules normally also require that the turnover of non-controlling shareholders and non-controlling shareholdings with a participation (capital or voting rights) of at least 25 per cent is (fully) taken into account for calculating the turnover of a concerned undertaking.² Although this very wide attribution of turnover (which in some cases may lead to nearly indefinite 'chains' for turnover attribution) has to some degree been constricted by the case law,³ establishing the turnover of the concerned undertakings for purposes of Austrian merger control sometimes requires additional efforts and cannot simply be based on the consolidated group turnover figures.

The scope of Austrian merger control became even wider in 2017 with the entry into force of the Austrian Cartel and Competition Law Amendment Act 2017 (KaWeRÄG 2017), which introduced an additional jurisdictional threshold for concentrations based on the value of consideration (size of the transaction test).⁴

Altogether, these factors led to a relatively high number of merger filings in Austria (however, as a result of the newly introduced second domestic turnover threshold, it is expected that the number of notifiable mergers in Austria will decrease).

The institutional structure of competition enforcement in Austria is split between the Federal Competition Authority (FCA) and the Federal Cartel Prosecutor (FCP) (together, the Official Parties) and the cartel courts (the Higher Regional Court of Vienna acting as the cartel court (the Cartel Court) and the Supreme Court acting as the Supreme Cartel Court (OGH)). Merger notifications in Austria have to be submitted to the FCA and are then assessed by the Official Parties in Phase I. The Official Parties have the exclusive right to request an in-depth (Phase II) review of a notified transaction by the Cartel Court.

Notwithstanding the above aspects, it is important to note that the vast majority of transactions notified in Austria receive merger clearance in Phase I.⁵ Since there is no pre-notification requirement and no 'stop-the-clock' principle under Austrian law, merger control clearance for most cases can usually be obtained within the initial four-week review period. Moreover, the Official Parties have introduced an Austrian Form CO also providing for a simplified filing (comparable with a Short Form CO under the European Merger Regulation (EUMR)) for merger control cases that do not exceed certain (market share) thresholds.⁶

Although the Official Parties (based on their headcount)⁷ are rather small competition authorities or enforcers compared with most of their counterparts in the European Union and at the same time have to deal with a high number of merger filings each year, they typically find a good balance between efficiency when dealing with unproblematic transactions and accuracy when dealing with cases that might possibly harm competition. Therefore, despite its wide scope of application, in practice, the Austrian merger control system is working quite well.

Year in review

In 2021, 655 merger cases were notified to the FCA in total (an increase of 230 cases from 2020, after a period of reduced merger activity during the covid-19 crisis).⁸ The large majority of notifications were cleared in Phase I after expiry of the initial four-week review period (i.e., in 95.9 per cent of the merger cases notified).⁹ In 15 cases, the Official Parties waived their right to request an in-depth (Phase II) review even before the expiry of the four-week review period. In eight cases, the notifying party or parties withdrew the filing in Phase I.¹⁰

Only three cases notified in 2021 were subject to an in-depth (Phase II) review by the Cartel Court¹¹ and two of them were cleared subject to commitments. In another case,¹² the FCP submitted a request for an in-depth review on 8 February 2022 (after an extension of the initial review period from four weeks to six weeks following a request of the notifying parties). As the merger notification was considered incomplete by the Cartel Court and was not timely supplemented with the legally required information with regard to potentially relevant product and geographical markets, following an order by the presiding judge of the Cartel Court, the notification was rejected by the Cartel Court on 29 March 2022 (in Phase I, the Official Parties cannot reject an incomplete merger notification).

i Fines for violation of the standstill obligation

It is important to note that the Official Parties are quite active in cases involving violations of the standstill obligation and regularly request the imposition of fines by the Cartel Court in the case of a possible – even negligent – infringement for implementing a transaction prior to receiving Austrian merger clearance. Also, a violation of commitments imposed by the Cartel Court as a condition for merger clearance or proposed by the notifying party or parties to the Official Parties constitutes a violation of the standstill obligation and may be subject to fines imposed by the Cartel Court.¹³ The following table lists fines imposed by the Cartel Court for violations of the standstill obligation in 2021.¹⁴

2021 fines for violation of the standstill obligation

Date	Sector	Undertakings	Fine
17 December 2021	Production of roofing products	Ondufin SAS	€64,000*
17 November 2021	Production of waterproofing and roofing products	Naxicap Partners SA	€83,000†
15 July 2021	Manufacture of machinery for metal production, rolling mill equipment and casting machines	SMS group GmbH	€30,000‡
22 July 2021	Web portals	Facebook, Inc; GIPHY, Inc	€9,600,000§
4 June 2021	Medical devices	OneMed Holding AB; SMEDICO AG	€30,000¶
22 April 2021	Software	Salesforce.com, Inc, USA	€100,000||
* Cartel Court, 17 December 2021, 27 Kt 13/21w † Cartel Court, 17 November 2021, 25 Kt 7/21y ‡ Cartel Court, 15 July 2021, 25 Kt 6/21a § Cartel Court, 22 July 2021, 28 Kt 6/21y ¶ Cartel Court, 4 June 2021, 24 Kt 6/21v || Cartel Court, 22 April 2021, 27 Kt 9/21g

ii Overview of major Austrian merger control cases in 20212021 Phase II cases

Date	Sector	Undertakings	Outcome
Notification: 20 July 2021 Request for in-depth review: 17 August 2021 (FCA and FCP) Clearance: appeal of the FCA against the clearance (subject to conditions) decision of the Cartel Court: 3 March 2022	Web portals	Facebook, Inc; GIPHY, Inc	Appeal of the FCA against the clearance (subject to conditions) decision of the Cartel Court on 3 March 2022 (clearance still pending)*
Notification: 2 September 2021 Request for in-depth review: 30 September 2021 (FCA and FCP) Clearance subject to structural remedies: 24 March 2022	Food retailing	METRO Cash & Carry Österreich GmbH; C & C Abholgroßmärkte Gesellschaft mbH	Clearance subject to commitments after request for in-depth review†
Notification: 28 December 2021 Request for in-depth review: 8 February 2022 (FCP) Rejection of notification: 29 March 2022	Information technology	ARAplus GmbH; Saubermacher Dienstleistungs-Aktiengesellschaft; digi-Cycle GmbH	Rejection of notification due to lack of complete information after request for in-depth review‡
* BWB/Z-5549; appeal of the FCA against the clearance (subject to conditions) decision of the Cartel Court on 3 March 2022; more detailed information on the case is available on the FCA website at https://www.bwb.gv.at/en/news/detail/meta-facebook-giphy-merger-afca-appealing-against-conditional-clearance (last accessed 12 May 2022) † BWB/Z-5650; Cartel Court, 24 March 2022, 25 Kt 8/21w – 84, in conjunction with 25 Kt 9/21t; more detailed information on the judgment is available on the FCA website at https://www.bwb.gv.at/en/news/news-2022/detail/metro-agm-merger-approved-by-cartel-court-with-structural-remedies (last accessed 12 May 2022) ‡ BWB/Z-5828; Cartel Court, 29 March 2022 (see Section II)

2021 Phase I cases subject to commitments

Date	Sector	Undertakings	Outcome
Notification: 8 January 2021Clearance: 5 February 2021	Printing; printing and media prepress	Post 102 Beteiligungs GmbH; D2D - direct to document GmbH	Clearance subject to behavioural commitments proposed by the notifying parties after negotiations with the Official Parties*
Notification: 11 January 2021Clearance: 9 February 2021	Production of irradiation and electrotherapy equipment and electromedical devices	FUJIFILM Corporation; Diagnostic Imaging Geschäftsbereichs von Hitachi, Ltd	Clearance subject to behavioural commitments (including monitoring) proposed by the notifying parties after negotiations with the Official Parties†
Notification: 26 February 2021Clearance: 27 March 2021	Production and distribution of polyurethane foams	Recticel SA/NV; FoamPartner Group	Clearance subject to behavioural commitments (including monitoring) proposed by the notifying parties after negotiations with the Official Parties and a market test‡
Notification: 20 May 2021Clearance: 18 June 2021	Online classifieds services and online advertising	eBay Inc; Adevinta ASA	Clearance subject to behavioural commitments (including monitoring) proposed by the notifying parties after negotiations with the Official Parties and a market test§
* BWB/Z-5188; for more detailed information on the commitments, see https://www.bwb.gv.at/fileadmin/user_upload/PDFs/Auflagenpapier_Z-5188_Phase_1.pdf (German language only) (last accessed 12 May 2022) † BWB/Z-5195; for more detailed information on the commitments, see https://www.bwb.gv.at/fileadmin/user_upload/PDFs/BWB_Z-5195_FUJIFILM_Corporation_Hitachi_Auflagen.pdf (German language only) (last accessed 12 May 2022) ‡ BWB/Z-5282; for more detailed information on the commitments, see https://www.bwb.gv.at/news/detail/zusammenschluss-recticel-und-foam-partner-mit-auflagen-freigegeben (German language only) (last accessed 12 May 2022) § BWB/Z-5420 and BWB/Z-5421; for more detailed information on the commitments and the case, see https://www.bwb.gv.at/en/merger_control/2021/5425 (last accessed 12 May 2022)

The merger control regime

i Jurisdiction

The Austrian merger control regime requires a (mandatory) merger filing if:

1. the transaction constitutes a concentration pursuant to Section 7 of the KartG;
2. the turnover thresholds¹⁵ or the (transaction value) thresholds of Section 9(4) of the KartG are met; and
3. the transaction has an effect on the domestic (Austrian) market or markets.¹⁶

ii Concept of concentration

Unlike many other European jurisdictions, the Austrian merger control regime is not limited to acquisitions of control and full-function joint ventures (JVs). Rather, the Austrian merger control regime has a distinct definition of the types of transactions that constitute a concentration. A concentration is defined as:¹⁷

1. the acquisition by one undertaking of all, or a substantial part of, the assets of another undertaking, especially by merger or transformation;
2. the acquisition of rights by one undertaking in the business of another undertaking by means of a management or lease agreement;
3. the direct or indirect acquisition of a participation of at least 25 per cent or 50 per cent (of the capital or voting rights) in one undertaking by another undertaking;
4. the establishment of interlocking directorates at the management board or supervisory board level (if at least half of the members of the management board or the supervisory board in two undertakings are identical);
5. any other connection between undertakings directly or indirectly conferring one undertaking a decisive influence over another undertaking; or
6. the establishment of a full-function JV.

Although Austrian merger control contains a specific provision declaring that the establishment of a full-function JV constitutes a concentration,¹⁸ it is currently the prevailing view that this provision does not exclude non-full-function JVs from the scope of Austrian merger control. Instead, the establishment of a non-full-function JV may also qualify as a concentration if the transaction falls under any of the other types of concentrations set out above.¹⁹

iii Turnover thresholds

Under Austrian law, a concentration (see Section III.ii) shall be notified prior to its completion if the following turnover thresholds are met by the concerned undertakings in the previous financial year:²⁰

1. combined worldwide turnover of all undertakings concerned exceeded €300 million;
2. combined Austrian turnover of all undertakings concerned exceeded €30 million and individual Austrian turnover of at least two undertakings concerned exceeded €1 million; and
3. the individual worldwide turnover of at least two of the undertakings concerned each exceeded €5 million.

There are special rules on calculation of turnover for credit institutions and insurance undertakings.²¹ In addition, for media mergers, multipliers apply to determine whether the turnover thresholds are met (see Section III.vi).

iv Exemptions

Even if the above thresholds are met, no notification has to be made if, in the previous financial year:²²

1. only one undertaking concerned achieved a domestic turnover of more than €5 million; and
2. the combined aggregate worldwide turnover of the other undertakings concerned was less than €30 million.

v Transaction value threshold

The KaWeRÄG 2017 introduced a new jurisdictional threshold based on a 'value of consideration' criterion that entered into force on 1 November 2017 and applies in addition to the existing turnover-based thresholds. According to the legislative materials, the new threshold based on the value of consideration shall particularly prevent monopolisation in the digital economy field. The legislative rationale behind the provision is to make acquisitions of companies with low turnovers for which a high purchase price is paid (e.g., due to the value of data collected by such a company) subject to merger control rules.²³ A comparable transaction value threshold has also been introduced in Germany (with a transaction value of €400 million; see the Germany chapter) with the Austrian provision closely following the German one. Both the Austrian and the German transaction value thresholds were triggered by the Facebook/WhatsApp transaction that was only reviewed by the EU Commission based on a referral request under Article 4(5) of the EUMR.²⁴ In a recent case, the FCA announced in March 2021 that it was investigating whether Facebook's takeover of the US company GIPHY in May 2020 should have been notified in Austria under the transaction value threshold.²⁵ On 22 July 2021, the Cartel Court imposed a fine of €9.6 million against Facebook for violation of the standstill obligation (see in detail above under Section II.ii).

According to Section 9(4) of the KartG, concentrations that do not meet the turnover thresholds (see Section III.iii) also need to be notified to the FCA when the undertakings concerned achieved a combined aggregate turnover in the previous financial year prior to the concentration exceeding €300 million worldwide of at least €15 million in Austria, the value of consideration for the concentration exceeds €200 million and the target company is active in Austria to a significant extent.

The transaction value threshold contains a number of new legal terms that will require clarification by the case law (in particular the terms 'value of consideration' and 'significance of domestic activities'). To assist undertakings with filing requirements, in 2018, the FCA and the German Federal Cartel Office (FCO) published a joint guidance paper on the application of the new transaction value threshold, which was updated in January 2022 (the Guidance).²⁶

According to the Guidance, the concept of 'value of consideration' includes all forms of cash payments, securities, unlisted securities or shares, other assets (real estate, tangible assets and current assets), intangible assets (licences, usage rights, rights to the company's name and trademark rights, etc.) and considerations for a non-compete undertaking that are offered to the seller in return for the acquisition of the target company. In addition, the liabilities of the target company and the seller that are assumed by the buyer form part of the value of consideration.²⁷ In the view of the FCA and the FCO, the inclusion of liabilities, however, applies only for interest-bearing liabilities.²⁸ Although the new threshold has some similarities with the US 'size of transaction' test, the Austrian 'value of consideration' test does not require that the value of assets or voting rights already held by the acquirer prior to the transaction be aggregated to the value of the assets or voting rights subject to the concentration.²⁹

The local nexus requirement ('significance of domestic activities') shall exclude marginal activities of the target from Austrian merger control. However, on the basis of the legislative material, the target company having a location in Austria is already considered a significant domestic activity. Furthermore, the factors indicating a significant domestic activity will depend on the particular industry (e.g., the number of monthly active user or unique visits in the digital economy).³⁰ According to the Guidance, the Austrian turnover may also be used as a benchmark.³¹

vi Media concentrations

A concentration qualifies as a media concentration³² if at least two undertakings concerned can be qualified as:

1. media undertakings³³ or media service companies;³⁴
2. media support undertakings (i.e., publishers, printing houses, undertakings that procure advertising orders, undertakings that procure the distribution of media on a large scale and film distributors);³⁵
3. undertakings holding an (aggregate) direct or indirect participation of at least 25 per cent in a media undertaking, media service company or media support undertaking; or
4. if one undertaking concerned can be qualified as a media undertaking, media service company or media support undertaking, and one or more media undertakings, media service companies or media support undertakings directly or indirectly hold an (aggregate) participation of at least 25 per cent in another undertaking concerned.

The turnover thresholds (see Section III.iii) also apply to media concentrations with the difference that the turnovers of media undertakings and media service companies are multiplied by 200 and the turnovers of media support undertakings are multiplied by 20 for calculating the combined (worldwide and domestic) turnover.³⁶

If a media concentration has to be notified under the EUMR, the transaction nevertheless may require an Austrian media merger control notification if the turnover thresholds for media concentrations are met³⁷ (cumulative judicial competence as provided for in Article 21(4) of the EUMR). In such a case, the substantive assessment under Austrian law is limited to assessing whether the concentration limits media plurality or diversity (see Section III.ix).³⁸

vii Consequences for completion without merger clearance

In addition to fines, the main legal consequence for infringing the obligation of not implementing a merger without prior clearance is that the agreement implementing the concentration is invalid. Although there is no specific case law on whether a subsequent notification may cure such invalidity, it is common practice to also file for merger clearance in cases where a filing obligation initially has been ignored. According to the unanimous opinion expressed in legal writing, an agreement implementing a concentration prior to the expiry of the standstill obligation is (only) provisionally invalid as long as merger clearance has not been obtained. Thus, once the transaction receives clearance, the agreement implementing the concentration (which was initially invalid as it violated the standstill obligation) will become legally effective with retroactive effect.³⁹

Furthermore, the Cartel Court may:

1. order measures to terminate the implementation of an unlawful concentration (only if clearance is not obtained subsequently);⁴⁰
2. declare that a concentration was implemented contrary to the standstill obligation (if clearance is subsequently obtained);⁴¹
3. impose a fine of up to 10 per cent of the worldwide (group) turnover achieved in the previous financial year against an undertaking violating the standstill obligation; and
4. impose a change of the corporate structure of the concerned undertakings (e.g., forced unwinding) if other alternative measures are not equally effective or are more burdensome for the concerned undertakings.⁴²

In addition, culpable violations of the standstill obligation may allow injured parties to claim damages before civil courts under general civil law rules (the special provisions of the KartG governing private antitrust damage actions normally do not apply for such cases).⁴³

The Official Parties actively pursue infringements of the standstill obligation and regularly request the imposition of fines. Fines for violation of the standstill obligation are regularly imposed by the Cartel Court, even in cases where the concerned undertakings voluntarily disclosed the infringement to the Official Parties after a short period (e.g., in the context of a subsequent filing) and the (subsequent) substantive review of the concentration proved to be unproblematic (see Section II.i).

viii Procedure

The Austrian merger control regime does not provide for a filing deadline or a pre-notification requirement. A notification can be filed as soon as the parties have agreed on the structure and timing of the transaction and intend to implement the proposed transaction within a reasonable time frame.⁴⁴ However, notifications must be submitted before the implementation of the transaction, as transactions subject to merger control must not be implemented before merger clearance (standstill obligation).

Every concerned undertaking is entitled to submit a merger notification to the FCA⁴⁵ (i.e., not only the acquirer but also the target undertaking⁴⁶ and (based on the case law) even the seller).⁴⁷ There are no specific form requirements for merger filings with the exception that the notification has to be executed in four copies and has to include the information pursuant to Section 10(1) of the KartG.⁴⁸ The Official Parties have published a Form CO (comparable with the Form/Short Form CO under the EUMR), which is intended to facilitate the swift review of a merger notification.⁴⁹ Although the use of this filing form is not mandatory, it is common practice to follow the structure of the Form CO when making merger filings in Austria.

Initial four-week (Phase I) review

The initial four-week review period will commence on the day the notification is received by the FCA, provided that the notifying party has also paid the merger filing fee (currently €6,000)⁵⁰ and the merger filing fee has been credited to the FCA's account.⁵¹ After receipt of the filing, the FCA has to publish on its website the fact that the notification was made, including its date and a short summary of the proposed transaction (including the names of the parties, nature of the concentration and business segment concerned).⁵² This publication triggers a two-week period allowing interested third parties to provide comments to the Official Parties in respect of the proposed transaction.⁵³ However, under Austrian merger control rules, third parties are not considered parties to the proceedings and do not have access to the file.

Unlike in many other countries, the Austrian merger control system does not have a 'stop-the-clock' mechanism if the Official Parties request additional information⁵⁴ or if a remedy proposal is submitted. However, the notifying party may request an extension of the initial four-week Phase I review period to six weeks.⁵⁵

The Official Parties have the exclusive right to request an in-depth (Phase II) review by the Cartel Court. If neither of the Official Parties requests the initiation of an in-depth review within the initial four-week (or, if extended, six-week) review period, the transaction subject to notification is cleared upon expiry of the review period. The Official Parties have to inform the applicant of the fact that they did not initiate an in-depth review.⁵⁶

Prior to the expiry of the initial review period, the Official Parties can waive their right to request an in-depth (Phase II) review, thereby allowing an early merger clearance prior to the expiry of the initial review period. In practice, an early clearance is possible only if the following prerequisites are met:

1. the two-week period allowing an interested third party to provide comments in respect of the notified transaction has expired;
2. the Official Parties were able to complete the substantive assessment of the notified concentration (and the assessment has not raised any concerns that – in the view of an Official Party – warrant an in-depth review by the Cartel Court); and
3. the notifying party has provided legitimate grounds for expedited clearance (e.g., in the case of financial difficulties of the target company requiring a quick completion or refinancing).⁵⁷

The notifying party or parties may propose commitments to the Official Parties aimed at preventing the initiation of an in-depth review before the Cartel Court.⁵⁸

In-depth (Phase II) review by the Cartel Court

If at least one of the Official Parties requests an in-depth review, the Cartel Court will review the notified transaction. The Cartel Court must adopt its decision within five months of receipt of the (first) request. If requested by the notifying party, this review period can be extended to six months.⁵⁹ If the Cartel Court does not adopt a decision within the five-month (or, if extended, six-month) review period, the concentration cannot be prohibited and the Cartel Court has to terminate the review proceedings⁶⁰ (with the termination decision effecting a clearance of the transaction).⁶¹

The Cartel Court may adopt a clearance decision subject to commitments if the transaction otherwise would not fulfil the clearance requirements.⁶² An implementation of a concentration having received merger clearance only subject to commitments without adhering to such commitments is considered a violation of the standstill obligation.⁶³ Furthermore, the violation of a commitments decision after implementing a concentration or obtaining a clearance decision on the basis of incomplete or incorrect statements allows the Cartel Court to impose proportionate post-merger remedies on the undertakings concerned.⁶⁴

A prohibition decision will be issued if the Cartel Court considers that the concentration leads to the creation or strengthening of a dominant market position or – following the KaWeRÄG 2021 – a significant impediment of effective competition (SIEC) unless the grounds for a justification set out in Section 12(2) of the KartG apply.⁶⁵

Furthermore, the Cartel Court may reject an application for in-depth review (e.g., because it was lodged after the expiry of the initial review period or because the notified transaction does not qualify as a (notifiable) concentration under Austrian merger control rules).⁶⁶

A final decision of the Cartel Court can be appealed with the OGH. The deadline for lodging an appeal is four weeks.⁶⁷ The OGH has to render its decision within two months of the receipt of the files from the Cartel Court.⁶⁸ If the matter is referred back to the Cartel Court, it is likely that the Cartel Court will, again, have five months to adopt a new decision.⁶⁹ Particularly in cases of transactions that are likely to raise substantive issues that may have to be analysed in an in-depth (Phase II) review, the above deadlines should be kept in mind for the overall time required until clearance of the transaction can be expected.

ix Substantive assessment

Whereas Austrian merger control traditionally (only) applied a dominance test, the KaWeRÄG 2021 additionally introduces the SIEC test in Section 12(1), No. 2b of the KartG (as applied under the EUMR) for concentrations being notified after 31 December 2021. As regards media concentrations, the assessment – in addition to the dominance and the SIEC test – is based on whether the concentration has negative effects on media plurality or diversity.⁷⁰

Under the dominance test, a concentration shall be cleared if it does not lead to the creation or strengthening of a dominant market position. An undertaking is considered dominant if it (1) is not subject to any or only insignificant competition or (2) holds a superior market position in comparison with all other competitors.⁷¹ Two or more undertakings are considered to hold collective dominance if there is no significant competition between them and (1) they are not subject to any or only insignificant competition or (2) together they hold a superior market position in comparison with all other competitors.⁷² The KartG contains rebuttable presumptions of (single or collective) dominance if certain market share thresholds are exceeded.⁷³

During in-depth review (Phase II) proceedings before the Cartel Court, (independent) court-appointed experts play a significant role when defining the relevant markets and providing a competitive analysis as regards the effects of a notified transaction. Therefore, the substantive assessment of a merger will often be based to a significant extent on the findings of this expert, and is often used as the basis for the Cartel Court's decision.

Other strategic considerations

The FCA is a member of the European Competition Network and the International Competition Network. On 13 May 2019, the FCA also became a founding member of the Framework on Competition Agency Procedures of the International Competition Network. The Official Parties cooperate closely with other competition authorities, particularly with the FCO.⁷⁴ If a transaction has to be filed in multiple jurisdictions, the concerned undertakings should ensure to provide consistent information in their respective filings.

Following the KaWeRÄG 2021, the FCA is now also required to forward all merger filings to the Federal Minister for Digital and Economic Affairs to administer their tasks under the Investment Control Act.⁷⁵ As a consequence, it is expected that transactions involving direct or indirect third-country acquirers or ultimate beneficial owners (non-EEA or Swiss) where an Austrian merger filing but no Austrian foreign direct investment filing is made will face heightened scrutiny from the Austrian foreign direct investment authority.

Under Austrian merger control law, pre-notification negotiations with the Official Parties are not mandatory and, although possible (and generally encouraged by the Official Parties), not very common.⁷⁶ However, in complex cases where it is likely that the Official Parties raise competition concerns, pre-notification discussion can be very useful to avoid extensive and cost-intensive in-depth reviews before the Cartel Court. Pre-notification contacts can also be useful if there are doubts as to whether a filing is required (e.g., because a transaction lacks domestic effect or does not qualify as a concentration).

Because the initiation of an in-depth (Phase II) review leads to a change of the decision-making body, the review process is basically restarted with the notifying party or parties and the Official Parties becoming parties of the Cartel Court proceedings. Court-appointed experts play a significant role in merger control proceedings before the Cartel Court, especially in connection with the definition of the relevant market and regarding the competitive analysis of a notified transaction.

Outlook and conclusions

Overall, as a result of the broad scope of application of the Austrian merger control regime, the number of merger control filings in Austria has been increasing constantly year after year⁷⁷ (although in 2020 these numbers suffered a (slight) decrease due to reduced merger activity during the covid-19 crisis). However, following the newly introduced second domestic turnover threshold – requiring that at least 'two of the undertakings concerned each . . . have a turnover of more than €1 million' in Austria – it is expected that the number of notifiable mergers in Austria is likely to decrease. In particular, the amendment will exclude most cases of acquisition of sole control from Austrian merger control where the target company achieved only insignificant domestic turnover (unless the transaction falls under the alternative transaction value threshold or if a JV is created where the turnover of other shareholder(s) has to be taken into account, such as a remaining shareholder with a participation of 25 per cent or more). A further major amendment following KaWeRÄG 2021 concerns the substantive assessment of a merger, namely the introduction of the SIEC test in Section 12(1), No. 2b of the KartG (as applied under the EUMR) in addition to the dominance test.