Austrian merger control – decrease in filings and new filing form

While the number of merger control filings in Austria has decreased quite substantially in 2020 because of COVID-19, the Austrian competition authority has published a new filing form in October for the first time in many years. See our blog for further information on the impact of this new form on the preparation of merger control filings in Austria.

On 30 November, the Austrian Federal Competition Authority (“FCA”) issued its activity report for 2019. The number of merger control filings was very high with 495 national filings, a rise yet again by 14 when compared to the year 2018. However, when looking at the developments in 2020, until the end of November, approx. 374 filings were submitted to the FCA. It can thus be expected that the total number for 2020 will be quite much lower than in 2019 (with about 50 filings likely to follow until the end of the year). No surprises there, taken the pandemic crisis, which has of course also touched upon the companies’ M&A activities.

Despite the pandemic (which only led to a prolongation of the investigation periods during the first lockdown back in March for a limited period of time and otherwise did not affect merger control proceedings in Austria), the FCA has been very active throughout the year. Amongst other things, it has also published an amended filing form in October, which parties are requested to use when reporting their notifiable transactions to the authorities. While the Austrian turnover thresholds are very low and thus lead to the comparably high number of filings, until now, the information requests prompted by the filing form were not too cumbersome for the parties in particular in (the vast majority of) straight-forward Phase I cases. Will the amended filing form change this, i.e. will it have any impact on the duration/complexity of the preparation of the filing?

The good news is no as regards the no-issue cases and also as regards cases with “affected” markets (combined market shares of at least 15 % or market shares of at least 25 % on vertically related markets) below the thresholds for the presumption of dominance. For these cases, the new form essentially does not bring about any material, additional requirements. However, even in cases where the parties are presumed dominant (most importantly when they have combined market shares of at least 30 %), while at first sight it could seem that the form has changed quite substantially, the impact should be rather limited with one exception. The following gives a brief overview of the most important new requirements:

In regard to all filings, the FCA now explicitly asks for information on the economic owner/operational entity also in connection with the summary provided for publication on its website. This is not surprising as the publication should allow third parties to react in case of any issues they see which is rendered difficult when the operational entity is not evident at first sight. The form also now requires the specific (4- or 5-digit) Austrian NACE-code categorization for the industry sector concerned by the transaction as well as an English version of the transaction summary. Interestingly, until now (the form is in use for about a month), this has not had any impact on the publication text: neither has there been a reference to the NACE-code in the publication (but rather to the overall industry sector like in the past) nor has the requested English version of the summary been published in regard to the transactions filed in November. However, we would expect this to change in the near future.

As regards transactions based on the relatively new transaction value threshold, also not surprisingly, parties are now explicitly asked to provide information on the transaction value (exact amount and main components of the value of the consideration), the significant domestic activity criterion and also the business strategy for the target for the next three years.

As for presumption of dominance cases, the most important new aspect of the amended filing form is that parties should submit – essentially in line with what is required as a standard in some other jurisdictions (e.g. for an EU filing) – the most important internal documents (presentations, info memos etc) prepared in connection with the transaction (e.g. discussing the rationale, alternatives, financial assessments, possible synergies, business plans and the like) as well as all analyses, studies etc relevant for the competitive assessment of the markets.  

Furthermore, parties in presumption of dominance cases are asked to elaborate on balancing factors, such as buying power, potential competition and the likelihood of market entries or failing firm defence arguments where applicable. However, such factors will in any event have to be discussed in the filing as the parties have to rebut the presumption of dominance. To this end, they have to bring forward arguments as set out as examples in the new form. Therefore, the form in essence does not really contain any new requirements in this connection, but merely describes possible grounds for the rebuttal and thus aims to assist the parties in providing important information already at an early stage, which should again enable the competition authorities to better assess the concentration’s impact on competition. In any event, the necessary contents of the merger filing in possibly problematic merger cases will – just like in the past – have to be discussed with the authorities in a pre-notification phase.

The parts of the form relating to justification grounds (in case the transaction creates or strengthens a dominant position), spill-over effects of joint ventures and media concentrations (which require substantial additional data, the collection of which is sometimes quite burdensome, in particular where foreign companies are involved) have remained unchanged.

To sum it up, the new filing form published by the FCA in October does not have a material impact on the preparation of merger filings in Austria, in particular concerning no-issue filings which account for the majority of filings submitted. The necessity of providing internal documents in presumption of dominance cases will not be welcomed by the transaction parties for obvious reasons, but remains the only major novelty of the amended form that parties should be aware of.

Please note: This blog merely provides general information and does not constitute legal advice of any kind from Binder Grösswang Rechtsanwälte GmbH. The blog cannot replace individual legal consultation. Binder Grösswang Rechtsanwälte GmbH assumes no liability whatsoever for the content and correctness of the blog.