Effective, proportionate, dissuasive? – Examining sanctions under the UTP Directive

The EU Directive on Unfair Trading Practices (UTP Directive) seeks to promote fair competition in the agricultural and food supply chain. However, the  lack of harmonization, has led to divergent approaches to sanctions: whereas Austria, for example, aims to impose far-reaching fines, Germany pursues a more restrained enforcement approach. Case C-311/24, currently pending before the ECJ, could provide important guidelines for future practice.

1 )  Background and objectives of the UTP Directive

The EU Directive 2019/633 (“UTP Directive”) created a union-wide legal framework designed to prevent alleged abuse of buyer power against smaller suppliers. In Austria, the UTP Directive was implemented in the second section of the Fair Competition Conditions Act (“FWBG”) and in Germany in the Agricultural Organizations and Supply Chains Act (“AgrarOLkG”).

The directive employs a formal system of fixed turnover thresholds to identify when a buyer possesses 'market power' and when a supplier requires protection. If these turnover thresholds are reached, a binding catalog of prohibited trading practices applies. The concept of the UTP Directive thus differs significantly from traditional antitrust law, which covers a large part of the UTP Directive's provisions in the area of abuse prohibition, but requires proof of actual market power and, in most cases, abuse of that power.

Due to the factual similarity to the prohibition of abuse, the question arises as to what extent the sanction regime of the UTP Directive should follow that of antitrust law. According to Article 6 (1) of the UTP Directive, infringements must be sanctioned in an effective, proportionate, and dissuasive manner, with the exact form of the sanctions being left to the discretion of the Member States.

2 )  Austria: Sanctions framework and current discussion

In Austria, the Federal Competition Authority (“FCA”) enforces the FWBG regulations. Upon request by the FCA, the Cartel Court may impose a fine of up to EUR 500,000 pursuant to Section 6 (2) FWBG. The fine is calculated in accordance with the principles of the Austrian Cartel Act (“ACA”, Section 33 ACA). During the legislative process, the FCA criticized the statutory upper limit for fines as being too low. Due to the similarity to the prohibition of abuse under antitrust law, the FCA had also advocated for fines to be calculated on the basis of turnover. The legislature did not follow this approach.

In its enforcement practice, however, the FCA interprets the possibility of sanctions under Section 6 (2) FWBG broadly: if an unfair trading practice is committed several times or against several suppliers, it considers each act to be a separate violation. According to this interpretation, the sum of the individual sanctions could exceed the nominal maximum limit. For example, a problematic clause in general terms and conditions that is applied several times in different transactions to different suppliers would lead to a large number of violations, the cumulative fines for which could far exceed the legal maximum limit.

This interpretation is the subject of a preliminary ruling pending before the ECJ (Case C-311/24). The case concerned a food retailer who approached several of its suppliers with a request for voluntary payments to finance restructuring measures.[1] The FCA considered this to be a series of separate infringements, citing the specific structure of the FWBG's sanctions regime as justification. In contrast, however, Austrian sanctions law considers this to be a single offense, meaning that only the maximum penalty could be imposed. The Cartel Court submitted a request for a preliminary ruling to the ECJ to clarify the extent to which EU law (the UTP Directive) requires multiple sanctions in such cases, contrary to the Austrian practice normally applicable.

Advocate General Rantos emphasized in his Opinion published in September 2025 that Member States generally have considerable discretion in determining penalties. A national regulation that treats multiple infringements as a single offense is permissible, provided that the sanction remains effective, proportionate, and dissuasive overall. An absolute upper limit on fines may also remain in place, but it must not be applied so restrictively that it loses its dissuasive effect.

A final ECJ ruling is expected by 2026. It is likely to provide authoritative guidelines for the FCA's future sanctioning practice and also influence the outcome of other pending proceedings. The FCA has also filed 20 separate applications for fines against a large drugstore chain, which could result in a cumulative fine of up to EUR 10 million if the maximum limit of Section 6 (2) FWBG is applied multiple times.

3 )  Enforcement practice in Germany

In Germany, the Federal Office for Agriculture and Food (“BLE”) oversees the enforcement of  the implementing provisions (AgrarOLkG) of the UTP Directive. Unlike the FCA, the BLE can independently issue prohibition orders and impose fines (up to EUR 750,000).

The prohibition decisions published by the BLE to date reveal a sanctions regime that is completely different to the Austrian one. So far, the BLE has refrained from imposing fines. Instead, the BLE focuses on publishing the prohibition decision. The authority assumes that the mere announcement of a violation has a sufficient preventive effect.

The Higher Regional Court of Düsseldorf has expressed concerns about the proportionality of this approach and considers this publication of prohibition decisions to be excessive in parts. For example, the Higher Regional Court of Düsseldorf (judgment of July 9th, 2025 – Kart 4/24 [V]) considered the formal determination of an (obvious and already terminated) violation to be disproportionate and therefore an error of discretion. Specifically, the court took into account that (i) the rules of the AgrarOLkG are new legislation, and (ii) the defendant company had even hired a lawyer to review the contracts, but the lawyer had simply overlooked the problematic clause. In addition, (iii) the suppliers' interest in a finding (and publication) was also to be considered low, as the clause was indisputably inadmissible and civil law claims for damages did not depend on a formal finding of this fact. Thus, the interest of the suppliers and the aspect of general prevention would be disproportionate to the impairment of the company concerned, namely the pillory effect of a formal finding of the violation and the publication of the decision.

It remains to be seen whether these (restrained) sanction standards will also spill over into Austrian case law or whether fines will continue to be regarded as the preferred means of punishment.

4 )  Outstanding Matters and Outlook

While Germany debates whether violations should be formally determined at all, Austria is grappling with the application of its maximum fine of €500,000 to multiple offenses.

The imposition of fines based on the implementing provisions of the UTP Directive is very heterogeneous across Europe. In 2023, fines totaling approximately EUR 22 million were imposed across Europe based on the UTP Directive, with EUR 20 million attributable to a single decision from Poland. In view of the current European legislative efforts (Directive 2024/0318 (COD)) to improve cross-border cooperation in the investigation of infringements and enforcement of the UTP Directive greater harmonization of sanction regimes is desirable.

For Austria, many questions remain unanswered for the time being. However, the ECJ's decision may provide urgently needed answers to ensure a consistent and targeted application of the FWBG. It is to be hoped that the ECJ will, on the one hand, provide this clarity and, on the other hand, also make it clear that particularly high fines are only appropriate in cases of more serious abuse of conditions or exploitation under Article 102 TFEU/Section 5 ACA and that they should not be excessive in cases of UTP violations.

We will continue to monitor these developments and contribute to fostering moderate and balanced solutions in this critical area of food supply regulation.

Please note: This blog is for general information purposes only and in no way constitutes legal advice from Binder Grösswang Rechtsanwälte GmbH. The blog cannot replace individual legal advice. Binder Grösswang Rechtsanwälte GmbH accepts no liability of any kind for the content and accuracy of the blog.