Two new merger control landmark decisions of the Austrian Supreme Cartel Court

1. Transaction value threshold

The Austrian Supreme Cartel Court (SCC), in a landmark decision (16Ok2/25t) on the scope of the transaction value threshold, had to decide on an appeal lodged by the Austrian Federal Competition Authority (FCA) and the Federal Cartel Prosecutor (FCP) against the Austrian Cartel Court’s rejection of a Phase II request pertaining to the planned statutory merger (by absorption) of JenaValve Technology, Inc. (JenaValve) by Edwards Lifesciences Corp. In 2023, the global turnover of the target JenaValve amounted to approx. EUR 19 million, of which only EUR 57,000 (approx. EUR 95,000 in 2024, respectively) was generated in Austria. The target had so far only sold eight of its systems in Austria to one single customer.

The SCC confirmed the lack of notifiability of the merger in Austria clarifying important aspects on the type of local nexus as well as concerning the requirement of significance of the target’s activities in Austria for the transaction value threshold to apply:

• Wide scope (not only digital economy): Notwithstanding the focus on digital economy, the transaction value threshold is applicable across all sectors and is therefore also applicable in the present case.
• Easily manageable rule (no market share test): The Austrian legislator’s clear intention was to create an easily manageable jurisdictional test to safeguard legal certainty. According to the SCC, the target’s market share is no such easily manageable indicator as this would require the sometimes complex exercise of market definition (thereby overruling a previous precedent of the Cartel Court (27 Kt 9/21g - Salesforce / Tableau) and the FCA’s current guidelines on the transaction value threshold).
• Only existing activitiesof the targetcan fulfil the “local activity” test: A mere existing EU market approval, the registration of a patent or the market readiness of a product still in the development stage (“pipeline product”) does as such not imply any domestic activity of the target in Austria. The issue whether any R&D activities carried out domestically could establish such sufficient domestic activity had not to be decided by the courts since such activities were undisputedly not carried out by the target in Austria.
• Significance of domestic activities test need not be turnover related but mere advertising in Austria probably not enough: The target’s local activities do not need to be turnover related to meet the significant domestic activities test and could thus also be met by mere marketing campaigns directed towards Austrian customers. However, in the SCC’s view, such mere advertising activities will usually fail to reach the significance criteria. Provided that the significance of the domestic activities testcannot be adequately established by other measurement factors, according to the SCC and in line with previous doctrine, it shall regularly be denied in cases where the target’s Austrian turnover is below EUR 1 million. Unfortunately, in its ruling, the SCC did not specify such alternative (non-turnover related) measurement factors.
• Time of the implementation of the merger as the relevant timing: According to the SCC, the significance of the target’s domestic activitiesmust be assessed as of the time of the (planned) implementation of the merger. Potential or even planned future local activities of the target (in the following years, e.g. stemming from pipeline products) are not to be considered in such analysis.

With the above reasoning, the SCC thus concluded that the target was not active in Austria to a significant extent to trigger a merger control filing obligation and thus rejected the existence of a notifiable merger in Austria. The full decision of the SCC is available here (in German), the press release issued by the FCA is available here.

The SCC’s decision, to some extent, contradicts the FCA’s existing guidelines on the transaction value threshold, which in reference to the Austrian Cartel Court’s previous case law in 2021, state that a market share of more than 10% of the target on a “competitive relevant segment in Austria” (wording according to the current guidelines) qualifies as significant domestic activity. Therefore, the present ruling will likely trigger a future amendment of the present guidelines.

Recently, further noteworthy new developments on narrowing the transaction value threshold’s scope of application also took place in Germany: In the same matter, in a press release issued in February 2025, the German Federal Cartel Office announced that it had discontinued its proceedings because the transaction value threshold was not met due to the target’s lack of substantial operations in Germany at the time of the acquisition.¹

In addition, the Higher Court of Düsseldorf rejected a merger control filing obligation of Adobe’s previous acquisition of two companies in the B2B-marketing sector in 2018 ruling out both, i.e., the general merger control filing criteria as well as the significance of the target’s local activity under the transaction value threshold.² The case is currently pending before the German Federal Court of Justice in Karlsruhe.

2. Record fine of EUR 70 million imposed for gun jumping

Gun jumping enforcement in Austria has reached an unprecedented level. In an astonishing landmark ruling (16Ok5/24g), the Austrian Supreme Cartel Court (SCC) raised the fine of EUR 1.5 million set by the Austrian Cartel Court following an appeal against the Cartel Court’s first decision not to impose any fine at all to EUR 70 million on second appeal – a nearly 47-fold increase marking a decisive shift in the level of fines for competition law infringements in Austria.

• The transaction: In this precedent-setting decision, the SCC’s fine on REWE was imposed for prematurely implementing a concentration without prior clearance by the Austrian Federal Competition Authority (FCA). The transaction, involving a long-term lease of a food retail space in a shopping centre, was considered notifiable under the Austrian merger control regime, but was everything but a straight-forward concentration. The space leased by REWE was newly renovated and closed for almost a year before REWE started its operations. REWE’s lessor was the real estate developer who had bought the entire shopping centre and who was thus not active in food retail at all. According to the FCA, however, REWE’s restart of the business had to be considered as taking over an established business (or at least a relevant part of it) because the space had previously been operated as a food retail store before the shopping centre was sold to the real estate developer who then rented the retail space to REWE. Hence, the argument was that the business’s market position, goodwill, and customer base were transferred to REWE despite the interruption, especially considering that suitable real estate for supermarkets was a rare commodity in Austria. Both the Cartel Court as well as the SCC followed the FCA’s opinion. The transaction was retroactively filed by REWE and then cleared by the FCA after the statutory 4-week review period had lapsed without any objections as there were no competition issues whatsoever in the local market concerned.
• Calculation of the fine: Despite several mitigating factors outweighing the aggravating factors – including no intentional wrongdoing, no financial enrichment, no impact on competition, and REWE’s cooperation with the FCA – the SCC rejected the Cartel Court’s initial decision not to impose a fine merely on the grounds of slight negligence by REWE upon appeal and ordered the Cartel Court to impose a fine with appropriate deterrent effect. The Cartel Court, in an attempt to follow suit, imposed a fine of EUR 1.5 million on REWE. The FCA, however, was still not satisfied and following its appeal, the SCC increased the fine to a breath-taking EUR 70 million, largely based on REWE’s global turnover of EUR 92.3 billion despite the transaction only relating to a local market without any material impact on competition (the overall annual turnover – not profits! – generated by the pre-owner before the space was closed down for almost a year amounted to just above EUR 5 million). The SCC emphasized the need for a certain substantive amount to have a sufficiently deterrent effect as well as the necessity to raise fines for competition law infringements in Austria for the purpose of bringing them in line with the long-lasting practice at EU level as well as in other EU Member States. This reasoning was not substantiated by any examples, which is of course not very surprising as no such practice exists. Quite to the contrary, gun jumping fines in other EU Member States – if any at all – are comparatively low and have so far very rarely exceeded the EUR 1 million threshold. At EU level, the scarce examples of fines of similar amounts are not comparable for various reasons (material competition concerns in the EU, deliberate infringement in straight-forward cases of gun jumping etc).
• Broader trend to higher fines: This ruling follows a pattern of increasingly strict enforcement by the SCC which aims to turn the current fine practice upside down. A similar shift could already be seen in the Hygiene Austria case decided shortly before REWE, where the SCC also drastically raised the fine for gun jumping from EUR 5,000 imposed by the Cartel Court to EUR 100,000, i.e. a 20-fold increase. Akin to REWE, the specific facts of the case (infringement period of only a few weeks of pre-clearance production of urgently needed face masks in the wake of the COVID-19 pandemic and thus very extraordinary circumstances owed to the first pandemic any of us had ever experienced) did not warrant a dramatic change of the well-established Austrian fine practice, which had been – not to forget – developed over many years by the SCC itself.
• Impact on merger control and the FCA’s settlement proceedings: The REWE decision sends a strong signal to the Cartel Court and particularly to the FCA. Until now, the majority of cases were settled and the fines – typically between EUR 50,000 and EUR 150,000 – were agreed upon by the FCA and the companies involved. Since the Cartel Court cannot impose higher fines than requested by the FCA, the legal parties effectively determine the amount of the fine. As a settlement is of only limited added value to the FCA in the mostly clear-cut gun jumping scenarios, it must be expected that the fine practice for gun jumping will change dramatically due to the FCA’s strong bargaining power following the REWE decision. It is difficult to imagine that any company would be prepared to take the risk and not agree to a settlement with the FCA.
• Opinion and criticism: The SCC’s ruling has drawn sharp criticism. Legal experts have pointed to the lack of transparency in fine calculation, the reliance on (unrelated) group turnover rather than specific (mis)conduct, and the apparent unpredictability and lack of certainty, especially for companies with high group turnover (REWE’s potential fine ranged between zero and EUR 9.23 billion (!), raising questions of the constitutionality of the underlying provision of the Austrian Cartel Act.
• Key takeaways: The stakes have risen substantially. Companies involved in M&A – especially larger companies globally active with high worldwide turnover – are at risk of facing hefty fines in Austria even for slightly negligent conduct even without potential impact on competition in gun jumping scenarios. As a result, in cases of only minimal doubt, it is highly recommendable to either file as a matter of precaution or consult with the FCA and not challenge the FCA’s opinion even in disputable matters to avoid bad surprises – in our opinion, quite an unsatisfactory result!

For more details and a critical analysis of the REWE decision, please refer to our blog on Antitrustpolitics.com and our article in the June edition of the NZKart.

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.