Austrian Building Cartel: Proceedings against STRABAG to Continue

Jul 28, 2023 Benn-Ibler Rechtsanwälte

The Austrian Federal Competition Authority (Bundeswettbewerbsbehörde, hereinafter BWB) was successful in its appeal to the Austrian Supreme Court (Oberster Gerichtshof, hereinafter OGH). The cartel court of first instance is now obliged to continue the proceedings against STRABAG and to review its final decision from 2021.

In the period from July 2002 to October 2017, two companies of the STRABAG Group were involved in price agreements, market sharing, and information exchange with competitors in violation of cartel law in connection with public and private tenders in the building and civil engineering sector in Austria. On the basis of a leniency programme, the Group was sentenced to a reduced fine of €45.37 million in 2021.

In 2022, on the basis of new facts and evidence, the BWB applied for a judicial review of this final decision. At that time, the BWB became aware of new facts which necessitated a new review by way of administrative assistance. With regard to compliance with the obligation to cooperate fully as the state’s witness, the circumstances were questionable. In the case of three further specific construction projects, there had been detailed descriptions of infringements of competition law which had not been the subject of disclosure although the STRABAG group had been fully aware of them.

However, the competent cartel court rejected BWB’s application for amendment. BWB successfully appealed against this decision to the OGH, which is the highest cartel court. The Cartel Court must now continue the proceedings.

The OGH stated that, contrary to the view of the Cartel Court, there were no objections to the application for amendment and that there was a clear legal basis for it in Sections 72 et seq. of the Austrian Act on Extra-Contractual Disputes (Außerstreitgesetz).

On the contrary, it cannot be in the interest of the effectiveness of the leniency programme to protect companies which have been granted leniency on the basis of their deliberate concealment of infringements of competition law from the imposition of appropriate fines if it subsequently transpires that the BWB was unaware of this through no fault of its own.

The leniency programme under the Austrian Cartel Act has been very successful and has already led to the uncovering of a large number of cartels. However, according to the OGH, companies are required to cooperate fully.

The proceedings will now be continued before the Cartel Court, which will decide on an appropriate fine.

OGH 16 Ok 8/22w (25 May 2023)