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AFCA confirms granting of leniency to FCC Austria Abfall Service AG and applies to Cartel Court

On 15 February 2024, and following extensive investigations into the waste management sector, the Austrian Federal Competition Authority (AFCA) filed an application with the Cartel Court against FCC Austria Abfall Service AG (“FCC”), the first of its kind, on the grounds of price fixing, market divisions and the exchange of sensitive information. FCC was involved in an Austrian cartel from at least July 2002 until March 2021.

FCC has fully cooperated with the AFCA and the Federal Cartel Prosecutor under the leniency programme from the outset. The company has also acknowledged the facts of the case, thereby helping to speed up the procedure. The AFCA has refrained from applying for the imposition of a fine due to the company’s early and full cooperation. FCC has therefore been granted full immunity under the leniency programme.

Previous AFCA investigations into the waste management industry

In March 2021, the AFCA carried out dawn raids at 20 waste management companies (press release of 18 March 2021). Additional dawn raids followed a year later, when new suspicions arose as a consequence of leniency applications, numerous whistleblower reports and the questioning of the parties concerned. The AFCA impounded significant amounts of data from the companies involved in nearly all of the federal provinces, including more than 60 TB in IT data and more than 2000 pages of physical documents. The AFCA is still investigating a large number of other companies.

“This is our first application to the Cartel Court in relation to the waste management sector. Further applications for fines to be imposed on a number of companies can be expected this year. We have looked into the whole issue very thoroughly. It is in the interest of municipalities, and ultimately the tax payer, that the sector conducts its business properly,” explains Natalie Harsdorf-Borsch, Director General of the AFCA.

Infringements

The infringements concern price fixing, market divisions and the exchange of sensitive information during a period lasting from at least July 2002 until March 2021. Companies helped each other to win contracts, reducing uncertainty around their future business conduct and securing their market shares as a result.

By dividing up markets and customers, the companies involved created an intertwined network of cartels, which ultimately covered the whole of Austria.

Economic sector concerned

The waste management sector is traditionally divided into waste collection, waste treatment, waste disposal and recycling. A distinction is also made between municipal waste and company waste, with further sub-segments according to material flows.

Some 300 companies are engaged in the waste management market in Austria. Apart from market participants that operate nationally, many are small companies that operate only within their region.

In addition to provisions under European law, the Austrian Waste Management Act (AWG 2002) is the most important legal basis for the waste services sector; it regulates waste prevention, recycling, other recovery (e.g. energy recovery) and waste disposal. Furthermore, regional laws in the federal provinces lay down the rules for municipal waste collection, refuse charges and the planning of plants.

The AFCA investigations into the waste management sector focused on waste collection, as well as further waste processing such as waste separation, recycling and recovery, and the disposal of waste.

Leniency without a fine

In accordance with the conditions laid down in § 11b of the Competition Act (WettbG), the AFCA may reduce a fine to be imposed or file only an application for a finding if a company cooperates in uncovering a cartel and full immunity from a fine is granted (see Leniency).