In early 2019, the Austrian Federal Competition Authority (AFCA) initiated investigations into Fond Of GmbH, a manufacturer of school bags and school backpacks, as well as into several retailers, in response to alleged anti-competitive concerted practices (vertical price fixing). The infringements concerned in particular the Fond Of GmbH brands “satch” and “ergobag”.
The company’s anti-competitive conduct involved agreements with manufacturers of school bags and school backpacks, requiring them to adhere to certain sales prices. Manufacturers imposed prices on the retailers, despite referring to them as recommended retail prices, which these retailers subsequently mostly adhered to, thereby restricting competition among them. In addition, Fond Of GmbH also partially restricted online selling of its products on retailers’ own websites or on third-party platforms, doing so in an unlawful manner.
The AFCA was first made aware of potential problematic conduct by consumer complaints, and consequently initiated an investigation. In January 2019, the German Bundeskartellamt carried out a dawn raid at Fond Of GmbH in Germany following AFCA’s request for assistance. The AFCA conducted dawn raids at retailers in Austria at the same time. During the dawn raid, Fond Of GmbH made an immediate application for leniency, subsequently cooperating fully with the AFCA to clarify the facts of the case. In July 2021, the Cartel Court imposed a reduced fine of EUR 340,000 on Fond Of GmbH upon AFCA’s application (25 Kt 5/21d).
The retailer Kastner & Öhler had also applied for leniency in the school bag cartel, allowing for another reduced fine to be applied for (24 Kt 1/22k). The Cartel Court issued its decision on 12 May 2022, imposing a fine of EUR 70,000 on Kastner & Öhler Beteiligungs-Aktiengesellschaft, Kastner & Öhler AG and Kastner & Öhler Mode GmbH (Kastner & Öhler) for a single, complex and continuous infringement. The company had entered into agreements with the manufacturers of school bags and school backpacks on resale prices, setting fixed and minimum retail prices (and, in some cases, the prices for accessories). The infringement covered the period from February 2016 to March 2019.
Another final decision was reached in relation to AFCA’s application for the imposition of a fine on Thalia Buch & Medien GmbH (25 Kt 4/22h); the fine amounts to EUR 100,000. The company had acknowledged the infringement, necessitating less complex proceedings and thus allowing for a reduction in the requested fine. In the case of Thalia Buch & Medien GmbH, the anti-competitive conduct concerned agreements with manufacturers of school bags and school backpacks to adhere to certain sales prices, and occurred during the period from February 2015 to February 2019.
Due to the retailer Georg Hausmann KG facing financial difficulties, the AFCA only filed an application for findings on 2 September 2022. The company has cooperated with the AFCA and acknowledged the infringement.
Following these decisions imposing fines on Kastner & Öhler Beteiligungs-Aktiengesellschaft, Kastner & Öhler AG and Kastner & Öhler Mode GmbH (Kastner & Öhler) of EUR 70,000, on Thalia Buch& Medien GmbH in the amount of EUR 100,000, and the application for findings in relation to Georg Hausmann KG, the AFCA can now conclude its investigations into the school bag cartel. All in all, fines amounting to EUR 510,000 have been imposed.
The investigations initiated by the AFCA also led to investigations being conducted in Germany; an example of the good cross-border working relationship between the Austrian and German authorities. The German Bundeskartellamt (Federal Cartel Office) also imposed a fine on the Cologne-based Fond Of GmbH, totalling approximately EUR 2 million (see Bundeskartellamt press release of 17 August 2021).
Vertical agreements are agreements or concerted practices between companies operating at different levels of the economic production or distribution chain. AFCA’s position paper on vertical agreements can be downloaded from its website (see STANDPOINT on Resale Price Maintenance).