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Market abuse: AFCA files application for appropriate fine to be imposed on Österreichische Post AG

On 23 January 2024, the Austrian Federal Competition Authority (AFCA) filed an application with the Cartel Court for the imposition of an appropriate fine on Österreichische Post AG. These proceedings came after individual court proceedings brought by several companies against Austrian Post.

Prior individual proceedings

The prior individual proceedings concerned a legal action against Österreichische Post AG aimed at remedying abusive conduct based on discriminatory discount practices. Companies are given the opportunity to file their own applications with the Cartel Court by way of individual proceedings. The companies also applied for interlocutory injunctions. The Cartel Court dismissed their applications for interlocutory injunctions but granted the request for termination of the abusive conduct. Österreichische Post AG disputed the Cartel Court’s decision and lodged an appeal with the Supreme Court of Justice sitting as the Supreme Cartel Court. The Supreme Cartel Court rejected the appeal (see press release of 13 January 2022).

The AFCA submitted several statements in the individual proceedings as well as a response to the appeal, finding the discount practices of Österreichische Post AG to be discriminatory and incompatible with competition law.

Discriminatory discount practices

Several mail consolidating companies claimed that discriminatory discount practices had been used in the market for the delivery of Info.Mail (personally addressed advertising). Mail consolidators offer preparatory postal services to mailing customers with large volumes of mail. This mail is then delivered by Österreichische Post AG.

Mail consolidators may only market their services to mailing customers in conjunction with Austrian Post’s delivery services. Mailing customers may also buy these mail consolidation services from Österreichische Post AG directly. The fee that mail consolidators have to pay for the delivery services is a key cost factor for them, limiting their room for manoeuvre in terms of price competition.

The Cartel Court ruled in the prior individual proceedings that Österreichische Post AG may not grant mailing customers higher annual bonuses or discounts for Info.Mail deliveries than those offered to mail consolidators.

AFCA now applying for appropriate fine in separate proceedings

The AFCA has now applied to the Cartel Court for the imposition of an appropriate fine in separate proceedings. The proceedings have been brought by the AFCA for the purpose of maintaining the public interest and ensuring that competition functions properly. The application was a direct consequence of the market abuse finally found in the individual proceedings; the illegal conduct related to the discriminatory discount practice of Österreichische Post AG in relation to its Info.Mail service.

Österreichische Post AG is cooperating with the AFCA. The proceedings now initiated before the Cartel Court deal with questions relating to the setting of the fine.

The Austrian Federal Competition Authority is stepping up its activities to unearth market abuse. Market dominance is not forbidden, but the abuse of a dominant position is. Market abuse has negative consequences for both competitors and consumers. Any such conduct is bad for the economy and must not lead to businesses being disadvantaged by dominant companies. This can have negative consequence for the whole market,” explains Director General Natalie Harsdorf-Borsch.

Individual proceedings and proceedings initiated by the AFCA

The Austrian Federal Cartel Act (KartG) allows any undertaking that has a legal or economic interest in a decision to submit its own applications to the Cartel Court in relation to infringements (such as requesting a finding or termination of conduct that breaches antitrust law).

Following the completion of individual proceedings, fines may only be imposed if the Federal Competition Authority or the Federal Cartel Prosecutor files a corresponding application. After thoroughly investigating the facts of the case, the AFCA has deemed it necessary to file such an application, particularly for reasons of general deterrence.