The dispute in the main proceedings
In November 2023, the Austrian Federal Competition Authority (AFCA) applied to the Cartel Court to have appropriate fines imposed on a food retailer for having breached the Fair Competition Act (FWBG) in 16 cases.
The proceedings related to requests for payment made by a food retailer to suppliers of agricultural and food products. The retailer had submitted pro forma invoices for different lump sums. The payments requested were not related to the products that were actually being purchased.
Order for reference by Cartel Court
The Cartel Court concluded that a number of requests for payment that are addressed simultaneously by a buyer to a number of suppliers on the basis of a single intent must be classified together as a single infringement. This only allows for the imposition of a single fine, which is capped at EUR 500,000. Given that the Cartel Court had doubts over whether this outcome would comply with the protective purpose of the UTP Directive, on which the FWBG was based, it decided on 26 April 2024 to suspend the proceedings and refer the question of admissibility of such a national regulation to the Court of Justice of the European Union (CJEU) for a preliminary ruling.
Key content of the CJEU judgment
In its judgment of 29 January 2026, the Court states that the provision relating to penalties and initiating proceedings simply refers to national rules and procedures in a general manner, without giving specific indications as to whether it is possible to classify a number of prohibited practices as a single infringement. The Court underlines that the UTP Directive follows an approach based on minimum harmonisation of the rules. In the absence of a specific provision, this means that the rules relating to the cumulation of penalties or the detailed rules for classifying multiple unfair trading practices generally fall within the discretion of the Member States.
The Court emphasised that any penalties must be in line with the principle of proportionality. This principle requires that the individual circumstances of the particular case be taken into account in determining the penalty and setting the amount of the fine. National enforcement authorities and courts must have the discretion necessary to set a penalty that complies with all requirements set forth in the Directive. Where several offences committed by means of a single act only allow for a single capped fine to be imposed, it is possible that there is no such discretion. That may particularly be the case where the maximum amount of the fine is much lower than the likely financial gain envisaged by the buyer through its unfair practices. It is therefore for the referring court to ascertain whether it has the necessary discretion.
The CJEU judgment did not finally clarify the question of whether the provision on fines in the FWBG was in line with the Directive. However, the Court clearly states that there could be circumstances in which the existing regulation might not be sufficient. Penalties must be effective, proportionate and dissuasive. The judgment can be downloaded from Curia (C-311/24).
Further proceedings
Two national proceedings were halted in light of these preliminary ruling proceedings. The AFCA will now apply for them to be continued.
Fair Competition Act (FWBG)
The FWBG aims, among other things, to protect suppliers of agricultural, food and grocery products from economically stronger buyers.
Unfair trading practices are prohibited, which includes unilateral changes to supply agreements, demanding payments that are not related to the sale of agricultural and food products of the supplier, the unlawful use of trade secrets, threatening commercial retaliation if the supplier files a complaint with enforcement authorities, discrimination etc.
According to the FWBG, the Cartel Court may impose fines of up to EUR 500,000 for breaches of the ban on unfair trading practices.
The AFCA published its revised Fairness in business paper, which provides an overview of the FWBG as well as permitted and prohibited trading practices, in October 2022 (the updated version is currently only available in German). The FWBG entered into force on 1 January 2022, with the AFCA being the authority in charge of enforcing the Act. Suppliers affected by unfair trading practices may also lodge complaints with the Fairness Office.