The establishment of HYGIENE AUSTRIA was only notified to the AFCA in accordance with § 7 para. 2 in conjunction with § 9 para. 1 of the Federal Cartel Act (KartG) on 12 May 2020. However, in the AFCA’s opinion, the merger had already been implemented earlier without waiting for the outcome of the merger examination. The AFCA was made aware by a parliamentary enquiry of a merger possibly having been implemented by the parties prior to notification and a completed examination by the competition authority. In the AFCA’s view, the merger had already been completed as at 24 April 2020 because, among other reasons, the founding companies were presenting themselves in the media and publicly at that time as if the merger had already been completed. The first-time market presence of HYGIENE AUSTRIA and thus completion of the planned merger is to be assumed from the time of the press release by the Austria Press Agency (APA) on 24 April 2020, with market structure changes being possible from that time onwards at the latest. Competitors and customers would have been able to learn about it and adjust their market behaviour to these new circumstances from that point on.
Lenzing is the only party not to have contested the facts on which the decision is based, acknowledging the infringement. Palmers disputes the AFCA’s application.
The AFCA filed two separate applications to impose fines on 19 March 2024, applying for a fine of EUR 75,000 for Lenzing and an appropriate fine for Palmers. Lenzing’s cooperation has been taken into account with regard to the setting of a lower fine.
Affected market
The planned merger concerns the market for the manufacture and sale of protective face masks. Since there were no competition concerns, the planned merger was cleared with effect from 26 May 2020 (Z-4887).
Lenzing Aktiengesellschaft is an Austrian producer of wood-based cellulose fibres. Palmers Aktiengesellschaft is an Austrian textile and clothing manufacturer. Hygiene Austria LP GmbH makes protective face masks that were used during the pandemic.
Illegal merger
Illegal mergers are mergers subject to notification obligations that are implemented prior to approval by the AFCA or the Federal Cartel Prosecutor and/or the Cartel Court. The Cartel Court may impose fines for illegal mergers at the request of the AFCA.
The standstill obligation protects competition on the market from the potential and actual restrictive effects of non-approved mergers.