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Cartel Court imposes a fine of EUR 4.2 million on Südzucker AG at AFCA’s request; the decision is final

On 13 September 2023, following a request submitted by the AFCA, the Cartel Court imposed a fine of EUR 4.2 million on Südzucker AG. The company had infringed cartel law by agreeing to divide the Austrian market for industrial sugar.

Südzucker AG has acknowledged the infringement committed between February and October 2006 as part of a settlement procedure (press release of 1 June 2023). This brings the cartel proceedings in the sector of industrial sugar, which have been ongoing for a number of years, to a close.

Course of proceedings

Back in 2010, the Austrian Federal Competition Authority (AFCA) applied for the imposition of a fine or a finding of an infringement against sugar producers on account of alleged territorial agreements relating to the sale of industrial sugar in Austria. The AFCA had started investigations after receiving information from one of the companies involved, which subsequently cooperated under the leniency programme. The Cartel Court dismissed the applications in the first instance in 2019 (case numbers: 29 Kt 2/16k, 29 Kt 3/16g). The German Bundeskartellamt had fined three large German sugar manufacturers (Pfeifer & Langen GmbH & Co. KG, Südzucker AG, Nordzucker AG) in relation to territorial agreements in the German market on 18 February 2014. The Cartel Court (KG) held the view that the ne bis in idem principle applied to the German proceedings, therefore refraining from a finding or imposing a fine on the leniency recipient.

The AFCA filed a partial appeal against this KG decision, i.e. in relation to that part of the dismissal that referred to the ne bis in idem principle possibly applying. The negative decision of the first-instance court, which was unable to find that Agrana Zucker GmbH had participated in an infringement, became final in 2019.

The Supreme Cartel Court (KOG) submitted a number of questions to the European Court of Justice (ECJ) in the context of a request for a preliminary ruling (press release of 2 April 2020). The ECJ judgment (C-151/20) was published on 22 March 2022 (press release of 1 April 2022). In line with the ECJ judgment, the KOG decided that the ne bis in idem principle did not apply in this case after all given that the material facts as found by the German Bundeskartellamt and as asserted by the AFCA were not identical.

The KOG found that the sugar producers Nordzucker AG and Südzucker AG had engaged in illegal concerted practices in the form of a territorial agreement in 2006, thus breaching the European and Austrian ban on cartels. The finding in relation to Nordzucker AG has become final. With regard to Südzucker AG, the KOG partially dismissed the KG’s negative ruling and referred the case back to the KG for procedural supplement in relation to the setting of the fine since the necessary findings for the criteria needed to set the fine had been lacking.

During the subsequent second legal procedure before the Cartel Court, Südzucker AG acknowledged the infringement and thereby accepted the fine of EUR 4.2 million as set by the AFCA (press release of 1 June 2023).

With its decision of 13 September 2023, the Cartel Court granted the AFCA’s concrete request and imposed a fine of EUR 4.2 million for the concerted practices agreed in a telephone call on 22 June 2006.

The decision is final.

Fines for cartels

The Austrian Federal Cartel Act prohibits any behaviour that prevents or distorts competition. This covers price fixing agreements or the division of markets or territories. At the AFCA’s request, the Cartel Court may impose fines of up to 10% of an entity’s total turnover generated in the preceding business year if that entity is found to have breached the rules banning cartels. Fines are determined on the basis of the gravity and duration of the breach, the degree of fault, and the economic strength and cooperation of the company concerned.