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Settlement in long-running industrial sugar cartel proceedings: Südzucker AG accepts fine of EUR 4.2 million and acknowledges infringement

Following a judgment by the Court of Justice of the European Union (CJEU), the Supreme Cartel Court (KOG) had referred the case back to the Cartel Court (KG). In 2019, the KG had dismissed the applications by the Austrian Federal Competition Authority, as a result of which the AFCA had appealed to the KOG. The KOG had subsequently made a request to the CJEU for a preliminary ruling. Südzucker AG has now acknowledged the infringement, accepting the fine of EUR 4.2 million set by the AFCA. Proceedings that have been ongoing for years are finally about to be closed.

Course of proceedings

The AFCA filed applications for a fine or a finding of an infringement of cartel law in relation to several companies that had allegedly engaged in territorial agreements regarding the sale of industrial sugar. One of these companies had come forward with relevant information and was included in the leniency programme.

In 2019, the Cartel Court dismissed all of the AFCA’s applications.

In 2014, the German Bundeskartellamt had brought proceedings against three large German sugar manufacturers (Pfeifer & Langen GmbH & Co. KG, Südzucker AG, Nordzucker AG) in relation to territorial agreements in the German market. The Cartel Court 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 principal witness. The KG did not consider other aspects of the infringement proven by evidence. The AFCA filed a partial appeal against the Cartel Court’s decision of 15 May 2019 (case numbers: 29 Kt 2/16k, 29 Kt 3/16g) pertaining to the part of the dismissal that referred to the ne bis in idem principle possibly applying. The negative decision of the first-instance court, which could not find that Agrana Zucker GmbH had participated in an infringement, has become legally effective.

The Supreme Cartel Court referred the case to the European Court of Justice, requesting a preliminary ruling on the question of the ne bis in idem principle (C-151-/20). In summary, the CJEU answered the question of the ne bis in idem principle’s applicability as follows: It was for the Court to ascertain, by assessing all the relevant circumstances, whether the Bundeskartellamt’s decision of 2014 sought to penalise the cartel at issue inasmuch as that cartel’s anticompetitive object or effect extended to the German sovereign territory but also inasmuch as such object or effect also extended to the Austrian sovereign territory. It was relevant in this context whether the German authority had based its calculation of the fine only on the turnover achieved in Germany. Consequently, it was necessary to ascertain which concrete market was affected by these concerted practices, and to what extent.

In its decision of 21 October 2022, the Supreme Cartel Court referred to these criteria and upheld AFCA’s partial appeal against the first-instance decision (16 Ok 2/22p). It confirmed that, during a telephone call in 2006, Nordzucker AG and Südzucker AG had engaged in concerted practices in relation to industrial sugar, thereby breaching Article 101 TFEU (ex Article 81 TEC) and § 1 of the Federal Cartel Act (KartG 2005). During the phone conversation between the sales managers of the two companies, Nordzucker was threatened with a reaction on the German market unless its Slovak subsidiary withdrew from the Austrian market.

Setting a concrete fine

Before deciding on the amount of the fine to be imposed on Südzucker AG, the Supreme Cartel Court ruled that the facts had to be examined further. This pending part of the proceedings was therefore referred to the Cartel Court for completion.

During settlement talks, Südzucker AG has now acknowledged an infringement committed between February and October 2006. The AFCA considers a fine in the amount of EUR 4.2 million appropriate for the facts of the case as confirmed by the KOG, with the Federal Cartel Prosecutor (Federal Ministry of Justice) being in agreement. Südzucker AG has accepted the amount of the fine as appropriate.