Austrian Federal Competition Authority applies for record fines amounting to EUR 88 million against five companies in the elevator and escalator industry

e-Competitions Bulletin, 2007
1. Dezember 2007
Dr. Michael Zellhofer

1. Background

On 5 October, 2007, the Austrian Federal Competition Authority ("BWB") announced that it had applied before the Austrian Cartel Court for fines amounting to EUR 88 million against five companies active in the elevator and escalator industry (see BWB-press release at After in-depth investigations by the BWB lasting for several months, the undertakings involved are suspected of running a cartel in Austria for over eighteen years comprising the allocation of tenders (bid rigging) and other contracts for the sale, installation, maintenance and modernisation of elevators and escalators with the aim of freezing market shares and fixing prices.

Previously in early 2004, the European Commission had drawn its attention to the elevator and escalator industry when it carried out simultaneous and unannounced inspections at the premises of a number of manufacturers of elevators and escalators (See EC Press release of 29 January, 2004, MEMO/04/20,, which led to fines against four big elevator groups - some of which are also involved in the pending Austrian elevators case investigated by the BWB - for building a cartel in different Member States (specifically Belgium, Germany, Luxembourg and the Netherlands), amounting to over EUR 990 million (COMP/E-1/38.823; No public version of the decision is available yet; for more information on this case, see EC Press release of 21 February, 2007, IP/07/209,

2. Leniency Application

Whereas the Commission had started proceedings on its own initiative using information brought to its attention, the investigations by the BWB were apparently triggered by a leniency application by one of the cartel members (which had already been heavily fined by the EC Commission in the preceding EC proceedings). The application for fines adopted by the BWB reflects the extent to which the respective undertaking must have cooperated with the BWB:

As confirmed by the recent BWB press release, the first leniency applicant was fully exempted from the application for fines according to Section 11, Subsection 3 of the Austrian Competition Act (Wettbewerbsgesetz). In the course of the proceedings, a second undertaking also filed a leniency application and thereby helped the BWB gather information necessary to successfully apply for fines in the pending fine proceedings before the Cartel Court. With regard to the second leniency applicant, the BWB can apply for a fine reduced by 30% to 50%; in light of these circumstances, it will be interesting to see how the BWB justifies the use of its discretion and whether the Cartel Court will follow the view adopted by the BWB.

The companies that have applied for leniency in this case are the first Austrian applicants that have enjoyed a full or partial relief from fines pursuant to the new Austrian leniency provisions being in force since January 2006. In this connection, it should be noted that the Cartel Courts may not impose fines in an amount exceeding the amount applied for by the BWB; therefore, provided that the Cartel Court does not find that the BWB had unlawfully accepted the leniency application from the undertaking, the leniency applicant is indeed protected from the imposition of a (higher) fine.

3. Another record fine?

It should be noted that, until today, the total sum of fines imposed on undertakings because of their violation of the cartel ban have not exceeded EUR 9.52 million. However, similar to the development in the EU, the Austrian Cartel Courts have shown their willingness to increase the pressure on undertakings violating the provisions of the KartG (and the corresponding provisions of the EC Treaty). Just recently, the Austrian Supreme Cartel Court imposed a record fine of EUR 7 million on an undertaking active in the Austrian debit card market for abusing its dominant position (see Axel Reidlinger/Heinrich Kühnert, E-Competitions, November 2007 – II, No 14823).

As mentioned above, the BWB applied before the Cartel Court for a total fine of EUR 88 million. Therefore, it is widely expected that the Cartel Court will impose a fine by far exceeding the fines imposed in previous cases. However, it is unclear whether the BWB has applied for the maximum fine for one of the incriminated companies (according to Section 29, subsection 1 KartG, companies infringing the cartel ban may be fined to up to 10% of their aggregate turnover achieved in the last business year).

Another aspect of the Austrian elevators-case is that the Cartel Court will, for the first time, address the question of the extent to which competition law violations committed by a cartel member will be attributed to the parent undertakings having acquired the incriminated undertaking after the prohibited actions have occurred. This question will arise in the case at hand, since - according to reports - almost half of the applied fine concerns one of the alleged cartel members that had recently acquired two other alleged cartel members.

The decision of the Cartel Court is highly anticipated due to the above reasons and due to the large number of third parties that have potentially been affected by the alleged bid rigging (and other incriminated practices).


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