Nominee

GUIDELINES ON THE APPLICATION OF SEC. 2 PARA. 1 CARTEL ACT TO SUSTAINABILITY COOPERTAIONS (SUSTAINABILITY GUIDELINES)

Click here to read the full article online

The question of whether and in what form cooperations that are anti-competitive, but simultane-ously contribute to overarching societal objectives, ecological sustainability and climate neutrality in particular, are to be treated preferentially when they are assessed under cartel law, has been a preoccupation in the academic discussion just as much as in the work of competition practitioners.

With these guidelines on the application of Sec. 2 para. 1 Cartel Act (KartG) to what are known as sustainability cooperations, the Austrian Federal Competition Authority (FCA) wishes not only to make a theoretical contribution to the discussion about “green competition”, but breathe life into this topic in practice as well. When it passed the Cartel and Competition Law Amendment Act 2021, the Austrian legislator grasped the initiative and oriented national cartel and cooperation law more strongly towards the EU’s and international sustainability objectives. The addition to the provisions on exemptions in Sec. 2 para. 1 Cartel Act created the possibility of greater consideration being given to ecological benefits when (potentially) anti-competitive cooperations are assessed under cartel law: “Consumers shall also be deemed to enjoy a fair share of the benefits which result from improvements to the production or distribution of goods or the promotion of technical or economic progress if those benefits contribute substantially to an ecologically sustainable or climate-neutral economy.” These provisions have created a “sustainability exemption” that is unique to date.

The guidelines are principally intended to enable undertakings engaged in competition to carry out the requisite self-assessment of whether sustainability cooperations are permissible under cartel law. These include, in particular, agreements that contribute to sustainability in the course of the development or improvement of products or services and/or their distribution without having (po-tentially) international effects. However, many of the assessment steps described in these guide-lines may be applied analogously to vertical cooperations, that is, business cooperations along the value chain.

The publication of the Sustainability Guidelines following the public consultation that took place in June 2022 and the drafting of a final text that reflects the results from this consultation is therefore an important step that will create transparency and legal certainty about the FCA’s future interpre-tation of the new provisions and enhance their practical relevance.

Authors