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Proposal for the amendment of the merger control regulations

A new government draft bill proposing amendments to the Austrian Cartel Act (ACA) was introduced in early March 1999 and is likely to be adopted in the first half of this year.

Contrary to prior proposals it is neither intended to establish a new administrative Federal Cartel Agency (following the example of the German Bundeskartellamt) nor to change the composition of the Cartel Court. The current act provides for a panel consisting of one professional judge and two laymen. The competence of the Cartel Court will be extended by enabling the Court to initiate proceedings on its own without application by one of the four official interveners (the Federal Government, the Federal Workers' Chamber, the Federal Chamber of Commerce, the Presidents' Conference of the Agricultural Chambers).

Following lobbying by the Federal Workers' Chamber, the draft bill provides for compulsory examination of any acquisition by which a company gains 30 % or more of market share. In such cases, the company concerned will have to prove in proceedings before the Cartel Court that the merger does not create a threat of market domination. The amendment, if adopted, is likely to have a close examination by the Court of product market definitions.

The draft bill also provides for the prohibition of dumping and of concerted practices.

Whether the intended changes will render Austrian merger control law more effective remains to be seen. It is, however, evident that despite the significance of EU merger control rules the Austrian regulations will remain a significant factor in domestic mergers and acquisitions.

Peter Huber and Otto Dietrich

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