Austria, 7 February 2025 — The Higher Cartel Court has imposed a €70 million (USD 72.3 million) fine on REWE International AG for executing a long-term lease agreement in a shopping center in Wels without securing prior approval from the Austrian Federal Competition Authority (BWB). The ruling marks a decisive stance on the enforcement of merger control laws.
Background of the Case
The dispute dates back to 2018, when a REWE subsidiary took over food retail sales areas in the WELAS Park shopping center through a tenancy agreement. The BWB contended that this action constituted a merger requiring notification. Despite being made aware of the BWB’s position, REWE continued to argue that no notification was necessary and only formally sought approval in August 2022 during ongoing proceedings.
In 2021, the BWB filed an application with the Cartel Court to impose a fine on REWE for violating the prohibition on unnotified mergers. While the Cartel Court initially acknowledged that a notifiable merger had occurred, it declined to impose a penalty due to a lack of criminal liability. This led the BWB and the Federal Cartel Attorney to appeal the decision.
Legal Proceedings and Decision
The Higher Cartel Court (OGH) overturned the lower court’s ruling in November 2023 and instructed the imposition of a “significant” fine. Initially, a penalty of €1.5 million was levied against REWE. However, following a subsequent appeal, the court increased the fine to €70 million, citing key statutory assessment factors, including:
- The severity and duration of the violation (July 2018 – September 2022)
- The financial gain derived from the unnotified transaction
- The economic standing of REWE Group, whose total sales in 2023 reached €92.3 billion
- The need for a deterrent effect to prevent future violations
The court rejected REWE’s argument that the turnover of its parent company and separately managed business units should be excluded from the calculation. It determined that the entire REWE Group’s revenue should be considered due to the close economic ties within the company structure.
BWB Director General Natalie Harsdorf emphasized that companies can seek guidance on merger registration requirements in advance through the authority’s legal department. “The Federal Competition Authority provides a dedicated advisory service for companies facing uncertainty regarding merger notifications. In 2024 alone, this service was utilized 36 times. We encourage businesses to take advantage of this resource to ensure compliance,” Harsdorf stated.
For further inquiries regarding merger notifications, companies can contact the BWB via email at POST-Anmeldepflicht[at]bwb.gv.at.
