1. Competition Advocacy
Competition Policy: Contemporary Trends and Challenges
, Tiflis, Georgia
Theodor Thanner
Director General, Austrian Federal Competition Authority

2. Overview Recent developments Further investigations
A closer look on (the system of) information exchange
Competition Advocacy?
How to measure Competition Advocacy?
Competition Advocacy in Austria
Opinion on fees for cash withdrawals
Opinion on banking fees
Industry for burial services
Competition Advocacy: more transparency
Media (Lufthansa/Air Berlin)
Events
Competition Policy: Contemporary Trends and Challenges, Tiflis,

3. The Austrian Competition Authority (since 2002)
Independent Monocratic Authority
Director General Dr. Thanner (since 2007)
Managing Director
Deputy Managing Director
Heads of Department
Teams
Casehandlers
Judicial Model
Cartel Court as decision making body
Quasi Criminal regime
→ Fines against undertakings up to 10%
worldwide turnover
Criminal
→ Bid Rigging, fraud,
embezzlement
More than 130
dawn raids
(2011 – 2017)
~ 40 staff
over 190 Mio € fines ( )
over 420 mergers reviewed (2016)
3 Mio €
Budget (2016); increased by 1,5 Mio €
established in 2002 (in 1995 Austria acceded EU)

4. Recent developments in the Austrian construction industry
Construction industry is one of the main focus of the NCA
Several bid rigging cases are pending
Case initiated on the basis of a leniency application in autumn 2015
Dawn raids in eight undertakings active in the dry construction sector in spring 2016
Search warrant was appealed by one undertaking –> Austrian Supreme Cartel Court confirmed lawfulness of the dawn raid
More than 350 dry construction projects analysed; projects related to so- called “restricted tenders”, current status:
3 companies sanctioned (settlements)
against one company (= leniency applicant) infringement decision with no fine
further cases pending before the Cartel Court  cases to be closed by the end of 2017
Competition Policy: Contemporary Trends and Challenges, Tiflis,

5. Recent developments in the Austrian construction industry
Financial police seized a folder with various construction projects in 2016
Folder provided by the Federal Bureau of Anti-Corruption (BAK) to the Austrian FCA on the basis of administrative assistance (Amtshilfe)
Dawn raids in spring 2017
Also independent dawn raids by the PPOC
Suspicion not limited to a specific sector of construction
Search warrant was appealed to the Austrian Supreme Cartel Court by one undertaking
Lawfulness of the dawn raid confirmed (16 Ok 1/17h);
Austrian Supreme Cartel Court noted in its decision that the evidence submitted for the search warrant confirmed the “severe suspicion” of “long-standing and systematic anti-competitive agreements”
currently: analysation of the suspicious material
Competition Policy: Contemporary Trends and Challenges, Tiflis,

6. A closer look on (the system of) information exchange
Dry construction sector
Calculations of offers by competitors
Cover bidding –
fake bidding
Company A
Company B
restricted tenders limited to, in general, 3-5 „invited“ undertakings
an „established system“ of mutual support between various groups of involved undertakings,
i.e., awareness that they could contact each another (e.g., phone calls, s)
Company C
Bid suppression – withholding bids
Company D
Company E
Review of bid calculations by competitors
Competition Policy: Contemporary Trends and Challenges, Tiflis,

7. Competition Advocacy
very broad term that consists of many various activities
Competition Advocacy is a transport system of information for a better and fair competition
in other words: Competition Advocacy is an interpeter for fair trading between competitors that improves the quality of products for a fair price
Competition Policy: Contemporary Trends and Challenges, Tiflis,

8. How to measure Competition Advocacy?
numerous methodologies how to measure effectiveness of Competition Advocacy
how to measure deterrence?
market situation/competitors‘ behaviour is rarely comparable
what is important?
consumer welfare
competitor‘s understanding of fairness and competitive behaviour
Competition Policy: Contemporary Trends and Challenges, Tiflis,

9. Competition Advocacy in Austria
„A good Competition Advocacy strategy can be a profound base for all other activities as a NCA“
Our Authority‘s work is built up on 4 Pillars:
ex post: enforcement (cartels, market abuse)
ex ante: merger control
sector inquires
competition advocacy
Competition Policy: Contemporary Trends and Challenges, Tiflis,

10. Competition Advocacy Activities in Austria
Opinion on legal and regulatory framework
Media
Events
Sector inquries
Guidance and positions
Competition Policy: Contemporary Trends and Challenges, Tiflis,

11. Opinion on fees for cash withdrawals at ATMs
discussion about fees for cash withdrawals
legislator wanted to prohibit such fees by law
BWB suggested to evaluate the effects for competition of such a prohibition by law
Goal: professional discussion on objective grounds
Competition Policy: Contemporary Trends and Challenges, Tiflis,

12. Opinion on fees for cash withdrawals at ATMs
numerous discussion with stakeholders
consumer and bank survey
result presented in February 2017
Result:
cash is for the Austrian consumer very important
43 % of cardholders don‘t know which amount they are paying monthly for their bank accounts
Competition Policy: Contemporary Trends and Challenges, Tiflis,

13. Opinion on fees for cash withdrawals at ATMs
Effects for competition:
consumers have only low incentives to switch to another bank even if it is cheaper
a legal prohibition would decrease competition drastically
For exmaple: we suggested to not implement fees for consumers but to regulate the fees at the upstream market -> Consumer shoulnd‘t pay for the fees in the end
Competition Policy: Contemporary Trends and Challenges, Tiflis,

14. Industry for burial services
This industry was regulated until 2002
„competition of silence“
High prices, no transparency
Burial services are not willing to increase transparency
In 2011 we provided recommendations on how to improve competition
fair access to essential facilities (morturary)
price transpareny
etc.
Competition Policy: Contemporary Trends and Challenges, Tiflis,

15. Industry for burial services
Last year we made an evaluation
only one burial services provided its prices on its homepage
the discussion on access to morturaries is still ongoing
Result:
again a disussion-round with the chamber of commerce
several burial serivces are providing prices now
but this is not the end, it‘s only the beginning
Competition Policy: Contemporary Trends and Challenges, Tiflis,

16. Competition Advocacy: more transparency
14 guidance papers were issued in the last years
new guidance on dawn raids
"The intention is to serve a guide to companies and their employees. Transparency, comprehensibility and clarity of administrative actions are essential contributions to public trust.”
Competition Policy: Contemporary Trends and Challenges, Tiflis,

17. Media (Lufthansa/Air Berlin)
Media can support your Competition activities tremendously
Example: Lufthansa/Air Berlin
the biggest airlines wants to buy the insolvent Air Berlin
the increased market power will lead to higher prices, lower output and probably less innovation
our efforts
Competition needs a mouthpiece
The NCA is this mouthpiece!
Competition Policy: Contemporary Trends and Challenges, Tiflis,

18. Media Strategy (Lufthansa/Air Berlin)
flying is a good topic as consumer are affected by the outcome of the planned merger
what we do: explaining, explaining, explaining!
What are the consequences of such a merger?
Negative effects of monopolies
Comparison with the US aviation industry (several mergers lead to higher prices, fees and less comfort, less service on board)
goal:
sensitization of the public for competition issues and negative effects of monopolies
result: every day in the newspapers, tv, radio
providing information as an expert to the media
Competition Policy: Contemporary Trends and Challenges, Tiflis,

19. Events Competition Talks Moot Court
current topic on competition issues
5 years
33 Competition Talks in total
last Competition Talk: Presentation of our guidance on dawn raids next Competition Talk: Digitalization
Moot Court
young students participate in a simulated cartel court proceeding
goal: to raise student´s awareness for Cartel and Competition Law
more than 60 students have already participated since 2015
Competition Policy: Contemporary Trends and Challenges, Tiflis,

20. Thank you for your attention!
Dr. Theodor Thanner
Director General
Bundeswettbewerbsbehörde | Federal Competition Authority A-1030 Vienna, Radetzkystraße 2 : +43 (01) :  
Competition Policy: Contemporary Trends and Challenges, Tiflis,