AUSTRIA Law and Practice Contributed by: Gerhard Fussenegger and Florian Neumayr, bpv Huegel
2.6 Calculations of Jurisdictional Thresholds Classic Threshold The thresholds under Section 9 (1) of the Cartel Act (see 2.5 Jurisdictional Thresholds ) refer to the previ - ous business year, are based on turnover (ie, asset values are not taken into account) and are calculat - ed based on net turnover generated by ordinary or regular business activities. Foreign turnover must be converted on the basis of official currency exchange rates, eg, the European Central Bank (ECB)’s official exchange rates for the previous business year. Special rules for calculating turnover apply for credit institutions and insurance companies. Value-of-Transaction Threshold The transaction value-based notification threshold (Section 9 (4) of the Cartel Act) applies when three criteria are met: • turnover thresholds; • the value of the transaction; and • significant activity of the target in Austria (“domes - tic activity”). The turnover thresholds are, as with the classic thresh - old, calculated on the basis of net turnover generated by ordinary or regular business activities. The value of the transaction (in euros) is based on “consideration”. According to the explanatory notes to the law and the FCA’s guidance, “consideration” comprises any value (which means any monetary ben - efits) that the seller receives from the acquirer in con - nection with the transaction (eg, cash, buyer’s shares, but also liabilities assumed by the buyer). If a new joint venture creating a previously non-exist - ing company is established by several parties that each transfers consideration into the new entity, the sum of those considerations must be used in calculat - ing the value of the transaction. Satisfying the “domestic activity” requirement In determining whether the transaction value-based threshold’s requirement of “domestic activity” by the target is satisfied, the focus is on current mar - ket-related activity. In contrast to Section 9 (1) of the
Cartel Act (see 2.8 Foreign-to-Foreign Transactions ), domestic activity is measured on the basis of domes - tic turnover only if this turnover adequately reflects the market position. Recently, the Supreme Cartel Court decided in Edwards / JenaValve (16 Ok 2/25t (28 March 2025)) that to verify the significant domestic activity, the activities of the target at the time of the (planned) implementation of the merger must be examined, whereas possible or even planned future activities (in subsequent years) are not to be taken into account. The sales revenues expected after closing are there - fore irrelevant. In practice, the FCA routinely finds that there is no domestic activity if the turnover of domes - tic target companies is below EUR1 million. However, domestic turnover over EUR1 million does not neces - sarily establish significant domestic activity, and all the circumstances will be taken into consideration by the authority. In addition to the EUR1 million threshold, various criteria (including non-remunerative factors) for measuring activities may be applied, depending on the sectors and activities. The measurement should be carried out in line with objective industry standards. For example, in the dig - ital sector, the explanatory notes in Austria refer to user numbers (“monthly active users”) or the access frequency of a website (“unique visitors”) as exam - ples of possible indicators. For instance, in assessing Facebook’s (as it was then known) planned acquisition of GIPHY, the FCA not only considered the direct use figures via GIPHY’s own website and app, but also the users of other services, websites and apps of third parties that integrate GIPHY. In its recent Edwards / JenaValve decision, the Supreme Cartel Court stated that a target company having a certain market share in the relevant market in Austria is not a decisive fac - tor when determining whether the activity is domes - tic. Furthermore, domestic activity must be presumed where the target has a physical presence (eg, a sub - sidiary office) in Austria. The mere fact that the target owns an EU-wide product authorisation or a (Euro - pean) patent registered in several countries does not (yet) constitute domestic activity. Likewise, the num - ber or stage of development of (pipeline) products is not sufficient to establish domestic activity.
41 CHAMBERS.COM
Powered by FlippingBook