Draconian punishment for REWE: What does this mean for Austria's economy?

Draconian punishment for REWE: What does this mean for Austria's economy?

REWE International AG faces a dramatic fine of 70 million euros after the Austrian Higher Cartel Court (OGH) imposed a sanction for a formal error. This significant sum results from a late registration of a merger that took place in Wels, Upper Austria, in 2018. The trade association is horrified by this decision, as it is assumed that the deal was not subject to registration at the time. REWE International AG had sought legal advice at this point and had no legal concerns, as there was no clear case law on similar cases up to that point the trade association reported.

REWE International AG argues that the punishment imposed is disproportionate to the alleged offense. It is a purely formal violation that has not produced any economic benefits for the company. According to management, the fine imposed, equivalent to a new car for a comparable violation, could paint the picture of an excessive measure. Despite this massive financial burden, the company assures that neither employees nor customers will be affected by the high penalty REWE International AG emphasized.

Impact on Austria as a business location

The decision of the OGH is perceived as worrying for Austria as a business location. The managing director of the trade association, Rainer Will, emphasizes that such a drastic penalty for what is essentially an unproblematic issue sends a negative signal for future investments. Companies need a predictable environment in order to operate successfully. Will also criticizes the unequal treatment that Austrian companies experience, while international platforms can operate largely uncontrolled. This increases the desire for fair regulation in order to create a level playing field.