Against the backdrop of the European Green Deal, the issue of whether sustainability aspects can play a role in antitrust law has come to the fore in the EU. Central questions were, in particular, whether environmental and climate initiatives between competitors (“sustainability agreements” or “sustainability cooperation“) can be exempted from the ban on cartels and under what conditions.
While the European Commission addressed this issue in its revised guidelines on the applicability of Art 101 TFEU to horizontal cooperation agreements, the Austrian legislature even went one step further and created a sustainability exception in § 2(1) KartG, which is unique in the EU to date, as part of the 2021 Cartel and Competition Law Amendment Act. To this end, the sentence “Consumers also have a fair share if the profit resulting from the improvement of the production or distribution of goods or the promotion of technical or economic progress contributes significantly to an ecologically sustainable or climate-neutral economy” was added. With the guidelines on the application of § 2(1) KartG to sustainability cooperation (“Sustainability Guidelines“)[1], the Federal Competition Authority (“FCA“) offers legal practitioners detailed assistance in their antitrust assessment of planned sustainability cooperation.
Recent decisions by competition authorities show that sustainability cooperation can be successfully implemented in accordance with antitrust law: In 2024, for example, the Dutch competition authority expressed no competition concerns about the introduction of an industry-wide sustainability standard by the trade association for the e-commerce sector for online stores. In 2024, the German Federal Cartel Office also expressed no concerns regarding a sustainability standard for reusable systems for the B2B transport of potted plants instead of disposable trays. Last year, the Japanese competition authority also approved a sustainability cooperation on carbon neutrality between five petrochemical companies located in the same business park.
The Austrian sustainability exception
According to the sustainability exemption under § 2(1) KartG, a sustainability cooperation that restricts competition may be exempt from the ban on cartels under the conditions that (i) the cooperation contributes to an ecologically sustainable or climate-neutral economy through efficiency gains (i.e. purely economic, social, or animal welfare aspects are not covered) and (ii) EU competition law does not apply because it does not meet the intergovernmental criterion.
The following five requirements must be met cumulatively for the sustainability exception:
- Cooperation leads to efficiency gains;
- The efficiency gains contribute to an ecologically sustainable or climate-neutral economy;
- This contribution to an ecologically sustainable or climate-neutral economy is essential;
- The constraints imposed by cooperation are essential to realizing the efficiency gains that contribute significantly to an environmentally sustainable or climate-neutral economy; and
- The cooperation does not open up the possibility of eliminating competition for a substantial part of the goods or services concerned.
FCA Sustainability Guidelines
Although – as far as can be seen – no FCA decisions on sustainability agreements have yet been published, the FCA has set out in its sustainability guidelines how it will apply the sustainability exemption in practice. With regard to the above five conditions, the FCA states that
- efficiency gains must increase the welfare of society as a whole and that such gains for future generations can also be taken into account (e.g. the threat of irreversible environmental damage);
- the criterion of indispensability
- "deadweight effects" are not relevant (i.e. only efficiency gains that would not occur in competition anyway are to be taken into account),
- the appropriate duration (the cooperation may only last as long as it is objectively necessary), and
- the appropriate scope (the cooperation must not contain any ancillary agreements that are not essential for achieving the sustainability goal) must be examined;
- for environmental benefits, it must be shown, among other things, which benefits are achieved in which period of time and how the cooperation contributes to this and that no additional damage is caused by the cooperation; and
- the materiality test requires that the negative competitive effects on the affected market are at least offset, but the balancing of positive and negative effects can be quantitative or qualitative.
What to do now?
Companies should make use of the new opportunities offered by the Austrian sustainability exception to leverage synergies in the context of sustainability cooperation with competitors. The case law of other competition authorities cited in the introduction shows that sustainability cooperation can be implemented in compliance with antitrust law to the benefit of the companies involved.
