Austria’s Supreme Cartel Court Raises Kiesel Fine Tenfold Over Two Illegal Mergers

Key Takeaways

• Fine Increased Tenfold: Austria’s Supreme Cartel Court raised Kiesel GmbH’s penalty from €240,000 to €2.4 million for illegally implementing two mergers.
• Two Standstill Breaches: The court upheld findings that Kiesel implemented its acquisitions of shareholdings in Vemcon GmbH and Suncar HK AG in breach of the standstill obligation.
• Lengthy Infringements Weighed Heavily: The court treated the two long-running breaches and Kiesel’s more-than-minor degree of fault as aggravating factors.
• Cooperation Mitigated the Penalty: Kiesel’s voluntary retroactive notifications, cooperation with authorities and the limited size of the affected market, particularly in Austria, were taken into account.
• Deterrence Drove the Increase: The court concluded that the fine needed to be noticeable and deterrent while recognizing that the underlying mergers were unlikely to have been prohibited.

Deep Dive

Austria’s Supreme Cartel Court has increased the fine against German construction machinery company Kiesel from €240,000 to €2.4 million for implementing two mergers before the law permitted it to do so, turning what had been a relatively modest penalty into one intended, quite deliberately, to be felt.

The Supreme Court, acting as the Supreme Cartel Court, sided with the Austrian Federal Competition Authority in its appeal over the size of the fine. The decision is final. In 2023, the company voluntarily filed retroactive notifications for its acquisitions of shareholdings in Vemcon GmbH and Suncar HK AG. It also retroactively notified an October 2023 acquisition of a shareholding in EmiControls Europe GmbH.

Kiesel, based in Germany, operates in the trade, manufacture, rental, servicing and repair of construction machinery and related products and services. The difficulty was not simply that transactions had taken place. It was that Austrian merger control law, where its notification requirements apply, does not permit companies to complete a deal first and submit it for examination later.

In August 2025, the Federal Competition Authority asked the Cartel Court to impose an appropriate fine for what it alleged had been the illegal implementation of all three mergers. Kiesel contested the premise. The company argued, among other things, that the transactions did not produce sufficient domestic effects to trigger the notification requirements.

It went further in the case of EmiControls. Kiesel argued that there had been no merger at all, maintaining that the target company had conducted no independent economic activity and that no substantial part of an undertaking had been transferred.

The Cartel Court divided the matter. It found that the Suncar and Vemcon transactions had been implemented illegally and fined Kiesel €240,000. On EmiControls, however, the competition authority did not prevail. The court dismissed that part of its application. Neither side was satisfied.

Kiesel appealed the findings against it, challenging in particular the conclusion that the two transactions had sufficient effects in Austria and the assessment of its degree of fault. The competition authority attacked the decision from the other direction. Its objection was principally to the weight the Cartel Court had given the factors used to calculate the penalty. A larger fine, it argued, was necessary to reflect the gravity and duration of the infringements and to serve both general and specific deterrence.

The Supreme Cartel Court agreed with the authority on the penalty. It increased the fine tenfold.

The Cost of Going First

There is a useful severity in the court’s reasoning because it separates two questions that can easily become tangled: whether a merger threatens competition and whether a company was entitled to implement it when it did.

The Supreme Cartel Court said a breach of the standstill obligation must generally be regarded as serious. Yet it also recognized something in Kiesel’s favor. There were no grounds for prohibiting the mergers, meaning the underlying transactions were unlikely to have been blocked. That made the infringements less serious than they otherwise might have been.

But it did not make them harmless. Kiesel had committed two breaches of the standstill obligation, and each had continued for a long period. The court also found that the company’s degree of fault was more than minor. Those considerations weighed against Kiesel when the judges turned to the amount that an appropriate penalty should actually be.

There were mitigating circumstances on the other side of the ledger. The market affected by the infringements was limited in size, particularly in Austria. Kiesel had voluntarily notified the mergers after the fact, and it cooperated in establishing the facts of the case.

The Supreme Cartel Court considered all of those circumstances together with the preventive and punitive purposes of the fine. Its conclusion was that €240,000 did not go far enough. A penalty had to be noticeable if it was to deter the conduct it punished. For Kiesel, the court put that number at €2.4 million.

The significance of the ruling lies partly in what the court refused to confuse. A transaction that probably would have survived competition scrutiny is not, for that reason, a transaction a company was free to complete without waiting for that scrutiny to occur. The absence of grounds for prohibition reduced the seriousness of Kiesel’s infringements. It did not erase them.

That is the purpose of the standstill obligation. A notifiable merger may be implemented only once that obligation no longer applies, preserving the competition authorities’ opportunity to examine possible anti-competitive effects while there is still something meaningful to examine. Merger control conducted only after companies have acted would surrender much of the control in the name.

Austrian law gives that requirement considerable weight. Upon application by the Federal Competition Authority, the Cartel Court may impose a fine of up to 10% of an undertaking’s total turnover in the preceding business year for violations.

Kiesel’s acquisitions of Vemcon and Suncar were not found to be transactions that should have been prohibited. That fact mattered, and the Supreme Cartel Court expressly treated it as such. But the final €2.4 million penalty rests on a different proposition: merger control is not merely a judgment about which transactions may proceed. It is also a judgment about who gets to decide that question, and when.

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