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Austrian recycling firm fined €6 million for blocking competition

The European Commission has fined Austrian recycling firm Altstoff Recycling Austria (ARA) for preventing competitors from accessing the household packaging waste market in Austria. 21 Sep 2016

In Austria, the producers of goods are obliged to take back and recycle packaging waste from their products. They can outsource this to another company, and Alstaff has been a dominant provider of this service since at least 2008, the Commission said.

A nationwide collection infrastructure has been established, partly controlled and partly owned by Alstaff, which could not be duplicated by competitors wanting to enter or expand their presence in the market. Competitors were therefore dependent on receiving access to the existing infrastructure, the Commission said.

The investigation found that between March 2008 and April 2012 ARA refused to give access to this infrastructure, "so that competitors were excluded from the market and competition eliminated. Such behaviour is in breach of … the Treaty on the Functioning of the European Union which prohibits the abuse of a dominant market position," the Commission said.

A structural remedy has been imposed to open the market to competition, with ARA divesting part of the collection infrastructure so that it will no longer be able to prevent competitors' access. This was proposed by ARA itself, the Commission said. The fine was reduced by 30% due to ARA's cooperation, it said.

Austria has also adopted a new waste law since the Commission began its investigation and several competitors have now entered the market.

Margrethe Vestager, commissioner in charge of competition policy said: "The waste management sector is an important part of the circular economy. Effective competition is vital for making recycling affordable for consumers. ARA was preventing competitors from accessing essential infrastructure and blocking them from entering the waste management market."

ARA said that the proceedings are mainly of "historical interest". ARA inherited the conflict when it merged with ARGEV Verpackungsverwertungs in 2008, it said.

"The central bone of contention had been whether the setting up of a parallel collection infrastructure for lightweight and metal packaging in addition to the existing ARA collection scheme was technically, legally and economically feasible. Such duplication has been expressly prohibited under the 2013 amendment to the Austrian Waste Management Act," it said.

ARA decided to settle the case "out of a sense of responsibility to businesses, customers and employees and to protect its highly successful recycling scheme", it said.

Competition expert Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com said: "The case is a good example of how competition law can be used by new entrants to try and force incumbent infrastructure owners to allow them access to infrastructure where it is necessary to operate on a downstream market."