#382 What's Up? Enforcement Updates From Austria and Switzerland

Narrator: Welcome to our Cureus Amalgam, the weekly podcast brought to you by the Antitrust Law section of the American Bar Association. Our curious amalgam explores the fascinating and increasingly overlapping world of competition, consumer protection, data protection and privacy law. Each week we bring you leading global experts on the most compelling issues of the day. Enjoy the show.

Honora Wan: Hello and welcome to our curious Amalgam. We have something special for you here. I have in person with Lukas Kovada, who is the, uh, Executive Director for International affairs for Austria's Federal Competition Authority, the bwb. Welcome to our curious and welcome.

Lukas Kovada: Thank you. It's great to be here.

Honora Wan: How do you feel about coming to the spring meeting?

Lukas Kovada: Well, it's always exciting and it's a very vibrant event, so I'm very much looking forward to the next few days.

Honora Wan: We take advantage of you being here and want to ask you a little bit about the past year, uh, of what the BWB has done. Could you please, uh, perhaps highlight for us a few, uh, most significant accomplishments of the agency, uh, in terms enforcement, policy development, um, and uh, how its work within the whole European Competition Network.

Lukas Kovada: Sure, sure. Well, uh, let me highlight, uh, what has been our most significant case, and that is actually the largest case, uh, in Austrian history. A construction sector bit rigging conspiracy involving more than 30 companies over 15 years. And this cartel affected actually thousands of public and private tenders, uh, contracts ranging from couple of thousand euros to a couple of million euros. And that behavior was actually case book, if you wish. Uh, we had price fixing, market allocation, exchange of sensitive information, uh, and illegal bidding consortia. Uh, and, well, in the course of the dawn raid, we seized thousands, uh, of paper documents and a, uh, lot of terabytes of digital evidence. Uh, and, uh, as of today, uh, we stand at approximately 300 million euros in fines. And actually the most remarkable chapter, uh, played out just two weeks ago. Uh, one of the companies involved had originally being granted leniency status and received a reduced fine of around 45 million euros. Um, but that's not the end of the story, actually. We, um, found out by investigations by the public Prosecutor's office that the company had not fully disclosed all projects it knew about. So we challenged this and, uh, the case went all the way to the Supreme Court, which confirmed that the integrity of leniency programs cannot be maintained if applicants knowingly withhold information. And two weeks ago, uh, we actually settled the case with the company and it resulted that the company lost its leniency status and that the fine was recalculated. So jumping from 45 million to 146 million which is quite a significant increase. And I think the message here is quite clear. Leniency is not a privilege, uh, not an entitlement. Full cooperation means full cooperation.

Honora Wan: That's definitely some, some lessons to be learned and also clear signals sent to the market. So can you also now sitting here, uh, sort of in the early part of 2026, can you tell us some of the highest priorities of the agencies in terms of enforcement uh, in the, in the upcoming year or whole uh, year, uh from now?

Lukas Kovada: Sure, sure. I mean our enforcement priorities are shaped by what matters most for uh, companies and people living in Austria right now. And that means the cost of living. So I mean, what do I mean by that? Food prices, energy costs and lately also fuel prices. These are everyday concerns and they are actually areas where competition enforcement can make a real tangible difference. So let me give you a very concrete example. Uh, in our food sector inquiry or market study if you wish, we identified what we call the Austria price markup. That is Austrian consumers systematically pay 10 to 15% more for the same branded products than consumers in neighboring countries. And this is actually not explained by logistics, wages or taxes. It's driven by so called territorial supply constraints. Constraints that are practices where multinational suppliers restrict retailers from sourcing, cross border or apply differentiated terms by territory. And across the EU single market. These restrictions are estimated to cost consumers around 14 billion euros a year. So the commission is uh, actually currently drafting a uh, legislative proposal which is scheduled for the end of 26. And we've been actively contributing to that process um, in energy. Our sector inquiry published last year found that competition simply does not function at the national level. Uh, we have regional incumbents dominate their uh, grid areas with market shares up to more than 90%. And about half of Austrian consumers have never switched their energy supplier. Uh, we have actually recommended far reaching measures including unbundling of cross shareholdings and cap on minority stakes between suppliers. We are also currently looking into the market of district heating. So it's a little bit early to tell but we also will likely identify there some competition concerns and will give recommendations in that respect. Um, maybe a last word on also merger control. Um, as you may know, Austria was one of the first EU member states that introduced a transaction value threshold that was designed specially for digital and innovation economy where turnover is uh, no longer a reliable proxy for market power. And it was actually introduced in 2017 and we have examined more than 170 cases under this rule and about 45% of those notifications involved the digital and pharmaceutical sectors, so precisely the industries the threshold was designed for, and I should mention gun jumping in that respect. Uh, a recent case involving a major Austrian supermarket chain resulted in a Supreme Court judgment and increased the fine from 1.5 million to 70 million, uh, sending a quite strong signal that virtual control filing obligations must be taken seriously.

Honora Wan: Well, it sounds like you've already, uh, uh, talked about a little bit like in the digital market and also perhaps nascent or innovation uh, competition in that way. But uh, that connects to my next question. What are some challenges that you think that agency is facing perhaps in the coming year, uh, in terms of like, you know, perhaps adapting to new rules, new tools and globalize the markets? Could you just tell us a little bit what in your view is the biggest challenge facing the bwb?

Lukas Kovada: Well, for me, the most significant challenge is keeping pace with markets that are being shaped by artificial intelligence. And the firms we oversee operate at a global scale. And the AI ecosystem is evolving at a speed that tests a limit, I would say, of competition enforcement almost at an unprecedented level. I, um, mean the key concern I think is concentration. Again, uh, training large scale AI requires enormous computing power, vast data sets and also significant capital. And if I access to these resources, or if access to these resources actually remains, uh, in the hand of a few dominant players, we risk seeing similar patterns of market power we've seen in previous waves of digital innovation. But I think this time it's much faster and more entrenched. This is why I believe it's essential that uh, competition authorities raise, uh, concerns in that respect at an early stage before market tip. Uh, to some extent that means, uh, lowering barriers to entry, ensuring fair access to data and computing infrastructure, and promoting transparency in how AI systems are developed and deployed. And I think there is also actually quite a need for certain guidance and also standards, I think, both for enforcers, so we know how to assess, uh, competitive harm, but also for businesses because it's equally important that they understand what transparency and non discrimination mean in practice.

Honora Wan: Yeah, Austria is not alone in facing these questions. Right. And also I think jurisdictions, um, around the globe are facing the same challenges. Perhaps, uh, perhaps this is a, uh, signal that there will be more convergence. Perhaps that also suggests that each jurisdiction is just going to try to deal with their own new or newer approach. So what do you think or how do you see international cooperation, uh, evolving, I guess, amongst the competition authorities, um, in terms like, you know, is there going to be deeper convergency or less?

Lukas Kovada: Right, right. Well, I think that's an excellent point. And I, um, want to make the case that international cooperation is more important than ever and it's not just desirable, but essential for effective competition enforcement in globalized markets. So I mean, the discussions between competition authorities, uh, are a key part of this. And fortunately we have a number of well functioning and well established fora that make this possible. And I think it's also fair to say that competition law and enforcement is a real success story. I mean today we have more than 140 jurisdictions around the world that have competition laws and authorities in place. And I think it's also arguably one of those areas where we see the greatest degree of international convergence, uh, even at a time when other policy areas are experiencing increasing fragmentation. Because I think it's fair to say that there's a broad agreement on core principles. Right. So most jurisdictions recognize that Carters are harmful to the economy, that unlawful unilateral conduct can undertermine competitive markets, and that certain mergers may reduce competition in ways that make interventions necessary. Um, at the same time, I think there is also a growing focus on impact assessment, um, not only asking whether we apply the right tools, but whether our interventions are delivering tangible results. And recent studies, uh, show that competition enforcement can generate consumer benefits amounting to six to 10 times an authority's annual budget. Uh, underlining that measurable economic impact is actually taking place.

Honora Wan: This has been a great update and thank you for sharing with us your views. Um, we don't have too much time here, but we do want to take advantage of you being here and want to give our audience opportunity to learn about you a little bit more as a person. Could you tell us a little them more? Maybe just one thing that people would not know about you if they had only worked with you or known you professionally. What would that one personal thing be?

Lukas Kovada: That's a good question. I would say, um, not a lot of people know that I'm quite an opera. Enthusiastic. So I've seen probably more than 50 different operas in my lifetime and I'm still curious and still, uh, want to uh, make it even a, uh, greater number of operas that I've seen. So I'm quite an opera and classical music enthusiast.

Honora Wan: Oh, wow. What's your favorite program?

Lukas Kovada: Well, my favorite composer, uh, is actually Richard Wagner. So I do really like his operas because there is so much to discover there. And uh, being here in the US I understood that there is actually quite, uh, a spectacular performance of Tristan and Isolde at the Met at the moment. So I would Love to see that.

Honora Wan: It's great. And being at Vienna, I'm sure you have more opportunities to see those.

Lukas Kovada: That's true.

Honora Wan: Thank you for sharing with us and we hope to get more updated with you perhaps next year. Thank you for tuning in and thank you Lucas again.

Lukas Kovada: Thank you. It's been a pleasure.

Honora Wan: Hello and welcome to our curious amalgam. I'm Honora Wan. I'm here today with a special guest who is Dr. Laura Melazine Bowkerbecker. Am I saying that right? And she is the president of the Swiss Competition Commission, which is known as Comco. And um, she has been in that position since January 2023. And interesting to most of us is that that position is a part time one. And aside of her role at the commco, Laura has a practice focusing on administrative and civil legation. Earlier in her career, Laura clerked for the former president of the Swiss Federal Administrative Tribunal. And after clerkship, uh, and before opening her current firm, Laura practiced at U.S. and British law firms in Brussels for years. Welcome to the show, Laura.

Dr. Laura Melazine Bowkerbecker: Thanks for having me. Pleasure to be here, Nora.

Honora Wan: So I already teased up a little bit how uh, the COMMCO is a little bit uniquely structured and your position as well. Could you tell us a little bit about the agency and your position? Perhaps a little bit just on a high level?

Narrator: Sure.

Dr. Laura Melazine Bowkerbecker: Um, our agency is I think quite unique in the world in that, as you rightly said, we, the commissioners, the members of the Commission are all part time, um, members. I have the highest amount, um, of work with 50%, officially 50% job. My vice presidents are 20% and the remaining members are 10%. Obviously uh, you can't lead big investigations with uh, such a team. So there's also the Secretariat which handles all the heavy lifting, which is dawn raids, investigates, analyzes the files and then proposes um, um, a decision to comco. And we will then review the files, review the statements by the parties. We will typically hear them and then we will decide.

Honora Wan: And how many people, uh, are there in total?

Dr. Laura Melazine Bowkerbecker: We are in the Commission itself. We are 11 members. And at um, the Secretariat, I think it's about, give or take, 70 full time equivalent positions. So we're fairly small. As an authority, we're very slim, but we're very effective. Uh, um, our team is um, known to handle big cases and very small teams and it's quite successful.

Honora Wan: And you do competition and consumer protection as well?

Dr. Laura Melazine Bowkerbecker: No. Consumer protection, no. There's a separate body in Switzerland that represents the interests of consumers, but we don't have this consumer protection approach that we would see in other European countries. I'd say consumer protection is not something that in the public is, um, that present or that popular, which is interesting because we are all consumers, but it's a very different culture.

Honora Wan: How many years has the COMMCO been running?

Dr. Laura Melazine Bowkerbecker: Well, that depends. Um, let's say the modern Comco, um, as we have it now has been there certainly since 1995. There was a structure change again in 2003, but, um, roughly we could say 1995 is when the modern structure was created.

Honora Wan: So within the past 12 months, I guess, uh, would you highlight some of the, uh, most, um, I guess the proudest accomplishments you have with the small but mighty agency you have?

Dr. Laura Melazine Bowkerbecker: I think a big achievement for our teams has definitely been promoting this new law that we introduced recently, a few years ago, where we can now intervene in cases of relative dominance. That means in a bilateral relationship, bilateral contractual relationship, if one of the parties is considered relatively dominant, not absolute dominance on the market, but relatively dominant, um, there is potentially a case for COMCO to pick up. And that's been very interesting for our teams as well, because the roles have been a bit reversed. Normally when you investigate cartels or abuse of dominance cases, they tend to not make you very popular. Um, and here we have a curious situation where one side, uh, is very happy with the investigation and the other obviously is not so much. Um, and we've had a couple of milestones there. We were able to take a couple of decisions that I think have given the market more comfort in how this new law needs to be applied. And I think we're very excited and proud that we, uh, finally now have the case that Parliament had always debated and always had in mind when it passed this law, which, uh, even in Parliament was called the Lex Nivea. The law Nivea, you know, the skin care products.

Honora Wan: Oh, I see.

Dr. Laura Melazine Bowkerbecker: Um, because the idea was that Nivea products are very comparable and they were considered much, much cheaper in Germany, for instance, than in Switzerland. So the question was, are prices potentially artificially inflated because consumers have deeper, uh, pockets in Switzerland? That's always been a debate. Um, and so we're very excited that we now have a pending case where one of the two major retailers in Switzerland, uh, claims that there's a relative dominance position towards, uh, Beiersdorf, who manufactures Nivea. So I think we're trying to close or finish this investigation as quickly as possible also to, again, to create this practice so that the market understands, uh, how this law will be applied in the future. Um, I think certainly a big um, milestone has been that we've been pushing our digitalization. We are moving away from publishing our practice in uh, school binders. Yes. And um, have developed now project to create a uh, modern database as well. Uh, fully searchable by industry by various terms. And um, I think that's definitely a big and important project for us. Um, on a political level we are very relieved. Uh, we were facing a lot of pressure from in particular the construction industry. Um, we had a number of investigations for quite large scale bid rigging and they're well connected uh, politically and managed to secure support in parliament to potentially weaken the law. And we were able to uh, prevent that. So uh, we're very excited about that. A thing that we are now um, potentially facing in Switzerland is that Switzerland signed agreements with the European Union. They will still have to go through parliament and probably also popular um, vote. Um, if they pass then we will introduce state aid law. So EU state aid law in Switzerland. And currently the idea is that uh, my authority will be uh, or there will be a chamber within the authority that will deal with these state aid cases.

Honora Wan: Definitely a lot of exciting developments. Newer law, newer concepts like the relative dominance and a Swiss version of the state aid. But also application areas. Right. Sounds like uh, COMCO has begun applying competition law in uh, newer areas like labor markets and digital infrastructure. Um, how is the convention adapting um, its analytical framework towards these areas?

Dr. Laura Melazine Bowkerbecker: I think we're very blessed that the law as it was drafted in 1995 was drafted in a way that allows us to react without requiring legal changes. So it's a very um, very smartly drafted uh, text. And generally in Switzerland we have a little bit the uh, American approach as well that you develop the law, whereas in Germany the system is much stricter. If there's a gap in the law it cannot be filled, usually by the courts. That usually means the law needs to be changed, needs to be revised. Um, in Switzerland that is almost never the case. And even if there's a gap, the judges have the power, the explicit power written into the uh, civil code to fill that gap. So um, I think our law allows us to react to it. What is perhaps more challenging is the political reactions, um, or the reactions in the public. Labor law is not something that people would traditionally associate with competition law. And it just takes a little bit more advocacy to explain why there is an issue. Um, digital markets, we have an interesting approach or maybe a different approach than in other European countries, uh, because our resources are Limited. We cannot infinitely open big investigations and certain investigations will probably exceed our capabilities. But we are very lucky that we um, have a, uh, neighboring institution like uh, the European Commission, the European Union that does pick up these cases. And in our experience, once remedies have been proposed, uh, in big tech cases, they are typically also applied for Switzerland. And that enables us to focus on genuinely Swiss cases. So we do have cases in the technical sphere that um, concern only Swiss stakeholders. We have Swiss, uh, online retail sellers where there have been allegations of anti competitive behavior. Um, we intervened in a case where a Swiss payment service provider was pushed away by an American service provider if you were trying to pay, uh, with your phone. So uh, that is kind of the cases that we focus on things that are very real and very close to Swiss consumers.

Honora Wan: Mhm. I suspect that's the trend or the focus for the next 12 months or if there's anything else.

Dr. Laura Melazine Bowkerbecker: We don't really set trends. Um, we um, take the cases where we can see that there is obviously a very serious issue. Um, sometimes we try to, or often we try to find an amicable solution without opening a big investigation. That's also a bit more of the Swiss culture. We're not very litigious. In a small country you have to be a bit, um, you know, have to compromise a little bit. Otherwise living together becomes difficult.

Honora Wan: I feel like sitting here in the United States there is a little tap on the shoulder when you're saying that.

Dr. Laura Melazine Bowkerbecker: No, not at all. I like being litigious. I spend a lot of time in America. Um, I actually, I enjoy that culture as well. No, no, no.

Honora Wan: That might have been the most provocative statement we have.

Dr. Laura Melazine Bowkerbecker: No, no, no, no. It, it wasn't meant as a criticism. Quite the contrary. I admire the American legal system tremendously. It's um, one of the ones I admire the most certainly in the world. And I admire the litigious culture as well. I was just trying to explain why we are not. So we shy away from conflict a little bit and that might mean that even authorities will try to find an amicable solution rather than uh, open a full investigation. So there's kind of reasons behind it.

Honora Wan: Um, so here we are recording sitting here in the United States and we are talking about things on a global scale. So maybe perhaps we can ask you look forward a little bit and tell us, how do you see the Swiss competition enforcement evolving in a way in relation to the global trends? I know you said you don't set trends, but what about the trends that's already going on on global scales.

Dr. Laura Melazine Bowkerbecker: I mean we're certainly observing um, the AI disruption that is also fascinating. We have a lot of, and I count myself as part of that, a lot of technically fascinated people who enjoy uh, digging into these topics. And we see it also as a big chance. We're not um, obviously we see the risks, we see the risks of concentration, um, but we uh, also see a lot of opportunities and we are looking into using this technology to further develop tools that we have developed. So we were, I think one of the first, if not the first authority to figure out that there are certain statistical animalities in bid ringing cartels. And those were two economists in our team who, because we had a lot of bid rigging cases who came across that and who've developed that into a tool, mhm. With which you can fairly easily establish whether uh, bid rigging has occurred in public or any tender. And we've, a couple of years ago we presented this to the US authorities, to um, other authorities in the world and we're now um, trying to develop this further. It's a manual tool at the moment.

Honora Wan: Um, oh wow, that's definitely exciting area, um, in Switzerland and as well. So we don't have a lot of time but since we have you in person here, we want to give our audience the opportunity to know you a uh, little better as a person. And you know, and I think you commented pretty much rightfully like, you know, this question, we don't always get the interesting answers. If I'm going to ask anyway, do you have any interest or hobbies outside of the competition law?

Dr. Laura Melazine Bowkerbecker: Absolutely. Um, I'd say it depends on the time of the year. When it's winter, I love skiing. I love to go skiing, um, when there's no snow, hiking is fun. But my biggest passion is scuba diving and just got back from uh, diving for the first time with tiger sharks and I have to say that was, that's about like being in a room with a bunch of antitrust believers.

Honora Wan: Oh wow. I don't know how to make that come man. Thank you for sitting down with us.

Dr. Laura Melazine Bowkerbecker: Thank you so much for tuning in. Thanks a lot.

Narrator: Thank you for listening to this week's episode of our Curious Amalgam, a competition, consumer protection, data protection and privacy law podcast. It is produced and shared around the globe by ABA's antitrust law section. The opinions expressed by the participants in this podcast are their own and do not necessarily represent their employer or other organizations. If you like what you heard or would like to become a member of the American Bar Association. Please check out what the Antitrust section has to offer@ambar.org antitrust you can learn more about our podcast at our curious amalgam.com if you have comments, suggestions or podcast ideas, please reach out to us@podcastourcurious amalgam.com until next time, thank you for listening.