European Commission's fining policy 10 February 2015 Dominik Piotrowski Case-handler European Commission/DG Competition *The views expressed are personal and do not bind the Commission

Fines imposed by the Commission

Recent record fines

Fining – general considerations Purpose of fines Ex ante deterrence (specific / general) Ex post punishment Legal basis Article 23(2)(a) of Regulation 1/2003 Administrative fines on undertakings Fines to reflect gravity and duration Fines capped at 10% of worldwide turnover 2006 Fining Guidelines – transparency and impartiality of the fining method General principles of law (legitimate expectation, non-discrimination, proportionality and equal treatment)

Fining – 2006 Fining Guidelines (1) Basic amount Proxy to determine the impact on the market Value of sales of the cartelised product within EEA Last full business year of the infringement Possibility to determine proxy sales if there are no actual sales within EEA Gravity percentage (0-30%) – for cartels at least 15% Duration multiplier Entry fee – deter from even entering into cartel

Fining – 2006 Fining Guidelines (2) Adjustments to the basic amount Mitigating factors Negligence, substantially limited involvement, cooperation outside leniency (beyond legal obligation), conduct authorised or encouraged by legislation Aggravating factors Recidivism, refusal to cooperate or obstructing conduct, the role of an instigator or coercer Specific increase for deterrence Large turnover beyond cartelised sales Discretion to impose a symbolic fine or to depart from the Fining Guidelines (exceptional)

Fining – 2006 Fining Guidelines (3) Legal maximum - 10% of the undertaking's worldwide turnover in the preceding business year. Its purpose is to avoid excessive and disproportionate fines Leniency discounts Immunity – 100% Leniency 1st leniency applicant – 30-50% 2nd leniency applicant – 20-30% 3rd and subsequent – up to 20% Settlement discount – 10% off the fine if the undertaking accepts liability for cartel conduct Inability to pay Exceptionally granted when a fine would irretrievably jeopardise the economic viability of the undertaking concerned Risk that fine causes insolvency does not as such render the fine disproportionate

Fining – concluding remarks Fines should be sufficiently high to deter and punish cartel conduct Fines bolster leniency and compliance 2006 Fining Guidelines contain discretionary elements 2006 Fining Guidelines have been approved by the EU Court of Justice and have been found to comply with human rights provisions (Schindler case) Discretion needs to be exercised with respect for general principles of law (legitimate expectation, non-discrimination, equal treatment, proportionality) EU Court of Justice enjoys unlimited jurisdiction and is not bound by the 2006 Fining Guidelines

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