1. ICN CWG SG1 webinar on ‘”Parental liability”
FINES, PARENTAL LIABILITY,
MULTIPLE INFRINGEMENTS,
AND NE BIS IN IDEM
Rafael Allendesalazar
15 November 2017

2. Goal of fines in competition cases:
GOALS OF FINES
Goal of fines in competition cases:
Retribution
Deterrence: General and specific
Disgorgement of illicit gains: “The Commission will also take into account the need to increase the fine in order to exceed the amount of gains improperly made as a result of the infringement where it is possible to estimate that amount”.
European Commission 2006 Fining Guidelines

3. LEGAL MAXIMUM. INCREASE
Methodology and legal maximum (10% of turnover) have remained essentially the same since Regulation 17/1962.
But significant increase in level of fines imposed:

4. TOTAL TURNOVER
Increase through an expanding interpretation of three parameters in the calculation of the fines:
Turnover: volume of sales of the infringement vs. total sales.
“As a factor for assessing the seriousness of the infringement, the turnover of an undertaking is necessarily vague and imperfect. It does not make a distinction either between sectors with a high added value and those with a low added value, or between undertakings which are profitable and those which are less so. However, despite its approximate nature, turnover is currently considered, as an adequate criterion, for assessing the size and economic power of the undertakings concerned.
The part of the overall turnover which derives from the sale of the goods or services which are the subject of the infringement best reflects the economic importance of that infringement. Judgment of the General Court of 29 February 2016, Schenker. (Case T-265/12)
Role of the 10% legal maximum. Cap in a two-step application procedure or basis for the fine.

5. LIABLE UNDERTAKING. PARENTAL LIABILITY; SINGLE ECONOMIC UNIT
The term ‘undertaking’ must be understood as designating an economic unit even if in law that economic unit consists of several persons, natural or legal.
When such an economic entity infringes the competition rules, it is for that entity, according to the principle of personal responsibility, to answer for that infringement.
The unlawful conduct of a subsidiary may be attributed to the parent company in particular where, although having a separate legal personality, that subsidiary does not determine independently its own conduct on the market, but essentially carries out the instructions given to it by the parent company, having regard especially to the economic, organisational and legal links between those two legal entities.
That is the case because, in such a situation, the parent company and its subsidiary form a single economic unit and therefore form a single undertaking for the purposes of EU competition law.
In the particular case in which a parent company holds all or almost all of the capital in a subsidiary which has committed an infringement of the EU competition rules, there is a rebuttable presumption that that parent company actually exercises a decisive influence over its subsidiary.
The parent company to which the unlawful conduct of its subsidiary is attributed is held individually liable for an infringement of the EU competition rules which it is itself deemed to have infringed.
If the parent company is part of the economic unit [that has committed the infringement], it is regarded as personally jointly and severally liable with the other legal persons making up that unit for the infringement committed.
(Quotes from JUDGMENT of the EUCJ of 27 April Case C‑516/15 P. Akzo.)

6. PARALLEL ENFORCEMENT. MULTIPLE PROCEEDINGS. NE BIS IN IDEM
Globalisation of antitrust enforcement: Risk of several cumulative procedures and fines for a single infringement.

7. PARALLEL ENFORCEMENT. MULTIPLE PROCEEDINGS. NE BIS IN IDEM
Principle ne bis in idem: “precludes an undertaking being found liable or proceedings being brought against it afresh on the grounds of anticompetitive conduct for which it has been penalised or declared not liable by an earlier decision that can no longer be challenged”. Judgment of the General Court of 26 October Marine Harvest ASA. Case T-704/14.
Threefold rationale.
Prohibits double punishment and double prosecution.
Cannot be avoided by reducing the amount of the fine.
Conditions for the application of ne bis in idem:
Same person;
Same facts;
Two sets of proceedings in which a penalty is imposed.
Same facts do not require them to be identical: “a set of concrete factual circumstances involving the same defendant and inextricably linked together in time and space”. Judgement ECtHR of 10 February 2009, Zolotukhin v. Russia.
Objective of an efficient system of prosecution: “each case should be handled by a single authority” (Recital 18 Regulation 1/2003)
Limited instruments in Regulation 1/2003 to impede double jeopardy.
ECN+ Directive: occasion to introduce mechanisms to ensure that each case is dealt by the best placed authority.