1. Defining and applying mitigating and aggravating circumstances. Relevant changes to the amount of fine. Defining and applying mitigating and aggravating circumstances. Relevant changes to the amount of fine. Kiev, 09. 09.2015

2. This presentation will focus on factors which generally qualify to adjust the basic amount of fines. Some authorities have some kind of guidelines detailing the application of these fine-tuning aspects. In other systems, the governing principles are to be worked out on the basis of the decisional practice and the case-law. The Recommendatory Explanations provide aggravating and mitigating circumstances. The basic amount of fine may be increased where there are aggravating factors and decreased where there are mitigating factors. The choice of aggravating and mitigating factors mostly reflect international practice in this area.

3. Aggravating elements DURATION Duration can play a different role in the calculation of the fine. It can be sometimes consider as a mitigating or aggravating circumstance depending on the relative length of the infringement. It is worth to check that duration is taken into account in defining the fine. It seems that the volume of affected commerce taken into account covers the entire duration of the infringement by taking all of the relevant sales for the infringement period into account (i.e. total sales).

4. Aggravating elements RECIDIVISM Repeated offenders are usually exposed to increased penalties. In EU where an undertaking continues or repeats the same or a similar infringement after the Commission or a national competition authority has made a finding that the undertaking infringed Article 81 or 82: the basic amount will be increased by up to 100 % for each such infringement established.

5. Aggravating elements Role of the undertaking in the infringement Under the EU practice this aspect means, that the Commission will also pay particular attention to any steps taken to coerce other undertakings to participate in the infringement and/or any retaliatory measures taken against other undertakings with a view to enforcing the practices constituting the infringement.

6. Aggravating elements Refusal to cooperate – obstruction Refusal to cooperate could lead to increase the fine. To note that non-compliance with procedural obligations (e.g. late provision of requested information, false or incomplete provision of information, lack of notice, lack of disclosure, obstruction of justice, destruction of evidence, challenging the validity of documents authorizing investigative measures, etc.) can be subject to autonomous sanctions, whether or not a final decision on a substantive infringement is reached. Where a decision on a substantive infringement is eventually reached, the procedural (mis) behaviour of the party can still be considered as an aggravating factor, whether or not it attracted separate procedural sanctions. The existence and the application of such procedural sanctions do not normally prevent the application of increases to the fine applied in a final decision on the merits.

7. Others - Aggravating elements If the offence involved vulnerable victims, this may be taken into account in determining the amount of the fine within the applicable fine range; the degree of premeditation; the continuation of infringing conduct qualifies as aggravating situation; the high ranking or seniority of the personnel involved; importance of the affected product or the overall financial/economic strength of the offender; extent of damages or potential damages to competition, to the country economy, to consumers or to third parties.

8. Mitigating elements Immediate termination of the infringement Immediate termination of the infringement where the undertaking concerned provides evidence that it terminated the infringement as soon as the Commission intervened: this will not apply to secret agreements or practices (in particular, cartels);

9. Mitigating elements Negligence The undertaking provides evidence that the infringement has been committed as a result of negligence. Negligence does not seem to be an effective mitigating aspect, since it is hard to imagine that an undertaking is not aware of the fact that its behaviour is against the law. In practice its application is unlikely.

10. Mitigating elements Limited participation The undertaking provides evidence that its involvement in the infringement is substantially limited and thus demonstrates that, during the period in which it was party to the offending agreement, it actually avoided applying it by adopting competitive conduct in the market: the mere fact that an undertaking participated in an infringement for a shorter duration than others will not be regarded as a mitigating circumstance since this will already be reflected in the basic amount;

11. Mitigating elements Effective cooperation The undertaking concerned has effectively cooperated with the Commission outside the scope of the Leniency Notice and beyond its legal obligation to do so.

12. Mitigating elements State action defence The anti-competitive conduct of the undertaking has been authorized or encouraged by public authorities or by legislation.

13. The size of the firm Existence of antitrust compliance programmes Restitution to victims Little significance Others – Mitigating elements

14. And as for mitigating/aggravating circumstances, there is no necessity to be more precise as to the level of gravity percentages. This is something different jurisdictions have consciously decided not to do (with the exception of recidivism).

15. For example, the UK guidance (OFT’s guidance as to the appropriate amount of penalty) states that “in the case of recidivism the amount resulting from the application of steps 1 and 2 may be increased by up to 100 per cent for each such infringement established”. Polish guidelines determines that the basic amount of fine may be increased or decreased by up to 50% taking into account aggravating and mitigating circumstances. European Commission also provide that “where an undertaking continues or repeats the same or similar infringement (…) the basic amount will be increased by up to 100% for each such infringement established”.

16. Thank you for your attention www.uokik.gov.pl Piotr Adamczewski Director of Branch The Office of Competition and Consumer Protection padamczewski@uokik.gov.pl