COMPETITION • EUROPEAN LAW • PROCEDURE
The Commission may by decision impose fines on undertakings or associations of undertakings which, intentionally or negligently, infringe Articles 101 or 102, or contravene a decision ordering interim measures or making a commitment binding (Regulation No 1/2003, Article 23). A fine may also be imposed on undertakings which, in the course of the investigation, fail to comply with their obligations. Only infringements committed intentionally or negligently may be penalized by a fine. Acting intentionally implies the intention of the party committing the infringement to act unlawfully. It is sufficient that it could not have been unaware that the object of its conduct was the restriction of competition; by contrast, it is not necessary for an undertaking to have been aware that it was infringing Articles 101 or 102 TFEU. Negligence is characterized when the “normally well-informed” undertaking should have foreseen the illegal effects of its behavior.
A fine imposed by the Commission – which is an administrative authority – on an undertaking is an administrative penalty even if the EU authorities to a certain extent apply some general principles of criminal law (ne bis in idem principle, presumption of innocence, principle that offenses and penalties must be defined by law, non-retroactivity).
In setting the amount of the fine, the Commission uses a multi-criteria analysis, based on criteria designed to determine the general level of the penalties imposed on the cartel participants and to weight the fine according to the specific situation of each participant. The Commission has a particularly broad discretion in assessing the deterrent effect of a fine and is not required to apply a precise mathematical formula.
The Commission’s decision imposing a fine must be reasoned. It must indicate the criteria used and the method of calculation of the fine imposed. Although the Commission is not required to provide figures for the method of calculation, it must justify the choice of the proportion of sales taken into account in determining the basic amount of the fine and explain how it weights and assesses the various elements it takes into account.
In order to ensure the transparency and impartiality of its decisions, the Commission has adopted Guidelines on the method of setting fines, which set a basic amount that may be increased or decreased depending on the existence of aggravating or mitigating circumstances. The Guidelines set forth an indicative rule of conduct for the Commission’s decision-making practice from which it cannot depart in a particular case without giving reasons compatible with the principle of equal treatment.
The fine must be proportionate to the gravity and to the duration of the infringements found (Regulation No 1/2003, Article 23).
Fines are assessed on an individual basis for each undertaking, organization or group of undertakings and the amount should specifically reflect any aggravating or mitigating circumstances. The Commission may, without infringing the principle of non-discrimination, impose different fines on the participants in the restricted practice with respect to their size, economic strength and role. Within one category of operators, similar situations cannot however be treated differently unless such treatment is objectively justified.
In determining the basic amount, the Commission takes the value of the sales of goods or services of the undertaking concerned to which the infringement directly or indirectly relates in the relevant geographic market during the last year of its participation in the infringement. The basic amount is related to a proportion of the value of the sales, depending on the degree of gravity of the infringement, multiplied by the number of years of participation in the infringement. That proportion may be lower than, or equal to 30% depending on the nature of the infringement, the combined market shares of all the parties concerned, the geographic scope of the infringement and whether or not the infringement has been implemented.
The imposing of a fine has a twofold objective: it is aimed both at preventing infringements from being repeated (general deterrence) and at sanctioning them (specific deterrence). However, the aim of deterrence is to guarantee the effectiveness of the fine rather than reflect the harmfulness of the infringement. In order to ensure a deterrent effect, the starting amount of the fine may therefore be increased having regard to the size of the undertaking, its overall resources and its capacity to raise the necessary capital on the date of the decision even if at an earlier stage the means and resources of some of the entities making up the undertaking were smaller. The Commission may include in the basic amount a sum, known as an “entry fee” of between 15% and 25% of the sales value. It can also increase the starting amount taking account of the size and resources of the group to which the undertaking belongs, if together they form a single economic unit. On the other hand, it does not have to take account of the fact that no profit has resulted from the infringement or of the fine imposed in a case contemporary to the one at issue insofar as the deterrent purpose of the sanction contains a general deterrence objective.