COMPETITION • EUROPEAN LAW • PROCEDURE
The power to impose fine confers upon the Commission the ability to determine the date on which the fine is payable and the one on which default interest begins to accrue, to set the rate of such interest and to determine the arrangements for implementing the decision.
The fine is payable upon expiration of the period prescribed in the decision. In case of non-payment within that period, the Commission is entitled to require default interest at the rate set in the decision. It can apply at its discretion the payments made provided that it complies with the rules or general principles of EU law. As there is no provision specifically dealing with this question it is challenged by undertakings on a regular basis. According to the EU courts, the charging of default interest is fully justified to prevent undertakings from rendering the Treaty ineffective through late payment. The Commission is even entitled, as part of its discretionary power when fixing the interest rate, to adopt a point of reference higher than the applicable market rate offered to the average borrower, in order to discourage dilatory behavior.
The Commission which can impose fines jointly and severally on a subsidiary and its parent company, must not however impose joint and several liability where this would lead to one company bearing the risk of the insolvency of another company if those companies do not form part of the same undertaking. On the other hand, when such is the case, it can fine both companies jointly and severally even if their individual involvement in the infringement is not the same. However, the Commission’s power to impose fines does not extend beyond the determination of joint and several liability to the power to determine the shares to be paid by those held jointly and severally liable from the perspective of their internal relationship, which is for the national courts to determine.
The Commission can, where appropriate, require the provision of a bank guarantee covering the principal amount of the fine plus interest. Furthermore, an action brought against the decision imposing a fine has no suspensory effect. An undertaking bringing an action therefore has a choice; it can pay the fine when due, together with any default interest, if applicable, or it can provide a bank guarantee. Although the General Court may modify the fine imposed by the Commission, it cannot substitute it for a new, legally distinct fine. Therefore, such modification has no impact on the conditions of collection set by the Commission, which remains entitled to require the payment of default interest from the date the fine fell due, and the interest is then reduced in proportion to the revised amount of the fine.