What are the penalties for incomplete or misleading information in the notification or in response to the authority’s questions?
Merger Control (2nd Edition)
In cases where false, inaccurate or incomplete information is provided, the notifying party(ies) may be subject to fines of up to 1% of its group turnover in the previous year. It is not clear as to whether the turnover concerned is national or worldwide, leaving this decision at the discretion of the PCA, according to the features of the case at stake. In the last couple of years, the PCA has applied several relevant fines (from €100,000 to €150,000) for these sort of infringements, although not within merger control. Criminal liability may also apply; however, such investigations have never been explored.
Additionally, ex officio investigations may also be initiated by the PCA if it concludes that a clearance decision was adopted based on false, inaccurate or incomplete information provided by the notifying party(ies).
The provision of incomplete information within the context of a notification process suspends the deadlines set for the HCC by law for the issuance of a respective decision until the supply of full and accurate information by the parties, provided that the HCC informs on such issue the notifying parties within seven days of the receipt of the notification form.
Furthermore, in terms of sanctioning, the provision of incomplete or misleading information may lead to the imposition of administrative fines ranging between Euro 15,000 up to 1% of the turnover of the liable undertaking or the initiation of disciplinary measures in case of civil servants or employees of public-law entities.
A person is liable to imprisonment for a term not exceeding two years, and/or to a fine if they:
- supply any information to the CMA which is false or misleading in a material respect and which they know to be false or misleading in a material respect (or if a person is reckless as to whether information is false or misleading in a material respect); or
- intentionally alter, suppress or destroy a document that the CMA has required to be produced.
In addition, the CMA can impose a fine of a fixed amount of up to £30,000, as well as daily fines of up to £15,000 for failure to comply with a binding CMA request for information, documents or attendance of witnesses, without reasonable excuse, or for intentionally obstructing the CMA from taking a copy of a document that is provided to it. This could apply, for example, if incomplete information is provided, or if information is not provided by the deadline specified in the request for information.
In addition, failure to provide information within the required timeframe may result in an extension of the CMA's first-phase or second-phase deadlines (see Section 19 above) and an extension of its four month deadline for jurisdiction to review completed mergers (see Section 6 above).
Failure to provide the requested information/documents, without a legitimate justification, may result in a fine up to EUR 25,823. Providing false information/documents may result in a fine up to EUR 51,645.
A certification signed by an officer of the filing party or one of its controlled entities must accompany a notification under the HSR Act stating that the filing is, to the best of his or her knowledge, ‘true, correct, and complete.’ If a filing has certain deficiencies, the antitrust authorities may ‘bounce’ an HSR filing and require that a party correct the deficiency and restart the HSR waiting period when the deficiency has been fixed.
The antitrust agencies have assessed sizable civil penalties (currently, up to $40,654 per day per violation) for failing to produce all required documents with their HSR filings.
In at least one exceptional case, criminal charges were brought for extreme violations of the HSR Act. There, the DOJ pursued criminal obstruction of justice charges against an executive for intentionally altering pre-existing documents to mislead the US antitrust agencies.
The FCO usually doesn’t impose fines in case of incomplete filings if caused by negligence only. However, incomplete filings lead to extended procedures as the clock does not start to run until the filing is complete. It is much more likely that the FCO will impose fines if information is found to be intentionally misleading.
Providing incomplete or misleading information in the notification or in response to the JFTC’s questions can trigger a criminal fine of up to JPY 2 million. It can be imposed on the party and its representative, director and/or employee who implemented the transaction on behalf of the party.
Undertakings which provide intentionally or negligently incorrect or misleading information in a notification may upon application by the official parties be fined by the Cartel Court up to 1% of their (group’s) total turnover in the preceding business year.
Information is incorrect or incomplete in case that it gives a distorted picture of reality in significant aspects. Significant aspects concern the minimum requirements regarding the content which notifications have to comply with. According to jurisprudence, in case of minor fault and insignificant consequences, the imposition of a fine can be refrained from if the fine is not deemed necessary on special or general preventive grounds.
In a recent case, the Cartel Court fined an undertaking with EUR 50,000 for failure to provide the (relevant) identity of two of three executives.
If a notification or a supplementary information request response is considered incomplete by the Bureau, then the notifying party will be advised and the applicable statutory waiting period will not commence until all required information is received.
Any person who provides misleading information to the Bureau could be subject to criminal sanctions, including a fine in the discretion of the court and a term of imprisonment of up to ten years.
In addition to the sanctions previously mentioned to those who notify a concentration providing false information, the following administrative and criminal sanctions may be applied:
(i) A penalty of minor imprisonment in its minimum to medium degree (this is, from 61 days to 3 years of imprisonment) to those who, in order to hinder, divert or avoid the exercise of the powers of the FNE, hide information requested or provide false information; and
(ii) a fine up to 2 UTA (equivalent to approximately USD $1,700 and EUR $1,400) per day of delay for those who do not respond or only partially respond, without justification, to a formal request for information of the FNE.
A fine of up to €50,000 may be imposed for a failure to provide requested information or clarifications, or for providing misleading or inaccurate information.
If the parties provide insufficient information, the DCCA will usually grant the parties a deadline to submit the relevant information.
If the parties deliberately provide incomplete or misleading information, or fail to com-ply with an obligation to submit a full-form notification, this may result in the rejection of the notification and the imposition of a fine upon the parties.
For incomplete or misleading information in a submission, a certification, a notification or a response to an information request involve fines of up to 1% of the aggregate turnover of the undertaking concerned can be imposed. This penalty is not of a criminal law nature.
In May 2017, the Commission imposed a fine of €110m on Facebook for providing misleading or incorrect information in the context of the Commission’s review of the acquisition of WhatsApp in 2014. In July 2017, the Commission announced that it opened two additional formal investigations into suspected breached of the EUMR, in particular the provision of incorrect or misleading information (Merck/Sigma-Aldrich and General Electric/LM Wind).
These investigations are still ongoing.
The FCA may (a) impose a fine of up to 5% of the previous financial year’s French turnover for corporate entities, and €1.5 million for individuals, and/or (b) withdraw the clearance decision. In such case, the notifying party may renotify the transaction.
The FCA may also (a) enjoin parties that have failed to reply on time to a request for information to do so, subject to a daily penalty of up to 5% of their average daily turnover; and/or (b) impose a fine of up to 1% of its highest worldwide turnover during the latest financial years on any company that has obstructed the investigation by providing incomplete or incorrect information.
notification or in response to the authority’s questions?-
In the event of a failure to notify, late notification or the supplying of incorrect, insufficient or misleading information, the DG may impose on the undertaking an administrative fine of between €1,000 and €10,000. Where an undertaking intentionally or negligently puts into effect a suspended concentration or one which has been declared unlawful, an administrative fine of up to 10% of the total turnover of the undertaking in the preceding financial year, shall also be due.
Where a concentration has already been implemented, the DG may also require the undertakings or assets brought together to be separated, the cessation of joint control or any other action that may be appropriate in order to restore effective competition.
The following penalties may be imposed on the party responsible for providing incomplete or misleading information or anyone acting on its behalf:
- Administrative fine of up to 1% of the infringing party’s annual aggregate turnover, provided that the infringement of the obligations was grossly negligent or intentional. Since the current Norwegian Competition Act entered into force in 2004, one company has been fined NOK 50,000 for providing incomplete information in a notification. In cases where relevant information is intentionally held back or is false, significantly higher fines must be expected.
- Individuals can be subject to criminal fines and/or imprisonment for up to 3 years , provided that other conditions set out in criminal law are fulfilled. This faculty has, so far, never been used.
Providing inaccurate, incomplete or misleading information in the notification or in response to the authority’s questions may entail the application of a fine ranging from 0.1% to 1% of the total turnover achieved by the concerned undertaking in the financial year preceding the sanction. The fine may be applied to the undertaking which is responsible for the inaccurate, incomplete or misleading information in question. Newly established undertakings which have not achieved any turnover in the financial year preceding the sanction may be sanctioned with a fine ranging from RON 10,000 (approximately EUR 2,175) to RON 1,000,000 (approximately EUR 217,400).
The Competition Council may also compel undertakings to provide the information and documents which are necessary to the Competition Council for analysing the notification of the economic concentration, by applying daily penalties of up to 5% of the average daily turnover achieved by the sanctioned undertaking in the financial year preceding the sanction. In case of newly established undertakings which have not achieved any turnover in the financial year preceding the sanction, the daily penalty may range between RON 300 (approximately EUR 65) and RON 7,000 (approximately EUR 1,520).
KN: If the parties provide incomplete or misleading information in the notification or in response to the authority's questions, the Commission may issue a procedural penalty ranging from EUR 500 to EUR 5,000 for each day of breach, provided that the maximum amount of fine cannot exceed 10% of the infringer’s turnover realized in the year preceding the year in which the Competition Commission initiated its investigation.
Failure to submit a complete filing in terms of the requirements in the Act and the Regulations, may result in the Commission issuing a Notice of Incomplete Filing in the prescribed form, the consequence of which is a suspension of the initial investigation period.
In terms of the Act, knowingly providing false information to the Commission constitutes an offence and the sanction for such conduct is a fine or imprisonment.
As per Article 10(3) of Communiqué 2010/4 on Mergers and Acquisitions Requiring the Approval of the Competition Board, if any change occurs during the Competition Board's review of a transaction regarding the information submitted in the filing, the parties have a legal duty to inform the board immediately. As a general rule, the parties are obliged to file correct and complete information with the Competition Authority. If the information requested in the notification form is incorrect or incomplete, the notification is deemed to have been filed only on the date when such information is completed following the Competition Board’s request for further data. In addition, the authority will impose a turnover-based monetary fine of 0.1% of the Turkish turnover generated in the financial year preceding the date of the decision (if this is not calculable, the turnover generated in the financial year closest to the date of the decision will be taken into account) on natural persons or legal entities which qualify as an undertaking or an association of undertakings, as well as the members of these associations, in cases where incorrect or misleading information is provided by the undertakings or associations of undertakings in a filed notification.
For providing incomplete or misleading information in the merger control notification or in response to the AMC’s additional request, the AMC may impose penalties of up to 1% of the worldwide turnover of the party, which provided incomplete or misleading information.
According to article 62 of the Brazilian Antitrust Act, in case of refusal, omission, deceitfulness, falsity or unjustified delay, by the applicants, with regards to the submission of information or documents required by Cade, without prejudice to the other applicable sanctions, the petition for approval of the act of economic concentration may be rejected due to lack of evidence, in which case the applicant may only perform the act upon submission of a new petition.
Furthermore, article 91 determines that the approval may be reviewed by CADE, ex officio or upon request of the General Superintendence, if the decision is based on false or misleading information provided by the interested party, in case of noncompliance with any of its obligations, or if the intended benefits are not achieved. Falsity or deceitfulness shall be punished with a pecuniary fine, equivalent to not less than sixty thousand Brazilian Reais (R$ 60,000.00) nor more than six million Brazilian Reais (R$ 6,000,000.00)
In addition, article 299 of the Brazilian Criminal Code determines that ideological falsehood, that is, omitting in a document a statement that should be included, or including a false statement in it in order to alter true information, create obligations or undermine rights, is a crime punishable with imprisonment, even if the document at stake is of private nature.
In respect of informal clearance, if the ACCC becomes aware of new information it may re-open its investigation of the transaction, even if the transaction has closed.
Formal clearance or authorisation granted on the basis of information that is false or misleading in a material particular may be revoked.
If the ACCC uses its compulsory information gathering powers to obtain information, documents or evidence from the merger parties, refusal or failure to comply with the notice issued, or knowingly furnishing false or misleading information or evidence to the ACCC, is an offence punishable on conviction by a fine up to A$3,600 or imprisonment for 12 months.
Incomplete or misleading information can be deemed to be a breach of the duty to cooperate with the authority (Article 50 LORCPM) and may also be seen as an act obstructing the performance of the authority’s duties (Article 78(1)(h) LORCPM). This constitutes a light violation sanctioned with 8% of the total turnover.
Without prejudice of the imposition of this penalty, the authority may also impose an additional “coercive fine” destined to force the undertaking to provide complete and accurate information. This fine may amount to total amount equivalent to 200 Basic Uniform Remunerations (i.e. USD 75.000).