What are the penalties for incomplete or misleading information in the notification or in response to the authority’s questions?
Merger Control (3rd edition)
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.
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 $1,500) 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.
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.
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 comply 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.
Furthermore, an amendment to the Competition Act entered into force on 1 January 2018, introducing a “stop the clock” provision, under which the DCCA may suspend the time limit for a merger review if the participating undertakings fail to disclose information requested by the DCCA within the set time limit.
The Competition Act provides that where the information contained in a notification is false or misleading in any material respect, or the CCPC is of the opinion that the full details required in the notification (or subsequently specified) have not been provided, the notification is invalid and any determination made by the CCPC on foot of such a notification is void.
Where the CCPC issues an RFI, failure by the parties to whom the RFI is addressed to provide the information required within the period specified by the CCPC is an offence under the Competition Act. An undertaking, or the person in control of an undertaking, convicted of such an offence may be liable on summary conviction to a fine not exceeding €3,000 or, on conviction on indictment, to a fine not exceeding €250,000.
In addition, if the failure continues one or more days after the date of its first occurrence, the undertaking or person concerned is guilty of a separate offence for each day that the breach occurs and may be liable on summary conviction to a fine not exceeding €300 or, on conviction on indictment, to a fine not exceeding €25,000.
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.
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.
An entity found to have supplied, whether intentionally or negligently, incorrect or misleading information to the PCC shall be subject to a fine of up to One Million Pesos (PhP1,000,000.00) in accordance with Section 29 of the PCA.
The penalty for incomplete or misleading information is RUB 500,000 for the company (applicant) and up to RUB 20,000 for the company’s general director. In addition, FAS can refuse to approve the transaction.
Pursuant to Article L.430-8 III of the Code, the penalties incurred by the notifying party(ies) for omitting information or providing inaccurate or misleading information are the same as those incurred in case of a failure to notify (see question 32). In addition to this fine, the FCA may also withdraw the clearance decision, in which case the parties are required to re-file a notification form within one month from the withdrawal of the clearance decision, unless they revert to the state which existed prior to the concentration.
The Commission may also revoke its decision to approve a merger if the decision was based on incorrect information for which a party to the merger was responsible.
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 $41,484 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 in connection with 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.
If an undertaking fails to comply with an obligation to provide information or to present documents or fails to do so correctly, it will be fined an amount of up to 100'000.- Swiss francs.
The FCO usually doesn’t impose fines in case of incomplete filings if the incompleteness was 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 or wrong.
Law No. 26876 sanctions with a fine up to 500 UIT (approx. USS 700,000) when inaccurate data has been provided to the authority.
According to Bill No. 2604, the fine is up to 1% of sales or gross income in the previous year. In case of Bill No. 2634, the fine is up to 1000 UIT (approx. USS 1,200,00), provided that the fine does not exceed 10% of sales or gross income in the previous year. Finally, Bill No. 2654 sanction with a fine not less than 1000 UIT the failure to notify, provided that the fine does not exceed 12% of sales or gross income in the previous year.
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 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 scenario has 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).
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.
The CCI can impose a penalty under Section 44 of the Competition Act against any person for making a statement which is false in any material particular, or makes a false statement knowingly, or for omitting to state any material particular knowing such information to be material.
The maximum penalty that the CCI can impose under Section 44 of the Competition Act is INR 10 million(Indian Rupees Ten million) and the minimum is INR 5 million (Indian Rupees Five million).
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).
The Commission may impose a fine of up to 1% of the aggregated turnover of companies for intentionally or negligently providing incorrect or misleading information to the Commission. This was most recently put into practice in May 2017 when the Commission fined Facebook €110 million for providing misleading information during the review of its acquisition of WhatsApp (case M.8228).
If the parties received merger clearance based on misleading information, this might constitute the illegal consummation of a merger transaction, subjecting the parties to all of the above mentioned penalties and repercussions, as well as fraud charges.
In addition, if information was officially required according to the Commissioner's legal power to issue requests for information under the Israeli Antitrust Law, providing incomplete or misleading information may be a separate breach. In this case, administrative fines may be imposed of up to 3% of a company's total sales turnover in the year prior to the violation, up to NIS 8,188,120. For individuals and for companies that in the year prior to the violation had a sales turnover of less than NIS 10 million, the maximum fine is NIS 307,050. This type of breach is also punishable by a criminal sanction of up to a year’s imprisonment and fines.
Where a notifying party deliberately conceals important information, refuses to provide relevant materials and information, or provides false materials and information, SAMR may refuse to register the notification or revoke registration that has been made. In addition, SAMR may impose a fine of not more than RMB 200,000 on the notifying party and a fine of not more than RMB 20,000 on the responsible individuals; if the circumstances are serious, SAMR may impose a fine of not less than RMB 200,000 but not more than RMB 1 million on the notifying party and a fine of not less than RMB 20,000 but not more than RMB 100,000 on the responsible individuals; and if a crime is constituted, criminal liability shall be investigated for in accordance with law.
Competition law stipulates a penalty of up to US$ 777,921.05.00 Dollars (using an exchange rate of MX$19.00 Pesos per US Dollar), for false statements or information, aside from possible criminal sanctions.