What factors are taken into account when the fine is set? In practice, what is the maximum level of fines that has been imposed in the case of recent domestic and international cartels?
The Competition Law makes reference to Article 17 of the Law on Minor Offences to require the Board to take into consideration factors such as the level of fault and amount of possible damage in the relevant market, the market power of the undertakings within the relevant market, the duration and recurrence of the infringement, the cooperation or driving role of the undertakings in the infringement, the financial power of the undertakings, compliance with their commitments, etc., in determining the monetary fine.
In terms of the highest monetary fines imposed by the Board as a result of a cartel investigation, two decisions stand out:
(i) The highest monetary fine imposed on a single undertaking is TL 213,384,545.76 (around EUR 35.3 million at the time of writing). This amount represented 1.5% of the 2011 annual gross revenue of the economic entity composed of Türkiye Garanti Bankası A.Ş. and Garanti Ödeme Sistemleri A.Ş. and Garanti Konut Finansmanı Danışmanlık A.Ş. (13-13/198-100, 08.03.2013)
(ii) The highest monetary fine imposed for an entire case (imposed on 12 undertakings active in the banking sector) was TL 1,116,957,468.76 (around EUR 185 million at the time of writing) for the same case (13-13/198-100, 08.03.2013).
The relevant factors the Court must have regard to in determining the appropriate civil penalty include:
- the nature and extent of the conduct;
- any loss or damage suffered;
- the circumstances in which the conduct took place;
- any previous findings regarding the same or similar conduct;
- the size and degree of market power of the company;
- the deliberateness of the conduct;
- whether the conduct was at the direction of senior management;
- the company’s culture of CCA compliance;
- the extent of cooperation; and
- specific and general deterrence.
In criminal matters, an offender is to be sentenced in accordance with the Crimes Act (Part 1B). In particular, the sentence imposed must be of a “severity appropriate in all the circumstances of the offence”, and the Court must take into account the matters in s16A(2) (among others).
In CDPP v NYK  FCA 1516, the Court found the factors identified in civil penalty cases bear also upon criminal sentencing and most are, in any event, replicated in some way in the relevant considerations set out in the Crimes Act. Some of the specific factors in s16A(2) include the degree to which the person has shown contrition, if the person has pleaded guilty to the charge; the degree of cooperation with law enforcement agencies in the investigation of the offence or other offences, the need for adequate punishment, and the offender’s prospects of rehabilitation.
In practice, the highest penalty awarded in Australia to date was A$46m imposed on Yazaki Corporation in May 2018 for civil cartel conduct involving the coordination of quotes with a competitor for the supply of wire harnesses used in the manufacture of certain Toyota vehicles supplied in Australia. The only criminal fine imposed in Australia is A$25m against Nippon Yusen Kabushiki Kaisha (NYK), a Japanese shipping company, for cartel conduct in relation to the supply of shipping services to Australia. At the time of writing, a co-accused, Kawasaki Kisen Kaisha Ltd, is awaiting sentence.
In applying these fines and penalties, the agencies must weigh a number of factors, such as (i) the actual harm; (ii) recidivism (that is, a prior fine in final form for an antitrust violation, which may result in a duplication of the otherwise applicable fine); (iii) wilful intent to engage in anticompetitive conduct; (iv) the duration of the illegal behaviour; and (v) the financial capacity of the responsible party.
The largest fines imposed to date by COFECE following a finding of per se anticompetitive behaviour were imposed in the recent pension-fund managers case (afores). In such matter, total fines amounted to approximately US$61.1 million, and the single largest fine amounted to USD$23.62 million. In such case, the fine to one of the afores was initially assessed at a higher amount based on estimated damage to the market but further reduced so as to not to exceed 10% of the income for tax purposes of the relevant agent.
According to Article 45 of the Brazilian Antitrust Law, CADE shall take into account for the purposes of imposing the penalties (i) severity of the infringement; (ii) good-faith; (iii) potential advantage; (iv) potential consummation of the infraction; (v) level of damage or harm to competition, consumers or third parties; (vi) economic effects (negative) produced within the market, (vii) financial situation and (viii) recidivism.
According to recent precedents, CADE has applied to companies condemned in cartel cases fines that have been about 15% of their gross revenues (or the economic group they belong). The table below shows the total major fines imposed by CADE:
Date of judgement
BRL 3.1 bi
Air Cargo Cartel
BRL 293 mi
BRL 150 mi
Hospital Gas Cartel
BRL 2.3 bi
BRL 345 mi
The maximum amount of fine that can be imposed on an infringing undertaking is 10% of the annual worldwide turnover of the business undertaking in question during the last year of its participation in the infringement concerned. When determining the amount of the fine, the Market Court will consider the nature, scope and duration of the restriction. The Market Court is not bound by the FCCA’s proposal in setting the amount of the fine. However, where the FCCA has not made a pro¬posal for the imposition of a fine, the Market Court may not ex officio impose a fine. In such cases the Market Court may, how-ever, decide to remit the case to the FCCA for reconsideration. Recent decision practice is described in more in answer 9 below.
There is a five-year limitation period for the imposition of fines following an infringement of the Competition Act. The limitation period begins from the date on which the competition restriction occurred or, in the case of a continued infringement, the date on which the infringement ended. The FCCA’s investigatory measures (eg, a dawn raid or the sending of a written request for informa¬tion) interrupt the limitation period. Nevertheless, the FCCA cannot impose a fine if it has not made a proposal for the imposition of a fine to the Market Court within 10 years of the date on which the competition restriction occurred or, in the case of a continued infringement, after the date on which the infringement ended.
The court will impose a fine after hearing from the DPP, which will have consulted with the Bureau on an appropriate fine. The Bureau will usually take as a starting point to the establishment of the base fine the volume of commerce of the cartel participant. It generally considers that a fine equivalent to 20% of the affected volume of commerce will be appropriate: unless there is evidence to the contrary, 10% of the party’s volume of commerce will adequately represent the overcharge resulting from the cartel, and an additional 10% is appropriate for deterrence purposes, as it does not represent the mere cost of doing business.
Mitigating and aggravating factors will then be taken into account, and will be weighed based on the circumstances of each case. Once the 20% base fine has been reduced or increased based on these factors, the Bureau will apply the “leniency discount”, if the party was a leniency applicant, as described above in section 9.
The CDN$30 million fine obtained in 2013 following a guilty plea in the international auto parts investigation is the largest fine imposed in Canada for a bid-rigging offence. With respect to domestic cartels, three carbonless paper sheet manufacturers settled a section 45 cartel inquiry for CDN$12.5 million each following guilty pleas.
As mentioned above, whether the monopoly agreement has been implemented would significantly impact the amount of fine. If the monopoly agreement has been implemented, the undertaking may be fined not less than 1% but not more than 10% of its sales achieved in the previous year. If such monopoly agreement has not been implemented, it may be fined not more than 500,000 yuan. At the same time, the AMEA will consider the duration, degree and nature of the illegal conduct when determining the amount of fine. NDRC published a draft of Guidelines on Calculation of Illegal Gains and Penalties for Monopoly Conducts (Draft Guidelines on Calculation) in June 2016, with an aim to provide specific guidance on how to determine the amount of fine. It is, however, reported that the legislative process of the Draft Guidelines on Calculation has been slow given the existence of certain divergence.
So far, the maximum amount of the penalty for domestic enterprises conducting monopoly agreement is 457 million yuan in the case of PVC in 2017. This case involved 18 companies, including state-owned enterprises and private companies. With consideration of the extent of the violation and its duration as well as the industry situation that the PVC industry was suffering recession, the 18 companies were imposed a fine from 1% to 2% of their 2016 sales.
The highest percentage of sales that has been imposed as fine for monopoly agreement cases is 9%, in a case where eight international ro-ro cargo shipping companies implemented a monopoly agreement by collusion bidding in 2015. Considering, inter alia, that the monopoly agreement lasted for a long time (no less than four years), and resulted in a wide range of influence (covering various main ship routes including North America-China, Europe-China and South America-China), NDRC imposed fines ranging from 4% to 9% of the sales of international shipping services of ro-ro cargo related to the Chinese market in 2014, i.e. 407 million yuan in total.
In another case involving domestic companies, the Allopurinol case in 2016, Chongqing Qingyang and its affiliated company Chongqing Datong were fined 8% of their sales in the previous year, while the other companies were fined 5% of their sales in the previous year.
In December, 2018, SAMR announced the first monopoly agreement case after its establishment, i.e. the Tianjin port storage yard case, where Tianjin Development and Reform Commission (TDRC) made administrative penalty decisions against 17 companies. Having taken into account the circumstances of each company, including the degree of cooperation, the cessation of illegal conducts and the duration of the illegal conducts, TDRC imposed fines on the 17 companies in five tiers, namely 5%, 3%, 2.5%, 2% of the respective sales in the previous year and an exemption from penalty.
The judge determines the sentence based a variety of factors including the formula provided by the United States Sentencing Guidelines, which are advisory not mandatory; the recommendation of the prosecution; the arguments of the defence; and the information provided by the United States Probation Office. In the case of a company, the plea agreement typically recommends or sets a fine amount.
The DOJ argues that fines larger than USD 100 million are possible through 18 U.S.C. § 3571, which provides that when a person derives pecuniary gain from the defendant’s offense, the defendant ‘may be fined not more than the greater of twice the gross gain or twice the gross loss, unless imposition of a fine under this subsection would unduly complicate or prolong the sentencing process.’ In 2014, the Ninth Circuit Court of Appeals upheld a fine of USD500 million against AU Optronics, following a jury trial.
Surcharges are calculated by multiplying the revenues of the products subject to the cartel activities during the cartel period by the relevant surcharge rate. When the duration of the cartel activity is more than 3 years, the period will be limited to the 3 years prior to the end of the cartel activity.
The surcharge rate is usually 10%, however, a rate of 3% applies to retail business operators and a rate of 2% to wholesale business operators. Also, additional 50% increase in surcharge is applicable to certain repeat offenders and parties who lead the cartels. Further, there are special rules for small and medium-sized undertakings and parties who withdrew from cartel activities.
Under the Antimonopoly Act, the surcharges are calculated by applying the relevant calculation formula as provided above, and unlike in some other jurisdictions, the JFTC does not have wide discretion in calculating the surcharges. However, as discussed in 9 below, there is legislation pending which would grant the JFTC wider discretion in deciding the surcharge amounts.
The MyCC has issued a ‘Guidelines on Financial Penalties’ and in imposing the financial penalty, the MyCC has the objectives of reflecting the seriousness of the infringement and deterring anticompetitive practices leading to an infringement of a prohibition under the CA.
In determining the amount of financial penalty to impose, the MyCC has in the said guidelines indicated that it will take into account some or all of the following factors:
(a) seriousness (gravity) of the infringement;
(b) turnover of the market involved;
(c) duration of the infringement;
(d) impact of the infringement;
(e) degree of fault (negligence or intention);
(f) role of the enterprise in the infringement;
(h) existence of a compliance programme; and
(i) level of financial penalties imposed in similar cases.
The MyCC has further indicated in the said guidelines that it will take into account aggravating factors, mitigating factors and the grant of leniency.
The aggravating factors may include but not limited to:
(a) the role of the enterprise as an instigator or leader or having engaged in coercive behaviour with others;
(b) obstruction of or lack of cooperation in the investigation;
(c) the enterprise has a record of committing similar infringements or other infringements under the Competition Act (recidivism);
(d) continuance of the infringement after the start of investigation; and
(e) involvement of board members or senior management in the infringement.
Meanwhile, the following non-exhaustive list of mitigating factors may also be taken into consideration:
(a) low degree of fault;
(b) relatively minor role in the infringement especially if involvement is secured by threats or coercion;
(c) cooperation by the enterprise in the investigation;
(d) existence of a corporate compliance programme that is appropriate having regard to the nature and size of the business of the enterprise; and
(e) any compensation made to victims of the infringements.
If the enterprise has received leniency, then the amount of the financial penalty as determined by the factors above, including any reduction to comply with the legal maximum requirement, will be reduced by the amount stipulated in the grant of leniency.
The maximum level of fines that the MyCC has imposed on cartels to-date is a 213.45 million ringgit penalty against the General Insurance Association of Malaysia (‘PIAM’) and 22 of its members in relation to an alleged anticompetitive agreement to fix trade discount rates for parts of certain vehicle makes, and labour hourly rates for workshops under the PIAM Approved Repairers Scheme.
The amount of the fine is calculated by taking into account the duration and gravity of the unlawful agreements or practices, as well as the presumed profit arising from the unlawful agreements or practices.
The highest sanction the Commission ever imposed was around 157 million Swiss francs against BMW restricting parallel imports to Switzerland.
The factors that are taken into account when a fine is set are specified in Section 50(e) of the Competition Law. These factors are, as follows: (1) the duration of the violation; (2) the degree of damage that the breach may cause to competition or to the public; (3) the infringer's part in the breach and the extent of its influence on its performance; (4) the existence or absence of prior violations and the date of their implementation; (5) the actions taken by the infringer to prevent the recurrence or discontinuance of the breach, including a report on his initiative for the breach, or actions taken to correct the consequences of the breach; (6) in cases that the infringer is an individual – his economic ability, including his income derived from a company related to the breach, as well as personal circumstances for which the violation was committed or grave personal circumstances that justify not bringing the crime to justice; (7) in cases that the infringer is a company – there is a significant concern that as a result of the imposition of the sanction, the infringer will not be able to pay his debts and his activity will be terminated.
On January 1, 2009, the Israeli parliament enacted Amendment 21 to the Competition Law. As part of the said amendment, Chapter G1 was amended, and the fine that the Competition Commissioner is authorized to impose on a company that breached the provisions of the Competition Law was limited to NIS 100 million. Moreover, the financial sanctions that the Competition Commissioner can impose on a private individual is NIS 1,035,730.
The Competition Commissioner has exercised its authority to impose economic sanctions on several prominent cases recently: (1) Determination of abuse of status against Section 29(a) of the Competition Law, and demand for payment under Section 50(h) of the Competition Law - IEC and managers – in this determination the IEC was required to pay a fine of NIS 13 Million, and the managers were required to pay NIS 165,000 and NIS 110,000; (2) The decision of the Competition Commissioner to impose a financial sanction on Milan House Ltd. – in this decision the company was required to pay NIS 20,000; (3) The Competition Commissioner's decision to impose a financial sanction on Tnuva Cooperative Society for Marketing Agricultural Products in Israel Ltd. Tirat Zvi 2000 Limited Partnership – in this decision Tnuva was required to pay NIS 800,000 and Tirat Zvi was required to pay NIS 240,000; (4) In the GIS Cartel, a request to approve a compromise agreement was submitted to the court. According to the said agreement, the companies were required to compensate the IEC and the public for an amount of NIS 465 million.
Given the breadth of the legal criteria, the former competition authority issued guidelines on the methodology for calculating fines along the lines of that adopted by the European Commission. However, the Spanish Supreme Court annulled them by judgment dated 29 January 2015 (see appeal 2872/2013  Transitarios 2). In that judgment it was clarified that the notion of ‘total turnover’ includes all sales made by the infringer in Spain in the year prior to the decision, thus including sales in markets and sectors unaffected by the infringement. The Supreme Court also interpreted that the relevant percentage (10% for very serious infringements such as cartels) is the maximum scale applicable in order to impose a fine, but that each actual fine must be individually calculated. Additionally, it must be noted that, in the CNMC’s practice, ‘infringer’ means the legal entity subject to the infringement proceedings and its consolidated subsidiaries and controlled entities, but not its parent companies.
The current situation is thus characterised by legal uncertainty as to the methodology actually used to calculate fines because the CNMC is developing a new fining practice on a case-by-case basis, which has not yielded any clear principles yet, despite the attempt at systematisation in the Provisional CNMC Fining Guidelines 2018 [10 October 2018]. At any rate, it may be inferred from precedents that the following three successive steps are taken by the CNMC to calculate fines.
Firstly, the overall seriousness of the conduct is considered. This first step consists of determining the basic percentage of the fine within the legal range ( 10% for cartels), which constitutes approximately 60% of the overall percentage, on account of: (a) the features of the affected market in terms of transparency and concentration; (b) the market share of the infringers; (c) the duration and scope of the infringement (namely portion of the national market affected by the conduct); (d) the effects on the legal interests of consumers or other economic operators (for example, the fact that the affected products are medicines, especially where financed through the public budget, or an indispensable input for other economic sectors); (e) the illicit gain obtained; or (f) the adoption of monitoring and implementing measures.
Secondly, the seriousness of the individual participation of each company is assessed. This second step aims at increasing (not decreasing) the basic percentage within the legal range (10% for cartels). Approximately 40% of the overall percentage is accounted for by individual participation. The main criterion, up to approximately two thirds of the percentage to be added under this second step, is the participation share of the individual infringer (that is, as a coefficient of the combined turnover achieved in the relevant product and geographic market by all the infringers participating in the conduct for the duration of their participation). Other parameters factored in at this stage are the legal ‘aggravating’ and ‘mitigating’ circumstances (see above).
Thirdly, a proportionality check is applied. Once the overall percentage is obtained as a result of the first and second steps and applied to the previous year’s turnover, the illicit gain obtained by the infringer as a result of the infringement is calculated and used as a cap to the fine. The CNMC has thus far not explained the exact methodology to estimate the illicit gain, but has vaguely referred to applying a certain percentage to the turnover achieved in the relevant product and geographic market by the individual infringer over the duration of its participation. This percentage might result from various economic parameters (for example, the contribution margin of the undertakings on competitive conditions, price increase due to the infringement and price-elasticity of demand in the relevant market), based on data provided by the infringers or public databases such as the Bank of Spain’s sectoral ratios for non-financial companies, or, where that does not exist, on forecasts from the economic literature. Then, the illicit gain is multiplied by a factor that ranges from 1 to 4 depending on the duration of the infringement and the size of the infringer to ensure deterrence.
Although the percentage resulting from this exercise has traditionally been applied on the Spanish turnover of the infringing entity, there is no certainty on whether the implementation of the Directive (EU) 2019/1 of the European Parliament and of the Council of 11 December 2018 to empower the competition authorities of Member States to be more effective enforcers and to ensure the proper functioning on the internal market (“ECN+ Directive”) would imply that the CNMC will calculate fines on the basis of the worldwide turnover.
This methodology, which is yet to be tested by the Spanish Supreme Court, has been subject to criticism for, inter alia, lack of proportionality, discrimination among infringers and, above all, lack of clarity. In practice, the four decisions of the CNMC adopted during 2018 on cartel cases imposed sanctions of between 0.6% and 8% (before the proportionality check, which is conducted on the amount of the fine once the overall percentage is applied) of the infringers’ turnover achieved during the previous year to the decision.
Additionally, the Competition Act 2007 does not provide for specific reductions of fines on account of implementation of compliance programmes by infringers. Nonetheless, the CNMC seemed to have recently opened the door to considering the effective implementation of compliance programmes for the purposes of modulating fines (see decision of the Board in case S/DC/0544/14  Mudanzas Internacionales - international movers). The basis seems to be an analogy with criminal rules on legal persons’ liability, which allow for account to be taken of the setting up of this sort of measure before the hearing as an mitigating circumstance. In casu, the existence of a robust compliance programme before the infringement was not proven but its application at a later point appeared to have been valued positively by the CNMC for the purposes of calculating a fine.
Finally, regarding infringements by association, Article 63(1) of the Competition Act 2007 allows the CNMC to take into account the turnover of their members for the purposes of calculation of the fine. This has been interpreted by the CNMC as permitting the imposition of fines of up to 10% of the turnover of the members of the infringing association earned during the year prior to the decision. In practice, the CNMC has tended to impose lump-sum fines on associations in cases where the members were also sanctioned in order for the burden of the fine on them not to be disproportionate (see, for instance, decision by the Board of the CNMC in case S/DC/0596/16  Estibadores de Vigo - stevedores in Vigo).
Under the Individualization Guidelines, the CC must take into account both mitigating (attenuating) circumstances, as well as aggravating ones, if any. They are exemplified in the said enactment and their applicability determines either a decrease or an increase of the basic level of the fine. By way of applying the mitigating circumstances in addition to the acknowledgement of the anticompetitive deed, in no case may the fine be lower than the absolute general minimum of 0.2%. In the event in which aggravating circumstances are applicable, then the absolute general maximum of 10% may not be exceeded. In a recent case, the CC went as high as 9% of the turnover achieved by a participant to a cartel.
The level of the sanctions imposed are determined by the nature of the anticompetitive arrangements, the impact on consumers and whether parties have applied for leniency.
Under fining guidelines issued in April 2018, the CMA will attempt to assess how much of an undertaking’s turnover has been affected by the infringing conduct, and will factor in the duration of the conduct and consider the need for deterrence. There are several aggravating factors (e.g. delaying the CMA’s investigation) and mitigating factors (e.g. acting under duress or genuine uncertainty as to whether the agreement constituted an infringement) which can affect the level of fine imposed.
To date, the largest single fine that the CMA has imposed is £58.5 million on British Airways in connection with a price-fixing agreement with Virgin Atlantic in 2012. Most fines have been significantly lower (although fine levels may increase after the UK’s withdrawal from the EU, if the CMA tackles larger cases that would currently be the natural domain of the European Commission).
The Commission has substantial discretion in setting the level of fines (up to the 10 per cent. cap). The Commission’s Fining Guidelines do, however, provide a methodology for the calculation of financial penalties. Factors taken into account include the value of sales in the market affected by the infringement, the duration of a party’s involvement, an ‘entry fee’ (i.e. an additional 15 to 25 per cent. of the value of sales to deter firms from participating in cartels even for a short period), any aggravating or attenuating circumstances, as well as adjustments for leniency or settlement.
The Commission has imposed some extremely high fines in recent years. For example, in July 2016, record total fines of €2.93 billion were imposed on four members of the Trucks cartel, with Daimler receiving the highest individual fine (€1.01 billion). However, in 2018, the Commission imposed total fines of approximately €801 million, representing a decrease compared to recent years.
Please refer to question 6.1 above.
Between 2000 and 2005, the Antitrust Commission showed an interest in prosecuting cartels and heavy sanctions were imposed (most notably in the Cement and Liquid Oxygen cases). However, highest fine ever imposed by the Antitrust Commission was applied on the Tierra del Fuego Car Manufacturer’s case. We provide below a brief summary of it.
On 12 December 2014, the Antitrust Commission condemned eight (out of 12 that are active in Argentina) car terminals to pay the highest fine ever since pursuant to the Antitrust Commission they had colluded in a price agreement. The claim was started in 2008 against the car dealers present in the Customs Special Area for a presumed infringement of the Antitrust Law, derived from an alleged breach to Law No. 19,640 (the Tax Law). The complainants alleged that the car dealers did not transfer the tax exemptions set by the Tax Law to the final consumer. However, after several years, in 2012, the Antitrust Commission decided to accuse almost all car terminals operating in Argentina stating that, as they were the ones that should have transferred the tax exemptions, they were violating the Antitrust Law since they were obtaining undue profits.
Pursuant to the analysis of the Antitrust Commission, the car terminals were charging in the customs special area the same price as in the rest of the Argentine territory where the tax exemptions did not apply. Therefore, the prices for cars in the customs special area were higher than they should be. According to the accusation of the Antitrust Commission, this conduct performed by the car terminals corresponded to a conscious parallel behaviour. Unlike other previous cartel cases, the Antitrust Commission did not have evidence to prove the alleged agreement. As a consequence, the Antitrust Commission decided to accuse the terminals solely on the basis of conscious parallelism but with no evidence of an agreement. The sanction applied by the Antitrust Commission to this case is the highest fine ever applied (1.06 billion Argentine pesos total).
In principle the NCA calculates fines using a methodology similar to that of the European Commission, but in practice the level of fines is lower.
When calculating the fine, the NCA will start by looking to the undertaking's turnover related to the goods or services directly or indirectly affected by the cartel, and within the geographic area in question. Depending on the gravity of the conduct, the NCA will start with an amount up till 30% of this turnover. When deciding on gravity, relevant factors are the nature of the infringement, the actual effect on the market, the size of the affected market, intent, the combined market share of the involved undertakings and whether agreements or efforts has been completed. In cases decided to date the basic amounts have corresponded to 15-19% of the affected turnover.
When the basic amount has been determined, the NCA will multiply the amount with the number of years the company has participated in illegal conduct. Periods under six months will be counted as a half year, while periods between six months and a year will be counted as one year.
For cartel conduct the fine may be increased by 15 to 25% of the basic amount. Finally, a number of aggravating and mitigating factors may be taken into account, which together with the gravity assessment, provides the NCA with substantial discretion when calculating the fine. Note, that the calculation method is presumed to be in accordance with the principles laid down in EU competition law.
The fine may not exceed 10% of the undertaking's relevant turnover in the previous fiscal year. Note that the undertaking include all companies which forms a single economic unit, i.e. all group companies.
The highest fine for cartel activity to date was imposed in the NCA's decision V2013-3 – Veidekke ASA / Veidekke Industri AS og NCC AB, where NCC received a fine of NOK 140 million (c. EUR 14 million). In the same decision the NCA calculated a fine of NOK 220 million (c. EUR 23 million) that would normally have been imposed on Veidekke, but the fine was eliminated as Veidekke was granted full immunity under the NCA's leniency programme.
The Belgian Fining Guidelines are based primarily on the Commission’s Guidelines. However, to calculate the basic amount of the fine, the BCA will look at the value of the undertaking’s sales in Belgium directly or indirectly relating to the infringement.
When there is no turnover in Belgium relating to the infringement, but there is a consolidated turnover, the following values are taken:
- If the infringement involves a division of markets, in which undertakings have agreed not to sell in Belgium, the value of the sales in the geographic markets where they did offer the product instead is taken;
- For all other infringements, the fine will be based on the average value of sales in Belgium by the other participants to the infringements.
When setting the ultimate amount of the fine, the BCA will look at the severity and duration of the infringement. Aggravating and mitigating circumstances will also be taken into account. Subsequently, reductions relating to leniency and to settlement will also be factored in to come to the final amount of the fine.
According to Article 25 (2) of the Competition Act, the administrative fine imposed for infringement of article 1 of the Competition Act and article 101 TFEU may be up to 10% of the total turnover of the undertaking concerned for the financial year in which the infringement ceased, or in case the infringement continues, for the financial year preceding the issuance of the decision. Where it is possible to calculate the level of the economic benefit the undertaking concerned derived from the infringement, the fine shall be no less than that, even if said amount exceeds the aforementioned 10% cap.
Guidelines on the method of setting fines have been published by the HCC, echoing the methodology set out in the European Commission’s Fining Guidelines. According to the Guidelines, in determining the level of the fine, account must be taken of the gravity, duration and geographical scope of the infringement; the duration and nature of participation in the infringement by the undertaking concerned and also its economic benefit derived therefrom. Additional adjustments are possible on the basis of other objective factors, including the specific economic characteristics of the undertakings in question, whereas in recent decisions the financial turbulence of certain sectors of the Greek economy has been taken into consideration as a mitigating circumstance.
Nevertheless, according to settled case law of the Administrative Court of Appeals, the HCC has a wide margin of appreciation when setting the level of fines on undertakings.
With regard to the recent decisional practice of the HCC on cartel-type cases, the highest fines imposed include:
a. Over € 27 million fines were imposed in the case of the bid-rigging cartel in tenders for public works of infrastructure, as was announced recently (March 2019). The fines were imposed on four construction companies that did not submit an application for settlement;
b. Approximately € 81 million fines were imposed in the same case of the construction cartel in 2017, regarding the undertakings that filed an application for settlement; the HCC imposed hefty fines on several construction groups, for collusive tendering in high value public infrastructure projects. This case also led to the imposition of a € 38.5 million fine, namely the largest ever in its history imposed on one single undertaking;
c. Total fines of € 19 million for horizontal anti-competitive agreement between wholesalers of luxury cosmetics pertaining to a coordinated pricing, commercial, and marketing policy. The decision of the HCC was published in 2017, following a settlement procedure.
d. Total fines of approximately € 40 million were imposed to undertakings active in the production and distribution of poultry-meat in Greece for price fixing.
e. Total fines of more than € 48 million imposed to seven undertakings in the diary industry regarding anti-competitive agreements in the dairy products’ market.
The legislation appears to give considerable leeway to the CCI in deciding on penalties. However, limits on this have been set by the Appellate Tribunal (the Competition Appellate Tribunal (COMPAT) and its successor the National Company Law Appellate Tribunal (NCLAT) and by the courts. While arriving at the penalty to be imposed for a cartel conduct, the CCI is expected to:
(i) act in a reasonable manner and evaluate the facts and circumstances of the case and factors such as the nature and age of the industry, its financial health, the nature of the goods or services involved and the existence of competitors in the market; and
(ii) consider aggravating and mitigating circumstances.
As seen above, the CCI can impose penalties of up to 10% of average turnover over three years, or, specifically in the case of cartels, it can alternatively impose a penalty of up to three time the profit or up to 10% of its turnover for each year of continuance of the agreement, whichever is higher. Especially where there have been repeated infringements, the CCI has been prepared to impose the maximum level of penalty. However, in cases where there are mitigating circumstances, the CCI has levied a lower percentage of penalty.
In value terms, the maximum penalty imposed by the CCI in the last year in a case was INR 213.81 crores (approx. USD 32.13 million) imposed on two participants in the Dry-Cell Batteries Cartel, after taking into account reductions in penalty under the Lesser Penalty Regulations. It should also be noted that, in July 2018, the NCLAT upheld the CCI’s order in the Cement Cartel case, maintaining that the INR 6,300 crores (approx. USD 946.97 million) penalty imposed by the CCI as the “mere minimum penalty”.
The maximum fine is ten percent of a company’s turnover during the preceding financial year. The fine shall be set in accordance with the gravity and duration of the infringement, with consideration taken to the nature of the infringement, the importance of the relevant market and the actual or potential effects of the infringement on the market. Aggravating or mitigating circumstances are also taken into consideration.
In practice, the highest fine imposed on a company by the SCA concerns the asphalt cartel case (SEK 200 million, as amended by the Patent and Market Court in 2009).
The fine imposed should not exceed 10% of the combined annual turnover of the undertaking or association of undertakings in the preceding financial year.
The Commission determines the level of a fine according to the gravity and duration of the infringement. Further, the CPC takes into consideration: the impact of the infringement and/or the impact that the infringement continues to have on the market; the anti-competitive results which may have been caused or which may be caused in the market, given also the economic power of the undertakings which have infringed the competition rules in the relevant market; and the extent of it. As such, any economic benefit or other benefit that such undertakings may have gained or sought to have gained, is also factored into the consideration. Mitigating factors include the absence of any prior infringement of competition rules by an undertaking, the fact that an undertaking does not repeat a previous offence, and the cooperative behaviour of an undertaking with the CPC during the proceedings. Aggravating factors include a prior offence, repeated offences and the fact that the undertaking in question could have foreseen the consequences of its action given its circumstances, assuming that it is ‘normally informed and sufficiently attentive.
In recent domestic cartel cases CPC imposed huge fines up to €31.000.000 on payment processing company JCC and 8 commercial banks for colluding to squeeze FBME Card Services out of the card payments processing market.
The Competition Law indicates that the financial penalties stipulated in the Law shall be aggravated in the event of recurrence. Therefore, one of the factors that is take into account when the fine is set whether the violating entity has committed the violation for the first time or not as well as the impact of the violation on the competition in the relevant market.
The maximum level of penalties/fines imposed, in accordance with the UAE Competition Law, are mentioned in the table in 7.1 above.