Fines are integral to EU cartel enforcement and subject to careful methodology and review. The European Commission (“EC”) determines cartel fines in accordance with the Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (the “Fining Guidelines”). The Fining Guidelines set the value of sales of goods or services to which the infringement relates as the proxy that forms the basis of the fine calculation. The value of sales, together with the duration of the infringement, is considered “an appropriate proxy to reflect the economic importance of the infringement as well as the relative weight of each undertaking in the infringement”.

The proportion of the sales value taken into account will depend on the degree of gravity of the infringement, multiplied by the number of years of the infringement, and will be set at a level of up to 30%. However, point 37 of the Fining Guidelines enables the EC to depart from the usual methodology where the peculiarities of the case, or the need to achieve a deterrent effect so require.

Implemented in 2006, the Fining Guidelines have since come of age and in recent cases – mostly in the financial services industry – the EC has started to apply point 37 to accommodate increasingly complex infringements and sectors, rather than as an instrument to wriggle it out of the occasional fining impasse. Does this mean the Fining Guidelines are ripe for an overhaul? Or can the use of point 37 cater for all situations in which the standard methodology falls short?
Continue Reading The EU Commission’s cartel fining challenges: a need to “re-fine” the method?