Keywords

Summary



Keywords

1. Competition – Fines – Community penalties and penalties imposed in a non-member State for infringement of national competition law

(Art. 3(1)(g) EC; Council Regulation No 17, Art. 15)

2. Competition – Fines – Amount – Discretion of the Commission

(Council Regulation No 17, Art. 15)

3. Competition – Fines – Guidelines on the method of setting fines

(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03)

4. Competition – Fines – Amount – Determination of the basic amount according to the infringement itself

(Council Regulation No 17, Art. 15(2))

5. Competition – Fines – Amount – Determination – Maximum amount

(Council Regulation No 17, Art. 15(2))

6. Competition – Administrative procedure – Observance of the rights of the defence

7. Competition – Fines – Amount – Determination – Criteria – Financial situation of the undertaking concerned

(Council Regulation No 17, Art. 15(2); Commission Notice 98/C 9/03, Section 5(b))

8. Competition – Fines – Discretion of the Commission

(Council Regulation No 17, Art. 15(2))

Summary

1. The principle of non bis in idem , also enshrined in Article 4 of Protocol No 7 to the European Convention on Human Rights, constitutes a fundamental principle of Community law the observance of which is guaranteed by the judicature.

Where the context of a cartel is an international one, characterised in particular by action of legal systems of non-member States within their respective territories, the exercise of powers by the authorities of those States responsible for protecting free competition under their territorial jurisdiction meets requirements specific to those States. The elements forming the basis of other States’ legal systems in the field of competition not only include specific aims and objectives but also result in the adoption of specific substantive rules and a wide variety of legal consequences, whether administrative, criminal or civil, when the authorities of those States have established that there have been infringements of the applicable competition rules.

It follows that, when the Commission imposes sanctions on the unlawful conduct of an undertaking, even conduct originating in an international cartel, it seeks to safeguard the free competition within the common market which constitutes a fundamental objective of the Community under Article 3(1)(g) EC. On account of the specific nature of the legal interests protected at Community level, the Commission’s assessments pursuant to its relevant powers may diverge considerably from those of authorities of non-member States.

Accordingly, the principle of non bis in idem does not apply to situations in which the legal systems and competition authorities of non-member States intervene within their own jurisdiction.

(see paras 26-29, 31-32)

2. Any consideration concerning the existence of fines imposed by the authorities of a non-member State can be taken into account only under the Commission’s discretion in setting fines for infringements of Community competition law. Accordingly, although it cannot be ruled out that the Commission may, on grounds of proportionality or fairness, take into account fines imposed previously by the authorities of non-member States, it cannot be required to do so.

The objective of deterrence which the Commission is entitled to pursue when setting the amount of a fine is to ensure compliance by undertakings with the competition rules laid down by the Treaty for the conduct of their activities within the common market. Consequently, when assessing the deterrent nature of a fine to be imposed for infringement of those rules, the Commission is not required to take into account any penalties imposed on an undertaking for infringement of the competition rules of non-member States.

(see paras 36-37)

3. The Commission enjoys a wide discretion as regards the method used for calculating fines imposed for infringement of the competition rules and it can, in this respect, take account of numerous factors, whilst complying with the ceiling on turnover laid down in Article 15(2) of Regulation No 17.

The calculation method set out in the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty contains various flexible elements, enabling the Commission to exercise its discretion in accordance with Article 15 of Regulation No 17.

(see paras 46-47)

4. Whereas the basic amount of the fine for infringement of the competition rules is set according to that infringement, its gravity is determined by reference to numerous other factors, in respect of which the Commission has a wide discretion. To take into account aggravating circumstances when setting the fine is consistent with the Commission’s task of ensuring that undertakings comply with the competition rules.

(see para. 71)

5. Only the final amount of the fine imposed for an infringement of the competition rules must comply with the maximum limit of 10% referred to in Article 15(2) of Regulation No 17. Consequently, that article does not prohibit the Commission from arriving, during the various stages of calculation, at an intermediate amount higher than that limit, provided that the final amount of the fine imposed does not exceed it.

(see paras 81-82)

6. In all proceedings in which sanctions, especially fines or penalty payments, may be imposed, where observance of the rights of the defence is a fundamental principle of Community law which must be complied with even if the proceedings in question are administrative proceedings, the mere failure to communicate a document constitutes a breach of the rights of the defence only if the undertaking concerned is able to show, first, that the Commission relied on that document to support its objection concerning the existence of an infringement and, second, that the objection could be proved only by reference to that document.

It is for the undertaking concerned to show that the result at which the Commission arrived in its decision would have been different if a document which was not communicated to that undertaking and on which the Commission relied to make a finding of infringement against it had to be disallowed as evidence.

(see paras 94, 97-98)

7. The Commission is not required, when determining the amount of the fine that it imposes on an undertaking, to take into account the poor financial situation of that undertaking, since recognition of such an obligation would be tantamount to giving unjustified competitive advantages to undertakings least well adapted to the market conditions.

That principle is in no way called in question by Section 5(b) of the Guidelines on the method of setting fines imposed pursuant to Article 15(2) of Regulation No 17 and Article 65(5) of the ECSC Treaty, which states that an undertaking’s real ability to pay must be taken into consideration. That ability can be relevant only in a ‘specific social context’, namely the consequences which payment of a fine could have, in particular, by leading to an increase in unemployment or deterioration in the economic sectors upstream and downstream of the undertaking concerned.

(see paras 105-106)

8. The powers conferred on the Commission under Article 15(2) of Regulation No 17 include the power to determine the date on which the fines are payable and that on which default interest begins to accrue, and the power to set the rate of such interest and to determine the detailed arrangements for implementing its decision. If the Commission did not have such a power, undertakings might be able to take advantage of late payments, thereby weakening the effect of penalties.

Accordingly, the Commission is entitled to adopt a point of reference higher than the applicable market rate offered to the average borrower, to an extent necessary to discourage dilatory behaviour in relation to payment of the fine.

(see paras 113-115)