Notice of the EFTA Surveillance Authority on the non-imposition or reduction of fines in cartel cases of 4 June 1997 (97/C 282/05)

A. The present notice is issued pursuant to the rules of the Agreement on the European Economic Area (EEA Agreement) and the Agreement between the EFTA States (1) on the establishment of a Surveillance Authority and a Court of Justice (Surveillance and Court Agreement).

B. The European Commission has issued a notice concerning the non-imposition or reduction of fines in cartel cases (OJ C 207, 18. 7. 1996, p. 4). This non-binding act contains principles and rules which the European Commission follows in exercising its fining policy in the field of competition.

C. The EFTA Surveillance Authority considers the above mentioned act to be EEA relevant. In order to maintain equal conditions of competition and to ensure a uniform application of the EEA competition rules throughout the European Economic Area, the EFTA Surveillance Authority adopts the present notice exercising the power conferred to it in Article 5 (2) (b) of the Surveillance and Court Agreement. It intends to follow the principles and rules laid down in this notice when applying the relevant EEA competition rules (2) to a particular case.

A. Introduction

1. Secret cartels between enterprises aimed at fixing prices, production or sales quotas, sharing markets or banning imports or exports are among the most serious restrictions of competition encountered by the EFTA Surveillance Authority.

2. Such practices ultimately result in increased prices and reduced choice for the consumer. Furthermore, they not only prejudice the interests of consumers within the European Economic Area (the EEA), but they also harm industry within this area. By artifically limiting the competition that would normally prevail between them, enterprises within the EEA avoid exactly those pressures that lead them to innovate, both in terms of product development and with regard to the introduction of more efficient production processes. Such practices also lead to more expensive raw materials and components for the enterprises that buy from such producers. In the long term, they lead to a loss of competitiveness and, in an increasingly global market-place, reduced employment opportunities.

3. For all those reasons, the EFTA Surveillance Authority considers that combating cartels is an important aspect in order to create a homogeneous EEA based on common rules and equal conditions of competition.

4. The EFTA Surveillance Authority is aware that certain enterprises participating in cartels might wish to terminate their involvement and inform the EFTA Surveillance Authority of the existence of the cartel, but are deterred from doing so by the risk of incurring large fines.

5. In order to take account of this fact, the EFTA Surveillance Authority has decided to adopt the present notice, which sets out the conditions under which enterprises cooperating with the EFTA Surveillance Authority during its investigation into a cartel may be exempted from fines, or may be granted reductions in the fine which would otherwise have been imposed on them. The EFTA Surveillance Authority will examine whether it is necessary to modify this notice as soon as it has acquired sufficient experience applying it.

6. The EFTA Surveillance Authority considers that granting favourable treatment to enterprises which cooperate with it in the circumstances set out below is beneficial for attainment of a well-functioning European Economic Area. The interests of consumers and citizens in ensuring that such practices are detected and prohibited outweigh the interest in fining those enterprises which cooperate with the EFTA Surveillance Authority, thereby enabling or helping it to detect and prohibit a cartel.

7. Cooperation by an enterprise is only one of several factors which the EFTA Surveillance Authority takes into account when fixing the amount of a fine. This notice does not prejudice the EFTA Surveillance Authority's right to reduce a fine for other reasons.

B. Non-imposition of a fine or a very substantial reduction in its amount

8. An enterprise which:

(a) informs the EFTA Surveillance Authority about a secret cartel before the EFTA Surveillance Authority has undertaken an investigation, ordered by decision, of the enterprises involved, provided that it does not already have sufficient information to establish the existence of the alleged cartel;

(b) is the first to adduce decisive evidence of the cartel's existence;

(c) puts an end to its involvement in the illegal activity no later than the time at which it discloses the cartel;

(d) provides the EFTA Surveillance Authority with all the relevant information and all the documents and evidence available to it regarding the cartel and maintains continuous and complete cooperation throughout the investigation;

(e) has not compelled another enterprise to take part in the cartel and has not acted as an instigator or played a determining role in the illegal activity,

will benefit from a reduction of at least 75 % of the fine or even from total exemption from the fine that would have been imposed if they had not cooperated.

C. Substantial reduction in a fine

9. Enterprises which both satisfy the conditions set out in Section B, points (b) to (e) and disclose the secret cartel after the EFTA Surveillance Authority has undertaken an investigation ordered by decision on the premises of the parties to the cartel which has failed to provide sufficient grounds for initiating the procedure leading to a decision, will benefit from a reduction of 50 % to 75 % of the fine.

D. Significant reduction in a fine

10. Where an enterprise cooperates without having met all the conditions set out in Sections B or C, it will benefit from a reduction of 10 % to 50 % of the fine that would have been imposed if it had not cooperated.

11. Such cases may include the following:

- before a statement of objections is sent, an enterprise provides the EFTA Surveillance Authority with information, documents or other evidence which materially contribute to establishing the existence of the infringement,

- after receiving a statement of objections, an enterprise informs the EFTA Surveillance Authority that it does not substantially contest the facts on which the EFTA Surveillance Authority bases its allegations.

E. Procedure

12. Where an enterprise wishes to take advantage of the favourable treatment set out in this notice, it should contact the Competition and State Aid Directorate of the EFTA Surveillance Authority. Only persons empowered to represent the enterprise for that purpose may take such a step. This notice does not therefore cover requests from individual employees of enterprises.

13. Only on its adoption of a decision will the EFTA Surveillance Authority determine whether or not the conditions set out in Sections B, C and D are met, and thus whether or not to grant any reduction in the fine, or even waive its imposition altogether. It would not be appropriate to grant such a reduction or waiver before the end of the administrative procedure, as those conditions apply throughout such a period.

14. Nonetheless, provided that all the conditions are met, non-imposition or reductions will be granted. The EFTA Surveillance Authority is aware that this notice will create legitimate expectations on which enterprises may rely when disclosing the existence of a cartel to the EFTA Surveillance Authority. Failure to meet any of the conditions set out in Sections B or C at any stage of the administrative procedure will, however, result in the loss of the favourable treatment set out therein. In such circumstances an enterprise may, however, still enjoy a reduction in the fine, as set out in Section D.

15. The fact that leniency in respect of fines is granted cannot, however, protect an enterprise from the civil law consequences of its participation in an illegal agreement. In this respect, if the information provided by the enterprise leads the EFTA Surveillance Authority to take a decision pursuant to Article 53 (1) of the EEA Agreement, the enterprise benefiting from the leniency in respect of the fine will also be named in that decision as having infringed the EEA Agreement and will have the part it played described in full therein. The fact that the enterprise cooperated with the EFTA Surveillance Authority will also be indicated in the decision, so as to explain the reason for the non-imposition or reduction of the fine.

16. Should an enterprise which has benefited from a reduction in a fine for not substantially contesting the facts then contest them for the first time in proceedings for annulment before the EFTA Court, the EFTA Surveillance Authority will normally ask the Court to increase the fine imposed on that enterprise.

(1) For the purpose of this notice, any reference to EFTA States shall be understood to mean those EFTA States presently Contracting Parties to the EEA Agreement (Iceland, Liechtenstein and Norway).

(2) The main provisions of the EEA competition rules applicable to undertakings are contained in Articles 53, 54, 57 and 59 of the EEA Agreement and Annex XIV to the EEA Agreement.