Information from the Commission - 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
Date: 1998-01-14
Institutions: European Commission
Subjects: competition law, fine, offence, restriction on competition, type of business

14.1.98

EN

Official  Journal  of  the  European  Communities

C  9/3

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

(98/C  9/03)

(Text  with  EEA  relevance)

The  principles  outlined  here  should  ensure  the  trans(cid:220)
parency  and  impartiality  of  the  Commission’s  decisions,
in  the  eyes  of  the  undertakings  and  of  the  Court  of
Justice  alike,  while  upholding  the  discretion  which  the
Commission  is  granted  under  the  relevant  legislation  to
set  fines  within  the  limit  of  10(cid:216)%  of  overall  turnover.
This  discretion  must,  however,  follow  a  coherent  and
non(cid:220)discriminatory  policy  which  is  consistent  with  the
objectives  pursued 
infringements  of  the
in  penalizing 
competition  rules.

The  new  method  of  determining  the  amount  of  a  fine
will  adhere  to  the  following  rules,  which  start  from  a
basic  amount  that  will  be  increased  to  take  account  of
aggravating  circumstances  or  reduced  to  take  account  of
attenuating  circumstances.

1. Basic  amount

The  basic  amount  will  be  determined  according  to  the
gravity  and  duration  of  the  infringement,  which  are
the  only  criteria  referred  to  in  Article  15  (2)  of  Regu(cid:220)
lation  No  17.

common  market.  There  might  also  be  abuse  of  a
dominant  position  (refusals  to  supply,  discrimi(cid:220)
nation,  exclusion, 
loyalty  discounts  made  by
dominant  firms  in  order  to  shut  competitors  out  of
the  market,  etc.).

Likely  fines:  ECU  1  million  to  ECU  20  million.

- very  serious  infringements:

These  will  generally  be  horizontal  restrictions  such
as  price  cartels  and  market(cid:220)sharing  quotas,  or
other  practices  which  jeopardize  the  proper  func(cid:220)
tioning  of  the  single  market,  such  as  the  parti(cid:220)
tioning  of  national  markets  and  clear(cid:220)cut  abuse  of
a  dominant  position  by  undertakings  holding  a
virtual  monopoly  (see  Decisions  91/297/EEC,
91/298/EEC,  91/299/EEC,  91/300/EEC  and
91/301/EEC(cid:216)(˛)  -  Soda  Ash,  94/815/EC(cid:216)(ˇ)  -
Cement, 
Cartonboard,
92/163/EC(cid:216)((cid:209))  -  Tetra  Pak,  and  94/215/
ECSC(cid:216)((cid:210))  -  Steel  beams).

94/601/EC(cid:216)(—)  - 

A. Gravity

Likely  fines:  above  ECU  20  million

In  assessing  the  gravity  of  the  infringement,  account
must  be  taken  of  its  nature,  its  actual  impact  on  the
market,  where  this  can  be  measured,  and  the  size  of
the  relevant  geographic  market.

Infringements  will  thus  be  put 
into  one  of  three
categories:  minor  infringements,  serious  infringements
and  very  serious  infringements.

- minor  infringements:

These  might  be  trade  restrictions,  usually  of  a
vertical  nature,  but  with  a  limited  market  impact
and  affecting  only  a  substantial  but  relatively
limited  part  of  the  Community  market.

Likely  fines:  ECU  1(cid:216)000  to  ECU  1  million.

- serious  infringements:

Within  each  of  these  categories,  and  in  particular  as
far  as  serious  and  very  serious 
infringements  are
concerned,  the  proposed  scale  of  fines  will  make  it
possible  to  apply  differential  treatment  to  under(cid:220)
takings  according  to  the  nature  of  the  infringement
committed.

It  will  also  be  necessary  to  take  account  of  the
effective  economic  capacity  of  offenders  to  cause
significant  damage  to  other  operators,  in  particular
consumers,  and  to  set  the  fine  at  a  level  which  ensures
that  it  has  a  sufficiently  deterrent  effect.

Generally  speaking,  account  may  also  be  taken  of  the
fact  that  large  undertakings  usually  have  legal  and
economic  knowledge  and  infrastructures  which  enable
their
to 
them  more 

recognize 

easily 

that 

These  will  more  often  than  not  be  horizontal  or
vertical  restrictions  of  the  same  type  as  above,  but
more  rigorously  applied,  with  a  wider  market
impact,  and  with  effects  in  extensive  areas  of  the

(˛)(cid:217)OJ  L  152,  15.6.1991,  p.  54.
(ˇ)(cid:217)OJ  L  343,  30.12.1994,  p.  1.
(—)(cid:217)OJ  L  243,  19.9.1994,  p.  1.
((cid:209))(cid:217)OJ  L  72,  18.3.1992,  p.  1.
((cid:210))(cid:217)OJ  L  116,  6.5.1994,  p.  1.

C  9/4

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Official  Journal  of  the  European  Communities

14.1.98

conduct  constitutes  an  infringement  and  be  aware  of
the  consequences  stemming  from  it  under  competition
law.

Where  an  infringement  involves  several  undertakings
(e.g.  cartels),  it  might  be  necessary  in  some  cases  to
apply  weightings  to  the  amounts  determined  within
each  of  the  three  categories  in  order  to  take  account
of  the  specific  weight  and,  therefore,  the  real  impact
of  the  offending  conduct  of  each  undertaking  on
competition,  particularly  where  there  is  considerable
disparity  between 
the  undertakings
the 
committing  infringements  of  the  same  type.

sizes  of 

Thus,  the  principle  of  equal  punishment  for  the  same
conduct  may,  if  the  circumstances  so  warrant,  lead  to
different  fines  being 
imposed  on  the  undertakings
concerned  without  this  differentiation  being  governed
by  arithmetic  calculation.

B. Duration

2. Aggravating  circumstances

The  basic  amount  will  be  increased  where  there  are
aggravating  circumstances  such  as:

-(cid:217)repeated  infringement  of  the  same  type  by  the

same  undertaking(s),

-(cid:217)refusal  to  cooperate  with  or  attempts  to  obstruct
the  Commission  in  carrying  out  its  investigations,

-(cid:217)role  of  leader  in,  or  instigator  of  the  infringement,

-(cid:217)retaliatory  measures  against  other  undertakings
with  a  view  to  enforcing  practices  which  constitute
an  infringement,

-(cid:217)need  to  increase  the  penalty  in  order  to  exceed  the
amount  of  gains  improperly  made  as  a  result  of
the  infringement  when  it  is  objectively  possible  to
estimate  that  amount,

A  distinction  should  be  made  between  the  following:

-(cid:217)other.

-(cid:217)infringements  of  short  duration  (in  general,  less

than  one  year):  no  increase  in  amount,

3. Attenuating  circumstances

-(cid:217)infringements  of  medium  duration  (in  general,  one
to  five  years):  increase  of  up  to  50(cid:216)%  in  the
amount  determined  for  gravity,

-(cid:217)infringements  of  long  duration  (in  general,  more
than  five  years):  increase  of  up  to  10(cid:216)%  per  year
in  the  amount  determined  for  gravity.

This  approach  will  therefore  point  to  a  possible
increase  in  the  amount  of  the  fine.

increase 

in  the  fine  for
Generally  speaking,  the 
long(cid:220)term 
infringements  represents  a  considerable
strengthening  of  the  previous  practice  with  a  view  to
imposing  effective  sanctions  on  restrictions  which
have  had  a  harmful  impact  on  consumers  over  a  long
period.  Moreover,  this  new  approach  is  consistent
with  the  expected  effect  of  the  notice  of  18  July  1996
on  the  non(cid:220)imposition  or  reduction  of  fines  in  cartel
cases(cid:216)((cid:211)).  The  risk  of  having  to  pay  a  much  larger  fine,
proportionate  to  the  duration  of  the  infringement,  will
necessarily  increase  the  incentive  to  denounce  it  or  to
cooperate  with  the  Commission.

The  basic  amount  will  be  reduced  where  there  are
attenuating  circumstances  such  as:

-(cid:217)an  exclusively  passive  or  "follow(cid:220)my(cid:220)leader’  role  in

the  infringement,

-(cid:217)non(cid:220)implementation  in  practice  of  the  offending

agreements  or  practices,

-(cid:217)termination  of  the  infringement  as  soon  as  the
it

intervenes  (in  particular  when 

Commission 
carries  out  checks),

-(cid:217)existence  of  reasonable  doubt  on  the  part  of  the
undertaking  as  to  whether  the  restrictive  conduct
does  indeed  constitute  an  infringement,

-(cid:217)infringements  committed  as  a  result  of  negligence

or  unintentionally,

-(cid:217)effective  cooperation  by  the  undertaking  in  the
proceedings,  outside  the  scope  of  the  Notice  of
18  July  1996  on  the  non(cid:220)imposition  or  reduction
of  fines  in  cartel  cases,

The  basic  amount  will  result  from  the  addition  of  the
two  amounts  established 
the
above:

in  accordance  with 

-(cid:217)other.

x  gravity(cid:216)+(cid:216)y  duration(cid:216)=(cid:216)basic  amount

non(cid:220)imposition  or  reduction  of  fines ((cid:212))

4. Application  of  the  Notice  of  18  July  1996  on  the

((cid:211))(cid:217)OJ  C  207,  18.7.1996,  p.  4.

((cid:212))(cid:217)See  footnote  6.

14.1.98

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C  9/5

5. General  comments

(a)(cid:217)It  goes  without  saying  that  the  final  amount
calculated  according  to  this  method  (basic  amount
increased  or  reduced  on  a  percentage  basis)  may
not  in  any  case  exceed  10(cid:216)%  of  the  worldwide
turnover  of  the  undertakings,  as  laid  down  by
Article  15  (2)  of  Regulation  No  17.  In  the  case  of
agreements  which  are 
illegal  under  the  ECSC
Treaty,  the  limit  laid  down  by  Article  65  (5)  is
twice  the  turnover  on  the  products  in  question,
increased  in  certain  cases  to  a  maximum  of  10(cid:216)%
of  the  undertaking’s  turnover  on  ECSC  products.

The  accounting  year  on  the  basis  of  which  the
worldwide  turnover  is  determined  must,  as  far  as
possible,  be  the  one  preceding  the  year  in  which
if  figures  are  not
the  decision 
available 
the  one
for 
immediately  preceding  it.

is 
that  accounting  year, 

taken  or, 

(b) Depending  on  the  circumstances,  account  should
be  taken,  once  the  above  calculations  have  been
made,  of  certain  objective  factors  such  as  a
specific  economic  context,  any  economic  or
financial  benefit  derived  by  the  offenders  (see

Twenty(cid:220)first  report  on  competition  policy,  point
139),  the  specific  characteristics  of  the  under(cid:220)
takings  in  question  and  their  real  ability  to  pay  in
a  specific  social  context,  and  the  fines  should  be
adjusted  accordingly.

(c) In  cases  involving  associations  of  undertakings,
decisions  should  as  far  as  possible  be  addressed  to
and  fines  imposed  on  the  individual  undertakings
belonging  to  the  association.  If  this  is  not  possible
thousands  of
(e.g.  where 
there  are 
affiliated  undertakings),  and  except 
for  cases
falling  within  the  ECSC  Treaty,  an  overall  fine
should  be  imposed  on  the  association,  calculated
according  to  the  principles  outlined  above  but
equivalent  to  the  total  of  individual  fines  which
might  have  been  imposed  on  each  of  the  members
of  the  association.

several 

(d) The  Commission  will  also  reserve  the  right,  in
certain  cases,  to  impose  a  "symbolic’  fine  of  ECU
1(cid:216)000,  which  would  not  involve  any  calculation
based  on  the  duration  of  the  infringement  or  any
aggravating  or  attenuating  circumstances.  The
justification  for  imposing  such  a  fine  should  be
given  in  the  text  of  the  decision.

Initiation  of  proceedings

(Case  No  IV/M.970  -  TKS/ITW  Signode/Titan)

(98/C  9/04)

(Text  with  EEA  relevance)

On  22  December  1997,  the  Commission  decided  to  intitiate  proceedings  in  the  above(cid:220)
mentioned  case  after  finding  that  the  notified  concentration  raises  serious  doubts  as  to  its
compatibility  with  the  common  market.  The 
initiation  of  proceedings  opens  a  second
phase  investigation  with  regard  to  the  notified  concentration.  The  decision  is  based  on
Article  6(cid:216)(1)(cid:216)(c)  of  Council  Regulation  (EEC)  No  4064/89.

The  Commission  invites  interested  third  parties  to  submit  their  observations  on  the  proposed
concentration.

In  order  to  be  fully  taken  into  account  in  the  procedure,  observations  should  reach  the
Commission  not  later  than  15  days  following  the  date  of  this  publication.  Observations  can  be
sent  by  fax  ((32(cid:220)2)(cid:216)296(cid:216)43(cid:216)01/296(cid:216)72(cid:216)44)  or  by  post,  under  reference  IV/M.970  -  TKS/ITW
Signode/Titan,  to:

European  Commission,
Directorate(cid:220)General  for  Competition  (DG  IV),
Directorate  B  -  Merger  Task  Force,
Avenue  de  Cortenberg/Kortenberglaan  150,
B(cid:220)1040  Brussels.