Guidelines on the method of setting fines imposed pursuant to the EEA competition rules
Date: 2003-01-16
Institutions: EFTA Surveillance Authority
Subjects: competition law, fine, offence, restriction on competition, type of business

C 10/16

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Official Journal of the European Communities

16.1.2003

29. The EFTA Surveillance Authority is aware that this notice
will create legitimate expectations on which undertakings
may rely when disclosing the existence of a cartel to the
Authority.

30. Failure to meet any of the requirements set out in sections
A or B, as the case may be, at any stage of the adminis-
trative procedure may result in the loss of any favourable
treatment set out therein.

31. The fact that an undertaking cooperated with the EFTA
Surveillance Authority during its administrative procedure
will be indicated in any decision, so as to explain the
reason for the immunity or reduction of the fine. The
fact
fines is
immunity or reduction in respect of
granted cannot protect an undertaking from the civil law

that

consequences of its participation in an infringement of
Article 53 of the EEA Agreement.

32. The EFTA Surveillance Authority considers that normally
disclosure, at any time, of documents received in the
context of this notice would undermine the protection of
the purpose of inspections and investigations within the
meaning of section 5 of
the Authority's information
guidelines.

33. Any written

EFTA
the
statement made
Surveillance Authority in relation to this notice,
forms
part of the Authority's file. It may not be disclosed or
used for any other purpose than the enforcement of
Article 53 of the EEA Agreement.

vis-à-vis

Guidelines on the method of setting fines imposed pursuant to the EEA competition rules

(2003/C 10/14)

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 on the estab-
lishment of a Surveillance Authority and a Court of Justice
(Surveillance and Court Agreement).

however,
follow a coherent and non-discriminatory policy
which is consistent with the objectives pursued in penalising
infringements under
the EEA
Agreement and with the practice of the European Commission
in this field.

competition rules of

the

B.
The European Commission has published ‘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’ (1).
the principles which the
That non-binding act
European Commission follows in the setting of
in
respect of
the EC and EEA competition
rules (2).

infringements of

sets out

fines

the EEA competition rules

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
the European
of
Economic Area (EEA),
the present
notice under the power conferred upon it by 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 rules to a particular case.

the Authority adopts

throughout

1. Introduction

The principles outlined herein should ensure the transparency
and impartiality of the EFTA Surveillance Authority's decisions,
in the eyes of the undertakings and of the EFTA Court alike,
while upholding the discretion which the Authority is granted
under the relevant legislation to set fines within the limit of
10 % of overall turnover as regards undertakings found to have
infringed the EEA competition rules. This discretion must,

(1) OJ C 9, 14.1.1998, p. 3.
(2) The competence to handle individual cases falling under Articles 53
and 54 of
is divided between the EFTA
Surveillance Authority and the European Commission according
to the rules laid down in Article 56 of the EEA Agreement. Only
one authority is competent to handle any given case.

the EEA Agreement

The 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.

2. 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 Chapter II of Protocol 4 of the
Surveillance and Court Agreement.

A. Gravity

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 EEA.

Likely fines: EUR 1 000 to EUR 1 million.

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— serious infringements:

B. Duration

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 EEA. There might also be abuse of a
dominant position (refusals
to supply, discrimination,
exclusion,
loyalty discounts made by dominant firms in
order to shut competitors out of the market, etc.).

Likely fines: EUR 1 million to EUR 20 million.

— very serious infringements:

These will generally be horizontal restrictions such as price
cartels and market-sharing quotas, or other practices which
jeopardize the proper functioning of the EEA Agreement,
such as the partitioning of national markets and clear-cut
abuse of a dominant position by undertakings holding a
virtual monopoly.

Likely fines: above EUR 20 million.

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 differ-
ential treatment to undertakings according to the nature of the
infringement committed.

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

that

Generally speaking, account may also be taken of the fact that
large undertakings usually have legal and economic knowledge
and infrastructures which enable them more easily to recognize
that their conduct constitutes an infringement and be aware of
the consequences stemming from it under EEA competition
law.

it might be necessary in some cases

Where an infringement
involves several undertakings (e.g.
cartels),
to apply
weightings to the amounts determined within each of
the
three categories in order
the specific
the offending
weight and,
conduct of each undertaking on competition, particularly
where there is considerable disparity between the sizes of the
undertakings committing infringements of the same type.

to take account of

impact of

therefore,

the real

A distinction should be made between the following:

— infringements of short duration (in general, less than one

year): no increase in amount,

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

— infringements of long duration (in general, more than five
increase of up to 10 % per year in the amount

years):
determined for gravity.

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

Generally speaking,
the increase in the fine for long-term
infringements represents a considerable strengthening of the
previous EEA practice with a view to imposing effective
impact
sanctions on restrictions which have had a harmful
on consumers over a long period. Moreover,
this new
approach is consistent with the EFTA Surveillance Authority's
new notice on the non-imposition or reduction of fines in
cartel cases (1). The risk of having to pay a much larger fine,
proportionate to the duration of the infringement, will neces-
sarily increase the incentive to denounce it or to cooperate
with the Authority.

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

x gravity + y duration = basic amount

3. Aggravating circumstances

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

— repeated infringement of the same type by the same under-

taking(s),

— refusal to cooperate with or attempts to obstruct the EFTA
Surveillance Authority in carrying out its investigations,

— role of leader in, or instigator of the infringement,

— retaliatory measures against other undertakings with a view
to enforcing practices which constitute an infringement,

— 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,

if the circumstances so warrant,

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

— other.

(1) Notice as adopted on 12 June 2002 (not yet published).

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4. Attenuating circumstances

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

— an exclusively passive or ‘follow-my-leader’ role in the

infringement,

— non-implementation

in
agreements or practices,

practice

of

the

offending

— termination of

the infringement as soon as the EFTA
Surveillance Authority intervenes (in particular when it
carries out checks),

— existence of reasonable doubt on the part of the under-
taking as to whether the restrictive conduct does indeed
constitute an infringement,

in any case
reduced on a percentage basis) may not
exceed 10 % of
the under-
takings, as laid down by Article 15(2) of Chapter II of
Protocol 4 to the Surveillance and Court Agreement.

the worldwide turnover of

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 the decision is taken or,
if
figures are not available for that accounting year, the one
immediately preceding it.

(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, the
specific characteristics of the undertakings in question and
their real ability to pay in a specific social context, and the
fines should be adjusted accordingly.

— infringements committed as a result of negligence or unin-

tentionally,

(c)

— effective cooperation by the undertaking in the proceedings,
outside the scope of the Authority's new notice on the
non-imposition or reduction of fines in cartel cases,

— other.

5. Application of

the EFTA Surveillance Authority's
notice of 12 June 2002 on the non-imposition or
reduction of fines in cartel cases

6. General comments

(a)

It goes without saying that the final amount calculated
increased or
according to this method (basic amount

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
If this is not possible (e.g. where there are
association.
and an
several
overall
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.

thousands of affiliated undertakings),
fine

imposed on the

should be

(d) The EFTA Surveillance Authority will also reserve the right,
in certain cases, to impose a ‘symbolic’ fine of EUR 1 000,
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.