Notice on immunity from fines and reduction of fines in cartel cases
Date: 2003-01-16
Institutions: EFTA Surveillance Authority
Subjects: competition law, fine, infringement of EU law, inter-company agreement, restriction on competition, restrictive trade practice

16.1.2003

EN

Official Journal of the European Communities

C 10/13

Notice on immunity from fines and reduction of fines in cartel cases

(2003/C 10/13)

INTRODUCTION

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

European Economic Area

2. By artificially limiting the competition that would normally
prevail between them, undertakings avoid exactly those
pressures that lead them to innovate, both in terms of
product development and the
introduction of more
efficient production methods. Such practices also lead to
more expensive raw materials and components for the
EEA companies that purchase from such producers.
In
the long term, they lead to a loss of competitiveness and
reduced employment opportunities.

B. The European Commission has issued a notice entitled
‘Notice on immunity from fines and reduction of fines in
cartel cases’ (1). That non-binding act sets out the principles
which the European Commission follows in respect of the
granting of immunity or reduced fines in cases considered
under Article 81 of the EC Treaty and/or Article 53 of the
EEA Agreement (2).

C. The EFTA Surveillance Authority considers the abovemen-
tioned 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 (EEA), the Authority adopts 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.

D. The present notice

EFTA Surveillance
Authority's 1997 notice on the non-imposition or
reduction of fines in cartel cases (the ‘1997 notice’) (3).

replaces

the

1. This notice concerns secret cartels between two or more
competitors aimed at fixing prices, production or sales
quotas, sharing markets including bid-rigging or restricting
imports or exports. Such practices are among the most
serious restrictions of competition encountered by the
EFTA Surveillance Authority
European
Commission and ultimately result in increased prices and
reduced choice for the consumer. They also harm EEA
industry.

and

the

3. The EFTA Surveillance Authority is aware that certain
undertakings involved in this type of illegal agreements
are willing to put an end to their participation and
inform it of the existence of such agreements, but are
dissuaded from doing so by the high fines to which they
are potentially exposed. In order to clarify its position in
this type of situation, the EFTA Surveillance Authority
originally adopted the 1997 notice.

4. The EFTA Surveillance Authority considered at the time of
the adoption of the 1997 notice that it was in the interest
of the proper functioning of the EEA Agreement to grant
to undertakings which cooperate
favourable treatment
with it. The interests of consumers and citizens
in
ensuring that secret cartels are detected and punished
outweigh the interest in fining those undertakings that
enable the Authority to detect and prohibit such practices.

5. Whilst the validity of the principles governing the 1997
notice has been confirmed, experience has shown that its
effectiveness would be improved by an increase in the
transparency and certainty of the conditions on which
fines will be granted. A closer
any reduction of
alignment between the level of reduction of
fines and
the value of a company's contribution to establishing the
infringement could also increase this effectiveness. This
notice addresses these issues.

(1) OJ C 45, 19.2.2002, p. 3.
(2) The competence to handle individual cases falling under Articles 53
is divided between the EFTA
and 54 of
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

(3) OJ C 282, 18.9.1997, p. 8, and EEA Supplement to OJ C 39,

18.9.1997, p. 1.

6. The EFTA Surveillance Authority considers that the colla-
boration of an undertaking in the detection of
the
existence of a cartel has an intrinsic value. A decisive
contribution to the opening of an investigation or to the
finding of an infringement may justify the granting of
immunity from any fine to the undertaking in question,
on condition that certain additional
requirements are
fulfilled.

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EN

Official Journal of the European Communities

16.1.2003

7. Moreover, cooperation by one or more undertakings may
justify a reduction of a fine by the EFTA Surveillance
Authority. Any reduction of a fine must reflect an under-
taking's actual contribution, in terms of quality and timing,
the infringement.
to the Authority's establishment of
Reductions are to be limited to those undertakings that
provide the Authority with evidence that adds significant
value to that already in the Authority's possession.

(b) the undertaking ends its involvement in the suspected
infringement no later than the time at which it submits
evidence under points 8(a) or 8(b), as appropriate;

(c) the undertaking did not take steps to coerce other

undertakings to participate in the infringement.

PROCEDURE

A. IMMUNITY FROM FINES

8. The EFTA Surveillance Authority will grant an undertaking
immunity from any fine which would otherwise have been
imposed if:

(a) the undertaking is the first to submit evidence which
to adopt a
in the Authority's view may enable it
decision to carry out, within the EFTA pillar, an inves-
tigation in the sense of Article 14(3) of Chapter II of
Protocol 4 to the Surveillance and Court Agreement in
connection with an alleged cartel affecting the EEA; or

the

contact

12. An undertaking wishing to apply for immunity from fines
should
EFTA Surveillance Authority's
Competition and State Aid Directorate. Should it become
apparent that the requirements set out in points 8 to 10,
the undertaking will
as
immediately be informed that
immunity from fines is
not available for the suspected infringement.

are not met,

appropriate,

13. If

immunity from fines

infringement,
conditions 8(a) or 8(b), as appropriate:

the undertaking may,

is available for a suspected
to meet
in order

(b) the undertaking is the first to submit evidence which
in the Authority's view may enable it
to find an
infringement of Article 53 of the EEA Agreement in
connection with an alleged cartel affecting the EEA.

(a)

immediately provide the EFTA Surveillance Authority
suspected
with all
infringement available to it at
the
submission; or

relating to the

the time of

evidence

the

9. Immunity pursuant to point 8(a) will only be granted on
the condition that the EFTA Surveillance Authority did not
have, at the time of the submission, sufficient evidence to
adopt a decision to carry out an investigation in the sense
II of Protocol 4 to the
of Article 14(3) of Chapter
in connection with
Surveillance and Court Agreement
the alleged cartel.

10. Immunity pursuant to point 8(b) will only be granted on
the EFTA Surveillance
the cumulative conditions that
Authority did not have, at the time of the submission,
sufficient evidence to find an infringement of Article 53
EEA in connection with the alleged cartel and that no
undertaking had been granted conditional
immunity
in connection with the
from fines under point 8(a)
alleged cartel.

(b) initially present this evidence in hypothetical terms, in
which case the undertaking must present a descriptive
list of the evidence it proposes to disclose at a later
agreed date. This list should accurately reflect
the
nature and content of the evidence, whilst safeguarding
the hypothetical nature of its disclosure. Expurgated
copies of documents, from which sensitive parts have
been removed, may be used to illustrate the nature and
content of the evidence.

14. The Competition and State Aid Directorate will provide a
written acknowledgement of the undertaking's application
for immunity from fines, confirming the date on which the
undertaking either submitted evidence under point 13(a)
or presented to the EFTA Surveillance Authority the
descriptive list referred to in point 13(b).

11. In addition to the conditions set out in points 8(a) and 9
or in points 8(b) and 10, as appropriate, the following
cumulative conditions must be met
in any case to
qualify for any immunity from a fine:

15. Once the EFTA Surveillance Authority has received the
evidence submitted by the undertaking under point 13(a)
and has verified that it meets the conditions set out in
points 8(a) or 8(b), as appropriate, it will grant the under-
taking conditional immunity from fines in writing.

(a) the undertaking cooperates fully, on a continuous basis
and expeditiously throughout the EFTA Surveillance
Authority's administrative procedure and provides the
into its
Authority with all evidence
relating to the
possession or
suspected infringement.
it remains at
the Authority's disposal to answer swiftly any request
that may contribute to the establishment of the facts
concerned;

to it
In particular,

that comes

is available

16. Alternatively, the EFTA Surveillance Authority will verify
that the nature and content of the evidence described in
the list referred to in point 13(b) will meet the conditions
set out in points 8(a) or 8(b), as appropriate, and inform
the undertaking accordingly. Following the disclosure of
than on the date agreed and
the evidence no later
having verified that
it corresponds to the description
made in the list, the Authority will grant the undertaking
conditional immunity from fines in writing.

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Official Journal of the European Communities

C 10/15

17. An undertaking which fails to meet the conditions set out
in point 8(a) or 8(b), as appropriate, may withdraw the
the purposes of
evidence disclosed for
immunity
application or request
the EFTA Surveillance Authority
to consider it under section B of this notice. This does
not prevent the Authority from using its normal powers
of investigation in order to obtain the information.

its

18. The EFTA Surveillance Authority will not consider other
applications for immunity from fines before it has taken a
position on an existing application in relation to the same
suspected infringement.

19. If at the end of the administrative procedure, the under-
taking has met the conditions set out in point 11, the
EFTA Surveillance Authority will grant it immunity from
fines in the relevant decision.

B. REDUCTION OF A FINE

20. Undertakings that do not meet

the conditions under
from a
section A above may be eligible to benefit
reduction of any fine that would otherwise have been
imposed.

21. In order to qualify, an undertaking must provide the EFTA
the suspected
Surveillance Authority with evidence of
infringement which represents
significant added value
with respect to the evidence already in the Authority's
possession and must
in the
suspected infringement no later than the time at which
it submits the evidence.

terminate its involvement

22. The concept of ‘added value’ refers to the extent to which
the evidence provided strengthens, by its very nature
and/or its level of detail, the EFTA Surveillance Authority's
ability to prove the facts in question. In this assessment,
the EFTA Surveillance Authority will generally consider
written evidence originating from the period of time to
which the facts pertain to have a greater value than
evidence
evidence
subsequently established. Similarly,
directly relevant to the facts in question will generally be
considered to have a greater value than that with only
indirect relevance.

23. The EFTA Surveillance Authority will determine in any
final decision adopted at the end of the administrative
procedure:

(a) whether

the evidence provided by an undertaking
to
that

represented significant added value with respect
the evidence in the Authority's possession at
same time;

Second undertaking to meet point 21: a reduction of
20 to 30 %;

Subsequent undertakings
reduction of up to 20 %.

that meet point 21:

a

In order to determine the level of reduction within each of
these bands, the Authority will take into account the time
at which the evidence fulfilling the condition in point 21
was submitted and the extent to which it represents added
value.
the extent and
continuity of any cooperation provided by the undertaking
following the date of its submission.

It may also take into account

In addition, if an undertaking provides evidence relating to
facts previously unknown to the Authority which have a
direct bearing on the gravity or duration of the suspected
cartel, the EFTA Surveillance Authority will not take these
elements into account when setting any fine to be imposed
on the undertaking which provided this evidence.

PROCEDURE

24. An undertaking wishing to benefit from a reduction of a
fine should provide the EFTA Surveillance Authority with
evidence of the cartel in question.

25. The undertaking will

receive an acknowledgement of
receipt from the Competition and State Aid Directorate
recording the date on which the relevant evidence was
submitted. The EFTA Surveillance Authority will not
consider any submissions of evidence by an applicant for
a reduction of a fine before it has taken a position on any
existing application for a conditional immunity from fines
in relation to the same suspected infringement.

26. If

comes

the EFTA Surveillance Authority

to the
the evidence submitted by
preliminary conclusion that
added value within the
the undertaking constitutes
meaning of point 22,
inform the undertaking in
it will
writing, no later than the date on which a statement of
objections is notified, of its intention to apply a reduction
of a fine within a specified band as provided in point
23(b).

27. The EFTA Surveillance Authority will evaluate the final
position of each undertaking which filed an application
for a reduction of a fine at the end of the administrative
procedure in any decision adopted.

(b) the level of reduction an undertaking will benefit from,
relative to the fine which would otherwise have been
imposed, as follows. For the:

First undertaking to meet point 21: a reduction of 30
to 50 %;

GENERAL CONSIDERATIONS

28. This notice replaces the 1997 notice for all cases in which
no undertaking has contacted the EFTA Surveillance
Authority in order to take advantage of the favourable
in that notice. The Authority will
treatment set out
examine whether it
is necessary to modify this notice
once it has acquired sufficient experience in applying it.

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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.