The Commission last month published new Guidelines for the imposition of fines for breaches of European antitrust law.

There are three main differences between the 1998 Guidelines and the new Guidelines:

(1) The starting point for setting the fine will take into account a percentage of the value of sales to which the infringement relates. This is then multiplied by the number of years during which the company participated in the infringement. Under the 1998 Guidelines, the starting point of a fine was a lump sum, which is based on the gravity of the infringement. A 10% increase was then added for each year of infringement.

(2) The new Guidelines create a mechanism of a so-called “entry fee”. This new mechanism means that simply entering into a cartel will cost a company 15% to 25% of its annual sales in the relevant sector. A similar “entry fee” may be applied to other types of infringements.

(3) The new Guidelines foresee a significant increase in the level of fines to be imposed on repeat offenders and, even more, on multiple repeat offenders. The Commission will also take into account decisions by national competition authorities adopted under Articles 81 or 82 of the EC Treaty in order to help to decide whether the company in question is a repeat offender.

It is expected that companies involved in infringements that are long lasting and in large markets should expect to receive significantly higher fines as a result of the new Guidelines. But, it should be noted that the maximum ceiling of any fine imposed will remain 10% of the total turnover of the undertaking in the preceding year.

Commenting on the new Guidelines, Competition commissioner Neelie Kroes said, “These revised Guidelines will better reflect the overall economic significance of the infringement as well as the share of each company involved. The three main changes – the new entry fee, the link between the fine and the duration of the infringement, and the increase for repeat offenders - send three clear signals to companies. Don’t break the anti-trust rules; if you do, stop it as quickly as possible, and once you’ve stopped, don’t do it again. Of course, if the Commission's leniency policy applies, companies should also report the infringement without delay. If companies do not pay attention to these signals, they will pay a very high price.”

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