Posted by Social Science Research Network
The EU Competition Law Fining System: A Quantitative Review of the Commission Decisions between 2000 and 2017
By Damien Geradin (TILEC) & Katarzyna Sadrak (University of Heidelberg)
Abstract: There is a large amount of legal and economic literature on the fining policy of the European Commission for breaches of EU competition law. This paper takes a quantitative approach as it analyses the factors that have been considered by the Commission in establishing the level of the fine imposed on infringing undertakings in 110 cartel decisions, as well 11 abuse of dominance decisions, adopted between January 2000 and March 2017. The factors included in our analysis, which is summarized in two tables provided in an Annex, comprise inter alia the gravity of the infringement, the presence of aggravating and mitigating circumstances, the adoption of an entry fee, whether inability to pay was invoked, and in the case of cartels the presence of some form of leniency and/or the use of the settlement procedure. We also looked at whether these Commission decisions have been appealed to the General Court of the EU.
Our analysis shows that the Commission has made significant use of the aggravating and mitigating circumstances listed in the Fining Guidelines to adjust the basic amount of the fine. It also shows that the vast majority of cartel decisions (i.e., 88%) adopted by the Commission during the period analysed involved some form of leniency (immunity from fines and/or fines reduction). Our analysis also shows that the cartel settlement procedure, even though it only provides for a 10% reduction of the level of the fines, has been a significant success with the Commission concluding 22 settlements since 2010. Despite the success of the leniency and cartel settlement procedures, which should in theory have a dampening effect on fines, the level of fines has massively increased over the past couple of decades. As recidivism is still prevalent, it is questionable whether increasingly high fines are an effective remedy to deter undertakings from breaching competition law. Alternative mechanisms, such as personal sanctions, should perhaps be contemplated.
