New EU Fining Guidelines

The European Commission (the Commission) has further strengthened the deterrent factor in fines for violations of European Community antitrust rules by issuing new guidelines (the Guidelines), designed to increase the level of fines imposed on companies and industry associations, in particular those involved in cartels.

The statutory maximum level for antitrust fines of 10% of a company’s previous year’s revenues has not changed, but the Commission has signaled that it will impose heavier penalties than previously. Under the Guidelines, the Commission will establish the “basic amount” of the fine by reference to up to 30% of the value of the defendant’s prior year’s sales of the products concerned, depending on the gravity of the offence. Cartels will be assessed on the higher end of the scale. The value of sales in case of violations by associations is the sum of the members’ value of sales. The Commission will then multiply this amount by the number of years the violation lasted. An additional amount—called an “entry fee”—of between 15% and 25% of the value of sales will be added to the basic amount in cartel cases as a further deterrent (and may be assessed for other antitrust violations). The entry fee will not be subject to the “duration multiplier.”

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