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EC Revises Guidelines For Fine-Setting In Antitrust Cases

by Ulrika Lomas, for LawAndTax-News.com, Brussels

30 June 2006

The European Commission announced on Wednesday that it has adopted new guidelines on the method of setting fines to be imposed on companies that infringe EC Treaty rules outlawing cartels and other restrictive business practices, and abuses of dominant position.

The new guidelines revise those adopted in 1998, with a view to increasing the deterrent effect of fines. Guidelines were first introduced at that time in order to enhance transparency as to the EC's fining policy.

Council Regulation 1/2003 provides that companies may be fined up to 10% of their total annual turnover.

Within this limit, the revised guidelines provide that fines may be based on up to 30% of the company’s annual sales to which the infringement relates, multiplied by the number of years of participation in the infringement.

Moreover, a part of the fine – the so-called “entry fee” - may be imposed irrespective of the duration of the infringement.

Finally, repeat offenders will also be fined more than in the past. These guidelines will apply to every anti-trust fines decision for which a Statement of Objections was notified to companies after their publication in the Official Journal, expected within the next two months.

Competition Commissioner Neelie Kroes commented:

“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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