EU Observer

Large companies that break European Union antitrust rules face significantly bigger fines under guidelines to be published today.

The European Commission has already imposed some of the toughest fines in recent history, including a record €497 million penalty against Microsoft in 2004 and one of €462 million against Roche in 2001. Over the past few months the Brussels regulator has again ratcheted up the fines, especially in cartel cases.

Officials believe that only higher fines will deter companies from operating price-fixing cartels or abusing dominant market positions. They are particularly keen to increase the fines for repeat offenders and large groups with significant financial firepower.

The new guidelines reflect the Commission’s belief that the rules are too rigid and lack transparency – a view shared by many competition lawyers and most companies targeted by the Brussels trust-busters.

The new regime will apply to all companies found guilty of participating in a cartel or that abuse their dominant market position. It will almost certainly mean that more companies will be fined the maximum amount allowed under EU law, which is 10 per cent of global annual turnover.

The new regime will be especially tough on repeat offenders.

Fines will be calculated by fixing a basic amount – up to 30 per cent of a company’s sales of the relevant product in the market where the abuse has taken place – and then multiplying it by the number of years during which the abuse continued.

To this may be added an “entrance fee”, equivalent to 15-25 per cent of the company’s yearly sales of the product in... read more...