Companies that repeatedly breach European Commission competition rules could see their financial fines double under new guidelines announced by the Competition Commission.
The Competition Commission has revised its guidelines for antitrust fines the first time since 1998, introducing the ability to double the fines for repeat offenders as well as an entry fee for companies that enter in to cartels.
While the cap of 10% of a company’s total annual revenue remains, the new guidelines give regulators the power to fine a company 30% of its annual sales for a specific infringing product, multiplied by the number of years the infringement took place.
Repeat offenders previously faced the potential to have fines increased by up to 50%, but that has been increased to 100% under the new guidelines, which also see the breach of national guidelines taken into account alongside EC decisions, as well as each infringement justifying an increase of the fine.
Companies caught teaming up to fix prices will immediately face an entry fee for doing so, under the new guidelines, with the fine starting at between 15% and 25% of a company’s sales even before the additional fine is calculated.
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, said Competition Commissioner Neelie Kroes. Don’t break the antitrust rules; if you do, stop it as quickly as possible, and once you’ve stopped, don’t do it again.
Microsoft Corp might be the most famous technology vendor currently being dealt with by the Competition Commission, but it is unlikely to be affected by the changes unless it is found to have broken EC rules a second time.
The new guidelines will only apply to decisions in which the Commission’s Statement of Objections is published after the official publication of the guidelines, which should happen in the next two months, according to the EC. Microsoft was fined 497.2m euros ($613m), among other remedies, after it was found guilty of breaking European Union competition law in March 2004.
Meanwhile, the Competition Commission has declined to comment on reports that it is set to fine Microsoft 2m euros ($2.5m) a day backdated to December 2005 for failing to comply with interoperability documentation requirements.
The Financial Times has reported that Microsoft had failed its appeal and that a draft ruling has been drawn up stating that Microsoft has failed to meet its requirements. The Commission said only that it would reach a decision by July 19.