The German Federal Court of Justice ("BGH") has handed
down a decision that is likely to have a significant impact on the
setting of cartel fines in Germany, potentially reducing the
maximum cartel fine for some defendants. The decision deals
with fines imposed on a number of German cement producers that
entered into agreements to fix market shares and distribution
areas. The participants of the cartel challenged the fines
imposed by the German Federal Cartel Authority
Under German law, the maximum fine for antitrust infringements
is ten percent of the total sales of the infringer and its
affiliates in the financial year before the BKartA's decision
(Section 81(4)(2) ARC). However, the law does not specify how
fines must be assessed in individual cases. It merely says
that the "importance of the infringement" must be taken
into account (Section 17(3) OWiG).
In 2006, the BKartA published Guidelines on the setting of fines
("BKartA Guidelines") which are, with certain exceptions,
modeled on Guidelines published by the European Commission earlier
that year ("EC Guidelines"). Under the BKartA
Guidelines, the BKartA starts with a basic amount of up to 30% of
the "relevant sales" affected by the infringement (i.e.
the products or services that were the subject of the
cartel). The BKartA may then take into account aggravating
and mitigating factors. The amount is then capped at 10% of
So far, the practice of the BKartA has mirrored that of the EU
Commission. The EC Guidelines also provide for a base amount
of up to 30%, and the Commission also applies aggravating and
mitigating factors, and the resulting fine must also be capped at
the 10% of total sales (Article 23(2)(2) Regulation 1/2003).
While defendants in EU proceedings have claimed that the setting of
fines through a method where the individual steps of calculating
the fine may exceed the 10% maximum violates Regulation 1/2003, the
European courts have dismissed this argument. The European
Court of Justice found that, when calculating the applicable fine,
the Commission is free to exceed the maximum fine of 10% of
revenues ("cap amount") at any intermediate step as long
as the final fine imposed on the company does not exceed the
The BGH, in its decision of 26 February 2013, adopts a different
approach. The Court ruled that the 10% maximum set forth in
German law is not a cap but the maximum fine. This means that
fines must be calculated in a manner that ensures that only the
most serious infringements of competition law (such as price-fixing
over a long period of time) trigger a fine equivalent to 10% of
The BGH decision may significantly affect the level of fines
imposed by the BKartA and the courts. It may well turn out to
be a milestone in particular for one-product-companies. Their
"relevant revenues" equal their aggregate worldwide
sales. Unlike the Commission, which in its intermediate steps
in calculating a fine, may exceed the cap amount, the BKartA will
be allowed to approach the ceiling amount only if it has sufficient
reasons to do so. While the BKartA will have to review how to
adapt its fine-setting guidelines, the expectation is that future
"average" cartel law infringements of
one-product-companies will be sanctioned with fines significantly
below the cap of 10%.
The BGH decision concerns German law only. The established
EU method of fine setting will remain in place unless the ECJ
revisits its established case law.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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