In a decision of 26 February 2013, the German Federal Court of
Justice has confirmed the constitutionality of Section 81(4), 2nd
sentence, of the German Act Against Restraints of Competition
(GWB). Pursuant to this provision, fines imposed by the German
Federal Cartel Office (FCO) or a court on an undertaking or an
association of undertakings "must not exceed 10 per cent of
the total turnover of such undertaking or association of
undertakings achieved in the business year preceding the decision
of the authority". Section 81(4), 2nd sentence, GWB was
introduced into the GWB in 2005 and reflects the provision of
Article 23(2) of Regulation No. 1/2003 at the EU level.
In 2003, several grey cement producers and one individual were
fined by the FCO for their participation between 1990 and 2001 in a
cartel on the German cement market. In 2009, the Higher Regional
Court of Düsseldorf, on appeal, imposed fines totalling €
278.6 million on these companies. In their final appeal before the
Federal Court of Justice, the appellants argued, amongst other
things, that Section 81(4), 2nd sentence, GWB was invalid because
of a lack of certainty.
The Federal Court of Justice essentially upheld the fines
imposed by the Higher Regional Court of Düsseldorf. Most
importantly, the Court confirmed that Section 81(4), 2nd sentence,
GWB, if interpreted correctly, is sufficiently precise and clear
and thus in conformity with the German Constitution. However,
according to the Court, the correct interpretation of Section
81(4), 2nd sentence, GWB requires to understand the provision not
as a cap for fines, such as under Article 23(2) of Regulation No.
1/2003, but as a strict ceiling for fines, which cannot be exceeded
at any point in time in the calculation of any fine.
This interpretation follows a general principle in German
criminal law, according to which a judge must fix fines within the
strict limits prescribed by the applicable legal provision. The
prescribed lower and upper limits for sanctions provide the range
in which the calculation criteria, which also must be prescribed by
law, have to be applied by the judge. Contrary to a ceiling for
fines, a cap for fines does not provide such a reference system, as
it does not apply in the course of the calculation of the fines but
only prohibits the imposition of fines the final amount of which
would exceed a certain threshold.
Finally, it is noteworthy that in compensation for significant
delays in the procedure which were found to be contrary to the rule
of law – it had taken the FCO and the Chief Public Prosecutor
of Düsseldorf nearly two years to prepare a joint
counterstatement to the final appeal – all appellants were
granted a 5 % reduction of their fines.
In a press release of 10 April 2013, the FCO welcomed the
decision of the Federal Court of Justice and announced that it will
align its guidelines for the calculation of cartel fines with the
ruling. The FCO further announced that, in its opinion, the
application of the approach taken by the Federal Court of Justice
might result in higher fines being imposed on large, diversified
companies in the future.
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