On 25 June 2013, the German Federal Cartel Office
("FCO") published new fining guidelines replacing the
FCO's previously applicable guidelines. This step was generally
expected after the FCO had announced in April 2013 that it would
revise its fining guidelines in reaction to a decision by the
German Federal Court of Justice ("FCJ") of 26 February
2013, confirming the constitutionality of Section 81(4), 2nd
sentence, of the German Act Against Restraints of Competition
("GWB") and clarifying the correct interpretation of this
provision (see VBB on Competition Law Volume 2013, No. 4, available
Section 81(4), 2nd sentence of the GWB provides that fines
imposed by the 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" and reflects Article 23(2) of Regulation No.
1/2003 at the EU level.
Whilst the FCO's previous guidelines had interpreted the 10%
rule in accordance with the European Commission's practice,
i.e. as a cap for fines, the new guidelines follow the FCJ's
decision in interpreting the 10% rule as a range for penalties, a
concept that is also used in German criminal law and German
administrative offences law. This means that the FCO will
henceforth calculate any individual fine within the range of
penalties provided by the GWB, i.e., between € 5 and 10%
of the group-wide annual turnover of the undertaking concerned.
As it had been the case under the previous guidelines, the FCO
will also under the new guidelines take into consideration both the
group-wide annual turnover of the undertaking concerned and the
turnover which the undertaking achieved in the cartelised market
during the infringement period.
However, under the new guidelines the size of an undertaking
will play a more important role in the fine calculation. The exact
upper limit for a fine will be determined by the FCO on a
case-by-case basis. More precisely, the FCO will calculate an
amount within the range of 10% of the respective undertaking's
turnover achieved in the cartelised market during the entire
infringement period and multiply it by a factor that is dependent
on the size of the undertaking (the larger the group-wide annual
turnover, the bigger the multiplier). The result of this
calculation will, as a general rule, further limit the range of
penalties at the upper end if it is below the 10% threshold. In all
other cases, no further limitation to the range of penalties
applies. It is only within the so established range that the FCO
will determine the final fine by considering all aggravating and
The FCO's rules on exemption from fines or reduction of
fines in accordance with its leniency programme as well as the
rules on reduction of fines for an agreement to settle proceedings
According to the FCO, the overall level of fines will not change
significantly but it can be expected that future fines on smaller
mono-product undertakings will be lower than under the previous
practice. Future fines on diversified corporations, however, might
turn out to be higher, especially in cases where the
anti-competitive conduct concerns only one product of the
corporation's large portfolio of products and/or services.
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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