Most Read Contributor in Netherlands, February 2017
Losing out on the 10% fine reduction in return for settling
isn't the only risk when pulling out of settlement negotiations
with the European Commission. The European Court of Justice
recently confirmed that abandoning the settlement procedure could,
paradoxically, result in a higher fine for a shorter cartel
duration. Companies should think twice before deciding on whether
or not to settle, since there is no certainty as to when the best
deal can be struck, either in the settlement procedure or in the
standard cartel procedure.
The European Court of Justice
confirmed the fine imposed by the European Commission on the
Roullier group for its subsidiary's participation in the animal
feed phosphates cartel. The cartel lasted from 1978 until 2004.
Unlike the other five groups of animal feed phosphate producers
involved, the Roullier group decided to drop out of the settlement
negotiations after hearing the range of the fine that the
Commission intended to impose if the case was settled. The Roullier
group thus became the only party to the Commission's standard
administrative procedure, making it the first "hybrid"
case featuring both the standard procedure and settlement procedure
running in parallel.
During the standard administrative procedure, the Roullier group
successfully argued that it had only participated in the cartel
from 1993 until 2004, thus reducing the duration of its cartel
participation by 15 years. Ironically, this led to a higher fine
than the maximum range discussed during the early stages of the
settlement procedure. During the settlement negotiations, the
following fine reduction options had been discussed: (1) a 10%
reduction for settling; (2) a 35% reduction for mitigating
circumstances, granted because the Roullier group provided
information on the cartel from 1978 onwards; and (3) a 17%
reduction under the Leniency Notice based on information the
Roullier group had provided in relation to the period
The European Court of Justice ruled that the General Court had
rightly concluded that the Commission had used the same calculation
method to set both the range of fines in the settlement procedure,
and the fine imposed in the standard administrative procedure. That
the fine in the administrative procedure turned out to be EUR 20
million higher for the shorter cartel duration could be explained
by the fact that (1) the turnover of the Roullier group's
subsidiary had sharply increased between 1993 and 2004, resulting
in a higher basic fine amount; (2) the 10% fine reduction no longer
applied since the Roullier group stepped out of the settlement
procedure; (3) the 35% fine reduction could no longer be granted
because the Roullier group had successfully disputed their cartel
involvement for that period; and (4) the leniency discount had been
reduced from 17% to 5% for the same reason.
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