This paper examines the law, practice and evidence on fines for price-fixing under European competition law. It undertakes the first comprehensive quantitative analysis of fines imposed on cartels by the European Commission. Based on an analysis of 30 fully reported cartel decisions, and appeals against many of these, the paper looks at how fines are calculated in practice, and whether they reflect consumers’ losses and are likely to deter price-fixing. It also examines the impact of the amended 2006 penalty guidelines.

The European Commission has intensified its prosecution of price-fixers in recent years. This has led to a significant increase in the number of convictions and level of fines. In fact the fines imposed in the first half of this decade were over four times the aggregate fines imposed for all antitrust violations by the European Commission in the previous three decades (Figure 1). In order to fully understand the enforcement process a quantitative analysis is undertaken of the European Commission’s fines in 30 fully reported cartel decisions primarily over the period 1999 to 2006. This examines how fines were imposed under the European Commission’s 1998 Penalty Guidelines1, leniency programme, and after appeal to the courts where applicable (sections II and III). The discussion then moves on to assess the fines under the 1998 Penalty Guidelines approximated consumers’ economics losses, and were likely to deter price-fixing (section IV). The discussion concludes (section V) by recalculating fines imposed on a sample of cartels using the 2006 Penalty Guidelines2, which came into operation in September 2006, to see whether price-fixers would have been fined more heavily. The analysis shows that while the headline fines for cartels were high they were substantially reduced under the EU leniency programme and the courts, that given sensible assumptions it was unlikely that the fines reflected consumers’ losses and/or deterred price-fixing, and that while the 2006 Penalty Guidelines would have led to significantly higher fines overall, in a substantial proportion of cases they were likely to be lower.

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