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Focus on Regulation

A Bigger Carrot: Commission Official Signals Availability of Larger Fine Discounts For Cooperation in Abuse Cases

In September 2016, the European Commission granted a 30% fine discount to Altstoff Recycling Austria for cooperating with an investigation into its alleged abuse of a dominant position in the Austria waste management market (see our previous post here).

The discount was granted on the basis of Paragraph 37 of the 2006 Fining guidelines, which allows for a departure from the general fining methodology due to “the particularities of a given case”. It may seem unusual that this paragraph, which also suggests increasing a fine for deterrence effect, would be used in this way, as the Commission’s regular practice to settle abuse of dominance cases is by accepting commitments pursuant to Article 9 Regulation 1/2003.  That provision allows companies to offer commitments that are intended to address the competition concerns identified by the Commission. If the Commission accepts these commitments it adopts a commitment decision making them binding on the parties without establishing an infringement.

Recently, at the 12th Annual Global Competition Law Center conference in Brussels, Kris Dekeyser, Director of Policy and Strategy at the Commission’s competition department, indicated that the Commission could grant discounts of greater than 30% in certain circumstances and in particular, if the firms cooperate early, acknowledge liability and suggest possible solutions or remedies. Dekeyser noted that ARA’s cooperation came “relatively late” in the investigation and that “fuller cooperation” could justify larger discounts.

These recent statements are a clear indication that the Commission intends to make use of this new form of cooperation “bonus scheme” more regularly. While it appears that the Commission wants to gain experience with the practice before issuing more formal guidance, it has at least opened the door to discounts of greater than 30% in certain circumstances.‎ Nevertheless, it remains to be seen whether companies under investigation for alleged abuses under Article 102 TFEU will ultimately agree to acknowledge liability in exchange for this financial incentive.