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Competition Policy

The Commission may impose fines for:

  • certain procedural infringements (Article 23(1) of Regulation 1/2003)

  • when undertakings infringe Articles 101 of 102 TFEU (Article 23(2)a))

  • when undertakings infringe an interim measures decision (Article 23(2)b))

  • when undertakings infringe a commitment decision (Article 23(2)c))

Most frequently fines are imposed for the infringement of Article 101 or 102 TFEU. The following section will focus on this scenario.

The purpose of fines is to sanction undertakings for having infringed competition rules, in order to deter these undertakings as well as other undertakings from engaging in or continuing behaviour which restricts competition.

When determining the amount of the fine, the Commission must consider both the gravity and the duration of the infringement (Article 23(3) of Regulation 1/2003). Further, the fine must not exceed 10% of the undertaking’s total turnover generated in the business year preceding the decision (Article 23(2) of Regulation 1/2003).

The fines collected by the Commission go into the EU budget.

Assessing Fines:

According to the 2006 Guidelines on Fines, undertaking’s starting point for the fine is a percentage of the company’s annual sales of the product or service concerned by the infringement. The relevant sales are usually the sales of the product or service covered by the infringement during the last full business year of the infringement. This percentage of the value of relevant sales is up to 30% and determined according to the gravity of the infringements (so-called "gravity percentage).  As cartels are particularly harmful restrictions of competition, their gravity percentage starts at 15%.  The resulting amount is increased by the considering the duration of the infringement, using a duration multiplier calculated on the basis of the days of participation in the infringement.

The fine can be increased (for example if the company is a repeat offender) or decreased (for example if the company’s involvement was limited). In cartel cases, the fine will be increased by a one-time amount equivalent to 15%-25% of the value of one year's sales as an additional deterrent (so called "entry-fee"). In case of other particularly harmful infringements an entry fee can be imposed as well.

The fine is limited to 10% of the undertaking's overall annual turnover generated in the business year before the adoption of the decision. The undertaking is composed of the highest parent held liable and all its subsidiaries.  The consolidated turnover of that group of companies is relevant.

Leniency Reductions

The Commission encourages companies that are involved in a cartel to come forward with evidence to help the Commission to detect cartels and build its case. The first company to provide sufficient evidence of a cartel to allow the Commission to do a targeted inspection can receive full immunity from fines; subsequent companies can receive reductions of up to 50% on the fine that would otherwise be imposed, depending on the timing of their application and the added value they provide.

Settlement Reductions

In cartel cases, the Commission also grants a reduction of 10% of the fine if the Commission reaches a settlement with the party.

Inability to pay

In exceptional circumstances, the Commission may reduce the fine if the undertaking provides sufficiently clear and objective evidence that a) the fine is likely to affect seriously the economic viability of the undertaking, b) the undertaking's insolvency would cause a significant loss of the value of its assets and c) there are specific economic and social circumstances.

What is the legal basis for the Commission’s fines?

Article 23 of Regulation 1/2003 gives the Commission the power to impose fines on undertakings. In its  decision, the Commission explains how it has set the fine. The Commission published general guidelines in 1998 to provide greater transparency and greater accountability. The Commission amended its Fining Guidelines in 2006. The European Courts review all aspects of Commission decisions and have full powers to vary the fine imposed.

Factsheet on Fines (select language)