Competition Buzz: Turnover as a Criterion for Setting Fines in Competition Law

By: Fernando Cachafeiro

Annual turnover is a key factor for adjusting the penalty that applies to companies that violate the Competition law. The higher the turnover of the offender, the greater the damage that his conduct may infringe to competition. In the EU “turnover in the market affected by the infringement” is a criterion that is used to set the basic amount of the fine, while the “global turnover of the infringing company” is employed to set a ceiling on the penalty. In Spain, the national competition authority has applied similar criteria to grade penalties. However, since March 2013, the High Court has launched a line of cases in which adopts a different methodology regarding turnover which has resulted, in practice, in a substantial reduction of fines. In this paper the author criticises the arguments that have led the High Court to adopt this interpretation sui generis of annual turnover. Furthermore, although its admissible the coexistence of two (national and European) sanctioning regimes for violation of Articles 101 and 102 TFEU, the author warns that this line of decisions may undermine the deterrent effect of the fines resulting from violation of the antitrust laws.

Full Content: SSRN

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