EU ANTITRUST: HOT TOPICS & NEXT STEPS

EU ANTITRUST: HOT TOPICS & NEXT STEPS 2022

Prague, Czechia

were set at almost 50% of the optimal level. It is obvious that the new Sentencing Guidelines enable the Office to impose a basic fine for bid rigging as 15% of the value of the procurement as a maximum, whereas the optimal fine is calculated as 20%. This makes the gap between the imposed and the optimal fine as well. However, if we look at the final fines which were actually imposed by the Office, we see in some cases (e.g., SUDOP Praha, a.s. ) that the Office significantly increased the calculated fine because it had an insufficient deterrent effect. In the case of SUDOP Praha, a.s. , this increase meant a fine of more than CZK 9,000,000 instead of CZK 2,000,000. If we compare the final fine with the optimal one, we find out that the Office imposed fines amounting 13.3% of the optimal fine on average. This number is influenced by two “extremes” when the fine amounted to 35% of the optimal deterrence fine. Again, if we assumed the probability of detection 100 %, the imposed final fines for bid rigging were on average optimal. 4. Conclusion The Office issued the new Sentencing Guidelines in April 2018, the aim of which was to significantly increase the fines imposed, especially for the so called ‘hard-core cartels’. The optimum to which the Office is heading is to set fines at such level that anticompetitive conduct does not pay off. The fines are intended to have both repressive and preventative functions. If we compare the new Sentencing Guidelines from 2018 with the previous ones from 2006, we see that the new Guidelines enable the Office to impose much higher fines for the same conduct. For the most serious and long-lasting hard-core cartel, a fine up to 150% of the relevant turnover achieved by the cartel member in the last finished accounting period can be imposed, whereas the old sentencing guidelines limited the fines for such cartels to 9% of such turnover. The data analysed data confirm that today’s fines imposed for hard-core cartels were in most cases at least able to take the cartel gain from the cartelists away and thus we can say that the Office is broadly imposing the optimal compensatory fines. Of course, if the probability of detection is very low, the fines imposed need to be much higher to have a deterrent effect. Presuming 15% as the probability of detection, the fines imposed amounted to 4% – 25% of the optimal fine depending on the demand elasticity, margin, and overcharge. We get similar results for bid rigging cases as well. The Office moreover is willing to increase the calculated fine significantly if it thinks that it does not have a sufficiently preventive function. We found that such individually increased fines achieved close to optimal deterrence.

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