Local view for "http://purl.org/linkedpolitics/eu/plenary/2010-10-06-Speech-3-222"
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"en.20101006.16.3-222"2
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"Madam President, it is, as ever, a great pleasure to be here with you day and night, and I speak on behalf of my colleague and friend, Mr Almunia, who has been held up as we speak at the working dinner between China and the European Union. Your House has asked the Commission to voice its policy on fines in the fight against anti-competitive practices. On its behalf, therefore, I am delighted to make this presentation.
The third and final question is whether fines should be reduced during the crisis. Rest assured that we look very closely at the financial situation of companies which, in some cases, claim their inability to pay and that we have significantly reduced our fines for a number of them. For example, during recent decisions on sanitary ware for bathrooms, or high-tensile steel, we have applied reductions ranging from 25 to 75%.
It is not in our interest, honourable Members, to exclude companies from the market. In fact, it is quite the opposite. Competition rules are often applied so as to enable new companies to break into the market and go about their normal business on a level playing field.
As you know, the Commission is duty bound to fight anti-competitive practices and to penalise them when they are detrimental to companies and consumers in the internal market.
The primary tool that we have at our disposal is our power to impose fines on companies involved in these cartels, which adopt restrictive business practices or abuse their dominant position. These fines are fixed in accordance with our guidelines on the method of setting fines. The version currently in force was adopted just four years ago.
We also offer reduced fines for companies willing to cooperate in our investigations, for example, when they draw our attention to the existence of a cartel, and also for companies agreeing to reach a settlement with the Commission. This saves a great deal of time and resources for all parties. In any event, companies cannot be forced to shell out more than 10% of their total annual turnover, which is the ceiling for the level of fines that can be imposed.
Fines, therefore, honourable Members, are our primary tool. However, the introduction of sanctions for individuals should not be ruled out in the future, in particular, administrative sanctions. A number of Member States actually authorise such sanctions. We want to look closely at the legal and political implications of this kind of development.
Is there a need for a formal legal framework? Article 23 of Council Regulation (EC) No 1/2003 provides the legal basis for fines imposed by the Commission but not the guidelines on the method of setting fines. Article 23 sets out the basic principles, including the turnover ceiling, which I have just mentioned, whereas the guidelines give details of how they are applied.
It is relatively standard practice in many European legal systems to have a wide range of possible sanctions laid down by law as well as administrative guidelines on the method of setting the definitive penalty. This is true of Germany, the United Kingdom and the Netherlands when it comes to the application of competition rules. Based on this situation, we see no reason to propose new legislation on the fines imposed by the European Union in competition cases.
The second question is whether the guidelines need to be revised before looking at the level of fines imposed. I would like to give you an idea of what cartels cost the European economy. According to our estimates, the damage caused by the 18 cartels dismantled between 2005 and 2007 ran to almost EUR 8 billion. Studies have also shown that cartels led to a 10 to 30% increase in prices, a tempting prospect which would be hard to resist were it not for vigorous implementation of competition legislation, which is our job.
Our fines are set at a level that fairly punishes past unlawful behaviour. They are high but they reflect the damage caused and the unlawful gains achieved by members of the cartel. Our fines must also effectively deter companies from engaging in such anti-competitive practices in the future. That is why, I repeat, we see no reason to amend the 2006 guidelines on the method of setting fines."@en1
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