In the interest of greater transparency and predictability of its competition law enforcement practices, the Office for the Protection of Competition (the Office) has issued two new soft law methodologies, namely a revised Notice on the procedure for imposing penalties and setting the amount of penalties and a new Notice on compliance programmes. The new methodologies are effective from 1 January 2024 and apply to offences committed and to proceedings initiated by the Office after that date.
What will change in the system for imposing fines for anti-competitive behaviour?
The Office will impose significantly higher fines for the most serious offences, which are considered to be, in particular, the conclusion of a horizontal agreement with the aim of distorting competition (typically agreements on price fixing or market sharing, agreements on limiting production or excluding competition in a tender procedure – so-called bid rigging) or abuse of a dominant position.
The Office has increased the so-called starting point from which it calculates the fine for the most serious offences, which is the value of sales of the competitor’s products or services directly or indirectly affected by the anti-competitive conduct. Previously, this starting point was set at between 5 and 15 % of the value of sales, but now the starting point will be between 10 and 30 % of the value of those sales, resulting in a doubling of the fine compared to the previous practice.
For the other categories of conduct, there is no increase in the starting value for the calculation of the fine.
The list of aggravating and mitigating circumstances also changes. The aggravating circumstance is no longer considered to be the intentional commission of an offence, but now it is the intentional obstruction of the proceedings conducted by the Office.
A compliance programme may now be taken into account as a mitigating circumstance. In the case of voluntary cessation of anticompetitive conduct, this will be considered a mitigating circumstance only if it occurs within maximally 15 days of the date on which the competitor received the statement of objections. So far, the relevant time has been the moment of the first instance decision.
The Methodology now explicitly regulates the procedure, criteria and considerations used by the Office when imposing sanctions on public authorities, associations of competitors and the concurrent imposition of fines and prohibitions on the performance of public contracts.
When will a compliance programme be considered by the Office as a mitigating circumstance that may lead to a reduction in the amount of the fine?
The Office sets out the rules under which a compliance programme can be recognised as a mitigating circumstance and the reduction of the fine that the applicant can achieve by introducing it (after the Office has initiated the administrative procedure) or by tightening the compliance system already in place.
The Office defines a compliance programme as a system of internal measures and procedures for the prevention, detection and response (including internal sanctions) to potential anticompetitive conduct. The Office will also accept programmes adopted and implemented by the competitor’s parent company if they are also applied to subsidiaries or within the whole holding company. The Office recommends declaring the existence of a compliance programme on the competitor’s website.
The methodology contains a list of typical compliance measures that the Office recognises as appropriate to comply with competition rules, i.e. as an effective compliance system. These include the introduction of a risk identification system, the holding of regular training sessions, the establishment of internal whistleblowing channels (the compliance programme may also be linked to the so-called internal whistleblowing system under the Whistleblower Protection Act), the establishment of a compliance officer or the adoption of disciplinary measures for breaches of the measures in place.
In the case of introducing measures that are not listed in the methodology, the Office recommends consulting the Office in advance.
In any case, it must be a real compliance programme tailored to the competitor in question. The Office will not take into account merely formally adopted programmes which competitors do not actually apply or comply with. In this context, the Office will therefore require not only the text of the compliance programme itself, but also supporting evidence of its effective implementation (e.g. copies of evidence of regular training, evidence of the compliance officer’s activities, copies of measures taken or sanctions imposed for non-compliance).
The competitor must apply to the Office for the compliance programme to be taken into account as a mitigating circumstance no later than the issuance of the statement of objections. The methodology sets out the elements of such a request.
The Office may reduce the fine by up to 5 % for the introduction of a new compliance programme which the competitor undertakes to implement at the latest before the first instance decision is issued, and may reduce the fine by up to 10 % in the case of already established programmes and/or their reinforcement.
However, there is a catch. The Office recognises the introduction or strengthening of a compliance programme as a mitigating circumstance only if certain conditions are met, which are, in addition to the sufficient effectiveness of such a programme and the fact that the competitor’s senior management was not involved in the anticompetitive conduct, that the competitor has successfully used the leniency and/or settlement procedure.
It is the last condition that appears to be the most problematic, as it presupposes that the competitor confesses to the offence and provides the Office with incriminating evidence. It is therefore questionable to what extent competitors will be motivated to use this newly introduced mitigating circumstance in practice and to implement effective compliance programmes as part of prevention, which was the original intention of the Office in connection with the adoption of the new methodology.
