In June 2006, the Commission published its new “Guidelines on the method of setting fines” (the ‘2006 Guidelines’), superseding its earlier guidelines dating back to 1998. The 2006 Guidelines mark a significant change in methodology, replacing the previous ‘lump sum’ approach with one more closely tied to the undertaking’s sales in the affected markets. The 2006 Guidelines also place greater emphasis on the infringement’s duration and provide for significant fine increases for recidivism. These changes do not appear to have been motivated by judicial censure, but rather by the Commission’s own realization that the previous approach lacked consistency and transparency, and that it may not have set the right kinds of incentives to discontinue anticompetitive conduct.
Only the 2006 Guidelines’ application in practice will show to what extent they achieve their aims. As a result of the change in methodology, the Commission and the courts will likely have to address a number of novel questions, such as the Commission’s discretion in determining the ‘gravity factor’, the calculation of the ‘value of sales’ affected by the infringement, the appropriateness of the last year of the infringement as the relevant reference year, and the application of the multipliers for recidivism and deterrence. More fundamentally, one could question whether (i) the 2006 Guidelines will not result in disproportionately higher fines on multi-product companies; (ii) the Guidelines set the right incentives to terminate anticompetitive conduct in some situations; (iii) the Guidelines will result in a net gain in transparency and predictability given the impact of multipliers whose application is subject to wide Commission discretion; (iv) the Commission has not bound its discretion too much in other respects; and (v) the Guidelines will not undermine other Commission policies, namely the leniency programme and its plans for a system of direct settlements.Common Market Law Review