Calculating the Cartel Fine: A Question of Jurisdiction or a Question of Economic Importance?

Abstract

The Court of Justice’s endorsement in InnoLux Corp v. Commission of the concept ‘direct European Economic Area (EEA) sales through transformed products’ for EU competition law fining purposes is not wholly uncontroversial. Infelicitous consequences arising from the application of this novel concept potentially include: (i) the imposition of excessive and disproportionate penalties, and (ii) the same sales being penalized by a competition authority in a country in which internal sales were made in addition to being penalized by the European Commission. The authors therefore advocate that the EU rules determining which acts can be taken into account for the purposes of determining a fine should be strictly coterminous with the rules on jurisdiction and that third-country competition authorities be encouraged to adopt a similar approach. It is believed that greater legal certainty can be achieved by having symmetry between the rules on jurisdiction and the rules on the sales to be taken into account for the purposes of determining fines. This solution does not exclude an application of the ‘qualified effects’ doctrine to downstream sales by related parties, provided there is adequate evidence to establish the existence of the ‘qualified effects’ in the first place. The rigours of that doctrine are necessary to ensure that the objective of ensuring effective deterrence does not become an autonomous and unruly principle of policy.