SERVICE PUBLIC FEDERAL ECONOMIE, P.M.E., CLASSES MOYENNES ET ENERGIE

Lignes directrices pour le calcul des amendes infligées en application des articles 36 à 39 de la loi sur la protection de la concurrence économique coordonnée le 1er juillet 1999. - Addendum Translation of the French and Dutch texts published in the Belgian Bulletin of Acts, Orders and Decrees on the 30th of April 2004 Ed 2, p. 36261 Guidelines on the method of setting fines imposed pursuant to Articles 36 to 39 of the Act on the Protection of Economic Competition, coordinated on 1 July 1999 I.Introduction The principles outlined in these guidelines should ensure the transparency and impartiality of the Competition Council's decisions, in the eyes of the undertakings and of the Brussels Court of Appeal alike, while upholding the discretion which the Competition Council is granted under the relevant legislation to set fines within the limit laid down in the Act on the Protection of Economic Competition, coordinated on 1 July 1999 (hereinafter APEC or the Act). This discretion must follow a coherent and non-discriminatory policy which is consistent with the objectives pursued in combatting infringements of the competition rules.

These guidelines complements the joint notice of the Competition Council and the Corps of Examiners on immunity from fines and reduction of fines in cartel cases and shows the willingness of the Competition Council to give greater priority to combating restrictive practices.

II. Legal framework of the Competition Council's power to impose fines with regard to competition law and scope in which fines may be imposed Pursuant to Article 16 APEC, the Competition Council is an administrative court with the power to take decisions, make proposals and deliver opinions conferred upon it by this Act.

The Competition Council may impose administrative penalties for infringing the Act.

Articles 36 to 39 APEC lay down the situations in which the Competition Council may impose fines.

Article 36, § 1 states that in the event of application of Article 31, § 1 APEC, that is in case a restrictive competitive practice has been established, the Competition Council may impose on each of the undertakings involved fines that do not exceed 10 % of their aggregate turnover realised in the previous financial year in the domestic and export markets. The Council may also, by the same decision, impose penalty payments for non-compliance with its decision on a daily basis of maximum 6,200 euro per undertaking involved.

Since 1999, Article 36, § 2 prescribes that such fines (and penalty payments) may also be imposed in the event of application of Article 29, § 2, b), c), and d) and in the event of failure to comply with the decisions referred to in Articles 33 and 34 APEC. On the basis of this provision, a fine may also be imposed if the parties involved commit a breach of a condition or obligation imposed by the Competition Council in a decision granting an individual exemption, provided for by Article 2, § 3 APEC, accompanied with conditions and obligations, or if they provide inaccurate information or if the decision was induced by deceit or if they abuse the exemption granted to them. A fine may also be imposed for non-compliance with decisions on concentrations (provided for by Articles 33 and 34) taken at the end of the first and/or second phase of investigation in a concentration procedure.

Article 37, § 1, states that the Competition Council may impose on individuals, undertakings and associations of undertakings, fines of from 500 to 25,000 euro where they, either deliberately or negligently, a) provide inaccurate or distorted information when making notification or a request for information;b) provide incomplete information;c) do not provide the information within the specified time limit;d) prevent or impede the investigations carried out under Article 23 by the Corps of Examiners and the Competition Office, as well as the general or sector inquiries referred to in Article 26. Paragraph 2 of Article 37 states that the same fines may be imposed in the event that an undertaking has put a concentration into effect within the meaning of the APEC without prior notification, even if it appears that the concentration is subject to approval.

Under Article 38, the Competition Council may, in the event of infringement of Article 12, § 4, impose the fines referred to in Article 36, if the undertakings involved have taken measures regarding the concentration that impede its reversibility and alter the market structure on a lasting basis before the Competition Council renders a decision on the approval of the concentration.

III. Principle of determining the amount of fines The new method of determining the amount of a fine will adhere to the following rules, which start from a basic amount that will be increased to take account of aggravating circumstances or reduced to take account of attenuating circumstances.

The basic amount will be determined according to the gravity and duration of the infringement and the undue profits that resulted from it.

The basic amount may be increased on account of aggravating circumstances. It may also be reduced because of the existence of attenuating circumstances.

Several hypotheses in which the Competition Council may impose fines should be distinguished.

IV. Basic amount A. Level of the infringement The level of the infringement is directly determined by the Act on the Protection of Economic Competition that defines the limits of the amount of the fine that may be imposed according to the nature of the committed infringement.

The impact of the infringement on the market, where this can be measured, and the size of the relevant geographic market may also be taken into account for the determination of the fine.

Infringements will thus be put into two categories : minor infringements for which a fine between 500 and 25,000 euro may be imposed and very serious infringements that may be sanctioned with a fine of up to 10 % of the undertaking's aggregate turnover realised in the previous financial year in the domestic and export markets. 1. Minor infringements Article 37 APEC specifies the minor infringements for which a fine between 500 and 25,000 euro may be imposed.These infringements may be committed either deliberately or negligently. A fine may be imposed on individuals, undertakings and associations of undertakings infringing the provisions of Article 37, when they : a) provide inaccurate or distorted information when making notification or a request for information;b) provide incomplete information;c) do not provide the information within the specified time limit;d) prevent or impede the investigations carried out under Article 23 by the Corps of Examiners and the Competition Office as well as the general or sector inquiries referred to in Article 26 carried out by the Competition Office. Article 37, § 2, mentions also as a minor infringement the situation in which an undertaking has put a concentration into effect within the meaning of the APEC without prior notification, even if it appears that the concentration is subject to approval. Since the notification requirement must be followed once the concentration is a fact, a late notification is also considered as a minor infringement (provided that the undertakings have not taken measures regarding the concentration that impede its reversibility and alter the market structure on a lasting basis. In that case the infringement must be considered as very serious according to Article 38 APEC).

In the event of pure negligence the amount of the fine imposed for any of these minor infringements may not be less than the minimum amount provided for by Article 37, § 1 APEC, being 500 euro .

As the fine must remain dissuasive, amounts of 1,000 euro (for natural persons) and 2,500 euro (for undertakings) will generally be considered as minimum amounts in those cases.

Depending on the factual elements and any possible aggravating circumstances, the fine may amount to a maximum of 25,000 euro . 2. Very serious infringements These are infringements for which a fine may be imposed of up to 10% of the aggregate turnover of the undertaking involved realised in the previous financial year in the domestic and export markets.a. restrictive practices (cartels and abuse of a dominant position) The restrictive competitive practices that are considered as very serious infringements are specified in chapter II, Articles 2 (cartels) and 3 (abuse of a dominant position), of the APEC.Article 36, § 1, states that in the event of application of Article 31, § 1, APEC, in case a restrictive competitive practice has been established, the Competition Council may impose on each of the undertakings involved fines not exceeding 10 % of their aggregate turnover realised in the previous financial year in the domestic and export markets. b. Non-compliance with a decision granting individual exemption or on the approval of concentrations or obtaining of such a decision in a fraudulent way or on the basis of inaccurate information or abuse of an individual exemption. The Act also considers as a very serious infringement punishable by a fine of up to 10% of the aggregate turnover of the undertaking involved realised in the previous financial year in the domestic and export markets, the fact that : - the parties involved commit a breach of a condition or requirement attached to a decision granting individual exemption ( Article 36, § 2, referring to Article 29, § 2 b, APEC); - the parties involved provide inaccurate information to obtain an individual exemption or that the decision granting individual exemption was induced by deceit (Article 36, § 2, referring to Article 29, § 2 c, APEC); - the parties involved abuse the individual exemption granted to them (Article 36, § 2, referring to Article 29, § 2 d, APEC); - the decisions rendered within the framework of a procedure on the approval of concentrations at the end of the first or second investigation phase are not complied with (Article 36, § 2, referring to Article 33 and 34, APEC); - the undertakings take measures on the concentration that impede its reversibility and alter the market structure on a lasting basis (Article 38, referring to Article 12, § 4, APEC).

Pursuant to Article 39, APEC the fines provided for by Article 36, § 1 may not be imposed for acts taking place after the notification provided for by Article 7, § 1, and before the decision by which the application of Article 2, § 3, is granted or refused, provided they fall within the limits of the activity described in the notification.

These infringements particularly relate to trade restrictions, abuse of dominant position (refusals to supply, discrimination, exclusion), horizontal restrictions such as price cartels and market-sharing quotas, or other practices which jeopardise the proper functioning of the market or clear-cut abuse of a dominant position by undertakings holding a virtual monopoly.

The horizontal restrictions such as price cartels and market-sharing quotas, or other practices which jeopardise the proper functioning of the market or clear-cut abuse of a dominant position by undertakings holding a virtual monopoly constitute the most serious infringements of competition law.

Account should be taken of the specific weight and, therefore, the real impact of the offending conduct of each undertaking on competition, particularly where there is considerable disparity between the sizes of the undertakings committing infringements of the same type.

Thus, the principle of equal punishment for the same conduct may, if the circumstances so warrant, lead to different fines being imposed on the undertakings involved without this differentiation being governed by arithmetic calculation.

B. Duration A distinction should be made between the following : - infringements of short duration (in general, less than one year) : no increase in amount; - infringements of medium duration (in general, one to five years) : increase of up to 50% in the amount determined for gravity; - infringements of long duration (in general, more than five years) : increase of up to 10 % per year in the amount determined for gravity.

This approach will therefore point to a possible increase in the amount of the fine.

Generally speaking, the increase in the fine for long-term infringements represents a considerable strengthening of the previous practice with a view to imposing effective sanctions on restrictions which have had a harmful impact on consumers over a long period.

The basic amount will result from the addition of the two amounts established in accordance with the above : x gravity + y duration = basic amount V. Aggravating circumstances The basic amount will be increased where there are aggravating circumstances such as : - repeated infringement of the same type by the same undertaking(s); - refusal to cooperate during the investigation or attempts to obstruct it; - role of leader in or instigator of the infringement; - retaliatory measures against other undertakings with a view to « enforcing » the decisions or practices which constitute an infringement; - need to increase the penalty in order to exceed the amount of gains improperly made as a result of the infringement when it is objectively possible to estimate that amount.

VI. Attenuating circumstances The basic amount will be reduced where there are attenuating circumstances such as : - an exclusively passive role in the infringement; - non-implementation in practice of the offending agreements or practices; - termination of the infringement as soon as the competition authorities intervene (in particular when it carries out checks); - infringements committed as a result of negligence or unintentionally; - effective cooperation by the undertaking in the proceedings, outside the scope of the notice of 30th March 2004 on the non-imposition or reduction of fines in cartel cases.

VII. General comments 1) The final amount calculated according to this method (basic amount increased or reduced on a percentage basis) may not in any case exceed the maxima provided for by the Act on the Protection of Economic Competition, coordinated on 1 July 1999.2) Account should be taken of certain objective factors such as a specific economic context, any economic or financial benefit derived by the offenders, the impact on the market, the specific characteristics of the undertakings in question and their real ability to pay in a specific social context, and the fines should be adjusted accordingly.3) In cases involving associations of undertakings, decisions should, as far as possible, be addressed to and fines imposed on the individual undertakings belonging to the association. If this is not possible (e.g. where there are several thousands of affiliated undertakings), an overall fine should be imposed on the association, calculated according to the principles outlined above, but equivalent to the total of individual fines which might have been imposed on each member of the association. 4) The Competition Council will also reserve the right, in certain cases, to impose a "symbolic" fine of 1,000 euro, which would not involve any calculation based on the duration of the infringement or any aggravating or attenuating circumstances.The justification for imposing such a fine should be given in the text of the decision.