The European Commission (EC) led the way, yet again, in 2017 in relation to the enforcement of cartel fines around the world by breaking the USD2 billion barrier, according to Allen & Overy’s Global Cartel Enforcement Report. Despite global fine totals being less than half of what they were in 2016 (USD3.15 billion compared to USD6.68 billion), the report suggests that these figures are more of a reflection of the conclusion in various jurisdictions of major international investigations than a signal of weaker enforcement.
With the detection and punishment of cartels being a continuing priority for the EC, it is very likely to remain a key enforcer in 2018. At EU Member State level, numerous jurisdictions continue actively to enforce local antitrust rules, with France not only imposing a EUR302 million fine on a price-fixing cartel in the floor covers sector but also fining Brenntag EUR30 million for a procedural infringement relating to another alleged cartel. Meanwhile, the UK’s Financial Conduct Authority has dipped its toe into the water with the announcement of its first statement of objections in a competition case.
In the U.S., 2017 saw another decrease in the total fines imposed by the Department of Justice (DOJ) for cartel conduct, with USD171.1 million fined compared to USD387 million in 2016, but it obviously remains a major jurisdiction when it comes to assessing cartel risk.
Philip Mansfield, partner in the global antitrust group, commented: “Though the European Commission may have contributed to more than half the total fines last year, it is worth noting that the overall story does not stop with that one agency. We are seeing mature and developing competition authorities alike continue to demonstrate an appetite for the detection and punishment of cartel behaviour and to feature this high on their priority enforcement agenda. In doing so, agencies are continuing to recognise the need to bolster their arsenal of detection tools to meet the challenges of an increasingly sophisticated business environment.”
As regards the CEE region, 2017 did not see many landmark cartel decisions. Despite that fact, most of the national competition authorities (NCAs) have been actively pursuing cartel enforcement, with bid-rigging at the top of the agenda. The construction, aviation insurance, and car paint sectors faced particular scrutiny. However, at the same time, many CEE NCAs suffered setbacks from judicial interventions in high-profile cartel cases. In the Czech Republic, Slovakia and Poland, those interventions paved the way to changes in NCAs’ dawn raid policies.
Reflecting on the trends in relation to Central and Eastern Europe, Marta Sendrowicz, Warsaw-based partner and head of the CEE Competition team, added: “The strengthening of enforcement tools is a clear signal seen across CEE authorities. Poland, for instance, has launched a whistleblowing programme and Hungary has implemented initiatives aimed at ensuring an effective compliance culture and honed its fining guidelines. It is highly probable that other regional authorities will also consider novel means to ensure even more effective enforcement of the most harmful violations of competition law.”
Looking ahead to 2018, the report suggests that the ongoing geopolitical uncertainty will continue to influence the level of enforcement globally, including Brexit and the new officials at the helm of U.S. antitrust in the Trump administration. Nevertheless, international cooperation remains a priority aim of key agencies around the globe and there are no signs of this changing any time soon.