There is an intense debate in competition law circles about the seemingly high level of fines levied by the European Commission on companies found guilty of EU competition law violations (notably compared with unduly modest sanctions imposed in other areas of law, such as insider trading, money laundering, misleading financial information, or environmental disasters). There is concern in many quarters not only that the Commission's policy of corporate punishment is an ineffective means of deterrence (after all, cartels keep forming despite increasingly high fines), but that handicapping European companies-the primary victims of the current policy-with headline-grabbing fines is hardly in tune with the Europe 2020 Strategy, which is designed to boost, not weaken, European industry. Recent research shows that on at least three occasions in the last 10 years, DG COMP has refused a request for inability-to-pay relief just weeks or months before the company requesting it was declared bankrupt. It seems that in all three cases the Commission ended up recovering none of the fines imposed. True, these are extreme cases, but the dangers associated with a single-track punishment mechanism are becoming evident in light of the current economic malaise. It is time to reconsider the current policy, to follow the lead set by other ECN members, and to search for a more sophisticated toolbox-designed to deter individuals, but not to put companies, jobs, and investment at risk.
This article tackles three issues.
This brief article does not purport to hold all of the solutions, but would hope to stimulate a debate on how best to upgrade the current system of deterrence.