The revision of the method for determining the size of fines has inter alia happened as a result of the recent implementation of the ECN+ Directive, which has increased the decision-making powers of the SCA, including providing the SCA with the power to impose fines on companies on its own.
The main purpose of the revised method and the issued guidelines concerning this is to clarify how the SCA assesses and determines the size of fines for competition law infringements in general.
The newly issued guidelines concerning the new method both describe the method for calculating the size of the fine and provides more transparency in how certain circumstances may affect the size of the fine.
The size of the fine is determined in two steps that are set out in chapter 3, article 6 and 8-11 in the Swedish Competition Act.
The first step is the establishment of a penalty value for the company which aims to reflect the severity of the infringement and to ensure the deterrent effect of the sanction. The SCA carries out the assessment of the severity of any infringements on a case-by-case basis by considering the following circumstances into account:
- The turnover of the company on the relevant market
- The seriousness and duration of the infringement
In the assessment of the seriousness the following may be included together with the turnover:
- The nature of the infringement
- The actual or potential impact on the market
- The geographical area impacted by the infringement
- The effect of the infringement towards consumers. For example, if more than 30% of a company’s sale is affected by the infringement, it is generally regarded by the SCA as serious.
The duration of the infringement is determined by multiplying the value of the severity by the number of years of the infringement.
Step two consists of the adjustment of the penalty value. This is done by considering the existence of any aggravating or mitigating circumstances which may lead to respectively an increase or a decrease of the determined penalty value.
Aggravating circumstances e.g. include that the company has had a leading role in the infringement, that the company has previously infringed competition law or that the infringement has had an anti-competitive intent. Conversely, mitigating circumstances may be found if the infringement is the result of negligence on behalf of the company or the company’s participation has been limited. It is, however, not considered as a mitigating circumstance if the company has only infringed competition law as a result of pressure from another company or that the company itself has suffered from the infringement.
Moreover the SCA has specifically stated that in exceptional cases the SCA may set the method aside and instead impose a symbolic fine.
Following these changes, the new Swedish method will be in closer conformity with the general guidelines of the EU Commission on the method of setting fines.
The method described in the issued guidance is not binding to the courts but clearly shows what approach the SCA will use when a fine is imposed for the infringement of competition law.
For more information please contact Morten Nissen and Alexander Brøchner.