Timing, geographic boundaries pose hurdles to coordinating cartel fines, says EU official

16 June 2016. By Joshua Sisco

Cartel fines imposed by different jurisdictions as part of the same international investigation focus on different geographic commerce and therefore are complementary, a senior European Commission official said.

“You can impose different fines because you are capturing different commerce,” Marisa Tierno Centella, deputy head of the commission’s cartel enforcement unit said Thursday at a conference in Chicago*.

Highlighting the differences in EU and US cartel enforcement, she said that because of them, the two jurisdictions are better equipped to work together when investigating the same international conspiracy.

Competition violations do not warrant prison sentences in Europe as they do in the US. “You cannot impose just more years to a prison sentence for the same cartel here and there,” Centella said.

But fines are “not redundant, even when we look at the same international cartels” because of the geographic differences, she said.

Following Centella’s remarks, Baker & McKenzie partner Darrell Prescott posed a question to a panel of attorneys on whether corporate fines are ever coordinated based on an ability to pay.

Prescott said that for a mid-sized multinational, facing fines from multiple jurisdictions “might end up hobbling the company’s ability to innovate and compete going forward, which would be a counterproductive result.”

“We do talk to other jurisdictions about the methodologies they use to determine the fine because, as you heard today, there are different approaches about how you get to the number,” said Marvin Price, director of criminal enforcement in the US Department of Justice’s antitrust division. “So we do talk to jurisdictions about that so we can have a better sense of what they’re thinking about and what their fine is likely to be,” Price said.

But there is also a timing issue, Price said. Since the US often moves first when fining companies for cartel violations, other countries may not even know yet if they will impose a fine. That makes it difficult to take the ability to pay into account, he said.

Some jurisdictions are concerned with overlapping fines. Earlier this month, a report by Japan’s Ministry of Economy, Trade and Industry called on antitrust regulators around the world to coordinate enforcement actions and adjust penalties imposed on companies operating in multiple jurisdictions.

In international cartel cases, fines could be imposed many times under certain conditions, the report cautioned, especially in cases concerning market division, indirect sales of components and indirect sales involving exports.

**Chicago Forum on International Antitrust Issues.” Northwestern School of Law. Chicago, Illinois. June 16-17, 2016. **

	Eliot Gao