Not all monetary payments made as a result of antitrust or competition law violations are fines. In most jurisdictions cartelists and other violators can be sued in court to pay damages to buyers that incurred supra-competitive overcharges or, in some cases, to suppliers that received sub-competitive prices. Damages payments are principally from settlements. Governments can themselves be the victim of bid rigging and other illegal activity, and governments usually can act as plaintiffs and collect antitrust damages. Occasionally, courts order both fines and mandatory compensation to victims; the latter is not a fine, but a form of restitution. Similarly, sometimes violators are required to disgorge their illegal profits, and these also are not fines.
In addition to fines for violating antitrust or competition laws, in most jurisdictions courts can impose fines on a company that fails to follow various procedural or reporting rules, such as partially or completely consummating a merger in the absence of final government approval (“gun-jumping”) or failing to give advanced notice of transactions to the authority. While a few jurisdictions mention punishment or compensation as the purpose of fines, contemporary surveys of antitrust authorities tend to confirm that deterrence is their primary or sole aim. Most regimes seek general deterrence rather than specific deterrence. Many enforcement authorities follow published fining guidelines intended to deter cartel formation optimally and treat offenders in a proportional and transparent manner. These fines frequently are increased if the violator is a recidivist, and they are decreased for defendants granted leniency. Although payments of fines are mandatory, in most jurisdictions they can be appealed. Parallel non-monetary sanctions may include conduct restrictions, structural orders, and imprisonment.
In the United States, overt price fixing, bid rigging, dividing territorial markets, allocating customers, and similar collusive business conduct can give rise to antitrust fines as can various reporting violations. The companies involved, or the individuals involved, or both, can be fined. Individual fines are far less than corporate fines. Although fines in the United States can only be imposed by courts, as a practical matter the maximum and minimum cartel fine ranges are determined by recommendations of prosecutors justified by the U.S. Sentencing Guidelines (USSGs). In practice, prosecutors have wide discretion to depart from the USSGs’ range because they can interpret culpability factors, negotiate the amount of affected commerce, and offer large discounts for defendants’ cooperation during prosecution. The maximum corporate fine since 2004 is $100 million (or alternatively double the economic harm); the maximum for individuals is $5 million. As a practical matter, however, the enforcers have a variety of techniques they can use to raise the effective maximum fines to much higher levels.
In the European Union, fines for illegal price fixing and related cartel activity closely follow the EC’s Fining Guidelines. Although prosecutors must adhere to this document’s numerical ranges, they also have significant interpretive discretion. There is no maximum euro fine for competition law violations, but they are limited to 10% of the violator’s ultimate parent company’s global sales in all lines of business in the year prior to the Decision. This limit is rarely binding, however, and the actual levels of fines imposed are usually much lower. However, unlike the U.S. approach, the EC Fining Guidelines apply to all types of competition law violations. For example, Google has been fined on multiple occasions a total of nearly the equivalent of $10 billion for abuse of dominance involving the Internet search market. The National Competition Authorities (NCAs) of the EU’s Member States employ EU competition law and the EC Fining Guidelines to determine their levels of fines for the competition law violations they prosecute. Neither the EU nor the NCAs imposes fines on the responsible individuals. EC competition law fines are often appealed to European courts, and a high proportion of these appeals result in small downward adjustments in fines, mostly because of procedural errors. In recent years EU fines have been larger than US fines. However, the sum of US fines and private damages actions have been more than the corresponding EU totals.
Most of the world’s remaining competition or antitrust enforcement authorities have a fining regime closer to the EC approach than to the US approach. A few jurisdictions (e.g., South Africa) have hybrid anti-cartel laws.