Periodic penalty payment


Author Definition



A periodic penalty is a sum imposed to provide an incentive for undertakings to comply with a decision in a timely manner. Gleiss distinguishes periodic penalties from fines as the later are imposed to punish past violations, while the former are designed to prevent future offences (Alfred Gleiss and Martin Hirsch Common Market Cartel Law, 3rd American ed. Bureau of National Affairs, 1981, 547-548). The decision to be complied with may be substantive, such as to bring an infringement to an end, or procedural, such as to supply information or to submit to an investigation. A daily amount is fixed and accrues for each day that the undertaking fails to comply with the decision. The final penalty is the product of the fixed amount multiplied by the number of days of non-compliance. The periodic penalty is separate from any penalty imposed in the decision it is seeking to secure compliance with.



Article 24 of Regulation 1/2003 (as did Article 16 of Regulation No 17) and Article 16 of Directive (EU) 2019/1 respectively allow the EU Commission and the competition authorities of EU member states to impose periodic penalties to re-enforce compliance with a number of their decisions. Penalties may be imposed to compel compliance with a decision to bring an infringement to an end; a decision ordering interim measures; a decision accepting binding commitments; a decision to supply complete and correct information; and a decision to submit to an inspection (Article 24(1) of Regulation 1/2003). Initially the maximum daily fine was in the order of $1000 USD (Christopher Bellamy and Graham D Child Common Market Law of Competition, Sweet and Maxwell, 1973, para. 1219 and Frederick Honig Cartel Law of the European Economic Community, Butterworths, 1963, 71-73). The maximum daily penalty has increased over time and currently stands at 5% of world-wide turnover.

As is made clear in the Commission’s Antitrust Manual of Procedures from March 2012, Article 24 of the Regulation sets out a two stage process. In the first stage there is a threat to impose the penalty (See for example Commission Decision of 19 December 2007 in Cases Comp/34.579, Comp/36.518 and Comp/38.580 MasterCard, para 774). In the second stage the actual penalty is imposed. Ordinarily, the mere threat that the penalty will be imposed is sufficient to secure compliance with the decision. As such, reaching the second stage of the process, and taking a decision to actually impose the threatened penalty is rare. This occurred for the first time in Microsoft, when the Commission threatened to impose a periodic penalty of €1.5 million for each day that Microsoft failed to bring an infringement to an end. The infringement continued and for the period between 16 December 2005 and 20 June 2006 a fine of €280.5 was fixed (IP/06/979: Commission imposes penalty payment of €280.5 million on Microsoft for continued non-compliance with March 2004 Decision, 12th July 2006). The Commission took a further decision threating that if Microsoft failed to bring the infringement to an end the periodic penalty would increase to up to €2 million per day and further increase to up to €3 million per day if the infringement had not been brought to an end within six months (MEMO/06/430: Competition: state of play on Microsoft’s compliance with March 2004 Decision, 15th November 2006). On 27 February 2008, the European Commission announced that it has imposed a penalty payment of €899 million on the basis that Microsoft had not complied with the infringement decision until 22 October 2007 (IP/08/318, SPEECH/08/105 and MEMO/08/125). The penalty was reviewed by the General Court and reduced from €899 million to €860 million (Case T-167/08, Microsoft v Commission, ECLI:EU:T:2012:323).

Periodic penalties have more often been used in response to failures to supply information and so encourage provision of information in a timely manner (See Baccarat OJ 1991 L79/16 and Commission Decisions of 8 February 2010 in Case COMP/39.523 and 3 September 2009 in Case Comp/39.523 Slovak Telecom). Article 15 of Regulation 139/2004 (on merger control) allows the EU Commission to impose periodic penalty payments of up to 5% of aggregate daily worldwide turnover in order to reinforce compliance with a decision under Article 11(3) to supply complete and correct information; a decision under Article 13(4) to submit to an inspection; a decision under Article 6(1)(b), Article 7(3) or Article 8(2) to comply with an obligation; and a decision under Article 8(4) or 8(5) to comply with a measure. This power has been used against undertakings that are not party to the merger transaction for failing to supply accurate information.



Commission’s Explanatory memorandum to its proposal for Regulation 1/2003 COM (2000) 582 final.

European Commission Antitrust Manual of Procedures: Internal DG Competition working documents on procedures for the application of Articles 101 and 102 TFEU (March 2012).

Regulation 1/2003.


  • University of Cambridge


Okeoghene Odudu, Periodic penalty payment, Global Dictionary of Competition Law, Concurrences, Art. N° 20090

Visites 5860

Publisher Concurrences

Date 1 January 1900

Number of pages 500


Institution Definition

The Commission may by decision impose periodic penalty payments in order to compel an undertaking to stop an infringement of competition rules in accordance with an earlier decision. In such a case, a daily amount is fixed which has to be paid for every day the infringement continues after the date stipulated in that decision. The Commission enjoys the same power where an undertaking refuses to supply complete and correct information which has been requested by decision or to submit to an investigation which has been ordered by decision. European Commission

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