BOS 5 - Sanctions

ICN Annual Conference, Sydney30 April 2015

ICN 2015 - CARTEL WORKING GROUP BOS 5 LEE CHEOW HAN

ASSISTANT CHIEF EXECUTIVE (LEGAL & ENFORCEMENT)COMPETITION COMMISSION OF SINGAPORE

• ADMINSTRATIVE CARTEL ENFORCEMENT REGIME- Prohibition of anti-competitive agreements or practices and conduct under

section 34 of the Competition Act - Enforcement power under section 69 - Right of appeal to the Competition Appeal Board under section 71- Appeal on point of law to the High Court and Court of Appeal under section

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• TARGET OF SANCTIONS- Directions to pay financial penalties imposed on “undertakings”, not

individuals- Direction to modify or terminate agreement, dispose of such operations,

assets or shares of undertaking etc.- Power to register directions with the State Courts to secure compliance

under section 85

SANCTIONS

• DISCRETION TO IMPOSE SANCTIONS- Imposition of financial penalty is discretionary- Commission is independent and comprises of members appointed by the

Minister on the basis of their ability and experience in industry, commerce or administration or their professional qualification

- Financial penalty imposed is subject to a statutory cap under section 69(4)

• METHODOLOGY - Discretion exercised at various steps in calculating financial penalties- Seriousness of infringement and impact on market- Aggravating and mitigating factors e.g. intentional versus negligent, repeat

offender, cooperation during investigations- Specific and general deterrence - Adjustment for leniency applicant

SANCTIONS

© 2015 CCS

ICN Cartel WG - BOS 5 Sanctions

Maria João MelíciasMember of the Board

AdC – Autoridade da Concorrência(Portuguese Competition Authority)

April, 30 2015

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Cartel sanctions in Portugal - Types and Targets

• Up to 10% of annual turnover/aggregated turnoverFines for undertakings & associations

• Board members & those responsible for the management or supervision of relevant business units - up to 10% of annual gross income

• No imprisonment

Fines for individuals

• In bid rigging: ban from public tenders - up to 2 years• Publication of infringement decisions in the press

Ancillary sanctions

Admonition?

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Cartel sanctions in Portugal - Nature and Level of discretion

• Neither strictly administrative nor criminal• AdC holds powers to impose sanctions – appeal does not

stay the effects of the fine• BUT judicial review entails full rehearing of the case/trial

court• e.g. cross examination, powers of full jurisdiction, etc.

Nature: tertium genus

• Power to set enforcement priorities/opportunity principle• Legal criteria for setting fine not exhaustive • Discretionary aspects of fining methodology

• e.g. 0-30% affected sales X duration

Level of discretion

French System (1)

• Administrative fines on undertakings

Com. Code, art. L 464-2Notice of 16 May 2011 on the

Method Relating to the Setting of Financial Penalties

Imposed by the FCA (Autorité de la concurrence) under the control of the CA Paris

• Possible criminal sanctions on individuals

Com. Code art. L 420-6If any natural person fraudulently takes a

personal and decisive part in the design, organisation or implementation of the practices referred to in Articles L. 420-1 and L. 420-2, such person shall be punished by a prison sentence of four years and a fine of 75,000 Euros.

No application these last ten years

French System (2)

2013: 10 infringement decisions; Total amount: 160 M € Main decisions: 13 D 12 cartel commodity chemicals: 79 M; 2 generics

cases 13 D 11 (plavix): 40 M; 13 D 21 (Subutex): 16 M

2014: 7 infringement decisions: Total amount: 1 013 M € Main decision: 13 D 19, home and personal care products (345,2 M (home) + 605,9 M (personal))

2015 (20 April): 3 infringement decisions: 198 M € Main decision: 15 D 03 (cartel fresh dairy products: 192 M €

SANCTIONS ON CARTELS UNDER THE TAIWAN FAIR

TRADE ACT

Andy Chen

Department Chair & Associate Professor, Department of Financial and Economic Law, Chung Yuan Christian University,

Taiwan

ICN 2015 Annual Meeting-Cartel Working Group Breakout Session 5 Sydney, Australia

April 30, 2015

CRIMINAL SANCTION Article 34 of the TFTA (recently revised in February 2015): “If any enterprise violating the provisions of Articles 9 or Article 15 is ordered by the competent authority pursuant to paragraph 1 of Article 40 to cease therefrom, rectify its conduct, or take necessary corrective action within the time prescribed in the order, and after the lapse of such period, shall such enterprise fail to cease therefrom, rectify such conduct, or take any necessary corrective action, or after its ceasing therefrom, shall such enterprise have the same or similar violation again, the actor shall be punished by imprisonment for not more than three years or detention, or by a fine of not more than one hundred million New Taiwan Dollars, or by both.” The “administrative action takes precedence over

criminal liabilities” principle

ADMINISTRATIVE SANCTION Article 40 of the TFTA

1. The TFTC may order the defendant to cease, rectify, or take necessary corrective action on the investigated cartel within the time prescribed by the TFTC

2. The TFTC may assess upon the defendant an administrative fine of not less than one hundred thousand and no more than fifty million New Taiwan Dollars (increased after the 2015 revision)

3. In cases of non-compliance, administrative fines in the amount of not less than two hundred thousand and no more than one hundred million New Taiwan Dollars could be consecutively imposed by the TFTC until the investigated cartels are ceased or rectified. (increased after the 2015 revision)

4. For “serious violations”, the TFTC may impose an administrative fine up to 10% of the total sales income of an enterprise in the previous fiscal year if the enterprise is deemed by the TFTC as in serious violation.

5. The definitions of the total sales income of the previous fiscal year and serious violations, and the factors considered for fine calculation are provided by Regulations.

ICN CWG BOS 5

Sanctions

Brent Snyder

Deputy Assistant Attorney General for Criminal Enforcement

U.S. Department of Justice

Antitrust Division

April 30, 2015

U.S. Framework for Antitrust Sanctions

• Criminal system– Fines for corporations

• Maximum fine of $100M or twice the gain or loss from the offense

– Incarceration and fines for individuals• Maximum term of incarceration is 10 years• Maximum fine is $1M or twice the gain or loss from

the offense

• Judicial approval required for all sanctions

U.S. Framework for Antitrust Sanctions

• Most significant factor: volume of affected commerce– May include all sales during the period of the conspiracy, without

regard to whether individual sales were made at the target price– Typically, affected commerce is determined by calculating U.S.

domestic or import commerce affected by conspiracy

• Other important factors include:– Number of employees in the company– Senior management participation or knowledge– Obstruction of justice– Individual’s role in the conspiracy– Acceptance of responsibility and cooperation