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COVID-19 impacts level and payment of antitrust fines

Home, but not alone: Commission may complete dawn raids from home

COVID-19 impacts level and payment of antitrust fines

03.09.2020 NL law

As well as granting companies leeway on certain COVID-19 initiated collaborations (see our May 2020 newsletter), the coronavirus outbreak has also led competition authorities to take a more lenient stance towards fine calculations and payments. The European Commission has extended the due date for fine payments by an additional three months in response to potential short-term liquidity issues brought about by the pandemic. Similar reasons led the Dutch Trade and Industry Appeal Tribunal to reduce a EUR 1 million cartel fine to just EUR 10,000.

Companies should realise that competition authorities are willing to take the impact of the coronavirus outbreak and the resulting short-term liquidity issues into consideration when dealing with cartel fines.

Extended payment terms for ethylene purchasers

In a recent cartel settlement, the European Commission imposed fines totalling EUR 260 million on a number of ethylene purchasers. According to the Commission, the companies coordinated their price strategies to purchase the chemical ethylene at the lowest possible price. These buying cartels are also on the radar of other competition authorities (see our December 2019 newsletter).

Contrary to more ‘conventional’ price-fixing cartels (where companies collude to increase their sales prices), buying cartel participants collude to reduce purchase prices. The Commission therefore used the value of purchases – instead of sales – to calculate the fine level. Similar to its fine calculations in the car battery recycling purchasing cartel, the Commission applied a 10% increase to avoid under-deterrence due to the (presumably) artificially lowered purchase prices (see our June 2019 newsletter).

Interestingly, the ethylene purchasers were granted an additional three months – on top of the usual three – to pay their fines. According to the Commission’s press release, “the impact of the coronavirus outbreak on all sectors and potential short-term liquidity issues of companies” was reason to prolong the due date for the payment of fines; a gesture likely welcomed by companies currently faced with cartel fines that are struggling to keep afloat.

Fine reduction by Trade and Industry Appeals Tribunal

The impact of the pandemic was also one of the reasons for the Trade and Industry Appeals Tribunal (CBb) – the highest court for public enforcement of cartel cases – to reduce a cartel fine from EUR 1 million to EUR 10,000.

In 2017, the Dutch Authority for Consumers and Markets (ACM) imposed a fine of EUR 2,789,000 on a subsidiary and its parent company for participating in a cartel. During the objection procedure, the subsidiary’s fine was reduced to EUR 1,935,000, and the parent company’s fine was withdrawn due to inability to pay. On appeal, the Rotterdam District Court concluded that the subsidiary had participated in the cartel but reduced the fine to EUR 1 million on grounds of proportionality. The parent company also appealed the cartel decision because, even though its fine had been withdrawn, its liability for the cartel infringement remained intact (see our March 2020 newsletter). This appeal is still pending.

On further appeal, the subsidiary argued that its immediate danger of bankruptcy meant that the EUR 1 million fine was no longer proportionate. The CBb requested the ACM’s opinion on a proportionate fine level when looking at the subsidiary’s current financial situation. The ACM deemed a fine of EUR 10,000 proportional, taking account of the following exceptional circumstances:

  1. the pending appeal proceedings by the parent company causing the subsidiary’s fine level to remain uncertain for too long;
  2. the subsidiary’s current financial situation and claimed urgency, and
  3. the corona crisis and the resulting consequences for the subsidiary.

As the subsidiary did not contest the fine level, the CBb ruled a fine of EUR 10,000 appropriate and necessary and annulled the Rotterdam District Court’s ruling in so far as it set a fine of EUR 1 million on the subsidiary.


The above developments show the willingness of competition authorities to take account of the corona crisis, at all stages of the cartel procedure. Companies struggling in the current climate should take this willingness to heart when faced with cartel fines.


This article was published in the Competition Newsletter of September 2020. Other articles in this newsletter:


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