1. Peter Stauber, LL.M. / Berlin, Germany
10 February 2015
Sanctioning Antitrust Infringements in Germany – Administrative & Criminal Sanctions for Individuals and Companies International Competition Network – Cartel Working Group Subgroup 1
Peter Stauber, LL.M. / Berlin, Germany

2. Date
Outline
System of administrative and criminal sanctions in Germany for antitrust infringements
Similarities and differences
Interaction between administrative and criminal system
Focus on sanctions for individuals

3. Administrative sanctions
Date
General principles (1)
Administrative sanctions
Criminal sanctions
Competent authority
Federal Cartel Office
Federal States’ Cartel Authorities
Public Prosecutor  prosecution
Criminal courts  sentencing
Relevant Law
Act against Restraints of Competition (ARC)
Administrative Offences Act
Criminal Code
Offences
Violation of antitrust provisions of:
ARC
Art. 101, 102 TFEU
Bid-rigging
(possibly also: fraud, breach of trust, bribery)
Sanctions
Fines
Monetary penalty & imprisonment
Discretion?
Principle of discretionary prosecution
Wide discretion at:
Initiation of proceedings
Imposing of sanctions
Purpose of sanction: Deterrence and/or skimming off of the illegal profit (uncommon)
Calculation of fines for undertakings predetermined by FCO’s Fining Guidelines of 2013
Principle of legality
General rule: Prosecution obligatory if enough evidence at hand
Statutory exemptions:
Criminal charges insignificant / no public interest for prosecution
State interests of higher priority (e.g. political offence; offence committed abroad)

4. Administrative sanctions
Date
General principles (2)
Administrative sanctions
Criminal sanctions
Individuals
Directly involved
No distinction between forms of involvement (perpetrator, instigator, accessory)
Regardless of direct involvement:
Organs, representatives, authorised proxies of a company, business owners
Liable for offences committed by employees
Reason: violation of supervisory duties
distinction between forms of involvement (perpetrator, instigator, accessory)
Undertakings
Undertaking liable if:
Involvement of company representatives in antitrust infringement, and
Company gained / should gain profit from it
(Currently) no criminal sanctions on undertakings

5. Administrative sanctions
Date
Administrative sanctions
Administrative Sanction = mixture of administrative and criminal law
Administrative part
investigation and sanctioning (setting of fines) by administrative authority
review by independent court only upon appeal
Criminal part
Procedural: applicability of Code of Criminal Procedure
Basic principles of rule of law apply:
Presumption of innocence
Prohibition of retroactivity
“Nulla poena sine lege certa“-principle
maximum fine on undertakings of 10% of worldwide turnover must not be applied as “capping threshold“, but as upper limit fine (Federal Court of Justice, dec. dd. 26 February 2013 – KRB 20/12)
Calculation method of European Commission is considered unconstitutional in Germany…

6. Criminal sanctions Bid-rigging (Sec. 298 CC) limited applicability
Date
Criminal sanctions
Bid-rigging (Sec. 298 CC)
limited applicability
preconditions
Procurement procedure
anti-competitive agreement concerning bid
submission of a bid (on the basis of the anti-competitive agreement)
Applicable also to private procurement procedures (if procedural structure similar to public procurement procedure)
What if procurement authority is aware of anti-competitive agreement or has even instigated the agreement?
What if no bid has been submitted?

7. Interaction between administrative and criminal sanctions
Date
Interaction between administrative and criminal sanctions
Priority of criminal prosecution
Administrative and criminal proceedings not possible simultaneously
NCA bound by criminal sanction  ne bis in idem
If criminal prosecution is terminated, administrative sanctions might be imposed
However, criminal procedure does not bar administrative sanctions against
undertakings
individuals not involved in the criminal offence

8. Interaction between administrative and criminal sanctions Example
Date
Interaction between administrative and criminal sanctions Example
Construction company Brick and Mortar (BAM) wants to participate in public procurement procedure by airport authority for construction of two new airport terminals. BAM’s sales director Karl Kartell agrees with sales manager of competitor Sticks&Stones (SAS) as well as head of public airport authority that (1) SAS submits inflated bid for terminal 1 so that BAM shall win, (2) BAM submits inflated bid for terminal 2 so that SAS shall win, and (3) BAM and SAS pay head of airport authority a kickback of 5%.
Kart Kartell, SAS’ sales manager and head of airport authority could be prosecuted for bid rigging, bribery of a government official (and possibly also for breach of trust vis-à- vis their respective employers)
BAM and SAS might be fined by (federal or regional) competition authority with up to 10% of worldwide turnover
Managing directors of BAM and SAS might be fined individually for failure in properly supervising their respective sales directors (even if they lacked knowledge of anti- competitive agreement)
Involved individuals and companies can be “blacklisted” for future procurement procedures

9. Sanctions for antitrust infringements by individuals
Date
Sanctions for antitrust infringements by individuals
Administrative sanctions
Criminal sanctions
Range of sanctions
Minimum 5 Euro
Maximum 1 mln Euro
Monetary penalty or prison sentence (up to 5 years)
Aspects in sanctioning
Gravity of the offence
Degree of fault
Financial situation of the offender (minor importance)
Subjective factors (motives, objectives etc.)
In practice
Basic fine = gross annual income
Adjustments (increase / decrease) according top specifics of case
Possible: symbolic fine for “small fry” to avoid appeals and thus safeguard sanctioning of undertaking
Sanctions for bid rigging (2013):
35 individuals
All prison sentences suspended
Monetary fines: mostly below 90 daily fines

10. Calculation of antitrust fines for undertakings (1)
Date
Calculation of antitrust fines for undertakings (1)
Federal Cartel Office‘s Fining Guidelines (25 July 2013)
Statutory framework of fines
Statutory minimum: 5 Euro
Statutory maximum 10% of worldwide group turnover
Case specific maximum: 10% of the offence-related turnover multiplied with a factor based on worldwide turnover of undertaking
Example: Cartel Corp. has worldwide turnover of 3 bln Euro. German subsidiary Kartell- GmbH participates in price fixing concerning sale of product X in Germany. Duration of price fixing is 5 years; Kartell GmbH’s annual turnover with product X in Germany was 100 mEuro.
Statutory maximum: 300 mln Euro (= 10% of 3 bln Euro)
Case-specific maximum: 200 mln Euro (= 10% of [100m Euro x 5years] x 4)
< 100 m€
100 m up to 1 b€
1-10 b € b€
> 100 b€
2-3
3-4
4-5
5-6
>6

11. Calculation of antitrust fines for undertakings (2)
Date
Calculation of antitrust fines for undertakings (2)
Determination of the fine based on case-related criteria
offence-related
type and duration of the infringement
size of affected market
relevance of undertakings on affected market
socio-economic relevance of affected products
degree of organization (“incidental” infringement vs. professional “cartel bureaucracy”)
offender-related
role of undertaking in the infringement (instigator / forced participant)
degree of culpability
repeat offender
financial/economic capacity of offender  in/ability to pay

12. Thank you for your attention!
Date
Thank you for your attention!
Expertise
European, German and Hungarian antitrust and competition law: national and international merger control, cartel investigations, compliance advisory, antitrust litigation including cartel damage claims
International Franchising
Career
Legal studies in Berlin and Dresden, Leuven and Budapest
Work experience with major international law firms in Budapest, Brussels, Moscow and New York
With Noerr since 2007
Languages
German, English, Hungarian, Russian and French
Distinctions
Leaders in their Field for Kartellrecht "Corporate M&A: Competition" in Germany and Hungary, Chambers Global (2014)
Peter Stauber, LL.M.
Associate Partner
Noerr LLP
Charlottenstrasse 57
10117 Berlin
Germany