Inability-to-Pay Fine Reductions in European Cartel Cases

Abstract

The European Commission can consider ‘the economic and social context’ of cartel members when imposing fines. This article investigates the process behind the inability-to-pay fine reductions. These fine reductions are rare and its process opaque. This article looks at the European Commission opinions and the case law to shed some light on the process. This article also collects data on companies involved. We found that 18.3% of applicants were granted some reduction. Applicants behave as expected: companies that are more likely to become insolvent are more likely to apply for a fine reduction. But the European Commission does not grant fine reduction based on insolvency propensity. These results show the importance of transparency to avoid further waste of resources in applying and investigating fine reduction claims. Inability to Pay, Fine Reduction, Cartel, European Commission