Category Archives: Penalties

Fairness between infringers: the need for consistency in punishments

Competition lawyers may want to brush up on their criminal law. The Court of Appeal’s recent judgment in Interclass Holdings v OFT [2012] EWCA Civ 1056 borrows criminal law principles to guide the calculation of penalties imposed.

The appeal was a further instalment in the litigation arising from the OFT’s largest ever investigation under the Competition Act 1998 concerning collusive tendering practices in the construction industry. A round of litigation before the Tribunal had resulted in substantial reductions in the fines imposed by the OFT on many of the appellant undertakings. This further appeal by Interclass concerned the application by the Tribunal of a 100 per cent uplift to the provisional fine payable by Interclass with the intention of adequately deterring both Interclass and other undertakings from committing infringements in the future.

The Court of Appeal accepted that the Tribunal had correctly followed a staged approach to the calculation of the penalty, beginning with starting figures based on the seriousness of the infringements and then proceeding to consider whether an uplift should be applied for deterrence.

However, the Court borrowed two important concepts from criminal law. Continue reading

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Filed under Agreements, Penalties

“Imprecise legal concepts” are no excuse

The second chapter of the Microsoft saga unfolded on 27 June 2012, when the General Court largely upheld the €899 million periodic penalty payment imposed on Microsoft for failing to share adequate interoperability information with its competitors. However, it also offered some comfort to proprietors of intellectual property rights, with the Court seemingly retreating from some of the more expansive views expressed in Microsoft I.

See Case T-167/08 Microsoft Corp. v European Commission.

The case follows the Commission’s 2004 decision that Microsoft had abused its dominant position by withholding interoperability information, upheld by the General Court in Microsoft I. As part of the remedy, Microsoft was required to provide access to the information on reasonable and non-discriminatory (“FRAND”) terms, to allow interoperability between the dominant Windows architecture and rival servers. It failed to do so, and in February 2008 the Commission imposed the penalty which is the focus of Microsoft II.

The judgment is important for two reasons. Continue reading

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Filed under Abuse, Penalties