What A Difference Ten Years Make!

Claire Harris on DG Competition’s increasing tendency to settle without sanction


It’s not always about having the right answer: sometimes it’s about asking the right questions. Writing in in MLex AbExtra the other day on the incidence of ‘settlement’ proceedings in high-tech competition investigations, my former colleague Stephen Kinsella asked: “Why would the Commission allow a company to escape with commitments when there is no doubt in its own mind that it could have taken a decision, imposed sanctions and possibly fines?”

That question leapt to my mind when news broke that nine of the 28 Commissioners – a third of the college – opposed Almunia’s decision to strike a deal with Google. He had announced that after months of negotiation Google had proposed to display rival links on internet search results more prominently to allay competition concerns.  The deal will mean Google avoids a fine of up to $5bn. But competitors (Microsoft among them) and Commissioners (who unusually voiced their concerns) consider it is too soon to close the dossier on this one.


This begs the question what the Commission is hoping to achieve by its increasing recourse to a procedure designed for exceptional use but which is now being lauded as a ‘compromise’ used almost routinely. As Kinsella notes, 13 of the 15 cases under Article 102 closed by decision since 2009 have been settlement decisions, whereas only two have been prohibition decisions with fines.  And there are more to come: investigations against Gazprom and Samsung are high on the agenda for settlement closure.

Why is it that the outcome appears so different from the settlement procedure in cartel investigations?  A company involved in a cartel settlement still gets fined heavily – even if not as much as it would have without settling. Speed and efficient use of resources are often cited as the reason for encouraging settlements in cartel cases. It is a case of investigating thoroughly, punishing proportionately and dispatching cases quickly. And of course, the company has to admit liability.


At the other end of the enforcement spectrum, speed is also cited as a good reason for settlement –  DG Competition’s Alexander Italianer himself recently urged companies to offer settlement ‘at the first opportunity’. But if settling a case increasingly involves no sanctions, there will be little disincentive for companies to play by EU rules if all they face is a telling off from the Commission. In March 2004, the Commission ordered Microsoft to pay €497m in the Windows case. How ironic that in March 2014 we are witnessing the possibility of the Commission adopting a decision, with no fine but a promise to ‘do better in the future’, against Google in respect of a complaint by Microsoft. In such an eventuality, the 18 companies who complained about Google will receive letters rejecting their complaints. How many of these will then appeal to the Court? And at what cost not only to them but to competition policy in general?

What a difference ten years make.

Claire Harris is FTI Consulting Brussels’ Head of Competition


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