The General Court ruled that the Commission may divert from the fine range indicated in a settlement procedure in a subsequen…

The General Court ("GC") upheld a decision of the Commission imposing a fine of almost EUR 60 million on Timab for its participation in the animal feed phosphate cartel (Timab Roullier v Commission T-456/10).

Initially, the Commission opened settlement procedures for all participants in the cartel. However, Timab decided to walk out after being informed that the fine to be imposed would be in the range of EUR 41 to 44 million. Since then, the Commission had two parallel procedures running concerning the same cartel: the standard procedure for Timab and the settlement procedure for the remaining undertakings (see the Commission decision following the settlement procedure). Ultimately, the Commission imposed a fine of almost EUR 60 million on Timab.

Timab claimed before the GC that the Commission misused its powers by penalising it for abandoning the settlement procedure. Also, it claimed that the Commission was in fact not allowed to deviate from the range indicated during the settlement procedure.

The GC dismissed Timab's claims and ruled that the Commission applied the same methodology of calculating the fine in both procedures and thus did not penalise Timab. Moreover, the GC ruled that the Commission is not bound by the range indicated during settlement discussions since the settlement procedure is a voluntary procedure distinct from the standard procedure.

Interestingly, although the Commission ultimately defined a more limited scope of the infringements in its decision in the standard procedure than it originally had done in the settlement procedure, the fine turned out to be higher as a result of a reassessment of the reductions that would have been granted earlier. According to the GC, the Commission may, as it did in this case, take new information into account, redefine the duration and scope of the cartel and readjust the amount of the fine.

This is the first GC judgment on the settlement procedure. The Commission introduced the settlement procedure in 2008. An increasing number of Commission investigations are resolved on the basis of the settlement procedure. Since participants in settlement procedures accept their liability, appeals are rare.

This ruling shows that there are risks involved in abandoning a settlement procedure. Not only will the Commission withhold the standard reduction of the fine of 10% offered in settlement procedures, the Commission may also take new information into account and readjust the scope of the cartel. This is likely to result in higher fines being imposed under the standard procedure than in settlement procedures, quite apart from the standard 10% reduction in settlement procedures.