The Bottom Line
- Increased Financial Risk: Companies involved in anti-competitive behaviour across multiple EU states can now be fined by both a national competition authority and the European Commission for the same set of facts.
- A Key Safeguard: The second authority to issue a fine is now explicitly required to take the first penalty into account, ensuring the overall punishment is proportionate and not simply a double penalty.
- Compliance Strategy is Critical: This ruling underscores the need for a robust, pan-European compliance strategy. A piecemeal, country-by-country approach is no longer sufficient to manage regulatory risk.
The Details
The Court of Justice of the European Union (CJEU) has clarified a long-standing and costly question for businesses operating across the single market: can you be penalised twice for the same infringement? The case centred on a company fined by a national competition authority for price-fixing within its territory. Subsequently, the European Commission launched its own investigation. It concluded that the same actions also distorted competition across the entire EU single market and imposed its own separate, significant fine. The company argued this violated the fundamental principle of ne bis in idem—the right not to be tried or punished twice for the same offence.
In its landmark ruling, the Court navigated a careful balance between protecting fundamental rights and ensuring effective enforcement of EU competition law. The judges reasoned that the two legal interests being protected were distinct: one was the integrity of a national market, and the other was the integrity of the EU’s single market as a whole. Because these two objectives are different, the Court concluded that two separate proceedings and, therefore, two separate penalties are permissible. This confirms that companies cannot use a fine from one national authority as a shield against a broader EU-level investigation.
However, the Court’s decision came with a crucial and welcome clarification for the business community. While parallel proceedings are allowed, the principle of proportionality must be respected. The authority imposing the second penalty has an obligation to give due credit for the first. This means it must review the initial fine and ensure that the additional penalty it imposes is justified and that the total sum of sanctions is not excessive. This prevents regulators from simply piling on penalties without consideration for what has already been paid, providing a degree of predictability and fairness for companies navigating complex cross-border investigations.
Source
Court of Justice of the European Union
