Competition authorities have imposed substantial fines for competition law violations over the last few decades and it is an international consensus that monetary sanctions against corporations are essential to deter anticompetitive conduct.This report compares Australia's competition sanctions regime to that of a number of other major OECD jurisdictions. It can be downloaded at oe.cd/2es.

1. Pecuniary Penalties
for Competition Law
Infringements in
Australia
2018
Available for download at
oe.cd/2es

2. Background
Australia’s system for imposing sanctions for breaches of
competition law is capable of delivering substantial and
deterrent sanctions for such breaches. In recent years,
more and more important cases have been brought before
the courts.
In 2016, the OECD Global Forum on Competition held a
discussion on Sanctions and Antitrust cases.
Building on this work, Australia has asked the OECD to
review its pecuniary sanctions regime and compare it with
the practices of a number of other OECD jurisdictions.

3. Background
Several common steps are observed in the setting of fines:
• determination of basic fine;
• adjustments (including aggravating and mitigating
circumstances);
• comparisons to limits; and
• considerations related to leniency programmes.
A majority of competition authorities refer to the relevant
turnover as the basis for the calculation of the fine while
other authorities calculate basic fine to be imposed with
reference to the global turnover.

4. Overview of setting fines in Australia
1. Federal Courts have power to set pecuniary
penalties
2. Accusatorial System (typical of common law)
3. Can be civil or criminal
4. Penalties set following a process of ‘instinctive
synthesis’
5. Taking into account a large number of
aggravating and mitigating criteria
6. Practical importance of agreed penalties

5. Overview of setting fines worldwide
1. All jurisdictions have the ability to impose
pecuniary penalties and other penalties
2. Main goal of pecuniary penalties is deterrence
3. All jurisdictions follow a set methodology, which
is publicly available:
• Set basic penalty, which reflects some measure of the
economic impact of the competition infringement
• Apply a large number of mitigating or aggravating
factors
• Final adjustments
• Immunity and Leniency

6. Steps
• Identify international best practices & comparator
• Carefully study the Australian Regime
• Analyse the Data
Comparator: A good sample of established competition
jurisdictions, providing a valuable mix of characteristics
that reflect the variety of competition law regimes across
the world and illustrate the breadth of approaches in
different legal systems.
Selected jurisdictions:
European Union Germany
Japan Korea
United Kingdom United States

7. The Base Penalty- Initial Measure
Countries Initial Measure
European Union Value of sales in the relevant market
Germany Turnover from sales connected with infringement
Japan Amount of sales or purchases of goods or services in question
Korea
Turnover of from the sale of goods or services in specific transaction
areas
United Kingdom
Turnover in the relevant product and geographic market affected by
the infringement
United States Volume of commerce in goods or services affected by the violation

8. The Base Penalty- Rate
Countries Initial Measure Maximum Rate
European Union Value of sales 30%
Germany Turnover 10%
Japan Amount of sales or purchases 1%-10%
Korea Turnover 0.5%-10%
United Kingdom Turnover 30%
United States Volume of commerce 20%

9. The Base Penalty- Time Dimension
Countries Initial Measure How long
European Union
Value of sales during
last business year
Infringement period
Germany
Turnover during
infringement period
Infringement period
Japan
Value of sales during
infringement period
Three Years
Korea
Turnover during
infringement period
Infringement period
United Kingdom
Turnover during
last business year
Infringement period
United States
Volume of commerce during
infringement period
Infringement period

10. The Base Penalty- Maximum Penalty
Countries Initial Measure
European Union
10% of total world-wide turnover during preceding business
year
Germany
10% of total world-wide turnover during preceding business
year (5% if negligence)
Japan
N/A
Korea
Cartel: 10% of relevant turnover
Abuse of dominance: 3% of relevant turnover
United Kingdom
10% of total world-wide turnover during preceding business
year
United States
Greatest of: USD 100 million, twice the pecuniary gains, or
twice the pecuniary loss

11. Comparison of Australian Fines
to Hypothetical Base Penalties
in Selected Jurisdictions
Highlights

12. Overview – Size of Jurisdictions
Population (millions) GDP (billion USD)
Australia 23 1,169
European Union 511.8 20,267
Germany 82.8 4,028
Japan 126.7 5,266
Korea 50.9 1,825
United Kingdom 65.8 2,796
United States 324 18,569

13. Analysis
Cases Actual Penalty
ACCC v Visy 36 million
ACCC v Qantas 20 million
ACCC v NSK 3 million
ACCC v Colgate 18 million
CPP v NYK
Commonwealth
25 million
(50 million without discount)

14. Analysis: Estimated Base Pecuniary
Penalty Based on Jurisdiction’s Method
Case Australia
European
Union
Germany Korea Japan
United
Kingdom
United
States
ACCC v Visy 36 m 1.272 b <1.06 b 371 m 318 m 1.06 b 1.06 b
ACCC v Qantas 20 m 103.3 m <221 m 31 m 22.1 m 88.6 m 88.6 m
ACCC v NSK 3 m 13.9 m <9.28 m 3.2 m 4.64 m 9.28 m 9.28 m
ACCC v Colgate 18 m 117 m <117 m 27.3 m 39 m 78 m 78 m
CPP v NYK
Commonwealth
25 m
(50 m w/out
discount)
800 m <900 m 210 m 300 m 600 m 600 m

15. Recommendations
• Increase awareness of international practices and
reasons
• Focus on deterrence effects during ACCC negotiations
and discussions
• Study potential to adopt mechanisms that link penalty
to economic size of infringing corporation’s conduct
• Study ways to ensure size of conduct is main criterion,
and not excluded by precedence
• Consider ways of ensuring size of benefit or harm
becomes a key element of consideration in penalty
setting

16. Recommendations
• Adopt a structured approach to the setting of
penalties
• Identify a base pecuniary penalty reflecting the size of
the unlawful conduct, e.g. volume of commerce
• Consider adopting guidelines while respecting
separation of powers and independence of judiciary
• Consider whether appropriate to reform law to
provide method of calculation for penalties for civil
pecuniary penalties applicable to economic agents for
violation of competition law - and potentially other
regulatory infringements.

17. Pecuniary Penalties
for Competition Law
Infringements in
Australia
2018
Access the full report and and
related materials at
oe.cd/2es