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EU Commission not bound by fine range proposed during settlement discussions when company withdraws from settlement procedure

March 2017

On 12 January 2017, the Court of Justice dismissed the appeal of Timab and its parent company Roullier and confirmed the fine of almost EUR 60 million imposed by the EU Commission for Timab's participation in a phosphates cartel. Timab had withdrawn from the settlement procedure after the Commission had proposed a fine range significantly lower than EUR 60 million. The Court of Justice ruled that, in the standard procedure, the Commission is entitled to depart from the (lower) fine range it has envisaged during settlement discussions.

In 2009, the EU Commission proposed a settlement to Timab and the other participants in a cartel on the animal feed phosphates market. The Commission proposed to Timab a maximum fine ranging between EUR 41 and 44 million. Unlike the other companies involved, Timab decided to withdraw from the settlement procedure. Ultimately, the Commission imposed a fine of almost EUR 60 million on Timab, which was significantly more than the amount envisaged during the settlement discussions. Moreover, the fine related to a considerably reduced infringement period.

The Roullier group brought an action before the EU General Court challenging the Commission's decision and arguing that Timab was penalised for its withdrawal from the settlement procedure. On 20 May 2015, the General Court entirely dismissed the action. The General Court held that, in the standard procedure, the Commission is not bound by the fine range it has communicated in the context of the settlement procedure.

On 12 January 2017, the Court of Justice confirmed the General Court's position. The Court held that the Commission, in the course of the standard procedure, had to take into account new information and adjust accordingly the reductions it had proposed during the settlement procedure. Because the Roullier group contested the duration of the cartel during the standard procedure, the Commission could no longer rely on the evidence Timab had submitted in the context of its leniency application. Therefore, the Commission decided to retain a shorter infringement period, but also to reduce the leniency (and other) reductions awarded to Timab in that context.

The Court of Justice held that, because Timab changed its defence position, it could not rely on the principle of legitimate expectations to retain a fine in the range which the Commission had envisaged during the settlement procedure.

The Court's judgment illustrates the risks involved in withdrawing from settlement discussions.


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