New guidance signals dramatic shift towards criminal sanctions for individual offenders in competition law mattersContact
Authors: Partner Aksel J. Hageler, Partner Thomas Sando and Associate Heidi Magnussen
A dramatic shift in enforcement strategy
Pursuant to the Norwegian Competition Act individuals who are found guilty of having acted in breach of the prohibition against anti-competitive agreements may face a fine or up to six years’ imprisonment. However, since 2004 the Competition Authority has never sought criminal sanctions against individuals, but rather focused on imposing administrative fines on the companies involved. Over the last couple of years, however, there seems to have been a growing realization that criminal sanctions are necessary in order to create a maximum deterrent effect against offenders. Calls for tougher sanctions against individuals have also voiced by members of Parliament.
With the new guidance issued by the Competition Authority, criminal procedures must be expected in the near future against individual offenders and senior management in companies found to have engaged in anti-competitive practices. Procedurally, such criminal sanctions will commence with the Competition Authority filing criminal complaints against individuals with the prosecuting authority, which will then be responsible for bringing the matter before the courts in an ordinary and public criminal trial. Any person who willfully or through gross negligence was involved in the infringement may be penalized.
Infringements likely to be subject to criminal sanctions
Although all types of infringements of the prohibition against anti-competitive agreements are subject to the threat of fines and imprisonment, the Guidance makes clear that the Competition Authority will focus on pressing charges against individuals in cases involving agreements which have an anti-competitive object, such as:
- Price fixing, inter alia agreements between competitors regarding purchase or sales prices, price increases and the granting of rebates.
- Market sharing, inter alia geographical partitioning of markets and customer sharing, as well as agreements reducing imports or exports between commercial markets.
- Limitations on production or sales, inter alia agreements fixing production quotas or limitations on sales.
- Anti-competitive cooperation in connection with tenders, such as joint bidding, information exchange and customer sharing/market sharing.
Possibility of avoiding criminal liability
Individuals involved in infringements of the prohibition against anti-competitive agreements may seek a declaration that the Competition Authority will not file a criminal complaint against them, provided the individual involved voluntarily notifies the Competition Authority of the infringement and actively participate in the investigations. The Norwegian leniency program does not cover individuals, but involved individuals may as part of a leniency application also ask for a declaration that no criminal filing will be issued.
Undertakings and individuals who fear or consider it likely that they are involved in anti-competitive agreements, are advised to seek legal assistance immediately, as the possibility of obtaining leniency and declarations that no criminal sanctions will be filed, are dependent on being the first to apply. If you have questions or comments, please contact: