A top European Union judge has criticised the European Commission for sharp increases in fines against companies involved in cartels, saying higher penalties may add to the pain for consumers by pushing up prices.
"There is a great danger that companies add the cost of the fines to their prices so that in the end customers at least partially end up paying the fines," Bo Vesterdorf, president of the EU's number-two court, the Court of First Instance, said in an interview with the German daily Handelsblatt.
"That hits those who were already harmed once by the cartel activity," he said. "The sums are already so high that I do not believe that a further increase makes any difference (to the deterrent effect)." The US system of putting managers of cartel member firms in prison had a "deterrent" effect, Vesterdorf said. "The politicians should consider introducing sanctions against the managers of the companies that participated in illegal cartels," he was quoted as saying.
The Commission rejected the criticism. "It is important that fines are sufficiently high to dissuade companies from taking part in anti-competitive behaviour," Commission Competition spokesman Jonathan Todd told a daily news briefing when asked about Vesterdorf's comments.
He said the EU executive intended to further increase the level of fines levied on cartels because of new guidelines adopted last year, saying: "We need again to increase the disincentives on companies from behaving in this manner."
Cartel fines have increased hugely under Competition Commissioner Neelie Kroes, who believes they have a strong effect in dissuading companies from breaking the law. Her fines have broken record after record. Last year, total cartel fines imposed by the Commission reached 1.8 billion euros ($2.4 billion), while this year they have already exceeded 2 billion euros.