Companies fined €7.8 billion for cartel infringements over last three years
Competition authorities in key jurisdictions around the world fined businesses a total of €7.8 billion over the years 2021-2023. Linklaters analysis* shows an increase on the previous three-year period, with €5.4 billion of fines imposed in 2018-2020.
The firm has produced a heat map (below) which demonstrates that fines increased in most jurisdictions, with particular hot spots being China, Belgium, UK, South Korea, Turkey, Mexico. Notably the EU and US have both bucked the trend with a fall in total fines.
The pipeline of new cartel cases is also booming. After a lull in raids and new cartel investigations during the pandemic, key jurisdictions have opened over 100 new investigations each year in the period 2021-2023 with 139 new investigations being opened in 2023 alone.
Bernd Meyring, Partner and Global Head of Antitrust & Foreign Investment at Linklaters:
“Enforcers around the world are becoming increasingly sophisticated in their approach to cartel enforcement. As investigation numbers proliferate, companies need to ensure they are taking the right steps now to manage antitrust risk exposure. Many enforcers’ priorities have shifted as a result of the cost-of-living concerns, and this has had a knock-on effect on the sectors being investigated”
Changes in working patterns and locations have affected raids post-Covid. Many authorities globally have conducted home raids in recent years, including in France, the US, the EU, the UK, Spain, Brazil and Chile. Indeed, most authorities have the power to visit home addresses to search for documents without warning and the evidence needed before a home raid is conducted is not necessarily more stringent – as the recent UK High Court ruling in CMA v Sika Limited (and Ors) confirmed.
Digital evidence is becoming ever more central in dawn raids. This is no longer confined to office desktops and servers. Authorities are increasingly focused on personal phones and private devices, when used for business purposes, in addition to instant messages such as WhatsApp or text messages and data stored in the cloud.
Doug Tween, Antitrust & Foreign Investment Partner at Linklaters:
“Competition authorities are increasingly fixated on digital content and ephemeral messages. Companies should ensure their digital retention policy is compliant and that staff know they must not delete messages (including texts and IMs) during a raid or investigation.”
Linklaters’ research underscores that new and evolving areas of enforcement include employment and HR issues, digital markets, retail price maintenance agreements and sustainability. Compliance policies should be updated to reflect the heightened risk in these areas. Sectors most at risk of enforcement action in the coming years include tech, consumer products (both essentials such as groceries and luxury items) and healthcare. Those active in these sectors should be especially focused on compliance and ensure board time is devoted to risk areas.
Xi Liao, Partner, Zhao Sheng Law Firm, Linklaters’ joint operation firm in China:
“Enforcement by Asian authorities - particularly in China - has seen a surge in recent years, after a quieter period. Ensure you stay on the right side of the line, with effective and tailored global compliance training.”
Global growth in private enforcement
The research has found a sharp growth in private enforcement which means that potential defendants to public enforcement action must take damages liability into account when determining their defence strategy. The impact on leniency applications is in turn leading enforcers to consider other methods of cartel detection.
The US remains the stand-out jurisdiction for private damages in recent years. Payouts were almost double the rest of the world combined (even excluding settlement figures), and the $1.8bn damages award against the National Association of Realtors, which reportedly imposed anti-competitive conditions on real estate brokers’ commission payments, is the biggest single damages award in the world. But damages awards in other jurisdictions are generally higher than 2018-2020 and the increased number of pending claims, supported by the development of collective actions and litigation funding (especially in Europe), suggests that further significant growth in damages figures can be expected across all regions.
Sarina Williams, Partner and Co-Head of Linklaters’ Competition Litigation practice:
“The growth of opt-out collective action regimes means that companies are increasingly facing significant cases in multiple jurisdictions. Having a coordinated global strategy to manage both regulatory and litigation risk is more important than ever.”
Read the full findings of Linklaters analysis here.
