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Can a company be fined for collusion even if it is not run for profit?

27 June 2013
Snowcap Mountain

Sóley Ragnarsdóttir, a lawyer at the Competition Authority, answers the question.The amount of fines depends on the nature and extent of the offence, how long the offence has been ongoing, and whether it is a repeat offence. Other factors may also be taken into account, for example, the size of the infringing company, the mindset of its management and profit considerations. Fines can amount to up to 101% of the infringing company's annual turnover. It should be borne in mind that business associations are also fined for competition law infringements. In the case of associations, the fine is determined based on the turnover of the association itself or the turnover of each of its members who is active in the market concerned by the association's infringement.

There is no requirement that a company must be run for a profit for fines to be imposed for a breach of competition law. However, it is clear that the imposition of fines takes into account each individual case as well as the general objective of deterrence. In the context of competition law, fines should therefore contribute to the enforcement of competition legislation and thereby increase competition. As provided for in competition law, a decision to impose a fine may be waived if the infringement is considered minor or if, for other reasons, a fine is not considered necessary to contribute to and strengthen effective competition.

Whether or not companies are run at a profit is not, in itself, a decisive factor when it comes to assessing whether and to what extent a company in breach should be fined.  Here you can Read more about how fines are determined. 

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