"Stretched"Calculation Method May Produce Higher Fine For Vertically-Integrated Companies

Vertically-integrated companies may face higher fines as a result of a recent ruling by the European Court of Justice. In setting the amount of a cartel fine, the European Commission may take into account the internal sales by the companies of cartelised products outside the EEA if these are incorporated into downstream finished products destined for sale to independent third parties within the EEA. This ruling seemingly "stretches" the European Commission's fine calculation method to include not only non-EEA sales, but also sales on markets not related to the cartel infringement. Companies should therefore be aware they do not automatically go "scot-free" if their direct sales are outside the EEA.