EU Commission's DRAM Settlement Decision Triggers New Brazilian Investigation competition, antitrust, DRAM cartel, The European Commission's settled DRAM decision has recently triggered a separate investigation by the Brazilian antitrust ministry ("SDE") into the worldwide DRAM cartel.
The European Commission's settled DRAM decision has recently triggered a separate investigation by the Brazilian antitrust ministry ("SDE") into the worldwide DRAM cartel. The investigation by the SDE may lead to additional fines on the companies and potentially also on implicated individuals.
The Commission issued its memory chips cartel decision in May 2010, having successfully utilised its settlement procedure for the first time. All 10 producers of memory chips (commonly known as DRAMs) admitted their involvement in the cartel and accepted a streamlined procedure in return for a 10% discount in penalty fine. The total fine amounted to over € 331 million (including the 10% reduction) (see Community Week issue 472). Enforcement action in relation to the DRAM cartel has also been taken in the US.
The new SDE investigation highlights the international risks and cumulative nature of cartel enforcement action and sanctions. It may also cause companies to think again about entering into settlement agreements with the Commission.
The Commission's cartel decisions can often trigger competition authorities in other jurisdictions to open a new investigation where they consider that adverse effects have occurred in their particular territories. Such additional investigations may however be accelerated if a settlement agreement is involved. The EU settlement procedure results in infringement decisions being taken more quickly, potentially expediting inquiries by other authorities. The admission of liability by the companies (albeit limited to conduct in the EU), and the reduced risk of challenge to the European Courts, may also be factors in favour of other competition authorities taking forward their own case. In the DRAMs case for example none of the parties to the Commission's decision have appealed, avoiding uncertainties as to the status of the decision.
Although the decision whether to settle a particular case is always likely to be finely balanced, turning on its own specific facts, the impact of any settlement agreement on potential investigations in other jurisdictions is clearly a key factor in the equation. It remains to be seen how the SDE investigation progresses and the impact (if any) on the Commission's settlement policy.
To date, the Commission's settlement procedure has had limited success with only two cartel cases settling since the procedure was adopted in 2008, although more cases are said to be in the pipeline.
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