The 2022 cash balance of the European Commission

In the past, the European Commission has often made significant contributions to the EU budget through its fines. This post examines whether that was also the case last year and takes a brief look at the decisions that had a significant impact on the European Commission’s cash position.     

Fines imposed in 2022  

In 2022, the European Commission issued two fining decisions in which it found that companies infringed Art. 101 TFEU:

  • In July 2022, the European Commission fined two companies a total of EUR 31.5 million for participating in a cartel concerning the sale of metal cans and closures in Germany. The European Commission found that the infringement consisted of two parts, namely the exchange of data regarding the past annual sales volumes to customers in Germany on the basis of individualized customers and the coordination regarding a surcharge and a minimum durability recommendation in Germany for cans and closures coated with BPA-free lacquers.  
  • In November 2022, the European Commission fined several companies a total of EUR 157 million for participating in a purchasing cartel concerning purchases on the styrene monomer merchant market. The companies were found to have  “exchanged sensitive commercial information and coordinated their negotiation strategy on an industry reference price of styrene”. The infringement concerned the purchase and not the selling side (more on the thin line between purchase cooperations and purchase cartels here). For the calculation of the fines the European Commission took, inter alia, the value of the purchases into account (and not the value of sales as it usually does in cartel cases concerning the sell-side).

So, in total the European Commission earned fined companies approximately EUR 188 million in 2022. This can also be seen in the European Commission’s statistic on cartel fines, which is updated on a yearly basis (can be downloaded here).

So, at first glance, this looks like a big plus for the EU budget in 2022, which should also make the Member States happy, since the contribution of the Member States to the EU budget is reduced by the fines paid.   

Fines to be paid back

However, one should not forget that the European Commission also lost two important cases before the General Court in 2022:

  • 2022 started poorly for the European Commission when the General Court annulled General court annulled the EUR 1.06 billion antitrust fine which the European Commission imposed on U.S. chip maker Intel in 2009 o (we have already blogged about the Intel case here). In what some call a “crushing defeat” for the European Commission, the General court held that the Commission’s analysis was incomplete and did not make it possible to establish the requisite legal standard that the rebates at issue were capable of having, or likely to have, anticompetitive effects. Although the General Court explicitly stated that the naked restrictions by Intel were not part of the decision and only partly found that the European Commission erred in the assessment of the rebate schemes imposed by Intel, it annulled the fine in its entirety (to the best of our knowledge this was only the third time that an Art. 102 TFEU fine imposed by the European Commission was annulled in its entirety).
  • After a bad start, not everything always turns out well again. In June, the General Court also annulled the European Commission’s fine of EUR 997 million imposed on Qualcomm in 2018 in its entirety (what makes it the fourth Art. 102 TFEU annulment, so doubling the previous number in only one year). On the one hand, the General Court found that the Commission made several procedural mistakes that negatively impacted Qualcomm’s right of defence. This includes failure to inform Qualcomm about the content of meetings with third parties and making significant changes concerning the theory of harm between the statement of objections and the final decision without giving Qualcomm the opportunity to comment. Furthermore, the General court concluded that “the Commission’s analysis was not carried out in the light of all the relevant factual circumstances”.

Against this background, with fines of approximately EUR 2 billion annulled, it is fair to say that the European Commission’s cash register took a hard hit.

Is the European Commission cash register now full or empty?

I’ve never been good at math. But for 2022, I think the calculation is as follows: Incoming EUR 188 million. To be repaid approximately EUR 2 billion. Makes a difference of around EUR 1.8 billion. So, this is a big minus in the cash account of the European Commission.

However, it can still become an even bigger minus. The European Commission might have to pay default interest to Intel and Qualcomm. While there is no information on Qualcomm, Intel asked the General Court to order the European Commission to pay compensation of approximately EUR 593 million as default interest (and according to the announcement the European Commission already paid approximately EUR 38 million).  

Of course, this can change (again). The European Commission has appealed the Intel decision (while leaving the Qualcomm decision as it is). It remains to be seen whether new decisions will help the European Commission returning to a plus in 2023.

 Picture from Radek Homola on Unsplash