Unlocking antitrust settlements: a strategic guide to resolving infringement cases

The PRCA allows undertakings to resolve antitrust investigations through a mutual agreement with the competition authority, rather than a unilateral administrative decision. Inspired by the European Commission's settlement procedures, this mechanism functions as a subordinate administrative contract – a concept prevalent in several European jurisdictions. However, Slovenia's General Administrative Procedure Act (GAPA) does not regulate administrative contracts generally, placing PRCA settlements in a unique legal context. This specificity highlights the framework's role in the evolving landscape of Slovenian law.

Key legal aspects of settlements

The PRCA permits sanction reductions of up to 20 % for settlement applications related to PRCA violations or breaches of Articles 101 or 102 of the Treaty on the Functioning of the European Union. Settlement discussions may be initiated by either the undertaking or the authority, focusing on the terms of the sanction.

Before applying, undertakings receive detailed information about charges, evidence and potential sanctions. Applications must include a clear admission of responsibility, a description of the violation and the maximum acceptable penalty. If rejected or withdrawn, evidence submitted during negotiations is protected from use in other proceedings, unless it is legally required. Importantly, settlement-based decisions cannot be challenged if they align with agreed terms.

Negotiation process

The determination of relevant turnover is critical in settlement discussions, as it forms the basis for calculating fines. The CPA's 2023 sanction guidelines align closely with European Commission and CJEU practices, offering valuable guidance for undertakings preparing their cases. A precise turnover calculation can ensure a fair penalty assessment and smoother negotiations.

In cartel cases, where multiple parties often negotiate in parallel, undertakings must consider joint defence strategies to the extent allowed by law. Effective coordination can lead to consistent outcomes and minimise liability exposure. Undertakings should also proactively evaluate potential aggravating factors, such as repeat violations, and mitigating factors, such as cooperation with the authority or limited involvement, which may impact the final terms of sanctions.

Other peculiarities

The PRCA's transitional provisions pose challenges, particularly for cases initiated under the old rules. In some cases, where infringement decisions were challenged in court but fines had not yet been imposed, undertakings and the CPA faced complex obligations requiring synchronised compliance. Escrow agreements have been employed to ensure obligations are fulfilled, reflecting the innovative, evolving nature of the framework. However, these transitional cases remain rare due to the limited overlap period.

A new era

The settlement framework under the PRCA reflects a significant evolution in Slovenian competition law. By offering quicker resolutions and reduced penalties, it presents a viable alternative for undertakings under investigation. While its application thus far has been limited, the framework has the potential to become an important tool of efficient competition enforcement in Slovenia. The recent settlements involving GA Adriatic and Renault serve as compelling evidence of its enhanced effectiveness. For undertakings, it offers an opportunity to embrace collaboration and adaptability in navigating antitrust challenges.

authors: Matej Črnilec, Špela Lovšin