COMPANIES SUSPECTED of pricefixing will be able to receive a 10 per cent reduction in their fines if they admit guilt to Europe’s top competition regulator, under a new “fast-track” settlement system for cartel cases unveiled yesterday.

The European Commission, which to date has never done deals with suspected cartelists, hopes the settlement procedure will allow it to handle pricefixing cases more quickly – and so free up limited resources.

The new system comes at a time when more cartels are coming to light, and penalties are rising. The commission, for example, raised more than €3.3 billion in fines last year, compared with less than €700 million in 2004.

Companies whose offices have been raided this year alone in suspected pricefixing cases have ranged from consumer products groups, such as Unilever and Procter Gamble, to airlines, such as KLM and Lufthansa.

“This new settlements procedure will reinforce deterrence by helping the commission deal more quickly with cartel cases,” said European competition commissioner Neelie Kroes.

But the small size of the potential fine reduction left industry associations and lawyers who defend potential cartelists disappointed.

Many predicted that the modest penalty reduction would have little appeal to businesses caught up in cartel investigations unless the evidence against them was compelling or they particularly wished to put the issue behind them.

“Ten per cent is going to be a hard sell, especially if there are any significant issues on which companies are going have to give up their positions,” said Marc Hansen, competition partner at Latham Watkins.

Britain’s CBI employers’ body, which had suggested reductions of at least 25 per cent in submissions to the commission, agreed: “I don’t think 10 per cent will provide an adequate incentive,” said one official. The American Chamber of Commerce to the EU described it as “disappointing”. – (Financial Times service)