Leniency Regimes

1. What is the relevant legislation containing the leniency policy and what is the enforcing body?

The law of 17 May 2004 on competition, having come into force on 30 May 2004 (Mémorial L 2004, page 111), (the ‘2004 Law’) and having abrogated the law of 17 June 1970 on anti-competitive practices (the ‘1970 Law’) basically mirrors the Council Regulation EC 1/2003 of 16 December 2002 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty (the ‘EC Regulation 1/2003’).

The 2004 Law has set up the competition authorities being the Council for Competition Matters (Conseil de la concurrence) (the ‘Council’) and the Investigation Division for Competition Matters (Inspection de la concurrence) (the ‘Investigation Division’).

The powers of the Investigation Division are very similar to the powers of the European Commission and subject to the same conditions as set out in EC Regulation 1/2003. The Council is the decision taking body.

The statutory rules on leniency provided for in Article 19 of the 2004 Law are very scarce.

2. What are the basic tenets of a leniency/immunity programme?

The principles laid down in Article 19 of the 2004 Law are as follows:

• The Council may grant an undertaking immunity from any fine which would otherwise have been imposed if the undertaking is the first to denounce the existence of an agreement between undertakings, decisions by associations of undertakings and concerted practices (the ‘cartel’) of which neither the Council nor the Investigation Division have knowledge.
  • The Council may reduce the fine imposed on an undertaking if that undertaking denounces the existence of a cartel prior to the notification of a complaint.
  • The cumulative conditions to be met in order to benefit from immunity or a reduction of fines are:
• the concerned undertaking provides the Council or the Investigation Division with all evidence and information in its possession regarding the suspected cartel and cooperates fully and on a continuous basis until the Council has reached its final decision;
• the concerned undertaking has ended its involvement in the suspected infringement no later than the time it denounces the infringement to the Council or the Investigation Division.
• the Council or the Investigation Division is not in possession of evidence that the concerned undertaking has coerced other undertakings by its economic market power or by any other means to participate in the infringements.

Even if those conditions are fulfilled, the Council still has discretionary power to grant immunity or leniency.

3. How many cartels have been unveiled and punished since the adoption of the leniency policy?

Since the 2004 Law is quite recent, there is no experience in this regard. Currently, investigations are being made in relation to a cartel between tiling undertakings for tiling works in the new court building of the City of Luxembourg.

4. What is needed to be a successful leniency applicant? Is documentary evidence required or is testimonial evidence sufficient?

Article 19 of the 2004 Law does not specify whether only documentary evidence or even testimonial evidence will be accepted by the Investigation Division and/or the Council. As the involved undertakings have to fully corporate with the competition authorities, one may assume that the authorities will accept any proof enabling the Council to take a decision.

TIMING

5. What are the benefits of being ‘first in’ to cooperate?

Only the ‘first in’ may benefit from immunity provided it meets the cumulative conditions as set out in Article 19 of the 2004 Law (see question 2).

6. What are the consequences of being ‘second’? Is there an ‘immunity plus’ or ‘amnesty plus’ option?

The second undertaking which denounces the existence of a cartel cannot benefit from an immunity but only from a reduction of fines provided the conditions set out in Article 19 of the 2004 Law are met (see question 2).

7. Are subsequent firms given any beneficial treatment if they make a useful contribution? How are ‘useful contributions’ defined?

Any subsequent undertaking meeting the conditions set out in Article 19 of the 2004 Law may benefit from leniency. It is very likely that the Council will apply the rates of reduction as provided for by Article 23 of the European Commission notice on immunity from fines and reduction of fines in cartel cases (2002/54/03).

The expression ‘useful contribution’ is not mentioned in the 2004 Law. However in a recent decision of the Council and in its annual report for 2006, the Council expressly refers to the test of ‘added value’.

SCOPE/FULL LENIENCY

8. Is it possible to receive full leniency? And, if so, what are the conditions required to receive full leniency?

See question 2.

9. How many companies have received full immunity from fines to date?

The decisions are not published. In its report for 2006, the Council only states that one undertaking may benefit from a reduction of the fines, all other applications have been rejected.

PROCEDURE/CONFIDENTIALITY

10. What are the practical steps required to apply for leniency?

Following the application of the concerned undertaking, the Council at the request of Investigation Division may take a decision which lays down the conditions under which the immunity or leniency is granted. The undertaking may present its observations prior to the leniency decision. Such leniency decision is notified to the undertaking and is not published.

11. Is there an optimal time to approach the regulatory authority?

The 2004 Law does not provide for any deadline but Article 19(2) of the 2004 Law provides that the Council may reduce fines imposed on an undertaking if such undertaking denounces the existence of the cartel prior to the notification of a complaint.

12. What guarantees of leniency exist if a party cooperates?

The 2004 Law does not provide for any guarantees of leniency. As stressed under question 2, the Council is not obliged to grant immunity or reduce fines.

In a recent judgment, the administrative court of first instance rejected the action introduced against a negative leniency opinion of the Council by arguing that such opinion which lays down the conditions is only a preliminary act which does not cause harm to the applicant. It is only the final decision which may cause harm to the applicant and hence only the final decision may be challenged before the administrative court.

13. Is confidentiality afforded to the leniency applicant and other cooperating parties? If so, to what extent?

Even if the 2004 Law does not address the issue of the confidentiality for leniency applicants, one may nevertheless assume that the competition authorities will not refuse confidentiality to the leniency applicant.

Furthermore article 19(4) of the 2004 Law provides that the decision of leniency is not published (see question 10).

CONSEQUENCES

14. What effects does leniency granted to a corporate defendant have on the defendant’s employees?

The 2004 Law only provides for immunity or leniency granted to undertakings. Due to the absence of precedent cases, it is very difficult to assess the impact of such decision on the undertaking’s employees.

15. Does leniency bar further criminal or private enforcement?

The legal framework does not provide for any effect of leniency on criminal or private enforcement.

Currently Luxembourg legislation does not recognise criminal liability of legal persons. A bill of law on the criminal liability of legal persons is pending before Parliament. A leniency decision will not bar a person from suing the undertaking having been granted full or partial leniency for civil damages provided the conditions for liability in tort are met.

RELATIONSHIP WITH THE EUROPEAN COMMISSION’S LENIENCY NOTICE AND LENIENCY POLICY IN OTHER EU MEMBER STATES

16. Does the policy address the interaction with applications under the Commission Leniency Notice? If so, how?

No.

17. Does the policy address the interaction with applications for leniency in other EU member states? If so, how?

No.

REFORM/LATEST DEVELOPMENTS

18. Is there a reform underway to revisit the leniency policy? What are the latest developments?

No current changes to this legislation, or other measures which might have an impact on the area are expected in the near future.