BACKGROUND
1. What is the relevant legislation containing the leniency policy and what is the enforcing body?
The rules on Austrian competition law are mainly set out in the Cartel Act 2005 (Kartellgesetz 2005 and in the Competition Act (Wettbewerbsgesetz). Due to the institutional structure, the enforcement of Austrian antitrust rules is quite complex.
The only body having the powers to make binding decisions in competition law matters is the Cartel Court (Kartellgericht), a special division within the Vienna Court of Appeals (Oberlandesgericht Wien). Further, two separate institutions, the so-called Official Parties (Amtsparteien) representing the interests of the public have special rights concerning proceedings before the Cartel Court. The Federal Competition Authority (Bundeswettbewerbsbehörde, or ‘FCA’) is an independent body and has far-reaching powers of investigation in competition matters. The Federal Antitrust Prosecutor (Bundeskartellanwalt, or ‘FPA’) is established at the Cartel Court and is bound by orders of the Federal Minister of Justice (Bundesminister für Justiz).
With regard to antitrust prosecution cases, it is important to note that, according to section 36(2) Cartel Act 2005, only the Official Parties are entitled to ask the Cartel Court to impose fines. The Cartel Court must not impose higher fines as asked for by the Official Parties.
The statutory rules on leniency are scarce. The only statutory provisions setting out a (very rough) framework for the Austrian leniency programme are section 11(3) through (6) of the Competition Act and section 36(3) of the Cartel Act 2005 .
Section 11(3) of the Competition Act sets out the conditions under which the FCA may refrain from instigating fine proceedings against a leniency applicant or in cases where conditions for full immunity are not met apply for a reduced fine only (for details see below).
Section 11(4) of the Competition Act, provides that the FCA has to explain its practice regarding the administration of the leniency programme in a handbook (Handbuch). This handbook has been published on the FCA’s website (for more details see below).
Section 11(5) of the Competition Act foresees that, at the request of the leniency applicant, the FCA has to issue a non-binding comfort letter on whether it applies the leniency programme in the particular case.
Finally, section 11(6) of the Competition Act makes it clear that information on the intranet of the European competition authorities stemming from leniency programmes (applied outside Austria) must not be used as a basis for an application for a fine to the Austrian Cartel Court. However, the use of information from other sources is not covered by this provision.
According to the rules mentioned above, the FCA is the sole authority in charge of administering the Austrian leniency programme. In general, the FAP may also apply for the imposition of fines against undertakings with the Austrian Cartel Court. However, once the FCA has informed the FCP that it applies the leniency programme in a particular case, the FCP loses the right to make such application (section 36(3) of the Cartel Act 2005).
2. What are the basic tenets of a leniency/immunity programme?
The leniency programme shall help to unveil and stop cartel infringements. Section 11(3) expressly refers to infringements of Article 81(1) of the EC Treaty and of (the almost identical provision of ) section 1 of the Cartel Act 2005, both concerning cartels only.
However, in its leniency handbook, the FCA states that also in cases where the conditions of section 11(3) are not or only partly met, the FCA may use its statutory discretion in order to refrain from instigating fine proceedings or in order to apply for a reduced fine only. According to legal writing this provision is not only seen as an expansion of the FCA’s discretion in cartel cases but could also be of particular interest where in merger control cases there is a risk of fines being imposed due to an implementation before clearance. However, FCA officials take for the time being a rather hesitant position with regard to an application of the ‘quasi leniency programme’ to merger cases. In practice, as far as can be seen, the ‘quasi leniency programme’ has not yet been applied.
Since such ‘quasi leniency programme’ has no formal basis under the abovementioned provisions, the FCP does not lose its right to apply for a (higher) fine. However, the FCA indicates in its handbook that it would inform the FCP about its reasons for applying a ‘quasi leniency programme’ and try to achieve a common approach for both authorities.
3. How many cartels have been unveiled and punished since the adoption of the leniency policy?
The leniency programme has been in place since 1 January 2006. As far as can be seen, the first leniency application was made in August 2006 and further applications followed. They all concern the elevator and escalator industry in Austria and the case is still pending before the Cartel Court (the authors advise one of the undertakings involved).
4. What is needed to be a successful leniency applicant? Is documentary evidence required or is testimonial evidence sufficient?
First and foremost, time is of the essence, since only the first undertaking to approach the FCA is eligible for full immunity. In addition full immunity is only granted if the FCA did at the time of the leniency application not have knowledge of the facts (Sachverhalt).
An undertaking being second in time, or approaching the FCA only after the FCA already has obtained knowledge of the facts may, according to the leniency handbook, qualify for a reduction of between 30 and 50 per cent. An undertaking approaching the FCA after another undertaking has qualified for the beforementioned reduction, may still receive a reduction of between 20 and 30 per cent. Pursuant to the handbook, any further leniency applicant may get a reduction of up to 20 per cent.
However, the ‘quality’ of the information provided also plays an important role. According to the Handbook the leniency applicant has to ‘inform’ the FCA about the infringement and has to provide ‘all evidence in its possession or otherwise available’. Thus all documentary evidence at hand has to be produced before the FCA and cannot be replaced but only supplemented by testimonial evidence. However, should no or little documentary evidence be available the FCA will also accept testimonial evidence.
As regards undertakings which qualify for a reduced fine the FCA in determining the exact reduction, takes into account the point in time when the information was provided by the leniency applicant and the ‘additional value’ of the information in establishing the infringement. As regards the additional value the FCA states in the handbook that written evidence stemming from the time when the infringement occurred as well as evidence which serves as a direct proof will outvalue more recent evidence and evidence which only has an indirect relation to the infringement.
In exceptional cases, the abovementioned reductions may be even higher (where the additional value was exceptionally high) or lower (where the additional value was exceptionally low).
The handbook comprises a form, which shall be used for leniency applications. The FCA recommends the completed form to be submitted via Telefax (+43 1 587 42 00) or email (wettbewerb@bwb.gv.at). At the reasoned request by the applicant, the form may also be filled in at the authority following an oral statement. In order to provide additional value, it should be considered to submit not only a corporate statement describing how the cartel functioned and the documentary evidence available but also affidavits of involved individuals.
TIMING
5. What are the benefits of being ‘first in’ to cooperate?
Only the first undertaking to cooperate is eligible for full immunity, ie the FCA may entirely refrain from instigating fine proceedings (for further details see above). However, section 11(3) foresees full immunity only if the FCA did at the time of the leniency application not have knowledge of the facts (Sachverhalt).
6. What are the consequences of being ‘second’? Is there an ‘immunity plus’ or ‘amnesty plus’ option?
As mentioned, an undertaking being second in time may (under normal circumstances) receive a reduction of between 30 and 50 per cent (for details see above).
The statutory rules do not provide for an express ‘immunity plus’ or the like. However, as also mentioned, the FCA might, at least in theory, grant full immunity either because the information provided second in time is of an extraordinary additional value or under the ‘quasi leniency programme’. Moreover, if the leniency application relates to a different infringement (though having some connection with the facts already known to the authority), there is an argument that for such infringement the applicant is eligible for full immunity.
7. Are subsequent firms given any beneficial treatment if they make a useful contribution? How are ‘useful contributions’ defined?
As explained, subsequent firms may well receive beneficial treatment – the point in time and the added value of their submissions is taken into account by the FCA in determining any fine reduction (for details see above).
SCOPE/FULL LENIENCY
8. Is it possible to receive full leniency? And, if so, what are the conditions required to receive full leniency?
Pursuant to section 11(3) of the Competition Act the following conditions must be met cumulatively for full immunity under the leniency programme:
In the Handbook, the FCA has added some more details to this list, being that the applicant has to deliver all evidence available to it to the FCA (see above), keep the cooperation with the FCA secret (in particular from the other cartel members) and has to terminate the activities in the cartel only after consultation with the FCA. The later provision shall prevent any jeopardising of an investigation conducted by the FCA.
It should be noted, however, that while the leniency applicant might not be fined in proceedings before the Cartel Court, it may well be held liable in private damage claims (before the ordinary courts). The Austrian leniency programme does also not extend to criminal liability.
9. How many companies have received full immunity from fines to date?
As far as can be seen, so far only one undertaking has received full immunity (ie no application for fines was filed against it). However, the case is still pending.
PROCEDURE/CONFIDENTIALITY
10. What are the practical steps required to apply for leniency?
In order to apply for leniency, the form comprised in the leniency handbook should be completed and submitted to the FCA in one of the ways mentioned (see above).
The form mainly requires the following information:
In order to obtain this information, normally some sort of internal audit will be required. In our experience, external counsel should be consulted at this stage.
11. Is there an optimal time to approach the regulatory authority?
Given that time is of the essence, leniency applications should be made as early as possible.
12. What guarantees of leniency exist if a party cooperates?
As mentioned, section 11(5) of the Competition Act foresees that, at the request of the leniency applicant, the FCA has to issue a non-binding comfort letter on whether it applies the leniency programme in the particular case. Moreover, the FCP cannot apply for a fine once he has been informed by the FCA that it applies the leniency programme. As the Cartel Court cannot act ex officio and may not impose a higher fine than applied for by the FCA (or the FCP), the applicant has some guarantee once the application for the imposition of fines is filed that it will at least receive the reduction mentioned there. However, it should be noted that, in practice, the FCA does normally not specify the exact amount of the fine in its application but at a later stage.
13. Is confidentiality afforded to the leniency applicant and other cooperating parties? If so, to what extent?
Under Austrian law, there is no right to access the files of the FCA. The files of the Cartel Court may only be accessed by the parties to the respective proceedings; other persons may only access the files if the parties give their consent (section 39(2) of the Cartel Act). Pursuant to section 39(1) of the Cartel Act, consent is also required to join proceedings instigated by the FCA (or the FCP) with proceedings instigated by another applicant (while some commentators argue that only the FCA and FCP need to give their consent, the law refers more generally to ‘the parties’). It should be noted that in the past, the Austrian Criminal Prosecution Service has requested files of the Cartel Court for inspection. There is also a risk that civil courts request files of the Cartel Court in the context of private damage or labour law claims pending before them.
In practice, the FCA consults with the leniency applicant at the latest before it instigates proceedings at the Cartel Court whether and if so which pieces of the information provided constitute business secrets and allows the applicant to provide non-confidential versions.
Finally, the fact that a leniency application was made will normally be published by the FCA at the time it instigates proceedings before the Cartel Court. However, the publication does not necessarily give the company name(s) of the applicant(s).
CONSEQUENCES
14. What effects does leniency granted to a corporate defendant have on the defendant’s employees?
The Austrian leniency programme does not extend to private damage claims or criminal liability. Therefore, the corporate defendant’s employees may well be charged with, for example, bid rigging.
15. Does leniency bar further criminal or private enforcement?
As mentioned above, the Austrian leniency programme does not extend to private damage claims or criminal liability.
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?
Section 11(6) of the Competition Act makes it clear that information obtained from the network of competition authorities (NCA) of the European competition authorities stemming from leniency programmes (applied outside Austria) must not be used to instigate fine proceedings with the Austrian Cartel Court.
17. Does the policy address the interaction with applications for leniency in other EU member states? If so, how?
See question above.
REFORM/LATEST DEVELOPMENTS
18. Is there a reform underway to revisit the leniency policy? What are the latest developments?
As far as can be seen, there is currently no reform on the way. The latest development appears to be the leniency case pending before the Cartel Court in the elevator and escalator industry.
