Leniency Regimes

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

Following a reform in 2006, the Belgian Competition Authority now consists of: (i) the Competition Service (Service de la Concurrence/Dienst voor de Mededinging) which is part of the Ministry for Economic Affairs; and (ii) the Competition Council (Conseil de la Concurrence/Raad voor de Mededinging), which is composed of (a) the Council (Conseil/Raad),

(b) the Auditorat (previously the Corps of Examiners) and (c) the Registry (greffe/griffie). The Auditorat leads the investigations with the assistance of the Competition Service. The Council is the decision making body.

The Belgian leniency programme was introduced following the adoption by the Competition Council and the Corps of Examiners (ie, the predecessor of the Auditorat) of a joint notice which was published in the Belgian Official Journal on 30 April 2004 (the 2004 Leniency Notice).

The reform of the Belgian Competition Act in 2006 (Act on the Protection of Competition coordinated on 15 September 2006, Belgian Official Journal, 29 September 2006 – the CCA) gave the leniency programme a more formal legal basis. Article 49 of the CCA sets out the basic principle of the leniency programme and the basic procedural rules governing leniency applications.

The Competition Council is currently (August 2007) preparing a new leniency notice which will replace the 2004 Leniency Notice and which is said to be based upon the ECN Model Leniency Programme. The new Leniency Notice is expected to be adopted, following public consultation, before the end of 2007. The 2004 Leniency Notice will remain applicable to all pending cases.

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

Article 49 of the CCA provides that the Competition Council can grant full or partial immunity for fines to undertakings or associations of undertakings which were involved in infringements of Article 2 of the CCA (the Belgian equivalent of Article 81 EC Treaty). The reference to Article 2 in its entirety suggests that – unlike the 2004 Leniency Notice which only applied to horizontal cartels such as price fixing, output restrictions, market sharing and bid rigging – the new leniency programme might also apply to vertical practices.

Full or partial immunity can be granted by the Council on the condition that the leniency applicant contributes to the demonstration of the existence of an infringement and to the identification of the participants to it, inter alia by:

• providing new information to the competition authority ie, information previously unknown to the authority;
• providing evidence of an infringement of Article 2 of the CCA the existence of which had not been established before; and
• admitting the existence of an infringement.

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

Several leniency applications have been filed with the competition authority under the 2004 Leniency Notice but there are, to date, no published decisions sanctioning companies for cartel behaviour unveiled as a result of a leniency application.

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

Article 49 of the CCA provides that full or partial immunity can also be granted to applicants who contribute to the demonstration of the existence of an infringement and to the identification of the participants in it.

According to the 2004 Leniency Notice the applicant needs to provide evidence enabling the Competition Council to establish the existence of an infringement of Article 81 of the EC Treaty or Article 2 of the CCA in Belgium (full immunity) or evidence of a suspected infringement offering significant added value compared to the evidence the competition authority already had at its disposal at the time of the application (partial immunity).

Neither the CCA nor the 2004 Leniency Notice rule out the possibility of submitting testimonial evidence. On the contrary, Article 49 of the CCA provides that full or partial immunity can be granted to applicants providing information (inlichtingen/éléments d’information) unknown to the competition authority. This wording seems to confirm that testimonial evidence will also be considered by the competition authority when assessing a leniency application. Testimonial evidence may nevertheless have to be provided in writing. Furthermore, documentary evidence is more likely to be considered as representing significant added value than testimonial evidence.

TIMING

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

Article 49 of the CCA does not explicitly specify what the benefits are of being ‘first in’ to cooperate. However, the leniency criteria it lists refer to ‘information not known to the competition authority’ and ‘evidence establishing the existence of an infringement that had not been proven before’. They confirm the practical importance of being ‘first in’.

The 2004 Leniency Notice provides that the company that is first to provide evidence allowing the Competition Council to establish the existence of an infringement of Article 81 EC Treaty or Article 2 of the CCA in Belgium can obtain full immunity provided it fully complies with all additional conditions for immunity (see the answer to questions 8 and 10 below).

The undertaking which does not meet the conditions for full leniency but is first to provide evidence of a suspected infringement representing significant added value compared to the evidence the competition authority already had at its disposal at the time of the application, can benefit from a 30 to 50 per cent reduction of the fine.

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

Article 49 of the CCA does not explicitly specify what the consequences are of being ‘second’. However, as discussed in the answer to question 5, the criteria listed in this provision confirm the practical importance of being first and the increased difficulty in qualifying for leniency for any subsequent applicants.

Under the 2004 Leniency Notice, being second deprives the leniency applicant of the possibility of obtaining full immunity. However the ‘second in’ can still benefit from a 30 to 50 per cent reduction of the fine if it is the first to provide evidence of a suspected infringement that offers significant added value to the investigation. The reduction of the fine will be of 20 to 30 per cent if the ‘first in’ was unsuccessful in obtaining full immunity but did obtain a 30 to 50 per cent partial immunity. There is no leniency plus or amnesty plus option.

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

Article 49 of the CCA does not explicitly specify what the consequences are for subsequent applicants. However, as discussed in the answers to questions 5 and 6, the criteria listed in this provision confirm the practical importance of being first and the increased difficulty of qualifying for leniency for any subsequent applicants.

Under the 2004 Leniency Notice, the third applicant offering added value may still qualify for a 20 to 30 per cent reduction of the fine if the ‘first in’ successfully applied for full immunity or a five to 20 per cent reduction of the fine if the ‘first in’ was unsuccessful in obtaining full immunity but did obtain 30 to 50 per cent partial immunity. The 2004 Leniency Notice does not address the situation of any subsequent applicants beyond the third applicant offering added value.

Added value is defined in paragraph 15 of the 2004 Leniency Notice as the extent to which the evidence submitted increases, because of its nature and accuracy, the possibility of the competition authority proving the facts.

SCOPE/FULL LENIENCY

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

Article 49 of the CCA confirms the possibility for the Competition Council to grant full immunity to a leniency applicant. However, it does not specify what conditions have to be met for a leniency applicant to be granted such immunity. The actual conditions will be determined in a leniency declaration (clementieverklaring/avis de clémence) adopted by the Council following receipt of the leniency application (see the answer to question 10 below). The new leniency notice, which should normally be adopted before the end of 2007, can be expected to clarify which conditions may be imposed in such leniency declaration.

Under the 2004 Leniency Notice, full immunity can only be granted to an undertaking which:

• is first to submit evidence allowing the Competition Council to establish the existence of an infringement of Article 81 EC Treaty or Article 2 of the CCA in Belgium (ie the competition authority does not, at the time of the submission of this evidence, have sufficient information and evidence to establish the existence of that infringement);
• cooperates fully, without interruptions or delays with the Competition authorities during the investigation and supplies all the evidence with respect to the suspected infringement it has in its possession or can have access to. It has to be at the disposal of the authorities to respond to all questions which can help to establish the facts;
• puts an end to its involvement with the suspected infringement no later than at the time it files its leniency application;
• did not force other undertakings to participate in the infringement; and
  • does not challenge the facts described in its leniency application.
  • Under the 2004 Leniency Notice, partial immunity can only be granted to undertakings which do not meet the conditions for full immunity and which:
• provide evidence of a suspected infringement that represents a significant added value compared to the evidence the competition authority already has at its disposal;
• put an end to their involvement in the suspected infringement no later than at the time they file their leniency application;
• cooperate fully, without interruptions or delays with the competition authorities during the investigation and supply all the evidence with respect to the suspected infringement they have in their possession or can have access to. They have to remain at the disposal of the authorities to respond to all questions which can help to establish the facts; and
• do not challenge the facts described in their leniency application.

Applicants who do not comply with the conditions laid out above in the course of the procedure will lose the benefit of their immunity/reduction but may still benefit from a five to 15 per cent reduction of the fine on the condition that they do not challenge the facts established by the evidence they have submitted.

Finally, when a company submits evidence relating to facts that were not previously known to the competition authority and which have a direct impact on the gravity or the duration of the suspected infringement, the Competition Council will not take these elements into account when determining the amount of the fine of the company that has submitted that evidence.

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

Several leniency applications have been filed with the competition authority under the 2004 Leniency Notice but there are, to date, no published decisions sanctioning companies for cartel behaviour that was unveiled as a result of a leniency application.

PROCEDURE/CONFIDENTIALITY

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

Leniency applications should be filed in writing (two copies). They should be addressed to the Council and the Auditorat, but sent to the Registry (greffe) together with all substantiating evidence. The address of the Registry is: North Plaza A Boulevard Albert II 9 1210 Brussels Tel: +32.2.277.52.72 Fax: +32.2.277.53.23.

The 2004 Leniency Notice provides that the Competition Council acknowledges receipt of the application in writing. The acknowledgement mentions the date and time of receipt of the application.

Article 49 of the CCA states that, following receipt of the leniency application, the Council will, at the request of the Auditeur-Général and after receipt of the observations of the applicant, issue a leniency declaration laying out the conditions to be complied with for the applicant to benefit from full or partial immunity. This leniency declaration will be notified to the applicant. It will however not be made public.

At the end of the investigation, the Council can, provided the conditions of the leniency declaration have been complied with, grant a reduction of the fine in its final decision, in proportion to the applicant’s contribution to the establishment of the infringement.

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

Given the importance of being ‘first in’ or at least second or third in, time is clearly of the essence. At the same time, it is obvious that ‘going in’ only makes sense if the applicant has gathered sufficient evidence to have a fair chance of offering convincing evidence and/or significant added value to the competition authority.

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

As described under question 10, following receipt of a leniency application, the Council will adopt a leniency declaration determining the conditions to be complied with for the applicant to obtain full or partial immunity. It is our understanding that if the applicant was ‘first in’, the leniency declaration may specify that full immunity may be granted provided the conditions specified in the declaration are complied with. For subsequent applicants however, the declaration will give no assurances as to the percentage of the reduction they will be entitled to.

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

Article 49 of the CCA explicitly provides that the leniency declaration is notified only to the leniency applicant concerned and that it is not made public.

In addition, paragraph 26 of the 2004 Leniency Notice states that the Council is of the opinion that disclosure of documents submitted in the context of the notice, regardless of its timing, would harm the effectiveness of its inspections and investigations. Written statements and communications with the competition authority are part of its file. They cannot be disclosed or used for other purposes than the enforcement of Article 81 of the EC Treaty or Article 2 of the CCA.

Furthermore, paragraph 23 of the 2004 Leniency Notice requires leniency applicants not to disclose the fact that they have applied for leniency pending the investigation. Any breach of this requirement will be regarded as a lack of cooperation.

However, the fact that a company applied for leniency will be mentioned in the final decision of the Competition Council, in particular in the section discussing the amount of the fine, if any.

Finally, it goes without saying that the leniency applicants benefit from the ordinary procedural rules protecting their business secrets.

CONSEQUENCES

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

Belgian competition law does not provide for personal liability of employees for anti-competitive practices. There are no criminal sanctions for anti-competitive behaviour either. Hence, there is no need for the leniency programme to address the issue of liability of the defendant’s employees.

15. Does leniency bar further criminal or private enforcement?

Leniency does not bar criminal or private enforcement. However, it has to be kept in mind that Belgian law does not provide for criminal sanctions for anti-competitive behaviour.

As to private enforcement, Article 49 of the CCA only grants immunity for the administrative fines imposed by the Council. Hence, it does not affect civil liability or the rights of victims of anti-competitive practices to claim compensation. Paragraph 25 of the 2004 Leniency Notice explicitly confirms that the leniency applicant is not protected against the civil consequences of his participation in the infringement of Article 2 of the CCA or Article 81 of the EC Treaty.

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?

The 2004 Leniency Notice does not address the interaction with applications under the Commission Leniency Notice.

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

The 2004 Leniency Notice does not address the interaction with applications for leniency in other EU member states.

REFORM/LATEST DEVELOPMENTS

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

The Competition Council is currently (August 2007) preparing a new leniency notice which will replace the 2004 Leniency Notice and which will be based upon the ECN Model Leniency Programme. The new Leniency Notice is expected to be adopted, following public consultation, before the end of 2007. The 2004 Leniency Notice will continue to apply to all pending cases.