BACKGROUND
1. What is the relevant legislation containing the leniency policy and what is the enforcing body?
The European Commission (the Commission) operates a leniency policy in respect of cartel conduct which infringes Article 81 of the EC Treaty.
The policy was first set out in the Commission’s 1996 Notice on the non-imposition or reduction of fines in cartel cases. This notice was replaced by a revised version in 2002, which was replaced by a further version in December 2006, the Commission notice on immunity from fines and reduction of fines in cartel cases (the Leniency Notice). The 2006 Leniency Notice was published in the EU Official Journal on 8 December 2006 (OJ C298/17) and came into force on that date.
The Commission’s leniency policy operates in parallel with the leniency policies of the EU member states, which enforce their own national competition laws and also share competence with the Commission to apply Article 81 in their respective territories. The Commission’s Notice on cooperation within the network of competition authorities (OJ C101, 27/4/04) (the EC Network Notice) indicates that the Commission is likely to be considered the best placed [European] authority to carry out an investigation (and hence the most appropriate recipient of a leniency application) where the effects of the cartel activity are felt in more than three EU member states. However, as a leniency application to the Commission will not be considered an application for leniency to an EU member state, and an applicant may be exposed under a member state’s national competition law, prospective applicants are advised to seek leniency from all competition authorities competent to apply Article 81 in the territory affected by the infringement which may be considered ‘well placed’ to act against the infringement.
The European Competition Network (the network of the national competition authorities of the member states and the Commission) recently sought to alleviate the burden of multiple leniency applications by introducing the ECN Model Leniency Programme which includes, among other things, a model for a uniform summary application to be submitted to national competition authorities when the applicant intends to seek immunity/leniency from the Commission. The uniform summary application model which was introduced in September 2006 requires adoption into the leniency policies of EU member states in order to take effect. At least one member state (the UK) has already adopted the summary application model.
Quite separate from the Commission’s leniency policy is the availability of a reduction in fine for mitigating factors, including effective cooperation by an undertaking beyond its legal obligation to do so. However, the Commission’s Guidelines on the method of setting fines imposed pursuant to Article 23(2)(a) of Regulation No 1/2003 (the Fining Guidelines) make it clear that such cooperation will only be considered a mitigating factor if it takes place outside the scope of the Leniency Notice.
2. What are the basic tenets of the leniency/immunity programme?
The Commission’s leniency policy covers undertakings which have participated in secret cartels that may infringe Article 81 EC Treaty who wish to terminate their involvement and inform the Commission of the existence of the cartel.
The Commission’s definition of a cartel is limited to agreements and/or concerted practices between competitors aimed at restricting competition (such as agreements to fix prices, allocate production or sales quotas, share markets or engage in bid rigging). Unlike the position in the UK, the Leniency Notice does not cover vertical price fixing (resale price maintenance).
As the Commission currently has no powers to impose penalties on individuals other than undertakings, there is no leniency policy for individuals.
The leniency policy offers immunity (full leniency) for the first undertaking to come forward with information, and a sliding scale of lenient treatment (partial leniency) for those undertakings that come forward subsequent to the first applicant.
In order to qualify for immunity, the applicant will need to provide information that meets the relevant immunity threshold. The immunity threshold applicable will depend on whether immunity is sought before or after a Commission inspection (dawn raid). If immunity is sought prior to an inspection, the applicant will need to provide information which is sufficient to enable the Commission to carry out a targeted inspection. If immunity is sought after an inspection, the applicant will need to provide information which is sufficient for the Commission to find a breach of Article 81 of the EC Treaty.
The applicant will also need to meet the conditions for obtaining immunity which require the applicant to, among other things, provide the Commission with all evidence relating to the cartel and make employees and directors available for interview by the Commission. The applicant will also be ineligible for immunity if it coerced other participants to join or remain in the cartel. The full list of conditions for immunity is set out in the response to section eight.
Leniency applicants that come forward subsequent to the first immunity applicant may be eligible for lenient treatment in the form of a reduction in fine (partial leniency) if they provide evidence that represents ‘significant added value’ as compared to the evidence already on the file. The Leniency Notice makes it clear that evidence which requires little or no corroboration provides greater value than evidence which requires corroboration. The first undertaking to submit evidence that provides significant added value (after the initial immunity applicant) will receive a reduction of 30–50 per cent; the second undertaking to submit significant added value will receive a reduction of 20–30 per cent and the third undertaking to submit significant added value will receive a reduction of 20 per cent. The exact level of leniency will be determined at the end of the administrative procedure and will depend on the time at which the evidence was submitted and the extent to which it represents added value.
Applicants wishing to apply for immunity or lenient treatment need to make a formal application to the European Commission. This will usually take the form of a corporate statement and the submission of evidence which meets the relevant immunity threshold, or in the case of an applicant for partial leniency, the submission of evidence which provides significant added value.
Applicants for immunity (full leniency) may also make use of either the marker system or a hypothetical application. The marker system will enable an undertaking to protect its place in the leniency queue while it gathers the evidence required to make a formal application, while a hypothetical application allows an undertaking to check whether the Commission considers the information it holds meets the immunity threshold, without disclosing the identity of the undertaking or the infringement.
Neither the marker system nor the hypothetical application procedure are available to cartel members that are not the first undertaking to come forward, ie those seeking a reduction in fine (partial leniency).
3. How many cartels have been unveiled and punished since the adoption of the leniency policy?
The EU first adopted a leniency policy in 1996 (Commission Notice on the non-imposition or reduction of fines in cartel cases [1996] OJ C207/4). This was replaced by a new policy in 2002 (Commission notice on immunity from fines and reduction of fines in cartel cases [2002] OJ C45/2, ‘the 2002 Leniency Notice’) which was subsequently replaced by the current policy in December 2006 (Commission Notice on immunity from fines and reduction of fines in cartel cases [1996] OJ C298/17.
The Commission have informed us that there have been 56 cartel infringement decisions by the Commission since 1996.
4. What is needed to be a successful leniency applicant? Is documentary evidence required or is testimonial evidence sufficient?
An undertaking will be eligible for total immunity (ie, full leniency) if it is the first cartel member to provide the Commission with information and evidence and that information and evidence will enable the Commission to either:
The first case covers the scenario where an applicant comes forward prior to a Commission inspection (dawn raid), while the second case covers the scenario when a Commission inspection has already taken place. In both cases, the applicant must be the first cartel member to come forward to the Commission.
Immunity will only be granted under the first scenario above, if the Commission does not already possess sufficient information to carry out an inspection or find an infringement, and the applicant provides information which will enable the Commission to carry out a ‘targeted inspection’.
The Commission has explained that this immunity threshold reflects its expectation that cartel members should be able to provide it with ‘insider’ information on the cartel that would enable the Commission to better target its inspection with more precise information as to, for instance, what to look for, and where, in terms of evidence. The assessment as to whether the information is sufficient to enable a targeted inspection will be carried out on the basis of type and quality of the information submitted by the applicant and will not take into account whether a given inspection is successful or whether it has been carried out.
Immunity is only available under the second scenario (b), if the Commission did not have sufficient evidence to find an infringement of Article 81 EC, and the applicant provides incriminating evidence that originates from the time of the infringement, which would enable the Commission to find an infringement of Article 81 EC.
In both cases, the Leniency Notice requires applicants to submit a corporate statement which contains detailed information and evidence regarding the alleged cartel arrangement, including (inter alia) the specific dates, locations, content of and participants in alleged cartel contacts.
An immunity applicant is also required to meet the cumulative conditions for the grant of immunity (set out in response to question 8 below). One of these conditions requires the applicant to cooperate genuinely, fully, on a continuous basis and expeditiously with the Commission. The Commission has prescribed that, as part of this condition of cooperation, an applicant must provide the Commission with all information and evidence available to the applicant regarding the cartel and make its employees and directors available for interview by the Commission.
Importantly, the Leniency Notice expressly contemplates that the Commission may, on the applicant’s request, accept an oral corporate statement (provided the applicant has not already disclosed the content of the corporate statement to third parties).
An oral corporate statement may be preferred in order to limit the possibility that the corporate statement could be discoverable in civil proceedings, both in Europe and in the US. Applicants, who are not the first to request immunity, may be eligible for a reduction in fine that would otherwise be imposed upon them (partial leniency). In order to qualify for partial leniency, an undertaking must provide the Commission with evidence of the alleged infringement which represents ‘significant added value’ with respect to the evidence already in the Commission’s possession.
The concept of ‘added value’ refers to the extent to which the evidence provided strengthens, by its very nature or its level of detail, the Commission’s ability to prove the alleged cartel. In this respect, the Commission will generally consider written, contemporaneous evidence to have a greater value than evidence subsequently established, and incriminating evidence directly relevant to the facts in question will generally be considered to have a greater value than evidence which is only indirectly relevant. Similarly, the degree of corroboration required from other sources before the evidence can be relied upon, will also impact on the value of the evidence: compelling evidence will be attributed a greater value than evidence such as witness statements which require corroboration if contested.
An undertaking requesting partial leniency is required to meet the same conditions as that of an immunity applicant with one exception: partial leniency, unlike immunity, is available to a cartel member which coerced another undertaking to join or remain in the cartel.
Further detail on the procedure for applying for either immunity or a reduction in fines is set out in the response to question 10 below.
TIMING
5. What are the benefits of being ‘first in’ to cooperate?
Total immunity is only available to the first undertaking to come forward and provide the Commission with requisite information relating to the cartel. Undertakings which are not the first to come forward are not eligible for total immunity.
6. What are the consequences of being ‘second’? Is there an ‘immunity plus’ or ‘amnesty plus’ option?
Undertakings which are not the first to come forward are ineligible for immunity (full leniency). An undertaking which comes forward subsequent to another leniency applicant will, however, be eligible for a partial reduction in fine if they provide the Commission with evidence of the alleged infringement which represents ‘significant added value’ and they meet the relevant conditions.
The Leniency Notice does not provide for an amnesty plus option. However, if an applicant for lenient treatment is the first undertaking to submit compelling evidence and that evidence is used by the Commission to establish additional facts increasing the gravity or duration of the infringement, the Commission will not take such additional facts into account when setting a fine to be imposed on the applicant that provided that evidence.
7. Are subsequent firms given any beneficial treatment if they make a useful contribution? How are ‘useful contributions’ defined?
Yes, a cartel member that comes forward subsequent to another leniency applicant may receive a reduction in the fine that would otherwise be imposed, provided the cartel member supplies evidence which represents ‘significant added value’ with respect to the evidence already in the Commission’s possession, and meets the first four (cumulative) conditions set out in response to question 8 below. An applicant for partial leniency does not need to meet the fifth condition that an immunity applicant must meet, remaining eligible for partial leniency even if it did take steps to coerce another cartel member to join or remain in the cartel.
As explained under question 4 above, the concept of ‘added value’ refers to the extent to which the evidence provided strengthens the Commission’s ability to prove the cartel – either by the level of detail of the evidence or its very nature. In making this assessment, the Commission will consider written evidence from the time of the cartel to have greater value than evidence subsequently established. Likewise, incriminating evidence directly relevant to the facts in question will have greater value than evidence which is only indirectly relevant and compelling evidence, which does not require corroboration, will be attributed a greater value than evidence – such as statements – which will require corroboration if tested.
The level of reduction (which will be decided by the Commission at the end of the administrative procedure) will be determined according to the following bands:
In order to determine the level of reduction within each of these bands, the Commission will take into account the time at which the relevant evidence was submitted and the extent to which it represents added value.
Applications for partial leniency may be disregarded by the Commission if they are submitted after the statement of objections has been issued.
SCOPE/FULL LENIENCY
8. Is it possible to receive full leniency? And, if so, what are the conditions required to receive full leniency?
Yes, full leniency (total immunity from fines) is available if the undertaking is the first cartel member to come forward and provide the Commission with either (a) information and evidence which will enable the Commission to carry out a targeted inspection in connection with the alleged cartel; or (b) if an inspection has already been carried out, information and evidence which will enable the Commission to find an infringement of Article 81 EC in connection with the alleged cartel.
In addition to being the first cartel member to come forward, the applicant must meet the following cumulative conditions to qualify for total immunity:
1. the undertaking must provide the Commission with:
2. the undertaking must cooperate genuinely, fully, on a continuous basis and expeditiously from the time it submits its application throughout the Commission’s administrative procedure. As part of this obligation, the applicant must:
5. the undertaking must not have taken steps to coerce other undertakings to join or remain in the cartel.
In respect of 1(a), an applicant will only need to provide the home addresses of individuals involved in the cartel, if this information is necessary to the Commission investigation and that information is available to the undertaking. The Commission may carry out inspections of other premises, including the homes of directors, managers or other members of staff, if a reasonable suspicion exists that relevant books or other records related to the business or the cartel are being kept in these premises.
The obligation in 1(b) is subject to the important qualification that an applicant should not take any measure in preparing its application that would jeopardise the inspection. An applicant should therefore inform the Commission if there is a risk that internal inquiries carried out for the purposes of completing an application may alert other cartel members prior to an inspection.
The exception contemplated in 2(e) is intended to address the conflict that may arise between the obligation on an immunity applicant under the Leniency Notice not to disclose the fact of an actual or intended leniency application with its legal obligations (eg, as a listed company) which may require the undertaking to make such an application public.
It is also worth noting that the obligation not to destroy, falsify or conceal evidence of the alleged cartel in point 4 covers the period when the applicant was contemplating making an application, as well as the period after the application was made.
Immunity will only be granted if the information provided by the applicant meets the relevant threshold for immunity: ie if the information and evidence is submitted prior to an inspection, the information and evidence will enable the Commission to carry out a targeted inspection or, if the information is submitted after an inspection, the information and evidence will enable the Commission to find an infringement of Article 81 EC.
The conditions for lenient treatment (partial leniency) are identical to those for immunity (full leniency) except that a cartel member found to have coerced other cartel members to join or remain in the cartel remains eligible for partial leniency but not for immunity.
9. How many companies have received full immunity from fines to date?
Since the introduction of the 2002 Leniency Notice, the Commission has received 106 applications for immunity and 99 applications for a reduction in fines (where several immunity applications have been received for the same alleged infringement the first application is counted as an immunity application and the subsequent ones as applications for a reduction of fines unless the first application for immunity is rejected). The Commission granted immunity under the 2002 Leniency Notice (either in the final decision, or where the Commission has not reached a final decision, by way of a grant of conditional immunity) in 51 cases.
PROCEDURE/CONFIDENTIALITY
10. What are the practical steps required to apply for leniency?
An undertaking wishing to apply for immunity or lenient treatment should contact one of the Commission officials involved in operating the leniency policy. The Commission has a dedicated fax line for leniency applications but recommends that an applicant first make telephone contact with a member of the Commission’s leniency team by calling one of the dedicated telephone numbers (+32 2 298 41 90 or +32 2 298 41 91). Contact can be made directly by the undertaking or via its legal adviser.
An undertaking seeking immunity may either initially apply for a marker or immediately proceed to make a formal immunity application, which can also initially be made on hypothetical terms.
The marker system is a key new feature of the 2006 notice. A marker can be sought by an applicant from the Commission and if granted, will protect the applicant’s place in the ‘leniency queue’ for a specified period, allowing the undertaking time to gather the information and evidence necessary to make a formal application. In order to obtain a marker, the applicant must identify itself and supply information on the alleged cartel including its duration, the other participants and the affected product(s) and territories. If a marker is granted, the Commission will set a period within which the applicant has to perfect the marker by submitting a formal application (a corporate statement) and all information and evidence available to it. If the applicant perfects the marker within the period set by the Commission, the information and evidence provided will be deemed to have been submitted on the date when the marker was granted.
An undertaking (via its legal adviser) is also able to make an initial approach to the Commission on hypothetical terms in order to ascertain whether the evidence in its possession would meet the immunity threshold, without disclosing the identity of the applicant or the infringement. Under this procedure the applicant is required to provide a detailed descriptive list of the evidence that it proposes to disclose at a later agreed date and the Commission has recommended that copies of documents redacted to remove information which would identify the identity of the applicant should also be provided. Once the Commission has reviewed the list of information to be provided, the Commission will verify whether the evidence described meets the relevant threshold and conditions. Following disclosure of the information described (no later than the date agreed with the Commission), and verification by the Commission that the evidence corresponds to the description, the applicant will be granted conditional immunity.
The Commission has emphasised in its Revised Leniency Notice Q&A that a marker and a hypothetical application serve different purposes and are appropriate in different circumstances: a hypothetical application enables companies to ascertain whether evidence in their possession would meet the immunity threshold and involves disclosure of the evidence (albeit by means of description or edited copies) while a marker is granted to protect an applicant’s place in the queue while evidence is collected. The Commission has made it clear that a hypothetical application cannot be combined with a marker request. Once a marker has been obtained or guidance received following a hypothetical application, the applicant needs to proceed to provide the Commission with all relevant evidence and information and a corporate statement (in effect, submitting the full formal application).
The Commission will inform the applicant if immunity is not available or if the conditions for obtaining immunity are not met (eg it appears that the applicant has coerced other participants to take part in the cartel). The applicant may then either withdraw its application or request the Commission to consider its application as a request for partial leniency.
The grant of immunity will be conditional until the end of the administrative procedure. If at the end of the administrative procedure the Commission finds that the applicant has not fulfilled the conditions for immunity, the undertaking will not benefit from full leniency/immunity. This will mean that immunity will be withheld if an applicant is found to have coerced other participants to join or remain in the cartel, or has failed to cooperate fully, on a continuous basis and expeditiously with the Commission.
There is no marker system for applicants seeking partial leniency. It is also not possible for such applicants to submit a hypothetical application.
An applicant for partial leniency must submit a corporate statement to the Commission and provide information and evidence which meets the threshold for obtaining leniency – ‘significant added value’. If an applicant makes any voluntary submissions of evidence separately to the formal application, the applicant should identify, at the time the submission is made, whether it wishes that evidence to be treated as part of its application.
The Commission will not make a decision on an application for partial leniency before it has taken a position on any existing applications for immunity (full leniency).
The Commission will inform the applicant of its preliminary conclusion as to whether the evidence submitted by the applicant constitutes significant added value no later than the date on which the statement of objections is issued.
The final position, and the degree of lenient treatment, will not however be evaluated until the end of the administrative procedure. The Commission will determine in any such final decision:
An undertaking will not receive any reduction in fines under the Leniency Notice if it fails to meet the conditions for partial leniency.
11. Is there an optimal time to approach the regulatory authority?
Total immunity is only available to the first cartel member to provide information to the Commission in relation to the cartel activities and apply for immunity.
In order to ensure that an undertaking secures a marker as the first in the queue, the undertaking should make contact with Commission officials and request a marker as soon as possible after identifying the basis for the suspected infringement. Alternatively, if the undertaking is not sure whether the evidence it holds meets the relevant immunity threshold, the undertaking could, via its legal adviser, submit a hypothetical application seeking guidance from the Commission as to whether the evidence held meets the relevant threshold.
A hypothetical application will not, however, secure the applicant a place in the leniency queue and if an undertaking is concerned that other cartel members may approach the Commission and seek immunity, a request for a marker should be made without delay.
12. What guarantees of leniency exist if a party cooperates?
Immunity (full leniency) is only available if the undertaking is the first cartel member to come forward with evidence on the cartel, the evidence provided meets the relevant immunity threshold and the undertaking meets the necessary conditions for obtaining immunity, including the condition that the undertaking ‘cooperates genuinely, fully, on a continuous basis and expeditiously throughout the Commission’s administrative procedure.’
Partial leniency is only available if the applicant submits evidence that provides significant added value to the Commission’s investigation and the conditions for obtaining partial leniency are met. The conditions for partial leniency include an identical cooperation requirement.
The Commission has elaborated on the content of the cooperation condition in the Leniency Notice and has prescribed the following requirements that must be met in order for the cooperation condition to be fulfilled:
Commission issues a statement of objections. This list is not exhaustive and an applicant should be careful to ensure that it cooperates with the Commission throughout the administrative process.
Provided all of the relevant conditions are met, then the immunity on reduction in fine are in principle guaranteed, ie the Commission is bound to grant them. However, in practice the Commission has significant discretion in deciding whether the conditions are met, particularly given the subjective nature of terms such as ‘significant added value’ and ‘full’ cooperation.
13. Is confidentiality afforded to the leniency applicant and other cooperating parties? If so, to what extent?
The Leniency Notice does not contain any specific provisions regarding the confidentiality of immunity and leniency applications. It will, however, clearly be in the interests of the Commission to keep the identity of the immunity applicant confidential until the Commission has, at the least, conducted an investigation and possibly until the issue of the statement of objections.
The addressees of the Commission’s statement of objections (the undertakings which have participated in the cartel) will receive access to the Commission file following the Commission’s notification of the statement of objections. This is a procedural guarantee intended to apply the principle of equality of arms and to protect the rights of the defence.
Access to business secrets (eg production secrets, customer lists or pricing and cost data) may however be restricted. The rules governing access to file are set out in the Commission Notice on the rules for access to the Commission file (2005/C325/07).
Quite separate from the rights of access contained in Commission Notice on the rules for access to the Commission file, are the rights contained in Regulation (EC) No 1049/2001 of the European Parliament and of the Council regarding public access to European Parliament, Council and Commission documents (OJ L145, 31.5.2001). The general right contained in this Notice is subject to different criteria and has specific exceptions. The Commission is anxious to protect corporate statements submitted by leniency applicants and has put in place steps to restrict access to corporate statements and to prevent them being used against leniency applicants in a civil action for damages.
CONSEQUENCES
14. What effects does leniency granted to a corporate defendant have on the defendant’s employees?
There is no civil or criminal liability under European law for the employees and directors of an undertaking that has engaged in cartel conduct.
However, the national competition laws of certain EU member states (principally the UK and Ireland) do contain a criminal cartel offence and there have been concerns that an undertaking seeking immunity/leniency from the European Commission could inadvertently expose its employees and directors to prosecution under a national criminal cartel offence, following an exchange of information between the European Commission and national competition authorities.
The Office of Fair Trading (the principal UK authority responsible for administering the cartel offence) has sought to allay these concerns and has made clear in its draft final guidance note on the handling of leniency and no-action applications, that it will not use, either as intelligence or evidence, any leniency-derived information obtained from the Commission, to further its criminal cartel enforcement function. The situation may, however, be different in other EU member states.
15. Does leniency bar further criminal or private enforcement?
The Commission is unable to prevent private enforcement claims against leniency applicants in the national courts of EU or non-EU states. However, the Commission is anxious to ensure that the risk of discovery of corporate statements in civil damage proceedings does not dissuade potential leniency applicants. It has therefore put in place a procedure to restrict access to corporate statements in order to limit this risk. The aim of the Commission’s procedure is to ensure that, in the event of a private enforcement claim, leniency applicants are not in any worse position than their fellow cartel members.
The first limb of this procedure is the ability of immunity applicants to provide a corporate statement orally to the Commission. Oral corporate statements will be recorded and transcribed by the Commission and then checked for accuracy by the applicant. The transcript will form part of the Commission’s file and will be used as evidence.
The second limb of this procedure is the restrictions on access to corporate statements. The Commission will only grant access to corporate statements to the addressees of the statement of objections, and then only on the condition that the addressee will not make a copy of the information contained in the corporate statement and will only use the information contained in the corporate statement for the purposes of judicial or administrative proceedings applying the competition rules at issue. The Commission has indicated that the corporate statements will be accessible only at the Commission premises and normally on a single occasion following the formal notification of the objections.
Use of the information contained in the corporate statement for a different purpose may be regarded as a lack of cooperation (and hence failure to fulfil the conditions of immunity) and if the information is used after the Commission’s decision has been adopted, the Commission may, in any legal proceeding before the European Community Courts, ask the Court to increase the relevant undertaking’s fine. The Commission may also report an external counsel’s involvement to the bar of that counsel with a view to disciplinary action.
While the Commission is unable to bar criminal enforcement by national bodies against a leniency applicant, the restrictions on access to the corporate statement are likely to apply equally to attempts to use corporate statements in a criminal prosecution. More importantly, at least one jurisdiction (the UK) has indicated that it will not use any leniency-derived information obtained from the Commission to further its criminal cartel enforcement functions.
RELATIONSHIP WITH THE LENIENCY POLICY IN EU MEMBER STATES
16. Does the policy address the interaction with applications for leniency in EU member states? If so, how?
The Leniency Notice does not expressly address the interaction with applications for leniency in EU member states. However, the principles contained in the EC Network Notice will govern case allocation and information sharing arrangements between the Commission and the member state’s national competition authorities in the context of a leniency application.
As set out in the EC Network Notice, the European Commission will be considered the best placed authority to act where the cartel has effects on competition in more than three member states. However, as a leniency application to the Commission will not be considered an application for leniency to an EU member state, and an applicant may be exposed under a member state’s national competition law, prospective applicants are advised to seek leniency from all competition authorities competent to apply Article 81 in the territory affected by the infringement which may be considered ‘well placed’ to act against the infringement.
The burden associated with multiple filings has been recognised by the ECN, and the Model Leniency Programme (introduced by the ECN in September 2006) provides for a ‘summary application’ system to be used when immunity is sought from the European Commission. This system, which is explained in response to question 17 below, allows a leniency applicant to submit a short form summary application to the national competition authorities of member states, where they intend to seek immunity from the European Commission.
REFORM/LATEST DEVELOPMENTS
17. Is there a reform underway to revisit the leniency policy? What are the latest developments?
As the new Leniency Notice was introduced in December 2006, there are no immediate plans for reform. However, it can be expected that the Commission will keep the system under constant review and may adjust its procedural practices in the light of its experience in applying the (new) Leniency Notice. Further, the Commission is considering introducing a new policy of ‘direct settlements’ under which fine reductions would be granted in exchange for recognition of the infringement and a commitment to pay the fine (see speech by Commissioner Neelie Kroes at the 11th EU1 Competition Law and Policy Workshop: Florence 2–3 June 2006).
The Commission’s leniency policy should also be considered in light of the Model Leniency Programme that was launched by the European Competition Network in September 2006.
The Model Leniency Programme, a soft law instrument, is aimed as a first step towards harmonising leniency policy throughout the EU. In addition to setting out the main procedural and substantive rules that the ECN members believe should be common to all leniency programmes, the Model Leniency Programme also sets out a model for a uniform summary application system.
The model summary application system provides that, where the Commission is ‘particularly well placed to act’ (ie where the cartel has an effect on more than three EU member states) and the applicant has or is in the process of filing an application for immunity with the Commission, the applicant may file a summary leniency application with the national competition authorities which the applicant considers might be ‘well placed to act’. The proposed requirements of the summary application are set out in the Model Leniency Programme and are significantly abridged from the requirements of a standard leniency application. However, as set out above, the Model Leniency Programme will need to be incorporated into the national leniency policies of the EU member states before it can take effect. At least one member state (the UK) has already adopted the necessary elements of the Model Leniency Programme (principally the summary application model).
