Comeback of leniency: More than a first step?

The decreasing number of leniency applications seems to be one of the main concerns of antitrust regulators (and private litigation firms) these days. Many argue that leniency applicants are an easy target for civil damage claims and need to be better protected in order to increase the number of leniency applications. Whilst this debate is far from over, the European Commission has presented a new guidance paper with the goal of providing more clarity on certain questions relating to the current leniency regime.

Since the introduction of the current Leniency Notice in 2006, companies apparently saved more than EUR 16 billion by benefiting from immunity or a reduction of the fine. Last week, the Commission published a guidance paper with frequently asked questions on its leniency policy and practice (FAQ). The goal is to provide “further transparency, predictability and accessibility to potential leniency applicants”.

It does not seem to be too far-fetched to predict that the FAQ alone will not tremendously increase the number of leniency applications in the near future nor do the FAQ change the general concept of leniency. Nonetheless, the document includes some interesting insights into the Commission’s legal assessment of cartel cases as well as some new possibilities for interested companies to interact with the Commission before and during cartel proceedings.

More than fixing prices

The leniency concept generally allows companies to apply for leniency (and ultimately benefit from immunity or a reduction of fine) if they reveal their participation in a secret cartel. The definition of “cartel” under the leniency notice already makes it clear that a cartel in the technical sense is broader than old grey-haired men sitting in heavy brown chairs in a secret backroom discussing how to best increase prices to the detriment of their customers (and this is not because of an increase in diversity).

In recent years, not only the big corporates have implemented compliance structures to prevent, inter alia, such hard-core infringements, but the Commission, has also increasingly focussed on less traditional cases. Those involved, e.g., buyer cartels, technical cooperations and cases merely involving information exchange. In the FAQ, the Commission now reflects these developments by citing some of those more prominent but less “traditional” cases in which immunity (or a reduction of the fine) was granted. So, even if a certain conduct is not a clear-cut hardcore infringement, leniency as such should be considered as a feasible option.

Again – Informal discussions are welcomed

More room for new cases under the leniency regime goes somewhat hand-in-hand with a second development. We have reported previously that the Commission encourages companies to proactively approach the regulator to informally discuss difficult cases. This point is stressed again in the FAQ, this time relating to leniency. Companies have the chance, even while remaining anonymous, to discuss via their “legal representative” (i.e. outside counsel) whether a given conduct indeed constitutes a secret cartel.

On top of that, the Commission emphasizes that companies can approach the Commission’s Leniency Officer to see whether immunity is still available (or if another company came in first). In such case, however, the “legal representative” must commit that the client will immediately submit its application (or a marker) if that is confirmed. The Leniency Officer serves as the first point of contact for those type of discussions (in case of need, here are the specifics).

No more trips to Place Madou?

Going to Place Madou in Brussels for submitting a leniency application via an oral statement in a windowless room has always been the (preliminary) final step  after having conducted several interviews and having reviewed tons of more or less incriminating documents. The satisfying feeling of fresh air after those sessions might be gone given that the Commission, now more than ever, encourages companies to make use of its eLeniency online platform to submit those statements. The Commission highlights in the FAQ that the eLeniency tool has become the “primary and preferred” procedure and provides the same guarantees as oral statements even when it comes to litigation discovery.

In terms of travelling to Madou, it even gets worse (or better, depending how much you actually like Brussels). The Commission announced that, as of October 2022, a new version of the eLeniency tool allows the Commission to grant access to corporate statements of other companies involved in the proceedings. So, the suspension of entering a room full of hard copies will similarly not be the same.

Small step or giant leap?

While the FAQ is obviously not a gamechanger with regards to weighing the pros and cons of leniency, it sends the clear signal that the Commission is not only developing new theories of harm but also encourages companies to seek guidance. Companies should further take away that leniency is also on the table in unusual cases.

Photo by Carson Masterson on Unsplash

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