Will the new Commission leniency and fining policy appeal to multi-jurisdictional lenency applicants?
| Autor | Luis Ortiz Blanco - María Muñoz de Juan - Ángel Givaja |
| Cargo del Autor | Abogados. Garrigues, Madrid and Brussels |
| Páginas | 101-129 |
Page 101
The aim of this paper is to address a few questions regarding the EC leniency and fining policy and its application to international cartels. Leniency programmes have become the most useful instruments for most
Page 102
competition authorities in their fight against cartels. However, such programmes will only appeal to the members of international cartels if they are able to instil some confidence on discovery issues and they are mutually consistent.
This paper briefly identifies the main points of the EC leniency and fining policy which may nevertheless deter members of international cartels from applying for immunity. Some words will also be devoted to the ECN Model Leniency Programme.
Cartels are treated as serious infringements in all jurisdictions which have antitrust laws in place. Competition authorities all over the world are increasingly focusing their efforts and resources on fighting cartels, whose detection and dismantling are among their main priorities given their pernicious effects on both the market and consumers.
At the same time, international cartels are becoming more and more common and often have effects in several countries. Thus companies’ defence strategies must take into account the rules applying in various jurisdictions. However, while leniency programmes have been established throughout the world, they are not necessarily consistent and harmonised. Leniency applications are likely to be multiple and the criteria for immunity and fine reduction vary significantly. The most harmful cartels are the international cartels but for their members the lack of consistency between the different jurisdictions deters them from making leniency applications.
It is not always an easy task for a company and its legal advisers to analyse the risks involved in different jurisdictions and very different results may be discovered. For instance, levels of fines may vary, while in some cases criminal sanctions (including imprisonment) may apply. The conditions for immunity and risk of discovery are also very different. A cartel may also cover jurisdictions without a leniency programme, and therefore a potential whistleblower will not be protected against actions initiated by that particular competition authority.
As indicated, this lack of consistency and harmonization makes leniency applications regarding international cartels less appealing. The success of all leniency programmes is inextricably linked to the legal certainty that they are able to provide. However, the question nowadays is not only whether the leniency programmes of the US, the EU or other countries
Page 103
provide enough certainty to ‘blow the whistle’ or to apply for immunity or a reduced fine, but rather how to achieve an efficient defence strategy in different jurisdictions at the same time. The main question is how to find a system that encourages members of an international cartel to apply for leniency under the various programmes, one that ensures such companies a satisfactory level of legal certainty worldwide. Thus, consideration must be given to the level of legal certainty a particular leniency programme can provide, bearing in mind how it interrelates with programmes in other jurisdictions. Drawing up a good defence strategy for several jurisdictions at the same time is not an easy exercise for legal advisers.
Needless to say, cartels are by their nature difficult to uncover, since they are not normally evidenced in writing. Discovering and proving the existence of a cartel may therefore be a very difficult task without the help of one or more leniency applicants. Even one whistleblower may not be enough.
In this context, in 2006 the European Commission modified its Notice on immunity from fines and reduction of fines in cartel cases1 (’the Leniency Notice’) and adopted new Guidelines on the method of setting fines2(‘the Fining Guidelines’). For lawyers representing multinational companies involved in international cartels the first question to address is whether the said Notice and Guidelines respond to the expectations of the market and whether they make the EC leniency programme more appealing to members of international cartels3. As we shall see, it is not clear whether they do.
Page 104
A leniency programme will be successful, i.e. of interest to any participant in a cartel, if the right balance is struck between the potential risks and benefits for applicants. Therefore, the following aspects will be taken into account by potential applicants: (i) a significant threat of severe sanctions; (ii) a high risk of discovery; and (iii) the legal certainty regarding the conditions for obtaining immunity or a reduced fine. However, a member of an international cartel will also take into consideration (iv) how many leniency applications are needed, and (v) what are the risks of the multi-jurisdictional filing in terms of civil or criminal litigation and discovery and disclosure.
The European Commission stated in its press release published on the date that the Leniency Notice was adopted that “the European Commission has taken another important step to uncover and put an end to hard-core cartels by adopting a revised Notice”4. Is this correct? Does the EC Leniency programme appeal more than before to members of an international cartel, and if so, does it go far enough5
To answer these questions let us review a few key aspects of the Leniency Notice.
• Legal certainty
As already indicated, it is widely agreed that the success of a leniency programme relies, among other factors, upon the legal certainty,
Page 105
predictability and transparency of the cartel enforcement programme. When deciding whether to apply for leniency, the applicant company will want to be able to predict with a high degree of certainty how it will be treated when seeking leniency (legal certainty), and what will be the consequences if it does not do so (deterrence). Both ingredients, essential for a successful leniency ‘recipe’, have to be balanced. Nevertheless, it seems that while the Commission has increased deterrence (raising fines in a way which might go beyond the “reasonable foreseeable standard” recognized by the ECJ in Dansk Rørindustri et al. v Commission6), it has been much less generous as regards legal certainty, and has in fact gone backwards in comparison with the 2002 Notice. The result is a very salty salad but with little lettuce, which will have to be eaten carefully to avoid serious indigestion.
Of course, the lack of legal certainty, transparency and predictability has as its corollary a wider discretion on the part of the Commission when deciding whether to grant total or partial immunity. This trend towards a widening of the Commission’s discretion – in marked contrast with the US amnesty programme – can be found in several parts of the Leniency Notice.
The most relevant issue is the stiffening of the test of when a firm is eligible for immunity. Point 8 of the 2002 Notice had already been the target for some criticism since it gave a great deal of discretion to the Commission, stating that the applicant had to submit evidence which ‘in the Commission’s view’ may enable it (i) to adopt a decision to carry out an investigation; or
(ii) to find an infringement of Article 81 EC. This was already in marked contrast with the US and Canadian systems, which grant ‘automatic’ immunity, at least when the authority does not know that an infringement has taken place. Once discovered, depending on the level of information that the authorities possess, some degree of discretion might be needed.
Page 106
The Commission, when drafting the 2006 Leniency Notice, missed the chance to harmonize its test with the US model7. Instead, under the new Notice it went for a more rigorous approach, changing the wording from ‘may enable’ to ‘will enable’. The immediate result is that applicants are having more difficulties in satisfying the new test.
The wording of the 2006 Leniency Notice suggests that the information provided by the applicant must in itself be sufficient to allow the Commission to carry out an inspection or find an infringement. As a consequence, information which ‘substantially’ contributes to the decision of the Commission to carry out an investigation or find an infringement might not be sufficient to qualify for immunity. This uncertainty could make companies reluctant to apply for leniency when, although having current and detailed information regarding the cartel (which can be used by the Commission to obtain further information), they fear that this alone is not enough to cause the Commission to undertake an inspection or find an infringement.
Further, ‘may enable’ is a concept which could be evaluated in the abstract and independently of the final use given by the Commission to the information. By contrast, the new ‘will enable’ test depends entirely on the subjective assessment of the Commission and the effective use of that information. In other words, while an undertaking can assess with a greater or lesser degree of certainty whether or not the information supplied may enable the Commission to find an infringement or carry out a dawn raid, the way in which the Commission will use the information for such purposes is beyond its...
Para continuar leyendo
Solicita tu prueba