Antitrust Leniency Notice: Guidelines from the European Commission

The European Commission recently published guidelines in the form of a Frequently Asked Questions (FAQ) document regarding its Leniency Notice (see here). Companies involved in a secret cartel that disclose their activities to the European Commission and hand over evidence can benefit from either total immunity from or a reduction of fines under the Leniency Notice. The guidelines offer companies further options to engage with the European Commission while remaining anonymous and to discuss whether the conduct they are considering disclosing would entitle them to the benefits of the Leniency Notice.

Key provisions of the Leniency Notice remain unchanged

The key provisions of the Leniency Notice remain unchanged:

• Immunity from fines: The first company to notify the European Commission of its participation in a cartel and to provide evidence that enables the European Commission to conduct an inspection or identify a cartel may apply for full immunity from fines.
  
  
• Reduction of fines: Each following company is eligible to have their fines reduced by up to 50% if they disclose their involvement in the cartel and provide evidence that has significant added value compared to the evidence already held by the European Commission.
  
  
• Further Conditions: The conditions for immunity from or reduction of fines also include that the company cooperates with the Commission promptly, continuously and to the fullest extent. In addition, any participation in the cartel must cease, and evidence of the cartel must not be destroyed, falsified or suppressed.
  
  

Guidelines provide more clarity on important issues

The guidelines aim at making the outcome of a leniency application more predictable for companies by introducing the following features:

• Informal Advice: The guidelines refer to specific Leniency Officers at the European Commission to whom undertakings and, in particular, their lawyers may turn for informal guidance on the Leniency Notice or on a leniency application.
  
  
• Anonymous Communication: The European Commission indicates its willingness to engage in an anonymous exchange of information on possible leniency applications without requiring disclosure of the cartel participants, their scope of activities or other details that could make it possible to identify the cartel.

This guidance and communication may help to eliminate uncertainties as to whether particular novel types of conduct even constitute a cartel covered by the Leniency Notice and to what extent a company may benefit from a leniency application in such a case.

The guidelines also aim at facilitating procedural aspects of leniency applications. To this end, the European Commission has updated its eLeniency platform that companies can use for leniency applications:

• Faster Access: The new version of eLeniency enables the European Commission to provide participating companies rapid access to documents that would otherwise only be accessible at the Commission’s premises.
  
  
• Faster Notification: The new version also affords the European Commission the possibility to notify the companies involved of decisions and similar ordinances and documents in the course of the leniency proceedings without delay. This may concern, for example, letters granting a marker, requests for information or “no-action” letters.

Finally, the guidelines contain a large number of clarifications in respect to definitions and further advice on the applicability of the Leniency Notice, the possible benefits for companies and the corresponding legal protection.

Consequences in Practice

The European Commission’s guidelines illustrate the importance of internal compliance measures, as did the German Federal Cartel Office’s guidelines on its Leniency Notice from last year (see our news article here). The guidelines help to further increase the predictability of the outcome of a leniency application and further facilitate filing a leniency application. Overall, the guidelines may incentivize more companies to seek guidance from the Commission on past conduct and file for leniency sooner. Accordingly, companies are well advised to establish adequate internal measures to detect potential cartel infringements.