Answer ... The Leniency Notice sets out a framework for the leniency programme in the EU.
The first undertaking to submit information and evidence enabling the Commission to carry out a targeted inspection or find an infringement of Article 101 TFEU will qualify for full immunity. Undertakings will need to submit sufficiently detailed evidence to qualify for immunity by enabling the Commission to carry out a targeted inspection. To qualify for immunity by enabling the Commission to find an infringement, it is also necessary that the Commission did not already have sufficient evidence to find such an infringement prior to the leniency application.
A number of other conditions apply. The undertaking must cooperate “genuinely, fully, on a continuous basis and expeditiously” throughout the process (see question 5.4). It must also have ended its involvement in the alleged cartel immediately following its application (except where continuation is deemed necessary by the Commission for investigatory purposes), and must not have “destroyed, falsified or concealed evidence” of the alleged cartel when contemplating making its leniency application.
Undertakings which are not the first to submit evidence and therefore do not qualify for full immunity may nonetheless be eligible for a reduction in their fine (between 30% and 50% for the first undertaking; between 20% and 30% for the second; and up to 20% for any others) if they provide evidence that represents “significant added value with respect to the evidence already in the Commission’s possession”.
Answer ... Full immunity from fines is afforded to the first undertaking to submit information and evidence enabling the European Commission to carry out a targeted inspection or find an infringement of Article 101 TFEU, provided that certain conditions are met (see question 5.1). A reduction in fines (between 30% and 50% for the first undertaking; between 20% and 30% for the second; and up to 20% for any others) is afforded to those providing evidence adding significant value to the Commission’s evidence file (see question 5.1).
Answer ... An immunity applicant will usually apply for a ‘marker’ first by providing brief details of the alleged cartel in order to guarantee its place in the queue in respect of other leniency applicants for a period of time while it gathers further information and evidence.
A formal leniency application requires an undertaking to provide detailed evidence of the cartel (see question 5.1) and a corporate statement. Alternatively, it may offer this evidence in hypothetical terms and present a list of the evidence it proposes later to disclose.
The Directorate-General of Competition will grant conditional immunity if it is satisfied that the application or a hypothetical set of evidence will meet the conditions. Once the evidence is disclosed and matches the hypothetical descriptions provided, conditional immunity will be granted. The immunity granted at this stage is conditional – if the end of the administrative procedure is reached and the undertaking has failed to meet the other conditions set out in question 5.1 (i.e., continuous cooperation; having ended its involvement in the cartel immediately after its application; not having destroyed or concealed evidence), the undertaking will not receive immunity.
The process is similar for applicants applying for a reduction in the fine. At the end of the administrative procedure, the Commission will evaluate the position of each applicant for a reduction, and will determine whether the evidence provided in each application represented significant added value and met the conditions, and the level of reduction in fine for each undertaking.
Answer ... Crucially, leniency applicants are subject to a requirement to cooperate “genuinely, fully, on a continuous basis and expeditiously” from the time they apply throughout the administrative procedure. As set out in the Leniency Notice, this duty to cooperate includes:
- promptly providing the Commission with all relevant information and evidence;
- remaining at the Commission’s disposal to answer requests;
- making employees and executives available for interview;
- not destroying, concealing or falsifying evidence; and
- not disclosing the fact or contents of its application before the Commission has issued a statement of objections.
The consequences of failing to comply with this duty extend to immunity being withdrawn or a reduction not being granted, as applicable.
Answer ... The leniency programme is available only to undertakings (see question 2.4 for a definition of an ‘undertaking’). Employees and former employees do not formally benefit from a leniency application filed by their employer (but there may be associated longer-term benefits, such as mitigated reputational harm, from an employer being successfully granted immunity or leniency).
Individuals can report cartels to the Commission either directly (which will reveal the individual’s identity, but will give the statement more credibility) or through the Commission’s anonymous online whistleblower tool, launched in 2017, which uses an encrypted messaging system run through a specialised external service provider to guarantee anonymity. Individuals can agree to two-way communication with the Commission through this tool if further information is needed (e.g., if the Commission seeks clarifications or further details).
Answer ... Immunity and leniency applications are conditional upon the undertaking meeting certain conditions (continuous cooperation; having ended its involvement in the cartel immediately after its application; and not having destroyed or concealed evidence) at the end of the administrative procedure. The undertaking will not benefit from immunity or a reduction in fine if these conditions are not met (see question 5.1).
For example, in the Commission’s Italian Raw Tobacco case, Deltafina breached its duty of cooperation by disclosing its application to the other cartel participants before the Commission had launched its investigation. Conditional immunity was therefore withdrawn. Deltafina’s cooperation was nonetheless considered a mitigating circumstance in the Commission’s assessment of the appropriate fine, so a reduction in fine was granted outside the formal leniency framework.