In January 2016 the European Commission reached a significant milestone when it imposed fines in the twentieth cartel settlement case. Many of the benefits of settlement have been realised since the procedure’s inception in 2008. The Commission benefits from a simplified and quicker procedure, allowing it to handle more cases with the same resources, and has to contend with significantly fewer appeals. The settling parties benefit from a 10 per cent reduction in the level of their fine, a shorter timeframe for the investigation, typically a more concise infringement decision and potentially more subtle benefits such as greater influence on the content of a decision than under the standard procedure.
Despite these benefits, in an article published by Competition Policy International on 15 June 2016, we examine some of the issues that have arisen in relation to the settlement procedure and how settlement cases are handled. In particular, we consider the complex issues that arise in “hybrid” cases. Parties considering settling will need to weigh the advantages of doing so against the potentially significant disadvantages associated with hybrid cases, regardless of whether they are a settling or non-settling party. The detailed information provided about the settling parties’ cartel activities in the only standard decision published so far in a hybrid case provides a strong disincentive for parties to settle and we believe that the Commission will need to ensure that this issue is addressed in any future hybrid decisions. Parties opting out of settlement on the basis of the fine also need to think carefully, in the knowledge that the Commission may well take the least favourable approach to calculating its fine under the standard procedure. Parties opting out of settlement on the basis of liability need to be aware of the risks of bias.
The article also examines the Commission’s considerable discretion in relation to the initiation and continuation of settlement discussions, as well as the appeals by Société Générale and Tompla in relation to the fines imposed in settlement decisions.