The network of European antitrust and competition authorities (“ECN”) published its revised Model Leniency Programme (“Revised MLP”) recently .
Goals of the Model Leniency Programme
Any undertaking participating in cartel activities and willing to put an end to its participation may inform the European Commission (“Commission”) and National Competition Authorities (“NCAs”) of the existence of those activities where they infringe EU and/or national competition law. In exchange for the information it provides, the undertaking, otherwise known as a ‘leniency applicant’, may obtain immunity from, or a reduction in, any penalty ultimately imposed for those activities. The information disclosed must be sufficient to enable the authority to carry out inspections, further its investigation, or make a finding of infringement. Immunity is available only to the first applicant for leniency; later applicants may receive only a reduction in penalty.
Currently, in addition to the Commission, all Member States (except Malta) have leniency programmes. Under several of these programmes, a leniency applicant involved in a cartel in more than one Member State may obtain protection throughout the European Union, provided that it approaches those authorities that have jurisdiction to pursue a case against it. Discrepancies between the different programmes make this exercise cumbersome, time consuming and costly. This led the European Commission to introduce the Model Leniency Programme in 2006 (“2006 MLP”) with a view to harmonising rules and procedures relating to the leniency programmes of the various ECN members. The Revised MLP builds on the 2006 MLP.
Changes to the 2006 MLP
The Revised MLP makes clear that all leniency applicants that apply to the Commission in cases concerning more than three Member States may submit a summary application to all relevant NCAs. The 2006 MLP had introduced a uniform summary application system, but had restricted the ability to submit a summary application to the first applicant only. In fact, some national authorities had already extended this right to all applicants. Rather than having to file complete leniency applications with all NCAs with jurisdiction to take actions against the cartel, a summary application system allows the NCAs to accept a leniency application on the basis of more limited information, where a full application has been given to the Commission.
The Revised MLP also provides a template for the submission of a summary leniency application within the ECN. The document is in form of a questionnaire, requiring an applicant to provide details of the affected products and territories, the period of the infringement and information about submissions to the Commission and other NCAs. It is to be noted that while this template may be useful, the Model Programme sets out only the principal elements that should be common to all leniency programmes across the ECN. It does not prejudice the ability of an NCA to add further detailed provisions which suit its own enforcement system or to provide for more favourable treatment of undertakings that apply to it. Therefore, an NCA could adopt its own summary leniency application form with some variations.
The Revised MLP also provides a list of NCAs that have agreed to accept summary applications in English. The table below is our extended version of the list provided with the Revised NLP.
Click here to view table.
Explanations in the Revised MLP highlight the conduct that is expected of the applicant immediately following the leniency application and throughout the procedure. The Revised MLP also clarifies when applicants are expected to update summary applications at national level. This may be necessary where, for example, applicants subsequently provide evidence to the Commission that indicates that the alleged cartel covers more products than originally reported to the NCA in a summary application.
The 2006 MLPwas brought out in response to calls for a one-stop leniency shop. While the revisions to the 2006 MLP are welcome, undertakings should not expect this to lead to a uniform leniency policy in the European Union. The variety of legislative frameworks, procedures and sanctions across the European Union would make it difficult to adopt a single uniform system.
It remains vital for a company to consider very carefully those countries in which a leniency application should be made, and to justify robustly why a leniency application should not be made in any particular jurisdiction. A decision not to make a leniency application in a particular jurisdiction could have consequences similar to those in the laundry detergent cartel decisions adopted by the European Commission and the French Competition Authority: one party obtained immunity fromthe European Commission but another party obtained immunity from the French Competition Authority, which imposed higher fines than the European Commission. In simplifying the procedure, the revised MLP may facilitate a leniency applications in a greater number of jurisdictions.
Before they can become operational, the principles in the Revised MLP need to be implemented under the leniency programmes of the various ECN members, either by being incorporated in their leniency programmes or by being implemented in practice. There will therefore be a transitional period before these changes are introduced.