Cooperating parties

Immunity

Is there an immunity programme? If so, what are the basic elements of the programme? What is the importance of being ‘first in’ to cooperate?

A leniency programme has been in place since 2002. The current policy rule on leniency applicable to companies as well as individuals wishing to confess to involvement in a cartel was published in July 2014. The policy rule provides that immunity from fines is available for the first party to present information to the ACM about a cartel prior to the start of an investigation which enables the ACM to carry out a targeted inspection or, in the event the ACM has already initiated an investigation, the first to provide information that was not yet in the ACM’s possession enabling the ACM to prove the cartel infringement. In addition, the party should not have compelled other companies to take part in the cartel agreement and should continue to comply with its duty to cooperate. Not only companies, but also individuals, can apply for leniency. An individual can apply for leniency independently or jointly with other individuals, on the condition that these individuals at the time of the leniency application are all employees of the same company involved in the cartel. Individuals may also be granted leniency if a company applies for leniency. If a company does so, current employees can benefit from the same leniency if they declare to the ACM that they want to be considered as leniency co-applicants of the company and they individually comply with the leniency requirements. Former employees can benefit from a company’s leniency application in the same manner, but only if the ACM determines that there is no conflict with the interest of the investigation.

Subsequent cooperating parties

Is there a formal programme providing partial leniency for parties that cooperate after an immunity application has been made? If so, what are the basic elements of the programme? If not, to what extent can subsequent cooperating parties expect to receive favourable treatment?

If immunity from fines is no longer available, parties can still apply for leniency by way of fine reduction if they supply information to the ACM that has significant added value to the investigation and provided they cooperate fully with the ACM’s investigation. The duty to cooperate includes the obligation to:

  • refrain from any practice that may obstruct the ACM’s investigation;
  • provide the ACM with all documents in its possession as soon as it obtains those documents or can obtain them;
  • immediately terminate its involvement in the cartel, unless otherwise agreed with the ACM; and
  • keep its employees and - insofar as is possible - former employees available for statements.

Parties that have not applied for leniency but cooperate with the investigation beyond the legal requirements may also obtain a fine reduction. The policy rule on fines provides that such cooperation qualifies as a mitigating factor when setting the fine.

Going in second

How is the second cooperating party treated? Is there an ‘immunity plus’ or ‘amnesty plus’ option?

The second cooperating party can obtain a fine reduction between 30 and 50 per cent for providing the ACM with information that has significant added value. A fine reduction between 20 and 30 per cent is available to the third party submitting information of significant added value. Subsequent parties can obtain fine reductions up to 20 per cent. All leniency applicants will have to continue to comply with their duty to cooperate in order to qualify for leniency. The Dutch rules do not provide for ‘amnesty plus’.

Approaching the authorities

Are there deadlines for initiating or completing an application for immunity or partial leniency? Are markers available and what are the time limits and conditions applicable to them?

Whether it is advisable for a company to apply for leniency depends on the specific circumstances of the situation, but although there are no deadlines for applying for leniency, once the decision to apply for leniency has been taken, it is advisable to present the information as soon as possible.

It is also possible to obtain a marker for an incomplete leniency application, if the information provided by the leniency application offers a concrete basis for a reasonable suspicion of the applicant’s involvement in a cartel. In most cases, it may prove time-consuming and burdensome to gather all the evidence on the cartel agreement. The marker secures the leniency applicant’s position in relation to other possible applicants during a time period that is determined by the ACM’s Leniency Office on a case-by-case basis.

Cooperation

What is the nature, level and timing of cooperation that is required or expected from an immunity applicant? Is there any difference in the requirements or expectations for subsequent cooperating parties that are seeking partial leniency?

The same level of cooperation applies to all leniency applicants, in that from the moment a company submits its leniency application, it should:

  • refrain from any practice that may obstruct the ACM’s investigation (such as destroying evidence, or any action that would result in the (future) leniency application becoming public knowledge;
  • provide the ACM with all documents in its possession as soon as it obtains those documents or can obtain them;
  • immediately terminate its involvement in the cartel, unless otherwise agreed with the Leniency Office; and
  • keep its employees and - insofar as is possible - former employees available for statements.
Confidentiality

What confidentiality protection is afforded to the immunity applicant? Is the same level of confidentiality protection applicable to subsequent cooperating parties? What information will become public during the proceedings and when?

The candidate leniency applicant can contact the ACM’s Leniency Office anonymously or through an authorised representative to discuss the applicability of the policy rule to a ‘hypothetical’ case. Prior to applying for leniency, the candidate applicant can also - through an attorney - (anonymously) contact the Leniency Office by telephone to determine whether it can still qualify for full immunity. If the Leniency Office confirms the availability of full immunity, the candidate applicant is obliged to immediately apply for leniency.

Corporate statements containing incriminating information do not have to be provided in writing but can be provided orally. Further, any information presented to the ACM by a company in the context of an application for leniency should not be made public to the extent that the information qualifies as confidential information (eg, business secrets) within the meaning of the relevant article of the Dutch Act on transparency in public administration. The identity of the applicant for leniency is not made public before the ACM has issued its report (comparable to the Commission’s statement of objections).

However, confidentiality of information contained in leniency applications in respect of exchange of information between agencies remains a controversial issue (see question 12).

Moreover, the policy rule on leniency also covers breaches of article 101 TFEU with effect in the Netherlands. Rules for exchange of leniency application information and cooperation with the Commission and other EU member state competition authorities are included. The policy rule refers to the Commission’s Notice on cooperation within the ECN and states that the ACM will follow the Notice with regard to the position of applicants claiming the benefit of a leniency programme and exchange of information (in relation to article 101 TFEU).

The policy rule on leniency states that the identity of the leniency applicant will remain confidential until the ACM has issued a report, unless there is a legal obligation to do so earlier or the leniency applicant agrees to earlier disclosure of its identity. Addressees of the report will be allowed to inspect the leniency statements (without being able to photocopy or photograph it) but can only use it within the context of the administrative procedure relating to the cartel at hand.

Settlements

Does the investigating or prosecuting authority have the ability to enter into a plea bargain, settlement or other binding resolution with a party to resolve liability and penalty for alleged cartel activity? What, if any, judicial or other oversight applies to such settlements?

In December 2018, the ACM published guidelines on how it handles settlements. The ACM states that when it considers a case suitable for a settlement, it will indicate the facts that constitute the Infringement and the fine It intends to impose on the relevant parties. They may react, but the ACM indicates that It does not want to negotiate. If a party acknowledges the Infringement and accepts the fine, the ACM will grant a 10 per cent reduction and publish a summary decision of the case.

Before that, the ACM was already willing to consider settlement of competition infringements by alternative means (to refrain from imposing substantial fines to competition law infringements). In August 2015, the ACM for the first time applied a procedure similar to the European Commission’s cartel settlement regime and lowered by 10 per cent cartel fines imposed on two natural vinegar producers in return for an acknowledgement of their involvement in and their liability for the cartel. The vinegar producers’ employees made use of the same procedure to have their personal fines reduced. In the cold storage cases (see question 6), the ACM used a procedure similar to the European Commission’s cartel settlement regime to lower the fine imposed on a cold storage company by 10 per cent in return for an acknowledgement of its involvement in and its liability for the infringement.

The ACM may further decide to refrain from sanctions if companies pledge in writing to refrain from certain behaviour, which enables the ACM to adopt a commitments decision (comparable to a commitments decision under article 9 of Regulation No. 1/2003). If the commitments are broken, the ACM can - without further investigation - impose a fine amounting to the higher of 10 per cent of turnover or €450,000. The ACM cannot accept a pledge if it intends to impose a fine, which will be the case with hard-core cartels. In February 2018, the ACM approved commitments offered by KLM Royal Dutch Airlines and Amsterdam Airport Schiphol not to have any contact about the restriction of growth opportunities of other airlines relative to KLM and other members of the Sky Team airline alliance. The ACM wanted to avoid KLM receiving improper preferential treatment.

According to the ACM, compliance programmes are particularly relevant to sectors in which the ACM’s enforcement policy has been successful (eg, the construction industry and insurance sector).

Corporate defendant and employees

When immunity or partial leniency is granted to a corporate defendant, how will its current and former employees be treated?

If a company applies for leniency, individuals can benefit from the same leniency if they declare to the ACM that they want to be considered as a leniency co-applicant of the company and they individually comply with the leniency requirements. Individuals can also apply for leniency by themselves, expressly stating that they do not act on behalf of the company of which they are (former) employees. Individuals can also apply for leniency jointly on the condition that at the time the leniency application is made they are all employees of the same company involved in the cartel.

Dealing with the enforcement agency

What are the practical steps for an immunity applicant or subsequent cooperating party in dealing with the enforcement agency?

Applications for leniency must be lodged with the ACM’s Leniency Office. Leniency officers are officials of the ACM who are not entrusted with surveillance or investigative duties. The Leniency Office has its own telephone and fax numbers and email address. It will notify a company of the date and time that its application for leniency has been received by the Leniency Office.

The order of applications is determined by the date and time of the initial telephone call or other oral or written contact between the undertaking and the Leniency Office when a company has unequivocally requested leniency on the basis of the policy rule.