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Immunity and leniency

Immunity and leniency programmes

Is an immunity and leniency programme available for companies? If so, how does it operate?

The Competition Act and the Regulations on Defence of Competition set out provisions governing the immunity and leniency programmes. In addition, the National Markets and Competition (NMCC) issued its communication on leniency programmes on June 19 2013 in order to improve the method of filing and reviewing a leniency application under cartel prosecution proceedings.

Accordingly, the NMCC must exempt a company or an individual that is allegedly involved in a cartel from the payment of the fine if:

  • the company is the first to provide evidence which allows the NMCC to order an inspection, provided that at the time of the submission of evidence the NMCC does not already have sufficient evidence to order an inspection; or
  • the company is the first to provide evidence which may enable the NMCC to find an infringement of Article 1 of the Competition Act in relation to a cartel, provided that at the time of the submission the NMCC does not have sufficient evidence to find an infringement and an exemption to a company or individual has not been granted in accordance with the first point.

Can the enforcement authority decline or withdraw leniency? If so, on what basis?

The NMCC can decline or withdraw leniency in the following cases:

  • if the NMCC is not the authority particularly well placed to deal with the exemption application submitted and that competence rests with the European Commission or with the competition authority of another EU member state;
  • if the NMCC is not the competent authority to deal with the exemption application and that competence rests with a regional competition authority;
  • if the presumed infringement becomes time barred under Article 68.1 of the Consumer Protection Act;
  • if the fine exemption application is presented after the statement of objections has been notified;
  • if the exemption application has been submitted jointly by several applicants or if the applicant indicates it has not participated in the cartel;
  • if the applicant is disqualified from obtaining exemption from payment of the fine because it took steps to compel other undertakings or individuals to join or remain in the cartel;
  • if the content of the exemption application is insufficient because it does not contain information and evidence on a cartel or if such evidence is not presented after the applicant has been granted a specific timeframe for doing so;
  • if the content of the exemption application is incomplete because the information and evidence submitted prevent the investigation division from ordering an inspection or establishing a cartel infringement; and
  • if the conditional exemption is unavailable because the requirements of Article 65 of the Consumer Protection Act are not met, either because the NMCC already has sufficient evidence to order an inspection or to establish the existence of the infringement or because a conditional exemption has already been granted to another exemption applicant.

Are there benefits for cooperators that do not qualify for immunity? If so, how are these benefits determined?

Yes. A company or an individual may ask for a fine reduction if it:

  • provides evidence of the suspected infringement that represents significant added value with respect to the evidence that the NMCC already has;
  • cooperates fully, continuously and expeditiously with the NMCC throughout the administrative investigation procedure;
  • ceases its participation in the alleged infringement at the time that it submits the evidence of the existence of the cartel, except in those cases where the NMCC deems necessary that its participation continues in order to preserve the efficacy of an inspection; and
  • has neither destroyed evidence relating to the application for exemption nor disclosed, directly or indirectly, to third parties other than the European Commission or other competent authorities, the existence of its application or part of its contents.

In these cases:

  • The first company or individual that fulfils the conditions is granted a reduction of 30% to 50%.
  • The second company or individual that fulfils the conditions is granted a reduction of 20% to 30%.
  • Any subsequent company or individual that fulfils the conditions is granted a reduction of up to 20%.

What benefits (if any) are available for employees and former employees of a company that seeks leniency?

The immunity or the fine reductions granted to companies will also benefit its legal representatives or the members of the management bodies that have participated in the agreement or decision provided that they have cooperated with the NMCC.

Is an immunity or leniency programme specifically available for individuals? If so, how does it operate?

The leniency programme is the same for both companies and individuals.

Have there been any notable recent cases in which a leniency application was the subject of adjudication?

Yes. Balearic Passengers Transport (S/DC/0512/14), in which an undertaking requested the exemption of penalties under the leniency application. The other 35 companies were fined.

Criminal liability

Is immunity from criminal prosecution available? If so, how and under what conditions is immunity granted?

Not applicable.

Application procedure

What is the procedure for a leniency application?

The NMCC recommends that applicants should submit their applications in a sealed envelope, which, after registration at the NMCC registry, must be opened only by Cartels and Leniency Unit (CLU) officials. Applications must consist of a template (the NMCC has included this template in Annex I of its communication on leniency programmes, available on the NMCC website), which should be signed by the applicant and contain the relevant information and documentation regarding the existence of the cartel and its main characteristics.

Two versions of each leniency application must be submitted: the original (to be kept by the NMCC) and a copy (to be kept by the applicant). Both versions should be marked with an adhesive receipt seal by the NMCC registry indicating the exact date and hour that the documents were received. If requested by the applicant, the NMCC may also provide a document confirming the receipt of the leniency application.

If previously agreed with the CLU, applicants may also submit oral leniency applications, which must be recorded on NMCC premises. The transcription of the application must be immediately registered at the NMCC registry, indicating the exact date and hour of registration.

Once the CLU receives an exemption application, it will review its contents and confirm with the applicant whether the exemption can be granted. This must be confirmed only by the council of the NMCC at the end of the penalty proceedings and provided that the applicant has fulfilled all of the legal requirements.

If the exemption of the fine is not possible (ie, in cases where a previous exemption has been submitted regarding the same cartel or where the NMCC was already aware of the existence of that cartel), the CLU must allow any applicant to withdraw its leniency application or to submit an application for a fine reduction.

What is the typical timeframe for consideration of a leniency application?

The Competition Directorate will grant a provisional immunity before any dawn raid following the application or before the submission of the statement of objections, as the case may be. The council of the NMCC will confirm the immunity in the decision declaring the existence of the cartel as long as the applicant has fulfilled all of the following requirements set out in the Competition Act:

  • maintaining full, continuous and efficient cooperation with the NMCC throughout the penalty proceedings;
  • refraining from further participation in the alleged infringement as soon as the evidence has been provided, unless the NMCC deems it necessary to safeguard the efficacy of a dawn raid;
  • having neither destroyed evidence relating to the application nor revealed its intention to apply for leniency to third parties; and
  • not having taken steps to coerce other companies to take part in the infringement.

What information and evidence is required?

According to the communication on leniency programmes, leniency applications must be accompanied by (at least) the following information:

  • the identification of the leniency applicant, including name and contact data, a brief description of the applicant and (if necessary) the identification of the representative and a copy of the power of attorney;
  • the participants in the cartel, including names and contact data, a brief description of the companies and the form and extent of their participation in the agreement;
  • a detailed description of the cartel, including its objectives, activities and functioning, products, services and territories affected, the duration and nature of the cartel, specific dates, locations, content and participants in meetings;
  • evidence relating to the cartel in the possession of the applicant or available to it within a reasonable period; and
  • actions adopted (ie, a declaration that the applicant has not disclosed to third parties its intention to submit a leniency application and a declaration that the applicant has not destroyed evidence relating to the leniency application).

What information and evidence is disclosed to subjects of the investigation other than the leniency applicant?

See answer to the question “What confidentiality is required from applicants?”

What level of cooperation is required from applicants?

The applicant must cooperate fully, continuously and expeditiously with the NMCC throughout the administrative investigation procedure.

What confidentiality protection is offered to applicants?

All leniency applications and their contents (including the identity of the applicant) are treated as confidential information by the NMCC, which must file these documents in a separate folder when classifying the information corresponding to the relevant case file. However, the affected companies will have access to the information deemed essential in order to reply to the statement of objections formulated by the NMCC.

According to the communication on leniency programmes:

  • In the event of judicial review, when the leniency application submitted in the penalty proceedings is sent to the National High Court, the NMCC will expressly identify the statements made by the leniency applicant and no copies of it will be permitted.
  • If the documents submitted by the leniency applicant are requested by a court that is competent to examine the NMCC’s actions before the issuance of the resolution that puts an end to the penalty proceedings, those documents will be remitted on a confidential basis and expressly indicate that they cannot be communicated to possible interested parties or third parties.
  • When dealing with civil actions for damages arising from cartels declared through penalty proceedings where a leniency application was submitted, the NMCC will not provide copies of the statements of the leniency applicants, since such disclosure would impair the effectiveness of the leniency programme and weaken the fight against cartels. Further, by virtue of the Civil Procedure Act, courts cannot request any party or third party to disclose statements made in the leniency application.

Can the company apply for a marker? If so, under which conditions?

The company can apply for a marker. On a prior reasoned request from the applicant, the competition directorate may grant a timeframe for submitting the evidence that the applicant was unable to submit at the time that the leniency application was presented. Further, in the summary application an extended time limit for submitting the cartel evidence may be requested. 

Once the application has been completed and the evidence has been submitted within the timeframe, the date and time of receipt of the leniency application will be understood to be the initial entry date and time at which the summary application was filed.

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