On 14 June 2011, the Court of Justice ruled that private litigants may access leniency documents for the purposes of preparing an action for damages in respect of alleged injury caused by the cartel6. It held that EU legislation does not preclude a victim claiming damages from being granted access to documents provided by a leniency applicant. It is for the national courts and tribunals to determine, on the basis of their national law, whether access to the documents should be allowed or refused.
Pfleiderer AG (‘Pfleiderer’), a major purchaser of decor paper, applied to the Bundeskartellamt for comprehensive access to the files relating to the decor paper cartel in order to prepare for civil proceedings for the recovery of damages. The Bundeskartellamt granted Pfleiderer limited access to the file, i.e., to a version from which confidential business information covered by the national leniency programme had been removed.
Pfleiderer brought an action before the Amtsgericht (Local Court) Bonn to challenge that decision. The Local Court of Bonn concluded that Pfleiderer, within the meaning of the German Code of Criminal procedure, was an aggrieved party which had demonstrated its legitimate interest to be granted access to the files and to evidence held by the authorities.
The Local Court of Bonn ordered access both to the material in the file which the applicant for leniency had voluntarily made available to the German competition authority and to the incriminating material and evidence collected but limited the access to confidential business information and internal notes on legal discussions of the Bundeskartllamt. However, the local court of Bonn decided to stay the decision since it considered that the intended decision could conflict with Articles 11 and 12 of Regulation No 1/2003 concerning the cooperation between the Commission and the NCAs and the exchange of information.
The Court of Justice points out that neither the EC Treaty provisions on competition nor Regulation No 1/2003 lay down common rules on leniency or common rules on the right of access to documents submitted during a leniency procedure. Even if Commission notices and guidelines might provide some guidance to National Competition Authorities ‘NCAs’, it remains that in the absence of a binding resolution under EU Law on the subject, it is for the Member States to establish and apply national rules on the right of access by persons adversely affected by a cartel, to documents relating to leniency procedures.
The Court, indeed, recognises that the disclosure of information voluntary submitted by a leniency applicant could reduce the attractiveness of leniency programs. However, the Leniency Notice does not provide cartel members with any immunity from civil law. In addition, well-settled case law endorses the right of injured parties to bring an action for loss caused by conduct which is liable to restrict or distort competition.
The Court seems to consider that the right to claim damages is as effective as a leniency program to end or to limit competition distortion. Such a right “strengthens the working of the Community competition rules” and discourages anti-competitive practices. The actions for damages before national courts contribute to the maintenance of effective competition in the EU.
The Court makes clear that national rules governing actions for damages for cartel infringements should not be less favourable than those governing similar domestic claims. The national rules should not diminish the injured party’s fundamental right to an effective remedy. It is further up to national courts to engage in a balancing exercise on a case-by-case basis to determine the conditions under which such access must be allowed or refused. The national courts must balance the respective interests involved. On the one hand the interests in favour of the disclosure of documents to ensure an individual’s rights to claim damages for loss caused by violations of competition law. On the other hand the interests in favour of the protection of the information submitted on a voluntarily basis by the leniency applicant.
The consequences of this judgment are far reaching. It places NCAs in a difficult position. The leniency applicant trusts the authority for not divulgating the information provided for the purpose to catch the cartelists. The Commission has largely maintained that adequate protection should be given to corporate statements by leniency applicants7. At the same time, the authority cannot ignore claimants’ rights to get reparation.
This judgment does not leave much uncertainty as to the possibility to disclose leniency documents to third parties in civil proceedings. However, ambiguities remain regarding the discoverability of oral corporate statements made during leniency application, transcripted by the Commission and which become an institution internal record.