A key case (C-360/09, Pfleiderer AG v Bundeskartellamt) regarding the interaction between the EU leniency program and the rights of private plaintiffs to claim damages for harm suffered as a result of cartels is currently pending before the European Court of Justice (ECJ).

A Reference for a Preliminary Ruling From Bonn, Germany

The case at issue involves a reference for a preliminary ruling from the German Amstgericht Bonn (the Local Court of Bonn), dealing with an allegedly injured party’s request for access to documents submitted by three leniency applicants previously found by the Bundeskartellamt (the German competition authority) to have engaged in a cartel violative of Article 101 Treaty on the Functioning of European Union (TFEU).

The claimant had purchased goods with a value in excess of 60 million euro from the three cartelists and, in order to prepare for civil proceedings for the recovery of damages, it applied to the Bundeskartellamt for comprehensive access to the files relating to the cartel proceedings.

The national authority informed the claimant that it intended to limit access to the file to a version from which had been removed documents covered by point 22 of the Bundeskartellamt’s Leniency Program[1]. Under that provision, the national authority has the power to refuse applications by private parties for file inspection, or the supply of information, involved in a leniency application. This decision of the German competition authority was appealed to the Amstgericht Bonn, which held that in cartel proceedings, an aggrieved party should be granted access to the files and to evidence held by the authorities insofar as it can demonstrate a legitimate interest in that regard.[2] In the case at issue, Pfleiderer, the claimant, which had allegedly paid excessive prices as a result of the cartel, in principle should have been considered an injured party bearing a legitimate interest in accessing the file.

However, the Amstgericht Bonn suspended the proceedings and referred the case to the ECJ, questioning whether its intended decision would conflict, in particular, with Articles 11 and 12 of Regulation 1/2003, that oblige the EU Commission and the national competition authorities to cooperate closely and provide for a mutual exchange of information - including leniency statements - for use as evidence in proceedings for the enforcement of antitrust rules. The German court observed that if the Bundeskartellamt were obliged to reduce the level of protection set forth by point 22 of its Leniency Program, this might entail two serious consequences.

First, the EU Commission and other national authorities may no longer provide the Bundeskartellamt with information based on leniency applications, because documents are exchanged between competition authorities only when the protection against disclosure granted by the receiving competition authority is equivalent to the one conferred by the transmitting authority. Second, there would be a risk that potential claimants may, in the future, be dissuaded from cooperating within the framework of the leniency program, because the leniency applicant would fear that documents voluntarily transmitted to the competition authority might be used directly against it in civil claims for damages. In that way, the applicant for leniency would be placed in an even worse position than cartel members who do not cooperate with the competition authorities.

The Opinion of Advocate General Mazák

Advocate General Mazák delivered his opinion on December 16, 2010.

The Advocate General (AG) stigmatized the approach of the referring court because, in his view, the issues of cooperation and exchange of information between the EU Commission and the national authorities provided for by Articles 11 and 12 of Regulation 1/2003 were only hypothetical in the case at stake.[3]

Conversely, the AG, partly reinterpreting the query posed by the court, focused on what he deemed to be the heart of the matter: whether the grant, by a national competition authority to an allegedly injured party, of access to information voluntarily submitted by a leniency applicant when the allegedly injured party intends to bring an action for damages, might jeopardise the effective enforcement of Article 101 TFEU.

The AG emphasized the tension between two conflicting interests: if leniency applications were to be available to private plaintiffs, the proof of the claim would be facilitated. This would render more effective the right of injured persons to bring actions for damages for cartel infringements, a right which has been clearly endorsed by the ECJ.[4] However, such a disclosure would reduce the attractiveness of leniency programs, an instrument of undisputable success in defeating cartels.

The AG believed that the absence of consistent and binding rules on the issue was particularly unfortunate. On one side, the EU Leniency Notice[5] states that cooperation pursuant to that notice does not provide cartel members with any immunity from the civil law consequences of its participation in an infringement of Article 101 TFEU. On the other hand, third parties injured by a cartel cannot “exploit” the evidences submitted in a leniency proceeding, because they are barred from accessing the Commission’s file. Access to documents, in fact, is only granted to the addressees of a statement of objections, essentially for the purpose of safeguarding their right of defense.

As to the nature of the documents, a specific protection (besides the one granted to internal documents, business secrets and confidential information) is granted by the EU Commission to corporate statements, which are “voluntary presentations of an undertaking's knowledge of a cartel and its role therein, prepared specially to be submitted under the leniency programme”[6]. According to the EU Leniency Notice, in fact, corporate statements may be oral, and access to them by the addressees of a statement of objection is subject to more stringent conditions than those provided for pre-existing documents submitted by the leniency applicant. Having considered this scenario, the AG proposed the following solution to the ECJ .

  1. Where a national competition authority operates a leniency program in order to ensure the effective application of Article 101 TFEU, parties adversely affected by a cartel may not, for the purpose of bringing civil-law claims, be given access to self incriminating statements voluntarily provided by leniency applicants in which the applicants effectively admit and describe to the authority their participation in an infringement of Article 101 TFEU, as this could substantially reduce the attractiveness and thus the effectiveness of the authority’s leniency program, and in turn undermine the effective enforcement by the authority of Article 101 TFEU.
  2. Conversely, it would run counter to the fundamental right to an effective remedy and a fair trial, guaranteed also by the Charter of Fundamental Rights of the European Union, if access to other pre-existing documents submitted by a leniency applicant were denied by the national competition authority.

The Possible Implications of the Anticipated ECJ Ruling

It remains to be seen whether the ECJ will adopt the Advocate General’s “twofold” proposal or a more clear-cut stance on the issue.

Indeed, the distinction between “self incriminating statements” and “pre-existing documents” is not “new,” but was already provided for by the EU Leniency Notice, although exclusively with regard to access to the file by the addressees of a Statement of Objection.

This distinction, while clear in theory, might create some practical problems for the competition authorities and for the national courts while dealing with requests for access by private parties. In particular, it hardly reconciles with the (recent) practice of the EU Commission to send requests for information to leniency applicants aimed at clarifying the position put forward in their corporate statement(s), and at collecting “pre-existing documents.” Will this additional information be treated as a “self-incriminating statement”?

The anticipated ruling of the ECJ may have repercussions on U.S. proceedings dealing with “multijurisdictional” cartels. The EU Commission has sought to resist and limit discovery of leniency documents - through the submission of letters, amici curiae briefs, and even direct intervention before U.S. courts - mainly relying on considerations of international comity, arguing that such a discovery would undermine its most effective weapon in cartel enforcement. To date, these “defensive” attempts by the EU Commission have met with varying degrees of success in the U.S. courts. It is possible, however, that the judgment of the ECJ may have an impact on the level of protection afforded by U.S. courts to EU leniency materials.