Introduction

In June 2011 the European Court of Justice (ECJ) held in Pfleiderer (C-360/09) that the EU law on cartels, in particular Regulation 1/2003, does not in itself prohibit a party seeking cartel damages from being granted access to leniency statements or documents held by the national competition authorities. Rather, the ECJ found that member states' courts and tribunals should determine requests for access to leniency-related documents on a case-by-case basis, weighing up the respective interests in favour of disclosure of the information on the one hand, and protection of that information on the other.

On January 18 2012 the Local Court of Bonn handed down its judgment in Pfleiderer (51 Gs 53/09), which gave rise to the ECJ's preliminary judgment. The local court decided to deny access to all documents related to leniency applications.

Facts and decision

The follow-on claimant (the alleged victim of a cartel detected and sanctioned by the Federal Cartel Office (FCO)) challenged the FCO's decision to deny access to the entire investigation file. The claimant sought access in order to prepare its damages claim against the cartel participants. The FCO had granted only partial access, withholding documents related to leniency applications submitted by the cartel participants.

Under Section 406 of the Code of Criminal Procedure, in principle, parties affected by a cartel may be granted access to the FCO's investigation file. However, that provision sets out several exceptions to the rule. Under one exception, access to the file may be denied if disclosure would appear to jeopardise the purpose of the investigation concerned, or of any other investigation.

Since the administrative proceedings against the cartel participant had been brought to an end before the cartel victim applied for access to the file, the court considered whether the disclosure of the leniency documents could jeopardise any other investigation. The court reasoned that potential leniency applicants in other cases would be deterred from cooperating with the FCO if they feared that documents related to their leniency applications could be disclosed to third parties, thus increasing their risk of being sued following the FCO's administrative proceedings. Under these circumstances, the court concluded that granting access to the complete file in Pfleiderer would set a precedent that would negatively affect the willingness of cartel participants in other cases to make use of the leniency procedure under German cartel law. In turn, this would severely diminish the likelihood that future cartels would be detected since, in the court's opinion, the leniency programme has been shown to be the most effective means of unmasking cartels. In addition, cartel victims would suffer from any increased reluctance of cartel participants to apply for leniency, as they would not become aware of the cartels in the first place.

The court also held that the denial of the disclosure in Pfleiderer would not undermine the ability of the claimant to substantiate the damages claim to the required degree, since:

  • the claimant had been granted access to the rest of the file;
  • the FCO's infringement decision had binding effect on the civil court; and
  • the civil judge was allowed to estimate the amount of the damages caused by the cartel.

The court based its decision on the general effect that the disclosure in the case at hand would have on future cartel participants. In contrast, in its decision of December 15 2011 in CDC Hydrogene Peroxide, the ECJ held that the European Commission was wrong to deny access to the statement of contents of its case file by referring to the third indent of Article 4(2) of Regulation 1049/2001. Under that provision, a refusal to grant access can be based on the protection of the purpose of the investigation activities. However, the ECJ held that the commission's reasoning that the disclosure of the statement of contents was likely to undermine its competition policy and, in particular, its leniency programme was flawed since these were general considerations independent from any specific procedure.

Comment

By its judgment, the Local Court of Bonn took a robust stance in favour of protecting leniency-related documents. Since the court has exclusive jurisdiction on appeals against decisions of the FCO to withhold documents contained in its file, it appears unlikely that in future cases leniency-related documents will be disclosed to third parties seeking damages. This holds even more true if one takes into account that the German legislature is currently considering amending the German cartel law by a provision explicitly denying access to leniency applications and evidence submitted in support of such applications. The new provision is expected to enter into force on January 1 2013.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.