On 8 October 2013, the European Commission (Commission) issued updated guidance for companies that make oral statements when cooperating with the Commission in a cartel investigation.
When to Apply for Leniency
Companies that have allegedly participated in a cartel can apply for leniency with the Commission and National Competition Authorities that operate leniency programmes. Should the company decide to apply for leniency, quick action is recommended. The Commission may only award full immunity from fines to the company that comes forward first. Companies that are not first to apply may, however, still benefit from a reduction of the fine if they can provide significant added value.
In order to apply for leniency, the company can contact the Commission and apply initially for a marker. The marker is a placeholder to secure the company’s place ahead of other companies that may apply for leniency and gives some additional time to gather information to prepare the formal application. According to the Commission’s leniency notice, the leniency applicant must provide a detailed description of the alleged cartel. This must include, inter alia, its activities and functioning,, its product and geographic scope, and any other evidence in the applicant’s possession that relates to the alleged cartel.
Why Oral Statements
At the applicant’s request, the Commission may accept that corporate statements are delivered orally. It is now common practice for applicants to provide the statements orally, as it is essential that the information provided concerning cartelist conduct cannot be accessed by third party claimants in follow-on damages actions. This is particularly important with respect to limiting the discoverable leniency materials under US discovery rules as US authorities have extensive discovery jurisdiction outside the United States. Documents produced by the Commission, such as transcripts of oral statements, cannot be accessed under US discovery rules.
What Should be Provided in an Oral Statement
The Commission requests that the oral statement is clear, factual and to the point, with precise and sufficiently detailed information. Although information on the alleged cartel can be provided orally, information such as the product and market description, general market information and other publicly available information must be provided in writing. It should be noted that oral statements cannot contain business secrets or other confidential information.
Annexes submitted to the oral statement need to be numbered clearly and provided in electronic format.
In the updated guidance, the Commission explains the formalities that need to be observed when making oral statements, from preparation for the appointment to checking the accuracy of the audio recordings after the oral statement has been delivered.
When making an appointment to deliver an oral statement, the Commission asks for at least 24 hours prior notice and details of who will attend, the equipment required and how long the meeting is likely to last.
Before arrival at the meeting, the applicant must have prepared all the materials to be provided to the Commission, including any annexes.
After the oral statement has been recorded, the applicant is obliged to check the technical accuracy of the audio recording and the accuracy of the Commission transcript within a given time limit. If this cannot be done on the day of the recording, another appointment must be arranged. Any corrections that go beyond ensuring the accuracy of the recording will have to be made as a separate audio file.
To view the full guidance please click here.