In terms of enforcement, the European Commission ( “EC”) issued three settlement decisions, confirming the continued success of the settlement instrument. The only traditional infringement decision this year was the second re-adoption of the Reinforcing Bars decision, a procedural saga which had been ongoing since its first adoption in 2002. The EC granted a 50% fine reduction in recognition of the long duration of proceedings.The EC wrapped up its second investigation in Occupant Safety Systems (II), bringing the total amount of cartel-related fines in the automotive sector to over €2 billion. The two Forex decisions are perhaps the most interesting: separate decisions were issued with respect to each of the chatrooms, under the name Three-Way Banana Split and Essex Express, in which the participating banks exchanged commercially sensitive information. A third leg of the investigation is ongoing.
As to policy output, the EC has been taking a number of measures to address the steady decline in European leniency applications – a topic which remains high on the agenda. In addition to the recently introduced anonymous whistle-blower tool and an increased focus on ex officio investigations (e.g. Alliance Casino & Intermarché), the EC has set up its new ELeniency tool, enabling companies to make online submissions in the context of leniency applications, settlement procedures and cooperating procedures. Covington, together with the Brussels School of Competition have organised a second survey on leniency, addressed to practitioners, regulators and companies, to verify the impact of these developments on their position towards the instrument. If you want to participate in the survey, please click here and we will send you the link.
Furthermore, Member States have until 4 February 2021 to implement the ECN+ Directive. This should give the National Competition Authorities additional instruments to enforce competition law alongside the EC in the European Cartel Network (“ECN”). Finally, the EC has also provided guidance on business secrets and voluntary confidentiality rings, to further facilitate access to file.
The Courts have continued to closely scrutinise the EC’s decisions, recently focussing largely on the requirement to adequately state its reasons when departing from the standard methodology of the Fining Guidelines, leading it to annul the EC’s decision against Icap v Commission and HSBC v Commission, and to grant a 40% reduction of the fine in Pometon v Commission.
The order of leniency applications was discussed in Recylex v Commission, where the Court confirmed that an undertaking cannot move up the leniency order if another undertaking has been disqualified from leniency for not meeting its duty of cooperation.
In Campine v Commission, the Court found that the Commission should have taken account of the two significant gaps in Campine’s participation in the Car batter recycling cartel. Although Campine had not publicly distanced itself from the infringement during these periods, the Court found that the Commission should have brought forward additional evidence in order to find a single and continuous, rather than single and repeated infringements. This had a substantial impact on the duration of the cartel – and resulted in a fine reduction.
The Court also provided a welcome clarification to its position on hybrid settlements in Pometon v Commission, after it gave the EC a stark warning that it should respect the rights of defence of non-settling parties, and the presumption of their innocence in particular. It has now been made clear that staggered hybrid procedures are possible, insofar as the settlement decision does not contain a legal qualification of the role of the non-settling parties, but remains limited to a description of the facts in that respect.
Looking forward, the speakers expect a continued scrutiny of the proof and motivation of EC decisions by the Courts. Of interest in the next years will be cartels where the theory of harm revolves around restrictions of innovation, e.g. in the context of the Car Emissions investigation. The speakers expect deepening cooperation within the ECN and the continued scrutiny by the Commission of automotive, financial services and industrial sectors. The settlement instrument is expected to continue its success of recent years, yet the future of the leniency instrument is an area to watch – in particular in view of recent EC policy initiatives and increased cooperation within the ECN.