Opinion of the Economic and Social Committee on the "Draft Commission Notice on immunity from fines and reduction of fines in cartel cases"
Date: 2001-11-29
Institutions: European Economic and Social Committee
Subjects: application of EU law, competition law, fine, restrictive trade practice

C 48/82

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Official Journal of the European Communities

21.2.2002

5. The next steps

The European Economic and Social Committee considers that:

(a)

over the next few weeks the Commission should submit
specific proposals, going beyond the declaration of the
Ghent European Council, as to how the economic policy
and macroeconomic policy mix of the Community and
the monetary union should be adapted to the changed
world economic situation; this should make it clear what
contribution is expected from individual players;

Brussels, 28 November 2001.

(b) discussion in the Council and in public of the Communi-
cation from the Commission of 7 February 2001 on
Strengthening economic policy coordination within the
euro area (1) should resume to ensure that pragmatic but
effective improvements are made in this area as soon as
possible;
in the near future a discussion should take place of ways
of increasing the effectiveness of the provisions of the
Treaties relating to economic policy and the articulation
of the Community economic interest in the process of
adapting the Treaties with a view to enlargement.

(c)

(1) COM(2001) 82 final.

The President

of the Economic and Social Committee

Göke FRERICHS

Opinion of the Economic and Social Committee on the ‘Draft Commission Notice on immunity
from fines and reduction of fines in cartel cases’

(2002/C 48/20)

On 18 October 2001, the Economic and Social Committee, acting under Rule 23(2) of its Rules of
Procedure, decided to draw up an opinion on the ‘Draft Commission Notice on immunity from fines and
reduction of fines in cartel cases’.

The Section for the Single Market, Production and Consumption, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 21 November 2001. The rapporteur was
Mr Sepi.

At its 386th plenary session (meeting of 29 November 2001), the Economic and Social Committee
adopted the following opinion by 52 votes to 6, with 10 abstentions.

1.

Introduction

establishing the facts surrounding what remains the most
serious infringement of competition rules.

The Committee has examined the draft notice on
1.1.
immunity from fines and the reduction of fines for undertak-
ings that disclose secret cartels between undertakings that
infringe competition rules.

1.2.
in 1996 (1),

This notice, which replaces the previous notice adopted
is intended to improve efficiency in terms of

2. Summary of the notice

(1) OJ C 207, 18.7.1996, p. 4.

The Commission is convinced that by limiting compe-
2.1.
tition, secret cartels between undertakings effectively push
prices up, restrict choice and have a detrimental effect on

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C 48/83

European industry. They enable undertakings to escape the
market pressure that would otherwise encourage them to
innovate, and the result is increased raw material prices and a
negative impact on employment.

The Commission believes that some undertakings
2.2.
would be prepared to end their participation in these cartels
and inform it of their existence, but are dissuaded by the risk
that they will have to pay high fines. After five years of
implementing the 1996 notice,
the Commission has the
practical experience necessary to propose major changes
based on the criteria of transparency, certainty and a closer
correlation between the levels of fine reductions and the
significance of the contribution made by the undertaking.
The reductions will apply only to undertakings that supply
significant evidence.

Lastly, the Commission takes the view that the benefit
2.3.
to citizens and consumers outweighs the interest in fining
those undertakings that enable it to detect unlawful practices.
On the basis of this reasoning, the Commission has presented
a draft notice on immunity from fines and the reduction of
fines, making the following specific points:

— The new notice will replace the 1996 notice and after a
sufficient period of implementation the Commission will
decide whether further modifications are required.

— It must provide evidence and information that enable the
Commission to order a verification under European law.

— It must provide the Commission with all evidence and

information in its possession.

— It must end its involvement in the illegal activity from the

moment that it makes its disclosure.

— It must not have coerced other undertakings to partici-

pate.

2.5. Reduction of fines

from a reduction.

In order to qualify,

2.5.1.
Once the Commission has granted conditional
immunity, or is aware of the alleged cartel, other undertakings
may benefit
the
undertaking must provide evidence that represents real added
value with respect to the evidence already in the Commission’s
possession. The concept of added value refers to the extent to
which the evidence provided enables the Commission to prove
beyond doubt the existence of the cartel. Provision is made for
three levels of reduction, taking into account the date on
which evidence was presented and the degree of added value,
and ranging from 20 % to 50 %.

— If at any point in the procedure the undertaking does not
it will no longer receive

fulfil the conditions listed,
favourable treatment.

2.6.

Procedures

— The level of cooperation is only one of a number of
elements to be taken into account by the Commission,
which will reserve the right to grant reductions for other
reasons too.

— Given that an undertaking benefiting from this procedure
is nevertheless not protected legally or judicially, the
Commission will take a decision, pursuant to Article 81(1)
of the Treaty, describing in full the part which the
undertaking played in the illegal practice and explaining
the reasons for immunity or reduction of the fine.

2.4.

Immunity

2.6.1.
In both cases, in the interests of transparency and
certainty, the procedures concern: written confirmation of
receipt of the request, a description of the infringement, the
number and identity of the participants, the size of the market
concerned, etc.

3. General comments

3.1.
It is always difficult to find proof of an illicit cartel, and
the opportunity for a member to cease involvement in an
illegal activity with immunity or a reduced fine will facilitate
investigations and deter those intending to set up new cartels.

An undertaking may benefit

2.4.1.
from immunity if,
having met the requirements listed below, it is the first to
disclose a secret cartel of which the Commission is not aware.
The requirements are the following:

3.1.1.
The Committee would nevertheless ask the Com-
mission to consider two precautionary measures and to alter
certain rules that make the disclosure of these illegal cartels
less attractive.

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3.1.2.
The first precautionary measure concerns the need
to limit the recompense for offenders to the minimum which
is necessary to detect and prohibit secret cartels, without losing
sight of the fact that it is in the public interest to punish
infringements of Community competition rules. Hence the
concessions offered under the notice must only be granted in
return for a substantial contribution to the establishment of
the facts and the punishment of offenders.

3.1.3.
Secondly, the disclosures should be complete and
exhaustive and bring to light all the information available to
the undertaking in question.

Comparison with the rules set out

3.2.
in the 1996
notice highlights a number of gaps that could prejudice the
effectiveness of the new provisions.

For undertakings to benefit

3.2.1.
for
instance, the new notice requires that the Commission be
unaware of the illegal cartel, whereas the previous notice also
covered cases in which the Commission did not have ‘sufficient
information’ to prove the existence of a cartel.

from immunity,

3.2.2.

This clearly restricts cases of immunity and makes

Brussels, 29 November 2001.

disclosure less attractive. The Committee therefore believes it
would be worthwhile returning to the 1996 version.

The condition imposed by the Commission for
3.2.3.
undertakings to benefit
from a reduction in the fine is
less flexible than the 1996 notice, as undertakings making
disclosures must now provide ‘evidence’, and the documents
and information required in the past will no longer suffice.
The notice does not specify the scope of the pieces of evidence
which undertakings are to provide.

Once again, this limits the opportunities and incen-
3.2.4.
tives for undertakings to act as intended. The Committee is of
the view that the Commission should reinstate the 1996
wording or specify in the notice the scope of the pieces of
evidence or information that can be deemed to qualify for a
reduction in a fine.

3.3. With regard to the legal consequences of the Com-
mission publicising a secret agreement, after the necessary
verifications, the notice should give a clearer indication of its
willingness to provide useful and reasoned evidence in order
to ease the position of undertakings making disclosures should
third parties sue them for damages.

The President

of the Economic and Social Committee

Göke FRERICHS

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C 48/85

APPENDIX

to the opinion of the Economic and Social Committee

The following amendment, which received over a quarter of the votes cast, was rejected during the debate.

Points 3.1.2 and 3.1.3

Delete the above points.

Reason

There is a serious risk that these proposals could undermine the purpose of the changes which the Commission is
proposing to the Notice. The aim is to make it easier for undertakings to anticipate how the rules will be applied and
hence to encourage them to help in exposing and putting an end to cartels. Admittedly the thrust of point 3.1.2 is
not entirely clear but the recommendation made in point 3.1.3 would seem either impracticable for the Commission
to implement or make it impossible for undertakings to assess whether immunity from, or a reduction of, fines will
be granted when an undertaking considers notifying the Commission of a particular cartel in which it has participated.

Results of voting

For: 23, against: 28, abstentions: 4.