Commission Notice on Immunity from fines and reduction of fines in cartel cases   (Text with EEA relevance)
Date: 2006-12-08
Institutions: European Commission
Subjects: competition law, fine, infringement of EU law, inter-company agreement, restriction on competition, unlawful agreement

8.12.2006

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Official Journal of the European Union

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Commission Notice on Immunity from fines and reduction of fines in cartel cases

(Text with EEA relevance)

(2006/C 298/11)

I. INTRODUCTION

(1) This notice sets out the framework for rewarding coopera-
tion in the Commission investigation by undertakings
which are or have been party to secret cartels affecting the
Community. Cartels are agreements and/or concerted prac-
tices between two or more competitors aimed at coordi-
nating their competitive behaviour on the market and/or
influencing the relevant parameters of competition through
practices such as the fixing of purchase or selling prices or
other trading conditions, the allocation of production or
sales quotas, the sharing of markets including bid-rigging,
restrictions of imports or exports and/or anti-competitive
actions against other competitors. Such practices are
among the most serious violations of Article 81 EC (1).

(2) By artificially limiting the competition that would normally
prevail between them, undertakings avoid exactly those
pressures that lead them to innovate, both in terms of
product development and the introduction of more efficient
production methods. Such practices also lead to more
expensive raw materials and components for the Com-
munity companies that purchase from such producers.
They ultimately result in artificial prices and reduced choice
for the consumer. In the long term, they lead to a loss of
competitiveness and reduced employment opportunities.

(3) By their very nature, secret cartels are often difficult to
detect and investigate without the cooperation of undertak-
ings or individuals implicated in them. Therefore,
the
Commission considers that it is in the Community interest
to reward undertakings involved in this type of illegal prac-
tices which are willing to put an end to their participation
and co-operate in the Commission's investigation, indepen-
dently of the rest of the undertakings involved in the cartel.
The interests of consumers and citizens in ensuring that
secret cartels are detected and punished outweigh the
interest
that enable the
in fining those undertakings
Commission to detect and prohibit such practices.

(5) Moreover, co-operation by one or more undertakings may
justify a reduction of a fine by the Commission. Any reduc-
tion of a fine must reflect an undertaking's actual contribu-
tion, in terms of quality and timing, to the Commission's
establishment of the infringement. Reductions are to be
limited to those undertakings that provide the Commission
with evidence that adds significant value to that already in
the Commission's possession.

(6) In addition to submitting pre-existing documents, undertak-
ings may provide the Commission with voluntary presenta-
tions of their knowledge of a cartel and their role therein
prepared specially to be submitted under this leniency
programme. These initiatives have proved to be useful for
the effective investigation and termination of cartel infrin-
gements and they should not be discouraged by discovery
orders issued in civil litigation. Potential leniency applicants
might be dissuaded from cooperating with the Commission
under this Notice if this could impair their position in civil
proceedings, as compared to companies who do not coop-
erate. Such undesirable effect would significantly harm the
public interest in ensuring effective public enforcement of
Article 81 EC in cartel cases and thus its subsequent or
parallel effective private enforcement.

(7) The supervisory task conferred on the Commission by the
Treaty in competition matters does not only include the
duty to investigate and punish individual infringements, but
also encompasses the duty to pursue a general policy. The
protection of corporate statements in the public interest is
not a bar to their disclosure to other addressees of the
statement of objections in order to safeguard their rights of
defence in the procedure before the Commission, to the
extent that it is technically possible to combine both inter-
ests by rendering corporate statements accessible only at
the Commission premises and normally on a single occa-
sion following the formal notification of the objections.
Moreover, the Commission will process personal data in
the context of this notice in conformity with its obligations
under Regulation (EC) No 45/2001. (2)

(4) The Commission considers that the collaboration of an
undertaking in the detection of the existence of a cartel has
an intrinsic value. A decisive contribution to the opening
of an investigation or to the finding of an infringement
may justify the granting of immunity from any fine to the
undertaking in question, on condition that certain addi-
tional requirements are fulfilled.

(1) Reference in this text to Article 81 EC also covers Article 53 EEA
when applied by the Commission according to the rules laid down
in Article 56 of the EEA Agreement.

II. IMMUNITY FROM FINES

A. Requirements to qualify for immunity from fines

(8) The Commission will grant

immunity from any fine
which would otherwise have been imposed to an under-
taking disclosing its participation in an alleged cartel

(2) OJ L 8, 12.1.2001, p. 1.

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affecting the Community if that undertaking is the first to
submit information and evidence which in the Commis-
sion's view will enable it to:

(a) carry out a targeted inspection in connection with the

alleged cartel (1); or

(b) find an infringement of Article 81 EC in connection

with the alleged cartel.

(9)

For the Commission to be able to carry out a targeted
inspection within the meaning of point (8)(a), the under-
taking must provide the Commission with the informa-
tion and evidence listed below, to the extent that this, in
the Commission's view, would not jeopardize the inspec-
tions:

(a) A corporate statement (2) which includes, in so far as
it is known to the applicant at the time of the submis-
sion:

— A detailed description of the alleged cartel arrange-
ment, including for instance its aims, activities and
functioning; the product or service concerned, the
geographic scope, the duration of and the esti-
mated market volumes affected by the alleged
cartel; the specific dates, locations, content of and
participants in alleged cartel contacts, and all rele-
vant explanations in connection with the pieces of
evidence provided in support of the application.

— The name and address of the legal entity submit-
ting the immunity application as well as the
names and addresses of all the other undertakings
that participate(d) in the alleged cartel;

— The names, positions, office locations and, where
necessary, home addresses of all individuals who,
to the applicant's knowledge, are or have been
involved in the alleged cartel, including those indi-
viduals which have been involved on the appli-
cant's behalf;

— Information on which other competition authori-
ties,
the EU, have been
approached or are intended to be approached in
relation to the alleged cartel; and

inside or outside

(b) Other evidence relating to the alleged cartel in posses-
sion of the applicant or available to it at the time of
the submission, including in particular any evidence
contemporaneous to the infringement.

the time of

(10) Immunity pursuant to point (8)(a) will not be granted if,
at
the Commission had
the submission,
already sufficient evidence to adopt a decision to carry
out an inspection in connection with the alleged cartel or
had already carried out such an inspection.

(11) Immunity pursuant to point (8)(b) will only be granted on
the cumulative conditions that the Commission did not
have, at the time of the submission, sufficient evidence to
find an infringement of Article 81 EC in connection with
the alleged cartel and that no undertaking had been
granted conditional
immunity from fines under point
(8)(a) in connection with the alleged cartel. In order to
qualify, an undertaking must be the first
to provide
contemporaneous,
incriminating evidence of the alleged
cartel as well as a corporate statement containing the kind
of
(9)(a), which would
enable the Commission to find an infringement of Article
81 EC,.

information specified in point

(12) In addition to the conditions set out in points (8)(a), (9)
and (10) or in points (8)(b) and 11, all the following
conditions must be met in any case to qualify for any
immunity from a fine:

(a) The undertaking cooperates genuinely (3), fully, on a
continuous basis and expeditiously from the time it
submits its application throughout the Commission's
administrative procedure. This includes:

— providing the Commission promptly with all rele-
vant
information and evidence relating to the
alleged cartel that comes into its possession or is
available to it;

— remaining at the Commission's disposal to answer
promptly to any request that may contribute to
the establishment of the facts;

— making

current

former)
employees and directors available for interviews
with the Commission;

possible,

(and,

if

— not destroying,

falsifying or concealing relevant
information or evidence relating to the alleged
cartel; and

— not disclosing the fact or any of the content of its
application before the Commission has issued a
statement of objections in the case, unless other-
wise agreed;

(1) The assessment of the threshold will have to be carried out ex ante,
i.e. without taking into account whether a given inspection has or
has not been successful or whether or not an inspection has or has
not been carried out. The assessment will be made exclusively on
the basis of the type and the quality of the information submitted
by the applicant.

(2) Corporate statements may take the form of written documents

signed by or on behalf of the undertaking or be made orally.

(3) This requires in particular that the applicant provides accurate, not
misleading, and complete information. Cfr judgement of the Euro-
pean Court of Justice of 29 June 2006 in case C-301/04 P, Commis-
sion v SGL Carbon AG a.o., at paragraphs 68-70, and judgement of
the European Court of Justice of 28 June 2005 in cases C-189/02 P,
C-202/02 P, C-205/02 P, C-208/02 P and C-213/02 P, Dansk
Rørindustri A/S a.o. v. Commission, at paragraphs 395-399.

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(b) The undertaking ended its involvement in the alleged
cartel immediately following its application, except for
what would, in the Commission's view, be reasonably
necessary to preserve the integrity of the inspections;

(a) provide the Commission with all

information and
evidence relating to the alleged cartel available to it, as
specified in points (8) and (9),
including corporate
statements; or

the

undertaking must
falsified or concealed evidence of

(c) When contemplating making its application to the
Commission,
have
the
destroyed,
alleged cartel nor disclosed the fact or any of the
content of
to
other competition authorities.

its contemplated application, except

not

(13) An undertaking which took steps to coerce other under-
takings to join the cartel or to remain in it is not eligible
for immunity from fines. It may still qualify for a reduc-
tion of fines if it fulfils the relevant requirements and
meets all the conditions therefor.

B. Procedure

(14) An undertaking wishing to apply for immunity from fines
should contact the Commission's Directorate General for
Competition. The undertaking may either initially apply
for a marker or immediately proceed to make a formal
application to the Commission for immunity from fines
in order to meet the conditions in points (8)(a) or (8)(b),
as appropriate. The Commission may disregard any appli-
cation for immunity from fines on the ground that it has
been submitted after the statement of objections has been
issued.

(15) The Commission services may grant a marker protecting
an immunity applicant's place in the queue for a period to
be specified on a case-by-case basis in order to allow for
the gathering of the necessary information and evidence.
To be eligible to secure a marker, the applicant must
provide the Commission with information concerning its
name and address, the parties to the alleged cartel, the
affected product(s) and territory(-ies), the estimated dura-
tion of the alleged cartel and the nature of the alleged
cartel conduct. The applicant should also inform the
Commission on other past or possible future leniency
applications to other authorities in relation to the alleged
cartel and justify its request for a marker. Where a marker
is granted, the Commission services determine the period
within which the applicant has to perfect the marker by
submitting the information and evidence required to meet
the relevant threshold for immunity. Undertakings which
have been granted a marker cannot perfect it by making a
formal application in hypothetical terms. If the applicant
perfects the marker within the period set by the Commis-
sion services, the information and evidence provided will
be deemed to have been submitted on the date when the
marker was granted.

(16) An undertaking making a formal immunity application to

the Commission must:

terms,

(b) initially present
this information and evidence in
in which case the undertaking
hypothetical
must present a detailed descriptive list of the evidence
it proposes to disclose at a later agreed date. This list
should accurately reflect the nature and content of the
evidence, whilst safeguarding the hypothetical nature
of its disclosure. Copies of documents, from which
sensitive parts have been removed, may be used to
illustrate the nature and content of the evidence. The
name of the applying undertaking and of other under-
takings involved in the alleged cartel need not be
disclosed until the evidence described in its application
is
service
concerned by the alleged cartel, the geographic scope
of the alleged cartel and the estimated duration must
be clearly identified.

submitted. However,

the product or

(17) If requested, the Directorate General for Competition will
provide an acknowledgement of receipt of the underta-
king's application for immunity from fines, confirming
the date and, where appropriate, time of the application.

(18) Once the Commission has received the information and
evidence submitted by the undertaking under point (16)(a)
and has verified that it meets the conditions set out in
points (8)(a) or (8)(b), as appropriate,
it will grant the
undertaking conditional immunity from fines in writing.

(19) If the undertaking has presented information and evidence
in hypothetical terms, the Commission will verify that the
the evidence described in the
nature and content of
detailed list referred to in point (16)(b) will meet the
conditions set out in points (8)(a) or (8)(b), as appropriate,
and inform the undertaking accordingly. Following the
the evidence no later than on the date
disclosure of
it corresponds to the
agreed and having verified that
description made in the list, the Commission will grant
the undertaking conditional
in
writing.

immunity from fines

(20) If it becomes apparent that immunity is not available or
that the undertaking failed to meet the conditions set out
in points (8)(a) or (8)(b), as appropriate, the Commission
will inform the undertaking in writing. In such case, the
undertaking may withdraw the evidence disclosed for the
purposes of
the
its immunity application or
Commission to consider it under section III of this notice.
This does not prevent the Commission from using its
normal powers of investigation in order to obtain the
information.

request

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(21) The Commission will not consider other applications for
immunity from fines before it has taken a position on an
existing application in relation to the same alleged infrin-
gement, irrespective of whether the immunity application
is presented formally or by requesting a marker.

(22) If at the end of the administrative procedure, the under-
taking has met the conditions set out in point (12), the
Commission will grant it immunity from fines in the rele-
vant decision. If at the end of the administrative proce-
dure, the undertaking has not met the conditions set out
in point (12), the undertaking will not benefit from any
favorable treatment under this Notice. If the Commission,
after having granted conditional
immunity ultimately
finds that the immunity applicant has acted as a coercer,
it will withhold immunity.

III. REDUCTION OF A FINE

A. Requirements to qualify for reduction of a fine

(23) Undertakings disclosing their participation in an alleged
cartel affecting the Community that do not meet
the
conditions under section II above may be eligible to
benefit from a reduction of any fine that would otherwise
have been imposed.

(24) In order to qualify, an undertaking must provide the
Commission with evidence of the alleged infringement
which represents significant added value with respect to
the evidence already in the Commission's possession and
must meet the cumulative conditions set out in points
(12)(a) to (12)(c) above.

(25) The concept of ‘added value’ refers to the extent to which
the evidence provided strengthens, by its very nature and/
or its level of detail, the Commission's ability to prove the
In this assessment, the Commission will
alleged cartel.
generally consider written evidence originating from the
period of time to which the facts pertain to have a greater
value than evidence subsequently established.
Incrimi-
nating evidence directly relevant to the facts in question
will generally be considered to have a greater value than
that with only indirect relevance. Similarly, the degree of
corroboration from other
the
evidence submitted to be relied upon against other under-
takings involved in the case will have an impact on the
value of that evidence, so that compelling evidence will be
attributed a greater value than evidence such as statements
which require corroboration if contested.

required for

sources

(26) The Commission will determine in any final decision
adopted at the end of the administrative procedure the
level of reduction an undertaking will benefit from, rela-
tive to the fine which would otherwise be imposed. For
the:

— first undertaking to provide significant added value: a

reduction of 30-50 %,

— second undertaking to provide significant added value:

a reduction of 20-30 %,

— subsequent undertakings

that provide

significant

added value: a reduction of up to 20 %.

In order to determine the level of reduction within each
of these bands, the Commission will take into account the
time at which the evidence fulfilling the condition in
point (24) was submitted and the extent to which it repre-
sents added value.

If the applicant for a reduction of a fine is the first to
submit compelling evidence in the sense of point (25)
which the Commission uses to establish additional facts
increasing the gravity or the duration of the infringement,
the Commission will not take such additional facts into
account when setting any fine to be imposed on the
undertaking which provided this evidence.

B. Procedure

(27) An undertaking wishing to benefit from a reduction of a
fine must make a formal application to the Commission
and it must present it with sufficient evidence of the
alleged cartel to qualify for a reduction of a fine in accord-
ance with point
this Notice. Any voluntary
submission of evidence to the Commission which the
undertaking that submits it wishes to be considered for
the beneficial treatment of section III of this Notice must
be clearly identified at the time of its submission as being
part of a formal application for a reduction of a fine.

(24) of

(28) If requested, the Directorate General for Competition will
provide an acknowledgement of receipt of the underta-
king's application for a reduction of a fine and of any
subsequent submissions of evidence, confirming the date
and, where appropriate, time of each submission. The
Commission will not take any position on an application
for a reduction of a fine before it has taken a position on
any existing applications for conditional immunity from
fines in relation to the same alleged cartel.

(29) If the Commission comes to the preliminary conclusion
that the evidence submitted by the undertaking constitutes
significant added value within the meaning of points (24)
and (25), and that the undertaking has met the conditions
of points (12) and (27), it will inform the undertaking in
writing, no later than the date on which a statement of
objections is notified, of its intention to apply a reduction
of a fine within a specified band as provided in point (26).
The Commission will also, within the same time frame,
inform the undertaking in writing if it comes to the preli-
minary conclusion that the undertaking does not qualify
for a reduction of a fine. The Commission may disregard
any application for a reduction of fines on the grounds
that it has been submitted after the statement of objec-
tions has been issued.

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(30) The Commission will evaluate the final position of each
undertaking which filed an application for a reduction of
a fine at the end of the administrative procedure in any
decision adopted. The Commission will determine in any
such final decision:

(a) whether the evidence provided by an undertaking
represented significant added value with respect to the
evidence in the Commission's possession at that same
time;

(b) whether the conditions set out in points (12)(a) to

(12)(c) above have been met;

(c) the exact

level of

reduction an undertaking will

benefit from within the bands specified in point (26).

If the Commission finds that the undertaking has not met
the conditions set out in point (12), the undertaking will
from any favourable treatment under this
not benefit
Notice.

IV. CORPORATE STATEMENTS MADE TO QUALIFY UNDER

THIS NOTICE

(31) A corporate statement is a voluntary presentation by or
on behalf of an undertaking to the Commission of the
undertaking's knowledge of a cartel and its role therein
prepared specially to be submitted under this Notice. Any
statement made vis-à-vis the Commission in relation to
this notice, forms part of the Commission's file and can
thus be used in evidence.

(32) Upon the applicant's request, the Commission may accept
that corporate statements be provided orally unless the
applicant has already disclosed the content of the corpo-
rate statement to third parties. Oral corporate statements
will be recorded and transcribed at
the Commission's
premises. In accordance with Article 19 of Council Regu-
lation (EC) No 1/2003 (1) and Articles 3 and 17 of
Commission Regulation (EC) No 773/2004 (2), undertak-
ings making oral corporate statements will be granted the
opportunity to check the technical accuracy of
the
recording, which will be available at the Commission's
premises and to correct the substance of their oral state-
ments within a given time limit. Undertakings may waive
these rights within the said time-limit, in which case the
recording will from that moment on be deemed to have
been approved. Following the explicit or implicit approval
of the oral statement or the submission of any corrections
to it, the undertaking shall listen to the recordings at the
Commission's premises and check the accuracy of the
transcript within a given time limit. Non-compliance with
the last requirement may lead to the loss of any beneficial
treatment under this Notice.

(33) Access to corporate statements is only granted to the
addressees of a statement of objections, provided that they
commit, — together with the legal counsels getting access
on their behalf -, not to make any copy by mechanical or
electronic means of any information in the corporate
statement to which access is being granted and to ensure
that the information to be obtained from the corporate
statement will solely be used for the purposes mentioned
below. Other parties such as complainants will not be
granted access to corporate statements. The Commission
considers that this specific protection of a corporate state-
ment is not justified as from the moment when the appli-
cant discloses to third parties the content thereof.

(34) In accordance with the Commission Notice on rules for
access to the Commission file (3), access to the file is only
granted to the addressees of a statement of objections on
the condition that the information thereby obtained may
only be used for the purposes of judicial or administrative
proceedings for the application of the Community compe-
tition rules at issue in the related administrative proceed-
ings. The use of such information for a different purpose
during the proceeding may be regarded as lack of coop-
eration within the meaning of points (12) and (27) of this
Notice. Moreover,
if any such use is made after the
Commission has already adopted a prohibition decision in
the proceeding,
in any legal
proceedings before the Community Courts, ask the Court
to increase the fine in respect of the responsible under-
taking. Should the information be used for a different
purpose, at any point in time, with the involvement of an
outside counsel, the Commission may report the incident
to the bar of that counsel, with a view to disciplinary
action.

the Commission may,

(35) Corporate statements made under the present Notice will
only be transmitted to the competition authorities of the
to Article 12 of Regulation
Member States pursuant
No 1/2003, provided that the conditions set out in the
Network Notice (4) are met and provided that the level of
protection against disclosure awarded by the receiving
competition authority is equivalent to the one conferred
by the Commission.

V. GENERAL CONSIDERATIONS

to grant conditional

(36) The Commission will not take a position on whether or
not
immunity, or otherwise on
whether or not to reward any application, if it becomes
infringements
the application concerns
apparent
covered by the five years limitation period for the imposi-
tion of penalties stipulated in Article 25(1)(b) of Regu-
lation 1/2003, as such applications would be devoid of
purpose.

that

(1) OJ L 1, 4.1.2003, p. 1.
(2) OJ L 123, 27.4.2004, p. 18.

(3) OJ C 325, 22.12.2005, p. 7.
(4) Commission Notice on cooperation within the Network of Competi-

tion Authorities, OJ C 101, 27.4.2004, p. 43.

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(37) From the date of its publication in the Official Journal,
this notice replaces the 2002 Commission notice on
immunity from fines and reduction of fines in cartel cases
for all cases in which no undertaking has contacted the
Commission in order to take advantage of the favourable
treatment set out in that notice. However, points (31) to
(35) of
the current notice will be applied from the
moment of its publication to all pending and new applica-
tions for immunity from fines or reduction of fines.

(38) The Commission is aware that this notice will create legit-
imate expectations on which undertakings may rely when
disclosing the existence of a cartel to the Commission.

(39) In line with the Commission's practice, the fact that an
undertaking cooperated with the Commission during its

administrative procedure will be indicated in any decision,
so as to explain the reason for the immunity or reduction
of the fine. The fact that immunity or reduction in respect
of fines is granted cannot protect an undertaking from the
civil law consequences of its participation in an infringe-
ment of Article 81 EC.

(40) The Commission considers that normally public disclosure
of documents and written or recorded statements received
in the context of this notice would undermine certain
public or private interests, for example the protection of
the purpose of inspections and investigations, within the
meaning
(EC) No
4
1049/2001 (1), even after the decision has been taken.

of Regulation

of Article

(1) OJ L 145, 31.5.2001, p. 43.