Commission Notice on the conduct of settlement procedures in view of the adoption of Decisions pursuant to Article 7 and Article 23 of Council Regulation (EC) No 1/2003 in cartel cases (Text with EEA relevance )
Date: 2008-07-02
Institutions: European Commission
Subjects: competition law, complaint to the Commission, infringement procedure (EU), restrictive trade practice

2.7.2008

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Official Journal of the European Union

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II

(Information)

INFORMATION FROM EUROPEAN UNION INSTITUTIONS AND BODIES

COMMISSION

Commission Notice on the conduct of settlement procedures in view of the adoption of Decisions
pursuant to Article 7 and Article 23 of Council Regulation (EC) No 1/2003 in cartel cases

(Text with EEA relevance)

(2008/C 167/01)

1. INTRODUCTION

1. This Notice sets out the framework for rewarding coopera-
tion in the conduct of proceedings commenced in view of
the application of Article 81 of the EC Treaty (1) to cartel
cases (2). The settlement procedure may allow the Commis-
sion to handle more cases with the same resources, thereby
fostering the public interest in the Commission's delivery
of effective and timely punishment, while increasing overall
deterrence. The cooperation covered by this Notice is
different from the voluntary production of evidence to
trigger or advance the Commission's investigation, which is
covered by the Commission Notice on Immunity from
fines and reduction of fines in cartel cases (3) (the Leniency
Notice). Provided that the cooperation offered by an under-
taking qualifies under both Commission Notices, it can be
cumulatively rewarded accordingly (4).

2. When parties to the proceedings are prepared to acknowl-
edge their participation in a cartel violating Article 81 of
the Treaty and their liability therefore,
they may also
contribute to expediting the proceedings leading to the

(1) References in this text to Article 81 also cover Article 53 EEA when
applied by the Commission in accordance with the rules laid down in
Article 56 of the EEA Agreement.

(2) Cartels are agreements and/or concerted practices between two or
more competitors aimed at coordinating their competitive behaviour
on the market and/or influencing the relevant parameters of competi-
tion 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.

(3) OJ C 298, 8.12.2006, p. 17.
(4) See point 33.

the corresponding decision pursuant

to
adoption of
Article 7 and Article 23 of Council Regulation (EC)
No 1/2003 of 16 December 2002 on the implementation
of
the rules on competition laid down in Articles 81
and 82 of the Treaty (5) in the way and with the safeguards
specified in this Notice. Whilst the Commission, as the
investigative authority and the guardian of
the Treaty
empowered to adopt enforcement decisions subject to judi-
cial control by the Community Courts, does not negotiate
the question of the existence of an infringement of Com-
munity law and the appropriate sanction, it can reward the
cooperation described in this Notice.

to Articles 81 and 82 of

3. Commission Regulation (EC) No 773/2004 of 7 April
2004 relating to the conduct of proceedings by the
the
Commission pursuant
EC Treaty (6) lays down the core practical rules concerning
the conduct of proceedings in antitrust cases including
those applicable in the variant
In this
regard, Regulation (EC) No 773/2004 bestows on the
Commission the discretion whether to explore the settle-
ment procedure or not in cartel cases, while ensuring that
the choice of the settlement procedure cannot be imposed
on the parties.

for settlement.

4. Effective enforcement of Community competition law is
rights of
respect of
compatible with full
defence, which constitutes a fundamental principle of
Community law to be respected in all circumstances, and
in particular in antitrust procedures which may give rise to

the parties'

(5) OJ L 1, 4.1.2003, p. 1. Regulation as last amended by Regulation (EC)

No 1419/2006 (OJ L 269, 28.9.2006, p. 1).

(6) OJ L 123, 27.4.2004, p. 18. Regulation as last amended by Regulation

(EC) No 622/2008 (OJ L 171, 1.7.2008, p. 3).

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penalties. It follows that the rules established to conduct
the Commission proceedings to enforce Article 81 of the
Treaty should ensure that the undertakings and associa-
tions of undertakings concerned are afforded the opportu-
nity effectively to make known their views on the truth
and relevance of the facts, objections and circumstances
put forward by the Commission (1), throughout the admin-
istrative procedure.

2. PROCEDURE

5. The Commission retains a broad margin of discretion to
determine which cases may be suitable to explore the
parties' interest to engage in settlement discussions, as well
as to decide to engage in them or discontinue them or to
definitely settle. In this regard, account may be taken of the
probability of reaching a common understanding regarding
the potential objections with the parties
the scope of
involved within a reasonable timeframe, in view of factors
such as number of parties involved, foreseeable conflicting
positions on the attribution of liability, extent of contesta-
tion of the facts. The prospect of achieving procedural effi-
ciencies in view of the progress made overall in the settle-
ment procedure, including the scale of burden involved in
providing access to non-confidential versions of documents
from the file, will be considered. Other concerns such as
the possibility of setting a precedent might apply. The
Commission may also decide to discontinue settlement
discussions if the parties to the proceedings coordinate to
distort or destroy any evidence relevant to the establish-
ment of the infringement or any part thereof or to the
calculation of the applicable fine. Distortion or destruction
of evidence relevant to the establishment of the infringe-
ment or any part thereof may also constitute an aggra-
vating circumstance within the meaning of point 28 of the
Commission Guidelines on the method of setting fines
imposed pursuant to Article 23(2)(a) of Regulation (EC)
No 1/2003 (2)
(the Guidelines on fines), and may be
regarded as lack of cooperation within the meaning of
points 12 and 27 of the Leniency Notice. The Commission
may only engage in settlement discussions upon the
written request of the parties concerned.

6. While parties to the proceedings do not have a right to
settle, should the Commission consider that a case may, in
principle, be suitable for settlement,
it will explore the
interest in settlement of all parties to the same proceed-
ings.

7. The parties to the proceedings may not disclose to any
third party in any jurisdiction the contents of the discus-
sions or of the documents which they have had access to
in view of settlement, unless they have a prior explicit
authorization by the Commission. Any breach in this
regard may lead the Commission to disregard the underta-
king's request to follow the settlement procedure. Such
disclosure may also constitute an aggravating circumstance,

(1) Case 85/76, Hoffmann-La Roche v Commission [1979] ECR 461, at para-

graphs 9 and 11.

(2) OJ C 210, 1.9.2006, p. 2.

within the meaning of point 28 of the Guidelines on fines
and may be regarded as lack of cooperation within the
meaning of points 12 and 27 of the Leniency Notice.

2.1. Initiation of proceedings and exploratory steps

regarding settlement

8. Where the Commission contemplates the adoption of a
decision pursuant to Article 7 and/or Article 23 of Regu-
lation (EC) No 1/2003, it is required in advance to identify
and recognize as parties to the proceedings the legal
persons on whom a penalty may be imposed for an infrin-
gement of Article 81 of the Treaty.

9. To this end,

the initiation of proceedings pursuant

to
Article 11(6) of Regulation (EC) No 1/2003 in view of
adopting such a decision can take place at any point in
time, but no later than the date on which the Commission
issues a statement of objections against
the parties
concerned. Article 2(1) of Regulation (EC) No 773/2004
further specifies that, should the Commission consider it
suitable to explore the parties' interest in engaging in settle-
ment discussions, it will initiate proceedings no later than
the date on which it either issues a statement of objections
or requests the parties to express in writing their interest
to engage in settlement discussions, whichever
is the
earlier.

10. After the initiation of proceedings pursuant to Article 11(6)
of Regulation (EC) No 1/2003, the Commission becomes
the only competition authority competent
to apply
Article 81 of the Treaty to the case in point.

11. Should the Commission consider it suitable to explore the
parties' interest to engage in settlement discussions, it will
set a time-limit of no less than two weeks pursuant to
Articles 10a(1) and 17(3) of Regulation (EC) No 773/2004
within which parties to the same proceedings should
declare in writing whether they envisage engaging in settle-
ment discussions in view of possibly introducing settle-
ment submissions at a later stage. This written declaration
does not imply an admission by the parties of having parti-
cipated in an infringement or of being liable for it.

12. Whenever the Commission initiates proceedings against
two or more parties within the same undertaking, the
Commission will inform each of them of the other legal
entities which it identifies within the same undertaking and
which are also concerned by the proceedings. In such a
case, should the concerned parties wish to engage in settle-
ment discussions, they must appoint joint representatives
duly empowered to act on their behalf by the end of the
time-limit referred to in point 11. The appointment of
joint representatives aims solely to facilitate the settlement
discussions and it does not prejudge in any way the attri-
bution of
the
different parties.

the infringement amongst

liability for

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13. The Commission may disregard any application for immu-
nity from fines or reduction of fines on the ground that it
has been submitted after the expiry of
the time-limit
referred to in point 11.

2.2. Commencing the settlement procedure: settlement

discussions

14. Should some of

the parties to the proceedings request
settlement discussions and comply with the requirements
referred to in points 11 and 12, the Commission may
decide to pursue the settlement procedure by means of
bilateral contacts between the Commission Directorate-
General for Competition and the settlement candidates.

15. The Commission retains discretion to determine the appro-
priateness and the pace of the bilateral settlement discus-
sions with each undertaking. In line with Article 10a(2) of
Regulation (EC) No 773/2004, this includes determining,
in the settlement
in view of the progress made overall
procedure, the order and sequence of the bilateral settle-
ment discussions as well as the timing of the disclosure of
information, including the evidence in the Commission file
used to establish the envisaged objections and the potential
fine (1). Information will be disclosed in a timely manner
as settlement discussions progress.

16. Such an early disclosure in the context of settlement
discussions pursuant to Article 10a(2) and Article 15(1a)
of Regulation (EC) No 773/2004 will allow the parties to
be informed of the essential elements taken into considera-
tion so far, such as the facts alleged, the classification of
those facts, the gravity and duration of the alleged cartel,
the attribution of liability, an estimation of the range of
likely fines, as well as the evidence used to establish the
potential objections. This will enable the parties effectively
to assert their views on the potential objections against
them and will allow them to make an informed decision
on whether or not to settle. Upon request by a party, the
Commission services will also grant it access to non-confi-
dential versions of any specified accessible document listed
in the case file at that point in time, in so far as this is
justified for the purpose of enabling the party to ascertain
its position regarding a time period or any other aspect of
the cartel (2).

(1) Reference to the ‘potential fine’ in Article 10a(2) of Regulation (EC)
No 773/2004 affords the Commission services the possibility to
inform the parties concerned by settlement discussions of an estimate
of their potential fine in view of the guidance contained in the Guide-
lines on fines, the provisions of this Notice and the Leniency Notice,
where applicable.

(2) For that purpose, the parties will be provided with a list of all accessible

documents in the case file at that point in time.

17. When the progress made during the settlement discussions
leads to a common understanding regarding the scope of
the potential objections and the estimation of the range of
likely fines to be imposed by the Commission, and the
Commission takes the preliminary view that procedural
efficiencies are likely to be achieved in view of the progress
made overall, the Commission may grant a final time-limit
of at least 15 working days for an undertaking to introduce
a final settlement submission pursuant to Articles 10a(2)
and 17(3) of Regulation (EC) No 773/2004. The time-limit
can be extended following a reasoned request. Before
granting such time-limit, the parties will be entitled to have
the information specified in point 16 disclosed to them
upon request.

18. The parties may call upon the Hearing Officer at any time
during the settlement procedure in relation to issues that
might arise relating to due process. The Hearing Officer's
duty is to ensure that the effective exercise of the rights of
defence is respected.

19. Should the parties concerned fail to introduce a settlement
submission, the procedure leading to the final decision
in their regard will follow the general provisions, in par-
ticular Articles 10(2), 12(1) and 15(1) of Regulation (EC)
No 773/2004, instead of those regulating the settlement
procedure.

2.3. Settlement submissions

request

20. Parties opting for a settlement procedure must introduce a
to settle in the form of a settlement
formal
submission. The settlement submission provided for in
Article 10a(2) of Regulation (EC) No 773/2004 should
contain:

(a) an acknowledgement in clear and unequivocal terms of
the parties'
liability for the infringement summarily
described as regards its object, its possible implementa-
tion, the main facts, their legal qualification, including
the party's role and the duration of their participation
in the infringement in accordance with the results of
the settlement discussions;

(b) an indication (3) of the maximum amount of the fine
the parties foresee to be imposed by the Commission
and which the parties would accept in the framework
of a settlement procedure;

(c) the parties' confirmation that, they have been suffi-
ciently informed of
the objections the Commission
envisages raising against them and that they have been
given sufficient opportunity to make their views
known to the Commission;

(3) This would result from the discussions as set out in points 16 and 17.

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(d) the parties' confirmation that,

in view of the above,
they do not envisage requesting access to the file or
requesting to be heard again in an oral hearing, unless
settlement
the Commission does not
submissions in the statement of objections and the
decision;

reflect

their

(e) the parties' agreement

to receive the statement of
objections and the final decision pursuant to Articles 7
and 23 of Regulation (EC) No 1/2003 in an agreed
official language of the European Community.

21. The acknowledgments and confirmations provided by the
parties in view of settlement constitute the expression of
their commitment to cooperate in the expeditious handling
of the case following the settlement procedure. However,
those acknowledgments and confirmations are conditional
upon the Commission meeting their settlement request,
including the anticipated maximum amount of the fine.

22. Settlement requests cannot be revoked unilaterally by the
parties which have provided them unless the Commission
does not meet the settlement requests by reflecting the
settlement submissions first in a statement of objections
and ultimately, in a final decision (see in this regard points
27 and 29). The statement of objections would be deemed
to have endorsed the settlement submissions if it reflects
their contents on the issues mentioned in point 20(a).
Additionally, for a final decision to be deemed to have
reflected the settlement submissions, it should also impose
a fine which does not exceed the maximum amount indi-
cated therein.

2.4. Statement of objections and reply

23. Pursuant to Article 10(1) of Regulation (EC) No 773/2004,
the notification of a written statement of objections to
each of the parties against whom objections are raised is a
mandatory preparatory step before adopting any final deci-
sion. Therefore, the Commission will issue a statement of
objections also in a settlement procedure (1).

24. For the parties' rights of defence to be exercised effectively,
the Commission should hear their views on the objections
against them and supporting evidence before adopting a
final decision and take them into account by amending its
preliminary analysis, where appropriate (2). The Commis-
sion must be able not only to accept or reject the parties'
relevant arguments expressed during the administrative

(1) In the context of settlement procedures, statements of objections
should contain the information necessary to enable the parties to
corroborate that it reflects their settlement submissions.

(2) In line with settled case-law, the Commission shall base its decisions
only on objections on which the parties concerned have been able to
comment and, to this end, they shall be entitled to have access to the
Commission's file, subject to the legitimate interest of undertakings in
the protection of their business secrets.

procedure, but also to make its own analysis of the matters
put forward by them in order to either abandon such
objections because they have been shown to be unfounded
or to supplement and reassess its arguments both in fact
and in law, in support of the objections which it maintains.

25. By introducing a formal settlement request in the form of a
settlement submission prior to the notification of the state-
ment of objections,
the parties concerned enable the
Commission to effectively take their views into account (3)
already when drafting the statement of objections, rather
than only before
the Advisory
Committee on Restrictive Practices and Dominant Positions
(hereinafter the ‘Advisory Committee’) or before the adop-
tion of the final decision (4).

consultation of

the

26. Should the statement of objections reflect

least

submissions,

the parties'
settlement
the parties concerned should
two weeks set by the
within a time-limit of at
Commission in accordance with Articles 10a(3) and 17(3)
of Regulation (EC) No 773/2004, reply to it by simply
confirming (in unequivocal terms) that the statement of
objections corresponds to the contents of their settlement
submissions and that they therefore remain committed to
follow the settlement procedure. In the absence of such a
reply, the Commission will take note of the party's breach
of
its commitment and may also disregard the party's
request to follow the settlement procedure.

27. The Commission retains the right to adopt a statement of
objections which does not reflect the parties' settlement
submission. If so, the general provisions in Articles 10(2),
12(1) and 15(1) of Regulation (EC) No 773/2004 will
apply. The acknowledgements provided by the parties in
the settlement submission would be deemed to be with-
drawn and could not be used in evidence against any of
the parties
the parties
to the proceedings. Hence,
concerned would no longer be bound by their settlement
submissions and would be granted a time-limit allowing
their defence anew,
to present
them, upon request,
including the possibility to access the file and to request an
oral hearing.

2.5. Commission decision and settlement reward

28. Upon the parties' replies to the statement of objections
confirming their commitment to settle, Regulation (EC)
No 773/2004 allows the Commission to proceed, without
the
any other procedural

to the adoption of

step,

(3) In this regard, recital 2 of Regulation (EC) No 622/2008 states: ‘(…)
Such early disclosure should enable the parties concerned to put forward their
views on the objections which the Commission intends to raise against them as
well as on their potential liability’.

(4) As required by Article 11(1) of Regulation (EC) No 773/2004 and

Article 27(1) of Regulation (EC) No 1/2003, respectively.

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subsequent final decision pursuant to Articles 7 and/or 23
of Regulation (EC) No 1/2003, after consultation of the
Advisory Committee pursuant to Article 14 of Regulation
(EC) No 1/2003. In particular, this implies that no oral
hearing or access to the file may be requested by those
parties once their
submissions have been
reflected by the statement of objections, in line with Arti-
cles 12(2) and 15(1a) of Regulation (EC) No 773/2004.

settlement

29. The Commission retains the right to adopt a final position
which departs from its preliminary position expressed in a
statement of objections endorsing the parties' settlement
submissions, either in view of the opinion provided by the
Advisory Committee or for other appropriate considera-
tions in view of the ultimate decisional autonomy of the
Commission to this effect. However, should the Commis-
sion opt to follow that course, it will inform the parties
and notify to them a new statement of objections in order
to allow for the exercise of
their rights of defence in
accordance with the applicable general rules of procedure.
It follows that the parties would then be entitled to have
access to the file, to request an oral hearing and to reply to
the
acknowledgments
provided by the parties in the settlement submissions
would be deemed to have been withdrawn and could not
be used in evidence against any of
the parties to the
proceedings.

statement of objections. The

30. The final amount of the fine in a particular case is deter-
mined in the decision finding an infringement pursuant to
Article 7 and imposing a fine pursuant to Article 23 of
Regulation (EC) No 1/2003.

31. In line with the Commission's practice, the fact that an
undertaking cooperated with the Commission under this
Notice during the administrative procedure will be indi-
cated in the final decision, so as to explain the reason for
the level of the fine.

32. Should the Commission decide to reward a party for
settlement in the framework of this Notice, it will reduce
by 10 % the amount of the fine to be imposed after the
10 % cap has been applied having regard to the Guidelines
on the method of setting fines imposed pursuant
to
Article 23(2)(a) of Regulation (EC) No 1/2003 (1). Any
specific increase for deterrence (2) used in their regard will
not exceed a multiplication by two.

33. When settled cases involve also leniency applicants, the
reduction of the fine granted to them for settlement will be
added to their leniency reward.

3. GENERAL CONSIDERATIONS

34. This Notice applies

to any case pending before the
Commission at the time of or after its publication in the
Official Journal of the European Union.

(1) OJ C 210, 1.9.2006, p. 2.
(2) Point 30 of the Guidelines on fines.

35. Access to settlement submissions is only granted to those
addressees of a statement of objections who have not
requested settlement, provided that
they commit —
together with the legal counsels getting access on their
behalf — not to make any copy by mechanical or elec-
tronic means of any information in the settlement submis-
sions to which access is being granted and to ensure that
the information to be obtained from the settlement
submission will solely be used for the purposes of judicial
or administrative proceedings for the application of the
Community competition rules at
issue in the related
proceedings. Other parties such as complainants will not
be granted access to settlement submissions.

if any such use is made after

36. The use of such information for a different purpose during
the proceeding may be regarded as lack of cooperation
within the meaning of points 12 and 27 of the Leniency
Notice. Moreover,
the
Commission has already adopted a prohibition decision in
the proceedings,
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,

37. Settlement submissions made under this Notice will only
the
be transmitted to the competition authorities of
Member States pursuant to Article 12 of Regulation (EC)
No 1/2003, provided that the conditions set out in the
Network Notice (3) 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.

38. Upon the applicant's request, the Commission may accept
that settlement submissions be provided orally. Oral settle-
ment submissions will be recorded and transcribed at the
Commission's premises. In accordance with Article 19 of
Regulation (EC) No 1/2003 and Articles 3(3) and 17(3) of
Regulation (EC) No 773/2004 undertakings making oral
settlement submissions 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 settlement submissions and the
accuracy of the transcript without delay.

39. The Commission will not transmit settlement submissions
to national courts without
the relevant
applicants, in line with the provisions in the Commission
Notice on the co-operation between the Commission and
the courts of the EU Member States in the application of
Articles 81 and 82 EC (4).

the consent of

40. The Commission considers that normally public disclosure
of documents
recorded statements
and written or
(including settlement submissions) received in the context
of this Notice would undermine certain public or private

(3) Commission Notice on cooperation within the Network of Competi-

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

(4) OJ C 101, 27.4.2004, p. 54; point 26.

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interests, for example the protection of the purpose of
inspections and investigations, within the meaning of
Article 4 of Regulation (EC) No 1049/2001 of
the
European Parliament and of the Council of 30 May 2001
regarding public access to European Parliament, Council
and Commission documents (1), even after the decision has
been taken.

41. Final decisions taken by the Commission under Regulation
(EC) No 1/2003 are subject to judicial review in accordance
with Article 230 of the Treaty. Moreover, as provided in
Article 229 of the Treaty and Article 31 of Regulation (EC)
No 1/2003, the Court of Justice has unlimited jurisdiction
to review decisions on fines adopted pursuant to Article 23
of Regulation (EC) No 1/2003.

Overview of the procedure leading to the adoption of a (settlement) Decision pursuant to Articles 7
and 23 of Regulation No (EC) 1/2003

I. Investigation as usual

IV. Settlement

— Conditional settlement submissions by the companies,

jointly represented where applicable.

— DG COMP sends acknowledgement of receipt.

V.

‘Settled’ statement of objections

— Notification of streamlined SO endorsing company's

settlement submissions, where appropriate.

— Company's reply to SO confirming clearly that it reflects

its settlement submission.

VI. ‘Settlement’ Decision pursuant to Articles 7 and 23 of

Regulation No (EC) 1/2003

— Advisory Committee on a draft streamlined final deci-

sion.

If College of Commissioners agrees:

— Adoption of streamlined final decision.

— Parties may express their interest in a hypothetical settle-

ment.

II. Exploratory steps regarding settlement

— Letter

to all companies (and MS)

the
decision to initiate proceedings in view of settlement
(Article 11(6)) and requesting them to express their
interest in settlement.

informing of

III. Bilateral rounds of settlement discussions

— Disclosure and exchange of arguments on potential

objections, liability, fines range.

— Disclosure of evidence used to establish potential objec-

tions, liability, fines.

— Disclosure of other non-confidential versions of docu-

ments in the file, when justified.

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